Gogo Continues In-Flight Services as Federal Circuit Rejects SmartSky’s Preliminary Injunction Appeal

by Dennis Crouch

In SmartSky Networks, LLC v. Gogo Business Aviation, LLC, No. 2023-1058 (Fed. Cir. Jan. 31, 2024), the Federal Circuit has affirmed a lower court denial of a preliminary injunction sought by the patentee SmartSky against Gogo.  SmartSky sued Gogo in 2022 for patent infringement, alleging that Gogo’s 5G wireless network infringed several of SmartSky’s patents related to in-flight internet wireless connectivity.  See U.S. Patent Nos. 9,312,947, 11,223,417, 10,257,717, and 9,730,077.  Along with its complaint, SmartSky moved to preliminarily enjoin Gogo from providing its in-flight network.  SmartSky argued it had shown a likelihood of success on the merits and that it would suffer irreparable harm without an injunction, but the D.Del. district court Judge Gregory Williams disagreed.  A grant or denial of preliminary injunctive relief can be immediately appealed, but the patentee’s appeal has also failed.

The preliminary injunction motion was associated with a new 5G network that Gogo had announced in 2019.  That network is, according to Gogo, “still in a pre-launch phase.”  Although customers are not yet actively using the service, the network itself is actually complete and the final step is including the chipsets within the planes.  This aspect of the case was the most critical for the Federal Circuit who concluded that the current status of Gogo’s operation was not definite enough to create irreparable harm.



Race to the Finish: Timing Battles in Parallel IPR and District Court Litigation

by Dennis Crouch

The new petition for certiorari filed by Liquidia raises some interesting questions about the ongoing race between inter partes review proceedings and district court litigation.  Liquidia Techs v. United Therapeutics Corp., 23-804 (US), on petition for writ of certiorari from United Therapeutics Corp. v. Liquidia Techs., Inc., 74 F.4th 1360 (Fed. Cir. 2023).

UTC won its infringement suit against Liquidia with a holding that its patent covering treprostinil administration by inhalation were valid and infringed. (US10716793).  While the appeal was pending, the PTAB sided against the patentee and found the claims unpatentable as obvious.  In the appeal, however, the Federal Circuit refused to give credence to the PTAB decision – finding that litigation was still “pending” and “non-final.” The claims had not actually been cancelled yet – since the Director only issues the certificate confirming unpatentability after any appeal. Further, the Federal Circuit concluded that IPR decisions do not have issue-preclusive (collateral estoppel) effect until the decision is affirmed on appeal, or the parties waive their right to appeal. Citing XY, LLC v. Trans Ova Genetics, L.C., 890 F.3d 1282, 1294 (Fed. Cir. 2018).

Liquidia’s petition argues that the PTAB’s final-written decision should be given preclusive effect in parallel litigation even if an appeal is pending, just like would be done for a district court opinion. (more…)

Has Diehr been Overruled?; and How do you Prove Technological Advance

by Dennis Crouch

Ficep begins its petition for certiorari with a brilliant statement of how its patented steel manufacturing method has won numerous awards and complements for its innovative approach, been copied by competitors, and led to numerous successful sales. Despite these clear indicia of patentability, the Federal Circuit invalidated claims — affirming the lower court’s judgment on appeal.

That the invention was an important real-world manufacturing innovation was, as a factual matter, thoroughly established. The improvement was touted as enabling vastly more efficient and superior manufacture of components – not just by Petitioner’s experts, but also in the defendant’s advertising. There was industry recognition applauding the “innovation.” There was copying by competitors. There was successful litigation and licensing. And there was specific customer demand for the improvement to the manufacturing process. That is, every objective indicium of inventiveness that this Court has identified was present in the technological, traditionally patent-eligible, setting of manufacturing lines.

Ficep petition for certiorari.  But, in the Federal Circuit’s view, facts are confined to the obviousness analysis, and Ficep’s patent is invalid because it is directed to an abstract idea. Ficep Corp. v. Peddinghaus Corp., No. 2022-1590, 2023 WL 5346043 (Fed. Cir. Aug. 21, 2023).  The petition goes on to ask three questions:

  1. Does a claim directed to patent-eligible subject matter (here, manufacturing) nevertheless become ineligible as “abstract” if the process is improved using automation? (and should an “abstract-idea” behind a claim to a patent-eligible process be identified and, if so, how and at what level of abstraction?)
  2. What is the appropriate standard for determining whether a claim is “inventive,” conferring eligibility under Alice Step 2, including whether objective evidence of inventiveness and technological improvement is relevant?
  3. Is either what a claim is “directed to” and whether that is abstract, or whether a claim is “inventive” as articulated in Alice step 2, only for a judge to decide as a legal matter or does it include fact issues and, if the latter, are they for a jury?

SCT No. 23-796.  This case again highlights the need for clearer guidance from the Supreme Court on when a patent claim directed to an industrial process should be considered an abstract idea and therefore patent ineligible under 35 U.S.C. § 101.

For its part, the Federal Circuit applied the two-step test for patent eligibility established in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014). At step one, the court determines whether the patent is “directed to” a patent-ineligible concept like an abstract idea. If so, then at step two the court searches for an “inventive concept” beyond the ineligible concept.

