I told my elder teenage child about Syngenta’s pending copyright case against Willowood involving EPA-required fungicide labeling. Crouch, Copyright Labels and Scope of 271(g), Patently-O (June 1, 2020).

Her graphic response follows:

SCT: Copyrighting Labels and scope of 271(g)

by Dennis Crouch.  NOTE – The patentee here is represented by my former law firm MBHB, including my mentors of mine Dan Boehnen & Grant Drutchas. MBHB is also a financial sponsor of Patently-O. That said, I have not had any communication with MBHB regarding this case. 

British Telecom v. IAC/InteractiveCorp and Tinder, Inc. (Fed. Cir. 2020)

In a short nonprecedential decision, the Federal Circuit has again affirmed a FRCP 12(b)(6) dismissal of an infringement lawsuit based upon a finding that the patent improperly claims an abstract idea.  The district court decision was written by Federal Circuit Judge Bryson sitting by designation.

Here, the claims walk through a step-by-step method of using a user’s geo-location to match the user with a short-list of relevant information sources and push those out to the user’s device. U.S. Pat. No. 6,397,040 (1997 priority date).

Steps in claim 1:

A telecommunications system server (i) proactively tracking each individual user, (ii) accessing location data to determine geo-relevant information sources; (iii) dynamically developing a shortlist of information sources that the server deemed relevant to a specific user based on both the user’s geographical location and other personalized factors, and (iv) then pushing that shortlist out to the user.

On appeal, the Federal Circuit found the claims generally directed to providing location-specific information to users — an abstract idea.

We have previously held that tailoring the provision of information to a user’s characteristics, such as location, is an abstract idea.

The court went on to hold that that the claims added nothing new — an inventive step — to take claim 1 across the patent eligibility threshold.  Here, the court only indicates that the claims recite “generic computer hardware.” The court focused only on the tech hardware and court did not particularly reference the patentee’s arguments of dynamic individualized user tracking and new techniques of combining data.

Non-Asserted Claims: In the case, the defendants challenged all 44 claims in the patent, but only discussed claim 1. The district court found all 44 ineligible – writing without further discussion that its analysis of claim 1 “applies equally to all claims of the ’040 Patent.”  On appeal, the Federal Circuit affirmed, explaining that:

Because British Telecom did not present any “meaningful argument for the distinctive significance of any claim limitation” not found in claim 1, the district court did not err in finding that British Telecom had forfeited its ability to argue that other claims are separately patent eligible.

Slip Op. Quoting Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018).  The odd aspect of the court’s citation of Berkheimer is that the patentee had relied upon the same portion of Berkheimer for its argument that claim 1 cannot simply be assumed to be a representative claim if the patentee argues that limitations in the other claims “bear on patent eligibility and never agreed to make claim 1 representative.”  Berkheimer.

= = = =

Note that the district court dismissed this portion of the action and issued final judgment with respect to the ‘040 patent.  The case is ongoing, however, with respect to other asserted patents.

Bozeman Financial LLC v. Federal Reserve Bank (Fed. Cir. 2020)

The Federal Circuit has denied Bozeman’s petition for en banc rehearing in this case – confirming the holding that the Federal Reserve Banks are permitted to petition the PTO for inter partes review proceedings despite the Supreme Court’s decision in Return Mail barring the US Postal Service (USPS) from taking such action.

The AIA indicates that any “person” other than the patentee can petition for inter partes review (IPR).  However, in Return Mail, the Supreme Court held that the U.S. Gov’t does not qualify as a “person” under the statute and thus cannot files such petitions. Since USPS is a branch of the US Gov’t, its petition was improperly filed.

The distinction in Bozeman is that the Federal Reserve banks are not actually governmental institutions but rather a set of somewhat independent banks.  Of course, the various Federal Reserve banks are substantially controlled by the Board of Governors, which is more appropriately termed a branch of the US Government.

by Dennis Crouch

The Chamberlain Group, Inc. v. Techtronic Indus. Co. (Supreme Court 2020)

Chamberlain Group’s asserted patent claims a garage-door-opener (claim 1, 5) and an associated method (claim 15). US7224275.

