Upcoming Senate Hearings on Section 101

Subcommittee on Intellectual Property
DATE: Tuesday, June 4-5, 2019 02:30 PM each day.

Panel I
The Honorable Paul R. Michel; The Honorable Q. Todd Dickinson;
The Honorable David J. Kappos; Mr. Charles Duan; Professor Jeffrey A. Lefstin

Panel II
Mr. Robert A. Armitage; Professor David O. Taylor; Ms. Sherry M. Knowles, Esq.;
Ms. Alex Moss; Professor Mark A. Lemley

Panel III
Mr. Michael Rosen; Professor Paul R. Gugliuzza; Professor Joshua D. Sarnoff; Mr. Patrick Kilbride; Professor Adam Mossoff

Day 2:

Panel I
Ms. Barbara Fiacco; Mr. Scott Patridge; Mr. Henry Hadad; Mr. David Jones; Ms. Stephanie Martz

Panel II
Mr. Paul Morinville; Mr. Phil Johnson; Dr. William G. Jenks; Mr. Christopher Mohr; Mr. Jeffrey A. Birchak

Panel III
Mr. Jeff Francer; Mr. Hans Sauer; Ms. Natalie M. Derzko; Mr. Rick Brandon; Ms. Kate Ruane


The Difficulty of Changing Statutes

As we continue to transition to patent prosecution under the AIA, many of us have made misstatements drawn from the substantial rewriting of 35 U.S.C. 102.  Its nice to see we are in good company.

Earlier this summer, the Federal Circuit decided Helsinn v. Teva – its first foray into interpreting the amended prior art definitions found in Section 102.  The case centered on whether the reorganization of the statute implicitly altered the definition of “on sale.”  In particular, the patentee (and the PTO) argued that the AIA focuses exclusively on publicly available prior art – and thus secret offers/sales should not be considered prior art under the statute.  The Federal Circuit rejected that argument and held that “on sale” as now codified in 35 U.S.C. 102(a)(1) continues to mean the same as it did pre-AIA when it was codified in 35 U.S.C. 102(b).

It turns out that in its original opinion, the Federal Circuit erroneously wrote “102(b)” – referring to the old on-sale bar – when intending to actually refer to the new law.  In a one line errata order today, the Federal Circuit corrects its typo: On page 27, change “under § 102(b)” to “under § 102.”  The court’s error here makes me feel a bit better about my several typos on the topic – especially considering that the decision was known to be an important decision and was reviewed by the entire court and numerous law clerks before release.  I will note here however, that this will not excuse similar errors on my Patent Law exam upcoming this Fall.

My Take after Oral Arguments: Supreme Court Likely to Affirm in Peter v. NantKwest

by Dennis Crouch

Peter v. NantKwest (Supreme Court 2019) [TRANSCRIPT]

The Supreme Court heard oral arguments on October 7, 2019 in this case involving the question of attorney fees in Section 145 civil actions.  I’ll agree with Mark Walsh who identified this as a “a dry, procedural patent case.”  But, I really enjoyed the oral arguments — Read some of the drama below.

Before getting too dramatic: I recognize that the result of this case is basically not going to have much of any impact on patent cases. So, perhaps one benefit is that the court is unlikely to ruin the patent system with its decision here.  Depending upon the outcome, Section 145 civil actions will be seen as relatively more/less expensive for the applicant. But, they are already very expensive for an applicant to pay its own expenses. My take is that the added PTO-attorney expense will be a relatively small extension of the already high-costs assuming that the PTO continues to be fairly thrifty in its defense of these cases.  On the PTO side, the agency has to pay its attorneys from collected fees somehow.  If it doesn’t get the fees from the 145 challenger, then it will collect them from the applicant pool in general (about $1.60 per applicant) as it has done for many years.

Conventional wisdom in patent cases is reversal. The Supreme Court does not take cases to offer congratulations to the lower court. And the absence of circuit splits means that there isn’t a right vs wrong appellate court.  My read of the oral argument though goes against this conventional wisdom — I’m betting on affirmance.  The Gov’t dropped its argument that the American Rule does not apply; and so the American Rule as applied in other areas has the potential of being undermined by a Gov’t win here.


Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

Reduced to Practice, but Not Yet Ready for Patenting

by Dennis Crouch

Barry v. Medtroinc, Inc. (Fed. Cir. 2019)

In a split decision, the Federal Circuit has sided with the patentee Dr. Barry — affirming the induced infringement and $17 million damages judgments as well as several determinations regarding the public-use and on-sale statutory bars. The patents here are directed to spine surgery methods that involve large screws drilled into the spine. U.S. Patent Nos. 7,670,358 and 8,361,121.

The dissenting opinion by Chief Judge Prost offers a concise explanation of a primary issue in the case:

The facts are simple. More than one year before filing for the ’358 patent, Dr. Barry successfully performed his claimed surgical method on three different patients, charging each his normal fee. Dr. Barry’s method was thus prima facie “on sale” or in “public use” before the critical date under 35 U.S.C. § 102(b) [pre-AIA].

The majority added to these facts — that Dr. Barry was not satisfied that his method worked well enough until follow-up testing that occurred after the third surgery.

Here, the patented invention is a method — and so cannot really be “on sale.” In addition, Barry’s pre-critical-date performance of the method was within the surgical rule where HIPAA and other privacy rules ensure that the method was not publicly used. However, one conflict was the extent that Barry was commercializing the the invention — with the idea that commercialization counts as a public use.  In a footnote, the Court concludes that he did not “exploit” his invention prior to the critical date since he charged the same for his new surgery has he did for the old.

Though earning his normal fees from the three surgeries [likely $$$$$], Dr. Barry did not “exploit” his invention as a means to attract the three patients for those surgeries or to charge more because he used his new technique. The jury could find that he would have gotten the same business, and earned the same fee, even if he had not planned to use or used the inventive process.

There are a number of major problems with this conclusion from the court — likely enough to fill a law review article.

In the end, for the majority, the case turned on the question of whether the invention was “ready for patenting” at the time when it was used for the surgeries.  The majority found that it was not yet ready for patenting – and thus that the uses did not serve as prior art.  Even though the invention had been reduced to practice used in practice, it was not ready for patenting because Dr. Barry didn’t really know if it worked to create a stable improvement in spine function.  “[T]here is substantial evidence that Dr. Barry’s invention was not ready for patenting until January 2004 because the final follow-up from the October surgery was reasonably needed for the determination that the invention worked for its intended purpose.”  The dissent again disagrees — arguing accurately that “Dr. Barry could have obtained a patent before the critical date.”

Note here that in my original short explanation of this decision, I indicated that the invention “had been reduced to practice.”  According to the majority, the invention was not reduced to practice because that requires a determination (by the inventor) “that the invention would work for its intended purpose.” In re Omeprazole Patent Litig., 536 F.3d 1361 (Fed. Cir. 2008).  


Crouch’s Supreme Court Patent Law Update

by Dennis Crouch

The Supreme Court is now open for business for its 2018-2019 Calendar.  The only pending patent case before the court is Helsinn v. Teva, which focuses on the meaning of “on sale ” in the Section 102 of the Patent Act as revised by the 2011 America Invents Act.  When do pre-filing sales count as prior art — what level of public disclosure is necessary?

CVSG: On October 1, the Supreme Court asked for the views of the U.S. Government in the case of RPX v. ChanBond — Whether a party that asks for review of a patent has standing to appeal the U.S. Patent and Trademark Office’s final ruling on that review to the U.S. Court of Appeals for the Federal Circuit.

Early in the term, the court regularly denies a host of petitions that had accumulated over the summer as part of its “long conference.”  The court has now done that with about 16 patent case denials out of the gate, including a few cases that I found interesting, including:

  • Smartflash LLC v. Samsung Electronics America, Inc. et al., No. 18-189 (PTAB judges as principal officers; retroactive CBM reviews)
  • Regeneron Pharmaceuticals, Inc. v. Merus N.V., No. 17-1616 (litigation misconduct and inequitable conduct).
  • Bombardier Recreational Products Inc., et al. v. Arctic Cat Inc., No. 17-1645 (does the “should have known” standard for willful infringement under Seagatemeet the “intentional or knowing” requirement set forth in Halo v. Pulse).
  • Integrated Technological Systems, Inc. v. First Internet Bank of Indiana, No. 17-1590 (“Does 35 U.S.C. § 282 allow for challenges to a patent’s validity based on patent eligibility under 35 U.S.C. § 101?”).
  • Leon Stambler v. Mastercard International Inc., No. 17-1140 (Whether the Federal Circuit’s issuance of Rule 36 judgments without opinions for the disposition of appeals from the Patent and Trademark Office violates 35 U.S.C. § 144’s requirement that the Federal Circuit “shall issue” its “mandate and opinion” for such appeals.).