Here, the Federal Circuit held Ficep’s patent claims to be directed to the abstract idea of “extracting and transferring information from a design file to a manufacturing machine.” The court characterized the focus of the claims as “automating a previously manual process” that a human operator used to perform. Further finding no inventive concept at step two, the Federal Circuit affirmed the district court’s ruling that the claims were patent ineligible under § 101.

In its cert petition, Ficep contends that the Federal Circuit misapplied Alice in a way that conflicts with precedent and casts doubt on patents for industrial innovations. Ficep argues that its claims are directed to an eligible manufacturing process under Diamond v. Diehr, 450 U.S. 175 (1981), which held that a rubber curing method did not become patent ineligible simply because one step used the Arrhenius equation to automate timing of when to open the presses. According to Ficep, the Federal Circuit improperly focused on one aspect of its claims—data extraction and transfer—rather than evaluating the claims as a whole, which require physical manufacture of components. Ficep also presented extensive evidence of its patented system’s superiority over prior manufacturing methods, which it contends demonstrates a technological advance under step two of Alice that the Federal Circuit wrongly dismissed.

Lets look at the claim at issue for just a moment. Claim 7 below claims an “apparatus for automatic manufacture of an object” and requires, among other things, “at least one manufacturing machine [that] manufactures the components” after receiving dimensions from a computing device.  Although the court agreed that the claim requires hardware, the court noted that the actual advance here is simply automating the previously manual process of transferring information from a CAD design model to a manufacturing machine.  The court found that, in a general sense, that automation process is an abstract idea.  And, that the patent claims offer no specific technological improvement that would transform the ineligible idea into a patent eligible.  But, the patentee here argues that the closest Supreme Court case on point is not Alice, but rather Diehr, which would favor eligibility.

7. An apparatus for automatic manufacture of an object, comprising:

a computing device adapted to create a design model of an object having multiple individual components, at least two of the individual components defining an intersection at which the two components are in contact with one another;

at least one programmable logic controller in communication with the computing device and with at least one manufacturing machine;

a receiver associated with the programmable logic controller for receiving the design model of the object;

a database unit adapted to store the design model received at the receiver;

a processor which is associated with the programmable logic controller and extracts from the design model a plurality of dimensions of components which define a plurality of components of the object;

wherein the processor identifies a plurality of intersection parameters which define the intersection of the two components;

wherein the processor extracts from the design model the intersection parameters;

a transmitter associated with the processor for transmitting the intersection and machining parameters and the component dimensions from the programmable logic controller to the at least one manufacturing machine; and

wherein the at least one manufacturing machine manufactures the components based at least in part on the transmitted component dimensions and on the transmitted intersection and manufacturing parameters.

In focusing on Diehr, the patentee here is raising a difficult issue that the the  Supreme Court’s landmark 1980 decision is effectively dead, even though it has not been rejected or repudiated by the Supreme Court. Rather, it was favorably cited in the Supreme Court’s recent trio of Bilksi, Mayo, and Alice.

Zombie Precedent: Ficep contends that its claims are analogous to the patent-eligible claims in Diamond v. Diehr for a rubber curing method that used the Arrhenius equation to calculate when to automatically open the presses. Ficep argues that like Diehr, its claims as a whole are directed to an eligible manufacturing process—namely manufacturing steel building components—even if one aspect involves automation based on extracting data like intersection parameters. But, the lower courts are not applying Diehr because they see that case as in conflict with the more recent trio. In its petition, Ficep asks the Supreme Court to make a statement on this issue — either confirm or overrule Diehr.

On the inventiveness issue that I started with in this post, the patentee here asks for guidance on Step-2 of Alice/Mayo and for a recognition that technological advance is a fact question for a jury to decide alongside parallel questions in obviousness and anticipation analysis.

= = =

The patentee-petitioner is represented by Matthew Lowrie and his team from Foley & Lardner.  Peddinghaus’s responsive brief is due Feb 23, 2024.  Their attorneys have not filed an appearance, but I expect they will still be represented by Nathaniel Love and his Sidley Austin team that includes Stephanie Koh and Leif Peterson.

Federal Circuit on TM Law’s Information Matter Doctrine

by Dennis Crouch

The Federal Circuit has just reissued this important trademark decision as precedential. In re GO & Associates, 22-1961 (Fed. Cir. 2023/2024)

In a non-precedential 2023 decision, the Federal Circuit affirmed a decision by the  Trademark Trial and Appeal Board (TTAB) refusing to register “Everybody vs Racism” as a trademark for apparel, tote bags, and services promoting racial justice advocacy. The court found substantial evidence supported the TTAB’s conclusion that the slogan fails to function as a source identifier for the applicant GO & Associates’ goods and services.  Although the outcome here supports the informational matter doctrine barring registration, the court is clear that political slogans and other informational matter can be protected as trademarks so long as the applicant shows that they actually function as a trademark. (more…)

Guest Post by Prof Burstein: Sanctions & Schedule A

By Sarah Burstein, Professor of Law at Suffolk University Law School

Jiangsu Huari Webbing Leather Co., Ltd. v. Joes Identified in Schedule A, No. 1:23-cv-02605 (SDNY Jan. 2, 2024), ECF 76.