Garage doors and opening mechanisms have been the subject of patents for 150 years. Back in 1919 Lee Hynes filed an early patent on electric-controller for a car door operating mechanism. Despite this long history, the Federal Circuit found Chamberlain’s patent ineligible under 35 U.S.C. 101 as directed to an abstract idea.

Chamberlain’s opener consists of three key elements:

• A device controller — This is an electronic component that receives and processes control signals and sends out the orders to open/close.
• A movable barrier interface coupled to the controller — This is the actual drive or clutch mechanism that powers the door movement.
• A wireless data transmitter coupled to the controller.

By the time this patent application was filed, all three of these elements were all “generally well understood in the art.” The innovative feature of the claims is that the system is designed to transmit the door’s “present operational status” — i.e., is it moving up; moving down; reversing; blocked; etc.  The signal also includes a “relatively unique” identifier for folks with multiple garage doors so that the unclaimed receiver can tell which door is up/down. Note here that there is nothing new about these various status points — the only difference is that it that the signals are being sent, and being sent wirelessly.

So, although the patent claims a garage-door-opener including various physical components, the point-of-novelty is that a particular signal is being sent wirelessly. In its decision, the Federal Circuit found the wireless transmission of status to be an abstract idea: “the broad concept of communicating information wirelessly, without more, is
an abstract idea.”  One Alice Step 2, the court held that the claims did not include any inventive concept beyond the excluded abstract idea:

In other words, beyond the idea of wirelessly communicating status information about a movable barrier operator, what elements in the claim may be regarded as the “inventive concept”?

[W]ireless transmission is the only aspect of the claims that CGI points to as allegedly inventive over the prior art. . . . Wireless communication cannot be an inventive concept here, because it is the abstract idea that the claims are directed to. Because CGI does not point to any inventive concept present in the ordered combination of elements beyond the act of wireless communication, we find that no inventive concept exists in the asserted claims sufficient to transform the abstract idea of communicating status information about a system into a patent-eligible application of that idea.

Fed. Cir. Opinion.

The new petition has two focal points (1) whether eligibility should be seen as a “narrow exception;” and (2) whether the Federal Circuit errs in its approach of separating the claim into various components and excluding the abstract idea portion from the claim when considering Alice Step 2.

Question presented:

Whether the Federal Circuit improperly expanded § 101’s narrow implicit exceptions by failing to properly assess Chamberlain’s claims “as a whole,” where the claims recite an improvement to a machine and leave ample room for other inventors to apply any underlying abstract principles in different ways.

Chamberlain Petition.  The petition also repeats the refrain of unsettling uncertainty:

The root cause of all this ire and uncertainty is the Federal Circuit’s insistence once again on crafting an elaborate test that strays from—and here, contradicts—the plain text of the Act.

Id.

The petition ends with a call for immediate action — calling out the current situation as “a patent emergency.” The breadth of eligibility challenges are shifting innovator behavior:

[T]here is no time. Innovators are adapting their behavior right now to the Federal Circuit’s new patent-hostile regime. Investors are deciding now to withhold investments they would have made before the Federal Circuit changed the law. Waiting any longer to intervene could inflict irreparable harm on U.S. industry.

Techtronic has already waived its right to respond to the petition — meaning that the Supreme Court may act on the petition before the close of its current session in June.

by Dennis Crouch

McRO, Inc. (Planet Blue) v. Bandai Namco Games (Fed. Cir. 2020)

This case has returned to the Federal Circuit. In 2016, the court issued an important legibility decision in the case — finding the algorithm for syncing anime lip-movements with various sounds to be patent eligible. McRO, Inc. v. Bandai Namco Games America Inc., 837 F.3d 1299 (Fed. Cir. 2016) (McRO I). Less than four years later, McRO I has been cited by over 2000 PTAB decisions as well as 200+ court decisions. The only more-cited patent cases from 2016 are Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016); Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016); and Electric Power Group, LLC v. Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2016).

