One Patent’s ‘Processor’ is Another’s ‘Means for Processing’: Dueling Claim Constructions at the Federal Circuit

Patent,

by Dennis Crouch

WSOU Investments LLC v. Google LLC, Nos. 2022-1063, 2022-1065 (Fed. Cir. Oct. 19, 2023)

WDTX District Court Judge Alan Albright sided with the accused infringer in this case — holding that the asserted claims were invalid as indefinite.  The setup here is a common scene: means plus function (MPF) claim limitations without adequate support in the specification.

Most commonly patentees draft claims that cover the physical structure of an invention or the particular steps taken in a process. However, the Patent Act also permits a patentee to claim the elements of an invention as “means for” accomplishing a specified function without actually claiming the structural components. Although a “means for holding hot coffee” appears potentially broader than claiming a “ceramic mug,” the statute itself places key limits on the scope of these so-called “means plus function” claims. In particular, a means for limitation is interpreted to only cover the “corresponding structure” disclosed in the specification and their equivalents. 35 U.S.C. § 112(f). And, a series of Federal Circuit cases have created a bright line rule that a means-plus-function limitation will render the entire claim invalid as indefinite in situations where no corresponding structure is provided in the specification. This is the case even in situations where various ways to perform the claimed means are well known to those of skill in the art. See, e.g., Williamson v. Citrix Online, LLC, 792 F.3d 1339, 1351-52 (Fed. Cir. 2015); Aristocrat Techs. Australia Pty Ltd. v. Int’l Game Tech., 521 F.3d 1328, 1337-38 (Fed. Cir. 2008).  In this situation, my “means for holding hot coffee” might not even cover a ceramic mug if the specification itself only discloses paper cups. And, the claim would be invalid if it failed to disclose any particular embodiments of a hot-coffee-holding device.

A patentee intending to invoke 112(f) style claiming will typically use the magic words “means for …” However, the Federal Circuit concluded that claim meaning is a matter of objective analysis, rather than subjective intent.  In MPF analysys, the court looks beyond the magic words and more generally ask whether the limitation recites a non-structural “nonce” word.  A “nonce” word is a verbal construct that does not convey a particular structure, such as “element,” “device,” or other generic, non-structural terms.  When a nonce word is interpreted in means plus function form, the corresponding structure in the specification must be something more than a repeat of the same nonce word — lest the claim be found invalid as indefinite.

In this case, the two patents at issue are related to image tracking technology (the ‘045 patent) and gesture control technology (the ‘825 patent).  The following claim terms were the ones disputed:

  1. “a processor configured to …” (‘045 patent)
  2. “at least one memory and the computer program code are configured, with the at least one processor, to cause the apparatus to …” (”825 patent)

U.S. Patent Nos. 8,965,045 and 9,335,825.

Judge Albright found each of these underlined terms to be in “nonce” form and therefore applied MPF analysis.  A processor is a means for processing; a memory is a means for storing data; etc.  According to Judge Albright, the patent document did not provide any further structural disclosure beyond the functional words — thus rendering the claims indefinite.

On appeal, WSOU argued on appeal that the limitations were not means-plus-function limitations, and thus § 112, ¶ 6 did not apply. Alternatively, it argued the specifications disclosed adequate structure.

As to the ’045 patent, the Federal Circuit affirmed the district court’s determination that the “processor” limitation invoked § 112, ¶ 6 because in the context of the claims and specification it was described only functionally and generically. The court concluded that the patentee had focused its arguments on the processor being not-MPF and had waived any arguments regarding corresponding structure. “WSOU argues for the first time on appeal that the specification discloses corresponding structure.”

As to the ’825 patent, the Federal Circuit reversed. It held that the “memory,” “code,” and “processor” limitations in this patent, read in context of the claims and specification, would connote sufficient structure to avoid § 112, ¶ 6. The court distinguished the ’825 patent’s more specific description of these elements.

So, we have the word “processor” interpreted as a nonce word invoking MPF analysis in one patent; but a structural limitation in the second patent.   The difference here is that in the ‘045 patent, the patentee “treats the word ‘processor’ so broadly as to generically be any structure that manipulates data” but without providing specific examples.  On the other hand, the ‘825 patent included a much more concrete explanation of the term. The court explained:

In contrast to the ‘045 patent, the specification [in the ‘825 patent] describes the ‘processor’ as hardware that runs the computer program code. Specifically, the specification teaches that the term ‘processor’ is synonymous with terms like controller and computer and ‘should be understood to encompass not only computers having different architectures such as single/multi-processor architectures and sequential (Von Neumann)/parallel architectures but also specialized circuits such as field-programmable gate arrays (FPGA), application specific circuits (ASIC), signal processing devices and other devices.’

Thus, the intrinsic evidence from the specification justified the distinction.  One odd note here is that I did read through the ‘045 patent and it does seem to include a bit more than what was suggested by the court. In particular, the ‘045 patent has the same quoted statement that a processor:

should be understood to encompass not only computers having different architectures such as single/multi-processor architectures and sequential (Von Neumann)/parallel architectures but also specialized circuits such as field-programmable gate arrays (FPGA), application specific circuits (ASIC), signal processing devices and other processing circuitry. …

‘045 patent. In addition, the ‘045 patent indicates that a processor could be configured as “processing circuitry” that includes a combination of implementations including microprocessor(s).

The Federal Circuit did not consider these factual similarities because, apparently the patentee raised them as to the ‘045 for the first time on appeal.   If I were the patentee, I might review this decision carefully and consider whether a request for panel rehearing is appropriate — is it true that the patentee only preserved the structure argument as to one of the patents?

In any event, the case is interesting for the outcome — the Federal Circuit finding that Judge Albright is being too tough on patentees.

Copyright-Free Sandbox: Implications of AI-Generated Content

Patent,

by Dennis Crouch

Conventional wisdom in copyright law has been to presumptively treat all online content as protected by copyright. This approach has made sense because of the low originality standard for copyright protection.  The result then has been that users would focus on whether they have a license; whether the intended use is a “fair use;” and (perhaps) whether the copyright holder is likely to discover the infringement and attempt to enforce their rights.

However, our digital landscape is experiencing a major upheaval with to the proliferation of synthetic works that likely do not meet the criteria for copyright protection. These works primarily fall into two main categories: (1) those lacking the necessary originality for copyright eligibility, such as raw data or certain surveillance camera footage; and (2) those created without direct human authorship, as with content generated by AI systems, often called GenAI.

The existing legal framework requires human creativity and ingenuity as the foundation for originality. Yet, AI systems are generating content at an unprecedented scale, and the volume of synthetic creations has likely already exceeded that of human-originated works. In the upcoming years, we can expect the number of synthetic creations to continue exponential growth. While some of this content may lack originality, a significant portion could easily meet the originality standard established in Feist and similar cases, if not for the absence of a human author.

This emerging copyright-free realm poses both opportunities and challenges. The prospect of freely accessing and building upon an expanding pool of non-copyrighted material without legal ramifications offers a unique freedom. This liberty to transform AI-generated works into new creations could potentially drive innovation and further creation at an accelerated pace. However, a challenge arises in determining to what extent these uncopyrighted synthetic works are discernible from copyrighted counterparts. If my forecast holds — that the majority of works in numerous fields will soon be synthetically generated — it might become prudent to reconsider shifting the burden back onto copyright claimants to explicitly mark their works.

This potential future holds many uncertainties. One question is whether the individuals behind  AI-generated works could leverage other legal mechanisms, like contracts, to safeguard their interests. Or, will the courts follow old rules prohibiting the use of contract to limit distribution of otherwise publicly available uncopyrighted content.

One or More: One Simple Trick to Invalidate this Patent

Patent,

by Dennis Crouch

ABS Global, Inc. v. Cytonome/ST, LLC, No. 22-1761 (Fed. Cir. Oct. 19, 2023).

We have another precedential Federal Circuit decision that turns on the meaning of the simplest word in the English language: “A.”

Cytonome’s US Patent No. 10,583,439 covers a microfluidic device for processing particles of interest in a sample fluid. The claim requires

an inlet configured to receive a sample stream; [and]
a fluid focusing region configured to focus the sample stream;. . .

‘439 Patent, claim 1 (emphasis added).  At the PTAB, patent holders typically seek a narrow claim construction in order to separate their claims from the closest prior art.

Here, the PTAB agreed with the patentee’s narrow construction that “the sample stream” was limited to a single, contiguous sample stream.  The PTAB relied primarily on two main reasons for its singular-only construction:

  1. The PTAB believed that allowing multiple streams would be inconsistent with dependent claim 2, which refers to “a centerline of the sample stream” in the singular. The PTAB reasoned a single centerline implies only one sample stream.
  2. The PTAB wanted to avoid redundancy with other claims that recite “a centerline of the flow channel” (claim 5) and “a centerline of the microfluidic channel” (claim 20). It distinguished those terms as referring to the physical device itself.

In addition, the patent document contains only embodiments showing a single stream. This narrow claim construction allowed the patentee to avoid the closest prior art (Simonnet) that disclosed a split stream.

On appeal, the Federal Circuit reversed — finding that the proper claim construction of “the sample stream” permitted multiple streams (including a split stream) on the same microfluidic device.

The Federal Circuit began its analysis by noting that “at least in an open-ended ‘comprising’ claim, use of ‘a’ or ‘an’ before a noun naming an object requires that the phrase be construed to mean ‘one or more’ unless the context sufficiently indicates otherwise.” Slip op. at 8-9 (Fed. Cir. Oct. 19, 2023) (citing Baldwin Graphic Sys., Inc. v. Siebert, Inc., 512 F.3d 1338, 1342–43 (Fed. Cir. 2008)). The court called this the “general rule,” and observed that the specification reinforced this rule with its boilerplate definition in the specification defining “‘a’ or ‘an’ entity [as] refer[ring] to one or more of that entity.” Id.

Although the general rule can be overcome based upon the circumstances of a particular case, the Federal Circuit held there was no sufficient basis for deviating from the general rule in this case. It rejected the PTAB’s view that dependent claim 2’s reference to “a centerline of the sample stream” implied a single stream, finding claim 2’s language “on its face is broad enough to cover” alternatives like separate centerlines or branches. The court also disagreed that the specification’s lack of a multiple-stream embodiment compelled a narrow construction, absent “‘clear and manifest disavowal’ of [the plural] meaning.” Id. (quoting Martek Biosciences Corp. v. Nutrinova, Inc., 579 F.3d 1363 (Fed. Cir. 2009)).

Given the presumption of plural meaning and finding no persuasive reason to deviate, the Federal Circuit held “the sample stream” should not be limited to a singular-only interpretation.  Reversed with a holding that claims 1 and 8 are now anticipated. The Federal Circuit remanded the case for further proceedings on dependent claims 2, 6, and 9 to consider whether those claims are now obvious.

= = = =

One question I have is whether the patent is now also likely invalid for lack of enablement and written description because it claims one or more streams while disclosing only one stream in original specification.

Fraudulent Incontestability Declarations: Textual Fidelity vs. Fraud Deterrence

Patent

by Dennis Crouch

In the trademark case of Great Concepts, LLC v. Chutter, Inc., No. 2022-1212 (Fed. Cir. Oct. 18, 2023), the Federal Circuit addressed whether fraud in a declaration of incontestability justifies cancelling the underlying trademark registration. Writing for the majority, Judge Stark held the TTAB lacked this authority under the Lanham Act. Stark reversed the TTAB’s cancellation order, finding the statute only permits cancellation for fraudulent acts taken while obtaining the registration, not for establishing incontestability. Dissenting, Judge Reyna argued this improperly restricts the TTAB’s ability to combat fraud before the agency. Their disagreement centers on the scope of “maintaining” a registration and policy concerns over deterring false statements.  Over the past several years, the global trademark systems have faced increasing fraudulent activity and this decision serve as a call for Congressional reforms.