Supreme Court 2018 — Pending Cases for September Conference

RPX (CVSG mentioned above) is the only case from the initial September conference that was not denied on the first round.

The next upcoming conference is October 5, 2018 and the court is scheduled to consider two cert petitions in patent cases:

  • Advanced Audio Devices, LLC v. HTC Corporation, et al., No. 18-183 (Whether an IPR against patents filed before enactment of the AIA violates the Takings Clause of the 5th Amendment to the U.S. Constitution.?)
  • Alexsam, Inc. v. Wildcard Systems, Inc., et al., No. 17-1483 (when does a breach of patent license case get to Federal Court?)

Both of these cases would interesting to see before the court.


Fourth Estate Public Benefit Corp. v. Wall-Street.com

In addition to the one patent case (Helsinn), the Supreme Court also has one Copyright case lined-up for its October 2018 term:

Fourth Estate Public Benefit Corp. v. Wall-Street.com, No. 17-571

Section 411(a) of the Copyright Act provides that “no civil action for infringement of the copyright in any United States work shall be instituted until” either (1) “registration of the copyright claim has been made in accordance with this title,” or (2) “the deposit, application, and fee required for registration have been delivered
to the Copyright Office in proper form and registration has been refused.” 17 U.S.C. 411(a).

The question presented is as follows: Whether a copyright owner may commence an infringement suit after delivering the proper deposit, application, and fee to the Copyright Office, but before the Register of Copyrights has acted on the application for registration.

ScotusBlog has the Briefs

Supreme Court Update – July 2018

by Dennis Crouch

Each summer, the Supreme Court takes a recess and patent cases begin to pile-up in the high-court’s docket. Only a handful of intellectual property petitions are granted certiorari each year, but almost all of the petitions raise interesting and important issues of law and policy.

The following is a comprehensive list of Patent cases pending before the Supreme Court.  I have excluded a small handful that have (in my estimation) no shot at certiorari and also fail to raise interesting patent law issues.

Petitions Granted:

  1. Prior Art – On Sale Bar: Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., et al., No. 17-1229. This case questions whether 102(a) prior art under the AIA is limited to publicly available prior art. Particularly, does a pre-filing sale of the invention count as “on sale” prior art where the sale was a private sale that did not publicly disclose the invention? Merits briefing should be complete in October with oral arguments likely held in November 2018.

Petitions for Writ of Certiorari Pending:

