ITC: Importing Articles that Infringe

Comcast Corp. v. ITC and Rovi Corp. (Fed. Cir. 2020)

Rovi complained to the US International Trade Commission (ITC) that Comcast’s customers directly infringe Rovi’s U.S. Patents 8,006,263 and 8,578,413 when they use the X1 system.  The ITC agreed and found Comcast in violation.

Three issues to talk about here: (1) Importing “articles that infringe”; (2) Importation by third parties; (3) Patents are now expired.

Articles that Infringe: The ITC statute provides for action based upon “importation … of articles that (i) infringe a valid and enforceable US patent.”  19 U.S.C. § 1337(a). Comcast argues that the set-top boxes do not infringe the patent at the point of importation, but rather only become infringing once in use by the customer. On appeal, the Federal Circuit held that this issue was already decided in Suprema, Inc. v. U.S. Int’l Trade Comm’n, 796 F.3d 1338 (Fed. Cir. 2015) (en banc) (ITC still can take action to block imports even though direct infringement is post-importation).  Note here that Comcast hired former US Solicitor General Donald Verrilli as its appellate counsel — in part to potentially push this issue up to the Supreme Court.

Third Party Importation: The Comcast X1 boxes are actually imported by ARRIS and Technicolor.  On appeal, the Federal Circuit confirmed that Comcast counts as the importer for Section 337 purposes because Comcast caused the articles to be imported and because the articles are particularly tailored to Comcast’s system so as to have no other use.

Expired Patents: The patents at issue here have expired. As such, the ITC exclusion order has no further prospective effect.  Since the ITC is not authorized to award damages, Comcasted that the patent expiration rendered the entire case and appeal moot.  On appeal, however, the Federal Circuit chose to decide the issues — finding that “appellate finality” is warranted based upon “collateral consequences” that may stem from its outcome.  In particular, the court noted two additional ITC actions involving Rovi patents asserted against the same Comcast X1 box in which ALJ noted that the present appeal will impact the outcome of the ongoing investigation. “We conclude that there are sufficient collateral consequences to negate mootness.”

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The case also involves parallel district court litigation that was originally filed in E.D. Tex. but moved to S.D.N.Y. That case has been stayed pending outcome of the ITC litigation under 28 U.S.C. § 1659.  Although the ITC upheld the asserted claims, the USPTO cancelled the claims of the asserted patents as part of an IPR proceeding. Those final decisions are now being appealed by Rovi to the Federal Circuit.

One of the appeals included the following interesting colloquy at oral from Judge Lourie associated with the patent’s listing of 1,500 cited references.

Judge Lourie: You are presumably registered to practice in the Patent Office?

Attorney: I am

Judge: What do you understand the purpose of citing prior art references to be?

Attorney: During prosecution?

Judge: During prosecution, yes.

Attorney: So that the examiner may consider them in whether to allow the claims

Judge: In other words, they are relevant to patentability

Judge: This patent, I’m sure you didn’t draft it, but you are standing here. This patent has 22 columns of cited references; Probably between 1,500 and 2,000. It’s very difficult to escape the conclusion that the applicant was trying to bury — it didn’t even cite [the reference used in the IPR]. What can be the sound purpose in citing 1,500 – 2,000 references other than to bury the examiner.

Attorney: The Rovi family of companies have a lot of different patent applications all related to similar technology. And I know that there is an obligation when you have multiple patents that are related to cite all of the prior art references.

Judge: So five references; ten references; twenty references …

Attorney: They do tend to accumulate when you have large patent portfolios. Because if you don’t cite all of the prior art references you cited for another patent that has your name on it then the implication is that well you purposefully didn’t cite it.  …

Judge: Well you’ve given a pretty good defense and I commend you for that. But, it is not convincing as to the citation of 1,500 references.  Will you filter back to the originators of this patent, at least with respect to one judge ‘it doesn’t sit very well.’? It doesn’t leave a good impression of patent prosecution.

Oral arguments in 2019-1188 available here:

The Many Mistakes in the Panel Decision in GS CleanTech Corp v. Adkins

By David Hricik, Mercer Law School

Over on the main page, Dennis has written up GS CleanTech Corp. and Cantor Colburn LLP v. Adkins Energy LLC (Fed. Cir. 2020) [Fed Cir Decision][DCT Decision] (does Dennis ever sleep?), which affirms a holding of inequitable conduct.

That finding can ruin careers.  Dennis examined the merits: I want to examine the procedure used on appeal. (I’ve taught civil procedure for decades now, and served as a clerk on the court a few years ago… this case is in need of correction by the full court or the panel on rehearing — whether it changes the outcome, or not, a point on which I have no view.) Whatever the merits, the panel mistates key issues of appellate review of inequitable conduct and contradicts prior panel decisions and even Therasense itself — and does so in a way that radically increases the scope of this equitable defense while, at the same time, failing to analyze the equities, oddly enough.

Specifically, first, the panel states the the standard of review of a fact finding of materiality underlying inequitable conduct  is for abuse of discretion. That is just flat wrong. “[W]e review the district court’s findings of materiality… for clear error.” Am. Calcar, Inc. v. Am. Honda Motor Co., 768 F.3d 1185, 1189 (Fed. Cir. 2014). Accord, Regeneron Pharm., Inc. v. Merus N.V., 864 F.3d 1343, 1351 (Fed. Cir. 2017).

Worse, invalidity “under the on-sale bar is a question of law with underlying questions of fact.” Robotic Vision Sys., Inc. v. View Eng’g, Inc., 249 F.3d 1307, 1310 (Fed. Cir. 2001). Accord, The Medicines Co. v. Hospira, Inc., 881 F.3d 1347, 1350 (Fed. Cir. 2018). The panel examines for abuse of discretion of, not just the underlying factual questions, but the legal question. That is wrong. Indeed, it applied abuse of discretion to whether the invention was ready for patenting, which is also wrong.

As stated,  reviewed the findings of intent to deceive for abuse of discretion: that’s wrong. “This court reviews the district court’s factual findings regarding what reasonable inferences may be drawn from the evidence for clear error.”
Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276, 1291 (Fed. Cir. 2011)

And, third, the panel never (as the district court apparently failed to do) analyzed equitable balancing — given the circumstances should the entire patent be held unenforceable?  I’ve often observed that nothing in Therasense changed the rule that, if the accused infringer meets its burden of showing both materiality and intent, “then the district court must weigh the equities to determine whether the applicant’s conduct before the PTO warrants rendering the entire patent unenforceable.” Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276, 1287 (Fed. Cir. 2011).

