An API for the Human Mind

by Dennis Crouch

The pace of technological advancement never ceases to amaze me, and it seems like even science fiction is struggling to keep up with reality. In recent months, we’ve witnessed some truly remarkable breakthroughs in the field of artificial intelligence (AI), and this latest development is right up there.

Researchers have used GPT-style machine learning architecture to decode human thoughts by analyzing their functional MRI (fMRI) brain scans. That’s right – we’re talking mind reading. The AI was initially trained trained by exposing participants to 16 hours of narrative stories while recording their brain activity.  And, once trained, the AI was able to accurately describe the content of their thoughts.  Of some interest, the AI was better at identifying concepts and meaning rather than the actual words at issue.

While this technology has the potential to revolutionize communication for individuals with disabilities or neurological conditions, it also raises some privacy concerns that could involve both reading thoughts and writing them.

I imagine that all this wouldn’t require a fMRI technology and instead could rely upon much smaller safe-for-home equipment such as Functional near-infrared spectroscopy (fNIRS) devices shown in the image above or made by Artinis.

A key for me here is that this is potentially moving toward an API for the human mind and body.  For those outside the software world, an API (Application Programming Interface) is a set of protocols, tools, and standards that allow different computer applications to communicate with each other. APIs provide a standardized way for software components to interact.  An API for the human mind and body would create an interface that allows software systems to access and interact with the brain or and other body parts. Over the past several years, folks have been making huge advances with brain/body connection, and I’m excited about where we are headed in this expanded mind approach.


Generative AI and Copyright

A few days ago I wrote an essay about the ongoing economic war between the leaders of the US and those of China, with a focus on the impact US attorneys representing Chinese clients. For the article, I used an AI tool to create some art for my publication. The image above shows the resulting four images. I chose the bottom right and had the AI enhance the image for publication by pushing a single button. I then did a cut and paste before publishing.

Although I didn’t contribute any of the expression seen in the work, after these actions and then publishing it, I actually feel some gut level of ownership. And, that I might be upset if someone else used _my_ image without permission.

My questions for you:

  • Do I deserve to “own” this image?
  • Should I be able to claim authorship?
  • Should I disclose my AI creation methodology when I use the image in published works?

Comment on LinkedIn:


Bringing Home the Bacon with Joint Inventorship

Guest Post by Jordan Duenckel.  Jordan is a second-year law student at the University of Missouri, head of our IP student association, and a registered patent agent.  He has an extensive background in chemistry and food science.

HIP, Inc., v. Hormel Foods Corp., 2022-1696, — F.4th — (Fed. Cir. May 2, 2023)

Joint inventorship requires a substantial contribution to the invention. In the decision HIP, Inc. vs. Hormel, Judge Lourie writes for a unanimous panel to reverse a district court’s determination of joint inventorship involving a new process for precooking bacon. US Patent 9,980,498 has four inventors that are employees of and assigned their interest to Hormel.  HIP sued Hormel, alleging that David Howard was either the sole inventor or a joint inventor of the ’498 patent. The district court determined that Howard was a joint inventor based solely on his alleged contribution to the infrared preheating concept in independent claim 5.  

Bacon is an interesting food with unique preservation and cooking properties. Being a cured product, for food safety reasons, no additional cooking of the bacon is needed when bought off the shelf in a refrigerated section. Of course, most people are not consuming the bacon without additional cooking and some companies will precook the product for consumer convenience. When precooking, Hormel is trying to avoid the loss of salt, and therefore flavor, through condensation and prevent the creation charred off flavors (as opposed to the desirable char on a steak).  

 In the process of viability testing the new method, prior to filing the application, the inventors consulted with David Howard of Unitherm, HIP’s predecessor, to discuss methods related to Unitherm’s cooking equipment to create a two-step process of preheating then a higher temperature step. After some difficulties, Hormel leased the equipment and returned to their own R&D lab. The method created, the subject matter of the ‘498 patent, involves a first step that allows the fat of the bacon to seal the surface of the bacon and prevent condensation. The charring was remedied by adjusting the heating method of the oven in the second step of high-temperature cooking. In Hormel’s product development, Hormel tried an infrared oven and a conventional spiral oven.

HIP argued that Howard contributed to the ‘498 patent in the preheating by hot air in claim 5 and/or preheating with an infrared oven in claim 5.  Claim Five reads in the relevant part:  

  1. A method of making precooked meat pieces using a hybrid cooking system, comprising: preheating meat pieces in a first cooking compartment using a preheating method selected from the group consisting of a microwave oven, an infrared oven, and hot air to a temperature of at least 140º F. to create preheated meat pieces…

On appeal, Hormel argues that Howard’s contribution is well-known in the art and insignificant when measured against the full invention. With inventorship being a question of law, and the issuance of a patent creating a presumption of inventorship, an alleged joint inventor must provide clear and convincing evidence to substantiate their claim. In evaluating whether a significant contribution was made by Howards, the parties apply the test from Pannu v. Iolab Corp., 155 F.3d 1344, 1351 (Fed. Cir. 1998). The test requires that the alleged joint inventor: 

(1) contributed in some significant manner to the conception of the invention; (2) made a contribution to the claimed invention that is not insignificant in quality, when that contribution is measured against the dimension of the full invention; and (3) did more than merely explain to the real inventors well-known concepts and/or the current state of the art. 

Analyzing the second Pannu factor, the Court found that the alleged contribution of preheating meat pieces using an infrared oven to be insignificant in quality because it was mentioned only once in the patent specification as an alternative heating method to a microwave oven and was recited only once in one Markush grouping in a single claim. In contrast, preheating with microwave ovens and microwave ovens themselves were prominently featured throughout the specification, claims, and figures. The examples and corresponding figures also employed procedures using preheating with a microwave oven, but not preheating with an infrared oven.  

Infrared heating seems to have been an afterthought in the creation of the two-step precooking method. Whatever discussions Howard might have had about the importance of the infrared, Hormel seems to have focused on microwave heating to solve the condensation problem. From one step further back, it seems absurd to permit joint ownership by a cooking equipment manufacturer when the significant discoveries and refinements of the methods were made in Hormel’s R&D facility without Howard present. The prevention of condensation and avoiding the char flavor were both made independent of Howard’s contributions. Considering the second Pannu factor, the reversal of inventorship seems appropriate.  

