by Dennis Crouch

The USPTO has published a notice of proposed rulemaking (NPRM) to formalize the process for Director Review of PTAB decisions. These proposed rules come in response to the Supreme Court’s decision in United States v. Arthrex, Inc., 141 S. Ct. 1970 (2021), which underscored the necessity for the USPTO Director to have the ability to review PTAB decisions to comply with the Appointments Clause of the U.S. Constitution.  Of course, the USPTO has been operating under an interim procedure for Director Review that began soon after Arthrex, but has been updated a couple of times.  The NPRM closely follows the most recent version of the interim rules. (more…)

by Dennis Crouch

The Federal Circuit’s August 2023 decision in In re Cellect, LLC has set-up a significant question regarding the interplay between the patent term adjustment (PTA) statute, 35 U.S.C. § 154(b), and the judicially-created doctrine of obviousness-type double patenting (OTDP). Now, Cellect is seeking Supreme Court review, recently filing a petition for an extension of time that also indicated its intent to file. Cellect’s petition is now due May 20, 2024, and I expect significant support from the patent owner community.

Patentees often receive PTA due to USPTO delays that otherwise eat into the 20-year patent term.  A fundamental issue in Cellect boils down to whether a patentee must forfeit their PTA term extensions to avoid an OTDP invalidity finding.  This comes up in situations where a patentee has two patents that cover only slightly different inventions.  Most often this is seen in family-member continuation applications, but it can also arise when applicants file several applications all within a short period.

Under the judge-made law of OTDP, it is generally improper for a patentee to obtain two separate patents that are obvious variants of one another. But, the practice is permitted if the patentee files a terminal disclaimer that links the patent terms together so that they will expire on the same date and also promises that the two patents will always be commonly owned.  The idea here is that the two patents effectively become one.  Cellect has challenged this approach — focusing particularly on the statutory PTA of § 154(b).

Of some importance here, patent law provides a second mechanism for adding to the patent term known as patent term extension or PTE under 35 U.S.C. 156. Rather than focusing on USPTO delay, PTE permits limited extension of a patent’s term due to regulatory review that delays a product’s commercial marketing or use. Most often this comes up in the context of FDA regulatory review.  In Novartis AG v. Ezra Ventures LLC, 909 F.3d 1367 (Fed. Cir. 2018), the Federal Circuit concluded that a terminal disclaimer need not cut off the PTE because that “would mean that a judge-made doctrine would cut off a statutorily-authorized time extension.”  Cellect argues this same reasoning applies to PTA.

20240402164244272_2024-04-02Cellect_Cert_Petition_Extension_Application

En Banc Denied in In re Cellect: Double Patenting and Patent Term Adjustment

I am sympathetic to both sides in this particular case. First, there are meaningful differences between the PTA and PTE statutes that can justify differential treatment for OTDP purposes. Most notably, § 154(b)(2)(B) expressly provides that PTA cannot extend a patent’s term beyond the date specified in a terminal disclaimer. While this provision did not directly apply in Cellect (because no disclaimer was filed) the Federal Circuit relied heavily on it to conclude that Congress intended that PTA should be limited by the OTDP doctrine. In contrast, § 156 governing PTE includes no such disclaimer provision. This statutory distinction, though not dispositive, lends support to the Federal Circuit’s divergent approaches.

At the same time, I am wary of allowing the stale judge-made of OTDP to unduly restrict a statutorily authorized term adjustment. OTDP arose years ago before the shift to a 20-year patent term running from the filing date. Under the old pre-GATT system, continuation practice could enable significant de facto term extensions through “submarine” patents that each had a 17 year term running from the issue date. Now that all patents in a family generally expire on the same date, the potential for abuse is greatly diminished.

But, the potential for abuse has not vanished. If Cellect were overturned I would expect a good amount of applicant gamesmanship in valuable families with the patentee seeking to prolong prosecution in order to maximize PTA.

Under 154(b), applicants can accrue adjustments for three types of USPTO delay: Type A delays, where the USPTO fails to meet certain deadlines; Type B delays, where the application pendency exceeds three years; and Type C delays, which encompass appeals, interferences, and secrecy orders. Each category presents opportunities for gamesmanship.