  1. Inequitable Conduct: Regeneron Pharmaceuticals, Inc. v. Merus N.V., No. 17-1616. The question presented is “Whether a patent right can be fully extinguished based on misconduct committed by the patentee’s counsel during federal district court litigation to enforce the patent right.”
  2. Validity – Indefiniteness: American Technical Ceramics Corp. v. Presidio Components, Inc., No. 17-1497 (Can a patent’s definiteness be proven based wholly upon post-filing evidence?)
  3. Damages – Enhanced Damages: Bombardier Recreational Products Inc., et al. v. Arctic Cat Inc., No. 17-1645 (Can treble damages for “willful infringement” be based upon a “should have known” standard?)
  4. Validity – Obviousness: Nichia Corporation, et al. v. Everlight Electronics Co., Ltd., et al., No. 17-1707 (Treating obviousness as a question of fact vs law).
  5. Validity – Obviousness: B/E Aerospace, Inc. v. C&D Zodiac, Inc., No. 17-1252 (Process of obviousness analysis — is there first a prima facie obviousness analysis followed by consideration of objective indicia of non-obviousness?)
  6. Procedure – Standing for AIA Trials: Return Mail, Inc. v. United States Postal Service, No. 17-1594 (Whether the government is a “person” who can petition to institute a CBM;  Does a 1498(a) action count as an infringement action?)
  7. Procedure – Standing of AIA Trials: RPX Corporation v. ChanBond LLC, No. 17-1686 (What is required for a petitioner to have standing to appeal an AIA Trial final decision?)
  8. Procedure – Impact of Factual Stipulation: Allergan Sales, LLC v. Sandoz, Inc., et al., No. 18-21 (may the court “ignore a factual stipulation”).
  9. Procedure – Federal Court Patent Jurisdiction: Alexsam, Inc. v. Wildcard Systems, Inc., et al., No. 17-1483 (Does a breach-of-patent-license lawsuit arise under the Federal Patent laws?)
  10. Procedure – Joinder of Co-Owner: Advanced Video Technologies LLC v. HTC Corporation, et al., No. 18-77 (When we have co-owners of a patent, can one co-owner use Fed. R. Civ. Pro. R. 19 to force joinder of the other co-owner in an infringement lawsuit?)
  11. Procedure – Timing of New Trial Motion: Promega Corporation v. Life Technologies Corporation, et al., No. 17-1669.
  12. Inventor Rights: Leitner-Wise v. LWRC International, LLC, et al., No. 18-52.  Leitner-Wise (the inventor) assigned his patent rights as part of a royalty agreement that have not been by the subsequent assignee.  May he now sue the assignee for infringement?
  13. Patent Eligibility: Integrated Technological Systems, Inc. v. First Internet Bank of Indiana, No. 17-1590 (“Does 35 U.S.C. § 282 allow for challenges to a patent’s validity based on patent eligibility under 35 U.S.C. § 101?”)
  14. AIA Trials and Appeals: Stambler v. Mastercard International Inc., No. 17-1140 (Can Congress revoke a patent owner’s right to have the validity of his patent determined by a jury trial before an Article III forum after his patent issues; and (2) whether Federal Circuit Rule 36 contravenes 35 U.S.C. § 144.).
  15. Infringement — Ensnarement as a Defense: Jang v. Boston Scientific Corporation, et al., No. 17-1332 (“Whether the Federal Circuit’s “ensnarement” defense to infringement [under the doctrine of equivalents] violates patent holders’ Seventh Amendment jury-trial rights.”)
  16. Prior Art – Effective Date of Prior Art: Ariosa Diagnostics Inc. v. Illumina Inc, No. 18-****.  (“If a patent discloses but does not claim an invention, does that disclosure qualify as prior art as of the date of the application in which it was first made, such that no one else may patent the same invention based on a later-filed application?”)


Supreme Court Refuses to Reconsider its Patent Eligibility Doctrine

by Dennis Crouch

As its final act for the 2021-2022 term, the US Supreme Court has denied certiorari in the pending patent eligibility cases of American Axle v. Neapco and Spireon v. Procon.

The Patent Act expressly lists four categories of patentable inventions: “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor.”  35 U.S.C. 101. This language is almost identical to the list created for the Patent Act of 1790.  The Supreme Court added further atextual caveats — no abstract ideas; laws of nature; or natural phenomenon.

Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

Reasonably Continuous Diligence vs. Continuous and Reasonable Diligence

ATI Tech ULC v. Iancu (Fed. Cir. 2019)

On appeal, the Federal Circuit has sided with the ATI — finding the patentee’s Unifed Shader claims patentable over the prior art. U.S. Patents 7,742,053, 6,897,871, and 7,327,369 (Graphics processing architecture employing a ‘unified shader’).

These patents are pre-AIA and the patentee is claiming that its invention pre-dates the prior art.  The PTAB agreed that ATI’s conception was early enough, but concluded that the patentee lacked diligence.

One problem with the PTAB opinion was its statement requiring “continuous reasonable diligence” in reducing the invention to practice while the actual traditional standard is “reasonably continuous diligence.” The Federal Circuit has previously decided this exact point:

A patent owner need not prove the inventor continuously exercised reasonable diligence throughout the critical period; it must show there was reasonably continuous diligence.

Perfect Surgical Techniques, Inc. v. Olympus Am., Inc., 841 F.3d 1004 (Fed. Cir. 2016) (emphases original).

In the IPR, the inventor provided testimony and supporting document that showed that at least one person worked on the design of a working model embodying the invention every business day during the diligence period.  The PTAB, however, dismissed this evidence because at least some of the time was spent working on alternative chip designs and optional features not particularly claimed.

On appeal, the Federal Circuit severely chastized the PTAB, Solicitor, and PTO Director for rejecting diligence while failing to identify any delays or gaps in activity.

