Guest post by Peter S. Menell, Koret Professor of Law; Director, Berkeley Center for Law & Technology; Faculty Director, Berkeley Judicial Institute; University of California at Berkeley School of Law

Prior to the mid-1990s, patent litigation took place in district court silos.  District judges managed these cases based on their general litigation background, which rarely extended to patent cases.  Experienced patent litigators, many of whom also prosecuted patents, brought their technical and litigation experience to the table.  As a result, each patent case reinvented the patent litigation wheel to a significant extent.

With the growth of high technology patent litigation in the 1980s and early 1990s, a new breed of general litigators entered the fray.  They saw advantages to trying patent cases to juries.  In addition, the newly established Federal Circuit was getting its sea legs and began to focus on the disarray.  With the Markman decisions of the mid 1990s, the Federal Circuit and the Supreme Court triggered a new patent litigation era.  Pre-trial “Markman” hearings to construe claims became the norm, and with that, the development of the Northern District of California’s Patent Local Rules for managing patent cases led by Judge Ronald Whyte.  Although initially put forth as a voluntary case management model, practitioners quickly embraced these rules.  Busy federal judges were all too happy to see the patent bar following these rules, thereby reducing the case management challenges.

It was around this time, in 1997, that I reached out to the Federal Judicial Center to offer the Berkeley Center for Law & Technology’s assistance in training federal judges in the intricacies of intellectual property law and case management.  That led to a 25 year collaboration leading annual week-long training programs, panels at FJC regional and national events, webinars, and the development of the Patent Case Management Judicial Guide (“PCMJG”).  These programs have educated much of the federal judiciary—including a substantial portion of district judges, magistrate judges, and bankruptcy judges—as well as involved Federal Circuit judges.  At the urging of former Federal Circuit Chief Judge Paul Michel, I developed programs and orchestrated a patent investigation guide for the International Trade Commission.  These efforts helped to persuade ITC administrative law judges to implement Markman hearings.

These efforts spread the wisdom of a new civil procedure framework for patent litigation.  Numerous districts followed the Northern District of California’s lead, adopting patent local rules and standing orders.  I also found myself working with judges in the District of New Jersey on a new branch of patent case management rules for pharmaceutical cases, which are predominantly pursued there and in Delaware.  The advantages of standardized and coordinated patent case management became apparent and have revolutionized patent case management.

These programs and publications brought together leading practitioners and judges from the most active districts to discuss patent case management.  The Patent Case Management Judicial Guide, now in its third edition and published by the Federal Judicial Center for judges and available for free via SSRN, has been widely used and cited.  Dennis Crouch referred to it as the Bible for patent litigators.  It is now commonly assigned for teaching patent litigation and is among the most important resources for newly appointed federal judges and clerks dealing with patent litigation.

Patent Case Management Goes International

I was delighted to be invited in the summer of 2020 to assist the World Intellectual Property Organization (WIPO) in developing an International Patent Case Management Judicial Guide.  In conjunction with Eun-Joo Min, Director of the WIPO Judicial Institute, and Judge (ret.) Jeremy Fogel, Executive Director of the Berkeley Judicial Institute, I have worked over the past two years with leading judges from eight of the most significant industrial nations (Australia, Brazil, China, Germany, India, Japan, Republic of Korea, and the United Kingdom) to develop an international version of the Patent Case Management Judicial Guide.  Judge (ret.) Kathleen O’Malley, who served as both a district judge and Federal Circuit judge, has also advised WIPO’s efforts.  My colleague Allison Schmitt, Director of BCLT’s Life Sciences and Innovation Project, and I have developed the U.S. chapter.  WIPO anticipates publishing the International Patent Case Management Judicial Guide by December 2022.  This volume promises to promote the advantages of nuanced patent case management on a global scale, enhance the capacity of litigators and in-house counsel to assess international patent litigation, and harmonize patent systems and policies.

Patent Case Management Goes Cross-Institutional

When I agreed to collaborate on the International Patent Case Management Judicial Guide, I mistakenly thought that producing the U.S. chapter would be relatively straightforward.  After all, the PCMJG was the model for the project.  But as discussions with the other participants revealed, the U.S. patent system is far more extensive and complex than district court litigation.  Other nations employ a variety of specialized tribunals and several treat invalidity challenges in separate tribunals.  The U.S. has moved in that direction with the establishment of the Patent Trial and Appeal Board’s Inter Partes Review and Post-Grant Review authority.  It was time to integrate PTAB case management into U.S. patent case management.  The project illuminated the U.S.’s distinctive approaches to dealing with border control (the ITC’s Section 337 authority) and pharmaceutical patents (Hatch Waxman and the BPCIA).  It also highlighted the growing importance of SEP/FRAND issues.  Thus, the WIPO project has spurred better appreciation of the many dimensions of U.S. patent case management and highlighted lessons for improving the U.S. system.

