Ex parte Callewaert, APPEAL 2019-005598 (Patent Tr. & App. Bd. Feb. 25, 2021).
Following an obviousness rejection, applicant relied upon an example in the specification to help prove an unexpected result (that the living cell would create certain “unnatural glycan structures”). The PTAB rejected the argument — finding that the example was written in the present tense and therefore assumed to be prophetic and therefore “does not provide the factual evidence needed to support unexpected results.” (emphasis in original). It appears in this case, the PTAB treated the prophetic example as merely an argument.
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Ex Parte Cigan, APPEAL 2020-001230 (Patent Tr. & App. Bd. Sept. 14, 2020)
Cigan provides a minor counterpoint to Callewaert. The patent applicant argued that the prior art examples should be disregarded as merely a prophetic example. The PTAB rejected the call and instead presumed that the prior art teachings were enabling. See In re Antor Media Corp., 689 F.3d 1282 (Fed. Cir. 2012) (holding that prophetic examples in the prior art are still presumed to be enabling).
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Ex Parte Harriman, APPEAL 2020-004459 (Patent Tr. & App. Bd. Feb. 10, 2021)
In Harriman, the PTAB reversed an examiner’s enablement and written description rejections, holding that the prophetic examples of an immunoglobulin light chain were sufficient. The claims are directed to a genetically modified (transgenic) chicken grows human immunoglobulin. (owned by Ligand)
The Federal Circuit has again granted mandamus and ordered Judge Albright to transfer two cases case out of his W.D.Tex. court to a more convenient forum (N.D.Cal.).
The underlying actions were filed by a patent holding company known as Ikorongo Texas LLC against Samsung and LG Electronics. As explained below, the owners of Ikorongo Texas formed the company as an attempt to solidify venue in W.D.Texas and avoid the case being transferred for inconvenient forum.
Ikorongo Texas is owned by five-individuals led by patent agents Hugh Svendsen & Sarah Svendsen. The five also own a separate company known as Ikorongo Technology LLC. The asserted patents were previously fully owned by Ikorongo Tech. However, before suing, Ikorongo Tech geographically divided the patent rights. In particular, the company assigned all rights in the patents relating to the WDTX back to the five-individuals. At that point, the five individuals owned all rights to sue and collect damages associated with infringement occurring in the “specific counties” covered by WDTX. The five individuals then created the new company Ikorongo Texas and assigned their WDTX rights to the company. Ikorongo Texas then sued Samsung and LGE. The following day, Ikorongo Texas amended its complaint to also add Ikorongo Tech as a co-plaintiff so that collectively they could seek damages for the full USA. Ikorongo Texas is a Texas LLC (corporate registration in Texas), but its owners and managers all reside in North Carolina.
The defendants in the lawsuit admitted that venue was proper in WDTX, even under the high bar for proper venue created by 28 U.S.C. § 1400(b). But, the defendants argued that N.D.Cal. is a better, more convenient venue, and requested transfer. Even if venue is proper, a defendant may still complain that that the forum is inconvenient and request a change of venue. The statute:
For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.
28 U.S.C. § 1404(a). A court has discretion as to whether to transfer a case, but should look to the convenience of the parties, convenience of the witness, and also the interest of justice. In addition, the court may only transfer a case to a district where venue and personal jurisdiction are proper (“where it might have been brought”).
Judge Albright refused to transfer the case to California — holding that Ikorongo Texas would not have had proper venue to sue in the state. In patent cases venue is only proper against a US corporate defendant if either (1) the defendant is incorporated within the state or (2) the infringement occurred within the district and the defendant has a regular place of business in the district. The defendants here are incorporated in NY & Delaware, and the infringement alleged by Ikorongo Texas was only in WDTX. Thus, no proper venue.
On mandamus, the Federal Circuit has rejected that analysis — rejecting this “collusive” attempt to avoid the transfer on convenience grounds.
Ikorongo Texas is plainly recent, ephemeral, and artificial—just the sort of maneuver in anticipation of litigation that has been routinely rejected. . . . [T]he district court disregarded the pre-litigation acts by Ikorongo Tech and Ikorongo Texas aimed at manipulating venue.
Slip Op. The court then disregarded the creation geographic division and ordered transfer (after also finding that the convenience factors clearly weigh in favor of transfer and refusing to transfer would be an abuse of discretion).
The decision here has a limiting feature–that Ikorongo Texas was formed for the sole purpose of manipulating venue. I wonder what the courts would say about Apple closing its store in E.D.Tex.
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I’ll note also that the case might have turned out differently if Ikorongo Tech had not been added to the case.
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The decision does not rely in direct on-point precedent, but instead relies heavily upon precedent in in the context of subject matter diversity jurisdiction. Miller & Lux, Inc. v. E. Side Canal & Irrigation Co., 211 U.S. 293, 305–06 (1908). In that case, a California corporation had formed a separate Nevada corporation and transferred property rights to the Nevada Corp in order to create diversity jurisdiction. The Supreme Court said No. One problem with this analogy is that there is a particular statute barring collusive incorporation in order to create diversity jurisdiction:
A district court shall not have jurisdiction of a civil action in which any party, by assignment or otherwise, has been improperly or collusively made or joined to invoke the jurisdiction of such court.
28 U.S.C. § 1359. Although also statutory, diversity jurisdiction has an express constitutional basis whereas convenient-forum is entirely statutory. That distinction has historically offered courts to – at times – distinguish between the two in their analysis and interpretation. The opinion does not delve into why the linkage is appropriate here.
Many patent applications are not fully reduced-to-practice by the time the patent application is filed. Although reduction-to-practice is a required element of invention, the Courts and Patent Office have long permitted the filing of a patent application to constructively satisfy the RTP requirement. Still, the application must fully satisfy the disclosure requirements of 35 U.S.C. 112(a), namely written description, enablement, and best mode.
A patent specification will typically include a series of examples, embodiments, use-cases and/or experimental results. In this post, I’ll refer to these collectively as “examples.” One way of categorizing the examples is to divide between actual “working examples” and predicted “prophetic examples.” As you might guess, working examples are typically more compelling and indicative that the invention will actually work as claimed. But, prophetic examples also have their use and are absolutely permissible. Although I have not measured this, I expect that the vast majority of patentees rely on prophetic examples to some extent in order to expand the scope and depth of their disclosure. Thus, even if the patentee has reduced the invention to practice and explained the RTP in a working example, the specification may also provide a set of prophetic examples with differing arrangements, elements, and outcomes. Because of their differences, the courts and USPTO have called on patent applicants to take care in distinguishing between the two in their patent applications.
