Search Results for: "sas institute"

“Customization Module” is a Means-Plus-Function Element; Indefinite Without Disclosed Algorithm

Patent

William Grecia v. Samsung Electronics (Fed. Cir. 2019)

In a non-precedential decision, the Federal Circuit has affirmed the district court’s holding that Grecia’s asserted claims invalid as indefinite.  The claims include a means-plus-function limitation, but an example of the underlying mechanism was not disclosed in the specification.

In the years leading up to the Patent Act of 1952, several courts (including the U.S. Supreme Court) severely limited the ability of applicants to use functional claim limitations (rather than structural) in order to obtain broader patent protection.  See, for example, Halliburton Co. v. Walker, 329 U.S. 1 (1946) (barring functional limitations at the point of novelty). Traditionally, patent attorneys had drafted these functional limits in “means-plus-function” language.  In Halliburton, for instance, Walker’s invalidated claim required “means … for creating pressure waves of known frequency.”

The 1952 Act added 35 U.S.C. § 112 ¶ 6 (now 112(f)) that allows for functional claims in certain circumstances:

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.

Section 112 ¶ 6.  Although this provision left patentees in a much better position than under Halliburton, most patent drafters attempt to avoid having claims fall under its ambit — preferring instead to rely upon quasi-functional limits that include some amount of structure and some amount of function and that do not use the magical words “means for.”  That approach is preferred because, under the statute true means-plus claims are construed narrowly — to cover only the “corresponding structure” that was actually described in the specification (“and equivalents thereof”).  In addition, as this case reiterates, a means-plus claim will be deemed invalid as indefinite if the specification does not actually disclose a corresponding structure.

It used to be much easier for attorneys to slip through the eye of the needle — but in recent years the gap has tightened as the Federal Circuit ruled that “nonce words” should not be seen as structural. (Is the eye too small, or the camel too large?)

Here, the patent claims a “customization module” that the district and appellate court found to be equivalent to a “means for customization.”  In Williamson v. Citrix, the Federal Circuit previously explained that “‘Module’ is a well-known nonce word that can operate as a substitute for ‘means.'”

After finding “customization module” to invoke 112 ¶ 6, the court then found that the specification did not provide any specific disclosure of how such a module would actually work.  Grecia’s patent is focused on computer implemented technology. In that context, the court has repeatedly held that disclosure of the associated computer algorithm can be sufficient (and is often required). Here, however, the specification did not include such an algorithm:

[T]he specification fails to explain how such customization is performed. Instead, the specification only describes the results of customization. . . . We have held that describing “the results of the operation of an unspecified algorithm” is not sufficient to transform the disclosure of a general-purpose computer into the disclosure of sufficient structure to satisfy § 112, ¶ 6. Aristocrat Techs. Because the ’860 specification merely describes the results of customization without any algorithm for configuring the claimed module to obtain those results, we agree with the district court that the specification fails to disclose the “corresponding structure” required under § 112, ¶ 6, thus rendering claim 21 indefinite under § 112, ¶ 2.

Invalidity affirmed.

Notes: The patent does discuss the “customization module” a few times and includes an image (below), but it is all very mushy.

The password module 204 prompts the user to enter a master password which provides access to the encrypted digital media. Subsequently, the customization module 206 allows the user to customize the user access panel of the encrypted digital media.

According to an embodiment of the present invention, the customization module 206 facilitates adding one or more of a banner, a logo, an image, an advertisement, a tag line, a header message and textual information to the user access panel of the encrypted digital media.

= = = =

In a prior unpublished decision, the Federal Circuit McDonald’s escaped liability on a divided infringement claim. Grecia v. McDonald’s Corp., 724 Fed. Appx. 942 (Fed. Cir. 2018). The case against Samsung focused on Claim 21.  Claims 1-8 and 11-20 had been cancelled by the PTAB. Mastercard International Inc. v. Grecia, IPR2017-00791 (PTAB 2017).

Celgene v. Peter: application of IPRs to pre-AIA patents is not a taking

Patent

By Jason Rantanen

Celgene Corp. v. Peter (Fed. Cir 2019)18-1167.Opinion.7-30-2019

Panel: Prost (author), Bryson, Reyna

While Oil States v. Greene’s Energy, 138 S.Ct. 1365 (2018), answered the question of whether inter partes review proceedings were unconstitutional generally, it left unanswered the question of whether application of inter partes review proceedings to patents granted prior to the America Invents Act constituted a taking under the 5th Amendment.  Here, the Federal Circuit directly addresses that question, concluding that it is not.

