All posts by Dennis Crouch

About Dennis Crouch

Law Professor at the University of Missouri School of Law.

Network Monitoring and . . .

by Dennis Crouch

It appears that the Federal Circuit has sharpened its blades and is now slicing the bologna extra thin.  This results-oriented decision unfortunately shades-facts and provides no clarity in its legal analysis of eligibility. While I agree that this network security invention should be eligible for patenting – the court’s analysis does not provide a convincing foundation for that result. 

SRI International, Inc. v. Cisco Systems, Inc. (Fed. Cir 2019)

At the close of trial, the jury issued its verdict favoring the patentee and awarding $23 million in reasonable royalty damages that were then doubled by the D.Del. Judge Robinson based upon the adjudged willful infringement.  On appeal, a 2-1 Federal Circuit panel has sided with the patentee on eligibility, but rejected the enhanced damages.

The eligibility outcome here fits expectations with the majority opinion penned by Judge Stoll and joined by Judge O’Malley while Judge Lourie stood in dissent.

SRI’s asserted claims are directed to methods of “hierarchical event monitoring” used within a computer network.  U.S. Patent 6,711,615.  The basic approach is (1) using a “plurality of network monitors” to detect “suspicious network activities”; (2) generate a report at the network monitor levele; and (3) a “hierarchical monitor” “automatically receiving and integrating the report.”  The specification makes clear that the “integrating” step might be simply looking for commonalities in the intrusion reports or might further involve “countermeasures.”  The specification does not appear to define “hierarchical monitor” other than contrasting them with peer-to-peer.

In considering the claims, the Federal Circuit found that the focus of the claim is on “providing a network defense system that monitors netowrk traffic in real-time to automatically detect large scale attacks.”

Contrary to Cisco’s assertion, the claims are not directed to just analyzing data from multiple sources to detect suspicious activity. Instead, the claims are directed to an improvement in computer network technology. Indeed, representative claim 1 recites using network monitors to detect suspicious network activity based on analysis of network traffic data, generating reports of that suspicious activity, and integrating those reports using hierarchical monitors. The “focus of the claims is on the specific asserted improvement in computer capabilities”—that is, providing a network defense system that monitors network traffic in real-time to automatically detect large-scale attacks. Quoting Enfish.

The majority opinion goes on to justify its conclusions based upon platitudes from the specification — that the invention provides “a framework for the recognition of more global threats to inter-domain connectivity, including coordinated attempts
to infiltrate or destroy connectivity across an entire network enterprise.”

Writing in dissent, Judge Lourie argued that the claims are effectively data collection methods.

The claims here recite nothing more than deploying network monitors, detecting suspicious network activity, and generating and handling reports. The detecting of the suspicious activity is based on “analysis” of traffic data, but the claims add nothing concerning specific means for doing so. The claims only recite the moving of information. The computer is used as a tool, and no improvement in computer technology is shown or claimed. There is no specific technique described for improving computer network security.

Lourie drew a tight analogy to the Electric Power Group eligibility decision that invalidated claims directed toward a “method of detecting events on an interconnected electric power grid in real time over a wide area and automatically analyzing the events on the interconnected electric power grid.”  Seemingly, this case here could also be seen as a close analogy to the court’s recent cases distinguishing between methods of diagnosis and methods of treatment. See Vanda and Natural Alternatives.

The Majority opinion here attempted to distinguish Electric Power Group as in invention “using computers as tools to solve a power grid problem, rather than improving the functionality of computers and computer networks themselves.”  What the majority fails to do here is to point to any particular aspects of the claimed invention that provide anything more than what other panels have identified as abstract ideas – receiving data; reporting data; and correlating data.

= = = =

The appellate panel rejected the willfulness finding and, as a consequence, the resulting doubling of damages.

While the jury heard evidence that Cisco was aware of the patents in May 2012, before filing of the lawsuit, we do not see how the record supports a willfulness finding going back to 2000. As the Supreme Court recently observed, “culpability is generally measured against the knowledge of the actor at the time of the challenged conduct.” Halo, 136 S. Ct. at 1933. Similarly, Cisco’s allegedly aggressive litigation tactics cannot support a finding of willful infringement going back to 2000, especially when the litigation did not start until 2012. Finally, Cisco’s decision not to seek an advice-of-counsel defense is legally irrelevant under 35 U.S.C. § 298. . . .

We leave it to the district court to decide in the first instance whether the jury’s presumed finding of willful infringement after May 8, 2012 is supported by substantial evidence.

Although willfulness is missing, the court still affirmed the award of attorney fees to the patentee based dupon Cisco’s litigation tactics.  Judge Robinson had written:

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

The appellate panel gave deference to district court conclusions on this final point and affirmed the award of fees.

= = = =

Note: In a separate case, Judge Robinson had previously held the claims invalid under 102/103. However, that decision was vacated on appeal SRI International, Inc. v. Internet Security Systems, Inc., 511 F.3d 1186 (Fed. Cir. 2008).  Here, interestingly, Judge Robinson sua sponte issued summary judgment that the claims were not anticipated.  That holding was affirmed here on appeal.

Physical-Realm: The Federal Circuit’s New Machine-or-Transformation

by Dennis Crouch

In Bilski v. Kappos, the Supreme Court issued three separate opinions — although all the justices agreed that physicality — machine-or-transformation — offers at least an important clue for deciding the issue.

  1. Five Justice majority opinion: “The machine-or-transformation test is not the sole test for deciding whether an invention is a patent-eligible ‘process.’ . . . [Rather, it is] just an important and useful clue.”
  2. Four Justice minority opinion: Arguing that a “business method” is not a “process” under Section 101, and that physicality “is a critical clue” for determining eligibility.
  3. Two Justice minority opinion: Explaining their view that only a “few patentable processes lie beyond” the machine-or-transformation test.

In InvestPic, LLC v. SAP America, Inc., No.  18-1199 (Supreme Court 2019), the question of physicality has been raised again. In that case, the patentee argues that the Federal Circuit has again recreated a physicality test for eligibility.

To reach [its conclusion of ineligibility], the Federal Circuit focused exclusively on whether the patent’s claims encompassed an invention in the “physical realm,” a requirement found nowhere in the Patent Act or this Court’s jurisprudence. The claimed novel process here
is a process that can only be performed by a computer; a human cannot perform the process. The Federal Circuit determined that the computer-executed invention does not touch the “physical realm” and therefore held it patent-ineligible.

With that basis, the patentee has asked the Supreme Court for its guidance on the following question:

Does the Federal Circuit’s “physical realm” test contravene the Patent Act and this Court’s precedent by categorically excluding otherwise patentable processes from patent eligibility?

Looking at the Federal Circuit’s decision in this case — it appears that the court has created a dichotomy with the world of ideas fitting into either (1) the physical realm or (2) the realm of abstract ideas.  The following excerpt from the Fed. Cir. decision is on point:

The claims in McRO were directed to the creation of something physical—namely, the display of “lip synchronization and facial expressions” of animated characters on screens for viewing by human eyes. . . . Similarly, in Thales Visionix Inc. v. United States, 850 F.3d 1343 (Fed. Cir. 2017), the improvement was in a physical tracking system. . . . Here, in contrast, the focus of the claims is not a physical-realm improvement but an improvement in wholly abstract ideas—the selection and mathematical analysis of information, followed by reporting or display of the results. . . . Some of the claims require various databases and processors, which are in the physical realm of things. But it is clear, from the claims themselves and the specification, that these limitations require no improved computer resources InvestPic claims to have invented, just already available computers, with their already available basic functions, to use as tools in executing the claimed process.

Note here, that the court did not give itself Bilski-style wiggle-room by suggesting that its physical-realm identity offered a “clue” to eligibility. Rather, the court held that the invention was not in the physical-realm (other than its use of computers) and therefore was abstract.  Now, to be clear, I believe that the InvestPic decision could be interpreted a different way. However, the easiest reading of the case is that the court meant what it said – the claim is directed either to something abstract or something physical.