The panel applied the standard of review on the ultimate issue — equitable relief — to fact findings and legal conclusions. It’s a slippery slope, and one with severe consequences to the boundaries created by Therasense: it allows district courts to make clear errors on factual findings and legal conclusions, but be affirmed on appeal so long as they do not abuse their discretion. Finally and in addition, lack of careful appellate review will lead to OED investigations into practitioners, as well as ruined businesses and scientific careers.

“They Chose Advocacy over Candor”

GS CleanTech Corp. and Cantor Colburn LLP v. Adkins Energy LLC (Fed. Cir. 2020) [Fed Cir Decision][DCT Decision]

The district court ruled against the patentee CleanTech — holding the four asserted patents unenforceable due to inequitable conduct during prosecution.  On appeal, the Federal Circuit has affirmed — particularly calling out the Cantor Colburn firm for its role.

The basic issue here is that the bio-oil recovery invention (embodied by at least some of the claims) had been the subject of a pre-filing commercial offer for sale after the invention was ready for patenting.  The pre-filing activity was not disclosed to the PTO in what the district court called a “complete lack of regard for their duty to the PTO.”

As the district court explained things: The inventors made a mistake by offering to sell the invention at that early date but compounded the mistake by taking “affirmative steps to hide that fact from their lawyers, then, later the PTO when they learned that it would prevent them from profiting.”  The district court also found that Cantor Colburn had acted inappropriately — either by purposeful evasion or by failing to seek out relevant information. They “chose advocacy over candor.”

Following Therasense, it is tough to prove inequitable conduct.

The accused infringer must prove by clear and convincing evidence that the patentee: (1) “knew of the reference” or prior commercial sale; (2) “knew that it was material”; and (3) “made a deliberate decision to withhold it.”

See Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1290 (Fed. Cir. 2011) (en banc).

On appeal here though the Federal Circuit seemed to find this a straightforward case:

The District Court did not abuse its discretion in determining for numerous reasons that CleanTech deliberately withheld material information.

First, the District Court concluded that CleanTech knew the July 2003 Proposal to Agri-Energy threatened its chances of patenting its ethanol oil recovery method. This determination is supported by the
record. . . .

Second, the District Court found that the Inventors and the attorneys at Cantor Colburn withheld evidence of successful testing in 2003 and made false representations by implying that the invention was not reduced to practice until 2004. This finding is supported by the record. . . .

Third, the District Court determined that CleanTech and Cantor Colburn “threatened” Agri-Energy to coerce its support regarding the critical date for the Patents-in-Suit, after the July 2003 Proposal surfaced and during the pendency of the ’516 and ’517 patents. . . . District Court did not abuse its discretion in concluding that these attempts to threaten Agri-Energy spoke to CleanTech’s and Cantor Colburn’s intent to deceive the USPTO.

Fourth, the District Court concluded that the Inventors and Cantor Colburn made a “patently false” statement in the First Cantrell Declaration, by claiming the July 2003 Proposal was delivered to Agri-Energy after the critical date. The District Court’s determination that the declaration was false is supported by the
evidence. . . . This was done notwithstanding the Inventors’ knowledge that Mr. Barlage had practiced the claimed method in June 2003 and they had offered to sell the claimed invention to Agri-Energy in July or early August of 2003. See Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556 (Fed. Cir. 1983) (“[T]here is no room to argue that submission of false affidavits is not material.”). . . . The District Court did not abuse its discretion in concluding that the “patently false” statement in the First Cantrell Declaration was material and supported its intent to deceive determination.

Fifth, the District Court explained that the Inventors’ and Cantor Colburn’s failure to correct the false declaration in the ’484 patent prosecution was “strong evidence of intentional deceit[.]”  . . . Based on this evidence, we conclude that the District Court did not abuse its discretion in concluding that, by clear and convincing evidence, the single most reasonable inference to be drawn from the record was that the Inventors and Cantor Colburn intended to deceive the


Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

UK out of Unified Patent Court

The Unified Patent Court was a nice idea. Enforce your European patent with one single patent infringement lawsuit rather than going nation-by-nation. The UK was an integral UPC member — although always with some trepidation about handing power over to a continental court to decide issues of the UK marketplace.  The British Exit (BREXIT) from European Union (EU) raised some concerns regarding the ongoing viability of the UPC. However, UK leaders repeatedly indicated that they would continue participating in the Unified Patent Court.  That resolution has now changed — the UK government has now announced that the UK will no longer participate in the court or its creation.

The UK will not be seeking involvement in the unitary patent/UPC system. Participating in a court that applies EU law and bound by the Court of Justice of the European Union (CJEU) is inconsistent with our aims of becoming an independent self-governing nation.”

[Quote of UK Gov’t Spokesperson via Sarah Morgan @ the World Intellectual Property Review]

Image result for European Union’s Member State

No Trademark for THE JOINT

by Dennis Crouch

In re JC Hospitality LLC (Fed. Cir. 2020) (nonprecedential)

In its decision, the Federal Circuit has affirmed a TTAB decision refusing to register THE JOINT either for nightclub services (Class 41) or a bar (Class 43).  JC Hospitality owns the Hard Rock Hotel and Casino in Las Vegas, Nevada — location of “the JOINT” which has been in operation since 1995.

The TTAB found “THE JOINT” to be a generic term for a nightclub or bar. I have personally never used that term to refer to a Bar, but I do remember Nathan Detroit using the term in Guys & Dolls (“bookie joint” and “Halleluja joint”).

Image result for guys and dolls "joint"

There is also the “Juke Joint” move from the 1940s that was produced for African American theaters in the US (at the time U.S. movie theaters were segregated by race).

THE JOINT is also a euphemism for prison as well as a cannabis cigarette (or so I’ve heard).

Folks around this joint love surprise inspections.

The Shawshank Redemption (1994).

 I mean, you can’t walk into a restaurant, roll a joint and start puffing away. You’re only supposed to smoke in your home or certain designated places.

Pulp Fiction (1994).

Perhaps folks in Vegas are going for a Turkey — go to THE JOINT where you smoke THE JOINT then get thrown in THE JOINT.

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The TTAB affirmed the examining attorney’s refusal to register the mark — holding that THE JOINT is generic for a bar/nightclub.  In the alternative, the Board also found that the term is “merely descriptive” of JC Hospitality’s services and that the company had not acquired distinctiveness.

On appeal, the Federal Circuit has affirmed — citing the Oxford Dictionary

JOINT: An establishment of a specified kind, especially one where people meet for eating, drinking, or entertainment.

JC Hospitality argued that its use of JOINT was as a double entendre — suggesting PRISON.  However, the court agreed with the Board that company had not provided a relationship between its operation and prisons.