For Type A delays, applicants might deliberately file complex specifications or claims in order to increase the likelihood of missed deadlines by the USPTO. This step could be coupled with a strategy to intentionally shift the continuation application to a new examiner and art unit who is unfamiliar with the application. Under Type B delays, applicants could potentially draw out prosecution by prompting minor objections and by filing office action responses that introduce new issues or arguments late in the process (and at the PTA deadline) with the hope of pushing their applications past the three-year mark. There is also some potential of using petition practice to delay issuance without the patentee sacrificing PTA. The biggest potential though is for Type C delay.  Applicants would have some incentive to pursue appeals in continuation applications in order to gain additional term based upon the lengthy appellate process. Although appeals may have a fairly low likelihood of winning, this strategy can be viable when the patentee already holds a similar patent covering the invention, and the appeal has the potential of extending the patent term by years.  In that situation, the patentee does not lose much if the patent is denied because they have a fallback position, but could potentially gain years of PTA from the successful appeal.   Although each of these processes are permitted under the rules of practice, their become problematic if done with the intent to delay patent issuance, and so it would require patent attorneys willing to blur the ethics line.

By Dennis crouch

The international IP community is moving toward further harmonizing legal protection for industrial designs. For almost twenty years, member states of the World Intellectual Property Organization (WIPO) have been negotiating a Design Law Treaty (DLT) that would streamline and align procedural requirements for obtaining registered design rights across jurisdictions. If successful, the DLT would make it “significantly easier for small and medium-sized enterprises to obtain industrial design protection overseas as a result of simplified, streamlined and aligned procedures and requirements.”[1]  The DLT can be seen as parallel to the Patent Law Treaty (PLT) adopted in 2000 that helped to harmonize and standardize the formal patent procedures such as the filing requirements sufficient for obtaining a filing date.

Throughout this time, it has been difficult to implement almost any global IP treaty because of major north-south divides.  For the DLT, negotiations have been stalled for the past several years over an African Group proposal that would permit countries to require design applicants to disclose the origin of traditional knowledge, cultural expressions and genetic resources used in creating protectable designs.[2] This same issue has arisen in other IP treaty negotiations over the past few decades.[3] A diplomatic conference is now scheduled for late 2024 to finalize the treaty, but it remains to be seen whether WIPO members be able to reach a consensus. The USPTO is currently soliciting public input to help formulate the U.S. negotiating position.

About the Design Law Treaty:

At its core, the DLT aims to simplify and harmonize the procedural requirements for obtaining registered industrial design rights across national and regional intellectual property (IP) offices.  In the US, these are design patent rights.  The DLT is intended to benefit designers seeking multinational protection for their designs by reducing discrepancies between jurisdictions’ filing requirements and associated costs and complications.

 Key provisions include:

• Standardizing elements that can be required in a design application (Draft Articles 3 & 4)
• Providing relief measures if application time limits are missed (Draft Articles 12 & 13)
• Allowing correction/addition of priority claims post-filing (Draft Article 14)
• Limiting representation requirements before offices (Draft Article 4)
• Providing a grace period for pre-filing disclosures (Draft Article 6)
• Limiting refusal grounds and invalidation of registrations (Draft Articles 18, 19, 21)

Proponents argue this “formalities treaty” would particularly benefit small entities and those in developing countries, who currently face significant hurdles protecting designs abroad due to inconsistent and burdensome procedural requirements. By establishing a ceiling on what countries can require, the DLT constrains national flexibility, but also ensures applicants “maximum predictability and simplicity of procedures.”

Several years ago, the US implemented the Hague Agreement Concerning the International Registration of Industrial Designs (Hague System).  Both the proposed DLT and the Hague System deal with industrial design protection (including design patents), but they serve different purposes and have distinct scopes.

The Hague System, also administered by WIPO, is an international registration system that allows design owners to seek protection for their designs in multiple nations through a single international application filed with WIPO. It simplifies the process of obtaining and maintaining industrial design protection internationally by enabling applicants to secure protection in any of the Hague System’s contracting parties through a single application, in one language, and with one set of fees. The Hague System has been operational since 1925 and currently has 77 contracting parties, although the United States only implemented the system in 2015.