On remand, the accused infringers again successfully moved for dismissal — this time on summary judgment of invalidity (enablement) and non-infringement. On appeal, the Federal Circuit has vacated the invalidity holding, but upheld the non-infringement determination.

Non-Enablement and Point of Novelty: Aspects of the invention that are known in the art need not be fully described.  Rather, the law relies upon the artisanal  knowledge to fill the gaps. A “patent need not teach, and preferably omits, what is well known in the art.” AK Steele (Fed. Cir. 2003). However, novel aspects of the invention must be enabled – and must reasonably teach how to make and use that aspect of the invention.

Non-Enablement by Example: Enablement requires that the patentee “teach the public how ‘to practice the full scope of the claimed invention.'” without undue experimentation. Slip Op. quoting AK Steele.  In a number of cases, the courts have invalidated patents on enablement grounds after identifying infringing products/processes that are not enabled. On appeal here, the Federal Circuit offered a limiting principle to that approach — it must be tied to a particular and actual product/process, not simply “an abstract assertion of breadth.”

In the case, the accused infringers identified two particular techniques that were not enabled (“bones” and BALDI).  However, a narrow claim construction meant that neither of those were actually covered by the claims.  And, only the claimed invention need be enabled.

No other concretely identified animation techniques have been advanced to support the district court’s and Developers’ enablement analyses.

Slip Op. Without any other particular example of infringing but non-enabled activity, the court held that theory of enablement failed.  The district court noted the breadth of the claims and narrowness of the specification.  On appeal, the Federal Circuit found that conclusion suggestive of an enablement problem, but insufficient:

[T]hese observations merely state the conclusion that the claims are too broad and the specification’s discussion is too narrow. The observations do not justify the conclusion with any concrete support. To say that the “first set of rules” limitation is broader than “if . . . then . . . else” statements based on keyframes is not to say what else is or may be within the phrase—and it was the burden of the Developers, not McRO, to prove that such specific content exists and that it is not enabled.

The appellate panel does not delve into this, but remember that enablement is a question of law, not a question of fact.  The result then is that the defendant has the burden of persuading the judge on enablement, not proving its case.  Lack of enablement can be supported by various factual conclusions, and those must be proven with clear and convincing evidence.

Non-Infringement: McRO’s non-infringement argument hinged upon claim construction of the claim term “morph weight set.” The morph weights identify how much and in what direction various morph targets (such as lip portions) move.  The district court interpreted the term to require these be in 3-D geometric vector form. The result of that claim construction was no-infringement because the accused infringers “do not represent the displacements of each vertex in terms of a simple xyz displacement vector.”

On appeal, the Federal Circuit affirmed the claim construction — holding that “the specification compels the three-dimensional geometric construction of ‘vector’ adopted by the district court.”  McRO had argued that vector should be given a broader definition to include how it is used in computer science — as a sequential list of numbers.

Three notes

• I don’t know why the Federal Circuit allowed the focus of this whole argument to be on the term ‘vector.’ Here, the argument was on how to define the term used to define the actual claim terms. Rather, the focus should have zeroed in on the claim term itself (“morph weight set”) and decide what that claim term required.
• In a bit of an oddity, Federal Circuit’s opinion actually uses vector in the computer science form — noting that the accused process “stores information, whether as a 4×4 matrix or as an equivalent 16-term vector.”
• Without knowing more, the difference being argued about here appears to be resolvable with a mere mathematical transform that could be seen as the equivalent.  No doctrine of equivalents argument was presented on appeal.

U.S. Patent No. 6,611,278 (“Method for automatically animating lip synchronization and facial expression of animated characters”).

by Dennis Crouch

Esip Series 2, LLC v. Puhzen Life USA, LLC (Fed. Cir. 2020)

In its decision here, the Federal Circuit has applied Thryv, Inc v. Click-To-Call Techs., LP, 140 S. Ct. 1367 (2020) and refused to consider whether the USPTO erred in its real-party-in-interest analysis.

