All posts by Dennis Crouch

About Dennis Crouch

Law Professor at the University of Missouri School of Law.

Cert Petition: Respecting a Jury Verdict

Imperium IP Holdings (Cayman), Ltd.., v.  Samsung Electronics Co., Ltd., et al. (Supreme Court 2019)


This case implicates fundamental questions about the proper roles of the jury and the court. After a six-day trial, a jury found that Respondent Samsung willfully infringed Petitioner Imperium’s patent rights. In reaching that verdict, the jury found that Samsung had failed to carry its burden of proving by clear and convincing evidence that the relevant patent claims were invalid. Following post-trial proceedings, including an award of treble damages plus attorney’s fees in light of Samsung’s willful infringement and litigation misconduct, the district court entered judgment for over $22 million on the patent claims at issue.

The Federal Circuit reversed, however, holding that Samsung was entitled to judgment as a matter of law on invalidity because the jury was required to accept the purportedly credible, “unrebutted,” and “uncontradicted” testimony of Samsung’s paid expert. The court of appeals reached that holding only after performing its own assessment of Samsung’s expert’s credibility and ignoring numerous other facts that could have led a reasonable jury to discount the value of this witness’s testimony.

The question presented is

whether an appellate court may reverse a jury verdict based on its own view that expert testimony was credible, “unrebutted,” and “uncontradicted,” or instead whether the Seventh Amendment requires the jury to make determinations about credibility and the weight of the evidence in determining whether a party has properly carried its burden of proof.


Manufacturers Locking-In Consumers with Design Patents

by Dennis Crouch

Automotive Body Parts Ass’n v. Ford Global Techs. (Fed. Cir. 2019)

Car manufacturers regularly use design patents to control the repair marketplace.  In this case, Ford accused members of the ABPA of infringing its U.S. Patent No. D489,299 (F150 truck hood) and U.S. Patent No. D501,685 (F150 headlamp) andn APBA responded with a declaratory judgment lawsuit — arguing that the patented designs are functional rather than ornamental and therefore invalid.

A design patent must be directed to an “ornamental design for an article of
manufacture” and not one “dictated by function.”  High Point Design LLC v.
Buyers Direct, Inc., 730 F.3d 1301, 1315 (Fed. Cir. 2013) (interpreting 35 U.S.C. § 171(a)).   Although the article of manufacture itself is typically functional, the design itself may not be “primarily functional.”

The Federal Circuit has applied a multi-factor approach that basically asks whether the claimed design is “essential to the use of the article.” Factors:

[W]hether the protected design represents the best design; whether alternative designs would adversely affect the utility of the specified article; whether there are any concomitant utility patents; whether the advertising touts particular features of the design as having specific utility; and whether there are any elements in the design or an overall appearance clearly not dictated by function.

Berry Sterling Corp. v. Pescor Plastics, Inc., 122 F.3d 1452 (Fed. Cir. 1997).

ABPA’s argument here is that anyone repairing a damaged F150 truck will want replacement parts that match the original design.  In particular, APBA “argues
that Ford’s hood and headlamp designs are functional because they aesthetically match the F-150 truck.”  On appeal, the Federal Circuit rejected this theory of functionality: “the aesthetic appeal of a design to consumers is inadequate to render that design functional” —  “even in this context of a consumer preference for a particular design to match other parts of a whole.”  According to the court, market advantage via aesthetic appeal is the exact type of market advantage that design patents are supposed to provide.

The holding here gives a powerful nod of approval to the already rampant use of design patents to lock-in consumers for repair parts and for manufacturers to use design patents to prohibit unauthorized interconnections.  In this form, the case sits closely alongside the Federal Circuit’s decision on Google v. Oracle that is pending certiorari before the Supreme Court.  The case also reaffirms the tradition that the functional limit in design patents is a very weak test — even weaker than that of copyright and trademark law. 

Auto insurance companies have long lobbied congress to weaken design patent coverage on repair parts. This case may trigger a resurgence in that activity.  The case also suggests a potential marketplace for after-market parts that are slightly different from OEM but still functional.  I’d probably prefer an F150 that doesn’t look like the original.  

Reopening Prosecution – Rather than Allowing Appeal

In his petition for writ of certiorari, Gilbert Hyatt asks:

Whether MPEP § 1207.04 violates patent applicants’ statutory right of appeal following a second rejection.

This section of the MPEP allows a patent examiner to “reopen prosecution to enter a new ground of rejection” in response to a patentee filing an appellate brief.  Hyatt argues that this approach violates the right to appeal under 35 U.S.C. § 134 and § 6(b).  When I previously wrote about the case, I noted a “remarkably parallel” case from 1904 where the Supreme Court authorized mandamus action where the examiner refused to forward cases to the Board. U.S. ex rel. Steinmetz v. Allen, 192 U.S. 543 (1904).  The Supreme Court in that case also wryly spells-out the justification for restriction practice — “to obtain more revenue” for the Patent Office.

In its newly filed responsive brief, the USPTO agrees that after having its claims “twice rejected . . . the applicant is entitled to appeal that rejection. . . [However], contrary to petitioners’ assertion, that procedure does not deprive any patent applicant of his right to review by the Board.”

[Supreme Court Docket Page]

The PTO draws a distinction with Steinmetz because it was related to a refusal to allow an appeal with regard to restriction practice — rather than repeated reopening of prosecution.

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My take here is that the PTO should be able to reopen prosecution when it acts reasonably.  A mandamus action or APA lawsuit should be available if the agency acts otherwise.

Whether Enhanced Damage Judgment is Required for a “Final Decision”

by Dennis Crouch

Brigham and Women’s Hospital v. Perrigo Co. (Supreme Court 2019).