In contrast, the proposed DLT is a harmonization treaty that aims to streamline and align the procedural requirements for obtaining industrial design protection at the national level. The DLT would set a maximum set of requirements that contracting parties can impose on design applicants, reducing differences in national and regional design registration procedures.

For utility patent experts, it may make sense to think about the relationship between the Hague and DLT as similar to that between the PCT and PLT in that one set (Hague and PCT) provides a framework for centralized applications and preliminary assessments at an international level, while the other set (DLT and PLT) focuses on harmonizing procedural requirements across jurisdictions at the national stage to streamline the application process nationally.

The African Group Disclosure Proposal: Preventing Cultural Misappropriation

The DLT has proved difficult to conclude, largely due to a 2014 proposal by the African Group that would permit countries to ask design applicants “disclose the origin or source of traditional cultural expressions, traditional knowledge or biological/genetic resources utilized or incorporated in the industrial design.”  Opponents countered that such a disclosure requirement was inappropriate for a formalities treaty, would inject legal uncertainty into the design system, and was irrelevant to a design’s ornamentality and registrability. A settlement may be likely that permits nations to have heightened disclosure requirements, but without the treaty mentioning what Professor Margo Bagley calls the “Forbidden Words” of traditional knowledge, cultural expressions, or genetic resources. (Cite below)

Other Hurdles to Finalizing the DLT

While the disclosure requirement remains the biggest point of contention, other thorny issues could still trip up the diplomatic conference, such as:

• Technical assistance responsibilities and funding for implementation (Draft Article 22)
• Whether to include mandatory Model International Forms (Draft Article 23)
• To what extent to allow substantive examination of designs beyond formalities (Draft Articles 1bis, 5, 16, 17)
• Terms of joining the treaty and domestic implementation flexibility (Draft Articles 26-31)

Public Input on the Design Law Treaty to the USPTO

As I mentioned above, the USPTO is soliciting public comments to inform the U.S. negotiating position at the upcoming diplomatic conference in November 2024.  The agency is open to all comments, and has particularly identified a few issues:

1. Experiences with foreign design protection and challenges faced due to inconsistent formality requirements across jurisdictions.
2. Views on the current draft DLT articles and regulations, including suggestions for additions, deletions or modifications.
3. Experiences with disclosure requirements related to traditional knowledge, cultural expressions or genetic resources in other countries and the impact on applicants.
4. Perspectives on whether a disclosure requirement should be included in the DLT and potential effects on harmonization goals and applicants.
5. Thoughts on remaining open issues like technical assistance, model forms, scope of examination, and treaty implementation flexibilities.

The USPTO notice is particularly interested in hearing from actual design applicants and practitioners about the practical impact of the DLT’s provisions.  Interested parties can submit comments online through the Federal eRulemaking Portal at www.regulations.gov by searching for the docket number PTO-C-2024-0008. The deadline to submit written comments is June 25, 2024.

Lets see some Color: Although I have not fully contemplated the details of the proposed DLT, I believe that it would not require any changes to US patent law.  One change in USPTO practice will be that the drawings / photographs may be in color “at the option of the applicant.”  Currently, the PTO only permits color in the drawings based upon a petition with a showing as to why why the color drawings or photographs are necessary.  In addition, the drawings rules in the DLT would permit a combination of photograph and drawing. It is not clear whether this rule is meant to include photographs that have been drawn-upon.  Most design patent applicants include multiple views of the design. DLT makes clear that “the industrial design may, at the option of the applicant, be represented by one view that fully discloses the industrial design, or by several different views that fully disclose the industrial design.”

= = =

[1] WIPO Diplomatic Conference on the Design Law Treaty, 89 Fed. Reg. 21242 (Mar. 27, 2024).

[2] WIPO Industrial Design Law and Practice – Draft Articles, art. 3(1)(a)(ix), WIPO Doc. SCT/35/2.

[3] See Margo A. Bagley, The Draft Design Law Treaty’s Forbidden Words, in DESIGN LAW: GLOBAL LAW AND PRACTICE, pt. B (Dana Beldiman ed. 2024); “Ask Me No Questions”: The Struggle for Disclosure of Cultural and Genetic Resource Utilization in Design Applications, 20 Vand. J. Ent. & Tech. L. 975 (2018).