In addition to the Bilski analogy above, this case here also runs parallel to Vanda where the court created the if-then rule that treatment claims are eligible.  The petition here also provides a list of Federal Circuit cases that the patentee identifies as not grounded in precedent:

  • Intellectual Ventures I LLC v. Capital One Bank, 792 F.3d 1363 (Fed. Cir. 2015) (using a § 101 analysis as a proxy for the independent § 112 inquiry);
  • Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016) (looking to whether a software program improves computer capabilities);
  • Exergen Corp. v. Kaz USA, Inc., 725 F. App’x 959, 966 (Fed. Cir. 2018) (finding a patent eligible in part because it took “years and millions of dollars” to invent).

The problem for the patentee in this case are the claims themselves.  Claim 1 of U.S. Patent 6,349,291 (as modified by reexamination and certificates of correction) reads as follows:

A method for calculating, analyzing, and displaying investment data comprising the steps of:

(a) selecting a sample space, wherein the sample space includes at least one investment data sample;

(b) generating a distribution function using a re-sampled statistical method and a bias parameter, wherein the bias parameter determines a degree of randomness in sample selection in a resampling process; and

(c) generating a plot of the distribution function.

The idea here is good — use a bootstrapping method to determine an appropriate predictive distribution of investment data rather than rely upon a predetermined distribution (such as the normal distribution).  However, the abstract idea analysis here could look a lot like it did in Bilski.

[Read the Petition Here]


Supreme Court Shows its Interest in New Eligibility Case

by Dennis Crouch

Hikma Pharmaceuticals USA Inc., et al. v. Vanda Pharmaceuticals Inc., No. 18-817 (Supreme Court 2019)

In this case, the Supreme Court has requested input from the U.S. Government — requesting the views of the U.S. Solicitor General (CVSG).  The SG’s office will likely submit its brief in December 2019 — so we have a nice wait on this question presented:

The question presented is whether patents that claim a method of medically treating a patient automatically satisfy Section 101 of the Patent Act, even if they apply a natural law using only routine and conventional steps.

Although Hikma did not declare all method-of-treatment claims automatically patent eligible. It appears that the court has doubled-down in Natural Alternatives Int’l. Inc. v. Creative Compounds, LLC (Fed. Cir. 2019) (“These are treatment claims and as such they are patent eligible.”).

The court is also awaiting the views of the SG in HP v. Berkheimer on the question of the extent that eligibility is based upon a questions of fact. Berkheimer has become standard Federal Circuit law — as the court explained recently in Natural Alternatives: “Eligibility under § 101 is a question of law based on underlying facts.”

Broadened Claims and Written Description

by Dennis Crouch

Sprint Communications Co., L.P. v. Time Warner Cable, Inc. (Fed. Cir. 2019) (Modified Opinion)(Original Opinion)

In its original decision in the case, a 2-1 appellate panel upheld a jury’s $140 million verdict in favor of the patent holder Sprint.  Time Warner petitioned for rehearing on two grounds: (1) damages apportionment; and (2) written description requirement. In response, the appellate panel has slightly modified its original opinion — but only to better explain its damages decision. As such, the $140 million verdict remains.

On apportionment, Time-Warner argues that the jury was able to rely upon a prior-verdict for damages calculation that did not correctly perform any apportionment to account for the unclaimed portions of its VoIP technology.  In the revised opinion here, the court explained its position:

  1. The “Georgia-Pacific factors, under proper instructions embody[] apportionment principles.”
  2. Here, Sprint’s expert did address apportionment and told the jury that damages should be attributed only to “incremental profits are attributable to the patents in suit.”  Further, the jury instructions indicated that damages should be based upon the value added by the patented features.
  3. Finally, the court noted that Sprint did not propose alternative jury instructions.

Written Description: The divide between the majority opinion (Judges Bryson and Chen) and the Dissent (Judge Mayer) is based upon the second issue — written description.

The Patent Act requires a “written description of the invention, and of the manner and process of making and using it.” 35 U.S.C. 112(a).  Judge Mayer concluded in dissent that description in the specification does not support the full-breadth of the asserted claims.

Here, the accused infringing systems are Voice-over-Internet-Protocol (VoIP) systems. The claims are not directed to internet protocol (IP) but rather use the broader category of “packet communication.”  Why not claim IP?: the original specification does not mention internet protocol but instead is directed toward a separate packet-communication form known as asynchronous transfer mode (ATM).  ATM was popular legacy telecommunications systems, but is being largely replaced by IP.  Although ATM and IP both involve packet communications, they are quite different in how they work.  For instance, ATM creates a virtual circuit / fixed call path while IP does not.

For Judge Mayer, the bulk of the specification is focused on the virtual circuits with no disclosure of other packet networks. He concludes that “the specification’s disclosure makes sense only in the context of ATM technology.”  As such, the claims that cover non-ATM IP-switching are not supported by the written description.

The majority disagreed with Judge Mayer and found sufficient support (giving deference to the jury’s implicit fact finding).  In its analysis, the majority first noted that IP technology “is not expressly excluded” by the specification and that the specification is not expressly limited to ATM:

[T]he specification refers to “[b]roadband systems, such as Asynchronous Transfer Mode (ATM),” a formulation that strongly suggests that the patents are not limited to ATM technology.

In addition, Sprint presented evidence that a person of skill in the art would understand the disclosure to — especially the term “broadband” — to include IP.

For the majority, the evidence here was enough to allow the patent to remain valid.  Even if the result is uncomfortable, it is easier to see after considering the level of deference.  The court should only overturn the jury verdict if the only reasonable conclusion is that invalidity was proven with clear and convincing evidence.

The invention here is a treatment claim — that is therefore patent eligible. 

by Dennis Crouch

The decision here is an important case adding substantial nuance to the product and law of nature exceptions.

Natural Alternatives Int’l. Inc. v. Creative Compounds, LLC (Fed. Cir. 2019)

Earlier this week I wrote about a separate Natural Alternatives reexamination appeal pending before the US Supreme Court on the issue of improper priority claims.

The case at hand focuses on patent eligibility.  Natural Alternatives sued Creative for infringing six of its patents covering various forms of the naturally-occurring compound beta-alanine and its use as a muscle-building supplement.  The district court dismissed the lawsuit on the pleadings for lack of eligibility — finding that the claims were directed toward a product of nature (beta-alanine) and a law of nature (that taking beta-alanine in sufficient quantities builds muscle).

On appeal the Federal Circuit has sided with the patentee.  In an opinion written by Judge Moore and joined by Judge Wallach, the court explained that we shouldn’t take the law-of-nature prohibition too far since “[w]e live in the natural world, and all inventions are constrained by the laws of nature.”

The decision here adds an important nuance to Vanda and CellzDirect.  In particular, the court explains that an important clue of eligibility for treatment claims is whether “homeostasis is overcome” in a way that leads to “specific physiological benefits.” This physiological impact tells us that the invention here is a treatment claim — that is therefore patent eligible.

The claims … they require that an infringer actually administer the dosage form claimed in the manner claimed, altering the athlete’s physiology to provide the described benefits. These are treatment claims and as such they are patent eligible.

One element of this case that could be distinguished from ordinary treatment claims is that the purpose of taking beta-alanine is to alter the body’s operation away from normal whereas most drug treatments are in pursuit of normalcy.

The court considered the fact that beta-alanine occurs in nature and is very longstanding part of the human diet. In the end, however, the court found that the law “expressly permits patenting a new use of an existing product.”  Here, the patentee argues that “the quantities being administered” do not exist in nature.