The Schedule A litigation phenomenon continues apace in the Northern District of Illinois, a court that has become, in the words of Judge Seeger, “an assembly line for TROs.” But Schedule A litigation is not confined to Chicago. It has spread, perhaps most notably to the Southern District of Florida and the Southern District of New York.

One recent decision out of New York merits closer attention. In this case, as in most Schedule A cases, the plaintiff was able to obtain an ex parte TRO that included an order instructing Amazon to freeze the defendants’ seller accounts. The order also required the plaintiff to post a bond of $20,000 “for the payment of any damages any person may be entitled to recover as a result of an improper or wrongful restraint ordered.”

The plaintiff sued 163 defendants, alleging that each was liable for infringing a utility patent directed towards “a rectangular-shaped buckle-and-belt mechanism” for “an outdoor exercise product.”

At the TRO stage, the plaintiff’s “infringement evidence chart” consisted of a series of screenshots (many of them low-resolution screenshots) of the accused products. Here’s an example of all of the evidence submitted in that chart with respect to one of the defendants:

As per usual in a Schedule A case, the defendants did not find out about the case until after their accounts were frozen. When the plaintiff moved to extend the TRO, multiple defendants appeared to object. Judge Rochon refused to extend the TRO and the plaintiff voluntarily dismissed the case.

Two of the defendants, Hyponix and NinjaSafe, moved for bond damages, sanctions, and fees. They argued that the plaintiff had filed to conduct a sufficient pre-suit investigation and had committed various acts of litigation misconduct. They further argued that they each suffered damages from being wrongfully enjoined.

Judge Rochon granted the defendants’ motions for bond damages but denied their motions for sanctions and fees. She agreed that the moving defendants had been wrongfully enjoined because “Hyponix has pointed to at least four elements of claim 1 of the ’673 patent that are not present in its product” and “Ninja Safe has also shown that its products may not infringe claim 1 and has raised questions of invalidity.” Accordingly, Judge Rochon granted each moving defendant bond damages, though less than they asked for: $3,682.28 for Hyponix and $14,641.51 for NinjaSafe.

But she refused to grant sanctions or fees, despite being “troubled by Plaintiff’s conduct in this case.” In particular, Judge Rochon noted the “‘clear discrepancies’ between the protected elements of the ’673 Patent and the products of many of the parties against which Plaintiff secured a TRO.” She also noted other instances of “possible misconduct,” including:

  • “Plaintiff represented that most of the 163 parties were difficult to find and contact. In practice, however, contact information for many of the parties was readily available. . . . Plaintiff does not indicate that it tried with any diligence to locate these parties before seeking a TRO.”
  • “The pace and prevalence of Plaintiff’s dismissals suggest to the Court that Plaintiff used Rule 41 as part of a broader strategy to freeze the accounts of its competitors, then withdraw its claim against any party that happened to object.”
  • “Plaintiff failed to provide Hyponix with documents necessary for its defense. . . . . Plaintiff claims, falsely, that Hyponix did not request these documents.”

(Emphasis added.) Despite all of this, Judge Rochon refused to sanction the plaintiff:

Despite these concerns, the Court does not lightly award sanctions and will not do so in this case. Plaintiff holds a valid patent for its Hanging Exercise Product, its claim was colorable against at least some of the parties, and it dismissed its lawsuit voluntarily at a very early stage in the litigation (presumably in light of the issues raised by the Court at the order to show cause hearing), before any of the defendants responded to the Amended Complaint. Defendants here were made whole for their losses under the bond. Although a close question, the Court exercises its discretion to deny Defendants’ request for sanctions under its inherent powers and 28 U.S.C. § 1927. . . . To the extent that Plaintiff and its counsel engage in similar misconduct in the future, however, the Court will not hesitate to impose sanctions.

As Professor Eric Goldman noted in this blog post, “it would not be lightly awarding sanction when a plaintiff has committed so many violations.” Two additional points stand out as well.

First, the fact that some of the infringement claims might be colorable does not change the fact that the plaintiff brought numerous claims that were not—including the claims brought against the moving defendants. If the plaintiff had sued Hyponix and NinjaSafe separately, would that have changed the court’s analysis? If so, why should the fact of mass joinder insulate the plaintiff from sanctions? Especially in light of the fact that it’s far from clear that any—let alone all—of the defendants were properly joined, as they sell different products and do not seem to be actually connected in any way. See 35 U.S.C. § 299. In any case, the fact remains that this plaintiff brought many claims that were not colorable and used the machinery of the federal judiciary to wrongfully enjoin competitors. That is what should matter in the sanctions calculus, not the fact that some of the other claims (against apparently unrelated defendants) might have potentially had merit.

Second, it is true that the plaintiff dismissed the case at what would be, in a regular case, “a very early stage in the litigation.” But in a Schedule A case, the TRO seems to be the whole game. The plaintiff gets a TRO with an asset freeze, then starts making settlement demands. At that point, the defendants generally either settle or default. It appears that these cases aren’t meant to proceed any further. And as the defendants’ submissions show, significant damage can be done in these cases, even in a short period of time. (One also wonders how much money the plaintiff may have been able to extract in settlements before dismissing the case.)