Guest post by Tim Holbrook. Robert B. Yegge Endowed Distinguished Professor of Law and Provost’s Professor, University of Denver Sturm College of Law.

United States patents are generally territorial.  Their exclusive rights only operate within the United States and its territories.  Or so one may think reading the Patent Act.  Moreover, in a global marketplace, the territorial nature of intellectual property rights can create challenges. It would be simpler for a patent holder to just use the U.S. patent to cover foreign activity. This is especially true if a domestic act of infringement has spillover effects into other countries.

So, when – if ever – can a patent owner receive damages for foreign activity that may flow from acts of domestic infringement?

The Supreme Court answered that question as it relates to 35 U.S.C. § 271(f) in WesternGeco LLC v. ION Geophysical Corp.  Section 271(f) deals with the exportation of components of a patented invention with an intent to assemble them abroad.

In answering that question, the Supreme Court applied its recently minted, two-step methodology for assessing the extraterritorial reach of U.S. statutes generally.  As articulated in a non-patent case, RJR Nabisco, Inc. v. European Community, step one requires a court to decide whether the presumption against extraterritoriality has been rebutted by a clear indication from Congress.  If the presumption is not rebutted, a court turns to step two, requiring the court to determine the focus of the statute.  If the activity relevant to the focus takes place in the United States, even if there is attendant foreign activity, then the case reflects a permissible domestic application of the statute.

In WesternGeco, the Court skipped step one and moved straight to step two. In assessing the focus of the patent damages provisions, 35 U.S.C. § 284, the Court noted that damages are tied to “the infringement.” Because “the infringement” was under § 271(f), the Court turned to that provision to determine its focus. The focus, according to the Court, is “the act of exporting components from the United States.” Because that activity is domestic, the lost profits for lost service contracts were the result of a permissible domestic application of the statute.

Of course, Congress designed § 271(f) with extraterritorial effects in mind: in adopting the provision, Congress overruled the Supreme Court’s decision in Deepsouth Packing Co. v. Laitram Corp. that strictly limited any potential extraterritorial application of the U.S. patent.

But what about other infringement provisions, like the traditional forms of infringement under 35 U.S.C. § 271(a)? WesternGeco did not squarely address that issue. Unlike § 271(f), § 271(a) has explicit territorial limits, limiting infringement acts of making, using, selling, or offer to sell the invention within the United States.  Similarly, importation of the invention into the United States is infringement.

Before WesternGeco, the Federal Circuit had adopted a strict territorial rule for § 271(a) damages in Power Integrations Inc. v. Fairchild Semiconductor International, Inc. and Carnegie Mellon University v. Marvell Technology Group, precluding damages for foreign activities flowing from domestic infringement regardless of whether the domestic acts were the proximate cause of the damages. But WesternGeco called these decisions into doubt.

The Federal Circuit resolved this matter in Brumfield v. IBG, LLC, although in an odd procedural posture.  The issue arose not from an award of damages.  Instead, the district court had excluded an expert opinion because it contravened the Federal Circuit’s strict proscription of foreign damages under § 271(a) articulated in Power Integrations.

The Federal Circuit confirmed that “WesternGeco displac[ed] Power Integrations.”  In so doing, the court made two clear holdings.  First, the court concluded that “the WesternGeco applies when the direct infringement” is alleged under § 271(a). This holding is unsurprising: the Supreme Court made clear that the step two analysis of a general remedy provision necessarily requires consideration of the liability provision giving rise to the damages award.

Second, the Federal Circuit concluded that the WesternGeco framework applies to a reasonable-royalty award.  WesternGeco involved lost profits, but the Federal Circuit noted that the Supreme Court’s analysis “did not distinguish the forms of damages.” But the court offered a caveat: theories of a reasonable royalty can differ from those of lost profits.  Lost profits reward the patentee for lost sales, whereas a reasonable royalty reflects what an infringer would have been willing to pay for a license.

Importantly, the court noted that the basis for a reasonable royalty cannot include activities that do not constitute acts of infringement, such as pre-issuance activity.  Moreover, apportionment takes place, separating out and excluding other value in economic products or practices.

