The Patent Public Advisory Committee (PPAC) forms a board of advisors for the USPTO Director. Nine members appointed by the Secretary of Commerce for three-year terms. Although PPAC does not have formal power to take action, the USPTO Director is required to cooperate with the committee, provide it with access to information, and consider its advice. Congress has declared that the committee should individuals representing both small and large entities, including at least independent inventor. The committee should also include individuals “with substantial background and achievement in finance, management, labor relations, science, technology, and office automation.”
Dir. Vidal has announced that the USPTO is seeking nominations for three new PPAC members. Due by July 1, 2022. For more information, contact Cordelia Zecher, Acting Chief of Staff for Director Vidal at 571-272-8600.
Ex parte Gillam, APPEAL 2021-002217, 2022 WL 1641777 (Patent Tr. & App. Bd. May 20, 2022) (RPI – Texas Instruments). [2021002297_Mail_Decision]
9. A method for evaluating a generalized rational function on a handheld graphing calculator, the method comprising:
determining, by a processor of the handheld graphing calculator, whether or not the generalized rational function has at least one asymptote; and
displaying, by the processor, the at least one asymptote on a display screen when the generalized rational function has the at least one asymptote, the displaying includes a textual representation of the at least one asymptote.
In its decision, the PTAB issued a new ground for rejection against Claim 9 for lacking subject matter eligibility. The Board concluded that the claim was directed to an unpatentable mathematical concept.
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Ex Parte Allaway, APPEAL 2021-002898, 2022 WL 1599499 (Patent Tr. & App. Bd. May 19, 2022) (Mars, Inc.).[2021002898_Mail_Decision]
1. A method of screening a foodstuff comprising:
(a) preparing a foodstuff comprising i) one or more of aspartic acid, serine, glutamic acid, glycine, alanine and praline, and ii) one or more of myristic acid, palmitic acid, stearic acid, palmitoleic acid, oleic acid and linolenic acid, the foodstuff further comprising a protein to fat ratio of 1:0.27 to 1:0.63 on a gram:gram as fed or dry matter basis;
(b) feeding a cat the foodstuff, and
(c) measuring the level of margaric acid in a blood sample from the cat before and after feeding the foodstuff, wherein an increase in endogenous margaric acid levels post prandially is indicative of a foodstuff effective to prevent or reduce the risk of coronary heart disease, type 2 diabetes and/or inflammation in the cat.
The Board found that the final wherein clause was directed to a potential mental process and thus an abstract idea in addition, the correlation between margaric acid and disease is a law of nature similar to that seen in Mayo. Rejection Affirmed.
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Ex Parte Mallet, APPEAL 2021-003081, 2022 WL 1641787 (Patent Tr. & App. Bd. May 20, 2022) (RPI – BIOMERIEUX) [2021003081_Mail_Decision]
1. A method for detecting at least two RNA transcripts, comprising:
obtaining a biological sample that is collected from a human patient suspected of having prostate cancer; and
detecting, in the biological sample, the presence or absence of at least two RNA transcripts comprising a first RNA transcript expressed by a first nucleic acid sequence having at least 99% identity with SEQ ID NO: 1, and a second RNA transcript expressed by a second nucleic acid sequence having at least 99% identity with SEQ ID NO: 3.
The claim was not rejected under Section 101, but the PTAB included an interesting footnote suggesting that the claim may lack eligibility under Mayo/Alice, but is OK under the 2019 USPTO Examination Guidelines.
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Ex Parte Bella, APPEAL 2021-002297, 2022 WL 1584710 (Patent Tr. & App. Bd. May 17, 2022) [2021002297_Mail_Decision]
Maria Bella is a forensic expert who testifies in cases involving aquatics and drowning. She created a step-by-step lifeguarding methodology that includes a series of steps and actions such as
staff mapping the shape of the swimming pool or body of water including any irregularities that may be present;
staff determining the number of submersible devices available;
staff determining the length of the swimming pool or body of water;
the staff determining the width of the swimming pool or body of water;
staff calculating and mapping a grid to determine the positioning of the submersible devices based on the number of submersibles, the length of the swimming pool or body of water, the width of the swimming pool or body of water and the blind spots present;
the staff positioning submersible devices on a bottom of the swimming pool or body of water according to the calculated grid …
The examiner rejected the claims on eligibility grounds. On appeal though the PTAB has reversed that rejection — basically finding that the submersible devices are “concrete things” that sufficiently “integrate” the mental processes “into a practical application.”
The Board did, however, issue a new ground of rejection on indefiniteness – The claim includes the following wherein clause that the Board found lacks any workable objective standard: “wherein failure to recognize the swimmer/bather in distress increases the risk of the swimmer/bather suffering a fatal drowning.”
The US Solicitor General has provided her input–arguing that the Supreme Court should grant American Axle’s petition and decide whether the claimed method of manufacturing a driveshaft is patent eligible. American Axle & Mfg., Inc. v. Neapco Holdings LLC, Docket No. 20-891 (Supreme Court 2022). [USDOJ Brief]
A decade ago, the Supreme Court decided Mayo v. Prometheus, 566 U.S. 66 (2012). Mayo broadened the scope of excluded “laws of nature” and established a two-step test for judging eligibility. The court followed-up two years later with Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014), extending Mayo‘s holdings to abstract ideas and computer implemented inventions. In the wake of these decisions, the USPTO substantially changed its practices as did the U.S. Courts. Thousands of claims have been denied, cancelled, or invalidated, but those involved still experience “substantial uncertainty about the proper application of Section 101.” In American Axle, the Federal Circuit reluctantly took the law a further step by finding abstract a method of manufacturing and calibrating a mechanical structure. The USDOJ concludes that the claim at issue here is a “paradigmatic examples of the ‘arts’ or ‘processes’ that may receive patent protection if other statutory criteria are satisfied.”
American Axle’s US Patent No. 7,774,911 claims a method of manufacturing an automobile driveshaft that operates with reduced vibration & noise. The claims are particular directed to the use of a shaft liner that has been tuned to reduces multiple vibration modes (bending and shell mode vibrations). Prior technology included a shaft liner, but not one tuned to multiple vibration modes. So, the novel feature here is that the liner has been tuned to both resistively absorb shell mode vibrations and reactively absorb bending mode vibrations.
22. … tuning a mass and a stiffness of at least one liner … wherein the … liner is a tuned resistive absorber for attenuating shell mode vibrations and wherein the at least one liner is a tuned reactive absorber for attenuating bending mode vibrations.
The crux of the problem found by the Federal Circuit is that these novel features are claimed functionally–at a fairly high level of abstraction. Rather than claiming the actual steps of tuning, the patentee has endeavored to claim all methods that achieve the claimed result. In some ways, this is like the claimed process in Diehr, but instead of using the Arrhenius equation the inventors here just use an unstated algorithm.
Broad claims like these have been typically dealt-with under the disclosure requirements–written description and enablement; as well as obviousness. Under those doctrines, broad functional claims are permitted so long as the disclosure is sufficient and the prior art allows. By shifting to eligibility the defense was able cut-off the broad claims straight away. And importantly from a procedure perspective, was able to achieve this without worrying about the strictures of “evidence” or “fact finding” because eligibility is a question of law that rarely involves any underlying factual findings.
Substantial Uncertainty: The DOJ brief focuses on uncertainty created by Mayo/Alice framework, both at Step 1 and Step 2.
