All posts by Dennis Crouch

About Dennis Crouch

Law Professor at the University of Missouri School of Law.

Judicial Recusal Order Saves Cisco $2.75 Billion

by Dennis Crouch

Cisco has escaped its $2.75 billion patent infringement loss with a recusal order based upon the fact that the Judge’s spouse owned $5,000 in Cisco stock. 

Centripetal Networks, Inc. v. Cisco Systems, Inc. (Fed. Cir. 2022)

Judge Dyk wrote this opinion ordering the recusal of E.D. Va. Judge Henry C. Morgan based upon his spouse’s ownership of about $5,000 of Cisco stock. The order also vacates all orders and opinions in the case entered after Judge Morgan learned of her ownership.

In this situation, the (rather small) financial interest suggests tilting things in Cisco’s favor. But, here is the crazy thing: The outcome of the case was a $2.75 billion verdict for the patentee Centripetal — i.e., Cisco lost the case. When Judge Morgan learned of the ownership, he immediately notified the parties. Centripetal indicated that it had no problem with Judge Morgan continuing to hear the case.  But, Cisco concluded that the it was likely to lose the case anyway and so requested Judge Morgan recuse himself under 28 U.S.C. § 455.   The Judge denied Cisco’s motion for recusal and eventually awarded the absolutely huge judgment against Cisco.

Spousal activity and recusal has been in the news lately with Justice Thomas and his spouse’s political advocacy.  Although judicial codes of ethics provide guidance. Congress has also created a statutory regime that requires recusal in certain situations. On point for this case, the statute calls for recusal if a judge “knows that he … or his spouse … has a financial interest … in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding.”  28 U.S.C. § 455(b)(4).  This requirement to step-down is not waivable. § 455(e).

Here it is clear that Judge Morgan falls within § 455(b)(4).  However, the statute goes on to indicate that a judge who has devoted substantial judicial time to a matter can keep the case so long as they “divest [themselves] of the interest that provides the grounds for the disqualification.”  § 455(f).  Here, Judge Morgan took the step of placing the stock in a blind trust.  However, the Federal Circuit here held that the blind trust was not sufficient for the statutory requirement of “divest[ment].”

Judge Morgan had considered simply selling the stock, but was concerned about the appearance of insider training. On appeal, the Federal Circuit added a footnote concluding that it would not have been insider trading: “Selling the stock to comply with ethical obligations is not insider trading, as was made clear in the Stop Trading on Congressional Knowledge Act of 2012 (“STOCK Act”), Pub. L. 112–105, 126 Stat. 291, 298 (2012).”

Remedy for failure to recuse.  Sometimes there is no ex post remedy for a judge’s failure to recuse.  Here, as I mentioned, the financial incentive favored Cisco, but it is also Cisco that is asking for vacatur.  Centripetal argued that the failure to recuse was  thus a harmless error.  In Liljeberg v. Health Servs. Acquisition Corp., 486 U.S. 847, 862 (1988), the Supreme Court highlighted three factors in considering whether failure to recuse was harmless:

(1) “the risk of injustice to the parties in the particular case”;

(2) “the risk that the denial of relief will produce injustice in other cases”; and

(3) “the risk of undermining the public’s confidence in the judicial process.”

Id. On appeal, the Federal Circuit suggested that all three factors weighed in favor of recusal.  The court noted that the statute is purposely designed to require recusal without proving any actual bias.

Making such a bias determination would require the sort of line drawing that the statute was designed to avoid. . . . The reason § 455(b)(4) establishes a bright-line rule and does not require a showing of prejudice is because of the great difficulty in establishing actual prejudice in any particular case.

Slip Op.  On remand, the case will be re-assigned and rolled-back to August 2020.  That will likely require a new trial in the case.

Note that Judge Morgan passed away in May 2022. He was 87 years old. RIP.

Fintiv: Dir. Vidal calls for Fewer Discretionary Denials of Inter Partes Review Petitions

by Dennis Crouch

When Congress passed the Inter Partes Review (IPR) provisions of the AIA, there was some concern that the USPTO might be overwhelmed with IPR petitions; that patentees might be abusively harassed by IPR petitions; or that IPR petitions might sometimes problematically interfere with ongoing litigation.  One solution offered by Congress was give the USPTO Director discretionary and unreviewable authority to grant or deny IPR petitions.  We know that the PTO Directors have then passed this authority down to the PTAB who decides the institution petitions.  More recently, under Dir. Iancu direction the PTAB developed a more formalized doctrinal process for denying IPR institution when ongoing parallel litigation is already well underway.  See, Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (precedential).   Because IPR petitions often follow infringement allegations, Fintiv considerations have become a regular aspect of IPR institution. In general, the PTAB  has been considering the following factors:

  1. Is the district court litigation stayed or likely to be stayed if the IPR is granted;
  2. Has the district court set a trial date that is close-in-time to the IPR statutory deadline for a final written decision;
  3. Have the district court and the parties already made substantial investment in the district court proceeding;
  4. Are there substantial overlap between issues raised in the petition and those found in the district court proceeding;
  5. Are the parties to the IPR the same as those in the parallel litigation;
  6. Are there other circumstances that suggest the exercise of discretion in denying the petition — including consideration of the merits of the petition.

In a recent release, USPTO Director Vidal has released a set of interim procedures for the PTAB to follow that somewhat modify Fintiv–and particularly make it less likely that the PTAB will exercise discretionary denials.  New rules:

  1. No discretionary denial if the petition presents “compelling evidence of unpatentability.”
  2. No discretionary denial if the petitioner stipulates that it will not “pursue in a parallel proceeding the same grounds or any grounds that could have reasonably been raised before the PTAB.”  (Can the stipulation be conditional upon the grant of the petition?).
  3. Fintiv precedent does not apply to USITC proceedings.
  4. Some courts regularly set early trial dates and then repeatedly push them back. And, it seems that at least one judge (Judge Albright) has been strategically setting early trial dates in order to trigger discretionary denial. With that in mind, the PTAB’s consideration of trial dates should consider the median time to trial for the district and potentially other aspects of the litigation rather than simply the particular trial date set by the district court.

Read the memo here.

As you can see, the substantive changes all weigh against discretionary denials.  The memo and other sideline discussions also make clear that  the new boss (Dir. Vidal) does not favor discretionary denials.  I.e., in addition to new rules, we are also likely to have a different narrowing interpretation of the denial approach.

Design Patent: Invalid as Unduly Functional

by Dennis Crouch

Golden Eye Media USA v. Evo Lifestyle Products (Fed. Cir. 2022) (nonprecedential).