I wrote about this case in February 2019 under the Headline: Pepcid Complete Generic Does not Provide “Immediate Relief” and Therefore Does not Infringe.  The jury sided with the patentee and awarded $10 million in damages.  That verdict was overturned by the district court who concluded that no reasonable jury could find infringement based upon the evidence presented. And, as my headline suggests, the Federal Circuit affirmed the non-infringement holding.

My original post focused on the patent law merits and avoided some of the appellate procedure issues that are the focus of a push by the patentee to the Supreme Court.

Here’s what happened in the case. A few days after the jury verdict siding with the patentee, the court clerk entered judgment for the patentee using the court’s standard judgment form.

Note here, that the judgment is lacking somewhat because it is subject to an accounting and also consideration of enhanced damages for willful infringement. But, this is pretty standard — there is usually some amount of clean-up following judgment on the merits.

The basic appellate procedure question is whether this judgment is a “final decision” that must be appealed within 30 days. The question is important because Perrigo didn’t file an appeal within the 30 day requirement.  Here is the guidance:

  • 28 U.S.C. 1295(a)(1): Federal Circuit has jurisdiction of “an appeal from a final decision” in a patent case.
  • Fed. R. Appellate Proc. 4(a): “the notice of appeal . . . must be filed . . . within 30 days of entry of the judgment or order appealed from.”

In its unpublished order, the Federal Circuit worked through the details of what counts as a ‘final decision’ under section 1295. In general, a final decision is one that “ends the litigation on the merits and leaves nothing for the court to do but execute judgment.” Catlin v. United States, 324 U.S. 229 (1945) (citation omitted).  The law though has some amount of nuance. While compensatory damages are seen as a core element of the ‘merits’ litigation, attorney fee awards are not.

If you remember, the district court’s December 2016 judgment did not decide enhanced damages for willful infringement.  On appeal in this case, the Federal Circuit decided that enhanced damages are more like regular compensatory damages than attorney fees — and thus the lack of an enhanced damage award/denial meant that the district court’s Dec. 2016 decision was not a final decision and thus didn’t need to be appealed immediately.

In papers recently filed with the Supreme Court, Brigham & Women’s has indicated its intent to petition for writ of certiorari on the final decision question — arguing that the Federal Circuit’s decision lacks authority and is contrary to several Supreme Court decisions, including Budinich v. Becton Dickinson & Co., 108 S. Ct. 1717 (1988) (a decision is final even without considering attorney fee motions — “A question remaining to be decided after an order ending litigation on the merits does not prevent finality if its resolution will not alter the order or moot or revise decisions embodied in the order.”); and Ray Haluch Gravel Co. v. Central Pension Fund, 134 S. Ct. 2205 (2014) (The fact that attorney fees are authorized by contract does not change the usual rule that attorney’s fees “do not remedy the injury giving rise to the action” and therefore not part of a merits decision.)

One key way that the Federal Circuit distinguished enhanced damages from attorney fees was by looking at the statutory structure and recognizing that enhanced damages are part of the regular damages statute 35 U.S.C. § 284 while attorney fees are separately codified in 35 U.S.C. § 285.  “The source of authority to award damages is the same source of authority that authorizes enhanced damages.”  I’ll note that this exact type of reasoning was rejected by the Supreme Court in Budinich and Ray Haluch Gravel.

Some fee-shifting provisions treat the fees as part of the merits; some do not. Some are bilateral, authorizing fees either to plaintiffs or defendants; some are unilateral. Some depend on prevailing party status; some do not. Some may be unclear on these points. The rule adopted in Budinich ignores these distinctions in favor of an approach that looks solely to the character of the issue that remains open after the court has otherwise ruled on the merits of the case.

Ray Haluch Gravel.  Bottom line here is that this statutory-linkage portion of the Federal Circuit’s decision is junky and has already been effectively preempted by two prior Supreme Court decisions. In its decision, the Federal Circuit does not offer any other reason for tying enhanced damages to the final decision other than that it has done obliquely so in the past.

Documents: Supreme Court DocketJim Bollinger (Troutman Sanders) is handling the petition and was also trial and appellate counsel. Jeff Gargano (Morgan Lewis) represented Perrigo at trial and in the appeal.


Unlawful Use of Flavor

ScentSational Tech v. PepsiCo (Fed. Cir. 2019)

The legal claims in this case are interesting and could form a Mountain Dew commercial — unlawful use of flavor.  To be clear, the case is not about actual flavors, but instead enhancing the “perceived taste” of orange juice and other beverages by adding an aroma in scratch-n-sniff form to a bottle-lid closure. A “fresh aroma that replicates or evokes memory of the expected flavor” is released by the abrasive force of twisting off the bottle-cap.

ScentSational and PepsiCo had a 10-year business relationship.  As that partnership was winding down, ScentSational ramped-up talks with Coca-Cola.  However, those talks also broke down — and ScentSational blames PepsiCo.  In particular, the allegation is that PepsiCo misappropriated and attempted to patent ScentSational technology; and Coca-Cola dropped the project when it found PepsiCo’s pending patent applications.  ScentSational then sued for trade secret theft, breach of contract, and inventorship correction — arguing that damages should be based upon the lost Coca-Cola contract.  However, the district court dismissed the case in PepsiCo’s favor.

The primary issue on appeal had to do with damages and expert testimony.  The district court had barred most of ScentSational’s expert testimony for failing Daubert. On appeal, the Federal Circuit affirmed — holding that the district court “did not abuse the broad discretion it is accorded in determining whether, and to what extent, to admit particular expert testimony at trial.”  The Federal Circuit also affirmed the lower court’s summary judgment finding that ScentSational had failed to produce inventorship evidence.

A controversial aspect of the decision was the notion that ScentSational’s failure to prove particular damages should result in dismissal of the entire case (since damages are not an element of the trade secret or breach claims).  The appellate panel held that ScentSational’s claim to nominal damages had been waived and “In any event, we have held that we will ordinarily not remand a case merely to determine whether nominal damages would have been appropriate.”