Clarification of both steps is especially important, both because a court’s step-two analysis often finally resolves the determination as to patenteligibility, and because the nature of the initial step-one screen logically depends in part on the inquiry that courts will apply at step two.
DOJ Brief. The original petitioner brief focused on Alice Step 1 — asking what is the “appropriate standard for determining whether a patent claim is ‘directed to’ a patent-ineligible concept.” The DOJ suggested that the court focus on both steps and ask more generally is it patent eligible?
Preemption: An overarching theme in patent eligibility jurisprudence has been the potential of handing-over exclusive rights to fundamental aspects of human life and “building blocks” human ingenuity. Avoiding improper preemption is the key goal. But, the Alice/Mayo test does not use preemption in its decision process, and the Federal Circuit has found evidence of no preemption irrelevant to eligibility. Rather, as the DOJ implies, preemption considerations should be fundamental to the eligibility analysis.
Levels of Abstraction: The role of patent attorneys has historically been to help inventors abstract-out their inventions to ensure that the claims cover sufficiently valuable scope. What we know is that some abstraction is OK, too much is not. The DOJ suggests that it would be helpful to have a bit more guidance.
Historic Exceptions: The court wrote in Bilski that these exceptions are historic and based upon longstanding precedent. The suggestion is that they should be guided by the old precedent and not expanded further without congressional input.
Despite my earlier focus on results-based claiming, the DOJ Brief explains that the claims here go far enough in reciting:
a specific sequence of steps … taking a “hollow shaft”; “tuning” the “mass” and “stiffness” of a liner, which the district court construed to mean “controlling” the liner’s mass and stiffness “to match the relevant frequency or frequencies” of vibration of the shaft; and “inserting the” liner “into the shaft,” whereupon the liner acts as an “absorber” of two kinds of vibrations.
DOJ Brief. These sequence of steps make the case look much more like Diamond v. Diehr than O’Reilly v. Morse.
Regarding Alice Step 2, the DOJ argues that “conventional claim elements” should not be disregarded. Rather, the focus should continue to be on the claimed invention “as a whole.”
The petition asks a second question — whether eligibility is a question of law. The DOJ suggests that this is a secondary question that can only be addressed once the general doctrine is established. “Answering the second question presented thus would be difficult while uncertainty about the substance of the Section 101 inquiry persists.”
Guest post by Peter S. Menell, Koret Professor of Law; Director, Berkeley Center for Law & Technology; Faculty Director, Berkeley Judicial Institute; University of California at Berkeley School of Law
Prior to the mid-1990s, patent litigation took place in district court silos. District judges managed these cases based on their general litigation background, which rarely extended to patent cases. Experienced patent litigators, many of whom also prosecuted patents, brought their technical and litigation experience to the table. As a result, each patent case reinvented the patent litigation wheel to a significant extent.
With the growth of high technology patent litigation in the 1980s and early 1990s, a new breed of general litigators entered the fray. They saw advantages to trying patent cases to juries. In addition, the newly established Federal Circuit was getting its sea legs and began to focus on the disarray. With the Markman decisions of the mid 1990s, the Federal Circuit and the Supreme Court triggered a new patent litigation era. Pre-trial “Markman” hearings to construe claims became the norm, and with that, the development of the Northern District of California’s Patent Local Rules for managing patent cases led by Judge Ronald Whyte. Although initially put forth as a voluntary case management model, practitioners quickly embraced these rules. Busy federal judges were all too happy to see the patent bar following these rules, thereby reducing the case management challenges.
It was around this time, in 1997, that I reached out to the Federal Judicial Center to offer the Berkeley Center for Law & Technology’s assistance in training federal judges in the intricacies of intellectual property law and case management. That led to a 25 year collaboration leading annual week-long training programs, panels at FJC regional and national events, webinars, and the development of the Patent Case Management Judicial Guide (“PCMJG”). These programs have educated much of the federal judiciary—including a substantial portion of district judges, magistrate judges, and bankruptcy judges—as well as involved Federal Circuit judges. At the urging of former Federal Circuit Chief Judge Paul Michel, I developed programs and orchestrated a patent investigation guide for the International Trade Commission. These efforts helped to persuade ITC administrative law judges to implement Markman hearings.
These efforts spread the wisdom of a new civil procedure framework for patent litigation. Numerous districts followed the Northern District of California’s lead, adopting patent local rules and standing orders. I also found myself working with judges in the District of New Jersey on a new branch of patent case management rules for pharmaceutical cases, which are predominantly pursued there and in Delaware. The advantages of standardized and coordinated patent case management became apparent and have revolutionized patent case management.
These programs and publications brought together leading practitioners and judges from the most active districts to discuss patent case management. The Patent Case Management Judicial Guide, now in its third edition and published by the Federal Judicial Center for judges and available for free via SSRN, has been widely used and cited. Dennis Crouch referred to it as the Bible for patent litigators. It is now commonly assigned for teaching patent litigation and is among the most important resources for newly appointed federal judges and clerks dealing with patent litigation.
Patent Case Management Goes International
I was delighted to be invited in the summer of 2020 to assist the World Intellectual Property Organization (WIPO) in developing an International Patent Case Management Judicial Guide. In conjunction with Eun-Joo Min, Director of the WIPO Judicial Institute, and Judge (ret.) Jeremy Fogel, Executive Director of the Berkeley Judicial Institute, I have worked over the past two years with leading judges from eight of the most significant industrial nations (Australia, Brazil, China, Germany, India, Japan, Republic of Korea, and the United Kingdom) to develop an international version of the Patent Case Management Judicial Guide. Judge (ret.) Kathleen O’Malley, who served as both a district judge and Federal Circuit judge, has also advised WIPO’s efforts. My colleague Allison Schmitt, Director of BCLT’s Life Sciences and Innovation Project, and I have developed the U.S. chapter. WIPO anticipates publishing the International Patent Case Management Judicial Guide by December 2022. This volume promises to promote the advantages of nuanced patent case management on a global scale, enhance the capacity of litigators and in-house counsel to assess international patent litigation, and harmonize patent systems and policies.
Patent Case Management Goes Cross-Institutional
When I agreed to collaborate on the International Patent Case Management Judicial Guide, I mistakenly thought that producing the U.S. chapter would be relatively straightforward. After all, the PCMJG was the model for the project. But as discussions with the other participants revealed, the U.S. patent system is far more extensive and complex than district court litigation. Other nations employ a variety of specialized tribunals and several treat invalidity challenges in separate tribunals. The U.S. has moved in that direction with the establishment of the Patent Trial and Appeal Board’s Inter Partes Review and Post-Grant Review authority. It was time to integrate PTAB case management into U.S. patent case management. The project illuminated the U.S.’s distinctive approaches to dealing with border control (the ITC’s Section 337 authority) and pharmaceutical patents (Hatch Waxman and the BPCIA). It also highlighted the growing importance of SEP/FRAND issues. Thus, the WIPO project has spurred better appreciation of the many dimensions of U.S. patent case management and highlighted lessons for improving the U.S. system.