Tying these principles to the issue of foreign conduct, the court pointed to “a minimum requirement” for reasonable royalty damages for foreign conduct that is not independently infringing:

the hypothetical negotiation must turn on the amount the hypothetical infringer would agree to pay to be permitted to engage in the domestic acts constituting “the infringement.” 35 U.S.C. § 284. If the patentee seeks to increase that amount by pointing to foreign conduct that is not itself infringing, the patentee must, at the least, show why that foreign conduct increases the value of the domestic infringement itself—because, e.g., the domestic infringement enables and is needed to enable otherwise-unavailable profits from conduct abroad—while respecting the apportionment limit that excludes values beyond that of practicing the patent.

(emphasis added). The court characterized this analysis as one of causation.

Couching this minimum requirement as a form of causation, the court opined on the role that proximate cause could play in policing the territorial limits on damages.  The Federal Circuit’s seminal en banc decision on lost profits, Rite-Hite Corp. v. Kelley Co., concluded that “the reasonable limits of liability … can best be viewed in terms of reasonable, objective foreseeability.” So, if the damages were reasonably foreseeable, then they should be awarded “absent a persuasive reason to the contrary.” Rite-Hite involved lost profits for the patentee’s foregone sales of competing products not covered by the patent at issue, and the court allowed that recovery. Rite-Hite did not confront damages for foreign activity.

The Federal Circuit in Brumfield pushed back on foreseeability as being the sole, sufficient criterion for proximate cause. According to the Supreme Court, foreseeability alone is insufficient for establishing proximate cause for some statutes. Noting that the Supreme Court in WesternGeco did not address whether proximate cause could serve as a limit to damages in that case, the Federal Circuit then posed some questions about the role of proximate cause.  The first is whether the foreseeability standard of Rite Hite “is applicable where those damages are for a (non-established) reasonable royalty” given the different conceptual foundation for royalty-based damages.  Second, the court pondered what role “the general avoidance of extraterritorial reach” should play into the proximate cause analysis.

Unfortunately, the court declined to address either, explicitly noting “[w]e need not and do not here suggest answers to, or further explore, those other options.”

After that lengthy exposition, the court affirmed the exclusion of the expert opinion and refusal to grant a new trial on damages on a different ground: that the expert had lumped the computer readable medium and process claims together in a theory of making the claimed invention in the United States.  Process claims can only be infringed by using the process, so the damages theory would entail unrecoverable foreign uses. The causal link to domestic infringement had to be solely on the making of computer readable medium claims, which was lacking from the opinion. There was “no focused, coherent explanation of the required causal connection to domestic infringement.”

In light of this analysis, Blumfield is interesting, if not problematic, for a number of reasons.

First, the court’s engagement with the presumption against extraterritoriality was less than robust. The court purported to apply WesternGeco, yet a review of the opinion demonstrates that the court never attempts to identify the focus of the § 271(a) statute, nor whether the activity in the case fell within that focus.  Instead, the court summarily noted that, if § 271(f) was domestic under WesternGeco, then § 271(a) must be too.

The provisions do differ.  Congress designed § 271(f) to reach extraterritorial conduct, unlike § 271(a). This glossing over step two of RJR Nabisco is particularly surprising given the ongoing debate within the Supreme Court regarding step two of its methodology, as can be seen in cases like Yegiazaryan v. Smagin and Abitron Austria GmbH v. Hetronic International, Inc. As I and Anshu Garg have detailed in a forthcoming article, there is considerable internal debate as to step two.

Additionally, I have argued that § 271(a) should be treated differently than § 271(f), although Professor Tom Cotter has reached the opposite conclusion.  The decision in Brumfield feels more like the analysis posited by Professor Cotter, although a richer engagement with the statute would have been helpful.

Second, even after resolving the step two question, the court suggested a broader role for considerations of extraterritoriality beyond the two-step methodology.  In discussing the limits of proximate cause, the court referenced “the general avoidance of extraterritorial reach,” which would come into play outside of the context of the two-step methodology. Ms. Garg and I identified this “softer” form of the presumption and how it still appears in Supreme Court decisions, even with the formalization of the two-step methodology.    Consistent with this language in Brumfield, I have argued that transnational aspects of potential damages should be as more remote under a proximate cause analysis given concerns with extraterritoriality. But it isn’t clear doctrinally that extraterritoriality should have any role beyond the RJR Nabisco methodology.