Regarding acquired distinctiveness, JC Hospitality submitted two declarations showing revenue, advertising, and marketing — including more than $100 million in revenue while operating under the name. The Board, however found those insufficient because of the “highly descriptive” nature of the mark.  On appeal, the Federal Circuit affirmed on this point as well — finding that the Board “correctly determined that a high level of proof was required.”  The court noted that the advertising of THE JOINT in Vegas has always been tied to the well known Hard Rock mark — that constant linkage made it difficult for JC to prove that THE JOINT alone had acquired distinctiveness.

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Unrelated except for TM law:

Judge Holte: Motion to Dismiss Denied – Pathway for avoiding motions-to-dismiss

Former law professor Ryan Holte is now Judge Ryan Holte, appointed by Donald Trump and sitting on the United States Court of Federal Claims (15 year term).  Welcome to the bench Judge Holte. The Court of Federal Claims handles money-demands against the U.S. Government — including allegations that the U.S. Gov’t has infringed privately owned patents.

One of Holte’s first substantive patent decisions comes in Wanker v. U.S., 18-1660, 2020 WL 521896, at *1 (Fed. Cl. Jan. 31, 2020).  The plaintiff, William Wanker, PhD. accused the U.S. Gov’t of infringing four of his patents: U.S. patents: 7,302,429; 8,126,779; 8,204,797; and 9,595,041.  All four asserted patents relate to “ranking products” using computers and the internet and the accused infringing activity is use of the Gov’t’s Past Performance Information Retrieval System (“PPIRS”).

The U.S. Gov’t filed its motion to dismiss — arguing that the patents are all invalid as a matter of law under Section 101. Judge Holte has denied the motion — holding that the complaint included sufficient “concrete, factual allegations as to why the claimed combination of elements was not well-understood, routine, or conventional.”  In walking through the complaint, Judge Holte disregarded some of the pleadings as mere conclusory statements of law.  For instance, the complaint alleged that the invention is a “significant technological improvement . . . not well understood, routine, or conventional activity at the time of the invention.”  However, the complaint also added more specific and detailed allegations to help the claims survive the motion to dismiss. Notably, the court cited these lines from the complaint:

57. In looking to solve this problem of comparing different products and multiple categories of information about each product, Mr. Wanker invented systems and methods to define, prior to data analysis, consumer-modifiable weighting factors for different categories of merchant and product information, collect the required information from each merchant or data source, calculate product ranks, and present the ranked list to the consumer. . . .

59. Persons of skill in the art would recognize that the claimed consumer-definable, multi-category comparison information reduces processing time and increases processor efficiency.

60. Those of ordinary skill in the art in 1999 understood that conventional online shopping systems could not deliver consumer-defined product or service ranking for different products from different vendors based on anything other than a simple price comparison which is unlike the inventions described, enabled, and claimed in the Asserted Patents.

61. The technical solutions of the Asserted Patents eliminate the need for consumers of products and/or services to make purchasing (or contract award) decisions based on price alone.

According to the Court, these factual pleadings are sufficient to raise a factual dispute regarding whether the invention was “well-understood, routine, or conventional” and – as such – precludes a judgment of invalidity as a matter of law on the pleadings. The case will now move on through the pleadings — perhaps to be resolved on summary judgment.

The allegations made by the patentee here are specific to his inventions, but any patentee could make parallel allegations in their complaints.  As such, this decision appears to provide something of a roadmap for patentees in drafting a complaint sufficient to avoid 12(b)(6). I’ll note that I still find it strange that the complaint was required to provide allegations sufficient to preemptively overcome an affirmative defense of invalidity — but Judge Holte is bound by precedent on that point.

As a recent professor, it is not surprising that Judge Holte cites to several of his former colleagues as part of his analysis.

  1. Paul R. Gugliuzza, The Procedure of Patent Eligibility, 97 Tex. L. Rev. 571, 601 (2019) (“eligibility should be understood to present a question of law based on underlying facts”).
  2. Timothy R. Holbrook & Mark D. Janis, Patent-Eligible Processes: An Audience Perspective, 17 Vand. J. Ent. & Tech. L. 349, 362–63 (2015) (“[T]he Supreme Court has made it clear that the use of merely conventional steps is not sufficient to create a patent-eligible inventive concept.”).
  3. Jeffrey A. Lefstin, Peter S. Menell & David O. Taylor, Final Report of the Berkeley Center for Law & Technology Section 101 Workshop: Addressing Patent Eligibility Challenges, 33 Berkeley Tech. L.J. 551, 579 (2018) (most 101 issues are being resolved pre-trial)
  4. David O. Taylor, Clear But Unconvincing: The Federal Circuit’s Invalidity Standard, 21 Fordham Intell. Prop. Media & Ent. L.J. 293, 312 (2011) (presumption of validity).
  5. Daniel Harris Brean, Business Methods, Technology, and Discrimination, 2018 Mich. St. L. Rev. 307, 335 (2018) (claim construction is critical to the eligibility analysis).

Improper Listing of Insulin-Pen Patents in the Orange Book

In re Lantus Direct Purchaser Antitrust Litig., 18-2086, 2020 WL 728628 (1st Cir. Feb. 13, 2020)

This class-action antitrust decision from the 1st Circuit reversed a lower court dismissal — holding that consumers had alleged sufficient injury based upon Sanofi’s improper listing of patents in the FDA Orange Book (Approved Drug Products with Therapeutic Equivalence Evaluations).

The court explains:

The principal questions posed on this appeal are whether Sanofi improperly submitted a patent for listing in the Orange Book and, if so, whether Sanofi is potentially liable under the antitrust laws to drug purchasers who were allegedly harmed by the effective extension of Sanofi’s monopoly. We answer “yes” to both questions and vacate the dismissal of the plaintiffs’ complaint to the extent that the district court held otherwise.

The FDA statute calls for listing of patents “which claim[ ] the drug for which [an application is submitted] or which claim[ ] a method of using such drug.” 21 U.S.C. § 355(b)(1).

Here, the listed patent at issue is US Patent 8,556,864 which covers the drive mechanism for Sanofi’s SoloSTAR Insulin Pen.  The Orange Book listing is important because it can be used to trigger a 30-month stay of FDA approval of a competitor’s product. The drive mechanism is apparently part of the SoloSTAR pen thus it appears that a generic knock-off competitor would infringe the patent.  But, the appellate panel still held that it was improperly listed in the orange book since the patent does not claim the drug or a method of using the drug. The court writes:

[B]ecause the claims of the ‘864 patent do not mention the drug for which the sNDA was submitted, the patent does not “claim the drug,” and it was improper for Sanofi to have submitted it for listing in the Orange Book as a drug claiming either insulin glargine or the Lantus SoloSTAR. The regulations clearly require a patent not to be submitted if it does not claim the drug for which the application was filed: “For patents that claim a drug product, the applicant must submit information only on those patents that claim the drug product, as is defined in § 314.3, that is described in the pending or approved NDA.” 21 C.F.R. § 314.53(b)(1) (emphasis added).