In Cuozzo (2016), the Supreme Court held that this Court is precluded from reviewing Board decisions concerning the “particularity” requirement under § 312(a)(3). The Court explained that § 314(d) bars appellate review of “questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review.” The Court further explained that “where a patent holder grounds its claim in a statute closely related to that decision to institute inter partes review, § 314(d) bars judicial review.”

[I]n Thryv (2020) … the Supreme Court held that § 314(d) also precludes judicial review of the agency’s decision whether to apply the one-year time bar set forth in § 315(b)). . . .

In view of Cuozzo and Click-to-Call, we find no principled reason why preclusion of judicial review under § 314(d) would not extend to a Board decision concerning the “real parties in interest” requirement of § 312(a)(2). ESIP’s contention that the Board failed to comply with § 312(a)(2) is “a contention that the agency should have refused to institute an inter partes review.” Indeed, ESIP expressly argues that the agency should have refused to institute inter partes review because of Puzhen’s failure to identify all “real parties in interest.”

Slip Op. Here, the statute requires that a petition for inter partes review “may be considered only if” the petition identifies all real-parties-in-interest.  In the case, ESIP argued that doTERRA should be considered a real-party-in-interest because the company is a co-defendant in the underlying litigation, sells the accused Puhzen product, and agreed to be bound by the IPR estoppel.  The Board’s approach to the issue will stand without considering whether it is in accordance with the law.

Thryv was released after briefing and oral arguments had been complete.  The court did accept the supplemental authority, but those are severely limited.  In its statement to the court, patentee ESIP argued that it wasn’t (only) appealing the institution decision but rather (also) whether the petition met the statutory requirements: “[We] contend that Puzhen’s IPR Petition did not satisfy the statutory requirement in 35 U.S.C. § 312(a)(2).”

= = = =

On the underlying merits, the Federal Circuit affirmed the PTAB’s obviousness final decision regarding the claimed “method for introducing a scent into breathable air,” US9415130; IPR2017-02197.

by Dennis Crouch

Lucky Brand Dungarees, Inc. v. Marcel Fashions Group, Inc. (Supreme Court 2020)

This case makes me sad because it reminds me that my walk-able grocery store, Lucky’s Market, has closed down. Colorado based Lucky’s had its own trademark dispute with California based Lucky Supermarket.

The case before the supreme court involved two other uses of LUCKY:

The parties in this case have been fighting in federal court over trademark rights for almost 20 years; and in three separate actions.

The petition before the U.S. Supreme Court involves “defense preclusion” –asking when a defendant in a subsequent action will be precluded from raising a defense that was or could-have been raised in the prior action.  In its decision, the Supreme Court explained that there is no special doctrine of defense preclusion, but rather the courts should apply the general rules of claim preclusion and issue preclusion.

The first litigation ended in a settlement.  During the second litigation, Lucky Brand raised the prior settlement as a reason to dismiss, but the court denied the motion-to-dismiss without prejudice (thus not “on the merits”).  The second litigation was then decided on other grounds.  In the third litigation Lucky Brand again raised the prior settlement as a defense, and Marcel argued that it was precluded.  In its analysis, the Supreme Court focused on whether the third litigation involved the “same claim” as the second; and whether it mattered.

Claim preclusion bars relititgation of an already decided claim between two parties.  Our notice pleading system encourages parties to join together in a single lawsuit all the claims that the parties have against one another.  Once the lawsuit ends, our claim preclusion will step-in to bar any further litigation between the parties relating to that transaction or occurrence.  If, for example, a patentee sues a manufacturer for infringing claim 1 of its patent (and wins).  The patentee will be barred from later filing a lawsuit asserting claim 2 of the same patent against the same manufacturer for the same infringing behavior.