Evo’s design patent claims an “ornamental design for a foldable bag” as shown in the figures above.  This style of bag is known as a “trolly bag” in the UK and is used in shopping carts (trollies) to maintain order in reusable fashion.

After receiving a threat letter, Golden Eye filed a declaratory judgment action and won on summary judgment. In particular, the S.D.Ca. district court held the patent invalid as both functional and obvious; and also not infringed.

Functionality: Design patents focus on ornamentality rather than utility.  But, this divide quicky become confusing. Although the design must be ornamental, it is simultaneously a “design for an article of manufacture.” I.e., typically a design for a useful item.  The Federal Circuit has attempted to police this divide in a number of cases — trying to discern whether the design is unduly functional (and thus unpatentable as an ornamental design). Certainly, a design falls on the unduly functional side if its patent excludes all possible forms of the article of manufacture in question.  A step further, the court has concluded that a design “dictated by the utilitarian purpose of the article” is not protectable by a design patent. High Point Design LLC v. Buyer’s Direct, Inc., 730 F.3d 1301 (Fed. Cir. 2013).   In several cases, the court has recited a list of additional factors to consider:

  • Does the patent cover the “best design;”
  • Would alternative designs adversely affect the article’s utility;
  • Are there parallel utility patents;
  • Does the advertising tout features as having utility;
  • Are there any elements that are clearly ornamental – i.e., “clearly not dictated by function.”

See Berry Sterling Corp. v. Pescor Plastics, Inc., 122 F.3d 1452 (Fed. Cir. 1997).  Although functionality is a question of fact, the Federal Circuit affirmed that summary judgment was appropriate — finding “no issues of material fact precluding summary judgment.”

Of these factors, the most important appears to be the availability of alternative designs.  The quirk with that key factor is that the burden will be placed on the patentee to present those alternative designs even though the patent is presumed valid.

Obviousness: The court also affirmed on obviousness grounds — finding that an Irish patent filing by Trolly Cart founder (Doyle) created the same overall impression and that the only real difference in cloth handle length that was shown in other prior art bags.

Again, the appellate panel found that summary judgment of obviousness was appropriate. Obviousness is a question of law based upon underlying factual conclusions and summary judgment is appropriate when “the content of the prior art, the scope of the patent claim, and the level of ordinary skill in the art are not in material dispute.”



Decision on American Axle Within the Week

by Dennis Crouch

The country is awaiting big non-patent cases from the U.S. Supreme Court that we expect sometime over the next week or so.  Most notably is the abortion case of Dobbs v. Jackson Women’s Health Org.  No patent decisions are expected, but the Court will consider whether to grant certiorari in the lingering eligibility petition in American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, et al., No. 20-891.  The American Axle received strong support from various amici filings, including an important recent brief from the US Solicitor General arguing that courts are now excluding inventions that have previously been at the core of eligibility. I look for an order granting or denying certiorari on June 27, 2022. Other pending petitions also ask the same or similar eligibility questions, including: Worlds Inc. v. Activision Blizzard Inc.;  and Spireon, Inc. v. Procon Analytics, LLC.  Over the past two years, the Court has been denying parallel pending eligibility petitions rather than holding them for resolution–suggesting to me that interest is not extremely high.

Animated Design Patents

Guest Post by Sarah Burstein, Professor of Law at the University of Oklahoma College of Law

Wepay Global Payments LLC v. PNC Bank, N.A. (W.D.Pa. June 1, 2022) [wepayDecision]

Companies associated with William Grecia have filed over a dozen cases alleging infringement of design patents for “animated graphical user interfaces.” A judge in one of those cases, Wepay v. PNC Bank, recently issued a decision dismissing the case.

The patent asserted in that case, U.S. Patent No. D930,702, was issued in 2021 and claims a “design for a display screen portion with animated graphical user interface.” Wepay alleges infringement of the second embodiment, which includes three images:

Consistent with the USPTO’s rules for “changeable computer generated icons,” see MPEP § 1504.01(a)(IV), the patent specifies that, “[i]n the second embodiment, the appearance of the     sequentially transitions between the images shown in FIGS . 3 through 5. The process or period in which one image transitions to another image forms no part of the claimed design.” Consistent with the USPTO’s general drawing rules, the patent disclaims all matter shown in broken lines “form[] no part of the claimed design.”

So what does this patent cover? According to the court, Wepay seemed to think its patent covered any app with a QR code that lets you send money to other people:

WPG maintains that both its patent and the PNC app include an icon array of three squares that simulate a QR code; both cycle to a functional screen where the user may choose to whom the money will be sent; and both conclude with the display screen with a display of a zero value, where the user may input the amount of money that the user wishes to send.

The court rejected that interpretation—and rightly so. It’s well-established that design patents cover the visual designs that are actually claimed, not the larger design concepts.

The court held that the claimed designs and accused design, shown below as shown in the complaint, were plainly dissimilar and granted PNC’s motion to dismiss.

In doing so, the court recognized that placement and proportion matter in design, noting that “[a]ny similarity between the two designs is limited to basic geometric shapes, but with notable differences in shape size and spacing such that no ordinary observer would mistake the Accused Design with the Asserted Design or vice versa.”

Some may argue that the court erred in considering the placement and proportion of the claimed design fragments, because matter shown in dotted lines “forms no part of the claimed design.” But even if other visual portions of the design are disclaimed, that doesn’t mean courts have to treat the claimed portions as free-floating motifs. (Indeed, sophisticated design patent owner Nike has recognized that placement matters, even when dotted lines are used. See this PTAB decision at 10-13.)

I’ve explained here, placement and proportion are essential elements of design. The differences between the claimed and accused designs here are an excellent example of how different a single motif (e.g., each of the three squares in figure 3 and in the accused design) can look in the context of the design, depending on its proportion to the other elements and where it is located on the screen.

Before diving into the merits, however, the court expressed some doubt over whether infringement was even possible in this case:

[T]he Court notes that the ordinary observer test focuses on a hypothetical purchaser induced to buy a product with an accused design over an asserted design. The cases cited by the parties likewise address designs where there exists a consumer and/or purchaser at play. However, neither the cited cases nor this Court’s research reveals a case where, like the instant matter, the consumer has not voluntarily chosen the design at issue. Instead, the Accused Design is incidental to the PNC customers utilization of the mobile application. The Complaint does not allege that a purchaser would have been or has been involved with the Accused Design. Further, the Complaint does not allege a purchase or transaction by a consumer with regard to the Accused Design over the Asserted Design. Thus, the ordinary observer test would seem not to fit squarely with the designs at issue, and WPG would not be able to assert a design patent infringement claim.

