I believe that today was the first time that I’ve seen the Federal Circuit issue a no-opinion affirmance in a case that included three amicus briefs along with briefs from three parties. The case, New Vision Gaming v. LNW Gaming, 20-1400 (Fed. Cir. 2024).
All posts by Dennis Crouch
Apple Watch Stays on US Market, But Pulse-Ox Disabled Pending Appeal
by Dennis Crouch
Apple v. Masimo (Fed. Cir. 2024) (Apple Stay Denial)
After initially granting a temporary reprieve, the Federal Circuit has now denied Apple’s stay pending appeal of the International Trade Commission’s limited exclusion order and cease-and-desist order (“the Remedial Orders”) against Apple Watch Series 9 and Ultra 2.
The baseline approach in American patent law is that any injunction issued by the district court will stay in effect through the duration of any appeal. However, district and appellate courts regularly stay the injunction if the defendant is able to satisfy a four-factor test that largely parallels the eBay standard:
- whether the movant has made a strong showing of likelihood of success on the merits;
- whether the movant will be irreparably harmed absent a stay;
- whether issuance of the stay will substantially injure the other parties interested in the proceeding; and
- where the public interest lies.
See Nken v. Holder, 556 U.S. 418 (2009). In its analysis, the Federal Circuit simply stated that it had reviewed the factors and, although it had the power to issue a stay, such action was not appropriate here.
Following the ITC’s exclusion order, Apple filed a request with the Exclusion Order Enforcement Branch of US Customs (EOE Branch) seeking a ruling that it could still import the Apple Watch having the Pulse-Ox feature disabled. Although the order itself is still secret, the Federal Circuit included a remark that the EOE Branch had concluded that “Apple’s redesigned products are not subject to the Remedial Orders.” A NYT article explains that:
People who buy a new watch in the United States will still see Apple’s Blood Oxygen app on the devices, the company said. But if they tap the app, it will say the feature is no longer available.
The image below comes from Apple Briefing from last week that attempted to keep information about the redesign confidential.
Presumably, Apple will have the capability of turning the functionality back-on via system update when either the patents expire or are found invalid.
So, bottom line here is that the Apple Watch stays on the market, but only if it disables the Pulse-Oximetry functionality. The decision here is also preliminary — Apple will still be arguing in the appellate briefing that it should have won at the ITC and that the exclusion order is improper. That briefing will take a few months and a decision might be 1 year away.
An important note here is that the ITC case only focuses on blocking importation and post-importation sales in the US. It does not award any money damages and it does not apply to sales of Apple Watch outside of the US. Masimo may separately seek infringement damages in parallel Federal Court litigation and has a related ongoing trade secrets lawsuit against Apple seeking almost $2 billion in damages.
The Carrot and Stick Approach to Innovation
by Dennis Crouch
A California Court of Appeals issued a product liability decision in early 2024 that raises interesting questions about the role of both carrots and sticks in innovation policy. Gilead Tenofovir Cases, No. A165558, 2024 WL 94462 (Cal. App. 1st Dist. Jan. 9, 2024) Read It Here. I first found the Gilead case while reading the Wall Street Journal with the board editorial decrying the decision for “invent[ing] a crazy new tort.” In particular, the appellate panel agreed that Gilead could be held liable for for delaying the development of an alternative HIV/AIDS drug (TAF) that it expected would be safer and equally effective compared to its existing drug (TDF) in order to maximize profits from TDF. Although the old drug TDF had been deemed safe by the FDA and was not itself defective, the plaintiffs allege that it was clearly much worse than the potential alternative that Gilead allegedly sidelined. In particular, patients taking TDF suffered bone and kidney damage. In its decision, the Court of Appeal held that a manufacturer’s duty of reasonable care under Cal. Civ. Code §1714 can extend beyond the mere duty not to market a defective product, permitting a negligence claim without alleging a product defect. The court relies on Mexicali Rose v. Superior Court 1 Cal.4th 617 (1992), which held that the presence of a natural substance causing injury doesn’t negate a restaurant’s duty of care in food preparation, allowing a negligence claim despite the lack of a product defect. The court also rejected policy considerations associated with FDA-approval and adequate warnings. However, the court did side with Gilead with regard to a fraudulent concealment claim, holding that Gilead owed plaintiffs no duty to disclose facts about the unapproved drug TAF, which was – at the time – unavailable to plaintiffs as a treatment alternative to TDF. The appeal assumed that the plaintiffs could prove the facts alleged above. On remand, there will likely to be a trial where this assumption will be put to the test.