As a way of harmonizing the presentation of patent case management regimes across the broad array of patent systems, WIPO developed the following template:
OVERVIEW OF THE PATENT SYSTEM
PATENT INSTITUTIONS AND ADMINISTRATIVE REVIEW PROCEEDINGS
JUDICIAL INSTITUTIONS
PATENT INVALIDITY
PATENT INFRINGEMENT
JUDICIAL PATENT PROCEEDINGS AND CASE MANAGEMENT
REMEDIES
THREATS ACTIONS
CRIMINAL PROCEEDINGS
ENFORCEMENT
APPELLATE REVIEW
BORDER MEASURES
SELECTED TOPICS
KEY CHALLENGES AND EFFORTS TO IMPROVE PATENT CASE MANAGEMENT
We developed a summary of PTAB case management in Chapter 2, ITC Section 337 patent investigation management in Chapter 12, and SEP/FRAND enforcement and pharmaceutical patent case management in Chapter 13. The appendix contains a chart comparing district court patent adjudication, ITC patent investigations, and PTAB Inter Partes review. The draft of the U.S. chapter can be downloaded by clicking on this link: WIPO International Patent Case Management Judicial Guide: United States.
The Future of Patent Case Management (and IP Case Management More Generally)
We are heartened to see growing interest in the study of patent (and IP) case management. Allison and I are developing a comprehensive patent case management guide that is geared for the U.S. patent system. We hope to finish that more extensive project by late 2022. I am also working with other teams of practitioners and scholars on copyright, trade secret, and trademark analogs. The trade secret project is close to fruition and we hope to release a draft this summer.
These projects help to demystify and improve the functioning of intellectual property systems, which is especially important in the United States where such matters are tried to generalist judges and lay juries. They also enable judges, practitioners, scholars, and law students to delve more deeply into the ways in which the legal system can more effectively and efficiently resolve disputes. We are grateful to BCLT, BJI, the Federal Judicial Center, and WIPO for supporting our efforts, as well as the many practitioners and judges who have shared their experience and insights.
Michael Kaufman v. Microsoft Corp. (Fed. Cir. 2022)
Kaufman’s US7885981 has a 2000 priority date and claims a method of automatically creating a database front-end for user access. Kaufman sued Microsoft–asserting that its Dynamic Data product infringed the claims. A jury agreed, finding the patent claims valid and infringed and awarded $7 million in damages. Both parties appealed.
The broadest claim has three steps that basically require
providing an output stream from from the server that defines a user interface paradigm (including user-interaction modes, such as “create, retrieve, update and delete” and display formats for each mode)
scanning the database to create a data model; and
using the data model to construct a client application also with the user interface paradigm.
‘918 patent.
The body of the claim does not include the an “automatic” requirement, but the preamble does: “A method for operating a server comprising a processor for automatically generating an end-user interface for working with the data within a relational database … , said method comprising …”
Much of Microsoft’s argument focuses on the term “automatic.” During claim construction, Microsoft had asked for the term to be construed as meaning “no human labor required.” At the summary judgment motion hearing, the Judge found no disagreement about the meaning of “automatic,” but rather concluded that the disagreement was about which parts of the process had to be automatic. Microsoft’s counsel then asked, “Can we resolve the claim construction issue?” and the district court responded , “You agreed on a definition.” At that point, Kaufman’s counsel agreed with the court “I think we have resolved it.” There was no further briefing on the issue pre trial.
Preserving o2Micro Issue for Appeal: On appeal, Microsoft argued that the district court should have resolved the claim construction issue as required by O2Micro. The Federal Circuit has refused to consider the argument — holding that Microsoft failed to preserve the issue.
Once litigation extends beyond pre-trial and into trial, claim construction should be seen as an issue of jury instructions. In general, pre-trial objections made during the pleadings or summary judgment stage must be reiterated during trial in order to preserve those objections for appeal. FRCP Rule 51(c) requires a timely objection on the trial record to any jury instructions (or the failure to provide sufficient instructions). Here, the Federal Circuit holds that same approach should apply to claim construction.
A proper claim construction provides a legal standard for the jury to apply, and so the requirement of clear, timely raising of an argument for a claim construction reflects the strong requirement of timely raising of distinct objections to jury instructions.
Kaufman, Slip Op. One problem with this panel decision is that there are quite a few cases where the appellate court has permitted claim construction appeals despite the absence of on-point jury instruction objection. Here, the appellate panel recognized that situation as “an exception to [the] requirement” that can apply when the issue was “sufficiently raised and settled earlier.” In particular, as the Court wrote in 02Micro, the trial-objection requirement is only preserved in a situation where the claim construction arguments had been “made clear to the district court” and then “fully litigated in and decided” by the district court in such a way that further objection would be “futile [and] unnecessary.” Id.
On appeal, Microsoft also argued that the jury verdict of infringement was not supported by substantial evidence since its Dynamic Data program required substantial user input – and thus was not automatic. On appeal though, the Federal Circuit concluded that claim language permitted some human actions (i.e., triggering the various operations). And, the jury heard expert testimony that separated out the human actions of setting-up the operation from the claimed automatic steps of scanning”, etc.
And: One of the more litigated claim terms is the word “and.” Here, the claims require several display modes: “create, retrieve, update and delete.” Later, the claims require that “each said mode display processes for representing, navigating, andmanaging” data relationships. The question here is whether the claims actually require each display mode provide the user all three options: represent, navigate, and manage. Microsoft’s product includes some modes that do not display all the options as required by the claims and so argues that it does not infringe.
The district court concluded in a post-verdict ruling that the term “and” should be construed as including “or.” On appeal, the Federal Circuit has affirmed. In its decision, the court particularly noted that the sole working embodiment described in the specification would only be covered by the claims under an “or” interpretation. “A claim construction that excludes a preferred embodiment is rarely, if ever correct and would require highly persuasive evidentiary support.” Epos Technologies Ltd. v. Pegasus Technologies Ltd., 766 F.3d 1338 (Fed. Cir. 2014). The court also noted that the specification repeatedly used the word “and” in ways that clearly included “or.”
Infringement Affirmed.
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Although Kaufman won at trial, he appealed the district court’s denial of pre-judgment interest that could potentially double the award. The patent statute particularly identifies interest as an element of compensation:
Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.
35 U.S.C. § 284. “Generally, prejudgment interest should be awarded from the date of infringement to the date of judgment.” Nickson Industries, Inc. v. Rol Mfg., 847 F.2d 795 (Fed. Cir. 1988). The Supreme Court interpreted this provision in its 1983 General Motors case, concluding that prejudgment interest is “typically” awarded in patent cases. The Supreme Court also noted that the statute indicates interest is “fixed by the court” and may be denied by a district court based upon “some justification.” General Motors Corp. v. Devex Corp., 461 U.S. 648 (1983). In Nickson the Federal Circuit found that undue delay by the patentee in bringing the lawsuit could justify denying interest. See also, Crystal Semiconductor Corp. v. Tritech Microelectronics International, Inc., 246 F.3d 1336 (Fed. Cir. 2001).
Here, the district court gave two reasons for denying the award of pre-judgment interest.
The jury verdict took into account the interest (because the instructions asked the jury to provide an award “discounted to present value”).
Kaufman was responsible for undue delay in bringing the lawsuit.
On appeal, the Federal Circuit found the denial of interest a clear abuse of discretion. The discounting portion of the verdict was tied to testimony regarding standard discount rates, but did not include any evidence or basis for the jury to also calculate or award interest.
Regarding undue delay, the district court identified a delay, but did not identify evidence that the delay was “undue,” i.e,. that it caused some prejudicial impact on the defendant. In particular, Microsoft indicated that it “could have” altered its product back in 2011, but did not produce evidence that it “would have” done so.
On remand, the district court will need to add up that interest (and, likely add post-judgment interest as well based upon the appeal).