Even though it’s dicta, the court’s suggestion that a design patent owner must plead “a purchase or transaction by a consumer with regard to the Accused Design over the Asserted Design” is worth further discussion.

Like other patents, a design patent is infringed when someone makes, uses, sells, offers to sell, or imports the patented invention without permission. The test for design patent infringement doesn’t change that. It just tells us when someone is making, using, selling, offering to sell, or importing the patented design.

The test for design patent infringement is a test of visual similarity. The “ordinary observer” part just tells us how similar the designs must be. (See this article at page 177.)

So, under current law, no sale is required, let alone—as the court seems to suggest—a direct sale to the end user, “with regard to the Accused Design over the Asserted Design.” Indeed, because there is no working requirement for design patents, there may not be a product embodying the claimed design available for sale.

All the defendant has to do is make (or sell, etc.) a product that looks “the same” as the claimed design. (For more on how the test for design patent infringement works, see this essay or Chapter 12 of this free casebook.)

Because Grecia-related companies have filed so many similar cases, it seems likely this decision will be appealed. It is definitely one to watch.

Fees for Delay

The typical office action rejection comes with a three month timeline, extendible  for another three months with payment of a fee. The fee escalates for each month of delay.

  • $220 – One Month Delay
  • $640 – Two Months Delay
  • $1,480 – Three Months Delay

After three months, the case is deemed abandoned and can only be revived based upon exceptional circumstances.

Here is my question: How do you decide who pays the fees?

Delegating Authority

CustomPlay, LLC v., Inc. (Supreme Court 2022)

New challenge to inter partes review. In this case, the patentee argues: (1) anti-delegation and (2) due process. Questions:

  1. Whether the Patent and Trademark Office (PTO) violated the statutory text and legislative intent of the America Invents Act (AIA) by delegating the PTO Director’s responsibility to determine whether to institute inter partes review (IPR) of issued patents to the Patent Trial and Appeal Board (PTAB), which is the entity that the AIA directs to render final decisions in instituted proceedings.
  2. Whether the PTO’s administration of IPR proceedings violates a patent owner’s constitutional right to due process by having the same decisionmaker, the PTAB, render both the institution decision and the final decision.

On question 1, remember that the statutory language calls for the USPTO “Director” to decide whether to institute an IPR, and then for the “Patent Trial and Appeal Board” to actually conduct the review.  35 U.S.C. 314, 316.  But, in its rulemaking, the USPTO gave authority to the PTAB to both institute and review.


The Manner in Which the Invention was Made

by Dennis Crouch

T0day’s oral arguments in Thaler v. Vidal was not too exciting. Court focused on the terms “individual” that was added to the Patent Act during the AIA and likely determinatively ends the case:

The term “inventor” means the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention.

35 U.S.C. s100(f).  I am close to 100% sure that the Federal Circuit will affirm that US law requires the patentee to identify a human inventor.

= = =

In the course of oral arguments, the government made two odd claims, neither of which were fully developed.

The first relates to the final sentence of Section 103 indicating that “patentability shall not be negated by the manner in which the invention was made.”  The Gov’t . made the following claim:

The Supreme Court in Graham against John Deere [more than] 50 years ago said that provision, that one sentence, applies only to the part of patentability that is referenced in Section 103.

Thaler Oral Arguments. In Graham, the Court did comment on the phrase and its  Congressionally intended purpose of overruling the flash-of-genius test.  However, I don’t see that the court bound the phrase to only be tied to Section 103 and obviousness.  The court wrote:

It also seems apparent that Congress intended by the last sentence of § 103 to abolish the test it believed this Court announced in the controversial phrase “flash of creative genius,” used in Cuno Engineering Corp. v. Automatic Devices Corp., 314 U. S. 84 (1941).

Graham v. John Deere Co., 383 U.S. 1 (1966).  Although the Graham court found a seemingly apparent Congressional intent, it did not actually interpret the provision as so limited and certainly did not indicate that it should be limited to application only in the context of obviousness analysis.

The second odd claim made by the gov’t in oral arguments is as follows: “One person’s innovation is another person’s step backwards.”  The basic underlying idea  here is apparently that Congress intended to intentionally exclude certain AI-generated inventions from patentability because they thought those innovations would have a negative societal impact.

The full oral arguments should be available shortly at this link:

I am the smart one: Sideshow Patent Litigation

Tod Tumey v. Mycroft AI (8th Cir. 2022)

Tod Tumey is a Houston-based patent attorney who represents Voice Tech Corp.  Back in 2021, VoiceTech sued Mycroft for patent infringement.  The PTO has apparently determined that the asserted claims are not patentable, but that case will be appealed to the Federal Circuit.

Meanwhile, Mycroft allegedly began to a series of “cyberattacks and harassment activity” against Tumey (including hacking attempts and heavy-breathing phone calls).  It is clear that Mycroft repeatedly announced that it was fighting VoiceTech as a patent troll and that Mycroft has a strong anti-troll position:

I don’t like letting these matters go quietly. In my experience, it’s better to be aggressive and ‘stab, shoot and hang’ them, then dissolve them in acid. Or simply nuke them from orbit, it is the only way to be sure.

Troll Hunter—Mycroft’s Position on Patent Trolls (February 5, 2020).

Tumey sued Mycroft as well as Mycroft founder Joshua Montgomery and CEO Michael Lewis on several causes of action: 

  • Racketeering. 18 U.S.C. §§ 1962(c) & 1962(d);
  • Hacking. 18 U.S.C. § 1030;
  • Privacy violations. 18 U.S.C. § 2701; and
  • Additional state and federal claims.

Tumey’s case is pending in the Western District of Missouri (KC).  The lawsuit was originally handled by Judge Ketchmark, but as you’ll read below, the 8th Circuit  recently ordered the case to be reassigned to a different judge. W.D.Mo. Chief Judge Beth Phillips has taken-up the case.

In the case, Tumey requested a preliminary injunction order that Mycroft and its people cease its incitement of cyber-attacks, phishing, and harassing phone calls.  Mycroft responded with sworn declarations promising that no one associated with Mycroft was involved in the cyber-attacks or harassment.  Still, the original district court granted a preliminary injunction barring Mycroft and its people from:

  1. Engaging in, participating in, or recklessly or intentionally inciting any cyberattacks, hacking or other harassment directed at Plaintiffs, including Plaintiffs’ officers, agents, servants, employees, attorneys, witnesses and potential witnesses (including Chilton Webb and Christina Butler), and the family members of any of the foregoing (the “Protected Parties”); and
  2. Using or disclosing any documents, information, or other materials of any kind obtained from Plaintiffs or any other Protected Party through any unauthorized means.