In the end, the decision to sanction and to award fees is left to the discretion of the judge. And while it is encouraging to see Judge Rochon recognize the damage caused by acts that have become common in Schedule A cases (e.g., using FRCP 41 to dismiss defendants who fight back), it is discouraging to see a result that will only serve to further disincentivize Schedule A defendants from fighting back.

Once a judge grants a TRO with an asset freeze, the deck is heavily stacked against the Schedule A defendants. Defendants have strong incentives to settle, even when the cases against them lack merit. In many cases, it’s just too expensive to fight back, especially when your assets have been frozen.

If judges were willing to sanction plaintiffs—or at least shift fees—when Schedule A defendants were wrongfully restrained, that would do a lot to help level the playing field and incentivize the plaintiffs to bring better claims.

Without fee shifting or sanctions, the cost of bringing a nonmeritorious claim in a Schedule A case is virtually zero, while the harms to defendants who are wrongfully restrained—even for a short time—can be devastating. As Judge Hunt has noted, “the extraordinary remedy of freezing all [the defendants’] assets without notice” can “potentially ruin[] a legitimate business.”

Plus, as Casey Hewitt noted on Mastodon, Schedule A “defendants have no choice but to litigate, have no option to meet and confer and avoid a lawsuit . . . They did not ignore demand letters or refuse to negotiate or discuss alleged infringement.” But once they find out that their assets have been frozen, they have to “hire expensive IP litigators or they will lose their businesses.” In these circumstances, it seems like fee shifting for wrongfully enjoined Schedule A defendants should be the norm, not the exception.

Yes, it’s true that a presumption in favor of fee shifting would be a departure from normal federal court practice. But courts routinely use their discretion to grant procedural departures to Schedule A plaintiffs—e.g., email service, ex parte asset freezes, mass joinder upon conclusory (and in many cases, dubious) allegations. Perhaps it is time for judges to start using their discretion to make routine departures for Schedule A defendants, too.

Additional observations:

  1. This case is a good example of why patent litigation is a poor fit for the Schedule A litigation model. I’ve written here before about how design patent infringement is ill-suited to ex parte adjudication; so too is utility patent adjudication. If judges are going to keep allowing the Schedule A model in patent cases (and they don’t have to do so, in these cases or in any others), they should consider making it a regular practice to special masters to help analyze the infringement evidence at the TRO stage. And they should, at a minimum, require an individualized claim chart for each and every defendant.
  2. It is far from clear that Judge Rochon actually had the power to freeze these defendants’ assets in the first place. As Judge Kendall noted in a recent order, 35 U.S.C. § 284 “does not provide for the equitable relief of accounting and profits,” which is seems to be the standard basis for asset freezes in other types of IP cases. Furthermore, as Judge Seeger has noted, “Schedule A plaintiffs typically don’t request and receive equitable monetary relief” at the end of their cases, even when equitable relief is available. Other judges might be well-advised to start questioning whether they should use their discretion to keep granting these types of asset freezes, even in cases where a remedy of equitable disgorgement is actually available.

For more on the Schedule A phenomenon, see:

Judge Pauline Newman: Evaluate For Yourself

David Lat has a great new podcast with Judge Pauline Newman and asks listeners to “evaluate the 96-year-old jurist’s mental acuity for yourself by listening to this podcast.”: https://davidlat.substack.com/p/integrity-an-interview-with-judge-pauline-newman

Lat also includes several video clips for those who would like to see Judge Newman as she speaks: https://davidlat.substack.com/p/6-video-clips-of-judge-pauline-newman


USPTO Granted Remand in Important Antibody Written Description Case

by Dennis Crouch

The Federal Circuit has remanded the Xencor appeal — allowing USPTO  leadership an opportunity to re-focus on the written description requirement for both Jepson claims and means-plus-function claims in the antibody art.  I have several prior posts about the case:


Vanda Seeks Supreme Court Review on Lower Standard for Obviousness

Vanda Pharmaceuticals recently filed a petition for writ of certiorari, asking the Supreme Court to review a May 2023 decision by the Federal Circuit that invalidated claims from four Vanda patents covering methods of treating Non-24-Hour Sleep-Wake Disorder (“Non-24”) using the drug tasimelteon (Hetlioz). Vanda Pharmaceuticals Inc., v. Teva Pharmaceuticals USA, Inc., 23-768 (Supreme Court).  The district court held that all the asserted claims were invalid as obvious, and the Court of Appeals for the Federal Circuit affirmed this decision. Vanda.cert.petition


See you Soon: Three Upcoming Events

I’m looking forward to participating in three really interesting upcoming events. Hope to see some of you there!