NetChoice, LLC v. Ken Paxton, Attorney General of Texas, 21A720 (Supreme Court 2022)
I previously wrote about the Texas Social Media Censorship Law known as HB20. A portion of the case is pending before the Supreme Court on an emergency motion to vacate the 5th Circuit’s recent decision allowing the law to come into force even as it is being challenged. After NetChoice filed its petition, Justice Alito requested responsive briefing from the state of Texas.
Those briefs have now been filed and provided below with a small excerpt or comment for each amicus brief.
Rep Chris Cox: Amicus Brief Supporting NetChoice. Cox is an author of Section 230 and provides its explanation of its importance and relevance to the case.
Prof. Eric Goldman: Amicus Brief Supporting NetChoice. Goldman adds that the “editorial transparency requirements [of HB20] violate the First Amendment.”
EFF, Wikimedia, et al.: Amicus Brief Supporting NetChoice. “Allowing HB20 to go into effect will cause social media platforms to alter their content moderation practices in ways that will harm the public interest.”
Cato Institute, Amicus Brief Supporting NetChoice. “The public interest is harmed by allowing the law to go into effect because most users do not want to see animal abuse, terrorist recruitment material, or racial slurs when they go on Facebook, nor do Facebook and other social media platforms want to host such material.”
ACLU, Reporters Committee for Freedom of the Press, et al.: Amicus Brief Supporting NetChoice. The brief argues that editorial autonomy is critically important. Although HB20 applies to social media and not newspapers the brief suggests it will have a chilling effect.
FLOOR64: Amicus Brief Supporting NetChoice. The owner of Techdirt.com. HB20 “takes aim at the entire Internet ecosystem and its ability to facilitate any online expression at all.”
Chamber of Progress, Anti-Defamation League, IP Justice, LGBT Tech, et al.: Amicus Brief Supporting NetChoice. The law would force publication of wasteful speech and would “render content moderation functionally impossible.”
Amicus Briefs in Support of Texas.
State of Florida, Amicus Brief in Support of Texas. Social media platforms “have supplanted the telephone for interpersonal communication, traditional television for news consumption, and the 24-hour cable news cycle in the potential to swing an election.” They should be regulated as such.
Professor Philip Hamburger, et al. Amicus Brief in Support of Texas. Hamburger explains that he has studied and written “on how governments, in the seventeenth century and again today, tend to privatize their censorship, leaving their dirty work to less accountable, private actors.” He argues that common carrier style regulation is an appropriate mechanism to promote speech.
Here is the setup in the Federal Circuit’s recent decision in Google LLC v. IPA Techs. Inc. (Fed. Cir. 2022):
March 23, 1998. Cheyer, Martin, and Moran co-author academic paper describing their Open Agent Architecture (“OAA”) project being developed at Stanford’s SRI International.
January 5 & March 17, 1999. Cheyer & Martin (but not Moran) file for patent protection on aspects of the OAA that were not fully disclosed within the original publication.
And the Question: Does the prior publication count as prior art in an IPR obviousness analysis?
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After IPA sued Google for infringement, Google petitioned for inter partes review (IPR). Although the Board granted the petition, it eventually concluded that the prior publication was not prior art and thus sided with the patentee in its final written decision. On appeal, the Federal Circuit has vacated and remanded–asking for further fact finding on the contribution of Moran.
IPR proceedings are limited to challenges anticipation and obviousness challenges and only those based upon prior patents & printed publications. Prior art used for an obviousness rejection must first qualify as prior art under Section 102. Since the patents here are pre-AIA, we focus on the old Sections 102(a) and 102(b):
Pre-AIA 102. A person shall be entitled to a patent unless —
(a) the invention was … patented or described in a printed publication … before the invention thereof by the applicant for patent, or
(b) the invention was patented or described in a printed publication … more than one year prior to the date of the application for patent in the United States, or
We can quickly eliminate the 102(b) time-bar because the patent applications at issue here were filed within the one-year grace period. 102(a) prior art asks whether the IPA invention was already the subject of a printed publication prior by the time the IPA inventors created their invention. In the obviousness context, we break this down a bit further and ask whether some aspect of the invention was disclosed in a printed publication prior to the applicant’s invention date.
Courts also added a “by another” limitation into this portion of Section 102(a). Thus, a prior publication by inventors (or a subset of the inventors) does not count as prior art under 102(a). In re Katz, 687 F.2d 450 (CCPA 1982).
In IPA’s case, the problem is that the prior publication was by the inventors and an additional third party. If the third-party contributed fully to the publication then it counts as prior art. But, the courts have recognized that listing of authors operates by a different norm than listing of inventors and so delve into whether or not the additional author actually contributed to the particular disclosure being relied upon. In the context of pre-AIA 102(e) (that expressly included the “by another” provision), the Federal Circuit provided a three step process:
determine what portions of the reference patent were relied on as prior art to anticipate the claim limitations at issue,
evaluate the degree to which those portions were conceived ‘by another,’ and
decide whether that other person’s contribution is significant enough, when measured against the full anticipating disclosure, to render him a joint inventor of the applied portions of the reference patent.
Duncan Parking Techs., Inc. v. IPS Grp., Inc., 914 F.3d 1347 (Fed. Cir. 2019).
In IPA, the Board concluded that Google had failed to show Moran had participated in the conception of the relevant portions. On appeal, the Federal Circuit vacated the ruling — concluding that the Board had failed to “complete the full Duncan analysis” but rather disregarded testimony from Dr. Moran regarding his contribution as lacking corroboration. On appeal, the Federal Circuit concluded that the original co-authorship represents “significant corroborating evidence.” On remand, the court will need to actually consider the testimony and decide the factual questions of Moran’s contribution to the prior publication.
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Note – the case has a few other interesting and important procedural aspects that I’m not covering in this post.
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Under the AIA: Section 102 was substantially rewritten in the Leahy-Smith America Invents Act of 2011. The revised provisions no longer consider the date-of-invention as relevant. If the patents were being considered under the AIA, we would still first look to Section 102(a) and find that the prior publication seemingly qualifies since the publication occurred prior to the applicant’s effective filing date:
Post-AIA. (a) Novelty; Prior Art.—A person shall be entitled to a patent unless— (1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.
We should not expect courts to read-in the “by another” limitation into this new Section 102(a), which is more properly thought of as a modification of the pre-AIA bar of 102(b) (despite its reference to “novelty”). Thus, any publication prior to the effective filing date qualifies for consideration under Section 102(a). But, prior art consideration under the AIA always require consideration of the exceptions found under Section 102(b). Importantly, prior disclosures via the inventors within 1-year of the effective filing date are excluded from prior art consideration.
Post-AIA. 102(b) Exceptions.— (1) Disclosures made 1 year or less before the effective filing date of the claimed invention.—
A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if—
(A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or
(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.
The new statute does not provide any direct guidance as to how courts will treat pre-filing disclosures akin to the one in IPA where the authors include both the listed inventors and also non-inventors. On the one hand, the court could continue to require the same Duncan Parking analysis where we delve into the details of who conceived of the various aspects of the pre-filing disclosure. On the other hand, the court could simply whether an inventor is one of the listed authors — if so, the disclosure “was made by the inventor or joint inventor.”
The USPTO appears to largely be applying the Duncan Parking approach — its examination guidance particularly focuses attention upon whether the 102(b)(1) disclosure is made solely by the listed inventors (or a subset). See also Ex Parte Chowdhury, APPEAL 2020-006272, 2021 WL 4306675 (Patent Tr. & App. Bd. Sept. 20, 2021) (prior publication by a subset of inventors qualifies as a 102(b)(1) exception); and MPEP 2153.01(a) (“If … the application names fewer joint inventors than a publication (e.g., the application names as joint inventors A and B, and the publication names as authors A, B and C), it would not be readily apparent from the publication that it is by the inventor (i.e., the inventive entity) or a joint inventor and the publication would be treated as prior art under AIA 35 U.S.C. 102(a)(1).”).