At this point in the analysis, claim construction became important.  At the pleadings stage, the district court agreed to follow the patentee’s proposed construction that would require that the dosage “elevate beta-alanine above natural levels to cause an increase in the synthesis of beta-alanylhistidine in the tissue.”

Looking at the product claims, the following claim is perhaps the broadest:

1. A human dietary supplement, comprising a beta-alanine in a unit dosage of between about 0.4 grams to 16 grams, wherein the supplement provides a unit dosage of beta-alanine.

In similar fashion to the method claims, the district court followed the patentee’s claim construction that a “human dietary supplement” should be construed as excluding “natural or conventional food” that “is manufactured.”

Although the appellate court found the claims ineligible even under this construction, the appellate panel sided with the patentee — finding that the not-natural and manufacture construed limitations sufficient to take the patents outside of the law of nature and product of nature exceptions.

Although beta-alanine is a natural product, the Product Claims are not directed to beta-alanine. A claim to a manufacture or composition of matter made from a natural product is not directed to the natural product where it has different characteristics and “the potential for significant utility.” See Diamond v. Chakrabarty, 447 U.S. 303, 310 (1980).

Judge Reyna wrote in dissent — arguing that the majority’s eligibility analysis relied upon a faulty claim construction “that improperly imports limitations into the claims and is contradicted by the written description.”

Claims are Invalid (not Patents)

Sophos, Inc. v. RPost Holdings (Fed. Cir. 2019) (RmailSophos)

The two paragraph decision in this case is designed to serve as a reminder that patent validity/infringement is considered on a claim-by-claim basis.

RPost sued Sophos alleging infringement its U.S. Patent No. 8,504,628.  However, during the litigation RPost filed infringement contentions that focused only on claims 14, 19, 24, 26, 27 and 30.  In its invalidity argument, Sophos directed its attention only to these asserted claims.  However, the district court wrote more broadly “that the ‘628 patent is invalid.”

On appeal, the Federal Circuit has affirmed the summary judgment of invalidity with the caveat that the district court’s opinion should be limited only to the asserted claims.

We agree that the asserted claims are anticipated by Dickinson and affirm the invalidity of the asserted claims on that basis. However, the district court’s Memorandum and Order granting summary judgment contained language suggesting that all claims of the ’628 patent are invalid. See J.A. 42 (“[T]he Court concludes that the ’628 patent is invalid.”) The parties agree that the district court’s judgment of invalidity must be limited to the asserted claims. Accordingly,


1. The judgment of invalidity of claims 14, 19, 24, 26, 27 and 30 of the ’628 patent is affirmed.

2. The case is remanded for the district court to revise its judgment to clarify that the declaration of invalidity is limited to claims 14, 19, 24, 26, 27, and 30 of the ’628 patent.

In this particular case, the patent challenger Sophos agreed that they had only challenged the asserted claims. Thus, this decision cannot be seen as creating any strict limit on challenging claims not pursued in the infringement contentions.

Boalick and Bonilla appointed as PTAB Chief and Deputy Chief

Congratulations to Scott Boalick and Jacqueline Bonilla for their appointments as Chief Judge and Deputy Chief Judge for the Patent Trial and Appeal Board. Judges Boalick and Bonilla have already been doing the work since September 2018 in their roles as Acting Chief and Deputy Chief.  Earlier this year, Dir. Iancu also appointed Thomas Krause as USPTO Solicitor.  These three individuals are each highly qualified with deep intellectual property and government experience.

These appointments round-out Dir. Iancu’s top staff so that all leadership team members are in permanent positions rather than temporary “acting” appointments.

Supreme Court Patent Rundown

by Dennis Crouch

Two patent cases are pending before the Supreme Court on their merits:

  • Return Mail, Inc. v. United States Postal Service, No. 17-1594 (Can a US Gov’t entity petition for AIA review?)
  • Iancu v. NantKwest, Inc., No. 18-801 (Are attorney fees automatically shifted in Section 145 Civil action to obtain patent?)

Neither of these cases address core patent law issues and so their outcome will have little impact on patent law practice.

The Court has indicated some interest in four additional cases — requesting the views of the Solicitor General in those cases:

  • RPX Corporation v. ChanBond LLC, No. 17-1686 (What level of injury-in-fact is required to appeal of a PTAB IPR final decision?)
  • Ariosa Diagnostics, Inc. v. Illumina, Inc., No. 18-109 (What is the prior art date for unclaimed disclosures in provisional filing?)
  • Texas Advanced Optoelectronic Solutions, Inc. v. Renesas Electronics America, Inc., fka Intersil Corporation, No. 18-600 (Is an “offer to sell” infringement as of the date of the offer or the date of the proposed sale?)
  • HP Inc., fka Hewlett-Packard Company v. Berkheimer, No. 18-415 (Should patent eligibility be treated as a pure question of law?)

These four are the most likely cases to be heard by the court. However, the Solicitor General often takes a full-year to file a brief — meaning that the certiorari question may well be pending until the September 2019.

One additional case can be seen as a follow-on to the RPX standing-to-appeal question:

  • JTEKT Corporation v. GKN Automotive Ltd., No. 18-750 (direct competitor but no injury-in-fact sufficient to provide appellate jurisdiction)

Note here that JTEKT adds the nuance of being a direct competitor while RPX is ostensibly not a competitor.

In addition to the standing question, several pending petitions also address the scope and review of time-bar decisions under Section 315(b)(“An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.”)

  • RPX Corporation v. Applications in Internet Time, LLC, No. 18-1075 (May a PTO 315(b) time-bar decision be appealed — or is it subject to the 314(d) “no appeal” rule?)
  • Dex Media, Inc. v. Click-To-Call Technologies, LP, et al., No. 18-916 (Is the 315(d) time-bar triggered by prior lawsuits dismissed without prejudice?)
  • Atlanta Gas Light Company v. Bennett Regulator Guards, Inc., No. 18-999 (same)
  • Superior Communications, Inc. v. Voltstar Technologies, Inc., No. 18-1027 (same)

The final pending petition regarding PTAB reviewability focuses on sovereign immunity:

  • Saint Regis Mohawk Tribe. et al. v. Mylan Pharmaceuticals, Inc., et al., No. 18-899 (May tribal sovereign immunity may be asserted to bar IPR review of patents owned by the tribe?)

I mentioned the Berkheimer eligibility case above. An important follow-on case is TS Patents.

  • TS Patents LLC v. Yahoo! Inc., No. 18-1114 (Is a R. 12(b)(6) dismissal for lack of eligibility appropriate when the complaint and patent both assert novel technical improvements?)

An additional eligibility cases goes to the core of the Supreme Court’s eligibility analysis and asks whether method-of-treatment claims are always patent eligible?

  • Hikma Pharmaceuticals USA Inc., et al. v. Vanda Pharmaceuticals Inc., No. 18-817 (presumptive eligibility of method-of-treatment claims)

Two final pending cases have to do with defining prior art and priority:

  • Macor v. United States Patent and Trademark Office, No. 18-1072 (What is the standard for determining whether prior art is “analogous”?)
  • Natural Alternatives International, Inc. v. Iancu, No. 18-1144 (Do amendments to a filing relied upon for priority impact the already-claimed priority?)

Overall, this is an interesting group of cases that address a set of important questions. Unfortunately, the two least impactful cases are the ones the court has agreed to hear.

Ex Post Breaks in the Chain of Priority

by Dennis Crouch

Patent families generally require a chain of copendency.  A later filed application may claim the same priority of an earlier-filed application so long as the later is filed while the earlier is still pending (not yet patented, abandoned, or otherwise terminated).  This pending Supreme Court petition focuses on the situation where the earlier-filed application is amended to alter its priority claim — and asks What happens to the later-filed application’s priority claim.

Natural Alternatives v. Iancu (Supreme Court 2019)

I have been following the Natural Alternatives cases for the past several years.  Natural’s patents cover a dietary supplement containing free beta-alanine.