On appeal, the 8th Circuit vacated the decision finding due process violations (briefing was related to 14-day TRO, but the judge transformed the hearing into a preliminary injunction hearing with only 1-hour notice); and merits problems (“there is a paucity of evidence in this record to find that Mycroft is behind the attacks”).  The appellate panel also concluded that the case should be reassigned to a different judge “[b]ecause a reasonable person aware of all the circumstances and events that have transpired so far would harbor doubts about the judge’s impartiality, reassignment to a different judge is appropriate.”  In particular, the appellate court suggested that “an objective review of the record demonstrates a degree of antagonism against Mycroft that is higher than that being applied against Tumey.”

After the district court allowed Tumey, over Mycroft’s strenuous objection, to transform his motion for a temporary restraining order to a preliminary injunction on one hour’s notice, the court further fanned the flames during the hearing by sua sponte restricting Mycroft’s access to evidence, or lack thereof, connecting Mycroft to the unlawful conduct that took place. Again, over Mycroft’s objection, the court allowed testimony about the disputes between neighbors in Hawaii when the relevance, if any, of this testimony to the current litigation is marginal and tangential. The preliminary injunction that was ultimately issued went beyond the intended use of maintaining the status quo until the claims can be resolved. When Mycroft sought reconsideration of the preliminary injunction, specifically raising claims regarding the breadth and restraint on speech and publication, the court dismissed, without analysis, Mycroft’s constitutional claims.

Slip Op.  On remand, the new district court is considering the defendants summary judgment motion that is currently being briefed.

Meanwhile, Mycroft’s founder Montgomery has sued Tumey in Hawaii alleging tortious abuse of process, conspiracy to extort, defamation, and intentional infliction of emotional distress. “Defendants’ misrepresentations and abuse of the legal and judicial systems intentionally and/or negligently caused Maj. Montgomery severe emotional distress.”  The lawsuit more interesting once we bring in Mongomery’s Hawaii next-door-neighbor, Christina Butler. After a handful of negative encounters with Mongomery, Butler located the pending Tumey lawsuit and offered to testify in support of Tumey’s case “believing she possessed bad character evidence about Montgomery that would discredit Montgomery.”  Mongomery’s Hawaii lawsuit includes Butler as a defendant and alleges:

First, Defendant Butler provided a photo of Maj. Montgomery attached to a sworn affidavit claiming that Maj. Montgomery was attempting to evade service. Then, Defendant Tumey requested and Defendant Butler provided another sworn affidavit claiming Maj. Montgomery committed criminal property damage by purposefully damaging her main water line the night after her initial affidavit was filed. Moreover, Defendant Butler claimed Maj. Montgomery was responsible for “drone harassment” and trespass, without providing a single piece of evidence to support her allegations.

Montgomery complaint.  That case is pending in Hawaii state court.

[quote source]

The Spirit of Lehman Brothers

by Dennis Crouch

Tiger Lily Ventures Ltd v. Barclays Capital Inc. (Fed. Cir. 2022)

LEHMAN BROTHERS has a bad name for triggering the US economic collapse in the mid 2000s.  But, as they say ‘any publicity is good publicity.’

Barclays purchases a number of Lehman Brothers businesses and accompanying goodwill back in 2008 as part of the bankruptcy proceedings.  That exchange included ownership rights of the LEHMAN BROTHERS trademarks.   But, Barclays was not using the marks and allowed their registration to expire.

At that point Tiger Lily entered the stage and applied to register the LEHMAN BROTHERS mark for its use its whisky. The spirit of the Lehman Brothers.  Barclays opposed the whisky registration and also applied to re-register its mark.  The TTAB agreed with Barclays holding particularly that (1) Barclays had not abandoned its common law mark; (2) there is a likelihood of confusion between the marks; and (3) Barclays provided sufficient evidence that it has a good faith intent to eventually begin using the mark again.

With regard to likelihood of confusion, the TTAB pointed particularly to the fact that lots of LEHMAN BROTHERS branded collectable items (including some alcohol) are still being traded by collectors–its like the new Nazi paraphernalia?  This collector  conclusion raises a number of interesting questions about the role of trademarks. Even if this is a good theory, I would suggest that collectors are among the most sophisticated buyers, always on the lookout for counterfeits and so would require a fairly high level of confusion.

On appeal, the Federal Circuit has affirmed — The Whisky mark is cancelled, and Barclay’s mark remains.

It is clear here that whisky registration was seeking to free-ride upon consumer recognition of the Lehman Brothers name.  But, Tiger Lilly suggests that its case here is different because it is lampooning Lehman Brothers.  It is not trading on the “goodwill” but rather the “bad will.”  On appeal, the Federal Circuit rejected this claim — finding “no legal support for these subtle distinctions.”  Rather, “Tiger Lily’s attempts to capitalize on the fame of the LEHMAN BROTHERS mark  weighs in favor of finding a likelihood of confusion.”

The court’s other important ruling in the case focuses on the expectation that owners of trademarks will extend their use of the mark into other fields.

[I]n modern consumer markets commercial trademarks are often licensed for use on products that may differ from the original source of the trademark. . . . As a legal principle, because the LEHMAN BROTHERS mark has achieved a high degree of fame, it is afforded a broad scope of protection. Our precedent makes clear that a famous mark “casts a long shadow which competitors must avoid.”

Slip Op.



Supreme Court Continues Preliminary Injunction of HB20 – with dissent

by Dennis Crouch

NetChoice, LLC v. Paxton, 21A720, 596 U.S. ___, 2022 WL 1743668 (U.S. May 31, 2022)

The most recent news in this case is that a 5-4 Supreme Court has sided against Texas–issuing an emergency order to reinstitute the preliminary injunction against enforcement of the Social Media Censorship law known as HB20.  The case is now back before the 5th Circuit who review the preliminary injunction order in a non-emergency fashion.

= = =

The State of Texas enacted HB20 to regulate large social media platforms (>50 million users).  The law has a number of reporting requirements and also prohibits large social media platforms from censoring users based upon  that user’s viewpoint viewpoint. Here, “censor” is broadly defined “to mean to block, ban, remove, deplatform, demonetize, de-boost, restrict, deny equal access or visibility to, or otherwise discriminate against expression.”

NetChoice is a lobbying organization controlled by large media companies, including Google, Facebook, TikTok, Amazon & Twitter.  Those companies argue that HB20 impinges upon their Constitutionally protected free speech rights.  In particular, the large social media platforms argue that the First Amendment protects their rights to operate as editors making publication decisions.