Following the May 2019 decision, ScentSational petitioned for rehearing arguing that the court misunderstood a number of facts in dispute and also “that while a plaintiff must prove the existence of damages with certainty in order to recover, plaintiff need not prove the amount of loss with certainty.”  In a recent order, however, the Federal Circuit has denied rehearing — effectively ending ScentSational’s case.

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Inventorship Challenges vs Invalidity Challenge — and Certifying Questions for Appeal

Heat Technologies, Inc. v. Papierfabrik August Koehler SE (Fed. Cir. 2019)

This case involves an unusual bit of appellate procedure regarding certifying questions for appeal under 28 U.S.C. 1292(b). 

Back in 2018, Heat Tech sued Koehler Paper in N.D. Georgia federal court requesting correction of inventorship under 35 U.S.C. § 256 as well as damages for unjust enrichment and conversion under Georgia state law. U.S. Patent No. 9,851,146.  The basic background of the lawsuit was that Heat Tech’s president (Plavnik) invented the paper-drying mechanism that was then disclosed to Koehler as part of a collaboration evaluation.  In addition, Heat Tech argued that almost all of the information disclosed in Koehler’s patent was included in a prior Heat Tech patent application.

At the district court, Koehler filed a motion to dismiss the case — arguing that Heat Tech’s actual claim is for invalidity and that an inventorship-correction lawsuit is not appropriate when the same alleged facts would invalidate the patent for lack of novelty or obviousness.  The district court denied the motion to dismiss, but agreed to certify the question for appeal to the Federal Circuit — noting some disagreement among the courts on the state of the law.

Question certified by the district court:

Can a claimant obtain relief under 35 U.S.C. § 256 when its inventorship allegations, if taken or proven as true, would necessarily invalidate the subject patent under other provisions of the Patent Act?

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The usual rule is that appellate jurisdiction follows final judgment by a district court. In a motion-to-dismiss situation, the case can be appealed if dismissal is granted — but not if dismissal is denied (because the case will still be pending at the district court).  There are several exceptions, including mandamus actions and appeals of preliminary injunction decisions another exception involves certification of an appeal under Section 1292:

(b) When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order.

The Court of Appeals which would have jurisdiction of an appeal of such action may thereupon, in its discretion, permit an appeal to be taken from such order, if application is made to it within ten days after the entry of the order.

In reviewing the statute, the Federal Circuit identifies three key requirements for hearing an interlocutory appeal under 1292(b):

  1. The appeal must involve “a controlling question of law.”
  2. There must be “substantial ground for difference of opinion.”
  3. An immediate appeal “may materially advance the ultimate termination of the litigation.”

Further, even when all three elements are met, the appellate court still has discretion to decide whether to permit the appeal.

On appeal now, the Federal Circuit HeatTechDecisionhas denied the 1292(b) petition and effectively indicated that the district court’s decision was correct.  In particular, the appellate panel found no “substantial ground for disagreement” because Section 256 jurisdiction “does not depend on whether the patent may be shown to be invalid.”  Slip op.  The appellate panel noted its lack of prior precedent directly and expressly on-point, but concluded that prior cases compel the answer. For example, in Frank’s Casing Crew & Rental Tools, Inc. v. PMR Techs., Ltd., 292 F.3d 1363, 1377 (Fed. Cir. 2002), the court wrote that an inventorship action could be maintained for an unenforceable patent.

Prosecution Disclaimer: Should patent law have a Parole Evidence Rule for Claim Construction?

by Dennis Crouch

Technology Properties Limited LLC, v.  Huawei Technologies Co., Ltd. (Supreme Court. 2019)

Back in February, the Federal Circuit issued a R.36 affirmance — affirming the lower court’s claim construction and non-infringement finding.  Tech. Properties has now filed a statement of intent to petition for writ of certiorari, now with Ken Starr at the helm and focusing on prosecution disclaimer precedent from the 1880’s along with a constitutional argument.  The patentee writes:

This case presents important questions of constitutional and patent law. The law of prosecution disclaimer, as applied in this case and in other cases, has morphed in a manner inconsistent with the Patent Act. The Federal Circuit’s increasingly anti-textualist methodology also conflicts with this Court’s long-established precedent. The improper expansion of this judicially-created doctrine upsets the balance between the role of the Patent Office and the role of the judiciary, as established by Congress, and injects great uncertainty into the publicnotice function of patents. Congress delegated the examination and issuance of patents to the Patent Office and requires deference to the agency’s decision-making.

The expanded disclaimer doctrine calls into question the Patent Office’s authority to examine and issue patents, and the limited role of the judiciary in reviewing the Patent Office’s determinations. Encouraging litigants and courts to wade through the back-and-forth between the Patent Office and a patent applicant to rewrite the issued claims through imposition of additional limitations under the guise of “claim construction” runs afoul of Congress’s delegation.

The basic argument that the patentee is making here is that patent claims should be adjudged by their terms and buried statements within the prosecution history should not be allowed to enlarge or reduce the patent scope.  You might call this the patent law parole evidence rule:

A patent is a public franchise.  The public and the patentee are entitled to clarity on the boundaries of a patentee’s rights; the claims, which define the metes and bounds of the inventor’s rights, provide that clarity. Gratuitous statements in the file history do not; they are inherently less predictable—illustrated by this case and other recent cases.

That 1880’s case: Goodyear Dental Vulcanite Co. v. Davis, 102 U.S. 222 (1880).