Back in March 2022, I wrote an essay on the spectrum of structural and functional claiming, particularly commenting on the Federal Circuit’s decisions in Dyfan, LLC v. Target Corp., 28 F.4th 1360 (Fed. Cir. 2022) and VDPP LLC v. Vizio, Inc., 2021-2040, 2022 WL 885771 (Fed. Cir. Mar. 25, 2022). See, Dennis Crouch, Discerning the Purpose and Means of Williamson v. Citrix, Patently-O (March 30, 2022).
A basic question in these cases is whether the claim elements at issue recite sufficient “structure” to avoid being classified as a “means” claim under 35 U.S.C. 112(f). Patentee’s typically prefer to avoid 112(f) classification as the result is typically either (1) narrow claim scope or (2) invalid claims. The classification is seemingly easy when a patentee uses classic “means plus function” (MPF) claim language without reciting specific structure, but patentees usually avoid that approach in favor of quasi-structural elements such as a “module,” “circuit,” or “system.” Prior to Williamson, the Federal Circuit strongly presumed claim elements lacking traditional MPF language were not MPF elements. Williamson eliminated that strong presumption in favor of a weak rebuttable presumption that can be overcome with a demonstration “that the claim term fails to recite sufficiently definite structure or else recites function without reciting sufficient structure for performing that function. Williamson v. Citrix Online,LLC, 792 F.3d 1339 (Fed. Cir. 2015) (en banc as to Part II.C.1). That case went on to focus attention on “nonce words” such as “mechanism,” “element,” and “device” that “typically” fail to recite sufficiently definite structure. The problem here is discerning in any particular case what level of structure is sufficient. Although the court used the word “definite”, it seems unlikely that they intended to tie the 112(f) here to the same reasonable certainty test used for 112(b).
In the recent cases of Dyfan and VDPP, the Federal Circuit pushed-back a bit on an expansive interpretation of Williamson. In Dyfan, the court considered a wherein clause requiring certain actions and concluded it was implicitly tied to claimed “code” and therefore recited sufficient structure to avoid MPF designation. In VDPP, the court indicated that the nonce word designation should be based upon “evidence that a person of ordinary skill would not have understood the limitations to recite sufficiently definite structure.” The district court in VDPP had not required submission of “evidence” but rather had summarily concluded that the “processor” and “storage” elements were nonce words lacking structure. On appeal, the Federal Circuit reversed — holding that those words provided sufficiently definite structure.
Now, the accused infringers in both of these cases have petitioned for rehearing: calling for either (1) panel rehearing or (2) rehearing en banc. The court has not yet requested responses in either case. (No response may be filed to a petition for panel or en banc rehearing unless the court orders a response).
In Dyfan, Target argues that the law was settled by Williamson v. Citrix Online, LLC, 792 F.3d 1339 (Fed. Cir. 2015) (en banc as to Part II.C.1) and confirmed in Egenera, Inc. v. Cisco Sys., 972 F.3d 1367 (Fed. Cir. 2020). The petition asks the following questions:
For claims that recite computer software for performing functions, what
are the criteria for determining whether software-implemented functional claim
language is subject to 112(6)?
Can the Court ignore parts of the recited software-implemented function, or ignore such function entirely, in making the determination as to whether the claim recites sufficiently definite structure?
If no, and if the software-implemented function cannot be performed by a general-purpose computer without special programming can 112(6) be avoided by claiming a general-purpose computer term (such as code or program or processor) and a software-implemented result, if a person of ordinary skill in the art would understand how to write a program to achieve this result; or is the claim required to recite an algorithm to achieve the software-implemented result to avoid the application of 112(6)?
As you can see, the focus of the questions tie the case to to general-purpose computers and software-implemented inventions, and thus implicitly raises overlay questions of subject matter eligibility. A group of law professor led by Mark Lemley have also filed an amicus brief in support of rehearing in Dyfan.
There is a reason Congress limited functional claiming in 1952. And that reason applies with particular force in the software industry. Many of the problems with abuse of software patents can be traced to the fact that we historically allowed patentees to claim functions, not implementations. It is broad functional claiming that leads to assertions that every part of a complex technology product is patented, often by many different people at the same time. It is broad functional claiming that puts stars in the eyes of patent plaintiffs, who can demand huge royalties on the theory that there simply is no other way to implement the technology they have patented. And it is broad functional claiming that makes most of the resulting patents invalid, since even if ten programmers developed ten different algorithms to solve a problem only one of them could be the first to solve the problem at all.
Williamson reined in those abuses by setting a clear rule: patentees can’t avoid section 112(f) simply by picking a magic word other than “means.” The panel opinion directly contradicts Williamson. This Court should grant en banc rehearing to resolve the conflict
In VDPP, the defendant (Vizio) asks the following questions in its petition:
May a claim term that connotes structure to one of skill in the art nonetheless require means-plus-function treatment because the structure it connotes is not sufficient for performing the functions the structure is recited as performing
Must the proponent of means-plus-function treatment of a claim term that does not include the word “means” adduce extrinsic or other evidence beyond the language of the claim itself, in order to meet its burden of production in rebutting the Williamson presumption—or may the proponent satisfy its burden by showing that on its face, the claim does not recite sufficient structure?
May the algorithmic-disclosure requirement that this Court has erected as a bulwark against purely functional claiming for computer-implemented inventions be evaded by reciting in a claim, rather than the specification, a generic “processor adapted to” perform claimed functions?
The court decisions lack some clarity as to what it means to “recite sufficiently definite structure.” Is this linked to the definiteness test of 112(b)?
It is unclear what “evidence” is required for a court to overcome the presumption — in particular, must a court always look outside the patent document itself?
How should all this be handled by the USPTO during ordinary prosecution?
Texas HB20 treats social media platforms as common carriers, especially those with very large number of users and market dominance. For its purposes, the law focuses on platforms with more than 50 million US monthly users and has a number of disclosure requirements. But, the heart of the new law is its prohibition on “censorship.”
CENSORSHIP PROHIBITED. (a) A social media platform may not censor a user, a user’s expression, or a user’s ability to receive the expression of another person based on: (1) the viewpoint of the user or another person; (2) the viewpoint represented in the user’s expression or another person’s expression; or (3) a user’s geographic location in this state or any part of this state.
“Censor” means to block, ban, remove, deplatform, demonetize, de-boost, restrict, deny equal access or visibility to, or otherwise discriminate against expression.
HB 20. The rule has a few exceptions. Censorship appears OK if done to protect intellectual property rights; based upon a request from “an organization with the purpose of preventing the sexual exploitation of children and protecting survivors of sexual abuse from ongoing harassment” or if user expression “directly incites criminal activity or “consists of specific threats of violence targeted against a person or group because of their race, color, disability, religion, national origin or ancestry, age, sex, or status as a peace officer or judge.” The law creates a private right of action for a censored user and also authorizes the state Attorney General to bring action.
The new law was passed by the Republican dominated Texas House and Senate and signed by Gov. Abbott back in 2021. But, before the law became effective a Federal District Court entered a preliminary injunction against its enforcement. Ordinarily, appeals are only proper after final judgment. One exception though is that a district court’s decision regarding a preliminary injunction is ordinarily immediately appealable. And so the state of Texas has appealed the Preliminary Injunction to the 5th Circuit.