  1. Feb 6 12noon EST – Debating Design Patent Obviousness – Streaming via Suffolk – Free Event (REGISTER HERE): The Federal Circuit has not held an en banc rehearing in a patent case since before COVID.  The first one (and only one on the docket) is the important design patent obviousness case of LKQ v. GM, with oral arguments scheduled for February 5, 2024. In the case, the accused infringer LKQ argues that the standard for design patent obviousness is too lax and thus allows for protection of many obvious designs. The primary legal hook in the case is that the flexible standard of KSR v. Teleflex should apply in design patent cases. Oral arguments will include the 11 Federal Circuit judges (absent Judge Newman) along with Mark Lemley (for the accused infringer); Joe Herriges (for the patentee GM); and USPTO Acting Solicitor Farheena Rasheed (for amicus USPTO).  On Feb 6 we’ll gather online to debate the case and its potential outcome and impact.  I will be joining Suffolk professor Sarah Burstein along with Meredith Lowry (Wright Lindsey); Darrell Mottley (Banner + Howard University); and Laura Sheridan (Google).
  2. Feb 16 – Utah IP Summit at the University of Utah (REGISTER HERE). This event has a great set of speakers from the judiciary (led by Judge Reyna) as well as academics and practicing attorneys. Thanks to Sarah Jelsema & Phil Harris and the Utah Bar for organizing what looks to be a set of really interesting topics.  I’ll be skiing at Snowbasin on the 17th – see you there! ⛷️
  3. March 7-8 – University of Missouri: AI and Government
    (REGISTRATION COMING SOON). Along with my patent work, I have also been delving deeply into AI law issues. As part of this I am helping organizing our upcoming conference here at Mizzou in Columbia Mo that is co-sponsored by MU Law, the Missouri Law Review, and also the MU Truman School of Government and Public Affairs. We’ll be focusing on broad themes of the use of AI in Government, the impact of AI on Democracy, Government Regulation of AI, and the Role of Education in Creating an AI Ready Public Sector.

See you soon!

A present assignment of future continuation applications

by Dennis Crouch

In Roku, Inc. v. ITC, the Federal Circuit has affirmed determinations by the International Trade Commission (“ITC”) favoring the patent holder Universal Electronics, Inc. (“Universal”). The most interesting part of the case for me is the assignment issue – whether the patents had been properly assigned at the appropriate time. This can become in cases like this because Universal has created a large patent portfolio that all claim back to original priority documents from more than a decade ago. While most of patents are attributable to both joint-inventors, some are only attributable to one or the other.  Here, though the Federal Circuit supported the simple approach of a “hereby assigns” transfer of rights that includes future continuations.  The decision is lacking though because the court does not ground its decision in any particular contract or property tradition.


Federal Circuit Upholds PTAB’s Obviousness Finding and Joinder Decision in CyWee v. ZTE Smartphone Patent Case

The Federal Circuit recently affirmed a ruling by the Patent Trial and Appeal Board (PTAB) in an inter partes review (IPR) filed by ZTE and joined by LG, finding claims of CyWee Group’s U.S. Patent No. 8,441,438 unpatentable as obvious. CyWee Group v. ZTE, No. 21-1855 (Fed. Cir. Jan. 18, 2024). The ’438 patent claims 3D motion-tracking technology for handheld devices like smartphones. The appeal included both IPR procedural issues and substantive patent law issues.  In siding with the PTAB, the Federal Circuit rejected CyWee’s argument that the Board should not have allowed LG to oppose CyWee’s motion to amend its claims. The court also affirmed the Board’s finding that the proposed amended claims would have been obvious over the prior art. (more…)

Apple Watch Stays on US Market, But Pulse-Ox Disabled Pending Appeal

by Dennis Crouch

Apple v. Masimo (Fed. Cir. 2024) (Apple Stay Denial)

After initially granting a temporary reprieve, the Federal Circuit has now denied Apple’s stay pending appeal of the International Trade Commission’s limited exclusion order and cease-and-desist order (“the Remedial Orders”) against Apple Watch Series 9 and Ultra 2.

The baseline approach in American patent law is that any injunction issued by the district court will stay in effect through the duration of any appeal. However, district and appellate courts regularly stay the injunction if the defendant is able to satisfy a four-factor test that largely parallels the eBay standard:

  1. whether the movant has made a strong showing of likelihood of success on the merits;
  2. whether the movant will be irreparably harmed absent a stay;
  3. whether issuance of the stay will substantially injure the other parties interested in the proceeding; and
  4. where the public interest lies.

See Nken v. Holder, 556 U.S. 418 (2009). In its analysis, the Federal Circuit simply stated that it had reviewed the factors and, although it had the power to issue a stay,  such action was not appropriate here.

Following the ITC’s exclusion order, Apple filed a request with the Exclusion Order Enforcement Branch of US Customs (EOE Branch) seeking a ruling that it could still import the Apple Watch having the Pulse-Ox feature disabled.  Although the order itself is still secret, the Federal Circuit included a remark that the EOE Branch had concluded that “Apple’s redesigned products are not subject to the Remedial Orders.” A NYT article explains that:

People who buy a new watch in the United States will still see Apple’s Blood Oxygen app on the devices, the company said. But if they tap the app, it will say the feature is no longer available.

The image below comes from Apple Briefing from last week that attempted to keep information about the redesign confidential.

Presumably, Apple will have the capability of turning the functionality back-on via system update when either the patents expire or are found invalid.

So, bottom line here is that the Apple Watch stays on the market, but only if it disables the Pulse-Oximetry functionality.  The decision here is also preliminary — Apple will still be arguing in the appellate briefing that it should have won at the ITC and that the exclusion order is improper.  That briefing will take a few months and a decision might be 1 year away.