Third, the causation discussion is surprising because none of the parties raised it. They argued over WesternGeco, but there is no mention of causation.  The court’s exploration of this issue arose sua sponte. Any concern with the court addressing an argument that neither party presented is lessened by the fact that the discussion is clearly dicta. It is still somewhat surprising, however.

The causation discussion remains important nevertheless.  It suggests that at least the members of this panel might be willing to consider other limits on damages under the proximate cause umbrella.

There is considerable literature on this issue not mentioned by the court.  Amy Landers has offered a comprehensive and thorough analysis of proximate cause in the patent context in Proximate Cause and Patent Law. Prior to the WesternGeco decision, Stephen Yelderman in Proximate vs. Geograpic Limits on Patent Damages,  argued that the Power Integrations decision was wrongly adopted a bright-line prohibition on damages for foreign acts, but he also argued that proximate cause nevertheless could limit the damages under the facts of the case.  While not necessarily disagreeing with Yelderman’s approach, Tom Cotter in Extraterritorial Damages in Patent Law, felt that Yelderman’s proximate cause analyses of Power Integration and another damages case, Carnegie Mellon University v. Marvell Technology Group, were “questionable.” But he did agree that “proximate cause should work to limit the liability in cases in which the initial act of domestic is not so closely tied to subsequent foreign sales.”  I argued in Extraterritoriality and Proximate Cause after WesternGeco that the courts should reconsider the foreseeability standard, and particularly proximate cause’s intersection with extraterritoriality, much as the Federal Circuit suggested in Brumfield.

If the Federal Circuit wants to go down this road, there is a wealth of literature to help inform their answers to these vexing questions.

Disclaimer from Dennis Crouch: I formerly represented Trading Technologies in litigation involving some of the patents at issue in this case. However, I was not involved in the writing or editing of this guest post. The views and opinions expressed are solely those of the author, not mine. -DC

By Dennis Crouch

Over the past year I’ve been investigating various generative Artificial Intelligence (GenAI) tools for assisting patent attorneys in their practice.  I have a strong belief that these tools and their progeny are now fixtures in our legal environment and are being used to both improve efficient delivery of legal services and to also improve the quality of those services.  Of course the generative creativity of our LLMs go hand in hand with hidden false narratives or hallucinations. Vendors are stepping up to thread the needle here: providing valuable GenAI tools while limiting false story telling.  As we move forward some of the struggle will be a focus on how much the attorney needs to know about how the GenAI works in order to use it responsibly.

Enter the USPTO and its Wet Blanket: The USPTO has released new guidance on the use of AI tools in practice before the USPTO. (more…)

By Dennis Crouch

In a recent unpublished decision, the Georgia Court of Appeals affirmed summary judgment in favor of CPA Global Support Services, LLC (“CPA”) (now part of Clarivate) against a claim of negligent misrepresentation brought by inventor James C. Robinson, M.D. and his patent holding company (Spectrum Spine).  Robinson’s firm FisherBroyles had relied upon the dates erroneously entered by CPA and missed the national stage filing deadlines.  The parallel case against FisherBroyles is still pending in Georgia state court. Robinson v. CPA Global Support Services, LLC, No. A24A0405 (Ga. Ct. App. Apr. 8, 2024). CPA vs Robinson.

The case serves as an important reminder about the limitations on vendor liability for negligent misrepresentation claims in the absence of contractual privity — and how attorneys are often stuck in the middle.

What are your thoughts on how to avoid this situation? (more…)

by Dennis Crouch

In a non-precedential opinion, the Federal Circuit has affirmed the US International Trade Commission’s (ITC) final determination in the patent infringement dispute between Sonos and Google involving smart speaker technology. Sonos, Inc. v. Int’l Trade Comm’n, Nos. 2022-1421, 2022-1573 (Fed. Cir. Apr. 8, 2024).  The ITC had issued a split opinion – finding that Google infringed a number of Sonos speaker patents, but concluded that Google’s proposed work-around was non-infringing.  Both sides appealed and the Federal Circuit’s deferential standard of review resulted in a full affirmance. The outcome then (more…)

by Dennis Crouch

Although non-precedential, the Federal Circuit’s new decision in Sumitomo Pharma v. Vidal offers the important conclusion that a patentee has no standing to appeal an invalidity holding once the patent expires, absent some showing of likely infringement during the prior six years.  Sumitomo Pharma Co. v. Vidal, No. 22-2276 (Fed. Cir. April 5, 2024).  The case is not so bad for the patentee because the court also vacated the IPR decision under Munsingwear.