Distribution of Working Draft to 250-Member Standard Setting Working Group – NOT a PUBLICATION

Samsung v. InfoBridge (Fed. Cir. 2019)

In the inter partes review (IPR), the Patent Trial & Appeal Board (PTAB) sided with the patentee Infobridge — concluding that the purported prior art was not sufficiently publicly accessible prior to the patent’s November 7, 2011 filing date (and therefore not prior art).  On appeal, the Federal Circuit has rejected that decision — holding that the PTAB “applied the wrong legal standard in assessing public accessibility.”

The reference at issue is “Working Draft 4 of the H.265 standard” (WD4) which was developed by an MPEG group known as the Joint Collaborative Team on Video Coding (“JCT-VC”).  The information included int he reference was discussed at a July 2011 meeting in Torino that included about 250 participants including both academics and corporate representatives. WD4 then written and uploaded to the JCT-VC website on October 4, 2011 as one of hundreds of documents listed on the Torino meeting sub-page. The documents are in no apparent order and when printed run 48 pages long. (The relevant page is listed below, can you find our reference of interest?).

 WD4 was also uploaded to an MPEG website on October 4, 2011, but required a password to access.  Also, the same day the WD4 lead author posted a link to the document to a listserve that included JCT-VC members and other interested individuals.

A publication must be either actually distributed or else made publicly accessible.  Courts ask “whether a person of ordinary skill in the art could, after exercising reasonable diligence, access a reference.”  If so, then it is a publication.

Level of Access: In its decision, the Board found no evidence to show that “WD4 was accessible to anyone other than members of JCT-VC” because the websites were too complicated and unorganized. Regarding the listserve, the Board found that the “other interested individuals” testimony to lack credibility and found it  “nothing more than conjecture and speculation.”  The board – in essence – found no evidence that the WD4 document “was generally disseminated to persons interested and ordinarily skilled in the art.” As such, the Board held that the reference should not be considered prior art as of its 2011 date.

Distribution within the Group: Samsung argued that the JCT-VC group should be considered analogous to an academic conference and that distribution within the group should count as publication.  “JCT-VC was composed of more than 250 members who were skilled artisans” in the relevant video coding art.  On appeal though the Federal Circuit rejected this argument — holding that publication requires distribution beyond the creators of the document.  ” [A] work is not publicly accessible if the only people who know how to find it are the ones who created it” — even if those people are a loose standard setting organization of 250 global experts.

Email Listserv Distribution: The patent challenger was able to gain traction with its listserv argument by showing public accessibility.

The Board departed from this well-established principle by repeatedly faulting Samsung for not proving that the WD4 reference was “generally” or “widely” disseminated. …[A] limited distribution can make a work publicly accessible under certain circumstances.  But the Board’s analysis stopped short of considering whether those circumstances were present here. The Board also faulted Samsung for failing to show that the email recipients “represented a significant portion of those interested and skilled in the art.” That was not Samsung’s burden. The Board’s decision to reject Samsung’s evidence because it did not establish that enough interested and ordinarily skilled artisans actually obtained the WD4 reference was therefore erroneous.

Rather than requiring Samsung to prove that persons of ordinary skill actually received the listserv email, the Board should have considered whether Samsung’s evidence established that an ordinarily skilled artisan could have accessed the WD4 reference, after exercising reasonable diligence, based on the listserv email. This might include examining whether a person of ordinary skill, exercising reasonable diligence, would have joined the listserv. It also might include considering the circumstances of the email itself, for example why the email was sent and whether it was covered by an expectation of confidentiality. Because the record is not clear on these factual questions, we decline to resolve them in the first instance on appeal. In particular, we are reluctant to assume that an email among potential collaborators should be treated the same as a public disclosure without clear findings by the Board. Accordingly, we vacate the Board’s finding that Mr. Bross’s email did not make the WD4 reference publicly accessible and remand so that the Board can consider this issue after applying the correct legal standard.

On remand, the PTAB will reconsider these issues — and likely find again that the listserv distribution was not sufficiently public.

Apportionment of Willfulness and Discretion to Reconsider Attorney Fees

by Dennis Crouch

SRI International, Inc. v. Cisco Systems, Inc. (Fed. Cir 2019)  (modified opinion on rehearing)

When the Federal Circuit released its eligibility decision in March 2019, I panned the opinion as a “results-oriented decision [that] unfortunately shades-facts and provides no clarity in its legal analysis of eligibility.”  On petition, the panel has modified its original opinion. Unfortunately, the court did not modify its eligibility analysis, but rather modified a portion of the remand on attorney fees.

At the conclusion of the trial, a jury awarded the patentee SRI $23 million in reasonable royalty damages associated with SRI’s network monitoring patents.  The jury also found that Cisco’s infringement was willful.

The jury awarded SRI a 3.5% reasonable royalty for a total of $23,660,000 in compensatory damages.  The jury also found by clear and convincing evidence that Cisco’s infringement was willful.  The judge then double the compensatory award and also awarded $8 million attorney fees as well as an ongoing compulsory license for any future infringement. (I believe the patents have now expired).

Willful Infringement: The patent act does not expressly identify willfulness as relevant to an infringement lawsuit. However, courts have ruled that willfulness is an underlying requirement for enhanced damages under 35 U.S.C. 284. “Enhanced damages under § 284 are predicated on a finding of willful infringement.”

On appeal here, the Federal Circuit ruled that enhanced damages willfulness should be further apportioned by time.  I.e., enhanced damages cannot be awarded for infringement that occurred prior to the infringer’s willful infringement. Here, the patentee proved infringement going back to 2000, but did not show that Cisco knew of the patent before May 2012 – thus no willfulness. On remand, the district court will need to reconsider the willfulness award to match the court’s temporal apportionment approach.

The court’s approach here is interesting — the jury found the infringement to be willful.  Rather than rejecting the jury verdict, the appellate panel “interpreted” the verdict as finding willfulness as of May 2012 (and finding no willfulness prior to 2012).  Then, the appellate court found error by the district court in enhancing damages for the entire term of infringement.