An important note here is that the ITC case only focuses on blocking importation and post-importation sales in the US.  It does not award any money damages and it does not apply to sales of Apple Watch outside of the US.  Masimo may separately seek infringement damages in parallel Federal Court litigation and has a related ongoing trade secrets lawsuit against Apple seeking almost $2 billion in damages.

The Carrot and Stick Approach to Innovation

by Dennis Crouch

A California Court of Appeals issued a product liability decision in early 2024 that raises interesting questions about the role of both carrots and sticks in innovation policy. Gilead Tenofovir Cases, No. A165558, 2024 WL 94462 (Cal. App. 1st Dist. Jan. 9, 2024) Read It Here. I first found the Gilead case while reading the Wall Street Journal with the board editorial decrying the decision for “invent[ing] a crazy new tort.”  In particular, the appellate panel agreed that Gilead could be held liable for for delaying the development of an alternative HIV/AIDS drug (TAF) that it expected would be safer and equally effective compared to its existing drug (TDF) in order to maximize profits from TDF. Although the old drug TDF had been deemed safe by the FDA and was not itself defective, the plaintiffs allege that it was clearly much worse than the potential alternative that Gilead allegedly sidelined.  In particular, patients taking TDF suffered bone and kidney damage. In its decision, the Court of Appeal held that a manufacturer’s duty of reasonable care under Cal. Civ. Code §1714 can extend beyond the mere duty not to market a defective product, permitting a negligence claim without alleging a product defect. The court relies on Mexicali Rose v. Superior Court 1 Cal.4th 617 (1992), which held that the presence of a natural substance causing injury doesn’t negate a restaurant’s duty of care in food preparation, allowing a negligence claim despite the lack of a product defect.  The court also rejected policy considerations associated with FDA-approval and adequate warnings.  However, the court did side with Gilead with regard to a fraudulent concealment claim, holding that Gilead owed plaintiffs no duty to disclose facts about the unapproved drug TAF, which was – at the time – unavailable to plaintiffs as a treatment alternative to TDF.  The appeal assumed that the plaintiffs could prove the facts alleged above. On remand, there will likely to be a  trial where this assumption will be put to the test.

The ruling in Gilead Tenofovir Cases opens the door to lawsuits punishing companies for not innovating fast enough – a sharp contrast to the patent system’s traditional approach to encouraging innovation through potential monopoly-like profits.  This flips the normal “carrot”/”stick” innovation incentive model on its head. Patents traditionally encourage innovation by rewarding it through time-limited exclusive rights enabling high prices that “fuel . . . genius,” as President Lincoln put it. Product liability laws, conversely, attempt to deter harm by forcing manufacturers to pay for injuries caused by defective products – a “stick” incentivizing safety. By penalizing failure to innovate quickly enough with tort liability, Gilead extends this disencentive to innovation: introducing disincentives for not innovating.

As the Wall Street Journal editorial board contends, this duty could spawn lawsuits against virtually any industry for not constantly upgrading products. It also seems in tension with the prevailing legal test for defective design, which balances safety risks against factors like usefulness and cost, recognizing that perfect safety is unattainable. Still, the decision here is incremental. It is based upon California Law, and the Gilead opinion dismissed arguments that its ruling amounted to “absolute liability” or a mandate for “ever-better new products.” How these assurances square with the newly recognized duty is unclear. Perhaps tellingly, the court left open whether liability might be cut off earlier, like after clinical Phase III trials of the safer alternative drug.  The court’s idea here is that liability should only attach if the better alternative is sufficiently known or foreseeable.  Thus, the case here really is about shelving known improvements.

I wonder whether there are other negative innovation disincentives.  We have all heard the mantra “innovate or die” – This “natural” competitive incentive can be distinguished from the Gilead’s that is artificially created as a public policy choice. It is the human condition — also exemplified in larger corporate institutions — to seek reward and avoid punishment.  It makes sense then that incorporating sticks like liability fears could be a useful part of the innovation policy landscape.  This is not to reflexively endorse the Gilead approach; its wider impacts seem quite unpredictable at this point. But the decision helps us challenge the one-sided assumptions that “carrots-only” frameworks like patents best spur invention and innovation. And, that some disincentives can fit within our current framework of laws.





Ethical Infantilism in the Age of Technological Advancement

by Dennis Crouch

Martin Luther King Jr. received the Nobel Peace Prize in 1964, and I re-read his speech today — especially the portion contrasting development of science and technology against development of the human spirit.  The past 60 years have continued to reveal astonishing discoveries and invention. Yet King’s words and warnings continue to resonate because we have continued to neglect our internal realm.

Every man lives in two realms, the internal and the external. The internal is that realm of spiritual ends expressed in art, literature, morals, and religion. The external is that complex of devices, techniques, mechanisms, and instrumentalities by means of which we live.

King.  In his speech, King did not decry advances in technology, but argued that the level of attention paid to material advances should be matched by attention to moral and spiritual humanism.