As a way of harmonizing the presentation of patent case management regimes across the broad array of patent systems, WIPO developed the following template:

1. OVERVIEW OF THE PATENT SYSTEM
2. PATENT INSTITUTIONS AND ADMINISTRATIVE REVIEW PROCEEDINGS
3. JUDICIAL INSTITUTIONS
4. PATENT INVALIDITY
5. PATENT INFRINGEMENT
6. JUDICIAL PATENT PROCEEDINGS AND CASE MANAGEMENT
7. REMEDIES
8. THREATS ACTIONS
9. CRIMINAL PROCEEDINGS
10. ENFORCEMENT
11. APPELLATE REVIEW
12. BORDER MEASURES
13. SELECTED TOPICS
14. KEY CHALLENGES AND EFFORTS TO IMPROVE PATENT CASE MANAGEMENT

We developed a summary of PTAB case management in Chapter 2, ITC Section 337 patent investigation management in Chapter 12, and SEP/FRAND enforcement and pharmaceutical patent case management in Chapter 13.  The appendix contains a chart comparing district court patent adjudication, ITC patent investigations, and PTAB Inter Partes review.  The draft of the U.S. chapter can be downloaded by clicking on this link: WIPO International Patent Case Management Judicial Guide: United States.

This draft is undergoing review.  We welcome comments from the Patently-O community on any aspects.  Please send these comments to pmenell@law.berkeley.edu and aaschmitt@berkeley.edu.

The Future of Patent Case Management (and IP Case Management More Generally)

We are heartened to see growing interest in the study of patent (and IP) case management.  Allison and I are developing a comprehensive patent case management guide that is geared for the U.S. patent system.  We hope to finish that more extensive project by late 2022.  I am also working with other teams of practitioners and scholars on copyright, trade secret, and trademark analogs. The trade secret project is close to fruition and we hope to release a draft this summer.

These projects help to demystify and improve the functioning of intellectual property systems, which is especially important in the United States where such matters are tried to generalist judges and lay juries.  They also enable judges, practitioners, scholars, and law students to delve more deeply into the ways in which the legal system can more effectively and efficiently resolve disputes.  We are grateful to BCLT, BJI, the Federal Judicial Center, and WIPO for supporting our efforts, as well as the many practitioners and judges who have shared their experience and insights.

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

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

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

= = =

• Appendix containing lower court opinions.
• Party Briefs:
  • NetChoice: Petition to the Supreme Court to Vacate the 5th Circuit’s Stay of the District Court’s Preliminary Injunction against the State.
  • State of Texas: Brief in Opposition.
  • NetChoice: Reply Brief.
• Amicus Briefs Supporting NetChoice.
  • Rep Chris Cox: Amicus Brief Supporting NetChoice.  Cox is an author of Section 230 and provides its explanation of its importance and relevance to the case.
  • Prof. Eric Goldman: Amicus Brief Supporting NetChoice.  Goldman adds that the “editorial transparency requirements [of HB20] violate the First Amendment.”
  • EFF, Wikimedia, et al.: Amicus Brief Supporting NetChoice. “Allowing HB20 to go into effect will cause social media platforms to alter their content moderation practices in ways that will harm the public interest.”
  • Cato Institute, Amicus Brief Supporting NetChoice. “The public interest is harmed by allowing the law to go into effect because most users do not want to see animal abuse, terrorist recruitment material, or racial slurs when they go on Facebook, nor do Facebook and other social media platforms want to host such material.”
  • ACLU, Reporters Committee for Freedom of the Press, et al.: Amicus Brief Supporting NetChoice. The brief argues that editorial autonomy is critically important. Although HB20 applies to social media and not newspapers the brief suggests it will have a chilling effect.
  • FLOOR64: Amicus Brief Supporting NetChoice.  The owner of Techdirt.com.  HB20 “takes aim at the entire Internet ecosystem and its ability to facilitate any online expression at all.”
  • TechFreedom: Amicus Brief Supporting NetChoice. “The Fifth Circuit panel order is poised to unleash a torrent of awful content.”
  • Chamber of Progress, Anti-Defamation League, IP Justice, LGBT Tech, et al.: Amicus Brief Supporting NetChoice. The law would force publication of wasteful speech and would “render content moderation functionally impossible.”
• Amicus Briefs in Support of Texas.
  • State of Florida, Amicus Brief in Support of Texas. Social media platforms “have supplanted the telephone for interpersonal communication, traditional television for news consumption, and the 24-hour cable news cycle in the potential to swing an election.” They should be regulated as such.
  • Professor Philip Hamburger, et al.  Amicus Brief in Support of Texas. Hamburger explains that he has studied and written “on how governments, in the seventeenth century and again today, tend to privatize their censorship, leaving their dirty work to less accountable, private actors.”  He argues that common carrier style regulation is  an appropriate mechanism to promote speech.

by Dennis Crouch

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

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

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

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

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

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

Dyfan En Banc Petition.

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

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

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

Professor Brief in Dyfan.

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

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

Vizio Petition.

What is missing here:

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

by Dennis Crouch

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

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

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

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

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

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

• District Court Preliminary Injunction Order
• Fifth Circuit Stay of Injunction
• SCOTUS Petition for Emergency Reinstatement of the Preliminary Injunction
• Amicus brief from former Sen. Cox supporting the Emergency Petition

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

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

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

SCT Brief.

by Dennis Crouch

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

Top six pending cases:

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

by Dennis Crouch

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

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

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

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

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

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

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

Newman in dissent.

Post Thrive: PTAB Decision Affirmed rather than Vacated

By Dennis Crouch

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

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

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

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

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

= = =

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

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

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

= = =

by Dennis Crouch

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

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

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

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

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

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

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

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

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

Teva En Banc Petition.

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

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

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

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

-Dennis

by Dennis Crouch

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

= = =

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

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

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

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

by Dennis Crouch

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

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

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

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

I would love to hear your thoughts on this topic.