Attorney Fees: Ordinarily, each party must pay its own trial costs, including attorney fees. However, in patent cases the district court has discretion to award fees to the prevailing party in “exceptional cases.” Here, the district court found that Cisco’s litigation tactics were unduly aggressive:

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

One example – was that Cisco maintained 19 invalidity theories until the eve of trial — then only presented two of them at trial along with defenses that were contrary to both the evidence and prior court rulings. The district court also noted that the willfulness finding by the jury contributed to the decision to award attorney fees.  Because the now-modified willful infringement judgment served as one basis for the enhanced damages, the appellate panel also vacated the enhanced damages for reconsideration on remand.

In its original opinion, the appellate panel had explained that there was sufficient evidence of bad behavior to justify a fee award even without willfulness — and thus had affirmed an award.  In the modified opinion, the court instead vacated the finding of exceptional case — likely because that decision is supposed to be within the discretion of the district court.

[Modified Opinion]

In its petition for rehearing, Cisco had also asked for reconsideration of the eligibility decision.  That portion of the petition was denied.  EFF had filed a petition in support of rehearing, arguing that “the claims here fall squarely within a category of abstract ideas that is now well-established: claims that involve collecting, analyzing, and displaying information without more.”

Network Monitoring and . . .

Relevant claim:

1. A computer-automated method of hierarchical event monitoring and analysis within an enterprise network comprising:

deploying a plurality of network monitors in the enterprise network;

detecting, by the network monitors, suspicious network activity based on analysis of network traffic data selected from the following categories:

  • network packet data transfer commands,
  • network packet data transfer errors,
  • network packet data volume,
  • network connection requests,
  • network connection denials,
  • error codes included in a network packet;

generating, by the monitors, reports of said suspicious activity; and

automatically receiving and integrating the reports of suspicious activity, by one or more hierarchical monitors.

US Utility Patents Granted per Year

by Dennis Crouch

We are about 3/4 of the way through fiscal year 2019 (ends September 30, 2019) and the USPTO is on-track to issue the most patents ever in a single year period — I’m forecasting 330,000 issued utility patents, which is up about 5% from the prior 1-year high in 2017.  This rise is consistent with more patentee-friendly attitude of Andrei Iancu who began his role as Trump’s USPTO director in 2018.


Fastest Patents of 2019

U.S. Patent No. 10,285,922 (110 days from earliest priority to issuance). The ‘922 Patent claims a “topical exfoliating formulation” that includes papain enzyme.   Case was subject to a petition to make special based upon the inventor’s age of 65+.  Applicant cited no references and the (primary) examiner only found two.

U.S. Patent No. 10,343,988 (111 days from earliest priority to issuance).  The ‘988  patent is directed to a new compound known as hydroxytyrosol thiodipropionic acid apparently useful for food preservation.

The patent claims priority to a Chinese application filed March 1, 2019.  The U.S. application was then filed March 20, 2019 and issued on June 19, 2019. Applicant cited no references and the (primary) examiner only found one.

U.S. Patent No. 10,336,689 (114 days from earliest priority to issuance). The ‘689 patent has a similar path to the ‘988 patent (and is owned by the same entity (Shaanxi University of S&T) and examined by the same primary examiner — but is directed to a totally different compound that exhibits “antitumor activities.”

U.S. Patent No. 10,302,471 (116 days from earliest priority to issuance). The ‘471 also stems from China, but does not rely on foreign priority.  The patent claims a device for observing “abyssal flow” and was subject to a “track one” petition.


Venue: “Regular and Established Place of Business” is a Questions of Law

Westech v. 3M (Fed. Cir. 2019)

Westech sued 3M for patent infringement in W.D.Washington. On motion from 3M, the district court then dismissed the case for improper venue under 28 U.S.C. 1400(b).  Under the statute, infringement cases can only be brought in a judicial district where the defendant either (1) resides (i.e., is incorporated) or (2) infringed the patent and has a regular and established place of business.  Here, the focus is on 3M’s sales activities with vendors, distributors, and sales professionals — and whether those activities constitute a “regular and established place of business.”  Two key precedential cases: In Cray, the Federal Circuit held that a “place of business” must be a “physical place in the district.”  In ZTE, the Federal Circuit held that it is the plaintiff’s burden of establishing proper venue (burden of persuasion).

Westech’s amended complaint states:

3M has one or more regular and established places of business in this judicial district. Furthermore, on information and belief, Defendants maintain contractual relationships with distributors of the infringing products who are located in this judicial district, Defendants have sales representatives located in this judicial district, Defendants represent that they sell products in this judicial district, and Defendants earn substantial sales revenue from sales of the infringing products in this judicial district.

Sufficient for venue? The district court saw these allegations as insufficient and the Federal Circuit has affirmed on appeal.  On point – The asserted facts do not lead to a conclusion that 3M has a physical place of business in the district, and the allegation that 3M has “regular and established places of business” is a legal conclusion not given any weight in the analysis. The court explains:

Simply stating that 3M has a regular and established place of business within the judicial district, without more, amounts to a mere legal conclusion that the court is not bound to accept as true. . . .

A presumption that facts pleaded in the complaint are true does not supplant a plaintiff’s burden to plead specific facts showing that the defendant has a regular and established place of business physically located in the judicial district.

Question of Law: The statements by the court here is a bit oblique, but it may be the first precedent expressly stating that whether the defendant “has a regular and established place of business” in the district is a question of law and not a question of fact.  In Cray, the court indicated that the analysis will be based upon underlying facts: “In deciding whether a defendant has a regular and established place of business in a district . . . each case depends on its own facts.”