The ruling in Gilead Tenofovir Cases opens the door to lawsuits punishing companies for not innovating fast enough – a sharp contrast to the patent system’s traditional approach to encouraging innovation through potential monopoly-like profits. This flips the normal “carrot”/”stick” innovation incentive model on its head. Patents traditionally encourage innovation by rewarding it through time-limited exclusive rights enabling high prices that “fuel . . . genius,” as President Lincoln put it. Product liability laws, conversely, attempt to deter harm by forcing manufacturers to pay for injuries caused by defective products – a “stick” incentivizing safety. By penalizing failure to innovate quickly enough with tort liability, Gilead extends this disencentive to innovation: introducing disincentives for not innovating.
As the Wall Street Journal editorial board contends, this duty could spawn lawsuits against virtually any industry for not constantly upgrading products. It also seems in tension with the prevailing legal test for defective design, which balances safety risks against factors like usefulness and cost, recognizing that perfect safety is unattainable. Still, the decision here is incremental. It is based upon California Law, and the Gilead opinion dismissed arguments that its ruling amounted to “absolute liability” or a mandate for “ever-better new products.” How these assurances square with the newly recognized duty is unclear. Perhaps tellingly, the court left open whether liability might be cut off earlier, like after clinical Phase III trials of the safer alternative drug. The court’s idea here is that liability should only attach if the better alternative is sufficiently known or foreseeable. Thus, the case here really is about shelving known improvements.
I wonder whether there are other negative innovation disincentives. We have all heard the mantra “innovate or die” – This “natural” competitive incentive can be distinguished from the Gilead’s that is artificially created as a public policy choice. It is the human condition — also exemplified in larger corporate institutions — to seek reward and avoid punishment. It makes sense then that incorporating sticks like liability fears could be a useful part of the innovation policy landscape. This is not to reflexively endorse the Gilead approach; its wider impacts seem quite unpredictable at this point. But the decision helps us challenge the one-sided assumptions that “carrots-only” frameworks like patents best spur invention and innovation. And, that some disincentives can fit within our current framework of laws.
Ethical Infantilism in the Age of Technological Advancement
by Dennis Crouch
Martin Luther King Jr. received the Nobel Peace Prize in 1964, and I re-read his speech today — especially the portion contrasting development of science and technology against development of the human spirit. The past 60 years have continued to reveal astonishing discoveries and invention. Yet King’s words and warnings continue to resonate because we have continued to neglect our internal realm.
Every man lives in two realms, the internal and the external. The internal is that realm of spiritual ends expressed in art, literature, morals, and religion. The external is that complex of devices, techniques, mechanisms, and instrumentalities by means of which we live.
King. In his speech, King did not decry advances in technology, but argued that the level of attention paid to material advances should be matched by attention to moral and spiritual humanism.
Modern man has brought the whole world to an awe-inspiring threshold of the future. He has reached new and astonishing peaks of scientific success. He has produced machines that think, and instruments that peer into the unfathomable ranges of interstellar space. He has built gigantic bridges to span the seas and gargantuan buildings to kiss the skies. His airplanes and spaceships have dwarfed distance, placed time in chains, and carved highways through the stratosphere. This is a dazzling picture of modern man’s scientific and technological progress.
Yet, in spite of these spectacular strides in science and technology, and still unlimited ones to come, something basic is missing. There is a sort of poverty of the spirit which stands in glaring contrast to our scientific and technological abundance. The richer we have become materially, the poorer we have become morally and spiritually. We have learned to fly the air like birds and swim the sea like fish, but we have not learned the simple art of living together as brothers.
Id.
Improving Efficiency to Increase Competition Act: Burdens of Bayh-Dole
by Dennis Crouch
The Leading pro-IP Senators, Thom Tillis (R-NC) and Chris Coons (D-DE) recently introduced a bill focusing on patents stemming from research paid-for by federal grants. The proposed legislation, titled the “Improving Efficiency to Increase Competition Act,” would require a government study on reporting requirements related to the landmark Bayh-Dole Act of 1980.
ITC: Apple is an “Adjudicated Infringer” Improperly Seeking “Permission to Continue Infringing”
by Dennis Crouch
This article analyzes some of the latest developments in the ongoing legal battle between medical device company Masimo and tech giant Apple regarding Apple’s adjudged infringement of Masimo’s pulse oximetry patents in its Apple Watch. The basic question is whether Masimo’s pulse-oximetry patents will be strong enough to stop the Apple juggernaut.
USPTO Guidelines: Amgen is a Nothingburger
by Dennis Crouch
The USPTO has published new examination guidelines regarding the enablement requirement for utility patent applications in light of the Supreme Court’s May 2023 decision in Amgen v. Sanofi, 143 S. Ct. 1243 (2023). As I explain below, the primary takeaway from the published examination guidelines is that the PTO will continue business as usual — i.e., Amgen did not significantly change the law. Still, there are, some key points to consider. Notably, the guidelines: (1) provide a reminder that enablement applies to all technology areas, not just biotech; and (2) suggests that the office may increase its assertion of the enablement doctrine against functionally defined claim limitations that are potentially directed to a large number of embodiments.