On remand, the district court will take-up the case again and likely focus on whether the improper listing actually caused harm to consumers.



Equivalents at the Supreme Court

In a couple of 2019 decisions, the Federal Circuit appeared to expand-out the “merely tangential” exception to prosecution history estoppel. Those cases have now both been petitioned to the Supreme Court for review — with the two cases becoming three petitions:

  • Hospira, Inc. v. Eli Lilly and Company, SCT Docket No. 19-1058. [Petition]

Whether a patentee may recapture subject matter via the doctrine of equivalents under the “tangential relation” exception by arguing that it surrendered more than it needed to during prosecution to avoid a prior art rejection, even if a claim could reasonably have been drafted that would literally have encompassed the alleged equivalent.

  • Dr. Reddy’s Laboratories, Ltd., v. Eli Lilly and Company, SCT Docket No. 91-1061 [Petition]

[W]hether, under Festo’s “tangential” exception to prosecution history estoppel, patent owners may recapture subject matter they could have claimed in prosecution but did not, by arguing that they surrendered more than they needed to during prosecution to address a rejection by the Patent Office.

  • CJ CheilJedang Corp. v. International Trade Commission, SCT Docket No. 19-1062. [Petition]

Whether, to avoid prosecution history estoppel under Festo, “the rationale underlying the amendment” must be the rationale the patentee provided to the public at the time of the amendment.

The doctrine of equivalents [DoE] is fairly complicated by itself because of the element-by-element function-way-result test and the limit on vitiation of claim elements.  DOE is further complicated by the prosecution history estoppel [PHE] that creates a presumption against equivalents associated with narrowing claim amendments made during prosecution for a “substantial reason related to patentability.”  In Festo, the Supreme Court explained that courts should presume estoppel based upon a narrowing amendment. However, the patentee may avoid the estoppel by providing evidence that the “rationale underlying the [narrowing] amendment … bear[s] no more than a tangential relation to the equivalent in
question.” Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 740 (2002) (TAN).  In prior posts, I called this expansion [DoE]; retraction [PHE]; re-expansion [TAN] process DoePHETAN.  The complication comes from the courts who – as I previously explained “wanted to empower patentees with the doctrine of equivalents but then became afraid that they had gone too far” and perhaps given too much power to a jury.

The petitions here are powerful and their parallelism may create interest from the court. Unfortunately, neither call for simplifying this process but rather ask for more detailing — What is the meaning of “tangential?”; At point must the “rationale” be declared?; What is the scope of “recapture” available for DoE?

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Recent DOE Decisions from the District Courts: Steyr Arms, Inc. v. SIG Sauer, Inc., 17-CV-483-JD, 2020 WL 905534, at *4 (D.N.H. Feb. 25, 2020) (court rejects DoE claim because the accused “pin” was not sufficiently structurally similar to the claimed “bridge”).

Speedfit LLC v. Chapco Inc., 215CV1323PKCRLM, 2020 WL 758824, at *2 (E.D.N.Y. Feb. 14, 2020) (patentee waived DoE claim after failing to include it in its pretrial infringement contentions).

KAIST IP US LLC v. Samsung Elecs. Co., Ltd., 2:16-CV-01314-JRG, 2020 WL 731360, at *7 (E.D. Tex. Feb. 13, 2020) (confirming jury verdict — finding that “the jury had substantial evidence from which to find infringement under the doctrine of equivalents.”).

Epistar Corp. v. Lowes Companies, Inc., LACV1703219JAKKSX, 2020 WL 771096, at *9 (C.D. Cal. Feb. 11, 2020) (unequivocal disclaimer during prosecution will bar DoE).

ViiV Healthcare Co. v. Gilead Scis., Inc., CV 18-224-CFC, 2020 WL 567398, at *3 (D. Del. Feb. 5, 2020) (refusing to apply the disclosure-dedication rule)

The Rare Beast: Consisting Essentially Of

In a recent post, I noted the “trap” for patent prosecutors who use the transitional phrase “consisting essentially of.” That phrase has been traditionally interpreted to indicate that an infringing apparatus (or method) would include all of those elements and may also include other elements that “do not materially affect the basic and novel properties of the invention.” The more popular and broader “comprising” transition captures as infringement an apparatus that practices all of the claim elements, regardless of what additional elements are also being practiced by the accused. The courts have also locked-down the meaning of the narrower “closed” transition “consisting of” to only find infringement when the accused apparatus practices the claim limitations and nothing more.

Following my alarmist post, Paul Morgan provided me with “calm down” commentary — writing that he “would suspect” the use of consisting essentially of “is quite small, essentially limited to some chemical composition claims.”

To follow-up with some data, I downloaded all of the utility patents issued so far in in 2020 and parsed through all of the claims.  Paul Morgan was correct — the beast is quite rare. Of the 50,000 utility patents issued thus-far in 2020, only 0.5% include the phrase within their claim sets. (Note – I searched for “consisting essentially of” or “consists essentially of”).   A prime example comes from U.S. Patent 10,525,007:

1. A preserved tea composition, consisting essentially of: green tea leaf; yerba mate leaf; peppermint leaf; honey powder; at least one of monk fruit and monk fruit extract; water; at least one of a Cannabis sativa extract and/or a Cannabis sativa extract having tetrahydrocannabinol and cannabidiol; and wherein the composition is free of nicotine, and wherein the composition is free of tobacco.

Note that some portion of the consisting essentially of limitations are not found in the transitional phrase following the claim introductions but rather in a transition leading to a sub-limitation or modified Markush group. An example of this structure is found in U.S. Patent 10,573,826.

1. An organic light emitting diode device comprising: a first light emitting layer consisting essentially of boron subphthalocyanine that emits substantially orange light; …

Comprising is obviously much more common — 98% of patents in my cohort include “comprising.” 12% of patents recite the phrase “consisting of” however, the vast majority of those are signaling a Markush group rather than an initial transition. (Note – again here, I looked for both the “ing” and “s” form of the terms). These results are shown in the chart below.