“We are directed to no view of the evidence that could support a conclusion that ATI set aside the development of the Unified Shader. The PTAB cited no basis for finding that this technology was not being diligently pursued. The Director seeks to excuse the PTAB’s absence of support for its holding, by stating that ATI bears the burden of proof of diligence. However, the Director does not explain where the burden of proof was not met, upon the extensive evidence of daily activity. . . . [T]he purpose of the diligence requirement is to show that the invention was not abandoned or set aside. Here, the Director does not point to the remotest suggestion of abandonment or setting aside of the Unified Shader technology.”


Dismissal on the Pleadings — for Indefiniteness

DataCloud Techs v. SquareSpace (D.Del. 2021)

Eligibility and indefiniteness are both judged primarily as questions of law, although both can occasionally depend upon some underlying factual finding.  And, even when questions of fact are at issue, it is a judge (rather than a jury) that hears the evidence and determines the facts.

In recent years, eligibility determinations have moved forward in the litigation context and become a true “threshold test.”  See Bilski v. Kappos, 561 U.S. 593 (2010).   Often, eligibility is the first substantive determination in patent litigation and it is typically decided either on a motion to dismiss (12(b)(6)) or motion on the pleadings (12(c)).

With all the parallels, it is not surprising that some litigants are also suggesting that indefiniteness be decided at the pleadings stage.

The recent motion for dismissal by SquareSpace is on point — arguing that DataCloud’s patent claims indefinite functional limitations parallel to those rejected by the Supreme Court in O’Reilly v. Morse. [Brief in Support of Motion to Dismiss].

The brief walks through Supreme Court history in indefiniteness associated with functional claim limitations.

  • O’Reilly v. Morse, 56 U.S. (15 How.) 62 (1854)
  • Corning v. Burden, 56 U.S. (15 How.) 252 (1854)
  • Burr v. Duryee, 68 U.S. (1 Wall.) 531 (1864)
  • Fuller v. Yentzer, 94 U.S. 288 (1877)
  • Risdon Iron & Locomotive Works v. Medart, 158 U.S. 68 (1895)
  • Westinghouse v. Boyden Power Brake Co., 170 U.S. 537 (1898)
  • Busch v. Jones, 184 U.S. 598 (1902)
  • Holland Furniture Co. v. Perkins Glue Co., 277 U.S. 245 (1928)
  • General Electric Co. v. Wabash Appliance Corp., 304 U.S. 364 (1938)
  • United Carbon Co. v. Binney & Smith Co., 317 U.S. 228 (1942)
  • Halliburton Oil Well Cementing Co. v. Walker, 329 U.S. 1 (1946)
  • Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 336 U.S. 271 (1949) (“Graver I”)

SquareSpace filed its motion to dismiss in May and DataCloud has recently filed an amended complaint and has argued that the amended complaint renders the motion “a nullity.”  The new complaint adds three additional patents and also includes an allegation that attempts to skirt the indefiniteness question:

A person skilled in the art … would understand that each of the limitations and/or steps in the claims … are defined by what they do (not what they are). Even if any limitation and/or step of the claims is “functional”— and none are—the teachings of the … Patent provides to any skilled artisan sufficient structure, material, or acts necessary to perform the recited function or provides information sufficiently identifying a finite group of structures, materials, or acts necessary to perform the recited function that were well known to skilled artisans at the priority date.

Amended Complaint.

= = = =

Lawyers on the brief include James Dabney and Sue Robinson (as well as others).


The Relationship between Eligibility and Functional Claiming

by Dennis Crouch

Glasswall Solutions v. ClearSwift (Fed. Cir. 2018) (non-precedential)

Glasswall’s patent claims are directed to a process of regenerating electronic files in a way that cuts-out non-conforming data. The approach here could be used as a virus filter.  U.S. Patent Nos. 8,869,283 and 9,516,045.  Although the generalized approach here is a nice goal, the Federal Circuit noted that the claims themselves did not actually claim how to achieve the goal.

The claims at issue … do not purport to claim how the invention receives an electronic file, how it determines the file type, how it determines allowable content, how it extracts all the allowable data, how it creates a substitute file, how it parses the content according to predetermined rules into allowable and nonconforming data, or how it determines authorization to receive the nonconforming data. Instead, the claims are framed in wholly functional terms, with no indication that any of these steps are implemented in anything but a conventional way.