The case also raises important issues associated with our ever-more-powerful administrative state. Although US courts are empowered by equity to counteract fraud on the system, administrative agencies are typically much more limited in their actions.  Of course, this balance of powers question goes far beyond the patent and trademark systems.

Great Concepts applied to register the mark “DANTANNA’S” for restaurant services in 2003.  The company runs restaurants of the same name in the Atlanta area that are described as “upscale” sports bars. I’m sure they are lovely.

The DANTANA’S mark registered in 2005 as Registration No. 2929764. In 2006, Chutter, Inc.’s predecessor Dan Tana petitioned to cancel the registration, alleging a likelihood of confusion with his common law “DAN TANA” restaurant mark.  For the Italian place in Santa Monica. The cancellation proceeding was eventually dismissed in 2010 for failure to prosecute.

Meanwhile in 2010, Great Concepts’ former attorney Frederick Taylor filed a combined declaration with the USPTO seeking to maintain the registration under Section 8 and also to obtain incontestable status under Section 15. The Section 15 declaration falsely stated no proceedings involving the DANTANNA’S mark were pending, when in fact the cancellation proceeding and related litigation were still ongoing.

In 2015, Chutter filed a new petition to cancel the DANTANNA’S registration, alleging Taylor’s Section 15 declaration constituted fraud warranting cancellation under Section 14 of the Lanham Act. The TTAB agreed, finding Taylor knowingly made false statements with intent to deceive the USPTO. It held the fraudulent declaration enabled Great Concepts to obtain new incontestable rights. Great Concepts appealed the cancellation order to the Federal Circuit.

The dispute here involves two adjacent provisions of the Federal Trademark statute known as the Lanham Act of 1946 (as  amended). Lets look at the statute.

Section 15 of the Lanham Act spells out the process of moving a mark to “incontestability” status.  15 U.S.C. § 1065.   Important for the purposes of this case, the process requires the mark owner to file “an affidavit … with the Director” making a variety of required statements. To be effective, the affidavit must include a statement that “there is no proceeding involving said rights pending.”  Id. As mentioned above, Great Concepts made such a statement at a time when a case was still pending.

Section 14 empowers the USPTO to act on a petition to cancel a registered trademark. 15 U.S.C. § 1064(3).  The law provides several reasons why a registration might be cancelled:

  • Mark becomes generic for the goods;
  • Mark is functional;
  • Mark was abandoned;
  • “Registration” was “obtained fraudulently”;
  • etc.

Id.  In considering Section 14, The majority concluded that it does not cover fraudulent Section 15 incontestability declarations.  The closest hook that the majority found was cancelling a mark if the registration was obtained fraudulently, but the majority found that not close enough.  Judge Stark explained “a Section 15 declaration only relates to a mark’s incontestability, not its registration.”  On this point, the court distinguished the case of Torres v. Cantine Torresella S.r.l., 808 F.2d 46 (Fed. Cir. 1986). In Torres, the the focus was on renewal under Section 8 that requires, and the court held that “[f]raud in obtaining renewal of a registration amounts to fraud in obtaining a registration within the meaning of section 14(c) of the Lanham Act.”  Id. But, the majority distinguished Torres as tied to registration because the mark would be lost absent a Section 8 renewal filing; whereas the mark is not lost based upon failure to file Section 15 incontestability docs. Truthfully, I expect that the majority here would have decided Torres differently, but they are bound by the precedent set.  As an aside: Great Lakes had simultaneously filed a Section 8 renewal with its incorrect Section 15 document, but the majority also concluded that the two should be treated as separate acts, and no fraud was found in the Section 8 filings.

The parties also pointed to conflicting statements from treatises and law reviews on the subject:

  • Jerome Gilson & Anne Gilson Lalonde, Trademarks § 9.03 (2022)) (“A fraudulent Section 15 affidavit is grounds for cancellation of the registration under Section 14(3).”).
  • J. Thomas McCarthy, Trademarks and Unfair Competition, § 31.81 (“[F]raud in a Section 15 incontestability affidavit or declaration should serve only to eliminate the incontestable status of the registration and not result in cancellation of the registration itself.”).
  • Theodore H. Davis Jr. & Lauren Brenner, Allegations of Fraudulent Procurement and Maintenance of Federal Registrations Since In re Bose Corp., 104 Trademark Rep. 933, 998-99 (2015) (even if not permitted under the statute, the courts should permit  this extra-statutory basis for cancellation)

Writing in dissent, Judge Reyna argued the majority improperly restricted the TTAB’s ability to combat fraud before the agency. He contended Section 15 declarations allow registrants to maintain their rights, placing such filings under Section 14’s umbrella for fraud in maintaining a registration. Reyna accused the majority of “constructing a milepost” in the trademark process “at which point (Section 15) fraudulent wrongdoing is green-lighted.”

In Reyna’s view, the TTAB has discretion to fashion appropriate remedies for fraud at any stage of the trademark continuum. He saw no principled rationale for the majority’s rule prohibiting cancellation for Section 15 fraud. Reyna also disagreed with imposing an artificially narrow definition of “maintaining” a registration that excludes incontestability declarations. He noted the USPTO itself advises the public that Section 15 is a maintenance filing. Beyond textual disputes, Reyna argued fraud should never be condoned at any point in agency proceedings.

The majority responded to these policy arguments with a statement that “We certainly do not intend by our holding today to encourage fraud – of any type.”  The majority goes on to agree that “some significant sanction” should be available to deter fraud.  The Federal Circuit noted that one such penalty approved in the old CCPA case of Duffy-Mott is to “remove the mark’s incontestability status.”  At least at that point the mark owner “will have a harder time preserving the validity of its registered mark” either in court or via TTAB challenge.   The majority also noted that the TTAB is empowered to “sanction any attorney who commits fraud before it.”  The court noted that such a filing may subject the attorney to a variety of penalties, including criminal prosecution.

Still, the majority concluded that it was bound by the statute — that Congress provided a closed list of reasons for cancelling a mark, and the markholder’s action here does not fit within that list:

Even if it were true that our decision would result in an unwelcome increase in fraud perpetrated against the Board – which, again, we do not believe it will – we would nonetheless adhere to the unambiguous language of the statute. . . . Whether we would prefer a different result be reflected in the statute is irrelevant to our responsibility to decide the case before us based on the law as it exists.

Slip Op. They are just calling balls and strikes.

The philosophical divide between textual fidelity and policy concerns is a recurring tension in administrative law.  The Great Concepts majority’s strict statutory interpretation contrasts Stark-ly with the dissent’s emphasis on the broader implications of fraud within the trademark system. While the court maintains its allegiance to the text of the law, it highlights another area where fraud can pervade.  The case suggests a rethink on whether the existing legal and procedural frameworks are equipped to uphold integrity in the face of evolving challenges, particularly the surge in fraudulent activities within global trademark systems.

The Complex Fact/Law Divide in Obviousness Analysis

Patent, , ,

by Dennis Crouch

The intersection between factual inquiries and legal conclusions in patent law is a complex and ever-evolving area, this is especially true in obviousness doctrine. A recent Federal Circuit decision highlights the tricky analysis required in assessing obviousness and damages in patent cases. In Cyntec Co. v. Chilisin Electronics Corp., the appellate court examined whether the lower court’s directed verdict (JMOL) of nonobviousness improperly removed factual questions from the jury.  This case provides an important reminder of the care required in delineating the fact finding and legal determinations in patent trials.  As is common, I think both the District Court and the Federal Circuit got it wrong.

Note, the court’s decision includes an interesting analysis of damages, finding that the plaintiff’s damages expert should have been excluded. It also includes a useful claim construction decision on when to give a term its plain and ordinary meaning.

A molded choke is a device used in electronic devices to filter undesirable signals.  The device contains a coiled conducting wire encapsulated in a molded mixture of magnetic powder. The powder is heated to a sufficiently high temperature to allow it all to bond together.  The patentee, Cyntec, had experienced some difficulties in creating the devices — with the high heat causing various problems such as melting the conducting wire or its insulative layer.  The solution that they hit upon was using a mixture of magnetic powders with different hardness and particle sizes.  This permitted a lowering of the required molding temperature and thus avoided wire damage during molding.  See U.S. Patent Nos. 8,922,312 and 9,481,037.

Competitor Chilisin began selling its own molded chokes and Cyntec sued for infringement.  At trial, Chilisin presented invalidity arguments that the claims were obvious based on two prior art references – Shafer and Nakamura. However, the district court granted JMOL of nonobviousness in favor of Cyntec before the case went to the jury (i.e., directed verdict). The jury subsequently found infringement and awarded full lost profits damages based on Cyntec’s expert calculations.

Although obviousness is ultimately a question of law, it depends upon upon substantial factual finding.  The particular threshold of where factual findings end and legal conclusions begin is quite tricky in this area.  In KSR, the Supreme Court appeared quick to determine as a matter of law that it PHOSITA would have been motivated to combine the references in a way rendering the claims obvious.  In subsequent cases, however, the Federal Circuit took pains to tease out motivation to combine from the ultimate conclusion of obviousness.

“Before KSR, we had also consistently treated the question of motivation to combine prior art references as a question of fact… KSR did not change this rule ….” Wyers v. Master Lock Co., 616 F.3d 1231, 1238–39 (Fed. Cir. 2010) (as quoted in Apple Inc. v. Samsung Elecs. Co., Ltd., 839 F.3d 1034, 1051 (Fed. Cir. 2016) (en banc)).

But, the fact/law divide is a bit more complicated in Cyntec because it involves a Judgment as a Matter of Law (JMOL).  We typically have two distinct types of legal questions at the JMOL stage:

  1. Regular questions of law, such as the meaning of a statute or the ultimate conclusion of a patent claim’s obviousness; and
  2. Lopsided questions of fact, where the evidence so favors one-side that no reasonable jury could find otherwise.

At JMOL, the district court is empowered to make these two types of legal conclusions, but cannot otherwise invade the jury’s factfinding role.

Adding to the difficulty is the reality that determination of the Graham factors rarely lead directly to the obviousness/nonobvious determination.  In Graham, the Supreme Court indicated that courts should work through the following for step fact-finding process and then rely upon the results to make the ultimate legal conclusion of obviousness.

These factual questions include: “(1) the scope and content of the prior art, (2) differences between the prior art and the claims at issue, (3) the level of ordinary skill in the pertinent art, and (4) [if presented,] the presence of objective indicia of nonobviousness such as commercial success, long felt but unsolved needs, failure of others, and unexpected results.”

Cyntec Co. v. Chilisin Electronics Corp., No. 22-1873 (Fed. Cir. Oct. 16, 2023) (quoting Elbit Sys. of Am., LLC v. Thales Visionix, Inc., 881 F.3d 1354, 1357 (Fed. Cir. 2018)).   The point here is that even after the fact-finder has made all the factual findings, there is still quite a bit of work for a the law-decider to do.  That said, quite a bit of the work is occupied by the motivation-to-combine factual finding.

Here, the patentee presented prior art and testimony regarding a motivation to combine. The district court found the evidence insufficient and awarded JMOL for the patentee.  On appeal, the Federal Circuit vacated that decision and instead concluded that “Chilisin presented the jury with evidence that would have allowed it to reasonably find the asserted claims obvious in view of Shafer and Nakamura. . . . Taken together and drawing all reasonable inferences in Chilisin’s favor, this evidence is enough for a reasonable jury to have found that the asserted claims would have been obvious.”