My definition of prophetic example is broad: I’ll pause here to recognize that my definition of prophetic examples is broad. Traditionally, many have focused the “prophetic example” doctrines only on reports of experimental results that are typically found in chemistry and biology related patents. In her Prophetic Patents article, Professor Janet Freilich primarily limited her analysis to “experiments that report protocols that were not actually conducted and describe results that are made up, or prophesized.” Using that definition and an automated search, Freilich found about 50% of chem/bio patents include prophetic examples. The MPEP has a broader definition that more closely parallels mine: “A prophetic example describes an embodiment of the invention based on predicted results rather than work actually conducted or results actually achieved.” MPEP 2164.02. Basically, if you are describing something that has not been actually reduced to practice, it is a prophetic example.
The USPTO has published a new notice to patent applicants with the same reminder cautioning applicants to distinguish between working and prophetic examples:
The USPTO is reminding patent applicants of their duty to ensure that patent applications are written in a manner that clearly distinguishes prophetic examples with predicted experimental results from working examples with actual experimental results. Prophetic examples, also called paper examples, are typically used in a patent application to describe reasonably expected future or anticipated results. Prophetic examples describe experiments that have not in fact been performed. Rather, they are presented in a manner that forecasts simulated or predicted results. In contrast, working examples correspond to work performed or experiments conducted that yielded actual results.
Notice: Properly Presenting Prophetic and Working Examples in a Patent Application, PTO-P-2021-0020 (Fed. Reg. July 1, 2021) (“Notice”). The notice indicates that examiners generally do not question disclosed test results unless there is a reasonable basis to do so. But, prophetic examples that fail a reasonableness test will be rejected for insufficient disclosure (enablement and/or written description).
In addition, applications that include prophetic examples should make clear whenever the example is prophetic. Otherwise, the application may be deemed to include a misleading statement in violation of the applicant’s “duty of candor and good faith in dealing with the Office.” 37 C.F.R. 1.56.
QUESTION for PATENT DRAFTERS: When you describe various embodiments in your patent application, do you tell the PTO which ones are working-examples (actually reduced to practice) and which ones are prophetic?
One way to disclose prophetic examples is to expressly label them as “Prophetic Examples.” “It is a best practice to label examples as prophetic or otherwise separate them from working examples to avoid ambiguities.” Notice. The PTO has also deemed it appropriate to use future-tense language in describing prophetic examples and past tense for working examples. “When drafting a patent application, care must be taken to ensure the proper tense is employed to describe experiments and test results so readers can readily distinguish between actual results and predicted results.”
The USPTO Notice focuses on prophetic examples stemming from experimental results, and thus remains to be seen whether the requirements will be practically extended to situations involving prophetic embodiments and use-cases presented without any experimental results. One approach for patent applicants is to write everything as if it is a prophetic example.
The USPTO has released some implementation information for Arthrex. In its decision, the Supreme Court held that the USPTO Director has power to review any IPR decision by the PTAB. The Agency’s basic approach is as follows:
At times, the PTO Director might initiate review of an IPR Decision sua sponte. This is unlikely.
A party may request review of a final written decision for an IPR/PGR.
The request must be filed within 30-days of the PTAB’s final written decision or rehearing decision. The Agency has indicated that a request for review by the USpTO Director will be considered a request for rehearing under 37 C.F.R. 90.3(b) — that means that no appeal to the Federal Circuit will be due until after the Director acts on the request. In the short-term, the Office is not charging a fee for the request, but a fee will be added.
Request vs Petition: I’m not sure why, but the PTO is not identifying the Request for Review as a Petition for Review.
Pop-Panels and Ex Parte Proceedings: The Supreme Court identified inter partes review as demanding a process for PTO Director Review. However, it is clear that this extends to Post-Grant and Covered-Business-Method Reviews. It is unclear though whether it will extend to reexaminations or ordinary ex parte examination. I’m sure that the Director will still receive those petitions this month. The Office created Precedential Opinion Panels (POP) as a mechanism for giving the PTO Director more direct control over PTAB precedent. The Agency has indicated that the POP system remains in place for now, but is could be eliminated in favor of the simpler system of director review.
In my property law course, I spend a good bit of time walking through post-conveyance rights and obligations. What warranties are are promised to the buyer? Do these need to be express or may they be implied? Can you disclaim the warranties by selling via quitclaim deed or “as is”? Are warranties different in for sale than for a gift? And What about caveat emptor? My class focuses on land and, to a lesser extent, personal property. Minerva asks the same questions, but for patents. The court upheld the assignor doctrine, but with some big caveats.
Majority: Justice Kagan. Joined by Chief Justice Roberts and Justices Breyer, Sotomayor, and Kavanaugh.
Dissent: Justice Alito.
Dissent: Justice Barrett. Joined by Justices Thomas and Gorsuch.
The dissenting opinions would have overturned the prior precedent, although Justice Alito’s approach would have been more strident especially with regard to the reenactment canon (did the 1952 Act reenact the prior law except where expressly disturbed?).
These ideas of stare decisis and silent reenactment are part of a major ongoing debate within the Court over its role in changing its own prior precedent.
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Practice Note: The holding in the case suggests that attorneys may want to begin to require inventors to sign a confirmatory assignment at the time of patent issuance.
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In a 5-4 decision, the Supreme Court has upheld prior precedent maintaining the doctrine of assignor estoppel:
When an assignor warrants that a patent is valid, his later denial of validity breaches norms of equitable dealing.
The baseline here is an issue of unfair dealing:
By saying one thing and then saying another, the assignor wants to profit doubly—by gaining both the price of assigning the patent and the continued right to use the invention it covers. That course of conduct by the assignor strikes us, as it has struck courts for many a year, as unfair dealing—enough to outweigh any loss to the public from leaving an invalidity defense to someone other than the assignor.
Implicit here is that assignor estoppel applies when the the assignor receives some compensation for transferring rights — that there is some deal. A transfer without compensation then would not imply the same warranty. Of course, inventors and others who assign their patent rights rarely offer an express “warrant that a patent is valid.” Doesn’t matter, the court found that , the court found that any assignment of any specific patent claims will typically include an implied warranty of validity. “[T]he assignment of specific patent claims carries with it an implied assurance.”