The Supreme Court and Patent Protection for Medical Diagnostics: A Closer Look at CareDx and Stanford U v. Eurofins

by Dennis Crouch

The recently filed petition for certiorari in CareDx and Stanford University v. Eurofins Viracor, Inc. (Supreme Court 2023) offers an opportunity to examine the patent eligibility doctrine in the context of an important health diagnostics innovation. The inventions at issue relate to early detection of organ transplant failure, which obviously hold significant potential to save lives and reduce reliance on invasive exploratory surgical procedures. The detection method involves identifying DNA fragments from the transplant within the bloodstream, a challenge that had stumped scientists for over a decade.  Although various scientists had proposed mechanisms for using this information, the evidence shows more than a decade of failed ideas, and at least one article reported that the process is “difficult and impractical.”  The breakthrough came when Stanford researchers successfully applied high-throughput multiplex sequencing (“shotgun sequencing”) to detect single nucleotide polymorphisms (SNPs) unique to donor organs.  Of potential importance, the Stanford researchers did not create these new sequencing techniques, but they were the first to take advantage of them in this particular context and, as the claim language below shows, the scientists focuses on creating thresholds as part of a method that particularly work in this situation.

Three patents are central to this case: U.S. Patent Nos. 8,703,652, 9,845,497, and 10,329,607. Claim 1 of the ‘607 patent exemplifies the claimed method, which includes the following steps:

  1. Providing a plasma sample from the recipient;
  2. extracting cell-free DNA from the sample;
  3. performing “selective amplification” of target DNA sequences, wherein that amplification “amplifies a plurality of genomic regions comprising at least 1,000 [SNPs]” using PCR;
  4. performing “high throughput sequencing” comprising a “sequencing-by-synthesis reaction” with an error rate of less than 1.5%;
  5. providing sequences comprising “at least 1,000 [SNPs]”; and
  6. quantifying the proportion of donor-derived DNA, using distinguishing biomarkers drawn from those at least 1,000 SNPs, and wherein the donor’s cell-free DNA comprises at least 0.03% of the total in the sample.

The Infringement Lawsuit: The Delaware District Court initially denied defendants’ motions to dismiss and for summary judgment of ineligibility. However, Chief Judge Connolly later reconsidered the summary judgment motion and ultimately ruled that the claims were ineligible under the two-step analysis set forth in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012). The Federal Circuit affirmed this decision.

The petition to the Supreme Court raises the following simple question: Is a new and useful method for measuring a natural phenomenon, which improves upon prior methods for measuring the same phenomenon, eligible for patent protection under Section 101? The petition emphasizes the importance of this case compared to Tropp and Interactive Wearables, and it underscores the need for the Supreme Court to review its application of eligibility exceptions to medical diagnostics.

This case has potentially significant implications for US patent law doctrine as well as potential impact on investment in medical diagnostics. We’ll be following the case closely and talking more about its potential effects.

Supreme Court Holds Over Two Patent Cases, Considers Two More on Patent Eligibility

by Dennis Crouch

On May 1, the U.S. Supreme Court revealed its decisions from the April 28 conference. Among the three patent cases considered, the court denied certiorari for the pro se case of Wakefield v. Blackboard, while holding over the other two for reconsideration at a later conference. This development increases the likelihood of these two cases being heard by the court, although a grant of certiorari has not yet been announced.

The held-over cases include: (more…)

Professional Liability risks of filing in DOCX

Carl Oppedahl has been focused on the USPTO’s electronic filing and docketing system for several decades. Most recently, he has been calling out the USPTO for “pants-on-fire lies” about the workability of the DOCX standard.  The PTO plans to institute a $400 surcharge for those who fail to use DOCX starting at the end of June 2023.

Oppedahl is presenting two webinars on the topic, focusing on professional liability risks associated with the new process and some tips for reducing the risks:

Professional Liability Risks of Filing in DOCX – for users of Microsoft Word.  Wednesday, May 10, 2023, 10 AM to 11:30 AM Mountain Time.  Executive summary from 10 AM to 10:40 AM, details from 10:40 AM to 11:30 AM.  For more information, or to register, click here.

Professional Liability Risks of Filing in DOCX – for users of non-Microsoft word processors.  Friday, May 12, 2023, 10AM to 11:30 AM Mountain Time.   Executive summary from 10 AM to 10:40 AM, details from 10:40 AM to 11:30 AM.   For more information, or to register, click here.

Establishing Guidelines for Patent Damages: The Garretson v. Clark Case of 1884

by Dennis Crouch

Calculating damages for patent infringement can be a complex task, particularly when the invention is an improvement to an existing machine or product.  The Supreme Court’s 1884 decision in Garretson v. Clark, 111 U.S. 120, helped establish a rule requiring apportionment in cases involving improvement patents.

The plaintiff, Garretson held two patents covering improved mop heads and sued the defendants for infringement.  The lower court sided with the patentee — finding the claims valid and infringed and also issued an injunction to halt ongoing infringement.  However, the court balked at awarding the requested back-damages for past infringement.

The patentee had offered a simple lost-profit damage calculation.  In particular the court was presented with evidence showing how much profit the patentee made from the sale of each mop, and the patentee asked the court to force the defendant to pay that amount for each of infringing mop.  The circuit court judge Samuel Blatchford appointed NY patent attorney George J. Sicard to conduct an accounting.  Sicard came back with a recommendation of $0 in damages, and Blatchford agreed.

The issue here is that the patent covered an improvement to a mop, but the patentee was seeking damages for the entire profits associated with the mop — not just the value of the improvement.  In his opinion, Blatchford wrote:

The patentee must in every case give evidence tending to separate or apportion the defendant’s profits and the patentee’s damages between the patented feature and the unpatented features, and such evidence must be reliable and tangible, and not conjectural or speculative; or he must show, by equally reliable and satisfactory evidence, that the profits and damages are to be calculated on the whole machine, for the reason that the entire value of the whole machine, as a marketable article, is properly and legally attributable to the patented feature.