1. A human dietary supplement comprising … beta-alanine [or amide thereof] that is not part of a dipeptide, polypeptide or oligopeptide.

U.S. Patent No. 8,067,381.

The particular issue in the pending petition here focuses on priority claims.

When is priority established for a patent application under the Trade-Related Aspects of Intellectual Property Rights (TRIPs) so that a Patent Owner can change priority in one application without affecting the priority of applications that have already established priority?

In this case, the patent at issue is the eighth in a long series of U.S. patent applications claiming priority back to an original UK application. For each patent in the chain, a new application was filed just before the prior patent’s issuance.  In each instance, the new application also included a claim to priority to all of the prior applications in the chain.

However, just before the fifth application issued, its priority claim was amended to “delete its claim of benefit from the fourth through first applications in the series back to the 1996 British application’s filing date and, instead, claimed benefit solely of a provisional application filed in 2003.”  Thus, for the fifth application, the applicant gave up the 1996 filing date in favor of the 2003 date — with the result of extending the 20-year timeline.  The problem for the patentee here is that the reduced priority claim in the fifth application also limited the chain of priority for the sixth, seventh, and eighth patent.

In a reexamination, the USPTO rejected the eighth patent after finding that the first patent in the series counts as prior art.  That holding was affirmed by the Federal Circuit.  To be clear, although the sixth application correctly established priority when filed, the priority claim of the sixth was undermined when the prior-filed application (the fifth) was amended.

In its petition, the patentee argues that this “nunc pro tunc” result is improper.

The Federal Circuit’s holding means this disclaimer occurs even when the later-filed application was filed before the priority claim was disclaimed. This departure from the normal tenets of property law is illogical.

The traditional property law law discussed here is the “vesting” of the priority claim — that the patentee argues occurs as soon as it is properly claimed.

This is an interesting decision here that should certainly offer pause to anyone considering priority-claim schemes.

Appellate Standing, Biosimilars, and the Federal Circuit

Guest post by Jonathan Stroud (Unified Patents) and Saurabh Vishnubhakat (Texas A&M Law). 

After a long wait, the Federal Circuit last month decided Momenta Pharms. v. Bristol-Myers Squibb Co. (Fed. Cir. 2019), dismissing Momenta’s appeal of an adverse PTAB decision based on standing and mootness concerns.  (The PTAB had instituted Momenta’s petition for inter partes review of Bristol-Myers Squibb’s patent on certain formulations of an immunosuppressive agent, but ultimately sustained the patentability of all the challenged claims.  Momenta, a biosimilar applicant, had sought inter partes review preemptively, with no prior infringement suit by BMS.)  The Federal Circuit’s conclusion that Momenta lacked Article III standing has important implications for access to appeals in unsuccessful PTAB challenges.

Building on Professor Crouch’s initial analysis of the Momenta decision, we explore the Federal Circuit’s developing case law on what counts as an adequate injury for a petitioner to have appellate standing from a PTAB decision.  Of particular interest is the persistent ambiguity about how potential future patent infringement and the PTAB estoppel provisions of the AIA affect standing to appeal.

The Stakes of Appellate Standing

Article III standing applied on appeal has always imposed an asymmetric burden on the system for administrative patent revocation.  Patent owners who appeal can almost always show the requisite injury for standing in the form of adverse effects on some or all of their patent rights.  Unsuccessful petitioners, meanwhile, may not be able to show enough injury through potential patent infringement.  Ironically, this especially true of those very parties who benefit the most at the margins from having access to administrative review—precisely because they could not otherwise have established standing to seek declaratory relief in federal court.

In effect, the more proactive and preemptive a challenge might be, the less likely that party is to be able to prove standing on appeal, adding another reason not to act until after litigation has begun.  The asymmetry of this burden is especially salient in domains like pharmaceutical drugs and biosimilars, where the incentive to test the validity of patents has important social consequences, and the complexities of those decades-long disputes create fact patterns that can be difficult to unpack.

The Momenta Appeal

At the time of its 2015 petition for inter partes review, Momenta was working with Mylan to develop a biosimilar counterpart to Orencia®, the branded biologic drug whose active ingredient was covered by the BMS patent.  Momenta’s plan was to enter the market as a biosimilar applicant under the Biologics Price Competition Act of 2009 (more detail here), which provides a pathway to generic competition for complex biologic drugs akin to the “Hatch-Waxman” Act provisions that govern small-molecule generic drug approval.  Momenta first sought inter partes review of the ‘239 patent covering a formulation of Orencia®.

Unsuccessful in inter partes review, Momenta appealed the decision in early 2017.  One major issue in the case (which one of us has discussed here in greater detail) was whether Momenta, who had no active district court litigation against BMS and had faced no direct threats of infringement and had not yet manufactured a competing product, had standing to maintain its appeal.

Momenta argued in briefing and at oral argument that the inter partes review was akin to an expensive “freedom-to-operate” action that resulted in immediate harm, presenting a “fork in the road” in its development process.  Momenta concluded that losing the ability to appeal would force it to abandon its research efforts and leave millions of dollars wasted.  BMS replied that any such harm was speculative and that the case law does not support Momenta’s standing.

In late 2018, almost a year after the oral argument concluded—but shortly before the Federal Circuit issued its opinion last month—Momenta sent a letter notifying the court that Momenta had initiated a conversation with Mylan “to exit [Momenta’s] participation in the development of M834, a proposed biosimilar of ORENCIA®.”  Thus, Momenta no longer had the same interest in the appeal.  BMS pushed to have the case dismissed as moot, though Momenta countered in a series of further letters that it still had a stake in the case and standing to appeal, noting that “[t]he concreteness of that stake is bolstered by the estoppel provision [of 35 U.S.C. § 315(e)], which the Board’s adverse decision already triggered.”

The Federal Circuit held that the case was largely moot given those recent developments, and dismissed the appeal.  As one of us wrote recently, this case “shows the difficult position the court and parties are put in when standing is raised based on proactive business decisions revolving around patent challenges, and also demonstrates how principles of mootness and ripeness bleed into the standing inquiry easily.”

The Potential for Infringement as an Injury

For five years now, the Federal Circuit has been actively exploring the boundaries of Article III standing on appeal from administrative action.  For instance, in 2014 in the inter partes reexamination context, the court in Consumer Watchdog v. Wis. Alumni Research Found. explained that appeals based on vague public interest concerns in invalidating the patent, without a particularized or personal injury, is not enough. There, WARF had obtained a patent related to human embryotic stem cell cultures, and Consumer Watchdog challenged the patent as ineligible subject matter.

On appeal, however, Consumer Watchdog framed its argument in terms that the patent helped “loot taxpayer funds and force research overseas” and that a challenge benefited the public at large.  As the party “seeking to invoke federal jurisdiction,” Consumer Watchdog bore the burden of establishing Article III standing, which included proving that it suffered an “injury in fact.”  The court found it had not alleged facts sufficient to demonstrate such an injury.

In the 2017 Phigenix v. Immunogen case, Phigenix filed an inter partes review but failed.  On appeal, Phigenix alleged harm apart from the threat of direct patent infringement—namely, that the existence of the patent was preventing others from taking a license to patents owned by Phigenix.  This blocking effect, the argument went, caused economic harm that is cognizable in standing.  The court allowed that alternative forms of economic harm were permissible and accepted the legal framework, but ultimately held that Phigenix had failed to meet its burden.

The court suggested that arguing possible or speculative future economic interest based on conclusory expert declarant testimony was not necessarily enough.  The Phigenix decision also laid out the burdens of production and persuasion for appellate standing, suggesting that the requirements apply only to the party seeking to invoke the court’s jurisdiction: the appellant.  It also allowed that such evidence can be produced for the first time on appeal.