There is no warranty in cases where there is no explicit nor implicit representations:
But when the assignor has made neither explicit nor implicit representations in conflict with an invalidity defense, then there is no unfairness in its assertion. And so there is no ground for applying assignor estoppel.
So, the warranty of validity is ordinarily implied when assigning “specific patent claims” but the court explains that a warranty would typically not exist if, for instance, the assignment occurred before the invention even existed.
An employee assigns to his employer patent rights in any future inventions he develops during his employment; the employer then decides which, if any, of those inventions to patent. In that scenario, the assignment contains no representation that a patent is valid. How could it? The invention itself has not come into being. See Lemley, Rethinking Assignor Estoppel, 54 Houston L. Rev. 513 (2016). And so the employee’s transfer of rights cannot estop him from alleging a patent’s invalidity in later litigation.
The court notes other situations where no warranty would be implied:
Assignment before invention;
Post-assignment change in the law that renders the patent invalid;
Post-assignment amendment to the patent claims, and the amendment alters the validity.
On remand, the Federal Circuit will consider how these caveats play into the specific case here where the claims were apparently changed substantially post-assignment.
The US Supreme Court has almost cleaned-up its patent docket for the October 2020 term. I still expect a decision at some point this week (by July 2) in Minerva Surgical, Inc. v. Hologic, Inc. focusing on the ongoing viability of assignor-estoppel. The court has already decided its one other patent-focused case for the term–United States v. Arthrex, 594 U. S. ___ (2021). In Arthrex, the court altered the power of the PTO Director beyond statutory limitations in order to preserve the PTAB’s constitutional authority during IPR proceedings. A number of parallel petitions had raised the same or similar questions to Arthrex. The Court vacated and remanded some cases back to the Federal Circuit “for further consideration in light of United States v. Arthrex, Inc.” For other cases, the court simply denied certiorari. There are also several Arthrex-follow-on petitions pending that have not yet been fully briefed. I expect these will also be denied.
The court also denied certiorari in TCL Communication v. Godo Kaisha IP Bridge 1, No. 20-1545. That case asked a couple of interesting questions regarding proof of literal infringement. The court allowed the patentee to make assumptions about the accused devices based upon admissions that the devices conform to certain industry standards.
The lone hold-over case is American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, 20-891 focusing on patent eligibility. A petition for certiorari was filed in that case back in December 2020. After briefing was completed, the Supreme Court then requested the views of the U.S. Government on whether the court should grant certiorari. Those views will come from the US Solicitor General, but probably will not be submitted until November or December 2020. The CVSG signals some amount of interest, making this case the most likely to be granted cert next year. Am. Axle asks two questions:
What is the appropriate standard for determining whether a patent claim is “directed to” a patent-ineligible concept under step 1 of the Court’s two-step framework for determining whether an invention is eligible for patenting under 35 U.S.C. § 101?
Is patent eligibility (at each step of the Court’s two-step framework) a question of law for the court based on the scope of the claims or a question of fact for the jury based on the state of art at the time of the patent?
A follow-on petition asks the identical questions in iLife Technologies, Inc. v. Nintendo of America, Inc.
New cases have already begun to line-up for consideration next term, starting at the end of September 2021:
Standing: Trademark – Standing to Cancel a TM Registration – Naked TM, LLC v. Australian Therapeutic Supplies Pty. Ltd.; See also Kaszuba v. Hirshfeld (similar issues, pro se).
Standing: Prisoner’s right to protect his patent rights via court action – Tormasi v. Western Digital Corp.
Preclusion: Ongoing viability of the Kessler Doctrine as an expansion of traditional issue and claim preclusion. PersonalWeb Technologies, LLC v. Patreon, Inc.
Anticipation: Is a method claim expressly requiring use of a man-made protein anticipated by use of a naturally-occurring version of the protein. Biogen MA Inc., Petitioner v. EMD Serono, Inc.
Due Process: Many of the patents cancelled via IPR had already been applied-for or issued prior to the America Invents Act of 2011. Does that “retroactive application … violate the Due Process Clause of the Fifth Amendment to the United States Constitution?” Ultratec, Inc. v. CaptionCall, LLC
Writing Opinions: Does the use of Federal Circuit Rule 36 to summarily affirm decisions from the PTAB “without opinion” violate 35 U.S.C. § 144? Ultratec, Inc. v. CaptionCall, LLC (see alternative question on due process)
The court will likely act on these certiorari petitions within the first couple of weeks of the October 21 term. Each of these cases are interesting and important. Still, it is quite possible that the Court will not grant certiorari in any new patent case for the next year.
I believe the clincher in this case is the fact that TVnGO’s patent claims use language not found anywhere within the patent specification. The result, claims invalid as indefinite. — Dennis Crouch
TVnGO v. LG Electronics (Fed. Cir. 2021) (nonprecedential) [Opinion]
Patentee TVnGO sued LGE–alleging that its Smart TV’s infringed U.S. Patent Nos. 8,132,220, 9,124,945, 9,392,339, 9,407,969, and 9,794,621. The district court found all asserted claims across the five related patents invalid as indefinite under 35 U.S.C. 112. On appeal, the Federal Circuit has affirmed. Opinion by Judge Prost, joined by Judge Reyna and Senior Judge Schall.
Section 112(b) of the Patent Act requires “one or more claims particularly pointing out and distinctly claiming” the invention. The language is only slightly modified from historical statutes:
Patent Act 1836: “But before any inventor shall receive a patent for any such new invention or discovery he … shall particularly specify and point out the part, improvement, or combination, which he claims as his own invention or discovery.”
Patent Act 1870: “[B]efore any inventor or discoverer shall receive a patent for his invention or discovery, he … shall particularly point out and distinctly claim the part, improvement, or combination which he claims as his invention or discovery.”