Garretson v. Clark, 10 F. Cas. 40, 44 (C.C.N.D.N.Y. 1878).  The plaintiff has the burden of proving damages, but its theory of damages utterly failed. And, no other damages evidence was presented. The effective result was no damages.

At the time of the decision, Blatchfort was a circuit court judge. In 1882, he was nominated by President Chester Arthur to the U.S. Supreme Court.  Because of the long backlog at the time, Blatchfort reached the court before the case was heard (even though it was directly appealed).  The Supreme Court finally got around to hearing the appeal in 1886 and affirmed in an opinion by Justice Field.

The high court quoted Blatfort’s decision as I have done above and  also remarked that for improvement patents, “the patentee must show in what particulars his improvement has added to the usefulness of the machine or contrivance. He must separate its results distinctly from those of the other parts, so that the benefits derived from it may be distinctly seen and appreciated.” Garretson v. Clark, 111 U.S. 120 (1884).

The decision helped establish a clear rule for patentees to follow when claiming damages for improvements in existing machines or contrivances. It emphasized the presentation reliable and tangible evidence to apportion profits and damages between patented and unpatented features or evidence to demonstrate that the entire value of the product is attributable to the patented feature.

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An interesting aside from this case is that the defendant – Charles B. Clark – is also co-inventor of one of the two asserted patents.  Clark had transferred his rights to a third party, and Garretson bought them up.  The case involves sales of 100,000+ mops.

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Note here that this case was brought in equity rather than at law and so that raises a major difference between current cases, and we had different statutory language under the 1870 Act.  A lot of our 1800s patent cases have quirks that leave them not susceptible to direct application to today’s cases.  Still, I be but they still provide some amount of foundational guidance and gives a chance to observe the evolution of the legal principles we know today.

Importance of Due Diligence for Patent Practitioners and the US/China Economic War

by Dennis Crouch

37 C.F.R. § 11.18(b) imposes crucial responsibilities on patent applicants, attorneys, and agents. Documents submitted to the USPTO implicitly certify that:

  1. Statements made are true or are are believed to be true (based upon information and belief) and do not include any attempt to conceal a material fact; and
  2. That a reasonable inquiry was conducted to confirm that: (i) statements have no improper purposes, (ii) legal contentions are supported by existing law or valid arguments for change, (iii) allegations and factual contentions have or are likely to have evidentiary support, and (iv) denials of factual contentions are based on evidence or a reasonable lack of information or belief.

Recent USPTO disciplinary cases underscore the seriousness of these obligations. Examples include filing a micro entity status request without proper investigation and submitting an information disclosure statement (IDS) by a non-practitioner without practitioner review. Rubber stamping is not permitted.


Functional Claims: Morse, Halliburton & Amgen

by Dennis Crouch

In the patent context, functional limitations describe inventions in terms of their function or intended use, rather than their specific structure or components. Such claims have been subject to much debate and litigation throughout the history of the US patent system. Notable Supreme Court cases like O’Reilly v. Morse, 56 U.S. (15 How.) 62 (1854) and Halliburton Oil Well Cementing Co. v. Walker, 329 U.S. 1 (1946) significantly impacted patent practice and the balance between functional and structural claim drafting.

The pending Supreme Court case of Amgen Inc. v. Sanofi, No. 21-757 (2023) is another example, with the potential to further shift the landscape regarding functional claim limitations. The title of my essay on the case following oral arguments, “Bye Bye Functional Claims,” hints at my outlook. Although the patentee focused on other issues in its briefing, the Justices repeatedly questioned the permissibility of broad functional claim limitations.


Patent Law Primer: A Newsletter Series on Key Patent Law Topics

I am happy to announce the launch of my newsletter series, “Patent Law Primer: A Short Introduction to Key Issues in Patent Law,” currently distributed through LinkedIn. This series is designed for a broader audience, making it accessible for anyone interested in the subject, not just patent attorneys.

Each essay delves into legal and practical aspects of various patent law topics while weaving in stories of notable court cases and patent disputes, in an attempt to provide readers with more memorable context.

I have already published the first three essays in the series:

  1. When to File a Patent Application
  2. A Primer on Obviousness
  3. Patent Claim Construction

Over the next year or so, I plan to explore an extensive list of about 50 topics. I welcome your thoughts and suggestions on this project, as well as any specific areas of interest you’d like me to cover in future essays.  Your input will help make this newsletter series a useful and engaging resource.

— Dennis

What Does it Mean to be an Inventor? The Inventor Diary Project and Kicking off the Diversity Pilots Initiative Blog Series

Guest Post by Colleen V. Chien, Founder of the Diversity Pilots Initiative (DPI), Professor of Law and Co-Director the High Tech Law Institute, Santa Clara University School of Law

A down payment on a house, a sense of being seen, the pride of one’s parents and children, validation of one’s creativity, a permanent mark, and confidence – these are just some of the answers received to the question, “what does being an inventor mean to you?” Though the patent system exists to promote innovation, it also serves to promote inventors and innovators. Today, on World IP Day, this post shares the often-overlooked personal journeys of invention that patent professionals play a crucial role in, by encouraging idea submission, collaborating with engineers and innovators, managing outside counsel, and in patent drafting, prosecuting claims,  patent examining, and studying and teaching patenting. This post is the first in a series by the Diversity Pilots Initiative (DPI), which strives to advance inclusive innovation so that all may access its benefits – including the social, confidence, and economic boosts chronicled in these diaries –  through rigorous research.

The question in various forms was asked in a survey of inventors and recognized innovators carried out from April 15-24, 2023 by myself and the IP team at Pure Storage, a company partner of the Diversity Pilots Initiative doing innovative work in invention and innovation led by Elizabeth Morris (SCU Law ‘06), Frances Winkler, and Joseph Kucera.  (response rate of ~25%). For more stories, and to add your own story , visit the “Inventor’s Diary” at

What did becoming an inventor mean to you?