The news over the past two weeks: On May 9, the 5th Circuit heard oral arguments and two days later issued a 1-sentence decision staying the preliminary injunction pending appeal (as the State requested). Here, the judges have not issued their final decision on whether the preliminary injunction was proper, but the stay suggests that their final decision will also favor Texas since a key element of relief here is likelihood of success on the merits. Those opposing the law have filed an emergency request with the US Supreme Court to reinstate the preliminary injunction during the appeal. Justice Alito is assigned to the Fifth Circuit region and so is set to decide the emergency petition–however, the full court could choose to weigh-in. Briefing in the SCOTUS case from Texas is due on May 18.
So to be clear, the decisions thus far have all focused on preliminary relief — whether the law can be enforced while the trial & appeal is ongoing.
In prior cases, the Court has treated social media has an important avenue for speech. In Packingham v. North Carolina, 137 S. Ct. 1730 (2017), for instance, the court found that prohibiting prior sex offenders from all social media violated those individuals speech rights since social media is the “modern public square.” Id. Here though, it is the social media platforms seeking the right to discriminate freely against viewpoints.” Texas presents the argument that social media platforms are not speaking through their editorial role, but rather are taking technological actions to present the speech of others. Of course, publishing and dissemination of speech are also protected by the First Amendment, and those opposed to the law present this as an open-and-shut case.
From the moment users access a social media platform, everything they see is subject to editorial discretion by the platform in accordance with the platforms’ unique policies. Platforms dynamically create curated combinations of user-submitted expression, the platforms’ own expression, and advertisements. This editorial process involves prioritizing, arranging, and recommending content according to what users would like to see, how users would like to see it, and what content reflects (what the platform believes to be) accurate or interesting information.
The Supreme Court has denied certiorari in the pending case of PersonalWeb Techs. v. Patreon. The case questioned the unique patent-law preclusion doctrine known as the “Kessler doctrine.” I previously argued that the court should hear the case and clarify the law. On the same day, the court also denied petitions in Universal Secure Registry LLC v. Apple Inc. (eligibility) and Cisco Systems, Inc. v. SRI International, Inc. (willfulness).
In Olaf Sööt Design v. Daktronics, the patentee argues that unduly aggressive claim construction undermined its 7th Amendment jury trial right. This case argues against 02Micro‘s requirement that any disputed term be construed by the court. In a new filing, the US Solicitor General has recommended against certiorari — concluding that it is the Judge’s role to construe the claims.
We are still waiting for a Gov’t brief in the pending eligibility case of American Axle & Manufacturing, Inc. v. Neapco Holdings LLC. The court requested the CVSG brief on May 3, 2021–more than a year ago. Pending follow-on cases include Ameranth, Inc. v. Olo, Inc., Spireon, Inc. v. Procon Analytics, LLC and Interactive Wearables, LLC v. Polar Electro Oy.
The parties are also awaiting the Gov’t CVSG brief in Apple Inc. v. Qualcomm Incorporated (licensee appellate standing) and Amgen Inc. v. Sanofi (written description requirement).
Hyatt v. USPTO challenges the district court’s APA trial procedures as part of his effort to force the Patent Office to issue patents for applications that have been pending for decades.
Top six pending cases:
Eligibility: American Axle & Manufacturing v. Neapco Holdings – pending petition for writ of certiorari awaiting CVSG amicus brief from Gov’t.
Written Description: Amgen v. Sanofi – pending petition for writ of certiorari awaiting CVSG amicus brief from Gov’t.
Appellate Standing: Apple . Qualcomm – pending petition for writ of certiorari awaiting CVSG amicus brief from Gov’t.
Nexus Requirement for Secondary Considerations: Zaxcom, Inc. v. Lectrosonics – pending en banc petition before the Federal Circuit.
Deference to Examiner on Definiteness: Nature Simulation Systems Inc. v. Autodesk, Inc. – pending en banc petition before the Federal Circuit.
Level of Possession for WD negative claim limitations: Novartis Pharmaceuticals v. Accord Healthcare Inc. – pending en banc petition before the Federal Circuit.
Following a failed en banc petition, famed inventor Gilbert Hyatt hired a new Supreme Court counsel (the famed Erwin Chemerinsky) who has now filed a petition for writ of certiorari focusing on standards for dismissing Administrative Procedure Act (APA) claims.
According to the USPTO, there are a couple of hundred patent applications still pending that were filed prior to the June 1995 patent term transformation (GATT). Of those, 99% list Gilbert Hyatt as an inventor. Hyatt is known for being tenacious. He does not give up easily. But, his filings argue that the USPTO is largely to blame for the delays.
In particular, Hyatt provided testimony of various former PTO officials of a no-patent-for-HYATT policy — “a secret agency policy to block issuance of his applications as patents, regardless of the merits of his patent claims.” The PTO created a Hyatt Unit of examiners who repeatedly referred to Hyatt as a “submariner” and tracked Hyatt applications using software they called the “submarine detector.” The group apparently distributed the shallow-fake image below depicting Hyatt applying Ted DiBiase’s finishing move – the Million Dollar Dream.
In 2018, Hyatt filed an Administrative Procedure Act (APA) suit seeking an order requiring “bona fide examination of his applications.” The lawsuit sought review under both Section 706(1) and 706(2).
The reviewing court shall—
(1) compel agency action unlawfully withheld or unreasonably delayed; and
(2) hold unlawful and set aside agency action, findings, and conclusions found to be (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; . . .
5 U.S.C. § 706. The district court sided with the USPTO with a sua sponte summary judgment order — finding that the USPTO was already working diligently on the applications based upon its recent filing of “numerous office actions on plaintiff’s applications.” In the process, the district court (1) based its decision upon facts already developed in the administrative record and without following the usual summary judgment approach of drawing every reasonable inference in favor of Respondents; and (2) concluded that summary judgment was proper because Hyatt could not satisfy the extraordinary “mandamus standard” that the court concluded was required to prove a Section 706(1) or (2) case. These two rulings form the basis of Hyatt’s newest petition for writ of certiorari.
Petitioner Gilbert Hyatt brought this action to challenge the Patent and Trademark Office’s secret rule, attested to by former agency officials and reflected in its official actions, to deny him further patents irrespective of the merit of his applications. After finding that Hyatt had plausibly alleged this rule’s existence, the district court sua sponte entered summary judgment against him, notwithstanding clear disputes of material fact as to the agency’s actions. Expressly holding that the ordinary summary judgment standard of Federal Rule of Civil Procedure 56 does not apply in agency cases, the district court drew inferences, made credibility determinations, and decided fact disputes in favor of the agency and against Hyatt. It also held that, because there was no basis to “compel agency action unlawfully withheld or unreasonably delayed,” 5 U.S.C. § 706(1), the agency’s rule could not be “h[e]ld unlawful and set aside” as “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” id. § 706(2). The Federal Circuit upheld the district court’s decision.
This Court should grant review to decide:
1. Whether the ordinary summary judgment standard of Rule 56 applies to review of agency action, as held by the First, Fifth, Ninth, and District of Columbia Circuits.
2. Whether the mandamus standard of Norton v. S. Utah Wilderness Alliance, 542 U.S. 55 (2004), applies to claims seeking to set aside agency action under 5 U.S.C. § 706(2).