Predictability and Criticality in the Written Description Analysis

by Dennis Crouch

In re Global IP Holdings (Fed. Cir. 2019)

In its reissue application, Global IP asked the PTO to broaden its carpeted-car-floor patent by changing the “thermoplastic” requirement to simply “plastic.”  The PTO rejected the reissue application on written description grounds — noting that the specification only discloses the use of thermoplastics and not parts “formed generally from plastic materials.”  According to the examiner, the broader scope constituted “new matter.”  The PTAB made clear that the, although “plastics” might be enabled and within the skill of someone in the art, the patent document does not show possession of that invention:

[R]egardless of the predictability of results of substituting alternatives, or the actual criticality of thermoplastics in the overall invention,[Global’s] Specification, as a whole, indicates to one skilled in the art that the inventors had possession only of the skins and core comprising specifically thermoplastic.

PTAB Decision.

On appeal, the Federal Circuit has vacated — can you spot the written description error?

In its opinion, the Federal Circuit explained that the level of written description required to show possession “varies depending on the nature and scope of the claims and on the complexity and predictability of the relevant technology.” Ariad.  Thus, the Board erred by stating that the predictability and criticality made no difference.

Contrary to the Board’s statement, the predictability of substituting generic plastics for thermoplastics … is relevant to the written description inquiry. . . . In addition to predictability, we have held that the criticality or importance of an unclaimed limitation to the invention can be relevant to the written description inquiry.

In other words, a variation predictable to PHOSITA is more likely to covered by the written description (as compared with an unpredictable variation). Likewise, variation of a non-critical component of the invention is more likely to be covered by the written description (as opposed to a component at the point of novelty).

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Note here that in this case the Examiner/Board raised a standard written description challenge. On remand, they might achieve better results by focusing on the heightened written description standard for broadening reissues.

Heightened Written Description Standard for Reissue Patents


Athena Loses on Eligiblity – Although 12 Federal Circuit Judges Agree that Athena’s Claims Should be Eligible

by Dennis Crouch

Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC (Fed. Cir. 2019)

In a 7-5 decision, the Federal Circuit has denied Athena’s petition for en banc rehearing on the question of eligibility of diagnostic patents. As discussed below, the en banc denial includes eight (8) separate opinions — all of which call for Supreme Court or Congressional intervention. Judge Moore explains:

This is not a case in which the judges of this court disagree over whether diagnostic claims, like those at issue in Athena, should be eligible for patent protection. They should. None of my colleagues defend the conclusion that claims to diagnostic kits and diagnostic techniques, like those at issue, should be ineligible. The only difference among us is whether the Supreme Court’s Mayo decision requires this outcome.

Athena and its co-petitioners Oxford University and the Max-Planck institute asked the Federal Circuit to address two particular questions:

  1. Whether this Court now recognizes a categorical bias against patent claims to methods of diagnosis, an impermissible expansion of the Supreme Court’s narrowly defined judicial exception to patent eligible subject matter under 35 U.S.C. § 101.
  2. Whether courts may now exclude claim elements that they deem “conventional” in determining whether the claim is “directed to” patent eligible subject matter, or does Supreme Court authority requiring that claims be assessed “as a whole” still apply in Section 101 analysis.

Athena’s claim at issue covers a method for diagnosing neurotransmission disorders by obtaining “bodily fluid” and running a set of lab tests to identify whether the fluid contains a “MuSK” complex.  I described the patent in a prior post:

Diagnosis: Ineligible

In its original decision, the Federal Circuit found the claim directed to an ineligible preexisting law of nature: “the correlation between the presence of naturally-occurring MuSK autoantibodies in bodily fluid and MuSK-related neurological diseases.” The court found the additional concrete steps in the claim were all “standard techniques in the art” and thus did not rise to a patentable inventive concept.

The en banc denial includes eight (8) separate opinions

  • Concurring opinion by Judge Lourie: Although we disagree with the Supreme Court, we are bound by its precedent. Thus, there is no need to revisit this case. (joined by Judges Reyna and Chen)
  • Concurring opinion by Judge Hughes:  “[T]his is not a problem that we can solve. As an inferior appellate court, we are bound by the Supreme Court. . . . I, for one, would welcome further explication of eligibility standards in the area of diagnostics patents.” (joined by Chief Judge Prost and Judge Taranto)
  • Concurring opinion by Judge Dyk: Section 101 is necessary — sometimes it is the only defense against overbroad patents that would stifle future discoveries.  However, the claims in this case are specific enough and have proven utility an provide the Supreme Court with a good vehicle “to refine the Mayo framework.” (Joined by Judge Hughes, and partially joined by Judge Chen)
  • Concurring opinion by Judge Chen: Under Diehr, the claims are patent eligible — but not under Mayo.
  • Dissenting opinion by Judge Moore: The claims in this
    case should be held eligible, and they are distinguishable
    from Mayo — especially when that case is read in light of Myriad(joined by Judges O’Malley, Wallach, and Stoll)
  • Dissenting opinion by Judge Newman: Medical diagnostics methods are critically important for society and the patent system should encourage their development.  Mayo does not create any anti-diagnosis rule. (joined by Judge Wallach)
  • Dissenting opinion by Judge Stoll:  Although the decision here is foreclosed by Mayo, the court should rehear the case because it is so important. (joined by Judge Wallach)
  • Dissenting opinion by Judge O’Malley: The Supreme Court is simply wrong in its statutory interpretation of 35 U.S.C. 101. 

The statements here by the judges have no direct impact on the law and are all 100% dicta.  That said, this collection of opinions is designed to send a powerful signal to both the Supreme Court and – perhaps more importantly to Congress – that all members of the “high patent court” see a major problem with the law as it stands now.

Of some interest – the judges were almost uniformly all careful to focus their attention on medical diagnosis inventions — suggesting a targeted solution that would not extend to business methods and other information-based inventions.