The addition of claims in the 1836 Act was designed to provide notice to the world as to the scope of the patent right following an on-point complaint from the U.S. Supreme Court (and others). See Evans v. Eaton, 20 U.S. 356 (1822). Over the years, the Supreme Court focused more on the importance of claims for publicly demarking the property line. See Winans v. Denmead, 56 U.S. 330, 347 (1853) (Campbell, J., dissenting); Merrill v. Yeomans, 94 U.S. 568, 573 (1876) (The patent laws “leave no excuse for ambiguous language or vague descriptions. The public should not be deprived of rights supposed to belong to it, without being clearly told what it is that limits these rights.”). The 1952 Act did not appear to change these general rules but rather attempted to clean-up the requirement slightly by grammatically separating the disclosure requirements 112¶1 from the claim requirements 112¶2. In his contemporary commentaries, P.J. Frederico explained that “the clause relating to the claim has been made a separate paragraph to emphasize the distinction between the description and the claim, and the language has been modified.” P.J. Frederico, Commentary on the New Patent Act (1952). In 2011, the statute was renumbered so that Sections 112¶1 and 112¶2. are now Sections 112(a) and 112(b).
The newest Supreme Court case on point is Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120 (2014). In Nautilus, the court explained that claims must provide reasonable certainty as to the claim scope:
[W]e read § 112, ¶ 2 to require that a patent’s claims, viewed in light of the specification and prosecution history, inform those skilled in the art about the scope of the invention with reasonable certainty. The definiteness requirement, so understood, mandates clarity, while recognizing that absolute precision is unattainable.
Id. Previously, the Federal Circuit had invalidated claims on definiteness only when claims are unable to be construed are “insolubly ambiguous.” The Supreme Court found that standard allowed claims that “lack the precision § 112, ¶ 2 demands.”
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The claims here all generally relate to producing an overlay of logo icons and small window-in-window content on a TV screen. All of the claims include the phrases “overlay activation criterion” or “overlay activation signal.” One problem here is that the those terms were not found in the original disclosure but rather added during prosecution. A second problem is that neither of these have any ordinary meaning to one skilled in the art (even though each word is individually known, the combination is not known to PHOSITA). A third problem is that the different patents appear to use the terms in slightly different ways — even though all have the same original specification. The court indicated that it was unclear whether the signal/criterion was focused on the icon-overlay or on the content-overlay or on both.
Here, a person of ordinary skill would encounter two claim phrases without an ordinary meaning in the art. Upon consulting the specification, he or she would not find those phrases. And when attempting to glean their meaning from the patent’s use of “activates” and “activating,” he or she would find that “the patents teach two different results”—i.e., display of IP content associated with an already displayed overlay versus display of an overlay in the first place—without reasonable certainty as to which reading is correct. The asserted ’339, ’945, and ’621 patent claims are therefore indefinite.
Slip Op. Note here that the court’s ruling could have gleaned further definitional information from the claims that state expressly that the “overlay activation criterion” is used “to cause the display screen to display the overlays” and that the “overlay activation signal” is used to “generat[e] display drive signals causing the
TV screen to display the overlays.”
The other two patents provided more specific description of the terms within the claims, but also expressed what the court called intra-patent inconsistencies (within the patent). The particularly inconsistency was the source of the activation criteria — was it from the internet or from the user’s devices.
On the one hand, the independent claims indicate that an “overlay activation criterion” is … provided “over the Internet” and “transmitted to the user’s premises.” But the dependent claims, on the other hand, state that “said overlay activation criterion includes . . . a user command information,” indicating that an “overlay activation criterion” can come from a user’s premises via the remote control. Comparing ’220 patent claims 1 and 9
Slip Op. According to the court, this internal inconsistency further sealed the deal. Invalidity Affirmed. I would note that the proffered inconsistency appears easily reconcilable in that the “activation criterion” and “user command” can come from two different sources. But, that is a distinction I had to guess at and create in my head ex post — not something offered by the patent documents.
Kanye West and Yeezy v. Walmart (California State Court 2021)
West helped to design the YZY Runners — a shoe that I would never have imagined possible. Walmart’s version are clearly knock-offs and West has sued. [WestvsWalmartYeezyComplaint]
The problem for West is that there is no underlying design patent, utility patent, or copyright registration. So, the lawsuit alleges Unfair Competition and Quantum Meruit both based on California law.
Defendants sold an imitation version of the popular and distinctive YEEZY FOAMRUNNER, notwithstanding comments by consumers that were or should have been sufficient to alert Walmart to the presence of imitation goods on its website. Further, Walmart traded off of the popularity and goodwill of West and the YEEZY brand in marketing, selling, and profiting from the sale of the Imitation Shoe. . . . [Walmart’s conduct] was immoral, unethical, oppressive, and/or unscrupulous in that it was designed to confuse consumers and profit off of the YEEZY brand.
Complaint.
It appears that the shoes are no longer available either from Yeezy or Walmart. The timing of the lawsuit appears to coincide with a new Yeezy model being released now:
We have one remaining Supreme Court patent case this term: Minerva Surgical Inc. v. Hologic Inc. (Supreme Court 2021) on whether the court will maintain the doctrine of assignor estoppel.
The court has been deciding other interesting cases. Here are a few notes:
Mahoney Area School Dist. v. B.L.: In this free speech case, the school district punished a high school student for her limited-distribution Snapchat post stating “Fuck school fuck softball fuck cheer fuck everything.” The post was copied and shared with school officials who suspended her from the cheer squad. In its decision, the Supreme Court found that the school overreached in its pursuit of “teaching good manners” since the speech here was “under circumstances where the school did not stand in loco parentis. . . . [and] the school has presented no evidence of any general effort to prevent students from using vulgarity outside the classroom.”
Van Buren v. US: In this computer-hacking case, the Supreme Court narrowly interpreted the Computer Fraud and Abuse Act in cases involving prohibited “exceeding authorized access.”
Lange v. California: In this criminal procedure case, an officer flashed his lights at Lange who did not stop but instead to his house, entered his attached garage and began closing the garage door. The Office prevented the garage from closing and then conducted a sobriety test. Lange was over the legal limit and was arrested. The lower courts found no problem with the Officer’s warrantless invasion of the home based upon a categorical rule, but the Supreme Court has vacated — holding that a fleeing suspect does not always permit home invasion. “An officer must consider all the circumstances in a pursuit case to determine whether there is a law enforcement emergency. On many occasions, the officer will have good reason to enter—to prevent imminent harms of violence, destruction of evidence, or escape from the home. But when the officer has time to get a warrant, he must do so—even though the misdemeanant fled.”