On the other hand, in the nonprecedential PPG Industries v. Valspar Sourcing, the Federal Circuit found sufficient economic harm to establish standing on appeal from inter partes reexaminations.  The PPG opinion held that PPG’s launched product and customer inquiries suggested a concrete stake in the outcome and noted that “[t]his stake is enhanced by the ‘estoppel provisions contained within the inter partes reexamination statute.’”

As for standing arguments related to infringement potential itself, the Federal Circuit JTEKT v. GKN Automotive has explained that there may be certain situations in which a PTAB petitioner has no infringing product on the market at the relevant time but may still be able to show Article III standing.  However, in such situations, the petitioner must establish “concrete plans for future activity that creates a substantial risk of future infringement.”  On that case’s own facts, JTEKT had sold no infringing goods, had not finalized its product design, and had not shown any concrete plans for future activity that would run afoul of GKN’s patent rights.  The court similarly concluded in RPX v. ChanBond that petitioner RPX was not engaged in any activity that even potentially infringed the patent being challenged.  This necessary specificity of future plans means that PTAB challenges even from direct market competitors may ultimately lack standing to support an appeal.

For direct competitors, however, standing to appeal may still be available where the parties are engaged in a live commercial dispute presenting a “significant risk” of infringement based on “significant involvement in research and commercial activities” involving the subject matter of the patent.  As the Federal Circuit held in DuPont v. Synvina, evidence showing that the petitioner in that case had an operating facility capable of infringing a method of manufacture  was enough to confer standing.

Understood in this context, Momenta is a dispute in which the patent challenger was engaged in likely-infringing activity at the outset, but lost its direct stake through an “intervening abandonment of the controversy” by ending its collaboration with Mylan on an Orencia® biosimilar.  The case is notable both for its high stakes on appeal and the fact that the biosimilar applicant was clearly engaged in an expensive, years-long dispute over a billion-dollar biologic product.

Although Momenta may still be able to receive royalties on any relevant biosimilar that Mylan may later develop, the court found this to be the sort of speculative future economic interest that proved inadequate in Phigenix.  As in ChanBond, the lack of any current activity that might potentially infringe undermined Momenta’s argument for revived standing, and the lack of any concrete plans going forward meant that the safety valves of JTEKT or DuPont were of little help.  In the end, the Momenta decision dodged the more contentious issue of just how much investment, how much potential for future infringement, and how much certainty there must be about that future harm, are ultimately enough to confer Article III standing.

Estoppel as an Injury

Throughout most of these cases, there has also been a thread of discussion about whether the strong statutory estoppel of 35 U.S.C. § 315(e), applied after the final written decision issues in an inter partes review, constitutes an independent injury capable of sustaining standing.  It is unclear whether the presence of estoppel “bolsters” or supports a finding of injury or is simply irrelevant.  The court seems to have entertained the middle road in Momenta, never finding that estoppel alone could constitute injury, but with appellants arguing that it supports their overall arguments about the existence of a genuine Article III case or controversy.

The “petitioner” estoppel of § 315(e) estoppel has two prongs.  One applies back to the PTAB itself; the other, to outside forums.  The plain language of the statute bars the maintenance of either another PTAB proceeding or an argument in a federal-court or ITC action that a patent is invalid based on any ground that was actually raised or reasonably could have been raised in the initial inter partes review.  Moreover, estoppel applies not only to the petitioner but also to their real parties in interest and privies.

Running through the various opinions on standing is an argument that the legal detriment of estoppel is at least a factor in, if not a deciding vote for, finding standing on appeal.

In Altaire Pharms. v. Paragon Bioteck, a case where the court found standing in a post-grant review, the court pointed to estoppel as compounding the harm.  As previously noted, the court found in the non-precedential PPG Industries case that the petitioner’s “stake is enhanced by the ‘estoppel provisions contained within the inter partes reexamination statute.’” And in Momenta, the appellant argued that that “[t]he concreteness of that stake is bolstered by the estoppel provision, which the Board’s adverse decision already triggered,” citing 35 U.S.C. § 315(e).

In JTEKT, on the other hand, the panel rejected appellant’s argument that inter partes review estoppel constituted a separate injury in fact, an issue the appellant there has raised in a petition for certiorari to the Supreme Court.  RPX Corp. argued something similar in their opposition to the motion to dismiss their appeal, and have likewise made that argument the basis of a petition for certiorari, which, it should be noted, has drawn a “call for the views of the Solicitor General” from the high Court.

These arguments appear to be grounded in Justice Kennedy’s concurrence in Lujan, where he noted that “Congress has the power to define injuries and articulate chains of causation that will give rise to a case or controversy where none existed before.”  But few actual cases exist holding that a statute itself creates standing, and it seems clear that the Federal Circuit, at least, is unconvinced that this argument holds water, certiorari petitions or no.

The Federal Circuit’s conclusion in Momenta that estoppel cannot constitute an injury-in-fact when Momenta “is not engaged in any activity that would give rise to a possible infringement suit” is potentially far-reaching.  Standing to appeal depends on whether there is adequate injury-in-fact at the time of appeal—but estoppel, of course, lasts indefinitely.  This is a significant disparity for petitioners, one that doubles down on the asymmetric burden that petitioners already face with regard to Article III standing.

Implications for Biosimilars

Although the opinion did not address it, it is noteworthy that Orencia® is listed in the Purple Book, which identifies what biological products the FDA has determined to be “biosimilar to or interchangeable with a reference biological product.”  In another PTAB appeal decided just a few weeks prior to Momenta, the Federal Circuit in Amerigen Pharms. v. UCB Pharma (Fed. Cir. 2019) held that the listing of a patent in the FDA Orange Book (a Paragraph III certification) can constitute an injury sufficient to support Article III standing.

Accordingly, appellants confronted with administrative challenges prior to open district court litigation may be left scratching their heads and wondering just when standing kicks in and whether it continues through the life of any given appeal.  That makes challenging biologics patents especially fraught with uncertainty.  It also pushes would-be PTAB petitioners toward later or more reactive filing of inter partes review petitions rather than early filing of post-grant review or inter partes review challenges prior to a district court litigation.  Given the complex regulatory schemes at work, it seems likely that these parallel proceedings will even further complicate ANDA and ABLA-related litigation and the related approval processes rather than streamline them.


We conclude that the Momenta decision has ultimately done little to ease concerns about who does and does not have standing to appeal.  It is an important development in the ongoing evolution of Article III standing for appeals from PTAB trials, to be sure, as well as an informative survey of the relevant case law.  Still, it may have created further confusion by injecting the issue of mootness into the debate.  While courts have no control over the parties’ positions or the status of any particular appeal, the Federal Circuit’s decision making seems to reflect some discomfort with taking evidence on appeal in the first instance—as, for example, the D.C. Circuit does.  This reluctance has led to longer briefing schedules and more complicated and uncertain appellate fact patterns.  The weight of that uncertainty ultimately falls upon the parties and Federal Circuit panels themselves.

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Prof. Saurabh Vishnubhakat is an Associate Professor at the Texas A&M University School of Law and the Texas A&M Dwight Look College of Engineering, and is a former USPTO advisor.  Mr. Jonathan Stroud is Chief Intellectual Property Counsel at Unified Patents Inc., an Adjunct Professor at American University Washington College of Law, and a former USPTO examiner.  The arguments presented here are the authors’ and should not be imputed to Unified Patents, the USPTO, or to any other organization.

Presumption of Nexus or “Presumptions All the Way Down”

by Dennis Crouch

Xactware Solutions, Inc. v. Eagle View Techs., Inc. (Fed. Cir. 2019)

Both of these companies use drones to measure houses — their reports are then used for roofing, solar, and insurance estimates. In 2015, Eagle View sued Xactware for patent infringement — that case is ongoing.  Meanwhile, Xactware filed a series of inter partes review petitions – the subject of the appeal here.