= = = =

The Supreme Court’s decision against Texas was issued without an opinion by a 5-judge majority of Chief Justice Roberts along with Justices Breyer, Sotomayor, Kavanaugh and Barrett.  Four justices dissented, including Justice Kagan who did so without any opinion. The only opinion then came from Justice Alito’s dissent that was joined by Justices Thomas and Gorsuch.  This sort of decision here is quite wonky — it is an emergency order to vacate the 5th Circuit’s order to temporarily stay the district court’s preliminary injunction.  Here, I want to just focus a bit on Justice Alito’s First Amendment suggestions, which he notes have not been finalized at this preliminary and emergency stage.

Justice Alito’s opinion identifies the first amendment issues at stake here to be important and novel. “It is not at all obvious how our existing precedents, which predate the age of the internet, should apply to large social media companies.”  Although editorial control is certainly within the First Amendment, the court has previously allowed requirements to be placed on broadcast and cable television and even a shopping center. See PruneYard Shopping Center v. Robins, 447 U. S. 74 (1980) and Turner Broadcasting System, Inc. v. FCC, 512 U. S. 622 (1994).

Next step in the case is for the 5th Circuit to decide whether to cancel the preliminary injunction.  I expect that the court will at least narrow the injunction if not entirely eliminate it.  At that point the case will move back down to the district court.  If Texas does begin enforcement then there will likely be a number of cases moving up through both State and Federal courts.


AI-Generated Invention at the Federal Circuit

On Monday, June 6, the Federal Circuit will hear oral arguments in the pending  AI-inventorship case of Thaler v. Vidal, Appeal No 21-2347. The court does not release the identity of the individual judges until just before oral arguments, so all we (and the parties) know is that it is Panel A in Courtroom 201.

This case raises the novel legal issue of whether a patent can be obtained for an invention created by an artificial intelligence (AI) in the absence of a traditional human inventor (“AI-Generated Invention”). The United States Patent and Trademark Office (“USPTO”) and the District Court for the Eastern District of Virginia have barred such inventions from being patented. This ignores fundamental statutory and constitutional principles and also stymies innovation. While other countries are promoting the progress of science, the USPTO is belatedly adopting luddism.

Appellant’s brief.  In their responsive brief, the US narrowed the issue somewhat:

Whether the District Court correctly concluded that an artificial intelligence device comprised solely of source code cannot qualify as an “inventor” under the Patent Act, where the plain statutory language specifically defines “inventor” to be an “individual” and refers to an “inventor” using personal pronouns.

Appellee Brief.

That same panel is hearing two other IP cases:

  1. Samsung v. Dynamics, 21-2352.  PTAB sided with the patentee Dynamics.  On appeal, Samsung argues obviousness — that the Board failed to consider some aspects of the prior art and required motivation-to-combine be found in the primary reference.  Dynamics patents cover electronic emulation magnetic stripes (on, for instance credit cards).  The infringement argument is that Samsung’s digital wallet infringes. John O’Quinn (Kirkland Ellis) will argue for Samsung and Robert Morris (Eckert Seamans) for Dynamics.
  2.  In re A. Zeta S.R.L., 22-1178. Zeta is an Italian company seeking to register the mark PARMA COFFEE to be used for coffee, chocolate, tea, and other food/beverages.  Parma is a mid-sized city in Italy (200k people) and the goods in question apparently originate from Parma. The PTAB refused to register the mark — finding the COFFEE portion of the mark generic, and PARMA to be “Primarily Geographically Descriptive” under Section 2(e)(2) of the Lanham Act.  One issue here is about “origination” — the coffee is not grown in Parma but the PTO still argues that there is sufficient connection with the city (and also that Zeta waived that argument before the TTAB).  The parties waived oral arguments in the case and so it will be submitted on the briefs .





USPTO PPAC – Ready for Nominees

The Patent Public Advisory Committee (PPAC) forms a board of advisors for the USPTO Director. Nine members appointed by the Secretary of Commerce for three-year terms.  Although PPAC does not have formal power to take action, the USPTO Director is required to cooperate with the committee, provide it with access to information, and consider its advice.  Congress has declared that the committee should individuals representing both small and large entities, including at least independent inventor.  The committee should also include individuals “with substantial background and achievement in finance, management, labor relations, science, technology, and office automation.”

Dir. Vidal has announced that the USPTO is seeking nominations for three new  PPAC members. Due by July 1, 2022.  For more information, contact Cordelia Zecher, Acting Chief of Staff for Director Vidal at 571-272-8600.

My four issues for this year:

  1. Outreach and cultivate the US as a flourishing innovative society rather than one that relies upon others to provide answers. 
  2. Ensure that the USPTO maintains highest quality examination practices post-COVID. 
  3. Work to transform intellectual property laws in ways that promote US investment in innovation in key industries.
  4. Manage the balance between patents and trade secrecy protection–especially as more companies have substantially shifted toward trade secrets.

Submit your nominees here [USPTO Link Currently Not Working].

PTAB on Eligibility: Four Recent Decisions

Ex parte Gillam, APPEAL 2021-002217, 2022 WL 1641777 (Patent Tr. & App. Bd. May 20, 2022) (RPI – Texas Instruments). [2021002297_Mail_Decision]

9. A method for evaluating a generalized rational function on a handheld graphing calculator, the method comprising:

determining, by a processor of the handheld graphing calculator, whether or not the generalized rational function has at least one asymptote; and

displaying, by the processor, the at least one asymptote on a display screen when the generalized rational function has the at least one asymptote, the displaying includes a textual representation of the at least one asymptote.

In its decision, the PTAB issued a new ground for rejection against Claim 9 for lacking subject matter eligibility.  The Board concluded that the claim was directed to an unpatentable mathematical concept.

= = =

Ex Parte Allaway, APPEAL 2021-002898, 2022 WL 1599499 (Patent Tr. & App. Bd. May 19, 2022) (Mars, Inc.).[2021002898_Mail_Decision]

1. A method of screening a foodstuff comprising:

(a) preparing a foodstuff comprising i) one or more of aspartic acid, serine, glutamic acid, glycine, alanine and praline, and ii) one or more of myristic acid, palmitic acid, stearic acid, palmitoleic acid, oleic acid and linolenic acid, the foodstuff further comprising a protein to fat ratio of 1:0.27 to 1:0.63 on a gram:gram as fed or dry matter basis;

(b) feeding a cat the foodstuff, and

(c) measuring the level of margaric acid in a blood sample from the cat before and after feeding the foodstuff, wherein an increase in endogenous margaric acid levels post prandially is indicative of a foodstuff effective to prevent or reduce the risk of coronary heart disease, type 2 diabetes and/or inflammation in the cat.