National Collegiate Athletic Assn. v. Alston: In this antitrust case, the Supreme Court found that the NCAA cannot prohibit schools from providing education-related benefits (internships; scholarships; laptops; musical instruments; etc.). The case did not decide the issue of direct payment for playing.
Fulton v. City of Philadelphia: In this free-exercise-of-religion case, the City of Philadelphia barred Catholic Social Services (CSS) from serving as a private foster care agency because the organization categorically refused to certify any same-sex couples to be foster parents based upon CSS’s religious doctrine regarding marriage. The Supreme Court held that the City’s action violates CSS’s religious freedom.
Intellectual Property legislation and oversight in the Senate goes through the Intellectual Property Subcommittee of the Judiciary Committee. On June 22, the Subcommittee heard testimony on the topic of ongoing problems with “low quality patents.”
Written testimony:
Testimony of Bridget Asay (Litigator, Lead counsel for Vermont’s consumer-protection case against patent trolling)
It is tough to figure out the status of a patent and identity of the patent owners.
Discussion of the Theranos-Holmes problem (patents issued and asserted even after criminal fraud indictment) — see Contreras Testimony. But generally, the problem is not seen as fraud but low-quality patents.
Contreras — there should be more focus on reduction to practice at the examination stage.
In an Inter Partes Review (IPR), the PTAB generally focuses on whether or not the claims have been proven unpatentable. If the patentee, the PTAB has a general approach of issuing a declaratory order that the claims “have not been shown, by a preponderance of the evidence, to be unpatentable.” The evidentiary-and-burden caveats from the PTAB leave substantial wiggle room about whether the claims are valid or invalid in any more abstract sense. We would be better off if the PTAB was able to make a positive statement — concluding that the claims are patentable.
The AIA calls for the Board to “issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner.” 35 U.S.C. § 318(a). This portion of the statute suggests to me that the Board’s declaration should be a more direct decision about patentability. That interpretation is bolstered by § 318(b) which suggest that every challenged claim will have either been “determined to be unpatentable” or “determined to be patentable.”
Section 318(b) referred to above particularly calls upon the USPTO director to receive the Board’s decision and then issue an Inter Partes Review Certificate “canceling any claim of the patent finally determined to be unpatentable, confirming any claim of the patent determined to be patentable, and incorporating in the patent by operation of the certificate any new or amended claim determined to be patentable.” Following the language of the statute, the PTO Director has a practice stating that claims maintained by the PTAB “are found patentable.” Thus, the Official Certificate appears to makes a claim about patentability (as required by the statute) rather than merely about the level of evidence provided.
In some ways, this is all semantics, but I would suggest that can matter quite a lot to a later tribunal to see a positive statement of patentability as opposed to a caveat filled statement regarding a claim not-proven-unpatentable. At the same time, asking the PTAB to positively rule on patentability suggests opening-the-door to broader patentability questions.
iLife Technologies, Inc. v. Nintendo of America, Inc., No. 20-1760 (Supreme Court 2021) [Petition]
iLife’s recent petition for writ of certiorari matches those found in American Axle’s pending petition:
What is the appropriate standard for determining whether a patent claim is directed to” a patent-ineligible concept under step 1 of the Court’s two-step framework for determining whether an invention is eligible for patenting under 35 U.S.C. § 101?
Is patent eligibility (at each step of the Court’s two-step framework) a question of law for the court based on the scope of the claims or a question of fact for the jury based on the state of art at the time of the patent?
The petition’s linkage is strategic since in Am. Axle the Supreme Court has asked the U.S. Government (Solicitor General) to offer its views on these same questions. The SG’s office (under president Trump) previously suggested that the Court should rehear a case on eligibility because of the ongoing uncertainty and resulting market disruption.
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iLife’s asserted U.S. Patent No. 6,864,796 covers a mobile device having a motion detection system to evaluate body movement and determine whether the movement “is within environmental tolerance.” The patent makes clear that “methods for determining specific movements of a body that use a variety of devices, apparatus and systems are, generally speaking, known.” The improvement then is the ability to determine whether any particular movement is outside of a normal tolerance and perhaps indicative of injury:
[The prior art is not] capable of evaluating body movement to determine whether the [movement] is normal or abnormal; and if abnormal, whether such movement is so abnormal to be beyond tolerance, for instance, to be damaging, destructive, crippling, harmful, injurious, or otherwise alarming or, possibly, distressing to the body.
‘796 Patent. Nintendo challenged the claims via IPR, but the PTAB sided with iLife. The IPR challenge focused on obviousness and anticipation.
Later in court, Nintendo argued that the claims were invalid for lack of enablement and written description, but the jury denied those defenses and instead awarded iLife $10 million in infringement damages.
Finally though the district court issued a post-verdict judgment as a matter of law — holding the claims ineligible as directed to the abstract idea of “gathering, processing, and transmitting information.” On appeal, the Federal Circuit affirmed, holding that the claims recite the abstract idea of “a motion sensor system that evaluates movement of a body using static and dynamic acceleration information.” Stripped away from pseudo-technical language, the court found this simply gathering, processing, and transmitting information.”
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At its heart, I see the invention here as a method of diagnosis much like that rejected in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012). In Mayo, the level of 6-thioguanine was measured to determine whether the patient needed more thiopurine drug. Although the link between body-levels of 6-thioguanine and thiopurine was an important discovery, that link was an unpatentable law of nature. In iLife, the correlation between certain accelerometer measurements and distress of a human body. But, the result is the same — that correlation itself cannot be patentable.
I have been repeating this mantra for quite a while – patents are political. In US v. Arthrex, the Supreme Court added an exclamation point. By design, the US governmental system places presidential political appointees at the top of each executive agency, including the US Patent & Trademark Office so that the US President can then be held directly accountable for the successes and failures. Note here that the accountability we’re talking about is political accountability.
The Federalist Papers (Hamilton) repeatedly focused on this issue, albeit not in the patent context: “The blame of a bad nomination would fall upon the President singly and absolutely.” Federalist 77, for example. Now, in the words of the Supreme Court, the Presidentially Appointed USPTO Director “is the boss.”
The Supreme Court has confirmed that PTAB Judges yield unreviewable authority during inter partes review and therefore acting as Principal Officers under the US Constitution. Therefore the APJs should have been nominated by the President and confirmed by the Senate.