For its part, the PTAB agreed to hear the IPRs — finding initially that the petitions had merit.  Ultimately, however, the PTAB sided with the patentee and found in its final decision that the challenged claims were not proven invalid. On appeal, the Federal Circuit has also affirmed.

Nexus between Secondary Indicia and the Claimed Invention:  The briefing focused on Eagle View’s secondary indicia of non-obviousness.  The service is clearly commercially successful and has been lauded with industry praise for solving solving a long-recognized problem.  Xactware argued, however, that these secondary indicia did not have a close enough nexus with the particular inventions claimed in the patents.  Without discussion, the Federal Circuit concluded that the Board’s finding of nexus was supported by substantial evidence.

Presumption of Nexus. The court did not touch the trickier question of presumption-of-nexus.

Patent claims are presumed patentable and non-obvious.  Thus, any obviousness challenge must present evidence sufficient to overcome that presumption.  Secondary indicia of nonobviousness are akin to rebuttal evidence — only needed if the challenger meets that initial prima facie burden.

Secondary indicia of non-obvousness involve two important elements (1) the indicia itself (such as commercial success or industry praise of a product); and (2) a nexus between the indicia and the claimed invention at issue.  This second element – nexus – is generally more difficult to actually prove.  However, the Federal Circuit has created a presumption-of-nexus doctrine.  We assume a nexus if the patentee shows that the successful/praised product (1) “embodies the claimed features” and (2) is “coextensive with the claimed features.” Brown & Williamson Tobacco Corp. v. Philip Morris Inc., 229 F.3d 1120, 1130 (Fed. Cir. 2000).  Here, the “coextensive” requirement prevents presumption-of-nexus when the claimed invention is just a small component of a multi-component product. However, we have an ongoing debate on how to know when a product has too-many non-claimed-features to still be coextensive with the claims.

Although the parties asked for further guidance on this issue, the Federal Circuit ruled that no determination on presumption-of-nexus was necessary because the patentee had provided actual proof of nexus — that the claimed features were the cause of the success/praise/etc.

= = = = =

Of note, the first result of my Google search for “xactware” is an advertisement for EagleView. I am amused but not confused. See Eric Goldman, Another Court Says Competitive Keyword Advertising Doesn’t Cause Confusion, Technology & Marketing Law Blog (2018).

Sleepy decision by the PTAB

In Ex parte Alder (Appeal No. 2017-4809) (PTAB 2019), the PTAB recently found the claimed “snoring detection device” ineligble as directed to the abstract idea of “detecting snoring.”

1. A snoring detection device comprising:

a sensor configured to detect sounds during a breathing cycle; and

a processor configured to: [1] detect a noise level during an inspiration phase of the breathing cycle with said sensor; [2] detect a noise level during an expiration phase of the breathing cycle with said sensor; [3] determine an occurrence of a snore based on a difference in the noise levels detected during inspiration and expiration, the difference comprising a subtraction of the noise level during expiration from the noise level during inspiration.

Alder.  This case followed the other recent PTAB decisions regarding the 2019 Eligibility Guidelines.  In particular, the decision recites elements of the guidelines but then makes no real effort to actually apply the guidelines to the case-at-hand. Rather, the decision follows the usual approach of drawing analogy to the various appellate and Supreme Court cases to find the closest thread.

[Updated to correct typo in name – Alder not Adler]

Supreme Court will hear Section 145 Attorney Fees Case

by Dennis Crouch

The Supreme Court has granted writ of certiori in Iancu v. NantKwest Inc. on the question:

Whether the phrase “[a]ll the expenses of the proceedings” in 35 U.S.C. § 145 encompasses the personnel expenses the United States Patent and Trademark Office incurs when its employees, including attorneys, defend the agency in Section 145 litigation.

When an examiner refuses to allow an applied-for patent, the applicant can appeal to the USPTO’s internal administrative board (PTAB). If still unsuccessful, the applicant then has a choice of either (1) filing a civil action in federal court or (2) appealing directly to the Court of Appeals for the Federal Circuit. 35 U.S.C. § 145.

The provision authorizing the civil action ends with the statement:

All the expenses of the proceedings shall be paid by the applicant.

In prior cases, the Federal Circuit has held that “all the expenses” means that applicant must pay the expenses win-or-lose, including the USPTO’s taxable costs.  Hyatt v. Kappos, 625 F.3d 1320 (Fed. Cir. 2010) (en banc). In NantKwest, the USPTO asked also for its attorney fees as part of “all the expenses.” (Note, the USPTO doesn’t hire outside attorneys to handle these, but it calculated its in-house attorney time and requested $100,000+).

The original NantKwest panel sided with the USPTO — holding that  “expenses” include USPTO attorney fees.  However, a 7-4 split of the en banc court changed direction and held that “expenses” does not include attorney fees.  In its decision, the Federal Circuit focused on the traditional presumptive “American rule” on attorney fees (each party pays for its own attorney fees) and found that the “all the expenses” language was not sufficiently “specific and explicit” to overcome the presumptive rule.

Petition Stage Briefing:

In a separate fees case, the Court today issued an opinion in Rimini Street Inc. v. Oracle USA Inc., holding that that the copyright act’s allowance of “full costs” only extends to traditional “taxable costs” and does not include, for instance, expert witness, e-discovery, or jury consultant fees.

Court: Pepcid Complete Generic Does not Provide “Immediate Relief” and Therefore Does not Infringe

by Dennis Crouch

This case provides an example of the all-elements-rule of infringement.  Here, the patentee failed to prove that the accused infringer each-and-every element of the claimed invention.  Here, the failed element was providing “immediate relief” after administration of the generic Pepcid Complete  

Brigham & Women’s Hospital, Inc., v. Perrigo Company (Fed. Cir. 2019) (non-precedential)

Brigham’s U.S. Patent 5,229,137 covers a method of treating heartburn using H2-blockers and antacids. Both ingredients were known in the art to provide relief with antacids having a immediate-but-fleeting action and  H2-blockers providing slower but sustained relief.  The invention here is to use both drugs at once and – surprise – the result is “immediate and sustained relief.”

The asserted claims are directed to a “method of providing immediate and sustained relief” by providing an effective amount of antacid and H2-blocker “for providing the human with immediate and sustained relief from pain, discomfort and/or symptoms associated with episodic heartburn.”  The claims go on to require that “the immediate and sustained relief” of the combined treatment must last longer “than when the human is orally treated with only the antacid” and must be more immediate “as when the human is orally treated with only the histamine H2 -receptor antagonist.”

The specification also particularly defines the term: “immediate and sustained relief:”

It means herein immediate, temporary and sustained relief which starts within about 5-10 minutes following ingestion of the active ingredients and continues and remains constant for at least about 4-6 hours after ingestion of the active ingredients.

Johnson & Johnson exclusively licensed the patent and listed it in the Orange Book listing for Pepcid Complete.  However, when Perrigo filed its generic ANDA and Paragraph IV certification, J&J chose not to file suit, but rather sued on a different listed patent and lost.  At that time, the ‘137 patent was also removed from from the FDA Orange Book listing. (I don’t know why).

In the present case, the Massachusetts jury sided with the patent holder — finding the patent enforceable and infringed and awarding $10 million in past damages (the patent expired in 2012).  However, in a post verdict decision the district court rejected the jury verdict — holding instead that no reasonable jury could have found infringement based upon the evidence presented.

Looking here at the infringement analysis, the patentee argued that the accused product included the same ingredients as Pepcid Complete, which is covered by the patent claims.  In this copy-cat situation, however, the decision maker has to be careful to focus on the patent claims, not simply compare the copied products.  Here, the district court considered the clinical evidence presented at trial and found that it “did not demonstrate that Pepcid Complete provided immediate relief from episodic heartburn.”  In particular, the evidence showed relief within 15 minutes, but not the 5-10 minutes required by the definition of immediate.