Claim preclusion is thought to also precludes defenses that were raised or that could have been raised in the the first lawsuit.  However, a key limiting factor that the court found today is the “same transaction” or “common nucleus of operative facts” test — and that test is defined by the well pled complaint.

Here, the Supreme Court explained that the two lawsuits did not involve the same claims: “Put simply, the two suits here were grounded on different conduct, involving different marks, occurring at different times.”  Thus, no claim preclusion. [I believe that both cases involved assertion of the “get lucky” mark, and so I don’t know what the court is talking about regarding “different marks.” – DC]

Note here that the court also suggested a possibility of eliminating claim preclusion to defenses altogether: “There may be good reasons to question any application of claim preclusion to defenses.” That issue though is saved for another day.

Issue preclusion bars relitigation of an already decided issue.  However, issue preclusion requires that the issue be actually decided. Although the defense was raised in the original lawsuit, it was not actually decided but rather dismissed without prejudice. Thus, no issue preclusion.

Trademark Law: In his short post on the case, Eric Moran notes:

The Court specifically pointed out the risk in barring such claims in trademark cases, when “liability for trademark infringement turns on marketplace realities that can change dramatically from year to year.”

The court could have allowed more conflation between these various cases, but drew a tight line on the “same claim” element of claim preclusion.  One ongoing debate on this topic in patent law is the extent that a patentee should be required to assert all of its patents related to a defendant’s accused infringing content at the risk of beinig precluded. Or, may a patentee file a first lawsuit with a first patent; then later a second lawsuit with a second patent; etc. Current Federal Circuit rule is that allegations of infringement of two different patents involve the “same claim” only if the claim scopes are “essentially the same.” SimpleAir, Inc. v. Google LLC, 884 F.3d 1160, 1167 (Fed. Cir. 2018); See also Acumed LLC v. Stryker Corp., 525 F.3d 1319 (Fed. Cir. 2008) (same claim also requires infringing activity to be “essentially the same”).

Patent Infringement Claim Preclusion: Only When Accused Device is “Essentially the Same” as Prior Adjudicated Device

by Dennis Crouch

This case is going to end up being a big one for our online marketplace.  Many many producers are finding knock-off versions of their products sold via Amazon — often with Amazon’s direct backing. The decision here support’s Amazon’s approach and is especially important coming from the pro-protection Federal Circuit. Importantly, the court here does not allow IP rights to be improperly extended in order to catch a counterfeit. 

Lanard Toys Limited v. Dolgencorp LLC and Ja-Ru (Fed. Cir. 2020)

Lanard makes the “Lanard Chalk Pencil” and sued the knock-off competitor Ja-Ru Products along with Lanard’s former distributor Dolgencorp and former retailer Toys-R-Us.

The setup begins with the clear statement that Ja-Ru copied the design and then Dolgencorp and TRU stopped buying from Lanard and started buying from Ja-Ru.  The question then is whether this setup is simply fair competition or is it somehow unfair or unlawful.

Here, Lanard made its chalk-pencil product look like a well-known unprotectable product — a pencil with an eraser.  Perhaps it shouldn’t be surprised that its associated exclusive rights are quite thin.

The trial court ended the case on summary judgment holding that (1) Ja-Ru’s product does not infringe the asserted design patent, D671,167; (2) that the asserted copyright over the pencil is invalid and not infringed; (3) Ja-Ur’s product does not infringe Lanard’s trade dress; and (4) there was no unfair competition since no IP rights were violated.

On appeal, the Federal Circuit has affirmed.

Infringing the Design Patent: The design patent is directed toward the “ornamental design for a chalk holder” as shown in the drawings.  35 USC 289 calls out design patent infringer as someone who as “applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale …”  Here, the court did not cite the statute, but went straight to the test in Egyptian Goddess that asks – what is the scope of the patented design? In that case, the court explained that the scope of a design patent will depend upon how it differs from the prior art.  Here:

The district court [] recognized that “the overall appearance of Lanard’s design is distinct from this prior art only in the precise proportions of its various elements in relation to each other, the size and ornamentation of the ferrule, and the particular size and shape of the conical tapered end.” In so doing, the district court fleshed out and rejected Lanard’s attempt to distinguish its patent from the prior art by importing the “the chalk holder function of its design” into the construction of the claim.