BUT, the Court solved the problem in a new way–by making PTAB determinations reviewable by the USPTO Director. This leaves the PTAB system in-place, but will place major insider political pressure on the PTO Director (and current Acting Director).
One irony here is that the person with new political accountability is Drew Hirshfeld. Although he is sitting in the Director’s seat, Hirshfeld was not appointed as PTO Director by anyone. Although the Supreme Court refers to him as “Acting Director,” the administration has taken pains to clearly state that he is not the acting director. Rather, Hirshfeld’s title is a person “Performing the functions and duties of the Under Secretary of Commerce for Intellectual Property and Director of the USPTO.”
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Chief Justice Roberts wrote the Majority Opinion.
Parts I and II Concludes that APJs were acting as Principal Officers. This portion was joined by Justices Alito, Gorsuch, Kavanaugh, and Barrett. (5 Justices)
Part III provides a judicial remedy by rewriting the statute to give the USPTO Director power to directly review PTAB decisions. That portion was only joined by Justices Alito, Kavanaugh, and Barrett. (only 4 Justices). However, Justice Breyer, Sotomayor and Kagan agreed in a separate opinion that the remedy was proper (although they disagreed about whether it was needed at all).
Justice Gorsuch disagreed with the remedy — He would have simply set-aside the PTAB decisions and let Congress fix the problem.
Justice Thomas dissented from the whole majority approach – finding that Congress expressly identified APJs as inferior officers and that they are two steps below the president (i.e., pretty far down on the chain). “For the very first time, this Court holds that Congress violated the Constitution by vesting the appointment of a federal officer in the head of a department.” In addition, Justice Thomas argued that the remedy is inappropriate: “If the Court truly believed administrative patent judges are principal officers, then the Court would need to vacate the Board’s decision.”
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It is telling that Chief Justice Roberts opinion does not begin with a discussion of “rights” but rather Congressional intent to create “a workable patent system.” Here, the court attempts to keep the train on the tracks, but does create real potential trouble by placing the USPTO Director in the political cross-hairs.
This case focuses on Inter Partes Revew proceedings that are decided by the Patent Trial and Appeal Board (PTAB) whose Administrative Patent Judges (APJs) are appointed by the Secretary of Commerce. This setup though has a Constitutional problem because APJs issue opinions on behalf of the U.S. Government in cases involving private property interests potentially worth billions of dollars. An individual with that power is an Officer of the United States and must generally be appointed by the US President and Confirmed by the Senate, just like is done with Federal Judges and heads of office. We obviously have some big due process problems when improperly appointed judges issue opinions deciding rights.
Regarding the Appointments Clause, Hamilton wrote that the President should appoint the officers so that the President can be held directly accountable for the good and the bad. “[S]ole and undivided responsibility of one man will naturally beget a livelier sense of duty and a more exact regard to reputation.” The Federalist No. 77.
In its opinion, the Federal Circuit found that APJ’s were improperly appointed, but then issued a savings-severance. The appellate court invalidated the tenure protections for APJs guaranteed by statute and concluded that was enough to reduce APJs to inferior officers who did not need presidential appointment. On reflection, the Supreme Court wrote “This satisfied no one.”
Edmond v. United States, 520 U. S. 651 (1997), is Supreme Court’s key case-on-point regarding principal-officer vs inferior-officer vs no-officer-at-all. Here, the court applied Edmond – finding that the PTO Director has substantial authority over APJs – finding that “he is the boss” in most ways. BUT, there is one big exception, the PTAB director does not have authority to review the actual APJ decisions.
He is the boss, except when it comes to the one thing that makes the APJs officers exercising “significant authority” in the first place—their power to issue decisions on patentability.
Slip Op. The Appointments Clause requires politically accountable individuals be responsible in a way that leads directly to the President, and the current setup does not allow for that result. “[T]he public can only wonder ‘on whom the blame or the punishment of a pernicious measure, or series of pernicious measures ought really to fall.'” Slip Op., quoting The Federalist No. 70. The court also looked to the history of the U.S. Patent System:
When it comes to the patent system in particular, adjudication has followed the traditional rule that a principal officer, if not the President himself, makes the final decision on how to exercise executive power. Recall that officers in President Washington’s Cabinet formed the first Patent Board in 1790. 1 Stat. 109–110. The initial determination of patentability was then relegated to the courts in 1793, but when the Executive Branch reassumed authority in 1836, it was the Commissioner of Patents appointed by the President with the advice and consent of the Senate—who exercised control over the issuance of a patent. The patent system, for nearly the next hundred years, remained accountable to the President through the Commissioner, who directed the work of his subordinates by, for example, hearing appeals from decisions by examiners-in-chief, the forebears of today’s APJs.
Slip Op. All of this leads to the conclusion that APJs are acting like principal officers:
We hold that the unreviewable authority wielded by APJs during inter partes review is incompatible with their appointment by the Secretary to an inferior office.
Note here that the court does not exactly state that “APJs are principal officers” but only that they are acting as such when deciding IPRs. Regardless, it is improper for them to act-as-such because they are not principal officers.
For a solution, the court rejecting the Federal Circuit’s approach because it does not solve the unreviewability problem. The Supreme Court offers its own solution: “Decisions by APJs must be subject to review by the Director.” Here is what the court tells us: Once the PTAB makes its decision, the PTO Director then has the power to review the case and “reach his own decision.” The PTO director’s decision is then reviewable in court.
When reviewing such a decision by the Director, a court must decide the case “conformably to the constitution, disregarding the law” placing restrictions on his review authority in violation of Article II. Marbury v. Madison, 1 Cranch 137, 178 (1803).
Slip Op. The Supreme Court also makes clear that its decision only directly applies to IPR proceedings. “We do not address the Director’s supervision over other types of adjudications conducted by the PTAB, such as the examination process for which the Director has claimed unilateral authority to issue a patent.”
On remand, the Supreme Court is not requiring the PTAB to rehear any of the prior decisions. But, the PTO Director will need to issue decisions in each case indicating whether or not the office will be rehearing the case.
In deciding the cases, the PTO Director should be careful to avoid calling it a rehearing since “Only the Patent Trial and Appeal Board may grant rehearings.” 35 U.S.C. 6.
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Big questions for the patent system going forward: how does this Director-Review work and how much political lobbying is appropriate?