So, taking this conclusion about these “wholly functional” terms, the next step is to ask whether that conclusion implicates any particular patent doctrine.

In O’Reilly v. Morse, 56 U.S. 62 (1853), the Supreme Court invalidated the broadest of Morse’s telegraph claims — claim 8 that had broadly claimed the process of sending messages at a distance without being limited to any particular machinery.  In Morse, the court held that the claim consisting of a single functional limitation was “too broad and cover[ed] too much ground.”  Later, in Halliburton Oil Well Cementing Co. v. Walker, 329 U.S. 1 (1946), the Supreme Court was faced with a situation closer to Glasswall‘s.  In that decision, the Supreme Court found that the claimed oil-well measuring apparatus included a wholly functional element at the invention’s point of novelty.  That lack of specificity led the court invalidate the claim as indefinite. The Halliburton Oil court wrote that it is improper for a claim to describe its “most crucial element . . . in terms of what it will do, rather than in terms of its own physical characteristics or its arrangement in the new combination apparatus.” Congress however rejected Halliburton in the 1952 Patent Act by adding the provision that elements of a combination claim may be drafted in functional form. 35 U.S.C. 112 p 6 (now 112(f)).

Back to the present case. in Glasswall, the court did not touch definiteness but rather focused its attention on eligibility under 35 U.S.C. 101 (as expanded by judicial decisions).  Here, the “wholly functional” language of the claims led the court to finding them directed to an unpatentable abstract idea.

Invalidity affirmed.


Facts about Patent Eligibility

From today’s Patent Trial and Appeal Board decision:

“We are aware of no controlling authority that requires the Office to provide factual evidence to support a finding that a claim is directed to an abstract idea.”

Ex parte Johnson, Appeal 2016-004623 (January 18, 2018).

The ex parte appeal involves IBM-owned patent application No. 13/191,583 with a pending claim 1 that itself is quite an essay at 900 words. (NYT letters to the editor should be <175 words). The PTAB affirmed the examiner’s rejection of the claims as effectively claiming the abstract idea of “managing customer discounts following the receiving of a cancellation request by a customer.”

= = = = =  (more…)

Claims that Defendant Infringed Patent Issued Years after Suit Filed Found Subject To Claim Preclusion

Normally, claim preclusion only bars later assertion of a claim only if (a) the plaintiff could have brought that claim when it filed an earlier suit and (b) the later-asserted claim is the “same” as a claim in the first case (courts take different approaches to how closely related the later claim must be to the first, but the federal rule is to look at whether the later-asserted claim arises out of the same operative facts as the earlier claim).  So, normally, if a patent issues to the plaintiff after the first suit is filed, claim preclusion wouldn’t apply because of the first step:  you can’t sue for infringement until the patent issues (with the narrow exception of seeking “provisional damages” for infringement under Section 154).

But, in a recent case, a district court held that the plaintiff had a “duty to seek to amend” its complaint to add a later-issued patent, and to the extent the defendant can show that its infringement arose out of the same set of facts as the earlier case, claim preclusion will (and does) apply. The case, XY, LLC v. Trans Ova Genetics, LC (D. Colo. 2018), is here.  One of the two patents issued after the complaint had been filed, and a second actually issued after judgment in the first case had been entered!  (The district court also took what may prove to be a very unworkable approach to determining the second step.)

So, be careful out there: this creates a real mess because now you’re going to have to assert every possible patent for infringement, and if a new one issues, you better move to amend and hope the judge grants the motion, or doesn’t, because then you’ll be starting all over again with discovery, claim differentiation issues, and so on…  If you’re a defendant, maybe you should consider seeking a declaration as to patents the plaintiff owns, but hasn’t asserted, and just make a mess that way.

Denied Certiorari on Section 101.