The Federal Circuit affirmed this approach as well as the district court’s separate consideration of functional and non-functional features of the design.

We have instructed trial courts that design patents “typically are claimed as shown in drawings,” but that it can be helpful to “distinguish[] between those features of the claimed design that are ornamental and those that are purely functional.” Egyptian Goddess.

In the end, the court compared the accused product with the patented design — keeping in mind the broad scope of prior art — and concluded that the ordinary observer would be drawn more to the differences than the similarities.

In its decision, the Federal Circuit focused some attention on the “points of novelty” that the Federal Circuit previously rejected as a requisite test for design patent infringement.  Here, the court recognized that the doctrine remains a useful approach when considering the scope of design patent claims.

Here, as a matter of claim construction, the district court undoubtedly considered the points of novelty of the patented design over the prior art. And the court placed those points of novelty in context by considering that those points of novelty would draw “the attention of the ordinary observer.” [W]e conclude that the district court correctly balanced the need to consider the points of novelty while remaining focused on how an ordinary observer would view the overall design. See Egyptian Goddess.

Slip Op.

On Copyright infringement, the court here essentially ruled that the pencil is more like a shovel than a cheerleader uniform. See Star Athletica, L.L.C. v. Varsity Brands, Inc., 137 S. Ct. 1002 (2017).

In attempting to identify separable features, “the feature cannot itself be a useful article.” Star Athletica. … Here, Lanard’s ’458 copyright is for the chalk holder itself, and Lanard’s arguments in the district court and in this appeal merely confirm that it seeks protection for the dimensions and shape of the useful article itself. Because the chalk holder itself is not copyright protectable, Lanard cannot demonstrate that it holds a valid copyright.

Slip Op.

The appellate panel went on to similarly reject Landards trade dress & unfair competition claims. (“Lanard has not identified evidence with which it could satisfy its burden to prove at trial that, when customers see the Lanard Chalk Pencil, their minds jump to the producer of the product rather than the product itself.”)

Affirmed.

Todd Bank’s effort to save the dignity of goats has reached the U.S. Supreme Court.  The respondent in the case is Al Johnson’s Swedish Restaurant — a Door County Wisconsin mainstay. “Al Johnson’s is an authentic Swedish family owned restaurant where you can find goats grazing the sod roof.” [Goat Cam].

Al Johnson’s registered trade dress “consists of goats on a roof of grass.” When Bank petitioned the USPTO to cancel the mark, the TTAB refused — holding that Bank did not have standing to file the petition.  On appeal, the Federal Circuit affirmed.  Unlike the no-injury-required approach an AIA-review petitioner on the patent-side, the trademark law requires that a cancellation petitioner “believe[] that he is or will be damaged” by the mark’s registration. Here, Bank was not particularly injured, although he does claim to be disparaged by the mark:

The petition asks two questions – one on the merits and the other associated with sanctions from the court:

1. Whether Tam precludes disparagement as the basis of one’s standing under Section 14 of the Lanham Act, 15 U.S.C. § 1064, to challenge the validity of a trademark where the basis of the merits of the challenge, i.e., the challenger’s assertion as to why the mark is invalid, is unrelated to disparagement.

2. Whether a federal appeals court abuses its authority by sanctioning a party for arguing in favor of his position, even though: (i) the arguments and the position are meritorious; and (ii) the court claimed that the party had conceded that his position had been foreclosed by a decision of this Court, whereas the party, rather than having made such a concession, had argued that his position was not foreclosed by that decision.