Close to 1% of claims do not use one of these three traditional transitions. Of those, it appears that the majority use some other word such as “having,” “containing,” or “including.” A small minority of patents are written without any transitional phrase at all. These typically jump from the introduction directly into wherein clauses. There are also a substantial number of chemical compound claims drafted in the following form: “A compound selected from the group consisting of: …”

Federal Circuit Confirms “Consisting Essentially Of” Trap for Patent Applicants

by Dennis Crouch

HZNP Finance Limited v. Actavis Laboratories UT, Inc. (Fed. Cir. 2020) [En Banc Order][Original Panel Decision]

In an 8-4 Federal Circuit has denied HZNP’s petition for en banc rehearing over a vigorous dissent from Judge Lourie (joined by Judges Newman, O’Malley, and Stoll).

The focus of the petition is the “reasonable certainty” indefiniteness standard in relation to the un-expressed elements of an invention claimed using the transitional phrase “consisting essentially of.”  In its original October 2019 holding, the Federal Circuit explained that the “consisting essential of” transition indicates that the claim requires the listed elements and is also “open to unlisted ingredients that do not materially affect the basic and novel properties of the invention.”  In that framework, the “basic and novel properties of the invention” become a claim limitation that itself must be definite.

HZNP’s claim at issue here is directed to a pain-treatment ointment “consisting essentially of” 2% diclofenac sodium; 40% DMSO; etc. (Sold as PENNSAID).  The specification indicated that “better drying time” was one of the improvements provided by the invention.  The specification provided two methods of evaluating better drying time.  However, those methods were ruled inconsistent and without a standard for PHOSITA to evaluate drying time.  Since the novel feature was indefinite, the court found that the claim itself was indefinite.

This outcome is clearly problematic for current patent application drafting practice because only a minority of patent applications expressly identify and explain the novel features of the invention.  One reason why those are not explained apriori is that the inventor’s understanding of novelty shifts as the patent application moves through the patenting process (or even later during litigation) and more prior art is unearthed.  Although not entirely clear, it looks to me that the proposed method of claim interpretation uses a more subjective novelty — what did the patent applicant think was the novel feature.

In its en banc petition, HZNP asked the Federal Circuit to hold that the “basic and novel properties” were not claim elements and thus not subject to the “reasonable certainty” requirements of Nautilus and 112(b).  The patentee provided three separate arguments:

  1. The plain language of 35 U.S.C. § 112, ¶ 2 restricts application of the definiteness standard to claim limitations;
  2. The “basic and novel properties” of the invention are not claim limitations since an infringer need not practice those properties in order to infringe; and
  3. Our tradition has never applied the definiteness standard to the “basic and novel properties” of an invention.

Judge Newman dissented in the original panel decision and joined Judge Lourie’s dissent from en banc rehearing.   The basic thrust of the dissents is as following:

Better drying time is not in the claim, and it is the claims that the statute requires be definite.

Dissent.  The dissent also notes that the patentee likely created the problems here by providing two methods of measuring — “one wonders whether, if this patent did not recite the methods by which better drying time was measured, any indefiniteness of the “consisting essentially of” language would have arisen at all.”

The question I would ask is whether we should require disclosure of the basic and novel properties of the invention as part of every patent specification — perhaps as part of the written description requirement.  The dissent appears to assume that these are a requirement of the utility doctrine — but notes that utility is such an easy test that it is not even challenged unless “not credible.”


Copyright: “Innocent” LLC Owner Still Liable for Willful Infringement

Joe Hand Promotions, Inc. v. Alburl (N.D. Ala. Feb. 20, 2020) [JoeHand v Barraza]

This short copyright decision has some interesting holdings regarding copyright infringement and LLCs.

The basics are that Sidelines Pub & Grub exhibited a PPV fight (2017 Mayweather vs. McGregor) without paying the license fee to the US promoter Joe Hand.

One of the defendants is Angie Barraza. Barraza was minority owner in the business (10%); was a daytime manager of the bar; but apparently had no knowledge of the alleged unlawful activity.

Barraza claims that all of the unlawful activity alleged in the complaint fell under the purview of Scott Alburl [Barraza’s husband at the time] and was orchestrated and carried out by him without her knowledge or assent. Barraza also stated that, even if she had known about her former husband’s activities with regard to the Program, she would not have been able to stop him because, she says, Alburl was abusive and deceitful towards her in their marriage.

The problem is that the ex-husband is in default.  Prior to the infringement another co-owner “sold” his rights to the business back to Alburl for “the amount of $0.00.”  The bar was never profitable and is now closed.  So . . . Barraza is the only one with money to pay.

Liability for Owner: Assuming that Barraza’s allegations are true, the Court must determine whether, despite her alleged limited ownership and control of Sidelines33, LLC, she can still be held vicariously liable for the infringing conduct of Alburl and Sidelines33, LLC.

  • The question: Is Barraza personally liable for the (willful) copyright infringement?
  • Answer: Yes, she is vicariously liable — even for the willful infringement.

In its opinion, the court appeared to have no concern regarding the role of “limited liability” or limits on officer liability. The court explains:

All business owners share in both the gains and losses of their businesses. Had the business been profitable, Barraza would have been entitled to a share of those returns. However, she can not now disclaim her interest in the business to avoid its liabilities.

The court went-on to explain that Barraza’s “level of influence” over the company activities is immaterial and irrelevant “for the purpose of determining whether she is jointly liable for the business’s copyright infringement.”

= = =

The statutory damage regime offers an award of $750 – $30,000 for each copyrighted work infringed.  That award can be increased to $150,000 for willful infringement, and lowered to $200 for innocent infringement.

(c) Statutory Damages.–

(1) … the copyright owner may elect … an award of statutory damages … for which any two or more infringers are liable jointly and severally, in a sum of not less than $750 or more than $30,000 as the court considers just.

(2) In a case where … the court finds, that infringement was committed willfully, the court in its discretion may increase the award of statutory damages to a sum of not more than $150,000. In a case where … such infringer was not aware and had no reason to believe that his or her acts constituted an infringement of copyright, the court in its discretion may reduce the award of statutory damages to a sum of not less than $200.

17 U.S.C. 504.

Joe Hand asked for $24,000 in statutory-damages — treble $8,000 standard license for this size of bar showing the fight.   Barraza asked that the court lower the damages to the $200 minimum for innocent infringement.

In its decision, the court found that willfulness damages would be appropriate even though Barraza may have acted be innocent herself.

The infringement at issue in this case was willful. . . .  Barraza appears to misunderstand the concept of vicarious joint and several liability. As noted above, the Plaintiff is not required to even prove that she had knowledge of or participated in the infringement. Rather, as an owner, the infringing actions of Sidelines are imputed to her.

Since the underlying infringement was willful — that willfulness can be imputed onto Barraza as the business owner. Accordingly, the amount of statutory damages is between $750 and $150,000.”