I have an important nitpick with the appellate court’s decision that goes back to the complexity of the law-fact divide in obviousness analysis.  The court skipped an important step by simply concluding that a reasonable jury could have found the claims obvious. Recall that obviousness is a question of law, and at JMOL we are only concerned taking disputed facts away from the jury.  The appellate court should have instead explained something like the following: “that the defendant presented evidence sufficient to put the factual question of motivation-to-combine into dispute in a way that, if taken as true, would lead to a legal conclusion of obviousness.”

The distinction here is important, the Federal Circuit’s rule here makes it harder to award summary judgment of non-infringement because it places an additional layer of reasonableness on the ultimate legal conclusion of obviousness. But that is a question of law, and with questions of law we don’t account for reasonable fact finders but instead ask only whether the question was decided rightly or wrongly. This distinction is why legal determinations are reviewed de novo on appeal and factual findings are given deference. This analysis also reveals the dirty secret that, although the law does not permit reasonable deference into legal questions, reasonable minds regularly do disagree upon the conclusion of obviousness even after making all the underlying factual findings.

On remand, the district court must ensure that the jury is tasked only with resolving the factual disputes, while reserving the ultimate legal question for itself. Carefully delineating the fact finding and legal conclusions will be critical to applying the proper review on any subsequent appeal.

= = =

Regarding damages, the Federal Circuit found the district court abused its discretion in admitting Cyntec’s expert testimony on alleged lost profits. Cyntec’s expert used total revenue from customer SEC filings to estimate what percentage of products containing the accused chokes were imported into the U.S. However, the appellate court found his methodology “speculative” because the filings included revenue from products that did not contain accused chokes, without distinguishing between them. Citing precedent like Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 711 F.3d 1348 (Fed. Cir. 2013), the Federal Circuit held the expert “assumed that (1) the sales revenue reported in the customers’ Form 10-K reflected sales of products with molded chokes; and (2) each third-party product shipped into the United States contained an infringing choke.” This “speculative” testimony should have been excluded under Daubert. The appellate panel thus vacated the lost profits award.  On remand, the damages calculation will need to be reevaluated without the flawed expert testimony, likely with a new trial focusing on obviousness and damages.

 

Amending Claims to Capture Post-Filing Market Activity

Patent

On LinkedIn I’m asking folks about continuation practice: Should it be OK to amend claims in a continuation to cover a competitor’s new product?

I don’t think I’ve seen such a lopsided poll outcome in quite a while with 93% so far indicating “Yes” it should be OK, assuming that the new claims create no enablement or written description problem.  There is still time to add your vote. (I think you have to login to vote).

Patent Continuation Strategies Face Major Threat

Patent,

by Dennis Crouch

Impact of Sonos on Patent Prosecution: The recent Sonos v. Google decision threatens to grind to a halt, or at least significantly restrict, a once-common patent prosecution strategy – keeping continuation applications pending for years to obtain new claims that cover marketplace developments. Sonos Inc. v. Google LLC, 20-06754 WHA, 2023 WL 6542320 (N.D. Cal. Oct. 6, 2023).  In Sonos, Judge Alsup found Sonos’s patents unenforceable due to prosecution laches, despite Sonos diligently prosecuting related applications for 13 years; serially filing a continuation with each allowance. The decision casts doubt on the viability of pending continuation applications over a long period, even absent any evident applicant delay — especially in situations where new claims are drafted in response to emerging technologies or market demands. Although claim fluidity remains an integral principle in patent law, Sonos adds considerable viscosity to the practice. The viability of continuation strategies, especially in rapidly evolving technologies, may face a reckoning in the wake of Sonos.  The patentee will certainly appeal, but it is not clear that the Federal Circuit will change the path in any way.

Understanding Claim Fluidity: One feature of the US patent system is claim fluidity.  Most claims are amended during prosecution. Most patents claim priority back to an earlier filing with different claims.  Claims can later be amended during a post-grant proceeding. And, to make things clear the reissue state permits a patentee to alter the claims to cover in situations where the original patent claims “more or less than he had a right to claim in the patent.” 35 U.S.C. 251.

Although reissue applications are always available during the life of a patent, they have major downsides, including the two year post-grant timeline for enlarging patent scope. Id. The alternative approach followed by most is to “keep a family member alive” in areas involving technology important to the patentee.  As one family-member patent is about to issue (or be abandoned), the patentee makes sure to file a continuation application with a new set of patent claims and claiming priority back to the original filing documents.

In developing that new set of claims, the patentee will typically consider the marketplace. What market developments have occurred since the original filing date? Some of these developments may be internal — looking at their own current and future product line.  Some of the developments will also be external — looking to see how others have begun using aspects of the disclosed invention.  We then craft claims that cover these new developments; being wary to ensure that the patentee has “a right to claim” this new coverage.  This right to claim is ordinarily measured by the doctrines of enablement and written description and during prosecution we also look to the prohibition on new-matter under 35 U.S.C. § 132.

Sonos v. Google: Judge Alsup’s new decision in Sonos v. Google suggests that this common approach should come to an end. In particular, the court concluded that Sonos’ asserted claims were unenforceable because they had been added to a continuation application filed 13-years after the original priority document in a way that was prejudicial to the behemoth Google.

The essence of this order is that the patents issued after an unreasonable, inexcusable, and prejudicial delay of over thirteen years by the patent holder, Sonos. Sonos filed the provisional application from which the patents in suit claim priority in 2006.

Sonos Inc. v. Google LLC, 20-06754 WHA, 2023 WL 6542320 (N.D. Cal. Oct. 6, 2023).  Judge Alsup goes on:

Trial brought to light what happened here. This was not a case of an inventor leading the industry to something new. This was a case of the industry leading with something new and, only then, an inventor coming out of the woodwork to say that he had come up with the idea first — wringing fresh claims to read on a competitor’s products from an ancient application. . . . It is wrong that our patent system was used in this way. With its constitutional underpinnings, this system is intended to promote and protect innovation. Here, by contrast, it was used to punish an innovator and to enrich a pretender by delay and sleight of hand. It has taken a full trial to learn this sad fact, but, at long last, a measure of justice is done.

Id.

The basic setup here is not simply a delay.  Judge Alsup concluded that Sonos learned of a particular feature from Google (allowing a speaker to be in two different zones). And, that Sonos later filed a continuation application that included claims to the new feature. Meanwhile Google invested in the technology and launched its own products.

New Matter and Priority Claims: An odd aspect of the decision is that Judge Alsup concluded that the new feature constituted “new matter” that “[u]nder black letter patent law … necessarily sunk any claim of priority.”   Of course, “new matter” does not actually tank priority claims.  Rather, the priority question depends upon a proper claim and sufficient support as guided by the doctrines of enablement and written description. But Judge Alsup appears to have felt misled regarding the priority issue earlier in the case. At that prior stage, Google had failed to present certain evidence showing lack of priority. Judge Alsup seems to feel he was duped into accepting Sonos’ priority claim. As he put it:

Put another way, ‘I got a half a deck of cards’ and ‘I was not told the complete truth.’ . . . To repeat, the judge was not made aware in the briefing (or at the hearing, or otherwise until trial,) that this sentence had been inserted by amendment in August 2019. That, alone, would have been a red flag.

Id.  The opinion shows Judge Alsup’s displeasure at feeling he was not given the full story by Sonos earlier in the case. He seems to take particular issue with Sonos relying on specification language that was added years later by amendment.  He similarly did not fault Google for failing to discover the issue since the prosecution history is quite complex.

Potential Repercussions for Patent Prosecutors and Portfolio Managers: The case is obviously a major one that patent prosecutors and portfolio managers should consider.  The decision suggests strongly that the common patent prosecution strategy of keeping continuation applications pending to obtain new claims may be disfavored – at least when done over a decade or more as well its use to obtain new claims covering market developments.

Diligence in Prosecution Not a Justification for Delay: Unlike prior cases such as Hyatt, the patentee was diligently prosecuting the patents during the entire period. However, the court found that diligence “does not render the delay any less unreasonable and inexcusable. Indeed, it renders the delay all the more unreasonable and inexcusable.” The court explained that Sonos “could have filed parallel applications with new claims covering the invention” and did not have to “run out its string of inert applications before turning to claim the invention that mattered.”

Patent Term and Prosecution Laches: The Hyatt and Lemelson cases adopted by the Federal Circuit focused on pre-1995 patent applications. The old system provided an incentive for delay during prosecution because the patent term of 17 years began running as of the patent issuance date.  The result was the potential of greatly increasing the effective patent term.  That incentive for delay no longer exists because post-1995 patents (like those of Sonos) have a patent term that runs from the non-provisional filing date.  Thus, each  day of delay ate into the Sonos patent term.  There is some support for the idea that prosecution laches no longer applies in this new system because of the congressionally created limited term of 20 years that begins with the start of prosecution in a manner that is closely parallel to a statute of limitations.  In recent cases, the Supreme Court has held that laches is not a proper defense to damages claims when a statute of limitations is in place.  Still, Judge Alsup concluded that the change in patent term has no impact on the doctrine of prosecution laches.

The Future of Claim Fluidity and Patent Strategy: In the case, a jury had sided with the patent holder Sonos and awarded $32 million in back damages.  Judge Alsup’s decision flips that verdict and also kills any plans Sonos had to exert its exclusive rights over the marketplace. While claim fluidity remains an integral feature of patent law, Sonos has added considerable viscosity to the system.

Claim Construction and the Indefinite Article Shuffle

Patent,

by Dennis Crouch

The Federal Circuit’s new Finjan decision once again focuses attention on what I call patent law’s “indefinite article shuffle.” Finjan v. SonicWall — F.4th — (Fed. Cir. 2023).

Although patent courts do interpret the indefinite article “a” as allowing for a plural meaning, they generally do not permit a change in the associated noun. Let me explain. Here, the patentee Finjan claimed “a computer” performing a certain operation and later referred to “the computer” performing another operation. The accused infringer SonicWall was using two different computers for these operations and the patentee sought a construction that relied upon the presumed plurality to encompass the accused activity. The district court refused and awarded summary judgment of non-infringement. On appeal, the Federal Circuit affirmed, finding that the transition from “a computer” to “the computer” requires the same computer perform both operations. As the court explained, “the use of ‘the’ also indicates the claimed term refers to an antecedent term.” Slip op. at 17 (citing Convolve, Inc. v. Compaq Comput. Corp., 812 F.3d 1313 (Fed. Cir. 2016)). Thus, the reference to “the computer” tied back to the same “a computer” initially recited, requiring a single computer be able to perform both steps.

The Federal Circuit issued a similar opinion earlier in 2023 in Salazar v. AT&T Mobility LLC, 64 F.4th 1311 (Fed. Cir. 2023). In Salazar, the court explained that “while the claim term ‘a microprocessor’ does not require there be only one microprocessor, the subsequent limitations referring back to ‘said microprocessor’ require that at least one microprocessor be capable of performing each of the claimed functions.” Id. See also Summit 6, LLC v. Samsung Elecs. Co., 802 F.3d 1283 (Fed. Cir. 2015).

Although I agree with the Federal Circuit’s decision here as to both the claim construction and non-infringement, it also appears to be a clear situation where the doctrine of equivalents could save the patentee.  However prosecution history estoppel may be a problem for the patentee on the DOE front because one of the “computer” references was added during prosecution in order to move the case toward allowance.