The Board found that the final wherein clause was directed to a potential mental process and thus an abstract idea in addition, the correlation between margaric acid and disease is a law of nature similar to that seen in Mayo.   Rejection Affirmed.

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Ex Parte Mallet, APPEAL 2021-003081, 2022 WL 1641787 (Patent Tr. & App. Bd. May 20, 2022) (RPI – BIOMERIEUX) [2021003081_Mail_Decision]

1. A method for detecting at least two RNA transcripts, comprising:

obtaining a biological sample that is collected from a human patient suspected of having prostate cancer; and

detecting, in the biological sample, the presence or absence of at least two RNA transcripts comprising a first RNA transcript expressed by a first nucleic acid sequence having at least 99% identity with SEQ ID NO: 1, and a second RNA transcript expressed by a second nucleic acid sequence having at least 99% identity with SEQ ID NO: 3.

The claim was not rejected under Section 101, but the PTAB included an interesting footnote suggesting that the claim may lack eligibility under Mayo/Alice, but is OK under the 2019 USPTO Examination Guidelines.

= = =

Ex Parte Bella, APPEAL 2021-002297, 2022 WL 1584710 (Patent Tr. & App. Bd. May 17, 2022) [2021002297_Mail_Decision]

Maria Bella is a forensic expert who testifies in cases involving aquatics and drowning.  She created a step-by-step lifeguarding methodology that includes a series of steps and actions such as

  • staff mapping the shape of the swimming pool or body of water including any irregularities that may be present;
  • staff determining the number of submersible devices available;
  • staff determining the length of the swimming pool or body of water;
  • the staff determining the width of the swimming pool or body of water;
  • staff calculating and mapping a grid to determine the positioning of the submersible devices based on the number of submersibles, the length of the swimming pool or body of water, the width of the swimming pool or body of water and the blind spots present;
  • the staff positioning submersible devices on a bottom of the swimming pool or body of water according to the calculated grid …

The examiner rejected the claims on eligibility grounds. On appeal though the PTAB has reversed that rejection — basically finding that the submersible devices are “concrete things” that sufficiently “integrate” the mental processes “into a practical application.”

The Board did, however, issue a new ground of rejection on indefiniteness – The claim includes the following wherein clause that the Board found lacks any workable objective standard: “wherein failure to recognize the swimmer/bather in distress increases the risk of the swimmer/bather suffering a fatal drowning.”

Keys to Eligibility: Preemption, History, and Levels of Abstraction

by Dennis Crouch

The US Solicitor General has provided her input–arguing that the Supreme Court should grant American Axle’s petition and decide whether the claimed method of manufacturing a driveshaft is patent eligible. American Axle & Mfg., Inc. v. Neapco Holdings LLC, Docket No. 20-891 (Supreme Court 2022). [USDOJ Brief]

A decade ago, the Supreme Court decided Mayo v. Prometheus, 566 U.S. 66 (2012). Mayo broadened the scope of excluded “laws of nature” and established a two-step test for judging eligibility. The court followed-up two years later with Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014), extending Mayo‘s holdings to abstract ideas and computer implemented inventions.  In the wake of these decisions, the USPTO substantially changed its practices as did the U.S. Courts.  Thousands of claims have been denied, cancelled, or invalidated, but those involved still experience “substantial uncertainty about the proper application of Section 101.”  In American Axle, the Federal Circuit reluctantly took the law a further step by finding abstract a method of manufacturing and calibrating a mechanical structure.  The USDOJ concludes that the claim at issue here is a “paradigmatic examples of the ‘arts’ or ‘processes’ that may receive patent protection if other statutory criteria are satisfied.”

American Axle’s US Patent No. 7,774,911 claims a method of manufacturing an automobile driveshaft that operates with reduced vibration & noise.  The claims are particular directed to the use of a shaft liner that has been tuned to reduces multiple vibration modes (bending and shell mode vibrations).  Prior technology included a shaft liner, but not one tuned to multiple vibration modes.  So, the novel feature here is that the liner has been tuned to both resistively absorb shell mode vibrations and reactively absorb bending mode vibrations.

22. … tuning a mass and a stiffness of at least one liner … wherein the … liner is a tuned resistive absorber for attenuating shell mode vibrations and wherein the at least one liner is a tuned reactive absorber for attenuating bending mode vibrations.

The crux of the problem found by the Federal Circuit is that these novel features are claimed functionally–at a fairly high level of abstraction.  Rather than claiming the actual steps of tuning, the patentee has endeavored to claim all methods that achieve the claimed result. In some ways, this is like the claimed process in Diehr, but instead of using the Arrhenius equation the inventors here just use an unstated algorithm.

Broad claims like these have been typically dealt-with under the disclosure requirements–written description and enablement; as well as obviousness.  Under those doctrines, broad functional claims are permitted so long as the disclosure is sufficient and the prior art allows.   By shifting to eligibility the defense was able cut-off the broad claims straight away.  And importantly from a procedure perspective, was able to achieve this without worrying about the strictures of “evidence” or “fact finding” because eligibility is a question of law that rarely involves any underlying factual findings.

Substantial Uncertainty: The DOJ brief focuses on uncertainty created by Mayo/Alice framework, both at Step 1 and Step 2.

Clarification of both steps is especially important, both because a court’s step-two analysis often finally resolves the determination as to patenteligibility, and because the nature of the initial step-one screen logically depends in part on the inquiry that courts will apply at step two.

DOJ Brief.  The original petitioner brief focused on Alice Step 1 — asking what is the “appropriate standard for determining whether a patent claim is ‘directed to’ a patent-ineligible concept.”  The DOJ suggested that the court focus on both steps and ask more generally is it patent eligible?

Preemption: An overarching theme in patent eligibility jurisprudence has been the potential of handing-over exclusive rights  to fundamental aspects of human life and “building blocks” human ingenuity.  Avoiding improper preemption is the key goal.  But, the Alice/Mayo test does not use preemption in its decision process, and the Federal Circuit has found evidence of no preemption irrelevant to eligibility.  Rather, as the DOJ implies, preemption considerations should be fundamental to the eligibility analysis.

Levels of Abstraction: The role of patent attorneys has historically been to help inventors abstract-out their inventions to ensure that the claims cover sufficiently valuable scope.  What we know is that some abstraction is OK, too much is not.  The DOJ suggests that it would be helpful to have a bit more guidance.