Background on Amgen v. Sanofi: In its unanimous opinion, the Supreme Court affirmed that Amgen’s broad functional claim was invalid having failed the requirements that claims must be enabled to their full scope, allowing for “a reasonable amount of experimentation.” Amgen. The claim at issue included a key broad functional element — covering all antibodies capable of binding with and disabling a particular enzyme (PCSK9). Although the Federal Circuit commented negatively on the functional aspect of the claim, the Supreme Court noted that there is no special rule for functional claims. Still, functional claims can often be suspect on enablement grounds because of their potential breadth that goes well beyond tech disclosed. The result then is a simple rule: broader claims require more detailed disclosure.
If a patent claims an entire class of processes, machines, manufactures, or compositions of matter, the patent’s specification must enable a person skilled in the art to make and use the entire class. . . . The more one claims, the more one must enable.
Id. To be clear the specification is not required to “describe with particularity how to make and use every single embodiment within a claimed class.” Id. In fact, I would posit that in most situations it is effectively impossible to describe all potential embodiments covered by a modern comprising-style patent claim. Instead of fully describing every potentiality, the court concluded that the specification must provide enough disclosure to “reliably enable a person skilled in the art to make and use all of what is claimed, not merely a subset” allowing for a reasonable amount of experimentation. Id. The threshold for enablement can often be difficult to ascertain, but here the Supreme Court made clear that Amgen’s specification was more of a research assignment than an enabling disclosure. The Court also noted that whether experimentation is reasonable depends on the context, citing Minerals Separation, Ltd. v. Hyde, 242 U.S. 261 (1916).
Two potential Points of Confusion: The Supreme Court’s analysis in Amgen introduced two potential points of confusion regarding enablement doctrine. First, while citing a litany of its own old precedent on enablement related to technologies like telegraphs and incandescent light, the Court did not explicitly reference leading contemporary Federal Circuit decisions that articulate enablement standards. Most notably, Amgen does not mention In re Wands, 858 F.2d 731 (Fed. Cir. 1988) and its seminal “Wands factors” that are regularly relied upon by patent examiners and litigants to assess if PHOSITA would need to conduct an unreasonable amount of experimentation in order to make and use the invention. These Wands factors include:
- (A) the breadth of the claims;
- (B) the nature of the invention;
- (C) the state of the prior art;
- (D) the level of one of ordinary skill;
- (E) the level of predictability in the art;
- (F) the amount of direction provided by the inventor;
- (G) the existence of working examples; and
- (H) the quantity of experimentation needed to make or use the invention based on the content of the disclosure.
Wands (noting that this is not an exhaustive list of potential factors). Although relied upon daily in the patent system, the Supreme Court did not reference the Wands factors in its analysis. This omission created a question of whether Wands and its factors are still applicable.
The second issue is related to the first, and it has to do with a subtle shift in the language that the court used in forming the test. In Amgen, the Supreme Court offered repeated reference to “reasonable experimentation” rather than the typical “undue experimentation” standard. This difference introduced potential confusion on whether the Court announced a distinct, new test.
In post Amgen cases, the Federal Circuit has resolved these two subtle points of confusion, holding (1) that there is no difference between the traditional statement of “without undue experimentation” and the Supreme Court’s similar wording of a “reasonable” amount of experimentation; and (2) that the Wands Factors continue to serve as the key approach to determining whether the amount of experimentation needed to make & use the invention is too much. The case that explains this best is probably Baxalta Incorporated v. Genentech, Inc., 81 F.4th 1362 (Fed. Cir. 2023).
Its new guidelines, published January 10, 2024, the PTO reviews Amgen and post-Amgen case law and concludes that examiners will continue applying the long-standing “undue experimentation” standard and In re Wands factors when evaluating enablement. Guidelines for Assessing Enablement in Utility Applications and Patents in View of the Supreme Court Decision in Amgen Inc. et al. v. Sanofi et al., 83 Fed. Reg. 1563 (Jan. 10, 2024).
From my initial review, these guidelines do not appear remarkable, but simply serves the purpose of keeping everyone on the same page. It remains to be seen whether the examiner corps will further increase its focus on functional genus claims – especially those directed to a large number of embodiments and whether examiners outside the traditional ‘unpredictable arts’ will alter their enablement examination practice.
To be clear, these are examination guidelines – guidance for patent examiners that supplement the Manual of Patent Examination Practice (MPEP). They are not “rules” and do not have the force of law.