= = =

The district court also found another set of claims not infringed — this time based upon an agreed claim construction of the term “downloadable.” The patents relate to cybersecurity technology for protecting network-connected devices from malware, and these patents particularly related to identifying and stopping malware downloads: U.S. Patent Nos. 8,677,494; 6,154,844; 6,804,780; and 7,613,926.

These all require receiving a “downloadable” and the parties had agreed to define a downloadable is an “executable application” that is downloaded and “run” on the destination computer. The problem for the patentee is that SonicWall’s software receives data packets but never reassembles them into an executable application.  Rather, the accused SonicWall product operates by inspecting the payload on a packet-by-packet basis and then sends each packet to its destination without reassembling the file.

Based upon this uncontroverted evidence of how SonicWall operates and the agreed upon claim construction, the district court awarded summary judgment of non-infringement to the accused infringer.  On appeal, the Federal Circuit affirmed — finding that the district court did not “impermissibly deviate[] from the parties’ agreed-upon construction” but rather only “elaborat[ed]” upon inherent aspects of the construction.

On appeal, the patentee raised a number of claim construction arguments that may have carried weight in an ordinary claim construction context. Here those arguments were rejected as the court repeatedly returned to the text of the stipulated claim construction that the patentee had agreed to.

We do not permit parties on appeal to raise claim construction arguments challenging a stipulated construction.  See, e.g., Function Media, L.L.C. v. Google, Inc., 708 F.3d 1310, 1322 (Fed. Cir. 2013); see also Traxcell Techs., LLC v. Sprint Commc’ns Co. LP, 15 F.4th 1121, 1129 (Fed. Cir. 2021) (“Now Traxcell insists in retrospect that this construction was wrong. But having stipulated to it, Traxcell cannot pull an about-face.”).

Slip Op. at 12.  Judge Bryson wrote in dissent noted that the district court’s construction leads to absurd results based upon how the internet works. No device ever ‘receives’ an already assembled executable program; rather folks receive the packets and that is seen as the equivalent of receiving the program.  Bryson then went further and argued that the district court overstepped the bounds of the agreed-upon construction.

SonicWall argues that Finjan agreed to the construction of the term Downloadable and is stuck with the consequences, even if the consequences are that the patent reads on no embodiments. In fact, however, the record reflects that although the parties to the construction of the term Downloadable, they did not share thesame understanding of the term “executable,” as used in that construction, a point that became clear during the summary judgment argument. By agreeing to the construction of the term Downloadable, Finjan did not acquiesce in the interpretation of the court’s construction of “executable,” which was that an “executable” file must be executable without any further processing, rather than being capable of execution after, for example, being reconstructed following its transmission in packetized form.

Dissent at 3-4. In Judge Bryson’s view, the district court interpreted “executable” too narrowly in a way that effectively altered the agreed-upon construction. Although Finjan agreed to the overall construction of “Downloadable,” it did not agree to the district court’s implicit interpretation of “executable” as requiring executability upon receipt.

= = =

The final issue in the case was the district court’s decision that a number of the asserted claims were invalid. In fact, the district court did not make this ruling on the merits, but rather used the procedural tool of issue preclusion (collateral estoppel) since the claims had been held invalid in a prior dispute.

Issue preclusion prevents a party from relitigating an issue that has already been actually litigated and necessarily determined by a final judgment in a prior case. Google LLC v. Hammond Dev. Int’l, Inc., 54 F.4th 1377, 1381 (Fed. Cir. 2022). Issue preclusion always involves two different cases, and the question is whether some determination in the first case will preclude the parties from relitigating the issue in a subsequent case.  The doctrine applies when: (1) the issue is identical to one decided in the first action; (2) the issue was actually litigated in the first action; (3) resolution of the issue was essential to a final judgment in the first action; and (4) the party against whom issue preclusion is asserted had a full and fair opportunity to litigate the issue in the first action. Id. Issue preclusion can bar relitigation of both questions of law and questions of fact.

Issue preclusion can attach as soon as a final judgment is reached in one case, even before any appeals are exhausted. Levi Strauss & Co. v. Abercrombie & Fitch Trading Co., 719 F.3d 1367 (Fed. Cir. 2013). This allows parties to rely on a decision without waiting for appeals to conclude. However, if the decision providing the basis for issue preclusion is later overturned on appeal, this eliminates the ability to continue to rely on issue preclusion. Mills v. City of Covina, 921 F.3d 1161, 1170 n.2 (9th Cir. 2019). Since the overturned judgment can no longer have preclusive effect, any issue preclusion decisions relying on it must also fall away. This is what happened in Finjan v. SonicWall with the court vacating the invalidity holding.  Based upon my reading, this outcome does not save the patentee’s case against SonicWall (Because of the non-infringement findings), it does allow Finjan to continue to assert its patents against others.

Secondary Considerations Get Short Shrift in Airbed Patent Fight

Patent,

by Dennis Crouch

Team Worldwide Corp v. Intex Recreation Corp. (Fed. Cir 2023)

I was disappointed to see the Federal Circuit’s no-opinion affirmance in this case — affirming the PTAB finding that Team Worldwide’s inflatable airbed invention was unpatentable as obvious.  US9211018. The case peaked my interest because I have been working on a short article focusing on what the courts term “secondary considerations” of obviousness, and the patentee raised substantial evidence of commercial success.   Ultimately the PTAB sided with the patent challenger and and that determination was affirmed on appeal in a R.36 no-opinion judgment.

TWC’s patent claims an “inflatable product,” such as an air mattress, that has a built-in electric pump.  In particular, the electric pump is built into and recessed within the exterior wall of the mattress with just one side of the pump body exposed through the exterior wall. The rest of the pump body is hidden inside the inflatable body and permanently held in place within the exterior wall of the inflatable body. The recessed design keeps the pump partially hidden and out of the way when not in use.

The key prior art references in the case are

  • U.S. Patent No. 6,018,960 (1996) (“Parienti”), which discloses an air mattress having an externally-attached solar powered pump.
  • U.S. Patent No. 2,493,067 (1945) (“Goldsmith”), which discloses ordinary inner-spring mattress having an attached fan used for temperature control (not inflation).  One embodiment includes “housing arranged within … said mattress and carrying a blower and temperature changing means therein.

This product has been a huge seller via brands such as Intex, Bestway, Boyd, Airtek, Air Cloud, Air Comfort, AirBedz, Altimair, Pittman, and TexSport.  The patentee has sued a number of folks for infringement, and they fought back with this Inter partes review proceeding.

The PTAB initially sided with the patentee, concluding that the claims had not been proven obvious. However, on appeal, the Federal Circuit vacated and remanded.

The Board misapplied the obviousness standard, and misapprehended Intex’s argument, when it fixated on whether the prior art literally disclosed Intex’s theory of modifying Parienti only slightly by taking the pump attached to the outside of the mattress and recessing it partially within the mattress. Intex’s argument regarding its proposed modification showed that Parienti was already close to the challenged claims, and only a slight change was needed to satisfy the broadest reasonable interpretation of “wholly or partially” recessing a pump. This showing, together with Intex’s showing that numerous references since the late 1800s illustrated prior artisans’ intuitive desire to recess pumps to save space, satisfied Intex’s burden [under KSR]. The Board erred in concluding to the contrary.

Intex (Fed. Cir. 2021).  Thus, in its 2021 decision the Federal Circuit concluded that Intex had satisfied its burden of proving the invention obvious. The only problem though was that the PTAB/CAFed had not yet considered secondary indicia of non-obviousness offered by the patentee.  Thus, remand was needed for the PTAB to address issues it previously declined to reach. Specifically, the PTAB had not addressed Team Worldwide’s evidence on objective indicia of non-obviousness.

On remand, the PTAB flipped its decision, finding the claims obvious despite substantial sales and other secondary considerations.  In its most recent appeal, Team Worldwide argued that the PTAB erred in its assessment of the objective evidence of nonobviousness. Specifically, Team Worldwide argued that the PTAB did not properly weigh the evidence presented regarding commercial success, failure of others, and industry praise.

Regarding commercial success, the PTAB found that Team Worldwide was entitled to only “some, but not considerable, weight in favor of non-obviousness” for the evidence of sales of infringing products, citing the impact of non-patented features on customer demand.  However, Team Worldwide argued that the PTAB ignored evidence that the majority of sales were of products admitted or shown to infringe, which constitutes overwhelming commercial success under Federal Circuit precedent. See Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 655 F.3d 1364, 1376 (Fed. Cir. 2011).

For failure of others, the PTAB concluded that Team Worldwide’s evidence was entitled to only “some weight.” But Team Worldwide argued that the PTAB improperly minimized competitors’ failed attempts to design around the claims, contrary to Federal Circuit precedent finding failure of others entitled to considerable weight. See WBIP, LLC v. Kohler Co., 829 F.3d 1317 (Fed. Cir. 2016).

Regarding industry praise, the PTAB found Team Worldwide’s evidence was entitled to some, but not considerable weight. However, Team Worldwide contended that the PTAB ignored relevant testimony praising the invention, which should be afforded considerable weight under Federal Circuit law. See Apple Inc. v. Samsung Elecs. Co., 839 F.3d 1034 (Fed. Cir. 2016) (en banc).

In sum, Team Worldwide argued that the PTAB did not properly weigh the objective evidence of nonobviousness as required under controlling Federal Circuit precedent and that this evidence outweighed the PTAB’s finding of obviousness.

Unfortunately, on appeal the Federal Circuit did not take the time to work through these issues but rather simply issued its R.36 Affirmance without opinion.

In addition to the general role of objective indicia, the appeal asked an important question about burdens of proof: “Did the Board err by inappropriately applying a standard of proof that required TWW to prove the validity of its claims in light of secondary considerations when the burden of proof statutorily remains with Petitioner to prove invalidity including in light of secondary considerations?”

The History and Importance of the Jury Trial System – An Excerpt from a Patent Infringement Trial

Patent,

I was reading through a recent trial transcript and enjoyed the following historical introduction to the jury system offered by Judge Gilstrap.  He was talking to the potential jurors as voir dire was just about to begin.  — Dennis

= = =

We are engaged or about to be engaged this morning in the selection of a jury in the civil case involving allegations of patent infringement. If you’d indulge me, though, for just a minute, I’d like to briefly review with you at this juncture how we came to have our American civil jury trial system.

If you go back in ancient history, if you start with the first five books in the Old Testament, the Pentateuch, you will find that the ancient Hebrew nation impaneled juries to decide issues of property ownership and property value.

The Greeks, the ancient Greeks, began using a jury system about 1500 B C. The Romans, as with many other things, copied the jury system from the Greeks and implemented a jury system as a part of ancient Rome. And, in fact, it was the Romans that brought the jury system to Europe across the English Channel into what we now know as Great Britain when they conquered Great Britain in the fourth century A.D.

Now, by the 12th century A.D., the jury system had been in place in England, what we now know as England, for 800 years. But in the 12th century A.D., a rather tyrannical king came to the throne of England and his name was King John. And he became embroiled in various disputes with his nobles that nearly led to the verge of a civil war.

One of those disputes was the king’s efforts to do away with the right to trial by jury. Thankfully, the civil war did not take place at that time, and the king and his nobles resolved their many disputes, including this one, by entering into a written agreement that they signed at a place in England called Runnymede. And this agreement that settled all these disputes and laid out a structure for that country going forward, including guarantees of the right to trial by jury, is a document many of you may have heard of called the Magna Carta.