Under Article III of the Constitution, federal courts are limited to deciding actual “Cases” and “Controversies.” A case becomes moot, and thus no longer a live case or controversy, “when the issues presented are no longer ‘live’ or the parties lack a legally cognizable interest in the outcome.”[1] There some some limited exceptions, such as for cases that are “capable of repetition, yet evading review,” but that only applies when “(1) the challenged action is in its duration too short to be fully litigated prior to cessation or expiration, and (2) there is a reasonable expectation that the same complaining party will be subject to the same action again.”[2]

On March 7, 2024, the U.S. Court of Appeals for the Federal Circuit heard oral arguments in Sumitomo Pharma Co. v. Vidal, with the pharmaceutical company challenging a PTAB IPR decision invalidating its patent. However, as revealed during the oral argument, the patent at issue had expired on February 20, 2024, just weeks before. Ultimately this development led the court to determine that the case was moot and that the PTAB decision cancelling the claims should be vacated.

During oral argument, Judge Taranto probed whether Sumitomo Pharma still had a concrete stake in the outcome given the patent expiration. Counsel for Sumitomo Pharma, Thomas Saunders, acknowledged the recent expiration but argued there was still a live controversy due to the six-year statute of limitations for past damages that might later be discovered:

There’s a difficult question I’ve been thinking about. There is still a look back period for damages. Obviously, in candor to the court, it is a highly regulated entry. . . . So what would be at stake here is whether there has been unauthorized use. I can’t stand before you and presently say we are aware that it’s happened in the last six years, but the possibl[ility exists].[3]

There has been some generic entry, but Thomas indicated those were licensed entrants subject to a settlement agreement and so not infringing the patent.

When a case becomes moot on appeal, the appellate court needs to consider whether to simply dismiss the case as moot, or to also vacate the lower tribunal decision under the Munsingwear vacatur doctrine. Under the doctrine, named after the Supreme Court’s 1950 decision in United States v. Munsingwear, Inc.,[4] when a case becomes moot while on appeal, the appellate court should vacate the judgment below and remand with instructions to dismiss in order to “clear[] the path for future relitigation of the issues between the parties.”[5] This prevents a decision rendered unreviewable due to mootness from having preclusive effect. The doctrine aims to avoid entrenching a decision that has become moot through no fault of the party seeking appellate review.

In response to Judge Taranto’s suggestion of Munsingwear vacatur, Saunders acknowledged the difficulty of the mootness question in this context:

I struggle with this, Your Honor, because I think it is a genuinely difficult question. It’s not traditionally in the context of someone who owns property, which has been vacated, abrogated by the government. … But this is also the unusual circumstance where there shouldn’t have been any entrance. So what I hesitate is we just don’t know [whether there has been infringement], and the law gives us the entitlement to discover within the next six years that there was somebody who jumped the gun in what they were supposed to be doing, or there was a compounding pharmacy, or there was some illegal use.[6]

Ultimately, Saunders indicated that Sumitomo Pharma’s “most important interest” was “having [the PTAB’s invalidity] reasoning abrogated, because it’s incorrect,” and that if the court was sufficiently concerned about jurisdiction, “at the very least, there should be a Munsingwear vacat[ur].”  Although this particular patent has expired, the Orange Book listing for Lurasidone Hydrochloride Tablets shows eight other listed patents that have not yet expired.  I expect that the obviousness conclusions made by the Board in this case could potentially carry over.