Claim Construction and its Role in Eligibility
by Dennis Crouch
In 2022, the Federal Circuit issued a Judge Hughes decision in IBM v. Zillow invaliding the claims of IBM’s asserted claims as ineligible subject matter. Intl. Bus. Machines Corp. v. Zillow Group, Inc., 50 F.4th 1371 (Fed. Cir. 2022) (U.S. Patent No. 9,158,789). In that case, Judge Stoll dissented in part, arguing that dismissal on the pleadings was inappropriate because the patentee had alleged plausible and specific facts showing that the claims embodied inventive concepts.
Now in 2024, the Federal Circuit has issued a new opinion in separate IBM v. Zillow case with patents from a different family. U.S. Patent Nos. 6,778,193 and 6,785,676. Seemingly by happenstance, Judges Hughes and Stoll were both on this panel. Judge Hughes again wrote the majority opinion affirming the motion to dismiss on eligibility grounds; Judge Stoll again dissented-in-part, concluding that the district court should have construed the claims (or preliminary relied upon IBM’s proposed construction) before deciding eligibility.
Intl. Bus. Machines Corp. v. Zillow Group, Inc., — F.4th — (Fed. Cir. January 9, 2024)
The two asserted patents related to improving the display of search results to users by using “visual workspaces” (the ‘193 patent) and “user context vectors” (the ‘676 patent) to better capture user preferences and context. The majority found these techniques covered only abstract ideas of “identifying, analyzing, and presenting certain data to a user.” This holding parallels the 2022 IBM decision as well as others, such as Customedia Techs., LLC v. Dish Network Corp., 951 F.3d 1359 (Fed. Cir. 2020).
In dissent, Judge Stoll argued that the majority failed to properly consider IBM’s proposed construction of the term “user context vector” in the ‘676 patent claims. IBM asserted this term should be construed as “an n-dimensional vector derived from the combination of user context and previous interaction with the system,” which Judge Stoll argued “add[ed] a degree of particularity.” But the majority stated Zillow had not disputed this construction, so there was no claim construction issue for the district court to resolve.
A key dispute in the case centered on whether IBM’s allegations of technological invention beyond the abstract idea were sufficient to survive dismissal. The majority held these allegations too “generic.” contrast, dissenting Judge Stoll argued reversal was warranted because “IBM has demonstrated that its claims plausibly recite an inventive concept under its proposed construction.”
Representative Claim 1 is below. What do you think?:
1. A graphical user interface for a customer self service system that performs resource search and selection comprising:
a first visual workspace comprising entry field enabling entry of a query for a resource and, one or more selectable graphical user context elements, each element representing a context associated with the current user state and having context attributes and attribute values associated therewith;
a second visual workspace for visualizing the set of resources that the customer self service system has determined to match the user’s query, said system indicating a degree of fit of said determined resources with said query;
a third visual workspace for enabling said user to select and modify context attribute values to enable increased specificity and accuracy of a query’s search parameters, said third visual workspace further enabling said user to specify resource selection parameters and relevant resource evaluation criteria utilized by a search mechanism in said system, said
degree of fit indication based on said user’s context, and said associated resource selection parameters and relevant resource evaluation criteria; and,a mechanism enabling said user to navigate among said first, second and third visual workspaces to thereby identify and improve selection logic and response sets fitted to said query.
As an aside, the panels of the two cases were not identical. In the IBM 2022, the Judge Reyna joined the majority, in IBM 2024, Judge Prost joined the majority.
Goutam Patnaik (Desmarais) argued on behalf of the patentee IBM, Steven Seigel (Susman Godfrey) argued for the defendants.
Yes, a “single biomolecule” means one biomolecule
by Dennis Crouch
Pacific BioSciences v. Personal Genomics (Fed. Cir. 2024)
PacBio was partially successful in its IPR against Personal Genomics that resulted in cancellation of some claims of US7767441. Both sides appealed with PacBio wanting all the claims cancelled, and Personal Genomics wanting restoration of its patent rights. The case focuses on preamble claim construction and interpreting the prior art.
Construing the Preamble: The claims were directed to “an apparatus for identifying a single biomolecule, comprising” three different elements. The preamble here has a purposive statement “for identifying a single biomolecule,” and a key question in the case is whether the preamble should be limiting. In the IPR, the patentee wanted a narrow construction – giving effect to the preamble – in order distinguish its invention from prior art apparently not capable of single-molecule identification.
The PTAB found the preamble as limiting and the Federal Circuit affirmed that holding on appeal. This is probably a case where the PTAB’s move to the Phillips v. AWH standard from Broadest-Reasonable-Interpretation during inter partes review.