“As an engineer you are usually stuck in an endless cycle of building the next billion-dollar product and in the world of every evolving and every updating software, most of our work is never permanent. But when you become an inventor and build something which no one ever thought of, you make a permanent mark of your existence in the tech industry. I still remember how happy I was when I filed my first patent back which was a moment of great joy and pride. And as time went by, I filed multiple patents and I felt more confident and more accomplished.” – Kshithij Iyer, became an inventor at age 27

“Being recognized as an inventor validates one’s creativity, empowering one to do more.” – Sujesha S.,  became an inventor at age 38

“My kids have bragged to their friends at school that I have a patent. My mom knows and I think I’m the first in my family to get one. So that’s pretty cool for her when she talks to her friends about her son. I sent her a copy so she knows it is real. It’s probably up on her wall next to the rabbit I finger-painted in school.” – Scott S., young-at-heart

What has becoming inventors meant to your team?

“Previous to our first invention being approved, my team had never really wanted to submit anything, due to concerns about the possible negative impact that may result if it was not a success.  With this first patent, we have put this concern behind us and are driving forward.  The help and advice of the patent team has massively helped give us confidence in our abilities, as has as the slick process they have developed. The team and myself believe we are seen and perceived as the go-to experts in many areas of technology and much of this could be attributed or linked to this first patent.” – Chris R, Senior Director of Engineering

What has being an inventor meant to your family and community?

“My family directly benefited from the patent awards I received … they helped increase the down payment on my home.  This helped me put down more permanent roots in my community.  We needed increased space at the time due to my third child on her way.  My family know that I have received patents, and they know that my employer is happy with me. I have applied my engineering mind to help solve problems in my condo community and church, and have seen some benefit there.”  – Randy S., became an inventor at age 28.

What has becoming a recognized innovator* meant to you?

“I would say that becoming a recognized innovator meant creativity for me. Often legal isn’t seen as a creative department but Pure Inclusive Innovation program that the IP Team at Pure has built proves that wrong. After my experience, I am more confident in my ideas and sharing them. Becoming a recognized innovator taught me that you don’t have to hold a specific title or have a certain tenure to make a difference. Everyone has something to offer, and change can come from the most unexpected places.” – Amber Winburn, Legal Operations Analyst,  first received company recognition for becoming an innovator at age 29.

“The IP team came to the office to do a presentation on the Innovator program. A couple weeks later, I was in a situation where I heard a customer’s struggle with the upgrade process due to his colorblindness. It seemed like there would be a simple fix for this accessibility issue and, while I thought it over, I thought I didn’t know where to go with it. And then when I came to the office, I remembered the team’s presentation and immediately reached out. The rest is history!”   – Jennifer A., first received company recognition for becoming an innovator at age 55.

For more stories, and to add your own story , visit the “Inventor’s Diary” at

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About the Diversity Pilots Initiative and DPI Blog Series

 Researchers with the Diversity Pilots initiative work with firms, organizations and others to conduct and produce empirical research, including surveys and rigorous (randomized or quasi-experimental) pilots, to produce insights to advance diversity and inclusion in innovation and invention. If you are interested in our work, we’d love to work with you too! We have expertise in econometric, observational, survey and other empirical methods, and are experts in topics ranging from mentoring to inequality in innovation to government policy. We intend for our blog to disseminate research findings on “what works” to advance diversity and inclusion in innovation and inventing. Watch this space for more blog posts from the Initiative, many of which will draw from last fall’s inaugural Innovator Diversity Pilots Conference, subscribe to our updates, and get in touch to share your own innovator or innovation journey with us at

Professor Chien thanks Sydney Yang, SCU Law ’22, for her help with the blog post.

Are you an inventor? Share your story


Guidance on Patenting Inventions with AI Contributions

The following are my remarks given on April 25, 2023 to the USPTO as part of their AI listening session:

by Dennis Crouch

Members of the USPTO, and fellow participants of this AI Listening Session, thank you for inviting me here today and for taking time to consider these important issues.  I want to also thank the prior speakers who have done a great job laying out many of the issues.  I am also happy to work with any of you to help figure this out and reach a workable system that truly encourages innovation.

My name is Dennis Crouch, and I am a law professor at Mizzou and author of Patently-O. It is my privilege to discuss the role of generative AI in the realm of intellectual property and the need for clear guidance from the USPTO.

As artificial intelligence progresses at an unprecedented pace, numerous cases have emerged where generative AI has played a crucial role in conceiving an invention. In certain instances, if the AI were human, it would be rightfully recognized as at least a joint inventor. This raises the question of whether it is appropriate to designate the human, who contributed to only a part of the invention and collaborated with the AI, as the sole inventor. This is particularly concerning in cases where the AI introduced concepts that the human had not conceived or even considered. Generative AI differs from traditional tools in that its responses are unpredictable and it produces results akin to those of a human inventor.

I would like to draw attention to a striking similarity between generative AI and biological models, particularly in the context of the pending Supreme Court case of Amgen v. Sanofi. In this case, researchers patented a genus of monoclonal antibodies, but the antibodies’ amino acid sequences were not designed by humans. Instead, a genetically modified humanized mouse generated the antibodies in response to a specific antigen. This scenario closely mirrors the role of generative AI in the invention process.

The parallel between the genetically modified humanized mouse and generative AI becomes apparent when we examine the prompt given to the mouse in the form of a PCSK9 injection and the subsequent response: antibodies collected from the mouse’s spleen. This analogy can be applied to generative AI, with a human providing the initial input or prompt, and the AI system generating an inventive output.

One key issue is the uncertainty patent attorneys face regarding the proper course of action. Innovators are seeking to protect their valuable inventions, but the lack of clear guidance creates potential ethical dilemmas for patent attorneys. I recently published an article on Patently-O titled “AI Inventor and the Ethics Trap for US Patent Attorneys,” highlighting this concern.

I believe the USPTO should promptly offer guidance, stating that patent applications may appropriately list the human contributor to the conception as the sole inventor, even in situations where an AI or other tool provided key elements of the discovery.

The US Copyright Office has taken steps to deny registration of AI-created works. It is essential for the USPTO to avoid the current pitfalls of the US Copyright Office in addressing AI-related issues.  Ideally, US intellectual property policymakers would consider all aspects of IP—patent, trade secret, and copyright in our situation here—as a unified whole. This might present an opportunity to contemplate the establishment of a US Intellectual Property Office that merges the PTO and Copyright Office, while also providing some authority to regulate trade secrecy.