Constitutional challenges like this one can be challenging to raise effectively on appeal.  While usually, the issues are brought up in a footnote or single sentence, this was not one of those instances: Celgene devoted 8 pages of its principal brief to its takings argument, making a serious go at it.  Still, Celgene had not raised the argument before the Board and requests to address an argument for the first time on appeal are granted only in exceptional circumstances.  However, given the circumstances–Celgene’s raising of an issue not directly resolved by Oil States, the growing number of retroactivity challenges following Oil States, and the thoroughness of the briefing on the issue, among other considerations–the court concluded that “this is one of those exceptional circumstances in which our discretion is appropriately exercised to hear Celgene’s constitutional challenge even though it was not raised below.”  Slip Op. at 25.

Celgene’s argument on the merits rested on a regulatory takings theory.  It contended that “subjecting its pre-AIA patents to IPR, a procedure that did not exist at the time its patents issued, unfairly interferes with its reasonable investment-backed expectations without just compensations.”  Id. at 26.  In response, the PTO argued that (1) the patent owner never had a valid property right because the patent was erroneously issued in the first instance,” and (2) “patents have been subject to reconsideration and cancellation by the USPTO in administrative proceedings for nearly four decades, and Celgene’s own patent[s were] issued subject to this administrative revocation authority,” and that “the AIA did not alter patent holders’ substantive rights.”  Id. at 26, 27 (internal quotation marks omitted).

The Court’s analysis focused on the degree of the change: “specifically whether IPRs differ from the pre-AIA review mechanisms significantly enough, substantively or procedurally, to effectuate a taking.”  Id. at 27.  The court concluded that they were not, a conclusion that was also in line with its precedent rejecting “constitutional challenges to retroactive application of the pre-AIA ex parte reexamination mechanism.”  Id.  The money quote:

The validity of patents has always been subject to challenge in district court. And for the last forty years, patents have also been subject to reconsideration and possible cancellation by the PTO. As explained below, IPRs do not differ significantly enough from preexisting PTO mechanisms for reevaluating the validity of issued patents to constitute a Fifth Amendment taking.

The bulk of the court’s remaining discussion walks through the various administrative revocation procedures in place over the past few decades, comparing and contrasting them with IPRs.  While the court recognized differences between ex parte and inter partes reexaminations, on the one hand, and inter partes review proceedings on the other, it viewed the similarities as “far more significant.”  Id. at 30.  The substantive grounds for review are the same (anticipation and obviousness, based on the same categories of prior art, the same evidentiary standard applies (preponderance of the evidence), the same claim construction standard applies (broadest reasonable interpretation applied in this set of IPRs), in both cases the Director has discretion to initiate the proceeding, and serve essentially the same purpose.

In the end, “Although differences exist between IPRs and their reexamination predecessors, those differences do not outweigh the similarities of purpose and substance and, at least for that reason, do not effectuate a taking of Celgene’s patents.”  Slip. Op. at 36.

The court also affirmed the PTAB’s decisions finding the appealed claims obvious.

 

Failing to Identify Real Party In Interest was Excusable Error that Did Not Reset Petition Filing Date

Patent

by Dennis Crouch

Mayne Pharma v. Merck Sharp & Dohme (Fed. Cir. 2019)

Mayne’s U.S. Patent 6,881,745 covers an azole antifungal drug with a particular formulation designed to increase absorption and bioavailability.  Back in 2015, Mayne sued Merck for infringement — accusing Merck’s Noxafil product. In the Inter Partes Review (IPR), the PTAB agreed with Merck — finding the claims unpatentable as obvious.  That decision has now been affirmed on appeal.

Time Bar under 315(b): An IPR may not be instituted if the petitioner (or its proxy or a real-party-in-interest) was served with an infringement complaint more than one year beforehand. 35 U.S.C. § 315(b).  Here’s the timeline:

  • May 29, 2015, Mayne sued both Merck & Co, Inc. (MCI) and the company’s international subsidiary Merck Sharp & Dohme (MSD) for infringing the ‘745 patent.
  • June 12 2015, MCI and MSD both served with a summons for the lawsuit.
  • June 11, 2016, MSD (but not MCI) filed for inter partes review challenging the ‘745 patent.  This appears to fall within the 1-year time limit.  Mayne asked the PTAB to require MCI be joined as a real-party-in-interest, but the PTAB refused at the institution stage.  At institution, MSD did not respond to the allegations regarding real party in interest; and the Board found insufficient evidence of Control.
  • December 2017,  PTAB required MSD to add MCI as a real party in interest to the case.  Although MCI was added to the case well after the one-year 315(b) deadline, the PTAB found that MCI’s addition did not alter the filing date.