The general presumption in patent claim construction is that the preamble is not limiting for obviousness purposes. But, the preamble can be given weight when it crosses some threshold of providing important meaning to the claimed invention. Here, the preamble identified “a single biomolecule” and body of the claim referenced “the biomolecule.” This antecedent basis for referencing the biomolecule was enough for the PTAB find the preamble limiting, and that construction was not appealed.
What was appealed was the actual construction of “a single biomolecule.” Petitioner argued that the claims should cover identifying a biomolecule by making copies, examining the resulting ensemble, and inferring the identity of the original molecule. But the court rejected this, finding it inconsistent with the language of the claim as supported by the specification describing problems of such ensemble approaches. Of interest, the court decided that the ordinary meaning of “identifying” should be applied and thus cited two dictionary definitions.
A final note on this preamble construction is that it could also be given no meaning because it appears simply state the purpose of the device (and thus not really limiting) rather than a structural limitation (that would be limiting). On appeal, the Federal Circuit noted that this issue was not challenged on appeal, but that there is precedential to support the notion that the phrase “for identifying a single biomolecule” is a limitation on the capability of the machine rather than simply a statement of purpose.
Scope of the Prior Art: One of the key prior art references (Hassibi) described its detection sensitivity “as low as 0.1 attomoles,” which is >60,000 molecules. Thus, the court was able to affirm that Hassibi does not meet the requirement of identifying a single biomolecule.
The patentee also argued that a second reference (Choumane), did not detect a single molecule. The patentee’s expert conducted a number of calculations and testified that Choumane’s sensitivity required at least 78 biomolecules — i.e., more than one. But, the text of Choumane disclosed “detection and observation of individual [biomolecules].” On appeal, the Federal Circuit recognized that that the expert’s calculations might have merit, but that the Board had substantial evidence to support its conclusion that Choumane disclosed a single molecule detector.
[T]his type of calculation can be proper where based on the express disclosures of a
piece of prior art. In this case, however, the Board, considering the calculation, had sufficient reason, in light of the Choumane statement quoted above, to reject the inference about Choumane that PGI offered the calculation to support.
Id. Although obviousness is a question of law, it must be supported by various factual findings, including a determination of the scope and content of the prior art. This means that the Court gives deference to the PTAB — affirming its factual finding so long as there is enough evidence available that a reasonable fact finder could rule as the Board ruled. See Shoes by Firebug LLC v. Stride Rite Children’s Group, LLC, 962 F.3d 1362, 1369 (Fed. Cir. 2020).
Edward Reines of Weil Gotshal argued for the patentee; Keith Orso of Irell & Manella argued for petitioner. The panel included judges Prost, Taranto, and Hughes, with Judge Taranto authoring the opinion.
A publication “by others” under pre-AIA Section 102
by Dennis Crouch
The text of pre-AIA Section 102(a) suggests that an inventor’s own prior publication qualifies as invalidating prior art, even if within the 1-year grace period. Although the statute includes a “by others” caveat, the clause’s grammar suggests that qualification only applies to prior art created by being “known or used” and does not apply to printed publications. Here is the statute:
A person shall be entitled to a patent unless —(a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent.
35 U.S.C. § 102(a)(pre-AIA). In the statute, “by others” modifies “known or used” but does not appear to modify “patented or described in a printed publication.” As the Federal Circuit’s precursor explained, a strait reading of the statute “would negate the one year period afforded under § 102(b) during which an inventor is allowed to perfect, develop and apply for a patent on his invention and publish descriptions of it if he wishes.” In re Katz, 687 F.2d 450 (C.C.P.A. 1982). In Katz, the court recognized the difficulty in the statute, but determined that a non-grammatical reading was the best reading in order to protect grace period rights. Id.
A case pending before the Federal Circuit focuses on the meaning of “by others” and asks whether a press release by the patent owner quoting one of the inventors qualifies as prior art under 102(a). Salix Pharmaceuticals et al. v. Norwich Pharmaceuticals, Docket No. 22-2153 (Fed. Cir.). Oral arguments were held January 8 2024, and a decision is expected later this year.
The case centers on two patents covering methods of using the drug rifaximin to treat irritable bowel syndrome with diarrhea (IBS-D). U.S. 8,309,569 and U.S. 10,765,667. Both patents have priority dates from early 2008. In finding the claims obvious, the lower court relied largely on a September 2007 press release from the patentee reporting positive Phase II trial results on using a particular dosage of rifaximin to treat IBS-D. Although the press release does not disclose exact invention eventually claimed, it does disclose aspects of the invention that arguably renders the subsequent claims obvious. (Although I don’t write about it here, the patentee argues that even if the press release is prior art, it still does not render the claimed invention obvious).