As several speakers have noted, generative AI is expected to reduce the cost of inventing, which is a tremendous benefit. As Profs Levine and Feldman explained, AI has different incentives than human inventors and lacks the fundamental humanity that our inventorship laws respect.  Still, a valuable technological improvement by an AI (such as a new medical treatment) is something that we want to encourage.

For inventions without direct human contribution, it is timely to consider a special rights category for computer-generated inventions. This unique exclusivity could feature a reduced term and additional requirements to ensure clarity and patentability, such as pre-screening, limited claims, definitions, and the incorporation of born-digital aspects of the documentation.

In conclusion, it is imperative for the USPTO to provide guidance on how to handle generative AI’s role in the invention process – distinguishing between situations where a human inventor exists and those with in no or insufficient human originality.

Hrdy & Seaman: Are NDAs unenforceable when they protect more than trade secrets?

Guest post by Camilla A. Hrdy, Professor of Intellectual Property Law at University of Akron School of Law

Are NDAs unenforceable when they protect more than trade secrets? The standard answer is no. NDAs can prevent disclosure of contractually-defined “confidential” information that is shared in the course of a confidential relationship, even if it is not technically a trade secret. NDAs can, in other words, go beyond trade secrecy.

NDAs have also not traditionally been treated as contracts in restraint of trade, like noncompetes are. An NDA’s purpose is, ostensibly, just to protect secrets. Similar to trade secret law, NDAs only prevent an employee from disclosing (and using outside authorization) specifically-defined information. They don’t prohibit competition per se. NDAs are thus seen as comparatively “narrow restraints” which, all else being equal, should be preferred to noncompetes.

Or at least that is the common wisdom.  Although there is some support for this viewpoint in treatises and judicial dicta, our new article, Beyond Trade Secrecy: Confidentiality Agreements That Act Like Noncompetes, shows that a growing contingent of courts across jurisdictions are finding NDAs in employment agreements to be unenforceable when they reach too far beyond trade secrecy.  Even Google’s NDA was recently found unenforceable by a California court, because it did not make sure employees could use or share skills they learned at Google with prospective employers. (That said, the Google opinion is quite extreme, even compared to others we reviewed. See pp. 8-11 of the opinion,  Doe v. Google, Inc., Case No. CGC-16-556034 (Cal. Super. Ct., Cty. of San Francisco, Jan. 13, 2022)).

The article is available on SSRN and is forthcoming in Yale Law Journal. It is co-authored by me and Chris Seaman.  This blog post is cross- posted on Patently-O

The Federal Trade Commission recently jumped into the deep end of this swimming pool by proposing a rule that would ban noncompete agreements in employment contracts nationwide. More surprising still, the proposed rule bans what the Commission is calling “de facto” noncompetes,” such as a “non-disclosure agreement between an employer and a worker that is written so broadly that it effectively precludes the worker from working in the same field after the conclusion of the worker’s employment with the employer.”

Our article shows that there is a long history in the courts of finding NDAs are unenforceable — and not just in California. The jurisdictional differences abound. It would probably be unwise to write a nondisclosure agreement today without consulting up-to-date statutes, cases, and regulations from the relevant jurisdiction. That said, from reading the case law, a few main problems stand out.

Confidentiality agreements are far more likely to be unenforceable when they:

(1) protect information that does not constitute trade secrets, in particular by protecting public or generally known information, or information that falls within (what a court is likely to perceive as) an employee’s general knowledge skill and experience;

(2) try to cover information that the employee already knew when they started the job or lawfully gained from a third-party source; or

(3) are so excessively broad that they have the effect of a noncompete, even if they are styled as a “nondisclosure” or “confidentiality” provision. For example, this hypothetical language in a NDA would almost certainly be unenforceable: “Anything you learn at the company that is used or usable in the business is confidential and can’t ever be shared or used by you again without our permission, and there are no meaningful exceptions.”

There is also an important empirical component to our article. These agreements are themselves often kept, or even required to be kept, secret. NDA skeptics like Orly Lobel and Sharon Sandeen have noted that a threshold challenge in assessing NDAs is simply finding them.  Thanks to Chris Seaman and his “army of RA’s” we have a dataset of 450 confidentiality agreements that were disclosed in trade secret litigation. These 450 contracts give a unique snapshot of what NDAs look like in practice. Some people may find the data points alarming. For example, most of the confidentiality provisions in our dataset cover far more than trade secrets, and around 40% of the agreements in our dataset had no carve-outs at all, even for public information. For people in practice, perhaps you will not be surprised at the breadth of the agreements, which is itself interesting. Either way, I hope you will check out our findings on SSRN.

AI Inventor and the Ethics Trap for US Patent Attorneys

by Dennis Crouch

The Supreme Court denied certiorari in Thaler v. Vidal, a case involving inventor Dr. Stephen Thaler’s attempt to patent an invention created by his artificial intelligence (AI) system, DABUS. Thaler argued that DABUS, not himself or any other human, conceived the invention and identified its significance. However, both the United States Patent and Trademark Office (USPTO) and the Court of Appeals for the Federal Circuit  (CAFC) maintained that US patent laws require a human inventor, and as a result, they refused to consider Thaler’s patent application.

In his petition to the Supreme Court, Thaler asked if the Patent Act restricts the statutory term “inventor” solely to human beings. The current legal stance in the US remains that the answer to this question is “yes,” human inventors and only human inventors.

Moving forward, I am quite concerned for the role of patent attorneys and the upcoming ethical dilemmas — that patent attorneys will be prompted to bury the truth about AI contributions within their patent applications.  In particular, a growing number of inventive entities are developing new products and designs with significant AI input. And, many of the resulting claims will be directed to aspects that were generated by the AI and then first recognized as patentable by either the AI or the patent attorney.  In that situation, the patent attorney will be asked to list the human closest to the invention as the inventor — but, depending upon the circumstances, that listing might turn out to be fraud.

This situation calls for a guidance from the USPTO or the legislature on the definition of “inventor” in the context of AI-generated inventions. The current legal framework does not adequately address this evolving landscape of innovation driven by AI.

I particularly like to think about this situation in the joint inventorship context because the contribution and recognition requirements are much easier to meet than for a solo inventor.  In my experience, generative AI are regularly providing conceptual input that would easily require listing as a joint-inventor, except for the exclusion of non-human inventors.