And so you can see, ladies and gentlemen, that our British forefathers who came to this continent as colonists brought the jury trial system with them. And the jury trial system flourished in colonial America for over a hundred years, until another tyrannical king came to the throne of Great Britain. This time his name was King George III. I’m sure you’ve have studied him in American history that led up to our American revolutionary war. And the king, prior to that, became embroiled in many disputes with his American colonists.

One of those disputes was King George III efforts was to do away with or to substantially curtail the right to trial by jury. In fact, ladies and gentlemen, when Thomas Jefferson sat down to write the Declaration of Independence which spells out — it really was a letter to the king telling the king all of the reasons why his subjects in America felt they had no other option but to revolt, declare their independence, and form their own independent nation, one of those reasons set forth by Thomas Jefferson in the Declaration of Independence for that separation between America and Britain was King George III’s efforts to do away with or curtail substantially the right to trial by jury.

And as you’re all aware, we did revolt against Great Britain, we did form our own independent nation, and shortly thereafter we adopted the governing document for our country, the supreme law of the land, the Constitution of the United States.

And immediately after the Constitution was ratified, there were ten additions or amendments added to the Constitution. Many of the states made it clear they would not vote to ratify the Constitution without a commitment to immediately add these ten amendments. And these ten amendments you’ve all studied about in school. They’re called the Bill of Rights. And in those first ten amendments to the Constitution, you will find the Seventh Amendment to the Constitution, which guarantees, ladies and gentlemen, the right to every American citizen to have their civil disputes resolved through a trial by jury. Those ten amendments, the Bill of Rights, were all ratified in 1791. So since 1791, well over 200 years ago, every American has had a constitutionally guaranteed right to have their civil disputes settled through a trial by jury.

So by being here this morning, with that brief background and overview of how we got to have the jury trial system that we’re implementing today, I want you to realize in the Court’s view every one of you here are doing a very important part to preserve, protect, and defend the right to trial by a jury as part of our constitutionally guaranteed rights. I always tell citizens who appear for jury duty as you have this morning that, in my personal view, the jury duty or jury service rendered by any citizen is the second highest form of public service any American can render for their country. In my personal view, the highest form of public service are those men and women that serve in our armed forces.

Now, later in the process this morning, the lawyers for both sides are going to address you. They’re going to ask you questions. I want you to understand none of them are seeking to inquire unduly into your personal affairs. Said another way, none of them are trying to be nosy and to ask you about things that are not relevant to this case. They will be asking you questions as a part of working with the Court to secure a fair and an impartial jury from among you to hear the evidence in this case. I want you to also understand when the lawyers ask you questions later as a part of this process, there are no wrong answers, as long as the answers you give are full, complete, and truthful. As long as they’re full, complete, and truthful, there are no wrong answers. . .

Finesse Wireless LLC v. AT&T Mobility LLC, Docket No. 2_21-cv-00316 (E.D. Tex. Aug 23, 2021) (trial transcript day 1).

Sisvel v. Sierra Wireless – Useful Guidance for Prosecutors on Motivation to Combine and Means-Plus-Function Claims

Patent, ,

by Dennis Crouch

Today’s post introduces the new decision in Sisvel International S. A. v. Sierra Wireless, Inc., No. 22-1493 (Fed. Cir. Oct. 6, 2023).  Here, I focus on two distinct issues. The first part has to do with motivation-to-combine, with the decision offering some good language for patent prosecutors attempting to overcome weakly worded office actions.  The second part focuses on means-plus-function language and concludes with my rant about the court’s unduly complicated layers of tests.  The case also upholds a single-reference obviousness holding, but I didn’t write about that portion of the decision.

Justifying a Motivation to Combine

In the IPR, the PTAB cancelled some claims of Sisvel’s U.S. Patent No. 6,529,561 based upon a single-reference obviousness determination (Chen; WO 99/26371), but sided with the patentee as to other claims. The Board particularly found no motivation to combine One of the key reasons was because of a lack of motivation to combine Chen with other GSM references.

On appeal, the Federal Circuit affirmed these findings.  US patent law has a long history of debate with regard to combination claims, with the Supreme Court’s most recent pronouncement in KSR reaffirming its old pronouncement that a combination of known elements is likely obvious absent some justification for deciding otherwise.  KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007).

[I]f a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill. . . . The combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results.

Id.  Referencing Sakraida v. Ag Pro, Inc., 425 U.S. 273 (1976); Anderson’s-Black Rock, Inc. v. Pavement Salvage Co., 396 U.S. 57 (1969); and Great Atlantic & Pacific Tea Co. v. Supermarket Equipment Corp., 340 U.S. 147 (1950).

Despite this lower bar, IPR petitioners still have the burden of at least explaining why a skilled artisan would have been be motivated to combine various references to form the claimed invention.  This is so, even if that explanation is simply a showing of how its case fits the model set out in KSR.

Here, however, the Board concluded that the IPR petitioner had failed that low burden.  In particular, in this case the petitioner offered “reasons to combine [that] were merely assertions that the references were analogous art, which, without more, is an insufficient articulation for motivation to combine.”  Rather, as KSR suggests, the known elements need to be combined “according to known methods” and yield only “predictable results.”  Although the petitioner might have recited these legal conclusions in its petition, the Board found them too conclusory and lacking in clarity.  Rather, the Board indicated that a proper motivation to combine analysis would explain how the primary reference is modified by the GSM reference.  As I mentioned above, this is a fairly low standard under KSR, but the Board explained that the petition failed to explain: “what reference is the primary versus secondary reference, what elements are missing from the primary reference, what elements should be added from the secondary reference to reach the claimed invention, or why those particular elements would be obvious to add.”

On appeal, the Federal Circuit affirmed the lack of motivation to combine – holding that “we cannot fault the Board for being at a loss in trying to decipher Cross-Appellants kitchen-sink of unclear and confusing motivation-to-combine arguments.”

Sisvel’s ’561 patent, owned by Sisvel, relates to improving channel coding techniques in transmitting data for radio systems. Channel coding adds redundant data bits to a data block before transmission to allow a receiver to better detect and correct errors caused by noise or other interference. The invention particularly employs “link adaptation” and “incremental redundancy” to optimize channel coding. Link adaptation allows the transmitter to adjust the code rate between data block transmissions by changing the number of redundant bits. Incremental redundancy allows the receiver to combine original and retransmitted data blocks to improve decoding.

The Federal Circuit’s affirmance on motivation to combine could be useful for patent prosecutors facing obviousness rejections. While the explanatory burden on an IPR petitioner is higher on the IPR petitioner than on a patent examiner, prosecutors may find Sisvel helpful in arguing an examiner provided inadequate rationale for combining references. Patent applicants could cite Sisvel in contending an office action improperly combines references without particularly explaining: (1) the primary and secondary references; (2) missing elements supplied by the secondary reference; (3) why a skilled artisan would have looked to the secondary reference to fill gaps in the primary reference; (4) why adding the secondary reference’s teaching would yield predictable results; etc. Although Sisvel arose in the context of invalidity allegations by an IPR petitioner, the motivation to combine principles apply equally during prosecution. By requiring examiner explanations meet KSR’s standards, applicants may succeed in overcoming some obviousness rejections.

= = =

The Noah Test as One Layer of Means Plus Function Analysis

The case also includes an interesting discussion about a means-plus-function limitation found in some of the claims, and the question of whether the claim is indefinite.  As you know, a claimed means plus function limitation is interpreted as covering the corresponding structures disclosed within the specification along with their equivalents.  35 U.S.C. 112(f).  But we have a special null case — if no such structures are disclosed then the Federal Circuit has ruled that the associated claim is automatically invalid as indefinite.  This gets a bit trickier for inter partes review proceedings since the petitioner is not permitted to challenge claims based upon indefiniteness. In Intel Corp. v. Qualcomm Inc., 21 F.4th 801 (Fed. Cir. 2021), the Federal Circuit instructed the PTAB to take the following approach to potentially indefinite MPF claims:

  1. Impossibility: Determine that the claim is indefinite and then decide whether the indefiniteness prevents a prior art analysis (the “impossibility” conclusion); or
  2. Possibility: Explain why it is able to construe the claim and resolve the prior art issues despite potential indefiniteness.

In either case, the PTAB needs to make some moves toward determining whether the limitation includes sufficient structural support in the specification.

Here, Claim 5 of the ’561 patent requires a “means for detecting a need for retransmission.”  The specification does not specify a particular algorithm to accomplish this goal, but does disclose protocols like “ARQ” and “hybrid ARQ.”  In situations like this, the Federal Circuit has created an unduly complicated framework  to determine whether expert testimony can be used to fill gaps in the structural explanation of algorithmic MPF claims. Noah Systems, Inc. v. Intuit Inc., 675 F.3d 1302 (Fed. Cir. 2012). At step one, the Noah framework specifically asks whether any algorithm is disclosed.  If no algorithm then no expert. In Noah step two, where an algorithm is disclosed but arguably inadequate, its sufficiency is judged based on a skilled artisan’s perspective and expert testimony is permitted to support the conclusions. Id.

Here, the PTAB found that references to “ARQ” and “Hybrid ARQ” were not algorithms.  On appeal the Federal Circuit found error in that conclusion. In particular, the court held the PTAB erred by not evaluating the protocol names under the step two framework. The court explained that even “brief disclosures” may warrant assessing expert views on their import to a skilled artisan. Because the specification explicitly referenced protocols, it was not wholly devoid of structure. The court vacated and remanded for the PTAB to conduct a step two analysis, including evaluating expert testimony.

This holding provides useful guidance for assessing computer-implemented means-plus-function claims. The Federal Circuit appropriately avoided rigid formalism, recognizing algorithm disclosures need not detail every step and by recognizing that  reference to commercially available tools can satisfy the structural requirement of 112(f).  Still, I would have simplified this approach and simply held that the claim covered the disclosed protocols. After Sisvel, courts evaluating software means-plus-function limitations must carefully walk the line between Noah’s step one and two.

Conclusions: The means-plus-function doctrine was originally designed to allow patent applicants to claim an element by the functions it performs rather than reciting structure, with the goal of providing a simple and flexible claiming technique. However, as evidenced by the complicated Noah framework sitting atop Williamson and Donaldson, Sisvel’s nuanced analysis of whether disclosed protocols qualify as algorithms, means-plus-function claims have become one of the more complex and controversial doctrines in patent law. The current morass of rules, exceptions, and expert testimony required to assess even basic computer-implemented means-plus-function claims suggests the doctrine has veered far from its original purpose. In my view, courts should seek to simplify the rules and refocus on whether the specification provides sufficient information to allow a skilled artisan to understand the boundaries of the functional claim element.

= = =

  • Sisvel International S.A.: Represented by Robert Gajarsa, Timothy Devlin, and Neil Benchell of Devlin Law Firm.
  • Sierra Wireless, Inc.: Represented by Kourtney Merrill of Perkins Coie LLP and Amanda Tessar.
  • Telit Cinterion: Represented by Guy Yonay of Pearl Cohen and Kyle Auteri.
  • Opinion: Authored by Judge Chen and joined by Chief Judge Moore and Judge Clevenger.

Upcoming Events

Patent

I have several public events coming up over the next few months that I’m looking forward to. I always enjoy the opportunity to connect with old friends and meet new people who are ready to dig into the details of intellectual property law.  Let me know if you want to meet up. — Dennis

AIPLA Annual Meeting – October 19-21, 2023 – Washington DC

I’ll be joining a year-in-review plenary session on the final day of the AIPLA Annual Meeting moderated by Melissa Pytel of Entrada Therapeutics. This year we’re limiting the focus to patent law & trademark law. My fellow panelist is trademark expert Richard Mandel of Cowan Liebowitz and we’ll be providing a year-in-review plenary session for the conference. The event is always interesting to me with 50+ speakers and hundreds of global IP specialists in attendances.  I’ll be looking out for PTO Director Kathi Vidal and Patent Commissioner Vaishali Udupa.