Historic Exceptions: The court wrote in Bilski that these exceptions are historic and based upon longstanding precedent.  The suggestion is that they should be guided by the old precedent and not expanded further without congressional input.

Despite my earlier focus on results-based claiming, the DOJ Brief explains that the claims here go far enough in reciting:

a specific sequence of steps … taking a “hollow shaft”; “tuning” the “mass” and “stiffness” of a liner, which the district court construed to mean “controlling” the liner’s mass and stiffness “to match the relevant frequency or frequencies” of vibration of the shaft; and “inserting the” liner “into the shaft,” whereupon the liner acts as an “absorber” of two kinds of vibrations.

DOJ Brief.  These sequence of steps make the case look much more like Diamond v. Diehr than O’Reilly v. Morse.

Regarding Alice Step 2, the DOJ argues that “conventional claim elements” should not be disregarded.  Rather, the focus should continue to be on the claimed invention “as a whole.”

The petition asks a second question — whether eligibility is a question of law.  The DOJ suggests that this is a secondary question that can only be addressed once the general doctrine is established. “Answering the second question presented thus would be difficult while uncertainty about the substance of the Section 101 inquiry persists.”

Patent Case Management Goes Cross-Institutional and Global

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:


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 and

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.

Three Topics: Construing AND as OR; Preserving O2Micro demand; Denying interest

by Dennis Crouch

Michael Kaufman v. Microsoft Corp. (Fed. Cir. 2022)

Kaufman’s US7885981 has a 2000 priority date and claims a method of automatically creating a database front-end for user access.  Kaufman sued Microsoft–asserting that its Dynamic Data product infringed the claims.  A jury agreed, finding the patent claims valid and infringed and awarded $7 million in damages.  Both parties appealed.

The broadest claim has three steps that basically require

  • providing an output stream from from the server that defines a user interface paradigm (including user-interaction modes, such as “create, retrieve, update and delete” and display formats for each mode)
  • scanning the database to create a data model; and
  • using the data model to construct a client application also with the user interface paradigm.

‘918 patent.

The body of the claim does not include the an “automatic” requirement, but the preamble does: “A method for operating a server comprising a processor for automatically generating an end-user interface for working with the data within a relational database … , said method comprising …”


Much of Microsoft’s argument focuses on the term “automatic.” During claim construction, Microsoft had asked for the term to be construed as meaning “no human labor required.” At the summary judgment motion hearing, the Judge found no disagreement about the meaning of “automatic,” but rather concluded that the disagreement was about which parts of the process had to be automatic. Microsoft’s counsel then asked, “Can we resolve the claim construction issue?” and the district court responded , “You agreed on a definition.” At that point, Kaufman’s counsel agreed with the court “I think we have resolved it.”  There was no further briefing on the issue pre trial.

Preserving o2Micro Issue for Appeal: On appeal, Microsoft argued that the district court should have resolved the claim construction issue as required by O2Micro.  The Federal Circuit has refused to consider the argument — holding that Microsoft failed to preserve the issue.

Once litigation extends beyond pre-trial and into trial, claim construction should be seen as an issue of jury instructions.  In general, pre-trial objections made during the pleadings or summary judgment stage must be reiterated during trial in order to preserve those objections for appeal. FRCP Rule 51(c) requires a timely objection on the trial record to any jury instructions (or the failure to provide sufficient instructions).  Here, the Federal Circuit holds that same approach should apply to claim construction.

A proper claim construction provides a legal standard for the jury to apply, and so the requirement of clear, timely raising of an argument for a claim construction reflects the strong requirement of timely raising of distinct objections to jury instructions.

Kaufman, Slip Op.  One problem with this panel decision is that there are quite a few cases where the appellate court has permitted claim construction appeals despite the absence of on-point jury instruction objection.  Here, the appellate panel recognized that situation as “an exception to [the] requirement” that can apply when the issue was “sufficiently raised and settled earlier.”  In particular, as the Court wrote in 02Micro, the trial-objection requirement is only preserved in a situation where the claim construction arguments had been “made clear to the district court” and then “fully litigated in and decided” by the district court in such a way that further objection would be “futile [and] unnecessary.” Id.

On appeal, Microsoft also argued that the jury verdict of infringement was not supported by substantial evidence since its Dynamic Data program required substantial user input – and thus was not automatic.  On appeal though, the Federal Circuit concluded that claim language permitted some human actions (i.e., triggering the various operations).  And, the jury heard expert testimony that separated out the human actions of setting-up the operation from the claimed automatic steps of scanning”, etc.

And: One of the more litigated claim terms is the word “and.”  Here, the claims require several display modes: “create, retrieve, update and delete.”  Later, the claims require that “each said mode display processes for representing, navigating, and managing” data relationships.  The question here is whether the claims actually require each display mode provide the user all three options: represent, navigate, and manage.  Microsoft’s product includes some modes that do not display all the options  as required by the claims and so argues that it does not infringe.

The district court concluded in a post-verdict ruling that the term “and” should be construed as including “or.” On appeal, the Federal Circuit has affirmed. In its decision, the court particularly noted that the sole working embodiment described in the specification would only be covered by the claims under an “or” interpretation.  “A claim construction that excludes a preferred embodiment is rarely, if ever correct and would require highly persuasive evidentiary support.” Epos Technologies Ltd. v.
Pegasus Technologies Ltd., 766 F.3d 1338 (Fed. Cir. 2014).  The court also noted that the specification repeatedly used the word “and” in ways that clearly included “or.”

Infringement Affirmed.

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Although Kaufman won at trial, he appealed the district court’s denial of pre-judgment interest that could potentially double the award.  The patent statute particularly identifies interest as an element of compensation:

Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.

35 U.S.C. § 284. “Generally, prejudgment interest should be awarded from the date of infringement to the date of judgment.” Nickson Industries, Inc. v. Rol Mfg., 847 F.2d 795 (Fed. Cir. 1988). The Supreme Court interpreted this provision in its 1983 General Motors case, concluding that prejudgment interest is “typically” awarded in patent cases.  The Supreme Court also noted that the statute indicates interest is “fixed by the court” and may be denied by a district court based upon “some justification.”  General Motors Corp. v. Devex Corp., 461 U.S. 648 (1983).  In Nickson the Federal Circuit found that undue delay by the patentee in bringing the lawsuit could justify denying interest. See also, Crystal Semiconductor Corp. v. Tritech Microelectronics International, Inc., 246 F.3d 1336 (Fed. Cir. 2001).

Here, the district court gave two reasons for denying the award of pre-judgment interest.