The statutory damages provision is written to suggest that the court (i.e., the judge) would set the amount of statutory damages “as the court considers just.”  However, the Supreme Court held in Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340 (1998) that statutory copyright damages serve as substitute for regular damages in a way that preserves the Constitutional right to a Jury Trial. “[I]f a party so demands, a jury must determine the actual amount of statutory damages under § 504(c) in order to preserve the substance of the common-law right of trial by jury.” Id. (internal citations omitted).

Bottom line here – the jury gets to pick a number between $750 and $150,000.


Numbering System in Drawings Used to Interpret Claims

by Dennis Crouch

Ironworks Patents LLC v. Samsung Elecs. Co., 2020 U.S. App. LEXIS 5269 (Fed. Cir. Feb. 21, 2020) (nonprecedential)

After a narrowing claim construction, the patentee stipulated to a non-infringement and invalidity judgment. On appeal, the Federal Circuit has vacated and remanded — holding that the underlying claim construction was partially erroneous.

The two patents at issue – U.S. Patents 6,427,078 & 5,915,239 – originated with Nokia in the mid-1990’s and are directed to aspects of hand-held personal communication devices.

Role of the Numbers in Drawings: The ‘078 patent requires a “camera unit” that is part of the device.  In construing the claims, the district court interpreted “camera unit” as requiring “a camera,  optics, microprocessor and memory, battery, and interface to external systems” all situated as a component of a personal communication device.  Samsung’s cameras do not have their own battery or external interface.  On appeal, the Federal Circuit looked within the patent document to conclude that those elements should not be read into the claim.

The specification confirms that a “camera unit” is a camera, optics, and an image processing unit. The specification consistently refers to camera unit 14 which includes camera arrangement 14o (comprising camera 14a and optics 14b) and image processing unit 14c (which comprises microprocessor 23 and memory units 24).

Slip Op.  The primary difficulty with this construction comes from the most detailed figure relating to the camera — Figure 5 (below).  Figure 5 shows the camera and includes the battery and interface and the specification states that “the structure of both camera card 15 and camera unit 14 conforms to the block diagram shown in Fig. 5.”

On appeal, the Federal Circuit refused to limit “camera unit” to the design found in the figure. In particular, the Federal Circuit explained that the camera unit is consistently numbered in the fourteens (14, 14a, 14b, 14o, 14c).  The battery and interface have separate numbers — indicating that they are not actually part of the camera unit.

Figure 5 uses the same numbering convention as the rest of the specification, suggesting camera unit 14 is comprised of elements numbered as 14 (i.e., camera arrangement 14o, which comprises camera 14a and optics 14b, and image processing unit 14c). Other elements in Figure 5 are numbered differently, such as battery 21 and interface 22, suggesting they are not part of the camera unit 14.

On remand, that narrowed definition of camera unit will raise the likelihood that Ironworks will win its infringement case.

Means Plus Function: Disputed claim construction in the ‘239 patent centered on two means plus function terms:

  • means for interpreting the received voice commands
  • means for storing the subidentifiers

Lack of Structure: The first – means for interpreting – led to an invalidity finding by the district court. Basically, the court found no corresponding structure in the specification.  On appeal, the Federal Circuit veered — finding structure:

The specification states that, “voice-control unit 2 comprises advantageously a voice-recognition means 3, a voice pattern memory 4, a controller unit 5, read-only memory 6, random access memory 7, speech synthesizer 8 and a interface 9.” It further discloses structure for the voice-control unit by describing the algorithm performed by the voice-control unit and its components.

Although these structural elements are disclosed at a fairly high level, the Federal Circuit found “sufficient structure.”

An important point here is that this particular step is only about interpreting the meaning of the claims — do we have enough information to be reasonably certain as to the claim scope? When the claims are construed broadly then there may be separate inquiries into whether the breadth implicates the enablement and written description doctrines.

subidentifiers: The second MPF term –  means for storing the subidentifiers – was sufficiently supported.  However, the district court limited the scope to the structure described in the specification — following the textual requirements of 112(f):

(f) Element in Claim for a Combination.— An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.

In particular, the district court interpreted the claimed means-for-storing as requiring the particular storage algorithm described in the specification.  Samsung apparently does not use that same algorithm and so the patentee asked for a broader construction.  In this case, Ironworks argued that the means could have been fully supported without the disclosed algorithm and so should not be limited by the algorithm.  On appeal, the district court rejected that argument — holding that the claimed storing function “requires more than merely plugging in a general-purpose computer.” (quoting Ergo Licensing).

Because this subidentifier limitation was in all of the asserted claims in the ‘239 patent — the non-infringement finding will stick. On remand though, the patentee will further pursue its infringement claim under US6,427,078.

This case is an example of a “picture claim” that works to avoid the prior art.

Toy’s picture-claim wins the day before the PTAB.

ChoiRock Contents Factory v. Aldric Saucier, Spin Master, Ltd. (Fed. Cir. 2020)

This case centers on Spin Master’s patented transformable toy. U.S. Patent 7,306,504. Korean toymaker ChoiRock petitioned for IPR, but the PTAB sided with the patentee — holding that the challenged claims had not been proven unpatentable.

On appeal, the Federal Circuit issued a split opinion on obviousness with Judges Bryson (Author) and Taranto in the majority affirming patentability and Judge Dyk dissenting (with regard to most of the claims).

Standing to Appeal: Before reacting the merits, the court first considered whether the patent petitioner had standing to appeal. ChoiRock challeged the patent in an IPR that reached final decision and thus has a statutory right to appeal under 35 U.S.C. 319.

A party dissatisfied with the final written decision of the PTAB under section 318(a) may appeal the decision pursuant to sections 141 through 144. Any party to the inter partes review shall have the right to be a party to the appeal.

In addition to the statutes, Federal Courts also have their own standing requirements based upon the limited jurisdiction offered by the case-and-controversy requirement found in Article III of the U.S. Constitution (as interpreted).  When a patent challenger appeals an adverse ruling from the PTAB it must establish that it sits in conflict with the patent holder regarding the patent in a way that is sufficiently concrete. In Spokeo, the Supreme Court offered a three part requirement of (1) injury in-fact; (2) the injury being fairly traceable to challenged conduct of the other-side; and (3) the injury being redressable by the court. Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016).

IPR appeals offer an interesting setup because the parties have been vigorously fighting over patent validity at the PTAB and because the statute expressly purports to create a right-to-appeal.  Still, the Federal Circuit requires that the appellant show that the patentee has been wielding the patent in a way that causes injury to the challenger.

Here, Spin Master sent a letter to ChoiRock indicating that the company was infringing several of its patents, including the patent at issue here and, according to the court, ChoiRock “provided evidence establishing that it has concrete plans to begin selling that product line in the United States by early 2020.”  The Federal Circuit does not review this evidence of concrete plans. I pulled-up the briefing and found the unhelpful briefing regarding this evidence:


The basic argument on obviousness is that the prior art teaches all of the elements.