The Board had provided “guidance” that it would not allow correction of non-clerical errors in the petition without also changing the filing date, 80 Fed. Reg. 50,  and Mayne argued that the rule applies here.

On appeal, the Federal Circuit sided with the patent challenger and PTAB — holding that the Board did not commit reversible error based upon a no-harm no-foul rule of law:

There was no evidence suggesting that MSD intended to conceal MCI’s identity. In fact, Mayne was aware of MCI because MCI was a named defendant in parallel district court litigation, and, had MSD named MCI as a real party in interest in its original petition, Mayne would be in the same position it is in now.

With regard to the PTAB guidance, the court noted that such guidance was “non binding” [upon whom?] and that the Board had allowed several petition corrections without changing the filing date.

Why Do It? – Privileged: The gaping hole in in the analysis is any discussion of why MSD did not name its parent company who was being sued for infringement as a real party in interest.

In the IPR, Merck’s attorneys (who represented both companies) indicated that they had intentionally omitted MCI as a real-party-in-interest, but did not explain their actions other than: “privileged legal strategy immune from discovery” (although this is in quotes, it is my paraphrasing).  The key patent-related reason here that comes to mind is that – at the time – Merck thought it might get around IPR estoppel by having its subsidiary file the petition.  It was not until more than a year later that Merck agreed that both companies would be bound by any resulting estoppel.

Appealable:  The patent challenger also argued that the issue here is not appealable because it is tied to institution. On appeal, the Federal Circuit ducked that issue and instead held that the case is affirmed whether or not it is appealable. (Interesting jurisprudence dance on this one).

This Case is Controversial: Competitor Standing Insufficient for IPR Challenge

Patent

by Dennis Crouch

AVX Corp. v. Presidio Components, Inc. (Fed. Cir. 2019)

In this case, the Federal Circuit dismissed AVX’s appeal — holding that the patent challenger lacked standing to appeal after losing on the merits in the Inter Partes Review (IPR).

AVX (its subsidiary ATC) and Presidio are competitors in the electronic components market, including sales of capacitors — the subject of Presidio’s patent here.  See U.S. Patent No. 6,661,639.  These companies have repeatedly battled in court over capacitor patent rights — albeit different patents. In one case, Presidio won a $3.3 million judgment and permanent injunction against ATC/AVX for its 545L capacitor; Later, Presidio sued again on ATC/AVX’s redesigned 545L capacitor (550 series) — that lawsuit is still pending.  Despite their ongoing competition, AVX apparently has no concrete plans to make a product covered by the patent.

The case here formally began with an inter partes review (IPR) proceeding before the Patent Office’s Patent Trial & Appeal Board (PTAB). The PTAB instituted review and found some claims unpatentably obvious, while upholding the validity of the remaining claims.

The patent challenger AVX appealed – as is its statutory right.

A party dissatisfied with the final written decision of the Patent Trial and Appeal Board 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.

35 U.S.C. § 319.

Rather than deciding the case, the Federal Circuit has dismissed AVX’s appeal for lack of standing and lack of appellate jurisdiction — holding that the U.S. Constitution prevents the case from being heard on appeal.

Article III of the U.S. Constitution creates the Judicial Branch and authorizes the Supreme Supreme (and its inferiors) to to hear “cases” and “controversies.”  Article III, Section 2, Clause 1.  The Supreme Court has read the clause as barring the courts from rendering advisory opinions about the law.  Rather:

For a party to have standing, it must show (1) an “injury in fact,” (2) “a causal connection between the injury and the conduct complained of,” and (3) a likelihood that “the injury will be redressed by a favorable decision.”

Quoting Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992).  If a party lacks standing, the Courts also lack jurisdiction to hear the case.

Agency to Appellate Court: Article III limitations do not directly apply to IPR proceedings themselves because the PTAB is an Article I administrative adjudicator rather than an Article III court.  Thus, the PTAB does not consider whether the patent challenger has been “injured” by the patent.  Article III standing does kick-in once appealed, and the appellant will need to show an actual controversy, including injury-in-fact between the parties.

On appeal AVX argued for “competitor standing” to challenge government actions.  However, the Federal Circuit refused to follow non-patent cases and instead ruled that that AVX lacks any “nonspeculative stake in cancelling” the claims. “[T]he rationale for finding standing in those cases does not carry over to support standing in the present context, where AVX has no present or nonspeculative interest in engaging in conduct even arguably covered by the patent claims at issue.”