[Petition]. On the second question, in Norton, the Supreme Court held that the mandamus standard applies when seeking an order under 706(1) to compel some administrative action. Hyatt argues that an ordinary legal standard should apply to 706(2) when seeking a declaration that the agency’s past actions were arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.”
The setup here is somewhat parallel to Kappos v. Hyatt, 566 US 431 (2012). In that decision, the Supreme Court held that Hyatt had a right to de novo consideration of evidence presented in a Section 145 civil action even for factual findings that had already been made as part of the prior administrative review.
The Federal Circuit’s new decision in Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc. (Fed. Cir. 2022) denies appellate jurisdiction over a case where the PTAB decision involves a wholistic judgment involving non-appealable issues (time-bar vacatur of institution) and appealable issues (sanctions award). Judge Newman dissented. In my mind, the could could have logically separated its decision to focus on the sanctions issue and decide whether sanctions decision to decide whether the dismissal was appropriate and sufficient.
This case has been up and down several times. The docket includes a final written decision cancelling Bennett’s claims while also awarding monetary sanctions against Atlanta Gas for failed to update its filing regarding Real Parties of Interest (RPI). But, those decisions were later vacated by the Board itself and the proceeding terminated based upon a new interpretation of the time-bar under 35 U.S.C. § 315(b). The Board eventually concluded that termination would “most effectively resolve the issues on remand by operating as a sufficient sanction while also conforming this Decision to current Office policy.”
The problem here is that time-bar issues are not appealable institution decisions. Thryv, Inc v. Click-To-Call Technologies, LP, 140 S. Ct. 1367 (2020). On the other hand, award or denial of sanctions are properly appealable.
On appeal, the Federal Circuit recognized that sanctions were relevant to the “multifaceted” termination decision, but ultimately concluded that the time-bar issues were “central” and “the core of the Board’s decision.” As such the court found that it lacked jurisdiction over the appeal. The majority distinguishes this case from a potential appeal over “purely a sanctions decision over which we ordinarily would have jurisdiction.” Dismissed for lack of appellate jurisdiction.
The majority opinion was written by Judge Stoll and joined by Judge Lourie.
Judge Newman wrote in dissent and explained that the appellate filings here had been careful to focus on the sanctions aspect of the order. “The Sanctions Order is the only issue on appeal.”
Here the agency imposed the sanction of cancellation of extensive administrative proceedings and their final decisions of patent invalidity, which final decisions had been appealed to the Federal Circuit and affirmed with issuance of the mandate on patent invalidity. We surely have jurisdiction to receive appeal of the agency action vacating all these proceedings and decisions, and purportedly including vacatur of decisions of the Federal Circuit. Our appellate jurisdiction is surely within our statutory assignment of judicial review of decisions of the PTAB.
Missouri Senator (and my former Mizzou Law Colleague) Josh Hawley has introduced S.4171 a modest copyright proposal that would substantially reduce copyright term to 56 years (28 years if holder fails to timely file for renewal). Current Copyright term is significantly longer and does not require renewal to stay in force.
Life of the author + 70 years.
For works-made-for-hire or anonymous works 95 years from first publication or 120 years from creation (whichever expires first).
The proposal is retroactive, but only if the owner fits has a market capitalization of $150 billion and operates in the industries of “Arts, Entertainment, and Recreation” or “Motion Pictures and Videos.”
Hawley Proposed Bill. In the U.S., about 70 companies fit the market cap requirement, including Sen. Hawley’s stated target Disney.
Claim preclusion and issue preclusion are conceptually difficult, but the Federal Circuit has further confused preclusion doctrines in its patent law jurisprudence. In a series of recent decisions, the appellate court improperly created and then expanded upon a separate-and-distinct form of res judicata that it labels the Kessler Doctrine. We argued recently that this expansion is in error and should be eliminated as an improper destabilization of settled res judicata principles.[1] In a recent amicus filing, the United States Solicitor General agreed that the Federal Circuit’s precedent is in error.[2] Despite that core agreement, the SG brief is rife with misleading guidance. The SG asserted the non-legal maxim “two wrongs make a right” to effectively conclude that the Kessler expansion error was rendered harmless by compounding errors in the court’s claim preclusion doctrine. The SG’s brief implicitly calls for a wholesale reevaluation of preclusion doctrine rather than addressing the issues at hand. The brief includes other doublespeak. At one point, for example, the SG argues that Kessler remains “practically significant” and “relevant as a practical matter.” Later, the same document concludes that the question presented—i.e., the viability of Kessler—“does not have practical importance.” Of course, the law of judgments remains critically important to both ensure justice and stability.
On May 12, 2022, the Supreme Court is set to decide whether to move forward with the pending case of PersonalWeb Technologies, LLC v. Patreon, Inc., No. 20-1394 which focuses on the Federal Circuit’s aforementioned doctrinal expansions.
Kessler and its Progeny: Kessler v. Eldred is an old and largely dormant 1907 Supreme Court case permitting a manufacturer to bring an equity action to stop an infringement lawsuit against its customers.[3] The manufacturer (Kessler) had already won on non-infringement grounds against the patentee (Eldred), thus freeing Kessler to continue freely commercialize his product. The Supreme Court saw the subsequent lawsuit against Kessler’s customers as an affront to Kessler’s right to manufacture and sell as guaranteed by the non-infringement judgment.[4] A lot has happened in procedural law 1907. Some of the relevant changes here include the merger of law and equity; adoption of the Federal Rules of Civil Procedure and its expansion of claim preclusion under the broader “transaction or occurrence” test; adoption of the Declaratory Judgment Act and its expanded use in counterclaims; and allowance of non-mutual issue preclusion, especially in the defensive setting. These changes are major, but they had had all been recognized as the Restatement (Second) of Judgments was being adopted in the early 1980s. In the 40 years since, the law of judgments has remained remarkably stable, with the courts adopting the stated principles of the Restatement embodied in the two preclusion principles of claim and issue preclusion.
But, the Federal Circuit has taken the law of judgments on a major tangent: Particularly, the court has identified a third form of preclusion, the Kessler doctrine, that it offers as separate and distinct from standard principles of preclusion. The court’s Kessler doctrine operates applies to bar litigation in situations where these traditional forms of preclusion do not. Despite its references to the 1907 decision, the appellate court’s Kessler decisions are also unmoored from that original precedent. In particular, the court has applied Kessler to situations where the issue of infringement was not actually litigated or even decided; as well as apply non-mutually. The effective approach is an odd blend of issue preclusion and claim preclusion where the due process safeguards of each are relaxed or removed.
The effect of judgment is inherent to every litigation, and the confusion created by the Federal Circuit in these cases is ripe for resolution.
= = =
[1] See, Dennis Crouch and Homayoon Rafatijo, Resorbing Patent Law’s Kessler Cat into the General Law of Preclusion, 55 Akron L. Rev. 51 (2022). We argue that the newly expanded doctrine is improper for several reasons. Most pointedly, the Supreme Court has chastised lower courts from fashioning new rules of preclusion “unmoored from the two guideposts of issue preclusion and claim preclusion.” Lucky Brand Dungarees, Inc. v. Marcel Fashions Grp., Inc., 140 S. Ct. 1589, 1595 (2020).
Oral arguments in the AI-inventorship case of Thaler v. Vidal are set for June 6, 2022. Prof. Ryan Abbott is set to argue on behalf of the patent owner (and AI creator) Stephen Thaler. Assistant US Attorney Dennis Barghaan will argue on the USPTO’s behalf.