61st Annual Conference On Intellectual Property Law – November 9-10, 2023 – Plano, Texas

I’m honored to be delivering the keynote address at this conference hosted by The Center for American and International Law. For my talk, I’m planning to offer an outlook on the future of IP in the US.  This is a great event that I’ve attended in the past and I’m looking forward to hearing from PTAB Vice Chief Judge Michael Tierney  of the PTAB as well as the afternoon IP Trivia Session led by Matt Cornelia (McGuire Woods) and Bethany Salpietra (Baker Botts).

IP Timely Topics CLE – November 14, 2023 – Washington State Bar Association

I’m delighted to be presenting again this year at the Washington State Bar Association’s IP section meeting. My presentation will focus on the implications of the Amgen vs. Sanofi decision for both biotech and “regular” tech.  This year’s meeting is virtual again — so you’ll just see flat personality.

IP&SKI CLE Conference – January 7-10, 2024 – Snowmass, Colorado

To wrap up a busy few months, I’ll be speaking again at the IP&SKI CLE conference organized by Scott Alter and David Bernstein. Along with skiing and networking, we have an amazing lineup of speakers including Federal Circuit Judges Leonard Stark and Kara Stoll. I always look forward to reconnecting with colleagues at this unique IP event that takes place right on the slopes.

VirnetX Seeks Supreme Court Review of IPR Joinder and Fake Acting Officials

Patent

by Dennis Crouch

The high-stakes patent dispute between VirnetX and Apple continues with VirnetX’s new petition asking the Supreme Court to review two important Federal Circuit rulings. 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”).

The AIA Question: IPR Joinder Time Limits

Under the AIA, parties sued for patent infringement generally must seek inter partes review within one year of being served with the complaint. 35 U.S.C. § 315(b). But the provision goes on to permit joinder to an already-instituted IPR proceeding, stating that the one-year time limit “shall not apply to a request for joinder” under § 315(c). VirnetX argues that while the one-year limit does not apply to the joinder request itself, a party still must have “properly file[d] a petition”—including within the one-year period—to be eligible for joinder.  This argument stems from the text of Section 315(c) that permits the Director to join a party “who properly files a petition…”

In the litigation below, VirnetX sued Apple for infringing patents on secure communications technology. Apple sought to challenge the patents’ validity through IPR, but its petitions were filed more than a year after VirnetX’s complaint and thus denied as untimely. Apple then joined IPRs filed by other challengers, and the Patent Trial and Appeal Board (“PTAB”) allowed that joinder despite the time-bar. VirnetX contends this contravenes § 315(b)’s time limit, as Apple never “properly file[d] a petition” within the statutory window.

The Federal Circuit upheld Apple’s joinder, construing § 315(b)’s time limit as inapplicable to a joinder request. VirnetX argues this nullifies § 315(b)’s clear time bar, allows defendants to evade the limit through improper joinder requests, and facilitates serial attacks on patents already upheld in court.

(b)Patent Owner’s Action.— An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner … is served with a complaint alleging infringement of the patent. The time limitation set forth in the preceding sentence shall not apply to a request for joinder under subsection (c).

(c)Joinder.— If the Director institutes an inter partes review, the Director … may join as a party to that inter partes review any person who properly files a petition under section 311 …

In addition to the direct statutory interpretation, VirnetX argues that the joinder work-around improperly enables Apple—with vast resources—to take control of the challengers’ invalidity case. It also contravenes the AIA’s purpose of providing an efficient and streamlined alternative to litigation. VirnetX contends the Federal Circuit’s reading warrants review given the importance of properly construing the AIA’s protections for patent owners.

The FVRA Question: Acting PTAB Officials

The second question concerns the Federal Circuit’s interpretation of the Federal Vacancies Reform Act, which governs temporary appointments to vacancies in Senate-confirmed offices. The FVRA establishes exclusive mechanisms for designating acting officials. 5 U.S.C. §§ 3345, 3347.

When VirnetX requested Director review of the PTAB’s decisions invalidating its patents, as required by Arthrex, Inc. v. Smith & Nephew, Inc., 141 S. Ct. 1970 (2021), the Director position was vacant. VirnetX’s request was denied by the Commissioner of Patents purportedly exercising the Director’s authority based on an agency succession order.  However, at the time the Commissioner was neither the Director nor even the Acting Director.  The FVRA includes a mechanism for the President to put into place a temporary officer, but that was not done. Rather, the PTO itself had created a succession plan authorizing the Commissioner to act.  The problem with this approach is that it violates the FVRA on its terms.

In order to cut the knot, the Federal Circuit interpreted the FVRA to allow temporary performance of a Senate-confirmed officer’s duties if those duties could have been delegated by a USPTO Director.  An example of this might be Section 132 that requires the Director to “notify the applicant” of any rejection or objection to a pending application.

VirnetX argues that the Federal Circuit’s interpretation construes FVRA into virtual nonexistence, since nearly all agency heads’ duties are delegable. It also undermines the Appointments Clause by allowing agencies to bypass the FVRA’s exclusive temporary appointment mechanisms.

VirnetX contends the Federal Circuit misread the FVRA’s text and precedent by importing a limited definition of “function or duty” from one FVRA provision into the entire statute. This important Appointments Clause issue, which arises frequently during presidential transitions, merits the Supreme Court’s review.

The petition notes that this has been growing across the Federal Government for more than a decade and these “fake” acting heads of agencies have been used ever more frequently in the past two administrations.

Further reading:

  1. Arthrex, Inc. v. Smith & Nephew, Inc., 35 F.4th 1328 (Fed. Cir. 2022), cert. denied, 143 S. Ct. 2493 (2023).  This is the case that most extensively discusses the FVRA issue.
  2. Anne Joseph O’Connell, Actings, 120 Colum. L. Rev. 613 (2020).  Outside of the patent context, this article provides substantial background on vacancies in Senate-confirmed offices and acting appointments.
  3. H. Comm. on Oversight & Reform, 116th Cong., Policy and Supporting Positions (Comm. Print 2020).

= = =

Counsel of record Naveen Modi of Paul Hastings LLP represents VirnetX.

Most respondents have already waived their right to respond to VirnetX’s petition.  The PTO Director, has waived her right to respond through DOJ counsel. Apple likewise waived response through counsel Mark Fleming of WilmerHale. And respondent Mangrove Partners Master Fund waived response through counsel James Bailey.

Only Black Swamp IP, LLC, which the PTAB allowed to join one of the IPR proceedings as an additional challenger to VirnetX’s patents, has not yet indicated whether it will file a response before the October 27 deadline.

Kavanaugh Signals Openness to Revisiting Patent Eligibility Framework as Supreme Court Declines CareDx Petition

Patent

by Dennis Crouch

The Supreme Court declined to hear an important patent eligibility case on October 2nd, denying certiorari in CareDx v. Natera. This leaves in place a Federal Circuit ruling that invalidated CareDx’s patents on its method for detecting organ transplant rejection.

The patents at issue covers breakthrough diagnostic technique using cell-free DNA to non-invasively detect organ transplant rejection. For over a decade, scientists had tried unsuccessfully to use cell-free DNA for this purpose. The key innovation was applying high-throughput DNA sequencing and identifying SNP thresholds to make the technique clinically useful. However, the lower courts ruled the patents invalid under the judicial exception to patent eligibility for natural phenomena.

The Supreme Court’s denial means this important legal issue remains unsettled. The Court’s Mayo/Alice framework for patent eligibility has been heavily criticized for over-invalidating diagnostic patents based on natural phenomena. But the Federal Circuit felt bound to apply it to CareDx’s patents. Justice Kavanaugh dissented from the cert denial, signaling his view that the Court should refine or reconsider its eligibility framework as applied to diagnostic patents.

For the medical diagnostics industry, the outcome is disappointing. These types of pioneering diagnostic techniques often require massive investment to develop clinically. Without reliable patent protection, investors may turn away from funding this research and scientists may avoid commercializing it. As a result, patients may never benefit from potentially life-saving tests.

Looking ahead, the eligibility framework will likely need to be addressed by the Supreme Court or Congress. Justice Kavanaugh’s dissent signals openness of at least one Justice, with four typically required to grant certiorari. Congress is also considering steps to revamp section 101 of the Patent Act, but action is unlikely prior to the 2024 election.

One eligibility petition is still pending in the case of ChromaDex, Inc. v. Elysium Health, Inc., No. 23-245.  ChromaDex is asking the court to rationalize its natural phenomenon jurisprudence from Myriad with its abstract idea and law of nature jurisprudence from Alice/Mayo respectively.  Does the same two part test apply to products of nature?

Discovering the Limit: Calculating the Copyright Damages Timeline

Patent,

by Dennis Crouch

The Copyright Act has a seemingly simple three year statute of limitations:

No civil action shall be maintained under the provisions of this title unless it is commenced within three years after the claim accrued.

17 U.S.C. 507(b). It is somewhat surprising then that the Supreme Court has just granted certiorari in a case asking whether the statute “precludes retrospective relief for acts that occurred more than three years before the filing of a lawsuit.” Warner Chappell Music, Inc. v. Nealy, 22-1078 (Supreme Court 2023). At first glance the answer appears to be clearly “no,” but in the case, the Eleventh Circuit sided with the copyright holder by concluding that the rule permits plaintiffs to recover damagers for earlier acts.

The particular dispute focuses on when the “claim accrued” — with the appellate court holding that the three year timeline does not begin until the owner “knows or has reason to know she was injured.”  This so called “discovery rule” has been implied into many statutes of limitation, has been rejected for some doctrines.  When it decided the important laches case of Petrella v. MGM, the Supreme Court highlighted that “[t]he overwhelming majority of courts use discovery accrual in copyright cases.” 572 U.S. 663 (2014). Still, without directly rejecting the discovery rule Petrella also stated that copyright damages are available “running only three years back from the date the complaint was filed.”

In the Subsequent case of SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, 137 S. Ct. 954 (2017), the Supreme Court provided further input on the discovery rule — although still not deciding directly is applicability.

According to First Quality, § 286 of the Patent Act is different because it “turns only on when the infringer is sued, regardless of when the patentee learned of the infringement.”

This argument misunderstands the way in which statutes of limitations generally work. First Quality says that the accrual of a claim, the event that triggers the running of a statute of limitations, occurs when “a plaintiff knows of a cause of action,” but that is not ordinarily true. As we wrote in Petrella, “[a] claim ordinarily accrues when [a] plaintiff has a complete and present cause of action.” While some claims are subject to a “discovery rule” under which the limitations period begins when the plaintiff discovers or should have discovered the injury giving rise to the claim, that is not a universal feature of statutes of limitations. And in Petrella, we specifically noted that “we have not passed on the question” whether the Copyright Act’s statute of limitations is governed by such a rule.

The SCA Hygiene quote clarifies that statutes of limitations generally start running upon accrual of a claim, not discovery of the injury. The discovery rule that starts the clock upon discovery of the injury is an exception to the norm.  The presumption then appears to be that the discovery rule will only be applied to a statute of limitations if there is some particular  statutory interpretation reason to do so.