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I noted above that Part III – the remedy portion – of Chief Justice Robert’s opinion only garnered four votes. Not a majority. However, Justice Breyer wrote a separate opinion joined by two others that “agree with its remedial holding.” I have not parsed through how this statement differs from simply joining Part III.
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The court notes and the Thompson v. Haight decision from Judge Van Ness that I quoted a couple of weeks ago:
Judge William Van Ness—who before taking the bench had served as second to Aaron Burr in his duel with Alexander Hamilton—lamented that Congress had left the door “open and unguarded” for imposters to secure patents, with the consequences of “litigation and endless trouble, if not total ruin, to the true inventor.” Thompson v. Haight, 23 F. Cas. 1040, 1041–1042 (No. 13,957) (CC SDNY 1826). Congress heeded such concerns by returning the initial determination of patentability to the Executive Branch, see 5 Stat. 117–118, where it remains today.
Slip Op.
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One interesting bit I saw in the opinion was the note that the Court of Customs and Patent Appeals (CCPA) was “an entity within the Executive branch until 1958.” In Ex parte Bakelite Corp., 279 U. S. 438 (1929), the Supreme Court called the CCPA a “legislative court and not a constitutional court.” As such, there was no standing requirement under Article III of the Constitution. “Even if the proceeding is not such a case or controversy, the Court of Customs Appeals, being a legislative court, may be invested with jurisdiction of it.” In 1958, Congress overturned that decision with a statement that the CCPA “is hereby declared to be a court established under article III of the Constitution
of the United States.” 72 Stat. 848.
This is not a patent case, but it is strange enough to need some thought. Sarah Vestal was an IRS employee. In 2018, the IRS planned to suspend her based upon “discourteous and unprofessional conduct.” In preparing her defense, Vestal sent the Record from a Taxpayer’s File to her private attorney. That record included private information that Vestal was not permitted to share outside the office. She was then fired as a consequence of sharing the information with her attorney. On appeal, the Federal Circuit has affirmed:
Ms. Vestal intentionally disclosed taxpayer information to an unauthorized person for her own benefit.
The writing of the decision is interesting (or perhaps odd) because it appears to treat IRS confidentiality as “sacrosanct,” but not attorney-client communication. Recognize here that the IRS might have permitted her to disclose some aspects of the case to her attorney — but only after redaction and approval.
This type of issue is important and relevant to anyone operating in a confidential environment (such as almost every company) who might need to privately consult an attorney.
On Saturday, June 12, I did a little experiment to see what information I could find about patents that I knew to have been challenged. I first searched for U.S. Patent No. 7,446,338, issued in 2008 to Casio for a “Display Panel.” As expected, the official USPTO Patent Full-Text and Image Database provided me with the text of the patent document and a link to its PDF image. The USPTO’s new PatentsView interface gave me a bit more information, mostly about forward citations of the patent, including a spiffy world map locating the citations geographically. Google Patents indicates when a patent has expired or is scheduled to expire and displays a timeline of litigation involving the patent. The ’338 patent was subject to litigation in the Western and Eastern Districts of Texas and at the Patent Trial and Appeal Board (PTAB). Clicking on these entries took me to a database run by Unified Patents, which lists docket entries in these matters and is accessible via a free sign-up. But to see the Complaint in one of the West Texas matters, Unified Patents redirected me to a database operated by MaxVal-IP, which, on the day I searched, gave me the dreaded error “404- File or directory not found.” I then moved on to PTAB action IPR2020-00320, filed on Dec. 18, 2019. The Unified docket showed the IPR as terminated following a Mar. 12, 2021 settlement between Apple and the patent owner (now a company called Solas OLED) and allowed me to access the Termination Order. But when I searched Lex Machina, the paid IP litigation analysis engine now owned by LexisNexis, I found that Samsung, one of the IPR plaintiffs, continued the IPR action after Apple settled, and that on June 6, the PTAB issued a Final Written Decision finding all challenged claims (1-3 and 5-13) to be unpatentable (the patent has a total of 22 claims).
When I searched for U.S. Pat. No. 5,710,001, one of Myriad Genetics’ BRCA1 gene patents issued in 1998, several claims of which were invalidated in Assn. for Molecular Pathology v. Myriad Genetics, 569 U.S. 576 (2013), Google Patents displayed the initiation of the earlier district court litigation on its timeline, but the link took me to the paid Darts-IP database run by Clarivate, to which I don’t have access. Lex Machina only includes data about district court cases, but did correctly report that the District Court found all challenged claims of the Myriad patent to be invalid. The LexisNexis TotalPatent One service, which also allows patent searches, added information about patent families, fee status, assignees and, not surprisingly, links to judicial decisions and dockets.
And when I searched for U.S. Pat. No. 10,533,994, one of the fluidic system patents originally assigned to Theranos and asserted in 2020 against the maker of a COVID-19 diagnostic test, I found no indication that the founders of Theranos were under federal indictment for fraud, that they never developed the patented device, or that the current owner of the patent, Fortress Investments, had publicly pledged to license it royalty-free to anyone offering COVID-19 tests.
Contextual Patent Information
All of the information about a patent beyond its four corners – the validity status of its claims, whether it has been pledged to the public, licensed, made available for licensing, abandoned, declared essential to a technical standard, declared unenforceable for inequitable conduct and much more – is what Professor Colleen Chien has termed “contextual” patent information (Contextualizing Patent Disclosure, 69 Vand. L. Rev. 1849 (2016)). This type of information can be extremely useful to innovators, researchers, litigants, businesses and other members of the public. As Professor Chien writes, “contextual information can … signal which inventions are important from an economic point of view, are unimportant from a risk management perspective (insofar as they are expired or pledged to defensive uses), and may be the subject of broader technology and know-how transfers” (p. 1854).
Some contextual information, to the extent that it has been properly reported by the patent holder, is already relatively easy to find – this includes patent assignment records (through USPTO Patent Assignment Search and TotalPatent One), government interest statements (through the USPTO’s Patent View system), and maintenance/expiration data (through Google Patents and TotalPatent One). This is a good start.
But as my informal Saturday morning experiment illustrates, contextual information is not always readily accessible or consistent, and even in the best case it is spread across a variety of public and private data sources (even the USPTO could do a better job of consolidating available information about a patent into a single record). Thus, there is significant room for improvement.