Good Luck Enforcing a Payment System Patent Claimed in Abstract Form

by Dennis Crouch

Innovation Sciences, LLC v., Inc. (Fed. Cir. 2019)

Eligibility: Of the three patents in suit, the district court found one ineligible under 35 U.S.C. § 101. U.S. Reissue Patent No. 46,140 (asserted claim 17).  The patent claims an use of a “payment server” in an online transaction to enhance transaction security, and the district found “securely processing a credit card transaction with a payment server” to be an unpatentable abstract idea. The key claim step includes the following limitation:

[R]eceiving credit card payment information at the payment server to buy items from a website … “wherein the credit card payment information is received after online communication of the buyer has been switched from the website listing the items to a website supported by the payment server, wherein the switching of the online communication of the buyer is after an indication from the buyer to buy the one or more of the items”

On appeal, the Federal Circuit affirmed the holding — finding that the claim “is directed to the abstract idea of securely processing a credit card transaction with a payment server.”  In reaching that conclusion, the court noted that the claim elements are written in “merely functional, result-oriented terms” — “an idea, having no particular concrete or tangible form.” (quoting Ultramercial).   Further, the recitation of “servers” limited the invention’s use to particular area of existing technology, but did not “render the claims any less
abstract.” (quoting Affinity Labs).

Regarding the wherein clause for switching from a regular server to a payment server, the court explained that the claim is merely directed to the abstract idea of switching — not any particular implementation or system improvement.

In Alice step two, the court explained “[t]here is no inventive concept in the claim’s use of a generic payment server ‘to perform well-understood, routine, and conventional activities commonly used in industry.'”

= = = = =

In the lawsuit, Innovation Services also asserted two other patents with claims that the Federal Circuit explained “are not a model of clarity and stray from the embodiments described in the specification.”

Still, with that framework, the court chose to give the claims their express meaning — broad enough to allow for infringement.  On remand though the court suggests review of the written description and enablement requirements. (“We do not express an opinion as to whether they satisfy the
requirements of § 112.”)


When do the “Principles of Equity” allow for Profit Disgorgment?

Romag Fasteners, Inc. v. Fossil, Inc., et al., No. 18-1233 (Supreme Court 2019).

The Supreme Court has granted writ of certiorari in the trademark case of Romag Fasteners involving profit disgorgement under 15
U.S.C. § 1117(a).

The statute appears to provide profit disgorgment (i.e., awarding the defendant’s profits) as a regular remedy for trademark infringement although “subject to the principles of equity.” In its decision, the Federal Circuit (following 2nd Circuit law) held that profit disgorgment must be associated with a more-egregious activity – such as willful infringement – before being awarded.  Here, the jury found no willful infringement and so that foreclosed the award of the defendant’s profits.  We are now set-up for the Supreme Court to decide the following question presented:

Whether, under section 35 of the Lanham Act, 15 U.S.C. § 1117(a), willful infringement is a prerequisite for an award of an infringer’s profits for a violation of section 43(a), id. § 1125(a).

Question presented in petition.  The adjudged infringer Fossil provided its alternative question as follows:

Whether the Court should address the standard for an accounting of a defendant’s profits even though (a) regardless of the different formulations of “principles of equity” invoked by lower courts, their application in the overwhelming majority of cases results in an accounting being ordered when the infringement was willful and denied when it was not; and (b) the trial court’s findings in this case bar petitioner from recovering respondents’ profits under either standard applied by the courts of appeals.

The relevant statute itself reads as follows:

When a violation of any right of the registrant of a mark registered in the [PTO], a violation under section 1125(a) or (d) of this title, or a willful violation under section 1125(c) of this title, shall have been established in any civil action arising under this chapter, the plaintiff shall be entitled, subject to the provisions of sections 1111 and 1114 of this title, and subject to the principles of equity, to recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.

My reading of the statute itself suggests that non-willful infringement can support an award of defendant’s profits, so long as that award is in accord with “the principles of equity.”  And, those principles are not fully defined for this particular question. There is also a question of timing — principles of equity as of when? Are these 18th; 19th; 20th; or 21st century equity principles?

In the patent world, profit disgorgment is permitted as a remedy for design patent infringement.  That remedy is not expressly limited to willful infringement or limited by the principles of equity.  However, the remedy does require on-its-face an “imitation,” which in my mind should be read to require some amount of copying.

Duty to Submit Supplemental Evidence

Polygroup Limited MCO v. Willis Electric Co., LTD (Fed. Cir. 2019)

In a rare split decision, the PTAB upheld the patentability of Polygroup’s U.S. Patent No. 8,974,072 (2-1 decision).  On appeal, however, the Federal Circuit has vacated that decision with an oddly written double-negative conclusion: “substantial evidence does not support the Board’s finding that Polygroup failed to establish a rationale to combine the prior art.”

This case is part of ongoing litigation between these makers of pre-lit artificial trees. The appeal here was already pending when the Federal Circuit decided a separate set of IPR appeals – holding that the PTAB had been unduly narrow in its claim construction on the claim term “tree portion” and had also failed to address a single-reference obviousness argument.  [prior decision] The patent at issue here is a child of that at issue in the prior case. On appeal here, those same issues were raised and – in a conclusory statement – the appellate panel found them resolved for the child as a matter of collateral estoppel (issue preclusion):

[B]ecause we have already decided [these issues] in Polygroup’s favor in a previous appeal concerning U.S. Patent No. 8,454,186, a parent of the ’072 patent, [these arguments have] been resolved against Willis as a matter of collateral estoppel.