Modern man has brought the whole world to an awe-inspiring threshold of the future. He has reached new and astonishing peaks of scientific success. He has produced machines that think, and instruments that peer into the unfathomable ranges of interstellar space. He has built gigantic bridges to span the seas and gargantuan buildings to kiss the skies. His airplanes and spaceships have dwarfed distance, placed time in chains, and carved highways through the stratosphere. This is a dazzling picture of modern man’s scientific and technological progress.

Yet, in spite of these spectacular strides in science and technology, and still unlimited ones to come, something basic is missing. There is a sort of poverty of the spirit which stands in glaring contrast to our scientific and technological abundance. The richer we have become materially, the poorer we have become morally and spiritually. We have learned to fly the air like birds and swim the sea like fish, but we have not learned the simple art of living together as brothers.



Improving Efficiency to Increase Competition Act: Burdens of Bayh-Dole

by Dennis Crouch

The Leading pro-IP Senators, Thom Tillis (R-NC) and Chris Coons (D-DE) recently introduced a bill focusing on patents stemming from research paid-for by federal grants. The proposed legislation, titled the “Improving Efficiency to Increase Competition Act,” would require a government study on reporting requirements related to the landmark Bayh-Dole Act of 1980.


ITC: Apple is an “Adjudicated Infringer” Improperly Seeking “Permission to Continue Infringing”

by Dennis Crouch

This article analyzes some of the latest developments in the ongoing legal battle between medical device company Masimo and tech giant Apple regarding Apple’s adjudged infringement of Masimo’s pulse oximetry patents in its Apple Watch.  The basic question is whether Masimo’s pulse-oximetry patents will be strong enough to stop the Apple juggernaut.


USPTO Guidelines: Amgen is a Nothingburger

by Dennis Crouch

The USPTO has published new examination guidelines regarding the enablement requirement for utility patent applications in light of the Supreme Court’s May 2023 decision in Amgen v. Sanofi, 143 S. Ct. 1243 (2023).  As I explain below, the primary takeaway from the published examination guidelines is that the PTO will continue business as usual — i.e., Amgen did not significantly change the law.  Still, there are, some key points to consider. Notably, the guidelines: (1) provide a reminder that enablement applies to all technology areas, not just biotech; and (2) suggests that the office may increase its assertion of the enablement doctrine against functionally defined claim limitations that are potentially directed to a large number of embodiments.

Background on Amgen v. Sanofi: In its unanimous opinion, the Supreme Court affirmed that Amgen’s broad functional claim was invalid having failed the requirements that claims must be enabled to their full scope, allowing for “a reasonable amount of experimentation.” Amgen. The claim at issue included a key broad functional element — covering all antibodies capable of binding with and disabling a particular enzyme (PCSK9).  Although the Federal Circuit commented negatively on the functional aspect of the claim, the Supreme Court noted that there is no special rule for functional claims.  Still, functional claims can often be suspect on enablement grounds because of their potential breadth that goes well beyond tech disclosed. The result then is a simple rule: broader claims require more detailed disclosure.

If a patent claims an entire class of processes, machines, manufactures, or compositions of matter, the patent’s specification must enable a person skilled in the art to make and use the entire class. . . . The more one claims, the more one must enable.

Id.  To be clear the specification is not required to “describe with particularity how to make and use every single embodiment within a claimed class.” Id.  In fact, I would posit that in most situations it is effectively impossible to describe all potential embodiments covered by a modern comprising-style patent claim. Instead of fully describing every potentiality, the court concluded that the specification must provide enough disclosure to “reliably enable a person skilled in the art to make and use all of what is claimed, not merely a subset” allowing for a reasonable amount of experimentation. Id. The threshold for enablement can often be difficult to ascertain, but here the Supreme Court made clear that Amgen’s specification was more of a research assignment than an enabling disclosure. The Court also noted that whether experimentation is reasonable depends on the context, citing Minerals Separation, Ltd. v. Hyde, 242 U.S. 261 (1916).

Two potential Points of Confusion: The Supreme Court’s analysis in Amgen introduced two potential points of confusion regarding enablement doctrine. First, while citing a litany of its own old precedent on enablement related to technologies like telegraphs and incandescent light, the Court did not explicitly reference leading contemporary Federal Circuit decisions that articulate enablement standards. Most notably, Amgen does not mention In re Wands, 858 F.2d 731 (Fed. Cir. 1988) and its seminal “Wands factors” that are regularly relied upon by patent examiners and litigants to assess if PHOSITA would need to conduct an unreasonable amount of experimentation in order to make and use the invention. These Wands factors include:

  • (A) the breadth of the claims;
  • (B) the nature of the invention;
  • (C) the state of the prior art;
  • (D) the level of one of ordinary skill;
  • (E) the level of predictability in the art;
  • (F) the amount of direction provided by the inventor;
  • (G) the existence of working examples; and
  • (H) the quantity of experimentation needed to make or use the invention based on the content of the disclosure.

Wands (noting that this is not an exhaustive list of potential factors).  Although relied upon daily in the patent system, the Supreme Court did not reference the Wands factors in its analysis. This omission created a question of whether Wands and its factors are still applicable.