The Genius of Shepard’s
I am pretty sure that every law student in the United States still learns to use the venerable Shepard’s citation system. Those of us who were educated during the Bronze Age and earlier know Shepard’s as a set of ponderous, maroon-bound volumes that were last seen as set pieces for Harry Potter. Today’s law students recognize Shepard’s as a component of the ubiquitous LexisNexis legal search engine. But its basic function has remained the same. Look up a judicial decision and Shepard’s will tell you, using simple color-coded icons (red stop sign, yellow triangle, green diamond, etc.) whether the case has been overruled, upheld, questioned and/or cited. (For a fascinating history of Shepard’s and legal citation indices in general, see Patti Ogden, Mastering the Lawless Science of Our Law: A Story of Legal Citation Indexes, 85 L. Libr. J. 1 (1993)).
Trademark issues aside, there is no reason that Shepard’s (or a variation thereof – maybe using yellow moons, orange stars, pink hearts and green clovers?) can’t be adapted for patents. The concept is simple. The record for every U.S. patent could include a set of regularly-updated signals conveying key contextual information for that patent. As with cases, the signals themselves would not convey detailed information, but would indicate that the interested reader should seek additional information (preferably through a hyperlink within the signal itself).
The implementation of such a system would admittedly require substantial up-front work, but several organizations including LexisNexis/Shepard’s/Lex Machina, Google and the USPTO, or some combination thereof, would be well-situated to undertake such a project.
If implemented, here are some of the contextual information categories that would be useful for such a patent signaling system:[1]
Invalidity – have some or all of the patent claims been disclaimed as invalid under 35 U.S.C. §§ 253(a) or 288, or challenged or invalidated by the PTAB or a court, or have claims survived challenges in litigation? The appealability/finality of these determinations could be indicated, as could the ground for invalidity (e.g., 101, 102, 103, 112).
Enforceability – has the patent been rendered, or challenged as, unenforceable for other reasons, such as inequitable conduct, patent misuse or standards deception?
Licenses – has the patent been licensed on an exclusive or non-exclusive basis? While many licenses are not publicly disclosed, licenses that are material to the business of publicly-traded companies are accessible through the Securities and Exchange Commission’s EDGAR database. Other licenses can become available through litigation discovery, freedom of information requests and other means (see discussion here).
Pledges and Dedications to the Public – has the patent been pledged by its owner for public use (see, e.g., the Open COVID Pledge, which I discuss at length here, subjected to a binding “covenant not to sue” (as was the trademark in Already, LLC v. Nike, Inc., 568 U.S. 85 (2013)), or dedicated to the public under 35 U.S.C. § 253(b)? There is currently no centralized repository for information regarding such commitments (see my proposal for creating a registry of pledges here), though various academic and nonprofit organizations maintain informal lists.
Standards Declarations – has the patent been declared essential to a technical standard? If so, the patent holder may have committed to license it on royalty-free or fair, reasonable and non-discriminatory (FRAND) terms. While some SDOs have searchable public databases of declared essential patents (e.g., ETSI and IETF), and some academic projects have consolidated some of this information, it is not generally linked to individual patent records.
***
In a world where patents play an increasingly important role in the technology development and innovation landscape, it is critical that reliable information about the status and history of patents be made available to the public. The USPTO has made a public commitment to the “discoverability, accessibility, and usability of public patent and trademark data”, and as such it can help to collect, organize and display contextual patent data in a simple and user-friendly fashion. A uniform “Shepardization” system for patents, which clearly flags issues for potential licensees, defendants and innovators and alerts the public to the potential investment and threat value of individual patents, would help to make the markets in which patents exist more transparent and efficient.
[1]Chien, p. 1877, Table 2, offers a comprehensive taxonomy of many types of contextual patent information that exist, though not all of these lend themselves to the simple signaling system suggested here and some (such as assignment, maintenance, expiration and government interest status) are already be available in a relatively (though not perfect) format.
Here is another mandamus writ coming out of Judge Albright’s Waco Texas courthouse. A basic repeated complaint against Judge Albright is that he appears to work quickly regarding issues that move the case toward trial, but acts more slowly to decide motions to dismiss transfer. I personally don’t put much weight in this complaint because truthfully he’s deciding all of the issues more quickly than most other judges.
This case:
August 2020, GreatGitz sued Freelancer for patent infringement and then filed an amended complaint just before Thanksgiving (November 23, 2020). U.S. Patents Nos. 6,662,194 and 7,490,086 (Providing job searching and recruitment services).
Two months later (January 21, 2021) Freelancer filed a motion to dismiss for failure to state a claim upon which relief can be granted.
Briefing ended on the eligibility question in March 2021. At that time, Freelancer also moved to stay all other proceedings in the case until the 12(b)(6) motion was decided.
It is now June 2021 and Judge Albright had not ruled on either the substantive motion to dismiss or the procedural motion to stay. But, claim construction briefing is moving forward.
June 10, 2021 Freelancer petitioned to the Federal Circuit to force Judge Albright to decide the 12(b)(6) motion and stop all other activities until that is decided.
The mandamus was assigned to a panel that has now denied the petition, holding that Freelancer has not shown a “clear legal right to a stay of all proceedings premised solely on the filing of a motion to dismiss the complaint.” Likewise, Freelancer did not establish that the delay is “so unreasonable or egregious as to warrant mandamus relief.” Slip Op.
Note here that the 12(b)(6) motion is not about eligibility but rather infringement. “The Complaint fails to put Freelancer on proper notice of how its products or services infringe either of the two asserted patents.” Although the complaint alleges infringement against particular activity, it does not do a claim-chart walk through showing how each limitation is met. Freelancer argues that “this generic, nonspecific language fails to meet the pleading standard set forth by Twombly, Iqbal, and the Federal Rules of Civil Procedure.”
In its responsive briefing, the patentee points to some amount of claim-term-linking in the pleadings — locating various components within “the so-called Aurora Database Cluster, Elasticache, Cloudwatch, Kinesis, and Redshift.”
See Figs. 1-6 (describing the apparatus comprising data centers with servers, which further comprise the Aurora database cluster (memory/processing device), Amazon Elasticache (processing device/receiver/transmitter), Cloudwatch (processing device), Kinesis (processing device/receiver/transmitter), and Redshift (memory/processing device)).
Amended Complaint. In addition, the patentee explained that it has done enough for a complaint and that further details “are quite obviously not subject to specific identification without fact discovery and source code review.”