Petitioner’s key argument is that the 11th Circuit’s application of the discovery rule to allow damages beyond the 3-year lookback period conflicts with statements by the Supreme Court in Petrella v. MGM that recovery is limited to three years back from the date the complaint was filed.  The responsive briefing pointed to a number of litigation issues, to suggest the case was a bad vehicle for certiorari.  On the merits, they also focused on the damages provision, Section 504, that contains no 3-year limitation and also noted that Petrella‘s statements are not controlling because that case only held that laches does not apply as a defense; It did not limit damages to 3 years.  In its brief the Chamber of Commerce warns against the discovery rule.  The organization represents often-sued businesses and does not want to see a transdoctrinal nationwide discovery rule for federal courts that would extend the statutes of limitations against its members.

 

 

Broad Claims Bite Back: Drafting Narrower Scope in the Age of IPR

Patent,

by Dennis Crouch

The Federal Circuit recently affirmed a PTAB IPR decision invalidating claims of Masimo U.S. Patent RE47,218 (“the ’218 patent”) as obvious under 35 U.S.C. § 103. Masimo Corp. v. Sotera Wireless, Inc., 2022-1415 (Fed. Cir. Sept. 28, 2023) (nonprecedential). The Federal Circuit panel of Judges Prost, Wallach, and Chen determined (1) the Board correctly construed the disputed claim terms and (2) its obviousness ruling was supported by substantial evidence.  Id. (authored by Judge Wallach).

The case is yet another example of a patentee’s broad claim language and attempts to avoid limitations coming back to bite during IPR proceedings.  Unlike a decade ago, patent prosecutors are operating in today’s AIA world where IPR challenges have become commonplace.  The old model of broad-as-possible clearly has deficiencies.  To withstand post-issuance validity challenges, prosecutors should carefully craft claims early on with an eye toward narrower scope and avoiding abstraction even if you are doing enough to satisfy the USPTO on 112 and 101. Prosecutors can take full advantage of the 20 ‘free’ claims to pursue both broad and narrow protection. In the case here, the patent owner may have benefited from prosecuting more specific claims early on, as the disclosure arguably supported narrower alternatives that an IPR petitioner would have struggled to knock out.

The ’218 patent relates to an adaptive alarm system for use with pulse oximetry sensors in patient monitoring.  A common problem is nuisance alarms generated when oxygen saturation briefly goes outside preset limits. This patent aims to improve alarm management by making the thresholds adaptive based on the patient’s current SpO2 levels and trends. Basically, an alarm threshold is calculated based upon a patient’s recent SpO2 levels rather than based upon an objective predetermined standard.  Key adaptive alarm functions are:

  1. The alarm threshold changes over time based on the patient’s recent SpO2 level
  2. But, the threshold offset shrinks as SpO2 drops closer to a minimum – making it more sensitive to drops when the patient’s readings are already low.

Sotera petitioned for inter partes review (IPR) challenging the claims as obvious over a combination of prior art references including U.S. Patent Nos. 7,079,035 (“Bock”) and 6,597,933 (“Kiani”), along with PCT Publication WO 2009/093159 (“Woehrle”). The Board instituted review and ultimately ruled all instituted claims obvious based on these references.

On appeal, Masimo first argued the Board misconstrued the claim limitation “trigger a second alarm based on . . . exceeding the second alarm threshold” in finding obviousness over Bock/Kiani. The Board had treated the requirement as a “condition precedent”, but ruled that the claim does not require that exceeding the threshold directly triggers the alarm.  On appeal, the court found this consistent with the plain claim language under Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc), and the specification.

We agree with the Board that the plain meaning of “based on” and “threshold” in claim 1 are both broad, and this broad claim language does not exclude the use of additional alarm thresholds or other conditions to trigger an alarm. Further, claim 5 depends from claim 1 and provides for an additional condition in the form of a time delay, and Masimo does not dispute that the meaning of “based on” allows for additional conditions for triggering an alarm. We also agree with the Board that disclosure of an embodiment in the specification that does not include any additional thresholds or conditions for triggering an alarm does not support reading such a limitation into the claim.

This intrinsic evidence thus supports construing “based on” and “threshold” broadly — a ruling that was key to upholding the Board’s obviousness determination.

Masimo also challenged the Board’s interpretation of “predetermined” in certain claims as referring to a predetermined formulaic calculation rather than a fixed value. Again, the Federal Circuit upheld the Board’s construction as entirely consistent with the adaptive alarm thresholds described in the claims.

Ben Katzenellenbogen from Knobbe argued for the patentee appellant. Rudy Telscher from Husch took the other side. The IPR case here relates to the parallel litigation still pending in Masimo Corp. v. Sotera Wireless, Inc. and Hon Hai Precision Industry Co. Ltd., Civil Action No. 3:19-cv-01100-BAS-NLS (S.D. Cal.). In that case, the patentee Masimo asserted nine patents, all of which were challenged in IPR petitions.  The PTAB granted 8 of those and cancelled all the challenged claims.  Parallel appeals are still pending in several of the others.  The infringement litigation has been stayed pending outcome of the IPRs.

Seeking Comment on Standards, SEPs, and Competitiveness

Patent

by Dennis Crouch

The U.S. Patent and Trademark Office (USPTO), International Trade Administration (ITA), and National Institute of Standards and Technology (NIST) have extended the deadline for public comments on their request for information on standards and intellectual property. The new deadline is November 6, 2023.

On September 11, 2023, the three agencies jointly published a request for comments in the Federal Register seeking input from stakeholders on issues related to standards and intellectual property, especially as they impact small and medium enterprises in critical and emerging technologies.  This request complements a broader NIST request published on September 7, 2023 seeking comments on implementing the U.S. Government National Standards Strategy for Critical and Emerging Technologies. Both requests were originally due on October 11, 2023.

Specific topics of interest include:

  • Participation of U.S. firms in international technical standards development
  • Ability of U.S. companies to adopt technical standards to grow and compete globally
  • Issues small and medium enterprises face regarding technical standards and intellectual property
  • Fostering standardization of critical and emerging technologies
  • Policies related to standard essential patents (SEPs)

Technical standards play a critical role in ensuring interoperability and have potential benefits of both enhancing competition and driving innovation.  Innovator companies can compete on implementation, quality, features, and price rather than controlling a proprietary technology that locks-in users. The standard interface becomes a platform for market competition.  For nascent technologies, early standards adoption can help coordinates efforts to advance the state of the art.

The IP side of standards development and adoption can be fairly complex.  Patents that cover technologies essential to implementing a standard are known as standard essential patents (SEPs). If not properly licensed, SEPs can enable patent holders to exert undue market power across entire industries. This highlights a need to balance rights of patent holders with obligations to license SEPs on fair, reasonable, and non-discriminatory (FRAND) terms.  Although I am not a fan of forced participation, there is a rationale for considering policy options to incentivize licensing of SEPs on FRAND terms, and discouraging patent holder from laying in wait until standards develop. For example, measures that increase transparency around patent declarations, licensing terms, and availability of dispute resolution may help balance good faith participation and voluntary consensus in standards bodies. Improved patent search and analysis can also help ensure that all SEPs are captured within the pool.

On the international level, standards and intellectual property issues are intricately linked to U.S. global competitiveness, especially in emerging technology areas.  Divergent national/regional approaches can disadvantage U.S. technology companies as they expand globally — assuming growth in that direction.  At the same time, those approaches open the door to price discrimination (and avoiding arbitrage) by selling products that only work within certain regional standards.

Submitting Comments:

To submit comments on the joint USPTO, ITA, and NIST request, refer to the Federal Register notice published on September 11, 2023. Comments can be submitted electronically via www.regulations.gov.

Guest post by Dr. Dimeglio – An Invitation to Inclusive Innovation

Patent

Guest post by: Dr. Paola Cecchi Dimeglio, Chair of the Executive Leadership Research Initiative for Women and Minorities Attorneys at Harvard Law School and Harvard Kennedy School

(This post is part of a series by the Diversity Pilots Initiative, which advances inclusive innovation through rigorous research. The first blog in the series is here and resources from the first conference of the initiative are available here. – Jason)

Virtual reality, AI chatbots, and other emerging technologies are fueling a drive to innovate, improve, and patent new products and services that are inclusive from the beginning. This goal is not only morally right but also economically essential; inclusive innovation has become a multibillion-dollar necessity. However, engaging diverse inventors at large technology companies still presents layers of challenges.

Picture of Dr. Dimeglio

In 2022, the USPTO reported a 32% growth in the number of U.S. counties where women patented over the 30-year span from 1990 to 2019; in 2019, over 20% of patents issued included at least one woman inventor; similar data is not available for minority inventors.

Perhaps more than at any time in their history, technology companies are under pressure to achieve patentable breakthroughs. One factor driving the urgency of innovation is the need to create and commercialize products and services that meet the promises of emerging technologies. Once the stuff of sci-fi and fantasy, the Metaverse and humanlike generative AI have taken substantial steps out of movies and literature. Virtual and augmented reality has gone mainstream, and the premier generative AI chatbot, ChatGPT, set user records shortly after it was released late in 2022. Having sampled the Metaverse and prompted chatbots to pour out pages, the public wants more, and they want it now.

Technology giants often partner with smaller, specialized businesses for the purpose of achieving technological breakthroughs. These collaborative ventures may produce new platforms, result in extensive IP development, and spawn multiple families of products. Most often, they fail.

In the current race to innovate, businesses are looking within their ranks for beneficial patentable ideas. It makes sense, as employees at all levels of a company have a close relationship with that organization’s products, patents, and aspirations. Leaders realize that the next big invention can emerge from unexpected quarters at their businesses, and many have begun casting the net as wide as possible.

This time around is different. Innovation has to be highly inclusive at the outset. The environments, cultures, policies, and dynamics of virtual worlds have to operate without traditional biases. And AI has to think and decide without the incidents of discrimination that are dragging many businesses into court. It’s about the bottom line. A Metaverse that is not tuned to highly diverse users cannot achieve its full value potential, estimated at $936.6 billion by 2030. To realize these earnings, inclusion has to be a real part of the innovation process.

Achieving this end at a company means having all perspectives involved in the inventing and patenting processes. Businesses’ all-hands invitations to inclusive innovation have come up against the history of who is more likely to file patents and who is not. Some organizations realize that their own culture has long perpetuated the stereotypes of who is an inventor. Most businesses are running up against the default assumptions that they have cultivated for decades. Some have invested significantly in changing the status quo. Many businesses, including prominent technology companies, have signed a Diversity Pledge and have committed to sharing many of their outcomes.

Other businesses and one significant technology company, in particular, have taken a more scientific approach to increasing the number of underrepresented inventors in their innovation pipeline.

The goal of eliciting innovation from all groups and quarters of the company, truly inclusive innovation, meant getting people from underrepresented groups to see themselves as people who file patents. The process commenced with a baseline assessment of the experiences that employees had with the company’s patent process and related staff. As a result of data analytics and employee interviews, the company reshaped how inventors interact with patent staff and resources. It also launched an internal campaign aimed at redefining who is an inventor.

On a specific level, interviews with minority employees, including those who had filed at least one patent, revealed an unexpected barrier. Part of the language of the invitation to share ideas so that they could be assessed for patentability was offending underrepresented innovators. This language was modified after the initial interviews.

In this case, the use of the term “harvesting” in reference to gathering ideas was being applied to brainstorming sessions. Many individuals across multiple racial, gender, and ethnic identities were offended by the choice of words and the suggested lack of sensitivity. The true number of inventors who hesitated due to past terminology will remain unknown. However, the shift toward inclusive and belonging language is now captivating and involving everyone.