In its first action for the October 2017 term, the Supreme Court has (inter alia) denied Certiorari in three pending Patent Cases:


Of these, only Synposis was truly interesting.  That case asked for a review of the law and procedure of the Abstract Idea inquiry under Section 101:

In Alice Corp. Pty. Ltd. v. CLS Bank International, 134 S. Ct. 2347 (2014), the Court reaffirmed the two-part test for determining whether an invention is patent-eligible under 35 U.S.C. § 101: (1) whether the patent claims are directed to a patent ineligible concept, such as laws of nature, natural phenomena, or abstract ideas, and (2), if so, whether the elements of the claim contain an “inventive concept” that transforms the ineligible concept into an invention that is patent-eligible. Here, a panel of the Federal Circuit held that in determining whether a patent is directed to an abstract idea, a court must ignore the specification and evaluate only the express limitations in the claims. The panel further held that the accused patents failed the second step of Alice because the claims do not explicitly call for involvement of a computer and therefore could not be characterized as an improvement to computers. The questions presented are:

1. Whether the § 101 inquiry requires courts to ignore the specification, as the Federal Circuit held, or whether courts should ascertain the true scope of the claims in light of the specification and intrinsic record in determining whether they are drawn to a patent-ineligible concept.

2. Whether an otherwise revolutionary technological breakthrough is not an “inventive concept” under the second step of Alice merely because the court believed the breakthrough could theoretically be implemented without a computer.

Mentor Graphics v. Synopsys: Covering All the Bases


In his case, Oleksy faced an uphill battle against an affirmance-without-opinion.

Single Reference Obviousness

Idemitsu Kosan Co., Ltd., v. SFC Co. Ltd. (Fed. Cir. 2017).

The decision here is important as one example of a single-reference obviousness decision upheld by the Federal Circuit on appeal.  Here, the prior-art is a published international patent application also owned by the patentee and with overlapping (but not identical) inventorship. 

Idemitsu’s U.S. Patent No. 8,334,648 covers an organic LED and claims priority back to a July 19, 2002 Japanese patent application.  The asserted prior art is an international application (PCT) publication from a two-weeks prior – July 4, 2002. International Publication WO 02/052904 (claiming priority to December 2000 and named Arakane).  At this point it is unclear why, but Idemitsu never challenged the status of prior-art status of Arakane.

In its obviousness analysis, the Board found that Arakane taught all of the elements of ‘648 patent’s challenged claims and that it would have been obvious to combine them in the way claimed. On appeal, the Federal Circuit has affirmed – holding that the Board had made reasonable conclusions both on the facts and the law.

The case includes a couple of procedural findings — importantly the Court permitted (at least in this situation) the PTAB to reach factual and legal conclusions not directly addressed in the petition.

= = = =

Note: The opinion here does not discuss why the single-reference decision was based upon OBVIOUSNESS rather than ANTICIPATION.

Federal Circuit Refuses to Hear Private Right Issue

by Dennis Crouch

Cascades Projections v. Epson America (Fed. Cir. 2017) (en banc denial)

In a split decision, the Federal Circuit has denied Cascades petition for initial en banc hearing.  The petition asked one question: “Whether a patent right is a public right.” Because a Federal Circuit panel already decided this decision in MCM, Cascades asked the court to bypass the initial panel appeal and head straight to the en banc question.  See MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284 (Fed. Cir. 2015), cert. denied 137 S. Ct. 292 (2016).  The issue is important because the answer to the private right question could lead to a judgment that the administrative patent trial system is an unconstitutional violation of due process rights.  I previously discussed the case on Patently-O.

Whether a Patent Right is a Public Right


For judges wrote separately on the case:

Judge Newman Concurring in Denial: The important question here is “whether the statutory scheme created by the America Invents Act, in which the Office is given an enlarged opportunity to correct its errors in granting a patent, with its decision subject to review by the Federal Circuit, meets the constitutional requirements of due process in disposition of property.”  Judge Newman suggests that she would vote for re-hearing after “full opportunity for panel rehearing.”

Judge Dyk (Joined by Judges Prost and Hughes) Concurring in the Denial: “MCM was correctly decided. . . . [T]here is no inconsistency in concluding that patent rights constitute property and that the source of that property right is a public right conferred by federal statute.”

Judge O’Malley, Dissenting from the Denial: Patent rights are likely “core private rights only subject to adjudication in Article III courts.”

Judge Reyna, Dissenting from the Denial: “The state of current law compels en banc review.”   According to Judge Reyna, the clear statement from Supreme Court’s 1898 decision in McCormick Harvesting that “The only authority competent to set a patent aside, or to annul it, or to correct it for any reason whatever, is vested in the courts of the United States, and not in the department which issued the patent.” McCormick Harvesting Mach. Co. v. C. Aultman & Co., 169 U.S. 606, 609 (1898).

We’ll look for the upcoming panel decision in the case and subsequent en banc hearing.