Although Saunders did not get his highest wish (reversal), he did receive the backup (Munsingwear vacatur).  The result then is that the IPR final written decision is vacated.  It will be interesting to me to see whether the PTAB picks up the case again — remember here that the case is moot before the Appellate Court because the constitution requires a case-or-controversy. As an Article I court, the PTAB operates without concerning itself with such standing issues and thus could go ahead and re-decide the case. (more…)

by Dennis Crouch

The United States Patent and Trademark Office (USPTO) recently proposed a new fee structure for fiscal year 2025, which includes significant increases in various patent fees. [Read the Notice of Proposed Rulemaking] While incremental fee adjustments are common, the proposed changes for FY2025 are particularly noteworthy due to their magnitude in certain targeted areas and potential impact on applicant behavior. Many filers will likely change their practices based on the new higher fees. The USPTO appears to be using these fee adjustments as a tool to shape patent prosecution strategies, encouraging more compact patent applications and smaller patent families.  However, the USPTO is also seeking ways to ensure that the agency remains financially solvent and able to perform its statutory duties in the face of inflation and the Unleashing American Innovators Act of 2022 which reduced patent fees for small and micro entity applicants. The USPTO’s proposed fee increases are largely unchanged from the plan announced last year.

One of the most striking changes in the proposed fee structure . . . (more…)

by Dennis Crouch

On January 23, 2024, the Federal Circuit granted the USPTO’s request for a remand in the case of In re Xencor, Inc. The appeal focused on two important issues concerning written description requirements for means-plus-function (MPF) and Jepson claims in the context of antibody patents. The USPTO had indicated that it wanted to reconsider its approach to these issues and convene its newly established Appeals Review Panel (ARP) to clarify its position. (ARP is the new POP). As part of its justification for remand, the Federal Circuit noted its expectation “that proceedings will be conducted expeditiously.”

However, more than two months after the remand order, there has been no visible progress in the case. The USPTO has not docketed the case with the ARP, and no public announcement has been made regarding the composition of the panel that will review the case. Furthermore, the prosecution history of the application in question (USPTO Application Number 16/803,690) does not reflect any updates or changes since the remand.

This lack of action is particularly concerning given the significance of the issues at stake. The PTAB previously made two controversial rulings that were on appeal: (1) that under 35 U.S.C. 112(f) equivalents require explicit written description support and (2) that non-limiting Jepson claim preambles also require such support, even if they do not limit claim scope.

Meanwhile, the USPTO did recently issue examination guidance on examining means-plus-function claim limitations under 112(f).  The troubling aspect of the memo, however, is that it does not provide any guidance on the Xencor enablement issue.

Citations:
[1] https://patentlyo.com/patent/2023/12/motion-remand-xencor.html
[2] https://patentlyo.com/patent/2024/01/important-antibody-description.html
[3] https://cafc.uscourts.gov/01-23-2024-23-2048-in-re-xencor-inc-order-23-2048-order-1-23-2024_2257719/

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by Dennis Crouch

In Rady v. The Boston Consulting Group, Inc., No. 2022-2218 (Fed. Cir. Mar. 27, 2024), the Federal Circuit affirmed the dismissal of a patent infringement lawsuit, holding that the asserted claims of Rady’s US10469250 were ineligible under 35 U.S.C. § 101.  The patent, owned by Max Rady, patent describes scanning a physical item, determining its unique pattern of imperfections (i.e., “signature”), and recording that signature to a blockchain if not previously registered.

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by Dennis Crouch

In April 2024, the Federal Circuit issued a significant decision vacating a district court’s judgment that Janssen Pharmaceuticals’ dosing regimen patent claims were nonobvious. Janssen Pharms., Inc. v. Teva Pharms. USA, Inc., No. 2022-1258 (Fed. Cir. Apr. 1, 2024). The case involved Janson’s U.S. Patent No. 9,439,906, which claims methods of treating schizophrenia by administering specific doses of the long-acting injectable antipsychotic paliperidone palmitate.

Teva filed an Abbreviated New Drug Application (ANDA) seeking approval to market a generic version of Janssen’s Invega Sustenna product, which embodies the claimed methods. In the ensuing Hatch-Waxman litigation, Teva stipulated to infringement but challenged the patent on obviousness and indefiniteness grounds. Following a bench trial Judge Cecchi (D.N.J.) rejected Teva’s invalidity defenses, and Teva appealed.

On appeal, Judge Prost authored a unanimous opinion affirming the district court’s indefiniteness determination but vacating and remanding on obviousness.  Overall, this is a bad case for pharmaceutical formulary patents.

This post focuses on the court’s obviousness holding and its potential implications for pharmaceutical method of treatment claims more broadly. I make three key claims. . .

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