What do you think here?

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USPTO is holding an AI listening session on April 25 at the USPTO (and webcast). See you there:

Amgen Scores Partial Victory in Efforts to Maintain OTEZLA Exclusivity

By Chris Holman

Amgen Inc. v. Sandoz Inc., 2023 WL 2994166, — 4th —   (Fed. Cir. Apr. 19, 2023)

In 2019, Amgen acquired worldwide rights to apremilast (OTEZLA) from Celgene $13.4 billion in cash, in connection with Celgene’s merger with Bristol-Myers Squibb. Apremilast was the only oral, non-biologic treatment for psoriasis and psoriatic arthritis, and in 2020 apremilast generated $2.2 billion for Amgen.

At the time Amgen’s acquired apremilast, Celgene was involved in Hatch-Waxman litigation with numerous generic challengers, including Sandoz. Celgene had asserted three of its 11 Orange Book-listed patents against Sandoz, and in 2020 Amgen was substituted as plaintiff.

The primary patent asserted is U. S. Patent 7,427,638, which is directed to pharmaceutical compositions comprising stereochemically pure apremilast. The original expiration date of this patent was in 2024, but the patent received a patent term extension of more than three years, resulting in an effective patent expiration date of February 16, 2028, according to the Orange Book.

Celgene also asserted U. S. Patent 7,893,101, which is directed to enantiomerically pure solid forms (e.g., crystalline polymorphic forms) of apremilast. This patent is due to expire December 9, 2023.

The third patent asserted by Celgene was U. S. Patent 10,092,541, directed to methods for treating a patient using dose titration of apremilast. According to the Orange Book, this patent was set to expire on May 29, 2034.

The district court found the claims of the ‘638 and ‘101 patents to be infringed and not invalid, and enjoined generic apremilast until the expiration of the ‘638 patent in February 2028. On appeal the Federal Circuit affirmed, an outcome that Amgen characterizes as a win.

On the other hand, the district court found the asserted claims of the ‘541 patent to be invalid for obviousness, which reportedly “pleased” Sandoz because the ruling “enables Sandoz to launch [its] generic apremilast product in the U. S. in 2028, six years prior to the expiry date of the latest-expiring Amgen patent asserted in litigation.”  On appeal, the Federal Circuit affirmed with respect to the obviousness of the ‘541 patent.

Here is a brief overview of the court’s decision regarding the asserted obviousness of these patents.

The ‘638 patent claims apremilast, which is the stereochemically pure (+) enantiomer of a compound falls that within a class of molecules referred to as phosphodiesterase-4 (“PDE4”) inhibitors.  Sandoz’s obviousness argument was based primarily upon a prior art Celgene patent, U. S. Patent 6,020,058, which includes an Example 12 that describes a racemic mixture containing apremilast, but that does not disclose the purified (+) enantiomer. The Federal Circuit found that the district court had not erred in holding that Sandoz had not proven that a skilled artisan would have had sufficient motivation to purify the (+) enantiomer from the racemic mixture disclosed in Example 12, nor that a skilled artisan would have had a reasonable expectation of success in resolving that mixture into its enantiomeric components, given the unpredictable nature of resolving racemic mixtures.

The Federal Circuit further found that the district court had not erred in its finding of strong objective indicia of nonobviousness, particularly given the unexpected potency of apremilast relative to the apremilast-containing racemic mixture disclosed in Example 12. The court credited testimony from a Celgene researcher listed as an inventor on the ‘638 patent, who noted a 20-fold difference in potency between apremilast alone and the racemic mixture, and stated that the inventors “didn’t expect a 20-fold difference in potency… Normally, if a racemate is a 50/50 mixture of two enantiomers, you might expect a two-fold difference in potency, all things being equal.” The district court also did not err in determining that apremilast satisfied a long felt need for an improved psoriasis treatment suitable for oral administration, that others in the field had tried and failed to develop other PDE4 inhibitors as drugs, and that there had been a degree of skepticism about the safety of apremilast because of its structural similarity to thalidomide, a drug notorious for its teratogenic effects in fetuses leading to severe and debilitating birth defects.

The issue with respect to the ‘101 patent was whether it could rely upon the filing date of a provisional application to which it claims priority. The ‘101 patent claims crystalline Form B of apremilast, and the provisional application includes an Example 2 which discloses a synthetic procedure for preparing apremilast. Although Example 2 does not explicitly disclose that the resulting apremilast has the Form B crystalline structure, Amgen provided the court with the results of over a dozen experiments following the procedure of Example 2, all of which resulted in crystalline Form B of apremilast, while Sandoz had provided no evidence to establish that Example 2 was capable of producing a crystalline Form other than Form B. Although the district court had based its holding on its conclusion that the provisional application inherently disclose crystalline Form B of apremilast, the Federal Circuit found that it did not need to reach the issue of inherent disclosure because the evidence established that Example 2 actually disclosed crystalline Form B of apremilast, albeit without specifically disclosing the crystal structure of the resulting product.

The ‘541 patent claimed a method of treating a patient with apremilast that basically involves starting with a relatively low dose and, over a course of days, gradually increasing the dosage to arrive at a full dosage which is significantly higher than the initial dosage, i.e., a dose-titration schedule. The court found this to be an obvious method, in view of prior art disclosing a similar dosage schedule. The Federal Circuit observed that, as a general matter, varying doses in response to the occurrence of side effects is well-known and obvious to the skilled artisan.

Obviousness and Stereochemistry

Amgen Inc., v. Sandoz Inc. 22-1147, — F.4th — (Fed. Cir. Apr. 19, 2023)

Jordan is a second-year law student at the University of Missouri and a registered patent agent.  He has an extensive background in chemistry and food science.

Amgen markets apremilast, a phosphodiesterase-4 (“PDE4”) inhibitor, which is used for treating psoriasis and related conditions, under the brand name Otezla® which is covered by three patents, U.S. Patents 7,427,638, 7,893,101, and 10,092,541. Sandoz submitted an Abbreviated New Drug Application (“ANDA”) seeking approval market a generic version of apremilast. Celgene, the original plaintiff, brought this Hatch-Waxman suit, asserting that Sandoz’s generic product would infringe the ’638 and ’101 patents. The Federal Circuit affirms the district court’s findings on all issues raised.