In its decision, the Federal Circuit sided with the mark holder and then found the appeal frivolous. The court thus awarded cost and attorney fees to Swedish Restaurant.

Even though Mr. Bank appears pro se before us, he is an attorney and bears the commensurate obligations. Accordingly, we grant Swedish Restaurant’s motion for costs and attorney fees, including the costs and fees incurred in relation to the parties’ sanctions motions, and deny Mr. Bank’s motion for sanctions.

Id.

Goats Remain on the Roof

Agarwal v. Topgolf Int’l (Fed. Cir. 2020)

Writing about golf in the midst of a national health crisis it a bit misguided, but the invention at issue is still interesting. Amit Agarwal is a former patent litigator and current assignee of U.S. Patent No. 5,370,389 (1994 patent – expired).

As Agarwal explained in his patent infringement complaint, the invention “revolutionized the boring, slow sport of golf by infusing the golf driving range experience with technology.” The technology here is to individually track the balls hit and award points for distance and alignment.  The infringement lawsuit was filed in 2016.  TopGolf responded with a petition for inter partes review (IPR), which resulted in the claims being cancelled as obvious.  On appeal, the Federal Circuit has affirmed — effectively tagging Agarwal with a double bogie.

Agarwal’s likely best argument – that the invention wasn’t obvious – was hampered by the substantial deference given to the PTAB factual determinations that underlie an obviousness conclusion.  The court explained:

The simple fact that some contradictory evidence exists in the record does not demonstrate that the Board’s findings are unsupported by substantial evidence.

Slip Op.; citing Elbit Sys. of Am., LLC v. Thales Visionix, Inc., 881 F.3d 1354 (Fed. Cir. 2018).

Agarwal also raises the issue of unconstitutional takings, which the Federal Circuit again rejected:

Agarwal argues that a finding of unpatentability of a patent filed before November 29, 1999 in inter partes review is an unconstitutional taking. This court has already held that “the retroactive application of IPR proceedings to pre-AIA patents is not an unconstitutional taking under the Fifth Amendment” because patent owners “had the expectation that the PTO could reconsider the validity of issued patents” in inter partes reexaminations and ex parte reexaminations. Celgene Corp. v. Peter, 931 F.3d 1342, 1362–63 (Fed. Cir. 2019).

Note that Celgene’s petition is on this issue is pending before the U.S. Supreme Court with the following question presented:

Petitioner’s Question: Whether retroactive application of inter partes review to patents issued before passage of the America Invents Act violates the Takings Clause of the Fifth Amendment

US Gov’t Restatement of Question: Whether the cancellation, following inter partes review, of petitioner’s pre-AIA patent violates the Just Compensation Clause.

Petition.

Caterpillar Paving Products Inc. v. Wirtgen America, Inc. (Fed. Cir. 2020)

In 2018, Wirtgen petitioned the USPTO Director to institute an inter partes review (IPR) against Caterpillar’s US9045871 (paving machine).  The PTO initiated the IPR, and eventually concluded that the challenged claims (as well as proposed substitute claims) were all unpatentable.

On appeal, Caterpillar asked the court to vacate and remand the decision for a new-hearing with a new-panel – citing Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019).  However, the court has refused:

Unlike in prior cases in which this court has recently vacated and remanded, Arthrex issued before the Board’s final written decision in this case.

The theory of Arthrex is that the court’s cancellation of PTAB judge job security instantly cured the Constitutional appointments problem (making them inferior officers rather than principal offiers).  Here, the Arthrex cure (Oct 2019) came just before the Caterpillar final judgment (Nov 2019). Caterpillar argued that it suffered under “a year’s worth of constitutional violations.” On appeal, however, the Federal Circuit ruled that the inoculation was complete against any IPR that had not yet reached final judgement.

Caterpillar, coupled with Cienna Corp., look to place a hard limit on the number of cases requiring new paneling following Arthrex.

Now Precedential: IPR Petitioner who Waived Arthrex issue cannot Raise it on Appeal after Losing the IPR