On appeal, however, the Federal Circuit agreed with the PTAB that the prior art’s “display member” include a “plurality of revealers rotatably connected to [a] movable member[]”.  Rather, only the head was a rotatably connected revealer (one is not a plurality).  This is where Judge Dyk dissented — arguing that the arms and legs were also “revealers.”

Proof that the Infringer was Notified of the Infringement

by Dennis Crouch

Arctic Cat Inc. v. Bombardier Recreational Prods. Inc. (Fed. Cir. 2020)

This case involves the notice requirement for collecting back-damages in patent cases.  35 U.S.C. 287(a) creates a system for limiting back-damages in instances  where a patentee fails to mark its patented articles as patented.

In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.

Id.  The marking requirement only applies to patentees practicing the invention via a “patented article.”  Non-practicing entities have nothing to mark, nor do patentees practicing their unmarkable patented process. In those situations, back damages are available — although still limited to six-years pre-complaint under 35 U.S.C. 286.

In this case, Arctic Cat had stopped manufacturing its patented thrust steering systems by the time the patent had issued — so no marking possible there.  However, Arctic Cat had licensed several of its patents to Honda, including the patents at issue here.  A couple of details regarding the license are important here: (1) The license was agreed-to prior to the issuance of the patents at issue and so did not expressly name them by patent number. However, the license expressly includes later-patents covering Thrust Steering. (2) The license expressly states that Honda has no marking requirements.

Honda made & sold products under the license and did not mark the products with Arctic Cat’s patent numbers.  Although disputed, Honda arguably stopped making covered-products in 2013.  Arctic Cat then sued Bombardier in 2014.   The question then on appeal is how-far back can Arctic Cat collect damages:

  1. Damages only go back to the date of the complaint filing since licensed products had been sold and not marked;
  2. Damages go back to 2013 — when it was no longer possible to mark the products; or
  3. Damages go back the full six years based upon a jury’s holding that the infringement was willful, which implies actual notice of the patent.

Holding: The answer by the court is #1 – Arctic Cat won’t get any pre-filing damages.

#2 (Damages after Cessation) is incorrect because “cessation of sales of unmarked products” alone does not excuse or cure “noncompliance with the notice requirement of § 287.” Rather, “to begin recovering damages after sales of unmarked products have begun, § 287 requires that a patentee either begin marking its products or provide actual notice to an alleged infringer; cessation of sales of unmarked products is not enough.”

#3 (Full Damages) is incorrect because the Federal Circuit has previously held that the back-damages “actual notice” requirement focuses on providing-of-notice.  What we look at is whether the patentee acted to provide notice — it is “irrelevant … whether the defendant knew of the patent or knew of his own infringement.” Amsted Indus. Inc. v. Buckeye Steel Castings Co., 24 F.3d 178, 187 (Fed. Cir. 1994) (citing Am. Med. Sys., Inc. v. Med. Engr. Corp., 6 F.3d 1523, 1537, N.18 (Fed. Cir. 1993) and quoting Devices for Medicine, Inc. v. Boehl, 822 F.2d 1062 (Fed.Cir.1987) (“Absent notice, [infringer’s] ‘knowledge of the patents’ is irrelevant.”).

Looking back to the statute — the key line calls for “proof that the infringer was notified of the infringement.”  287(a).  The court holds here that “notified of the infringement” requires an action by the patentee to provide actual notice. This outcome is similar to what is required by Fed. R. Civil Procedure R. 4(c) which places the burden on the plaintiff for providing notice of a new complaint being filed. A key difference though is that the rules of civil procedure actually spell out that “the plaintiff is responsible for having the summons and complaint served.” I’ll note here that the “filing” of a lawsuit triggers notice under 287 — service of the complaint and summons is seemingly not required. It is also different outcome than the notice requirement found in property recording statutes, including 35 U.S.C. 261 which asks whether a “subsequent purchaser” was “without notice.”

The language of Section 287 at issue here stems from the Patent Act of 1861. That statute indicated that – absent marking – “no damage shall be recovered by the plaintiff, except on proof that the defendant was duly notified of the infringement, and continued after such notice to make or vend the article patented.”  In an 1894 decision, the Supreme Court found that the “duly notified” statement requires an action by the patentee to provide notice.

The clear meaning of this section is that the patentee or his assignee, if he makes or sells the article patented, cannot recover damages against infringers of the patent, unless he has given notice of his right, either to the whole public, by marking his article ‘Patented,’ or to the particular defendants, by informing them of his patent, and of their infringement of it.

Dunlap v. Schofield, 152 U.S. 244, 247–48 (1894).  In Coupe v. Royer, 155 U.S. 565 (1895), the Supreme Court repeated that the required notice is “an affirmative fact, and is something to be done by him” i.e., done by the patentee.

In an interesting article, Michael McKeon argues that the Federal Circuit’s approach of requiring “an affirmative act” is actually based upon “a specific misquote of a critical word (act instead of fact).” Michael J. McKeon, The Patent Marking and Notice Statute: A Question of “Fact” or “Act”?, 9 Harv. J.L. & Tech. 429, 431 (1996). McKeon argues that Dunlap and Coupe were both about placing a burden of proof on the patentee — the patentee must affirmatively prove the fact that notice occurred — and that the Federal Circuit mistakenly read the cases as requiring an affirmative act of providing notice. McKeon cites to several pre-Federal Circuit cases that find actual notice is sufficient even without affirmative notice from the patentee. See, for instance, Warner v. Tennessee Products Corp., 57 F.2d 642 (6th Cir. 1932) (“Actual notice of the issue and contents of the patent, and of the claims that a practice infringes, is sufficient regardless of the source of such notice.”); Abington Textile Mach. Works v. Carding Specialists (Canada) Ltd., 249 F. Supp. 823, 849 (D.D.C 1965) (defendant’s actual/constructive notice was sufficient even though prior to formal notice from the patentee).

Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

Processing Checks and Patent Eligibility

Solutran’s new petition for writ of certiorari asks a seemingly simple question:

Does Alice’s step one require that the claims be viewed as a whole and that consideration be given to the claimed advance over the prior art?

Solutran, Inc., v. Elavon, Inc. (Supreme Court 2020).

In the underlying litigation, the district court denied the defendant’s summary judgment motion on eligibility.  Similarly, the USPTO PTAB had refused to institute a covered-business-method review  on eligibility — explaining that the method of processing paper checks includes nothing “that would indicate that it is directed to an abstract idea at all.” On appeal, however, the Federal Circuit reversed — holding that the claims were directed to the abstract idea of crediting a merchant’s account as early as possible while electronically processing a check.