The press release specifically quotes and references Dr. Bill Forbes, who is listed as an inventor on the IBS-D patents. This press release is also discussed in the patent specifications. Salix argues this means the press release reflects the inventor’s own work, not the work of “others,” and thus does not qualify as prior art that can be used against the patents.
At oral argument, the attorney for Salix, William Peterson (MorganLewis), focused on how Norwich as the challenger failed to carry its burden of proving by clear and convincing evidence that the press release was prior art – i.e., that it reflected work done by “others” not inventors. He reiterated how the press release quotes the inventor and patents describe the underlying study, clearly tying it to the inventors. In his view, this means it cannot be Section 102(a) prior art used to invalidate the patents as obvious.
But the judges pushed back with probing questions about inventor Forbes being quoted and whether that alone makes the press release not prior art. They suggested that the face of the press release gives no indication or reason to assume it is solely reflects the inventor’s work. The suggestion here is that a publication by someone other than an inventor will be assumed to be “by others” — shifting the burden to the patentee to at least present a prima facia case that the release was not by others. Thus, a central issue here is who bears the burden with respect to showing whether the release reflects “others” vs the inventors.
This issue was solved in the AIA with Section 102 no longer using the words “by others.” Still, we’ll be litigating lots of pre-AIA cases the next decade. A similar issue does arise under AIA 102(b) in terms of who has the burden of proving whether a disclosure was derived from the inventor.
William Peterson (MorganLewis) argued on behalf of the patentee and Chad Landmon (Axinn) on behalf of Norwich.
Supreme Court Denies Certiorari in Three Patent Cases
The Supreme Court announced on Monday, January 8, 2024, it has denied certiorari petitions in three patent cases that we have been watching. This leaves the Federal Circuit rulings intact. It also means that the court is unlikely to hear a patent case this term.
The first case is Intel Corp. v. Vidal, which challenged the Patent Trial and Appeal Board’s “Fintiv rule.” This policy allows the PTAB to use the director’s delegated discretion to deny inter partes review petitions if, for instance, parallel litigation in district court is progressing quickly. Intel argued the rule is arbitrary, overly restrictive, and skirted proper rulemaking procedures. But the Federal Circuit said decisions on whether to institute reviews cannot be appealed. Although the Supreme Court has declined to take-up the issue, Dir. Vidal has already narrowed the approach taken under Dir. Iancu and will potentially go further.
The second case, Realtime Data v. Fortinet, involved eligible subject matter under 35 U.S.C. 101. Realtime alleged the Federal Circuit had expanded eligibility exceptions too broadly and asked SCOTUS to reinforce that most inventions should qualify as patentable. However, the Court turned down Realtime’s appeal.
Finally, Traxcell Techs v. AT&T raised a narrow question on whether attorney’s fees can be awarded for “baseless” litigation actions taken after a magistrate judge’s recommendation but before final confirmation by the district judge. Here too though, the Supreme Court denied cert, leaving the Federal Circuit’s answer that “yes, fees were appropriate.” (paraphrasing).
With these three denials on widely-varying patent issues, the Court seems inclined to let CAFC precedent control in these areas for now.
There are still two pending petitions, with VirnetX having a much greater shot than Tehrani.
- VirnetX Inc. v. Mangrove Partners Master Fund, Ltd., No. 23-315. The VirnetX petition focuses on the Federal Circuit’s interpretation of the inter partes review (“IPR”) joinder provisions and the requirements of the Federal Vacancies Reform Act (“FVRA”). Both Cato and BIO filed briefs in support of the petition.
- Tehrani v. Hamilton Technologies LLC, No. 23-575. The petition raises issues of obviousness, expert qualifications, claim interpretation, etc. I wrote previously that although the issues are super interesting, “the petition largely re-argues the evidence — typically a losing approach at the Supreme Court” petition stage.
Federal Funded Innovation and March-In Rights
by Dennis Crouch
The Biden Administration is seeking comment on its proposed framework for how how agencies should evaluate exercising “march-in rights” over federally funded inventions. For those familiar with march-in rights, this guidance has been a long time coming. While these powers have technically existed for years under the Bayh-Dole Act, the lack of clear procedures around their use has rendered them largely theoretical. This proposal could change that.
Sharon Israel, PTO New Chief Policy Officer
Congratulations to Sharon Israel on her new leadership role at the USPTO. I was happy to learn that Director Vidal has appointed Sharon Israel as its new Chief Policy Officer and Director for International Affairs. Ms. Israel has been a leader of the patent bar for many yeas and will bring tremendous expertise to this important role overseeing the USPTO’s policy and international programs. For the past few years, she has been a partner at Shook Hardy focusing on patent litigation — primarily on the defense side. (more…)
Plagiarism Police come for Winston & Strawn
Hsuanyeh Law Group v. Winston & Strawn, 23-cv-11193 (S.D.N.Y. 2024)
A recent copyright infringement lawsuit filed by small Boston intellectual property boutique Hsuanyeh Law Group PC (HLG) against international giant Winston & Strawn LLP focuses a dividing line that can highlight when copying the work of another firm is permissible. I believe that Winston & Strawn will eventually prevail based upon a fair use defense, but it is still an embarrassing situation for the firm and attorneys involved. I hope that they did not overbill the client. The role of attribution is also receiving increasing focus as attorneys begin to rely more heavily on AI outputs for their legal documents.