  1. The jury verdict took into account the interest (because the instructions asked the jury to provide an award “discounted to present value”).
  2. Kaufman was responsible for undue delay in bringing the lawsuit.

On appeal, the Federal Circuit found the denial of interest a clear abuse of discretion.  The discounting portion of the verdict was tied to testimony regarding standard discount rates, but did not include any evidence or basis for the jury to also calculate or award interest.

Regarding undue delay, the district court identified a delay, but did not identify evidence that the delay was “undue,” i.e,. that it caused some prejudicial impact on the defendant.  In particular, Microsoft indicated that it “could have” altered its product back in 2011, but did not produce evidence that it “would have” done so.

On remand, the district court will need to add up that interest (and, likely add post-judgment interest as well based upon the appeal).

NetChoice v. Paxton: Briefs are in.

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.

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  • Appendix containing lower court opinions.
  • Party Briefs:
  • 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  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.

The Inventive Entity and Prior Publication by Another

by Dennis Crouch

Here is the setup in the Federal Circuit’s recent decision in Google LLC v. IPA Techs. Inc. (Fed. Cir. 2022):

  • March 23, 1998. Cheyer, Martin, and Moran co-author academic paper describing their Open Agent Architecture (“OAA”) project being developed at Stanford’s SRI International.
  • January 5 & March 17, 1999. Cheyer & Martin (but not Moran) file for patent protection on aspects of the OAA that were not fully disclosed within the original publication.

And the Question: Does the prior publication count as prior art in an IPR obviousness analysis?

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After IPA sued Google for infringement, Google petitioned for inter partes review (IPR).  Although the Board granted the petition, it eventually concluded that the prior publication was not prior art and thus sided with the patentee in its final written decision. On appeal, the Federal Circuit has vacated and remanded–asking for further fact finding on the contribution of Moran.

IPR proceedings are limited to challenges anticipation and obviousness challenges and only those based upon prior patents & printed publications.  Prior art used for  an obviousness rejection must first qualify as prior art under Section 102.  Since the patents here are pre-AIA, we focus on the old Sections 102(a) and 102(b):

Pre-AIA 102. A person shall be entitled to a patent unless —

(a) the invention was … patented or described in a printed publication … before the invention thereof by the applicant for patent, or

(b) the invention was patented or described in a printed publication … more than one year prior to the date of the application for patent in the United States, or

We can quickly eliminate the 102(b) time-bar because the patent applications at issue here were filed within the one-year grace period.  102(a) prior art asks whether the IPA invention was already the subject of a printed publication prior by the time the IPA inventors created their invention.  In the obviousness context, we break this down a bit further and ask whether some aspect of the invention was disclosed in a printed publication prior to the applicant’s invention date.

Courts also added a “by another” limitation into this portion of Section 102(a).  Thus, a prior publication by inventors (or a subset of the inventors) does not count as prior art under 102(a).  In re Katz, 687 F.2d 450 (CCPA 1982).

In IPA’s case, the problem is that the prior publication was by the inventors and an additional third party. If the third-party contributed fully to the publication then it counts as prior art.  But, the courts have recognized that listing of authors operates by a different norm than listing of inventors and so delve into whether or not the additional author actually contributed to the particular disclosure being relied upon.  In the context of pre-AIA 102(e) (that expressly included the “by another” provision), the Federal Circuit provided a three step process:

  1. determine what portions of the reference patent were relied on as prior art to anticipate the claim limitations at issue,
  2. evaluate the degree to which those portions were conceived ‘by another,’ and
  3. decide whether that other person’s contribution is significant enough, when measured against the full anticipating disclosure, to render him a joint inventor of the applied portions of the reference patent.

Duncan Parking Techs., Inc. v. IPS Grp., Inc., 914 F.3d 1347 (Fed. Cir. 2019).

In IPA, the Board concluded that Google had failed to show Moran had participated in the conception of the relevant portions.  On appeal, the Federal Circuit vacated the ruling — concluding that the Board had failed to “complete the full Duncan analysis” but rather disregarded testimony from Dr. Moran regarding his contribution as lacking corroboration.  On appeal, the Federal Circuit concluded that the original co-authorship represents “significant corroborating evidence.”  On remand, the court will need to actually consider the testimony and decide the factual questions of Moran’s contribution to the prior publication.

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Note – the case has a few other interesting and important procedural aspects that I’m not covering in this post.

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Under the AIA: Section 102 was substantially rewritten in the Leahy-Smith America Invents Act of 2011.  The revised provisions no longer consider the date-of-invention as relevant.   If the patents were being considered under the AIA, we would  still first look to Section 102(a) and find that the prior publication seemingly qualifies since the publication occurred prior to the applicant’s effective filing date:

Post-AIA. (a) Novelty; Prior Art.—A person shall be entitled to a patent unless— (1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.

We should not expect courts to read-in the “by another” limitation into this new Section 102(a), which is more properly thought of as a modification of the pre-AIA bar of 102(b) (despite its reference to “novelty”).   Thus, any publication prior to the effective filing date qualifies for consideration under Section 102(a).  But, prior art consideration under the AIA always require consideration of the exceptions found under Section 102(b).  Importantly, prior disclosures via the inventors within 1-year of the effective filing date are excluded from prior art consideration.

Post-AIA. 102(b) Exceptions.— (1) Disclosures made 1 year or less before the effective filing date of the claimed invention.—

A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if—

(A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or

(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.

The new statute does not provide any direct guidance as to how courts will treat  pre-filing disclosures akin to the one in IPA where the authors include both the listed inventors and also non-inventors.   On the one hand, the court could continue to require the same Duncan Parking analysis where we delve into the details of who conceived of the various aspects of the pre-filing disclosure. On the other hand, the court could simply whether an inventor is one of the listed authors — if so, the disclosure “was made by the inventor or joint inventor.”

The USPTO appears to largely be applying the Duncan Parking approach — its  examination guidance particularly focuses attention upon whether the 102(b)(1) disclosure is made solely by the listed inventors (or a subset).  See also Ex Parte Chowdhury, APPEAL 2020-006272, 2021 WL 4306675 (Patent Tr. & App. Bd. Sept. 20, 2021) (prior publication by a subset of inventors qualifies as a 102(b)(1) exception); and MPEP 2153.01(a) (“If … the application names fewer joint inventors than a publication (e.g., the application names as joint inventors A and B, and the publication names as authors A, B and C), it would not be readily apparent from the publication that it is by the inventor (i.e., the inventive entity) or a joint inventor and the publication would be treated as prior art under AIA 35 U.S.C. 102(a)(1).”).