Claim 1 of U.S. Patent No. 8,311,945 is a method of processing checks and lists a four step process: (1) receiving data associated with magnetic ink character recognition (MICR) for each paper check (but not an image file of the checks); (2) crediting the merchant account; (3) subsequently scanning the checks for a digital image and (4) comparing the scanned image with the MICR information.


Solutran v. Evalon: Processing Paper Checks and Patent-Eligible Subject Matter



Pre-Possessory Interests in Patent Law

by Dennis Crouch

A newly canonical case in property law texts is Popov v. Hayashi, 2002 WL 31833731 (Cal. Super. Dec. 18, 2002).  The case involves a Barry Bonds record-setting home run baseball.  Alex Popov almost caught the ball, but as it entered his glove he was immediately engulfed by the crowd of fans who were deemed an “out of control mob, engaged in violent, illegal behavior.”  The ball came-out and Patrick Hayeshi (who was also knocked to the ground) picked up the ball and took possession. There was no credible evidence that Hayeshi took part in any of the violent or illegal behavior. Because of the oddity of fandom, the $6 ball was boosted to an expected value $1.5 million based upon its record-setting experience. (It was eventually sold at auction for ~$500k because of Bonds’ drop from fame).

Hayeshi had physical possession, but Popov wanted ownership and sued — pleading conversion, trespass to chattel, injunctive relief and constructive trust.

In its decision, the California judge partially ruled for Popov — holding that he had a “pre-possessory interest” in the baseball once it went in his glove, and that interest was unlawfully interrupted by the Crowd.

As a matter of fundamental fairness, Mr. Popov should have had the opportunity to try to complete his catch unimpeded by unlawful activity. To hold otherwise would be to allow the result in this case to be dictated by violence. That will not happen.

Although Popov had some interest in the ball, Hayeshi was the one who took actual possession (gaining complete control of the ball and stopping momentum), and did so using within the bounds of both law and baseball custom.

In the end, the judge was unable to figure out which of the two should win:

Neither can present a superior argument as against the other.

Mr. Hayashi’s claim is compromised by Mr. Popov’s pre-possessory interest. Mr. Popov cannot demonstrate full control. … Their legal claims are of equal quality and they are equally entitled to the ball.

The court therefore declares that both plaintiff and defendant have an equal and undivided interest in the ball.

Id. In the end, the two co-owners sold the ball. The case would have come out differently if Hayashi was seen as a wrongdoer (Popov would get full ownership) or if Popov had dropped the ball without being wrongfully jostled (Hayashi would get full ownership).  The halfsies outcome is somewhat unusual in property law but was made easier because both parties announced they wanted to sell the ball — it was much easier to split the money rather than share possession of the ball itself.

In patent law, conception used-to establish a pre-possessory interest in the future patent.  Conception created an inchoate (incomplete) right that could be secured by diligently reducing the invention to practice (either actually or constructively by filing the patent application).  This approach has changed substantially post-AIA where the focus is on completing the invention process by filing for patent rights with severe limitations on any pre-filing rights or interests.  Prof Oliar and Stern explained;

The first-to-invent rule was abandoned following enactment of the Leahy-Smith America Invents Act (“AIA”) in 2011, the most comprehensive overhaul of U.S. patent law in at least half a century. Its most prominent change was to replace the first-to-invent rule with a first-to-file system, or more precisely, a system that awards patents to the first person to disclose their invention to the public, whether by filing a patent application or through other public acts. The AIA thus pushes back the temporal lynchpin from the beginning of the inventive process to its end.

Dotan Oliar, James Y. Stern, Right on Time: First Possession in Property and Intellectual Property, 99 B.U. L. Rev. 395, 422 (2019) (DDC: Note that the FTF change hasn’t been the most prominent change as suggested by the authors).

Patent law presents an element beyond the Oliar article and the Popov v. Hayashi decision. The patent system is not not generally focused on a winner-take-all approach. We’re not talking about the single Barry Bonds ball (or even a half-dozen). Rather, there are hundreds of thousands of potential valuable inventions awaiting discovery.  The plethora of potential inventions naturally offers the partial reward granted in Popov v. Hayashi.  No single person or entity will be able to claim all (or even a substantial percentage) of the inventions.  But, to claim any rights, the inventor must actually capture the “wily quadruped” despite knowledge of other hunters.  Pierson v. Post, 3 Cai. 175, 175 (N.Y. Sup. Ct. 1805) (“Pierson, well knowing the fox was so hunted and pursued, did, in the sight of Post, to prevent his catching the same, kill and carry it off.”).

In thinking through Popov v. Hayashi, I would pause to distinguish between the Popov’s pre-possessory interest in the ball and the pre-filing inchoate rights of an inventor.  While the second has been long considered a property right — the former is more like a personal interest that should not be wrongfully injured.  The closest actions would be unfair competition or wrongful interference with contractual relationships. Those actions are powerful, but are generally seen as outside of the property law context and instead in the midst of torts. The Supreme Court, on the other hand, has explained the power of an inchoate right to a patent:

The discoverer of a new and useful improvement is vested by law with an inchoate right to its exclusive use, which he may perfect and make absolute by proceeding in the manner which the law requires.

Gayler v. Wilder, 51 U.S. 477, 493 (1850).

Disqualification of a Party’s Expert Who Migrates to the Firm of a Court-Appointed Expert

By David Hricik, Mercer Law School

An order by Judge Alsup in Oracle Am., Inc. v. Google, LLC (N.D. Cal. Jan 28, 2020 (here)) reflects an unusual fact pattern.  The court had appointed an expert (in docket 2143, which by itself says a lot) who worked with the firm of Charles River Associates (“CRA”).  Google had an expert, Dr. Leonard.  Google notified Oracle that Dr. Leonard was to become “affiliated” with CRA, prompting Oracle to file an “objection” with the court.

In response, Judge Alsup issued an order stating the most it could say so far was “that Dr. Leonard (and Google) have made this move at their peril.”  He asked for motion practice and an appropriate record.

Expert witnesses are not subject to the same rules of conflicts of interest as lawyers (even when a lawyer is serving as an expert witness).  I know of cases where opposing parties choose experts who end up at the same firm, but never one where a court-appointed expert is affiliated with the same firm as a party’s expert.  If it is a conflict — and one that can’t be obviated by a screen of Dr. Leonard and other appropriate measures (I can think of many) — presumably Google will suffer disqualification of its expert, which would presumably cause tremendous problems with its case if, as you’d think, Dr. Leonard is serving an important and non-cumulative role.

Interesting problem.