Federal Circuit Affirms Invalidity of Genus Claims to Stevia Production Method Lacking Written Description and Narrower Claims as Combining Natural Phenomena with an Abstract Idea
by Dennis Crouch
In PureCircle USA Inc. v. SweeGen, Inc., No. 22-1946 (Fed. Cir. Jan. 2, 2024) (non-precedential) [PureCircle Decision], the Federal Circuit affirmed a district court summary judgment siding against the patentee, PureCircle. The court concluded that the stevia production method claims were all invalid, either for: (1) lack of written description for the genus claim or (2) lack of eligibility because the claims are directed to a natural phenomenon combined with an abstract idea. Judge Dyk authored the opinion of the court that was joined by Judges Schall and Stark affirming the ruling of C.D.Cal Judge James Selna.
The written description portion of the opinion parallels the Supreme Court’s 2023 Amgen decision that focused on the sibling doctrine of enablement. Although non-precedential, the eligibility portion appears important because of the way it combines prohibited eligibility categories and rules that method claims requiring a particular purity level are themselves an abstract idea absent requirement of specific steps on how that purity level is achieved.
The First Precedential Patent Decision of 2024: Dexcom v. Abbott Diabetes Care
by Dennis Crouch
The U.S. Court of Appeals for the Federal Circuit has begun 2024 [2023] with its first precedential patent decision in DexCom, Inc. v. Abbott Diabetes Care, Inc., 2023-1795 (Fed. Cir. January 3, 2024). In an opinion by Judge Stoll, the court affirmed a district court decision denying DexCom’s motion for a preliminary injunction. The patentee had requested an order barring Abbott from pursuing its IPR challenges – based upon a forum selection clause that was part of a prior settlement between the parties. Judges Dyk and Hughes were also on the panel.
Patent Law Exam 2023: Are you Smarter than a Law Student?
by Dennis Crouch
The following is my patent law exam from this past semester. As in years past, the exam was worth less than half of the final grade because the students did other substantial work during the semester, including a major moot court competition. Students were permitted access to their book/notes/internet, but were barred communications with another human during the exam.
This year’s exam is very loosely based upon an interesting patent that I found associated with the Tow Whee product created by Eric Landis. See US11167164, US11731470, and US11724148. But, the events described are entirely my creation.
= = =
Patent Grant Total 2023
by Dennis Crouch
The US Patent and Trademark Office (USPTO) issued a total of 312,100 utility patents in the calendar year 2023. This marks the fourth consecutive year of decline in the number of issued patents. The 2022 figures show a 3% decrease from the previous year and a 12% decrease from the record-high numbers seen in 2019, as depicted in the chart below. One of the biggest changes from 2022 to 2023 is that non-US patent applicants dropped from 51% of the total down to 48%. In fact, numbers from US-applicants increased over the past year. There was a roughly parallel shift when looking at the % of patents naming a US inventor — up from 47% in 2022 to 50% in 2023.
It’s important to recognize that patent issuance in any given year is largely based on innovations and applications filed 2-5 years prior or more. For example, the 2023 decline reflects a drop in underlying patent filings, R&D, and new invention volume primarily from 2018 to 2020, with most applications pending examination for years before grant. Similarly, the 2022 and prior year patent volumes correlate most directly with late 2010s economic, policy and innovation landscapes. So this data is more of a backwards-looking snapshot. The drivers behind 2023’s applicant mix shift likely originated a few years back as well — established in the midst of the COVID pandemic. Though issuing patents now, the underlying applicant behaviors and investment decisions providing this US boost trace back to the 2020-2022 period or earlier based on typical application lag. Any analysis of the grant mix changes must recognize this context, and account for influencers at the time of filing rather than issuance to best understand the shift.
Rather than an economic indicator, the grant numbers and details surrounding them are (I believe) more reflective of the operation of the USPTO and the faith innovative companies have in the patent system.