On appeal, the Federal Circuit has affirmed. Although the patentee presented evidence of very rapid change in esophageal pH after taking the drug (within 5-10 minutes), the court found that a change in esophageal pH does not directly correlate with immediate relief of episodic heartburn.

At most, the study suggests that Pepcid Complete might provide immediate and sustained relief; such speculative data, however, cannot sustain Brigham’s burden of proof.

A related study did show fairly-rapid action, but the shortest period measured was 15 minutes.

There is no dispute that adequate relief first measured at 15 minutes after administration is a parameter different from relief starting 5–10 minutes after administration. . . . As Studies 110 and 127 did not measure the result that Brigham claimed in the ’137 patent, we agree with the district court that they do not support the jury verdict. . . . Because only speculation supports Brigham’s contention that data showing adequate relief at 15 minutes implies that relief started within 5–10 minutes, it cannot sustain the jury verdict.

I’ll also note that the the inventor of the ‘137 patent (Wolfe) participated at trial as an expert witness.  Wolfe testified that he took the Perrigo product and that it worked on him within five to ten minutes.  On appeal, the Federal Circuit rejected that statement as “uncorroborated, conclusory, and interested testimony … insufficient to carry Brigham’s burden of proof and to sustain the jury verdict.”


Hikma Case Set for Supreme Court Consideration

by Dennis Crouch

Hikma Pharmaceuticals USA Inc. v. Vanda Pharmaceuticals Inc. (Supreme Court 2019)

Briefing is now complete in this important eligibility case pending before the Supreme Court. Hikma’s petition presents the following question:

Whether patents that claim a method of medically treating a patient automatically satisfy Section 101 of the Patent Act, even if they apply a natural law using only routine and conventional steps

Hickma’s question clearly mischaracterizes the Federal Circuit opinion – a common approach these days.  In its opposition brief, the patentee Vanda calls-out the intentional error:

Hikma’s Petition wrongly asserts that the Federal Circuit declared all method-of-treatment claims to be “automatically” patent-eligible under Section 101. . . [Hickma’s] Question is not presented by the decision
below or any other decision.

Although Hickma does a good job of nit-picking, the underlying reality is important — the Federal Circuit’s decision in Vanda is not easily reconciled with its Ariosa decision or the Supreme Court’s decision in Mayo v. Prometheus.  And, the Federal Circuit and USPTO have effectively green-lighted patents on methods of treatment that would be ineligible if recharacterized as methods of diagnosis or creating a treatment plan.

The amicus briefs in this case all focus on the same issue — arguing that the Federal Circuit’s Vanda decision conflicts with Mayo and Flook. The Law Prof brief explains:  “The Federal Circuit’s decision effectively overturns this court’s precedents, thwarts the proper development of patent eligibility law, and will lead to countless improperly issued patents.”  The Law Professor Brief was filed by Stanford’s IP Clinic – although neither Mark Lemley nor Lisa Larrimore Ouellette signed-on.  Professors Josh Sarnoff (DePaul) and Katherine Strandburg (NYU) substantially drafted the brief.  Top pharma-patent litigator Douglass Hochstetler (KelleyDrye) filed the AAM brief.

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In a previous post, I explained that Vanda’s drug dosage claims that have two basic steps:

  1. Determining whether a patient is likely a poor metabolizer of the drug iloperidone based upon DNA analysis (i.e., determine if the patient has has the CYP2D6 genotype)
  2. Administering iloperidone at a lower dose to predicted poor metabolizers in order to reduce the risk of “QTc prolongation” for poor metabolizers.

In the case, iloperidone was already known as a drug treatment and it was also known that some folks were poor metabolizers in a way that created the particular health risk and that a lower dosage is still effective for poor metabolizers (since the drug stays in the body longer).  A remaining problem solved by the inventors was how to predict who should get the low dosage.  The core discovery here is that a genetic difference substantially explains the risk.  The inventors made that important discovery and then implemented it with straightforward administration steps.  The question then is whether this approach is patent eligible.

No Sovereign Immunity for Patent-Asserting State University

by Dennis Crouch

University of Florida Research Foundation, Inc. v. General Electric Company (Fed. Cir. 2019)

UF’s asserted patent is titled “Managing Critical Care Physiologic Data Using Data Synthesis Technology.” U.S. Patent No. 7,062,251.  From the patent title, keen Patently-O readers will recognize a potential eligibility problem.  N.D.Fla. District Court Judge Mark Walker dismissed the case on a R.12(b)(6) motion without taking any evidence — finding the asserted claims ineligible as a matter of law. On appeal, the Federal Circuit has affirmed.

Sovereign Immunity: Before reaching the merits of the eligibility claim, the Federal Circuit first addressed Florida claim of Sovereign Immunity under the 11th Amendment of the U.S. Constitution.  In a prior decision, the PTAB refused to consider an inter partes review (IPR) challenge of the ‘251 patent based upon sovereign immunity grounds. IPR2016-01275 (note – this is a questionable decision under St. Regis Mohawk).

The 11th Amendment has been seen as quite strong — preventing the Federal Courts from hearing “any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.” U.S. Const. amend. XI.

The for UF here is Waiver — UF filed the infringement lawsuit against GE and GE raised invalidity as a defense.  The Federal Circuit has clear precedent that “a state waives its Eleventh Amendment immunity when it consents to federal court jurisdiction by voluntarily appearing in federal court.” Regents of the Univ. of N.M. v. Knight, 321 F.3d 1111 (Fed. Cir. 2003).  As the court explained in a prior case, “the Eleventh Amendment applies to suits ‘against’ a state, not suits by a state.” Regents of the Univ. of Cal. v. Eli Lilly & Co., 119 F.3d 1559, 1564–65 (Fed. Cir. 1997).

Eligibility as a Defense: As part of its holding, the court continued-on to explain that lack-of-eligibility is a proper defense:

Even if § 282 did not extend to a § 101 eligibility challenge, such a challenge would still be a defense to a claim
of infringement. [Since w]e and the Supreme Court have long treated § 101 eligibility as a “condition[] of patentability” alongside §§ 102 and 103.

An interesting aspect of the court’s explanation here is the two citations that it uses:

  • Versata Dev. Gr., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1330 (Fed. Cir. 2015) (“It would require a hyper-technical adherence to form rather than an understanding of substance to arrive at a conclusion that § 101 is not a ground available to test patents.”);
  • Aristocrat Techs. Austl. PTY Ltd. v. Int’l Game Tech., 543 F.3d 657, 661 (Fed. Cir. 2008) (“It has long been understood that the Patent Act sets out the conditions for patentability in three sections: sections 101, 102, and 103.”).

The “hyper-technical” admonishment of Versata can be juxtaposed to the hyper-technical holding in Aristocrat holding the improperly reviving an abandoned patent cannot be a defense in patent cases because it does not fall within Section 282. Id. (“The salient question, then, is whether improper revival is “made a defense” by title 35. We think that it is not.”)

Eligibility Analysis: Moving now to the merits, the court looked at representative claim 1 that is directed toward “a method of integrating physiologic treatment data” and that requires steps of :

  • receiving physiologic treatment data from at least two bedside machines;
  • converting [the] data from a machine specific format into a machine independent format within a [remote] device …;
  • performing [a] programmatic action involving [the] data; and
  • presenting results from said programmatic actions upon a bedside graphical user interface.

The court explained this method as automating pen-and-paper methods — i.e., “do it on a computer.”

This is a quintessential “do it on a computer” patent: it acknowledges that data from bedside machines was previously collected, analyzed, manipulated, and displayed manually, and it simply proposes doing so with a computer. We have held such claims are directed to abstract ideas. . . . That the automation can “result in life altering consequences,” is laudable, but it does not render it any less abstract.