Here, there is a good argument that the Federal Circuit failed to properly consider on-point Supreme Court precedent in cases such as Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150 (1970). In Data Processing, the Supreme Court held that data processing service providers had standing to challenge a governmental action allowing new sellers into the market. The basis for standing was the potential lost profits due to increased competition. It seems to me that AVX has alleged enough to show that PTO’s action on the patent similarly shifts the competitive marketplace. The Federal Circuit, however disagreed with my analysis:

The government action is the upholding of specific patent claims, which do not address prices or introduce new competitors, but rather give exclusivity rights over precisely defined product features. That sort of feature-specific exclusivity right does not, by the operation of ordinary economic forces, naturally harm a firm just because it is a competitor in the same market as the beneficiary of the government action (the patentee).

One way to read the Federal Circuit’s analysis here is as an implicit statement that the more recent case of  Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) created a more stringent test and implicitly overruled Data Processing. 

Still, I think that AVX could make a strong case on petition for certiorari.

102(f), Where have you Gone?

Patent

Endo v. Actavis (Fed. Cir. 2019)

Obviousness is a tough issue to appeal because its flexible fact-heavy analysis lends itself to giving deference to the fact-finder.  This is a case-in-point.

Endo is the exclusive licensee of Mallinckrodt’s U.S. Patent 8,871,779 covering a form of the opioid oxymorphone.  Claim 1 is directed to a highly pure form of “oxymorphone” with “less than 0.001% of 14-hydroxymorphinone.”

Actavis argued that the claims were invalid as obvious.  However, following a bench trial the Delaware district court sided with the patentee — holding that the claims had not been proven invalid with clear and convincing evidence.

The district court did make a major legal mistake — holding that confidential communications between the FDA and oxymorphone producers (including the patentee) were not prior art.  In the communications, the FDA “mandated that opioid
manufacturers reduce ABUK impurities in oxycodone and oxymorphone to below 0.001%” — the exact result claimed by Mallinckrodt. On appeal, the Federal Circuit found the communications prior art under pre-AIA § 102(f) (“A person shall be entitled to a patent unless (f) he did not himself invent the subject matter sought to be patented.”).  Note that 102(f) was eliminated by the AIA and so this type of confidential communication will likely not be counted as prior art in future cases.

On appeal, the Federal Circuit held that the FDA communication – despite being prior art – did not show that the claims were obvious. Although the communications expressly set out the low-impurity goal and was the motivational force for the research, it did not set out the solution created by the patentee.

The majority opinion was penned by Judge Wallach and joined by Judge Clevenger.  Judge Stoll wrote in dissent — arguing that the error was not harmless.  In particular, the FDA mandate actually expressly discloses every limitation found in claim 1, “yet, the district court determined that this mandate did not disclose ‘anything substantive relevant to obviousness.'”

While we owe deference to a district court’s factual findings, such deference is not due where the trial court applies the incorrect standard to arrive at those findings. I would vacate the district court’s decision and remand for a proper analysis under the correct legal standards.

According to the dissent, the FDA statement would have provided substantial motivation to combine prior art references that worked toward the proffered solution.

= = = = =

102(f) what have we lost: Inventor is given secret information that leads to creation of the invention.  That information is a 102(f) reference under pre-AIA law and can also be used to as part of an obviousness argument. Post-AIA, the provision was wholly eliminated except that the law still supports a narrow action for complete derivation.

Case Dismissed: No Standing When Deal Fell Through

Patent

Momenta Pharma v. Bristol-Myers Squibb Co. (Fed. Cir. 2019)

In this recent decision, the Federal Circuit dismissed Momenta’s appeal — finding that the company lacks standing to appeal its loss before the PTAB.  The decision stands on fairly controversial grounds and in some tension with Supreme Court jurisprudence on appellate jurisdiction requirements.  Still, I suspect it will be cabined-in by its facts and not have a large precedential impact.

In 2015, Momenta petitioned for inter partes review of US Patent 8,476,239 owned by BMS. The patent covers a particular immunosuppressive formulation sold as ORENCIA .  At the time, Momenta was exploring an ORENCIA biosimilar as part of a partnership with Mylan.  And, over the years, Momenta has apparently conducted clinical trials on aspects of the product.  According to Momenta, during that time the ‘239 patent has been a clear obstacle to the project’s success.

Back to the administrative action: In the IPR, the PTAB sided with the patentee BMS — finding that the claims were not proven invalid (i.e., confirming the claims). Momenta appealed.