Trademark Influencers and Aspen Mountain
by Dennis Crouch
I’m excited to head out to Snowmass in early January for the IP-SKI conference! Although we have the Ozarks here in mid-Missouri, there is nothing like the Rocky Mountains. This year I’ll also have the opportunity once again to connect with other intellectual property lawyers and talk shop while enjoying some long runs. (LINK)
In the meantime, I came across an interesting lawsuit that Aspen Skiing Company (ASC) recently filed against ski apparel company Perfect Moment. ASC owns and operates the four famous ski resorts that make up Aspen Snowmass – Snowmass along with Aspen Mountain, Aspen Highlands, and Buttermilk, with a history stretching back to 1947. According to the complaint, ASC is suing Perfect Moment for trademark infringement, false association, unfair competition, and other claims. [Aspen Complaint]
The basic scoop here is that Perfect Moment conducted photo shoots on ASC properties to promote its skiwear, intentionally trading on ASC’s fame and reputation. Back in March 2021, Perfect Moment posted social media photos showing influencers posing in Perfect Moment apparel, with recognizable buildings, ski lifts, and trails of the ASC resorts in the background. ASC asserts such posts falsely imply an endorsement or sponsorship relationship. After a cease & desist letter, Perfect Moment removed some but not all of the photos. More recently, Perfect Moment began selling jackets and pants bearing an image of people relaxing in at the Aspen “beach club,” complete with the signature red-and-white striped tents and lounge chairs on the mountain. The complaint seeks injunctive relief, destruction of the allegedly infringing apparel, and disgorgement of Perfect Moment’s profits.
Truthfully, the case here is a bit shaky, but courts have been known to strongly protect trademark holder rights. I expect that PM will quickly cave to the legal pressure, although I would suggest first sending in the influencers to the Federal Courthouse for a quick shoot with their winter attorney apparel.
Ian Saffer and Kate Bohmann from Quarles & Brady filed the lawsuit on behalf of Aspen. It does not appear that PM has been served yet.
Artificial Intelligence and Copyright in China: Lessons from a Recent Court Case
by Dennis Crouch
Thus far US copyright and patent tribunals have refused to award rights for AI generated works. China has begun its move in the opposite direction with the recent decision granting rights to an artist who created an image using the popular generative AI system Stable Diffusion. The case of Li v. Liu was decided by the recently Beijing Internet Court. The court decides internet related cases using online tools. Although the court uses AI judges in some cases, this one was decided by humans.
[Read an English translation created by GWU Law Students Yuqian Wang and Jiaying Zhang supervised by Prof. Robert Brauneis: Li v Liu Beijing Internet Court 20231127 with English Translation. More AI related decisions are available at the GWU AI Litigation Database.]
The plaintiff, Li, used Stable Diffusion to generate a photorealistic image of an Asian woman. He shared the work on Xiaohongshu, a Chinese platform similar to Instagram. Later, the defendant Liu, a blogger, published the image in a blog post without Li’s permission, removing his username and platform watermark.
Li sued for copyright infringement. The Beijing Internet Court ultimately ruled in his favor, ordering Liu to apologize publicly, pay ¥500 ($72) in damages, and cover ¥50 ($7) in court fees.
Crucially, the court recognized Li as the legal rights-holder, having contributed the necessary “intellectual input” through choices of models, prompts, parameters, and final image selection. Judges emphasized that copyright law aims to encourage human creativity.
In this case, from the moment the Plaintiff conceived the disputed image to the moment the Plaintiff finally selected the disputed image, it can be seen that the Plaintiff has carried out a certain amount of intellectual input, such as designing the presentation of the character, selecting the prompts, arranging the order of the prompts, setting the relevant parameters, selecting which picture meets their expectations, and so on. . . . Currently, a new generation of generative AI technology is increasingly being used for creation. As long as AI-generated images reflect the original intellectual input of a person, they should be identified as a work and protected under copyright law.
This court ruling signals China’s interest in extending copyright law to better account for AI-generated content and also potentially places the country in the forefront of protecting AI creations. Still, the Beijing Internet Court itself emphasized the approach of judging AI copyright issues based on the specific facts.
Of course, this is one regional lower court decision and is not generally a policy statement of the PRC. The judges here particularly noted that the level of creative expression requires a case-by-case analysis. In an email, Berkeley IP scholar Yuan Hao (郝元) points out, there is still debate within China on this issue. A similar case decided by a court in Shenzhen came to the opposite conclusion, finding AI-generated output eligible for copyright protection as the “intellectual fruits” of the AI developer rather than the AI user. According to Hao, cases like Li v. Liu feature “experimentalist practice” with different local courts exploring the issue before final guidance from the Supreme People’s Court. Hao also disputes depictions of the case as a political move to strategically assist China’s AI industry. While acknowledging that some “political” IP cases may occur, she has not seen evidence of that here. In my view, the low-value of the case (less than $100) also serves as an indication that this was not intended as a landmark decision setting national policy, but rather resolving a minor copyright dispute between two individuals.