Sandoz asserts that U.S. Patent 6,020,358 renders the Amgen patents obvious. The ’358 patent is the first U.S. patent describing a racemic mixture containing apremilast. Enantiomers detail the orientation of the molecule around a chiral center and can have vastly different therapeutic outcomes and clinical results between the (+) and (-) enantiomers, particularly thalidomide analogues. The critical difference between the ‘358 and ‘638 patents is the composition of the mixture:

The ’358 patent is a racemic mixture comprised of 50% of the (+) enantiomer of 2-[1-(3-ethoxy-4-methoxyphenyl)-2-methylsulfonylethyl]-4acetylaminoisoindoline-1,3-dione and 50% of the (-) enantiomer.

Compare to an excerpt of Amgen’s language in claim three of ‘638:

A pharmaceutical composition comprising stereomerically pure (+)2-[1-(3- ethoxy-4-methoxyphenyl)-2- methylsulfonylethyl]-4- acetylaminoisoindoline-1,3-dione, or a pharmaceutically acceptable salt, …

The ’638 Patent: Sandoz failed to provide clear and convincing evidence at the district court to show that a skilled artisan would have reasonably expected a benefit from separating the enantiomers or that the (+) enantiomer was the cause of the desirable properties of the ‘358 formulation. Sandoz’s appeal asserts that the district court erred in its findings.

At the Federal Circuit, Judge Lourie, writing for a unanimous panel of Judges Cunningham and Stark, focuses on the unexpected potency of apremilast discovered relative to the apremilast-containing racemic mixture during testing and experimentation. At the district court, the named inventor, Dr. Schafer, testified that the stereomerically pure apremilast reduces the production of tumor necrosis factor alpha (“TNFα”), the factor that is linked to psoriasis, 20 times more effectively than the previous patent.

Dr. Schafer also says that a skilled artisan would expect a twofold improvement in efficiency. The district court finds that the 20-fold difference, when an otherwise two-fold difference would have been expected by the skilled artisan was sufficient to support a finding of an unexpected result and subsequent nonobviousness. A 20-fold difference from the steromerically isolated formulation goes well beyond a difference in degree into a difference in kind.

It strikes me as interesting that the characteristics of apremilast were largely left undiscussed. Apremilast is a thalidomide analogue and safety concerns about the infamously teratogenic effects related to thalidomide were sufficient skepticism for a skilled artisan and the industry at large regarding stereomerically pure formulations. However, it would seem that this teratogenicity could cut both ways as a skilled artisan would have ample incentives to investigate the enantiomers separately for safety concerns in light of the thalidomide paradox.

The thalidomide paradox provides that racemic mixtures and pure enantiomers have different characteristics, despite in vivo racemization. If the molecule is sufficiently analogous to thalidomide, it seems that a skilled artisan would be inclined to be taught towards separating the enantiomers. Regardless, the unexpected result was found to be dispositive on appeal and the objective indicia weren’t necessary but the other findings of the objective indicia of long-felt need, others had tried and failed, industry skepticism, and commercial success were also affirmed.

           The ’101 Patent: Sandoz also alleges that the ’101 patent should have been found to be obvious. Sandoz says the ‘101 patent should not be entitled to the priority date of March 2002 because the  ’515 provisional application did not inherently disclose crystalline Form B of apremilast and therefore did not satisfy the written description requirements of 35 U.S.C. § 112. The district court relies on a finding that ‘515 application did inherently disclose the crystalline form.

The Federal Circuit did not find it necessary to delve into inherent disclosure because a review of the trial record shows Amgen provided multiple experiments, and expert testimony, showing that there was actual disclosure of the crystalline Form B. Absent any contrary evidence by Sandoz, the priority date and subsequent finding of nonobviousness were affirmed. Another win chalked up to Amgen’s excellent expert testimony.

            The ’541 Patent: On cross-appeal, Amgen asserts that the district court finding that the patent is obvious in light of prior art is erroneous. The district court found that the ’541 patent would have been obvious over the prior art or in crediting expert testimony stating that dose-titration modification would have been routine to a skilled artisan. Specifically, dose titration would be something that is regularly done in the treatment of psoriasis.

In re Charger Ventures: Federal Circuit Affirms TTAB Denial of Trademark Registration

By Dennis Crouch

In re Charger Ventures, — F.4th. —, 22-1094 (Fed. Cir. 2023)

In this trademark case, the Federal Circuit affirmed a decision by the Trademark Trial and Appeal Board (TTAB) denying registration of the mark SPARK LIVING for residential real estate, based upon the prior registration of SPARK for commercial real estate. The prior registration is tied to Spark Co-working spaces that started in Baltimore and have now expanded to several other cities.

Charger presented several arguments centering on the du Point factors used to determine whether a proposed mark “so resemble a registered mark as to be likely, when used on or in connection with the goods or services of the applicant, to cause confusion, mistake, or to deceive.” Section 2(d).

An interesting discussion in the case focuses on the weakness of the prior mark. Although the tribunals agreed that it was potentially weak, it is still a registered mark and therefore subject to protection. Further, Charger’s trademark application proceeding is not a proper arena for challenging the validity of a trademark held by someone else. This is especially true here since the owner of the prior mark did not file an opposition.

A second, interesting aspect of the decision focuses on the “LIVING” portion of the proposed mark. That word is generic with regard to residential housing and, in addition, the applicant had disclaimed the word. Still, likelihood of confusion question should focus on comparing the entire proposed mark. The applicant argued that the TTAB had improperly given no weight to the LIVING portion. But, the appellate court affirmed, holding that the Office was correct to focus attention on the dominant portion of the mark. Here, the TTAB had quickly considered the impact of LIVING, but concluded that it offered no meaningful distinction.

Finally, the appellate court agreed that there was no reason to distinguish between commercial and residential real estate.

Throughout its entire review, the court appeared to agree with the TTABs conclusions, but noted that it would give deference to TTAB factual conclusions so long as supported by substantial evidence.