The second issue is related to the first, and it has to do with a subtle shift in the language that the court used in forming the test.  In Amgen, the Supreme Court offered repeated reference to “reasonable experimentation” rather than the typical “undue experimentation” standard.  This difference introduced potential confusion on whether the Court announced a distinct, new test.

In post Amgen cases, the Federal Circuit has resolved these two subtle points of confusion, holding (1) that there is no difference between the traditional statement of “without undue experimentation” and the Supreme Court’s similar wording of a “reasonable” amount of experimentation; and (2) that the Wands Factors continue to serve as the key approach to determining whether the amount of experimentation needed to make & use the invention is too much.  The case that explains this best is probably Baxalta Incorporated v. Genentech, Inc., 81 F.4th 1362 (Fed. Cir. 2023).

Its new guidelines, published January 10, 2024, the PTO reviews Amgen and post-Amgen case law and concludes that examiners will continue applying the long-standing “undue experimentation” standard and In re Wands factors when evaluating enablement. Guidelines for Assessing Enablement in Utility Applications and Patents in View of the Supreme Court Decision in Amgen Inc. et al. v. Sanofi et al., 83 Fed. Reg. 1563 (Jan. 10, 2024).

From my initial review, these guidelines do not appear remarkable, but simply serves the purpose of keeping everyone on the same page.  It remains to be seen whether the examiner corps will further increase its focus on functional genus claims – especially those directed to a large number of embodiments and whether examiners outside the traditional ‘unpredictable arts’ will alter their enablement examination practice.

To be clear, these are examination guidelines – guidance for patent examiners that supplement the Manual of Patent Examination Practice (MPEP). They are not “rules” and do not have the force of law.

Claim Construction and its Role in Eligibility

by Dennis Crouch

In 2022, the Federal Circuit issued a Judge Hughes decision in IBM v. Zillow invaliding the claims of IBM’s asserted claims as ineligible subject matter. Intl. Bus. Machines Corp. v. Zillow Group, Inc., 50 F.4th 1371 (Fed. Cir. 2022) (U.S. Patent No. 9,158,789). In that case, Judge Stoll dissented in part, arguing that dismissal on the pleadings was inappropriate because the patentee had alleged plausible and specific facts showing that the claims embodied inventive concepts.

Now in 2024, the Federal Circuit has issued a new opinion in separate IBM v. Zillow case with patents from a different family. U.S. Patent Nos. 6,778,193 and 6,785,676. Seemingly by happenstance, Judges Hughes and Stoll were both on this panel. Judge Hughes again wrote the majority opinion affirming the motion to dismiss on eligibility grounds; Judge Stoll again dissented-in-part, concluding that the district court should have construed the claims (or preliminary relied upon IBM’s proposed construction) before deciding eligibility.

Intl. Bus. Machines Corp. v. Zillow Group, Inc., — F.4th — (Fed. Cir. January 9, 2024) 

The two asserted patents related to improving the display of search results to users by using “visual workspaces” (the ‘193 patent) and “user context vectors” (the ‘676 patent) to better capture user preferences and context.  The majority found these techniques covered only abstract ideas of “identifying, analyzing, and presenting certain data to a user.”  This holding parallels the 2022 IBM decision as well as others, such as Customedia Techs., LLC v. Dish Network Corp., 951 F.3d 1359 (Fed. Cir. 2020).

In dissent, Judge Stoll argued that the majority failed to properly consider IBM’s proposed construction of the term “user context vector” in the ‘676 patent claims. IBM asserted this term should be construed as “an n-dimensional vector derived from the combination of user context and previous interaction with the system,” which Judge Stoll argued “add[ed] a degree of particularity.” But the majority stated Zillow had not disputed this construction, so there was no claim construction issue for the district court to resolve.

A key dispute in the case centered on whether IBM’s allegations of technological invention beyond the abstract idea were sufficient to survive dismissal. The majority held these allegations too “generic.” contrast, dissenting Judge Stoll argued reversal was warranted because “IBM has demonstrated that its claims plausibly recite an inventive concept under its proposed construction.”

Representative Claim 1 is below. What do you think?:

1. A graphical user interface for a customer self service system that performs resource search and selection comprising:

a first visual workspace comprising entry field enabling entry of a query for a resource and, one or more selectable graphical user context elements, each element representing a context associated with the current user state and having context attributes and attribute values associated therewith;

a second visual workspace for visualizing the set of resources that the customer self service system has determined to match the user’s query, said system indicating a degree of fit of said determined resources with said query;

a third visual workspace for enabling said user to select and modify context attribute values to enable increased specificity and accuracy of a query’s search parameters, said third visual workspace further enabling said user to specify resource selection parameters and relevant resource evaluation criteria utilized by a search mechanism in said system, said
degree of fit indication based on said user’s context, and said associated resource selection parameters and relevant resource evaluation criteria; and,

a mechanism enabling said user to navigate among said first, second and third visual workspaces to thereby identify and improve selection logic and response sets fitted to said query.

As an aside, the panels of the two cases were not identical. In the IBM 2022, the Judge Reyna joined the majority, in IBM 2024, Judge Prost joined the majority.

Goutam Patnaik (Desmarais) argued on behalf of the patentee IBM, Steven Seigel (Susman Godfrey) argued for the defendants.