The court here does not explain its view of whether claim construction associated with a parent patent always decides the issue for a child patent.  In the case, we apparently had a lack of good briefing.  Apparently neither party provided supplemental authority to this panel regarding the intervening decision, and the court provided a little chastising footnote:

Although Polygroup notified us that it anticipated an earlier decision … would control the “tree portion” construction issue in this appeal, see Appellant’s Br. 1, we expected more. Pertinent and significant authority came to the parties’ attention after the briefing in this appeal concluded, yet both parties failed to notify the Panel about this occurrence. Rule 28(j) contemplates the submission of such supplemental authority. Fed. R. App. P. 28(j).

To be clear, 28(j) does not require supplemental submissions, but only states that “a party may promptly advise” the court of “pertinent and significant authorities” identified after briefing or oral arguments. At oral arguments, the Judges went further to state that the failure to submit supplemental authority “is no small matter; its your duty to ensure to ensure to the best you can, that the court doesn’t go down blind alleys.” “Both [counsel] had an obligation to advise us of these cases.”  The court’s upset here is a bit odd since the parties had designated these cases as related and one of the judges (Judge Dyk) was on both sets of panels.

Regarding the actual underlying obviousness decision: The big question was whether someone of skill in the art would alter “snap-fitting” electrical connectors with the claimed tapered compression-fitted electrical connectors. In its decision, the Board found that these were not known alternatives.  On appeal, the Federal Circuit vacated that conclusion — finding that the board made several errors in its reasoning that were not supported by substantial evidence. On that portion, I’ll just say that it appears to be a poorly written decision.

Eligibility: Pleadings are Enough, but they must Tie the Claims to an Inventive Concept

Cellspin Soft v. Fitbit, Moov, Nike, Fossil, etc. (Fed. Cir 2019)

The district court dismissed Cellspin’s infringement lawsuit on the pleadings — finding the asserted claims unenforceable as a matter of law under 35 U.S.C. § 101 (ineligible abstract idea).  On appeal, the Federal Circuit has vacated — holding instead that the early-stage dismissal was inappropriate because the patentee’s amended complaint included “specific factual allegations” that, when accepted as true, showed a plausible inventive concept sufficient to satisfy Alice Step 2.

The court explains here that under Aatrix, “plausible and specific factual allegations that aspects of the claims are inventive” are sufficient to overcome a pleadings-stage motion to dismiss.  “[T]he specification need not expressly list all the reasons why this claimed structure is unconventional” so long as the arguably inventive elements are “recited by the claims.”

Here, the claims recite a sensor with Bluetooth.  The claims recite a “two-step, two-device structure requiring a connection before data is transmitted.” And, the complaint identified this structure as a concrete and inventive application that goes beyond the abstract idea of “acquiring, transferring, and publishing data and multimedia content on one or more websites.”  The appellate panel found that “[t]he district court erred by not accepting those allegations as true.”

On remand, the case will move to summary judgment stage — moving beyond the mere allegations and looking at the evidence produced by both parties.  The burdens of proof and presentation at summary judgment may be confusing.  Eligibility is a question of law that does not necessarily require any evidentiary conclusions by the court.  However, we would expect that the patentee here will present some amount of evidence (probably expert testimony coupled with documentation) potentially sufficient to support a prima facie case of inventive concept under Alice Step 2.

The term inventive concept sounds very patent-like, but the law remains confused about more precise qualities of the term.  A patent claim directed to an abstract idea (or law of nature) can still be patented so long as it also recites an “inventive concept.”  Inventive Concept:

  • Something more than the application of an abstract idea using “well-understood, routine, and conventional activities previously known to the industry.”
  • Enough to “transform an abstract idea into a patent-eligible invention.”
  • More than simply “using conventional and well-understood techniques.”

Here, the court held that the patent itself must include the concept (and it must be particularly claimed) but need not explain in the specification that it represents the inventive concept. What is not clear is how directly inventive concept relates to other patentability concepts such as novelty, obviousness, and utility.

Copyrighting the Official Annotated Statutes: Georgia v.

The Supreme Court has granted certiorari in the important public access case of Georgia v. Inc. The case focuses on Georgia official statutory code with official annotations (the “Official Code of Georgia Annotated” or  “OCGA”).  OCGA includes the statutes, section titles, statutory histories, guidance from the Georgia Code Revision Commission, judicial summaries, and opinions by the State AG, for example. bought a copy of the OCGA, copied it, and uploaded it to the internet so that the public could have free access to the law.  Georgia then sued for copyright infringement.

The district court held OCGA copyrightable and the 11th Circuit reversed that decision — finding that the “government edicts doctrine” prohibits copyright in this case.  One difficulty with with that doctrine is that it was last discussed by the U.S. Supreme Court 130 years ago in Callaghan v. Myers, 128 U.S. 617 (1888) and Banks v. Manchester, 128 U.S. 244 (1888).

Question presented:

This Court has held, as a matter of “public policy,” that judicial opinions are not copyrightable. Banks v. Manchester, 128 U.S. 244, 253-254 (1888). Lower courts have extended that holding to state statutes. See, e.g., John G. Danielson, Inc. v. Winchester-Conant Props., Inc., 322 F.3d 26, 38 (1st Cir. 2003). But the rule that “government edicts” cannot be copyrighted has “proven difficult to apply when the material in question does not fall neatly into the categories of statutes or judicial opinions.” Ibid.

The question presented is: Whether the government edicts doctrine extends to—and thus renders uncopyrightable—works that lack the force of law, such as the annotations in the Official Code of Georgia Annotated.

OCGA is published by LEXIS, but its contents are particularly controlled by the Georgia General Assembly and the Commission (a division of the Assembly).  The appellate panel found particularly that “the Commission exercises direct, authoritative control over the creation of the OCGA annotations at every stage of
their preparation.”

Although PublicResources won at the appellate court, it agreed that the Supreme Court should hear the case in order to clarify and simplify the law of public access to public information. Current case law “is confusing and outcomes are difficult to predict.”

Briefing in the case will continue over the summer and the Court will likely schedule oral arguments for late 2019.