Businesses that are innovating to find and patent the next big thing can examine their own systems of gathering ideas from their people. After hearing from their innovators, they will likely make changes to the systems and staff that help their employees file and prosecute patents on behalf of the organization. Internal education processes and peer-to-peer information sharing bolster engagement.  But even with everything in place and everyone invited to share their ideas, the language of the invitation can create a barrier.

Historically, only certain employees have been invited into the mystery of patenting. The broadly accepted idea has been that patenting is for a limited segment of employees. Now, companies are tasked with dismantling the exclusion and elitism they built. This time, their earnings depend on it.

Three takeaways:

  1. There is a need for inclusive innovation in emerging technologies both ethically and economically. However, involving diverse inventors in large tech companies presents challenges.
  2. Innovation must be highly inclusive at the outset. To do so, tech companies should have all perspectives involved in the inventing and patenting processes.
  3. The language of the invitation matters. Historically, only certain employees have been invited to become involved in patenting. The language should not only be inclusive and welcoming in itself but should also be directed towards all potential employees. To do so, companies should dismantle the exclusion and elitism they had built.

If you find this insight compelling and want to stay informed on the latest developments, sign up for the DPI research updates today!

Guest Post by Prof. Goodman – Unseen Contributors: Rethinking Attribution in Legal Practices for Equity and Inclusion

Patent

By: Jordana R. Goodman Assistant Professor at Chico-Kent College of Law

(This post is part of a series by the Diversity Pilots Initiative, which advances inclusive innovation through rigorous research. The first blog in the series is here and resources from the first conference of the initiative are available here. – Jason)

According to the National Association for Law Placement, female equity partners in law firms comprised about 23% of the total equity partner population in the United States in 2022.  Women made up more than half of all summer associates and have done so since 2018.  Representation among intellectual property lawyers parallels this trend, with women representing about 22% of all equity partners and over 50% of all summer associates in 2019. Although there has been steady progress in hiring women attorneys at junior levels, there have not been similar increases in partner retention in the past thirty years.  NALP called the partner level increases “abysmal progress,” and suggested that one reason for this failure is that “little work has been done to examine and change the exclusionary practices that create inequalities.”

If presence was the only obstacle to creating a more diverse, equitable, and inclusive legal environment, the pipeline of diverse junior associates would have begun to significantly shift the partner demographics at law firms across the country.  However, because the environment within a law firm can be unfriendly to non-Caucasian, non-cisgender male, non-heterosexual lawyers, people who identify as such tend to leave legal practice at higher rates. More must be done to remedy inequities within the day-to-day practices to create an equitable legal environment.

As detailed in my study, Ms. Attribution: How Authorship Credit Contributes to the Gender Gap, allocation of credit on public-facing legal documents is not equitable. When the senior-most legal team member signs documents on behalf of their legal team, they are erasing the names of associates from the record.  This widespread practice, combined with the constant perceived differences in status between male and female colleagues as well as biases related to accents, can lead to negative consequences and unequal attribution for women, people of color, and LGBTQ+ individuals. “Under-attribution of female practitioners falsely implies that women do less work, are more junior, and do not deserve as much credit as their male colleagues” and such practices must change.

Not every attribution decision is a social decision, where a partner has a complete choice to allocate credit to associates within a firm.  Government forms and procedures can prevent equitable attribution of all practitioners.  For example, the United States Patent and Trademark Office (USPTO) requires applicants to submit paperwork accompanying a patent application, but this paperwork does not allow for equitable attribution of everyone who wrote the patent application.

Specifically, the cover sheet of a provisional patent application prominently features five distinct lines dedicated to naming inventors, with an additional prompt allowing for the inclusion of more inventors on a separate sheet if needed. However, there is a stark contrast when it comes to attributing practitioners; there’s merely one designated line for practitioner correspondence and notably, no space provided to credit practitioners responsible for composing the application.  Similarly, the Application Data Sheet (ADS)—a form that accompanies a non-provisional application—initially provides only one line to list a corresponding practitioner. Any additional lines for other practitioners necessitate manual addition, highlighting a consistent limitation in acknowledging multiple contributors in the practitioner field.

With the exception of solo practitioner-composed applications, most patent applications are written as a collaboration, with both junior and senior practitioners participating in the written exercise.  However, due to prevailing norms within law firms, where gender representation disparities are especially pronounced at senior partnership levels, and the social dynamics between junior and senior practitioners, paperwork is more frequently signed by male practitioners than their female counterparts.  Not only are women’s names disproportionately concealed from the public record, but also the credit gap increases as attorneys continue to practice.  As Figure 1 below shows, of the highly-credited patent practitioners identified from 2016-2020, over 90% were male.The importance of this credit – signatures at the bottom of paperwork accompanying patent applications – should not be underestimated.  Credit serves as a reward and incentive for future work, as well as a humanizing function – linking work product “to the reality of human endeavor.”  Credit in this context can influence client acquisition, a sense of belonging in the firm, career advancement, and achieving notoriety. Therefore, the USPTO should consider amending their paperwork to ensure teams of practitioners can all receive credit for their contributions to the patent application.

First, the USPTO could add more signature lines on all patent application paperwork.  In addition to corresponding practitioners, practitioners who composed a substantial amount of the patent application could also receive public attribution. The USPTO could expand the forms, such that associates who have not passed the patent bar could still receive credit for their work.  Furthermore, the USPTO could compose a bulletin for firms, explaining the importance of credit for associates and showing ways that multiple practitioners could receive credit on office action responses, issue fee sheets, and other documentation.  Finally, the USPTO could track attribution to determine if teams are taking advantage of the increased attribution opportunities and if the opportunities increase female attribution and retention.

Three main takeaways:

  1. Persistent Gender Disparities: Despite steady progress in hiring women attorneys at junior levels and women constituting over 50% of summer associates since 2018, there have not been similar increases in partner retention in the past thirty years. Women only hold around 23% of equity partner positions in U.S. law firms, highlighting unaddressed, systemic inequalities and exclusionary practices.
  2. Inequitable Attribution in Legal Documents: The current practice of senior-most legal team members signing documents conceals the contributions of associates, leading to unequal attribution. This under-attribution particularly affects female practitioners, people of color, and LGBTQ+ individuals, implying they do less work and do not deserve as much credit as their male counterparts. This iniquity in credit allocation on public-facing legal documents serves to reinforce gender gaps and hinders career advancement, client acquisition, and a sense of belonging within the firm.
  3. Proposed Amendments to USPTO Procedures: To address inequity, USPTO should revise procedures and forms to facilitate equitable attribution for all patent application contributors and to stress the importance of credit, assessing the impact on attribution and retention dynamics, especially for women.

If you find this insight compelling and want to stay informed on the latest developments, sign up for the DPI research updates today!

 

Emails Analyzing Own Patents Likely Not Trade Secrets

Patent

by Dennis Crouch

In most patent cases, the parties jointly agree to a system limiting the publication of confidential case information and typically file a stipulated motion for protective order seeking the a judicial order requiring the parties to comply. One problem with this approach is that it goes against our traditional notion that courts and court filings are open and accessible to the public. The purpose of open court records is to promote transparency and accountability in the judicial system. Public access to court records allows the public (including journalists) to monitor the work of the courts and acts as a check on the judicial process. However, the public is not a party to the lawsuit and so typically is not asked for input on protective orders. Sealing records and holding proceedings behind closed doors undermines public confidence in the courts and can create a perception that courts or the parties may be engaged in undisclosed improper or illegal activities. While there are valid reasons to keep certain information confidential in some cases, such as protecting trade secrets or personal information, restricting public access should be approached carefully and narrowly to balance the interests of the parties with the public’s right to open courts.

A recent court order in the case of Woodstream Corp. v. Nature’s Way Bird Products, LLC, No. 1:23-cv-294, 2023 WL 6146706 (N.D. Ohio Sept. 20, 2023), demonstrates the balancing act between a party’s interest in keeping information confidential and the public’s interest in open court records.

In its infringement case, Woodstream asserted two hummingbird feeder patents against competitor Nature’s Way.  US11147246 and US11033007.  The parties filed a joint motion for a protective order to keep confidential information secret during the pretrial discovery process. The defendant, Nature’s Way, then moved to file its claim construction brief under seal because it referred to documents designated “confidential” by the plaintiff, Woodstream. The confidential documents were emails by Woodstream employees giving opinions on the scope and interpretation of Woodstream’s patents at issue in the case.  Of note, these emails had been disclosed during discovery since they were not privileged communications with attorneys, but rather discussions among business and engineering employees.  Woodstream described the emails as follows:

The designated emails contain discussions between members of the Woodstream Engineering department, including Paul McQuillan, the SVP Research, Development, and Engineering regarding Woodstream’s

(1) approach to pursuing patent infringement claims against competitors, and

(2) an explanation of arguable ways competitors could avoid Woodstream’s patents.

These discussions involve both in-suit patents as well as an uninvolved patent. The public disclosure of this communication would disclose a roadmap to competitors for avoiding Woodstream’s patents and knowledge of Woodstream’s resources and strategy in protecting its patent rights.

Woodstream argued this email string constituted a trade secret and should remain sealed. But the court disagreed. Applying Ohio trade secrecy law, the court found the email did not actually contain trade secrets. To qualify as a trade secret, information must: (1) have independent economic value from being secret, and (2) be subject to reasonable efforts to maintain its secrecy. The court found Woodstream failed to show how its employee’s opinions on patent scope had independent economic value. Nor did Woodstream provide evidence showing efforts it took to keep the email secret.

The court then weighed the public’s interest in access to court records against any interest Woodstream had in keeping the email secret. The public interest in open records is strong because it allows the public to monitor the workings of the court system. As the Sixth Circuit has stated, “[u]nlike information merely exchanged between the parties, ‘[t]he public has a strong interest in obtaining the information contained in the court record.'” See Shane Grp., Inc. v. Blue Cross Blue Shield of Mich., 825 F.3d 299, 305 (6th Cir. 2016).  Sealing records can undermine public confidence in the courts, as “sealing court records and proceedings ‘is generally impermissible’ due to the ‘strong presumption in favor of openness’ of court records.” See In re Nat’l Prescription Opiate Litig., 927 F.3d 919, 938-39 (6th Cir. 2019)).

The court found the public interest outweighed Woodstream’s interests because the email was directly relevant to the central issues in the case regarding claim construction and patent scope. “Lubic’s email is directly relevant to adjudicating Woodstream’s patent infringement and claim construction claims.”  Therefore, public access to the email through the court record was warranted.

The court also ordered that any future motions to seal must be accompanied by both: (1) a motion explaining why sealing is appropriate, and (2) a public redacted version of the document.

You can now read the email chain for yourself: Woodstream Letter Public Version.

Some important take-aways from this case:

  • Businesses often treat many aspects of their business and confidential.  However, business confidential information does not necessarily rise to the level of importance required for a court to agree to filings under seal.
  • Opinions and analysis on scope and validity of your own patents likely do not qualify as trade secrets, even if useful to competitors. There must be independent economic value from secrecy and reasonable efforts to maintain the secrecy.  In addition, it is important to note that these same emails may have been protected as privileged if they had been done as part of an attorney investigation into the potential lawsuit. Here though, no attorneys were  even involved in the email conversation.
  • Once discovery materials reach the court record, the presumption of public access becomes very difficult to overcome. Only more compelling interests like trade secrets justify sealing records.  This is a distinguishing point between the regular out-of-court discovery process (where many items can be kept secret).  Once the evidence is brought to court, it will likely become public.
  • If you want to keep aspects of a filing secret, be prepared to make particularized showings on a line-by-line basis when seeking to seal court records. Andm be prepared to file public versions containing redactions rather than outright sealing court documents.