Thaler developed an AI that he calls DABUS. DABUS apparently created two inventions–a “neural flame” and a “fractal container.” But, Thaler refused to name himself as inventor. Rather, he says that it was DABUS who did the inventing. But, the PTO refused to issue the patent without a human listed inventor. After being rejected by the PTO, Thaler filed a civil action in the E.D. Va. That court dismissed the case–holding that a non-human device cannot quality as an “inventor.” Abbott and Barghaan litigated the case below as well.
The question on appeal:
As stated by Thaler: “whether an AI-Generated Invention is patentable.”
As stated by the Gov’t: Whether “an artificial intelligence device comprised solely of source code can[] qualify as an ‘inventor’ under the Patent Act.”
Lots of folks might resist Thaler’s suggestion that the AI is the one who invented, but at this dismissal stage of the litigation that fact is procedurally assumed to be true. Both sides in this case have good arguments, but we should probably be troubled if the result is that “two otherwise patentable inventions cannot receive patent protection” despite the statutory statement that “[p]atentability shall not be negated by the manner in which the invention was made.” 35 U.S.C. 103.
Most of the Orange Book patents do not cover a novel active ingredient or new drug. Rather, most are new methods of treatment or formulations. When a drug is covered only by method-of-treatment claims, that means that generic sales of the active ingredients does constitute patent infringement, unless the sales are somehow inducing folks to perform the method. This gets a bit complicated when a drug has multiple therapeutic uses, only some of which are patented. Obviously, generic versions should be permitted for the non-patented uses. But, we know that there is going to be a lot of substitution at the retail level because of the price differential between the brand & generic.
Skinny Label: Congress thought through this problem (a little bit). The basic approach is that the Brand (Patent Owner) must tell the FDA (under penalty of perjury) which of its labelled & approved uses are protected by patent. When approving a generic version, the FDA will respect the patent by carving-out the patented uses for the generic’s “skinny label.” Of course, doctors, pharmacists, and patients all know that the generic version is the same drug at a lower price and so go ahead and substitute the generic version even for the patented uses. In these cases we’re talking about many millions of dollars in sales. That means we have very sophisticated parties on all sides–everyone knows what is happening.
The statute does not create any express ‘safe harbor’ for the generic manufacturer against liability for patent infringement. Certainly, the manufacturer would be liable for inducement if it encouraged off-label infringing use of its product. But, does the manufacturer need to take a more active role in discouraging infringing use?
This situation was litigated most recently in GlaxoSmithKline LLC v. Teva Pharm. USA, Inc., 7 F.4th 1320 (Fed. Cir. 2021), en banc denied at GlaxoSmithKline LLC v. Teva Pharm. USA, Inc., 25 F.4th 949 (Fed. Cir. 2022). GSK sells the beta blocker carvedilol labelled for three uses:
treatment of congestive heart failure
treatment of hypertension
treatment of left ventricular dysfunction following myocardial infarction
All three uses were patented, but by 2007, patents covering the second and third uses had expired. At that point, Teva received approval for its generic version, but with a skinny label that carved-out the congestive heart failure usage. The procedural posture of the case is somewhat confusing, but the Federal Circuit eventually sided with the patentee–holding that Teva’s skinny-label along with other practices induced infringement (i.e., encouraged folks to use it for congestive heart failure).
In a recent filing, Teva’s attorney William Jay (Goodwin Proctor) indicated that Teva plans to petition the Supreme Court for writ of certiorari in the case. (Request for Extension). If Teva’s request for extension is granted, the petition will be due July 11, 2022 with any amicus in support due in early August. Teva’s failed en banc petition provides a guide for questions that it will likely ask in its petition:
(1) Can the generic manufacturer nonetheless be held liable for induced infringement based on evidence that would be available in every carve-out case—the skinny label itself and product materials that describe the generic drug product as the AB-rated generic equivalent of the brand product, but do not even mention the patented method?
(2) Even if the generic manufacturer were found to have encouraged infringement, can it be held liable for infringement that it did not cause—e.g., if the direct infringer undisputedly did not see the communication that supposedly encouraged infringement?
If you have time, I would recommend attending the USPTO’s Virtual Instructor Led Training (vILT). The training is great background for patent prosecutors because it is typically identical to what is provided to patent examiners. The Office is working through a multi-part course on how it examines 35 U.S.C. § 103 and the next 2-hour course is called Obviousness Part 2: “Writing Rejections.”
How to establish a prima facie case
Rationale for combining prior art
Communicating a rejection
Although it is online, the PTO is still limiting enrollment because it is an interactive course. For questions email vILT@USPTO.GOV or go to this link. Part 1 covered obviousness rejections and you can see the materials here. Part III will focus on “examining evidence.”
The Administrative Conference of the United States (ACUS) is an independent federal agency that’s charged with recommending improvements to administrative process and procedure. The position of Chairman is currently vacant, so the Vice-Chairman, Matthew Lee Wiener, is serving as Acting Chair. A key aspect of ACUS is soliciting input from the public.
Since at least the late 1980s, concerns have been raised that the high cost of
patent litigation deters small- and medium-sized enterprises, including
those owned by traditionally underrepresented groups, from seeking
to enforce their patents. Policymakers, scholars, and organizations have studied
whether a small-claims procedure is needed for resolving patent disputes.
They have reached different conclusions and proposed different actions.
The Department of Commerce has also considered the possibility of a
small claims patent court. Most recently, in December 2012, the USPTO
issued a Federal Register notice requesting public comment on ‘‘whether
the United States should develop a small claims proceeding for patent
enforcement’’ (77 FR 74830 (Dec. 18, 2012)).
Given ongoing interest in the topic, USPTO has engaged ACUS to conduct
an independent survey and analysis of issues associated with and options to
consider in designing a small claims patent court. A report resulting from the
study will ultimately be submitted to Congress and will address, among other
topics, whether there is a need for a small claims patent court, the feasibility
and potential structure of such a court, and the relevant legal, policy, and
practical considerations in establishing a small claims patent court.
Although ACUS is seeking all comments on the topic, they’ve specifically pointed out these areas of interest:
1. Whether there is need for a small claims patent court;
2. The policy and practical considerations in establishing a small
claims patent court;
3. The institutional placement, structure, and internal organization of a
potential small claims patent court, including whether it should be
established within the Article III federal courts, as or within an Article I court,
or as an administrative tribunal;
4. The selection, appointment, management, and oversight of officials who preside over proceedings in a potential small claims patent court;
5. The subject-matter jurisdiction of a potential small claims patent court,
whether participation in such proceedings would be mandatory or
voluntary, and whether parties can remove cases to another administrative
tribunal or federal court;
6. The procedures and rules of practice for a potential small claims
patent court, including, as relevant, pleadings, discovery, and alternative
dispute resolution;
7. The remedies that a potential small claims patent court would be able to
provide;
8. The legal effect of decisions of a potential small claims patent court; and
9. Opportunities for administrative and/or judicial review of small claims
patent court decisions.
While I forsee lots of issues associated with a small claims patent court, I would imagine that the issue preclusion issues arising from an invalidity determination would be need especially carefully thought out, as well as whether patent owners could use this mechanism to bring large quantities of suits against consumers/end users who lack the resources to adequately defend themselves against a patent infringement claim.
Comments are due by July 5, 2022, and can be submitted at “info@acus.gov,” with “Small Claims Patent Court Comments” in the subject line of the message. Remember that submitted comments may be made publicly available.
Credit to Jeremy Graboyes for bringing this to my attention.