In examining the patent, the court was unable to identify any specific technological improvements but rather the particular key features of the system are defined in functional terms.  Thus, in addition to being directed to an abstract idea, the claims also fail Alice step two as merely reciting “well-understood, routine, conventional activit[ies]. . . . Here, the claims do no ‘more than simply instruct the practitioner to implement the abstract idea . . . on a generic computer.’ Quoting Alice.

Invalidity Affirmed.

Google v. Oracle Filings Thus Far

Google LLC, Petitioner v. Oracle America, Inc., SCT Docket No. 18-956

Questions Presented:

  1. Whether copyright protection extends to a software interface.
  2. Whether, as the jury found, petitioner’s use of a software interface in the context of creating a new computer program constitutes fair use.

Party Documents (more…)

Why 65 Intellectual Property Scholars Filed an Amicus Curiae Brief in Support of Google’s Petition for Cert in the Oracle Case

Guest Post by Pamela Samuelson, Berkeley Law School.  Prof. Samuelson has been involved with digital copyright law for the past 35 years. She recently led an amicus effort pushing against the Federal Circuit’s enforcement of Copyrights on the method call names (API) for Java. – DC

[Read the Amicus Brief]

In January 2018, Google filed a petition to ask the U.S. Supreme Court to review two adverse rulings by the Court of Appeals for the Federal Circuit in the Oracle Am. Inc. v. Google Inc. case. The first was the Federal Circuit’s 2014 decision overturning a district court ruling that several thousand declarations that Google used for its Android platform, which it derived from 37 of 166 Java application program interface (API) packages, were unprotectable by copyright law. Although disagreeing with the lower court’s copyrightability analysis, the Federal Circuit remanded the case, saying that there was a triable issue of fact on Google’s fair use defense. In the spring of 2016, Google’s fair use defense prevailed before a jury. The second adverse ruling was the Federal Circuit’s decision that no reasonable jury could have found fair use. Google’s petition asks the Court to review both the copyrightability and fair use rulings. Oracle will be filing its brief opposing Supreme Court review later this spring. Amicus curiae (friend of the court) briefs, whether in support of Google’s petition or in support of neither party, were filed this week.

One of the amicus curiae briefs supporting Google’s petition on the copyrightability issue was co-authored by me and my Berkeley colleague Catherine Crump, who is the Director of the Samuelson Law, Technology and Public Policy clinic at Berkeley Law School. Although the Supreme Court denied Google’s previous petition seeking review of the Federal Circuit’s copyrightability ruling, our amicus brief on behalf of 65 scholars of intellectual property law has asked the Court to grant the petition because, as the brief explains, we

are alarmed that the Federal Circuit’s copyrightability ruling has deepened splits in circuit court interpretations of several major copyright doctrines as applied to computer programs. That ruling disrupted the relative equilibrium of more than two decades of software copyright precedents and upset settled expectations within the software industry. Th[e] Court’s guidance is urgently needed to address and resolve circuit conflicts affecting this $564 billion industry. [Our] sole interest in the case lies in [our] concern for the proper application of traditional principles of copyright law to computer programs. Because amici have devoted [our] careers to understanding the balancing principles built into copyright and other intellectual property laws, [our] views can aid the Court in resolving the important issues presented by the Petition.

While there is much that IP scholars will have to say on the merits if the Court grants the petition, our brief concentrates on numerous respects in which the Federal Circuit’s ruling is in conflict with Supreme Court and other appellate court rulings.

Before presenting the brief’s summary of our argument, it is worth noting that the district court gave three reasons for holding that the Java API declarations were unprotectable by copyright law: first, because they constituted an unprotectable method or system under 17 U.S.C. § 102(b), second, because the merger doctrine precluded copyright protection for the declarations as there was, in effect, no other way to say them, and third, because the declarations were unprotectable under the words and short phrases doctrine. The Federal Circuit rejected all three rationales in its copyrightability ruling.

While our brief focuses primarily on the merger issue because the Federal Circuit’s interpretation of that doctrine is so clearly contrary to Supreme Court as well as other appellate court precedents, it also identifies the proper application of § 102(b) method/system exclusion in software copyright cases as another cert-worthy question. In addition, the brief touches on the words and short phrases issue, albeit less extensively.

We reprint the Summary of Argument below. The entire brief is available from the Supreme Court’s website [LINK]

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The Federal Circuit’s copyrightability ruling in Oracle has deepened splits in circuit court interpretations of several major copyright doctrines as applied to computer programs.

This brief makes three principal points. First, the Federal Circuit’s merger analysis is in conflict with this Court’s ruling in Baker v. Selden, 101 U.S. 99 (1880), and decisions by the First, Second, Fifth, Sixth, and Eleventh Circuits. Second, the Federal Circuit’s interpretation of the scope of copyright protection available to computer programs is at odds with Baker and decisions of the First, Second, Tenth, and Eleventh Circuits. Third, the Federal Circuit’s interpretation of the words and short phrases doctrine cannot be reconciled with holdings of the Third and Sixth Circuits.

The merger doctrine holds that expressions in works of authorship are unprotectable by copyright law when, as a practical matter, there is only a limited number of ways to express an idea, fact, or function. When ideas, facts, or functions, in effect, “merge” with expression, copyright protection will be withheld from the merged elements. The merger doctrine fosters socially beneficial competition and ongoing innovation as well as promoting the ongoing progress of science and useful arts, as the Constitution commands. U.S. Const. art. I, § 8, cl. 8.

The Federal Circuit’s copyrightability ruling conflicts with Baker in three respects: first, because the Federal Circuit concluded that merger can only be found if a first author had no alternative ways to express an idea when creating the work; second, because it held that constraints on a second comer’s design choices are never relevant to merger; and third, because it ruled that merger is only a defense to infringement, and never raises a copyrightability issue.

Post-Baker cases from the First, Second, Fifth, Sixth, and Eleventh Circuits have conceptualized and applied the merger doctrine more broadly than the Federal Circuit. These idea/expression, fact/expression, and function/expression merger cases have resulted in uncopyrightability rulings, which contradict the Federal Circuit’s holding on merger.

Beyond merger, the Federal Circuit’s interpretation of the scope of copyright protection available to software innovations conflicts with the rulings of other circuits in four respects. First, the Federal Circuit’s interpretation of the exclusion of methods and systems from copyright’s scope under 17 U.S.C. § 102(b) is contrary to the First Circuit’s interpretation in Lotus Development Corp. v. Borland International, Inc., 49 F.3d 807 (1st Cir. 1995), aff’d by an equally divided Court, 516 U.S. 233 (1996). Second, several circuit courts have ruled in favor of compatibility defenses in software copyright cases. Only the Third and Federal Circuits have rejected them. Third, the Federal Circuit’s conception of “structure, sequence, and organization” (SSO) of programs as protectable expression as long as it embodies a modicum of creativity conflicts with the Second Circuit’s landmark decision, Computer Associates International, Inc. v. Altai, Inc., 982 F.2d 693 (2d Cir. 1992). Altai rejected the conception of SSO as determinative of protectable expression. Id. at 706. Fourth, the Federal Circuit’s assertion that copyright and utility patents can provide overlapping protection to program SSO is in conflict with Baker as well as Tenth and Eleventh Circuit decisions.

There is, moreover, conflict among the circuits concerning the protectability of “words and short phrases.” The District Court denied Oracle’s claim in part based on its view that names and short phrases are not copyrightable, but the Federal Circuit held that words and short phrases, such as the names of individual Java declarations, could, if original, be eligible for copyright protection. However, the Third and Sixth Circuits have denied similar claims in cases involving identifiers such as names and numbers. Granting the Petition would enable this Court to resolve this split as well.