The Court did find one error by the TTAB, but concluded that it was harmless. In particular, the lower tribunal had failed to expressly indicate what weight it accorded to each of the du Point factors. Although the TTAB decision lacked clarity on this point, the appellate panel concluded it could sufficiently discern the agency’s path of reasoning.

Refusal Affirmed.


Claim Construction and Due Process: Examining NST Global v. Sig Sauer Inc. in the Supreme Court

by Dennis Crouch

NST Global, LLC, dba SB Tactical v. Sig Sauer Inc. (Supreme Court 2023)

This case has a low chance of being granted certiorari, but it still has some interesting elements regarding claim construction and procedure.  This is a perfect case for the Supreme Court to issue a GVR (Grant-Vacate-Remand) with an order to the Federal Circuit to explain its reasoning.

The setup is common. Tactical sued Sig Sauer for patent infringement; Sig Sauer responded with an IPR petition that was eventually successful.  Tactical appealed based upon the PTAB’s sua sponte claim construction that found the preamble to be limiting, but the Federal Circuit Affirmed without opinion.

The Supreme Court petition asks three questions:

  1. Whether the claim construction finding the preamble limiting was improper.
  2. Whether the PTAB violated due process by construing the term sua sponte and failing to give the patentee with notice or an opportunity to present evidence.
  3. Whether the Federal Circuit’s use of Rule 36 violates constitutional guarantees  of due process and the statutory protections of 35 U.S.C. 144.

The Tactical patents cover a forearm stabilizing brace that can be attached to a pistol. U.S. Patent Numbers 8,869,444 and 9,354,021. Sig Sauer initially was a distributor of Tactical’s product, but later began making its own competing product. At that point Tactical sued.

In the IPR petition, Sig Sauer did not request any claim construction. Likewise, the petition decision granting the IPR stated that no claim terms needed any express construction.  “We agree—we need not expressly construe any claim term
to resolve the parties’ dispute.”  During briefing, neither party requested construction of any aspect of the claim preambles.  Eventually though, in its final written decision, the PTAB interpreted the preambles as limiting and then used that construction to conclude that the claims were invalid as obvious.

Yes, I said that the narrow construction led to the claims being found invalid.  That is unusual — usually the addition of limitations helps to avoid the prior art. In this case though the focus was on objective indicia of non-obviousness. NST’s sales; copying by Sig; praise; etc.  But, by giving weight to the preamble terms, the PTAB was able to destroy the presumed nexus between the claims and NST’s product.  The result, those secondary indicia were found wanting because NST had not provided additional evidence “commensurate with the claims” as newly construed.

For context, the claims are directed to the attachment, but the preamble recites “a handgun” and “a support structure extending rearwardly from the rear of the handgun:”

1. A forearm-gripping stabilizing attachment for a handgun, the handgun having a support structure extending rearwardly from the rear end of the handgun, the forearm-gripping stabilizing attachment, comprising: . . .

The PTAB ruled that the claims require the handgun and also the support structure  as recited in the preamble along with the forearm attachment described in the body.  The problem for the patentee is that its objective indicia evidence focused on the forearm attachment, not the whole package.  Thus, no nexus and no weight given to those secondary factors.  In its decision, the PTAB when through the whole life and meaning analysis: “we conclude that the preambles of claims 1, 3, and 5 are ‘necessary to give life, meaning, and vitality to the claim[s],’ and, as such, are limiting.”

The case was already close because there is a long history of this sort of stabilizer going back to the 19th Century, and so the absence of secondary considerations led to the obviousness conclusion.

During the IPR trial, Sig Sauer had argued that the high sales were due to an odd regulatory scheme against semi-automatic rifles, and the pistol attachment was actually popular primarily because it allowed the pistol to be shouldered.  On appeal, that was raised as an alternative justification for the judgment. But, in my view, the PTAB did not actually rule on that issue in the first place.

The patentee appealed, but the Federal Circuit panel of Judges Reyna, Schall, and Chen affirmed without opinion.

An AI Journey From Fractals to GPT

By Dennis Crouch

I recently was thinking back to 1996 and the start of my senior year at Princeton University. Although I was a mechanical & aerospace engineering major, I had become fascinated with AI and so focused my senior thesis on developing a new AI model within the department of electrical and computer engineering. Instead of employing traditional layers, I utilized a fractal metaphor to design the neural networks. The main theoretical advantage of this approach was its potential to offer a deeper understanding of how the network operated, allowing us to peer into the brain and gain insights into its learning process based on the structure created. Furthermore, the model facilitated greater human control and direction.

This past weekend, computer law expert Van Lindberg reminded me of the Dartmouth Summer Research Project on Artificial Intelligence that had a game plan of solving AI during the summer of 1956. My senior thesis project took 8 months, and met with roughly the same (lack of) success. I’ll write more about this later, but the project was one of the first to use massive parallelism offered by human players across the internet as the learning model. That part was a big success — as well as the Applet front-end developed mostly by my partner Ryan Kotaro Akita. 

I feel like things are coming full circle for me, but this time the AI model has improved exponentially. The rapid progress in human-machine interaction and generative AI is astonishing. I find myself constantly exploring new, innovative technologies poised to disrupt bloated organizations. The venture capital landscape is necessarily shifting, as small teams rapidly develop and release disruptive products and services with higher speed but lower financial requirements.

Today’s exploration for me is autoGPT that allows users to stack various traditional and AI services to create the best autonomous assistant that I have seen so far.  After being provided with general instructions, autoGPT can generate a dynamic project plan that it executes through online interaction and GPT-4 training results. This technology has the potential to equalize expertise, much like what happened with chess several years ago. However, unlike chess, which relies on a fixed board and finite options, this new model addresses real-time, real-world problems. Indeed, it’s a fascinating time to be alive.

This setup is wonderful but also so scary. Awesome in all senses. The AI is ruthless and without emotion or wisdom. It empowers anarchists, terrorists, and reckless operaters to inflict significant harm. GPT layering enables more sophisticated attacks that exploit a combination of human-social and technological weaknesses in a massively parallel manner. Scams, both big and small, are becoming increasingly easier to execute. Of course, there will be those who use these tools to fight for good. As the battle of technology unfolds, life may begin to resemble a futuristic graphic novel more and more.

What are your thoughts on where we are headed?