The Patent Act allows for any “person” to file IPR petitions and also indicates that the losing party of an IPR (here the patent challenger) has a right to appeal the decision to the Federal Circuit.  Although the statute provides a right to appeal, the U.S. Constitution has a further standing requirement before the courts are allowed to step in and pass judgment.  In particular, the Case and Controversy clause of Article III requires a genuine material dispute between the parties that can be resolved by the litigation.

By the time the appeal rolled around, Momenta’s clinical trials turned out to be a failure and BMS filed for dismissal — arguing that Momenta was no longer planning to use the invention and thus had no stake in the validity/invalidity of the patent. Momenta first responded that it was still intent on producing an ORENCIA biosimilar, but later the court was updated with information showing that Momenta was exiting its partnership with Mylan and was no longer developing the biosimilar.  Momenta did not provide any further explanation as to whether it had standing — and the Federal Circuit ultimately determined that Momenta no longer had standing. Thus, the appeal was dismissed for absence of standing/jurisdiction and for mootness.

A party filing an appeal must have a “concrete and particularized” interest at stake in order for a court to have Constitutional jurisdiction over the case (“Article III Jurisdiction”).  This interest required during all parts of the litigation.  Here, the court ruled that Momenta may have once had an interest at stake, but that interest “has now been eliminated by Momenta.”

Although momenta still has a potential of receiving royalties on a future biosimilar impacted by the patente, the court agreed with the patentee that interest was “too speculative to support standing.”

= = = =

There are a long line of Supreme Court and DC Circuit cases that involve situations parallel to this that begin with a statutory right to an administrative action.  In those cases, the standing issue arises when the party attempts to appeal a negative administrative decision.  The basic rule in these cases is that a concrete and particularized interest needs to exist before the court will get involved. That said, the courts have allowed for a reduced standing requirement in these appeal cases as compared with what is required for a new district court action.

My concern with this case is the basic notion that Momenta’s standing to challenge the patent completely disappeared based solely on a mid-appeal SEC filing stating that a particular deal had fallen-through.  From that front, this appears to be a rash decision by the Federal Circuit.  On the other hand, I think that the better frame for seeing this case is to recognize that Momenta could have (but did not) update and explain its standing argument based upon its withdrawal from the Mylan-biosimilar project.  In Federal Court each party is expected to affirmatively make its case, and Momenta simply did not make its case.

Perhaps Momenta did not provide any explanation because it no longer cared about the case — providing a precise primary justification for the standing rule in the first place.

Hikma Pharmaceuticals USA Inc., et al. v. Vanda Pharmaceuticals Inc., No. 18-817

Patent

Hikma has petitioned the Supreme Court for review of this important eligibility case.  In its decision, the Federal Circuit drew a fine line between Vanda’s personalized medical treatment claims (adjudged eligible) and the methods found in Mayo and Ariosa (adjudged ineligible).  Question presented (long form):

This Court has repeatedly held that “natural phenomena[] and abstract ideas are not patentable” under Section 101 of the Patent Act. E.g., Alice Corp. Pty. Ltd. v. CLS Bank, Int’l, 573 U.S. 208, 216 (2014). Thus, “a process that focuses upon the use of a natural law” must also contain other elements or a combination of elements, sometimes referred to as an ‘inventive concept,’ sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law itself.” Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 72-73 (2012). Mayo, for example, invalidated a medical diagnosis method patent that was just “an instruction to doctors to apply the applicable laws when treating their patients.” Id. at 79.

In the decision below, a divided Federal Circuit panel did exactly what Mayo forbids: it exempted all patent claims that are drafted as reciting a method of medically treating patients from this analysis. Citing the ruling, the Patent and Trademark Office has directed its examiners that “(1) ‘method of treatment’ claims that practically apply natural relationships should be considered patent eligible under * * * the USPTO’s subject matter eligibility guidance; and (2) it is not necessary for ‘method of treatment’ claims that practically apply natural relationships to include nonroutine or unconventional steps to be considered patent eligible under [Section 101].”

The question presented is whether patents that claim a method of medically treating a patient automatically satisfy Section 101 of the Patent Act, even if they apply a natural law using only routine and conventional steps.

Read the Petition.

Guest Post by Prof. Yelderman: Which Kinds of Printed Publications Invalidate Patents in Court?

Patent

Stephen Yelderman is a Professor of Law at the University of Notre Dame Law School.

Continuing our study of prior art in the district court, in this post we’ll take a closer look at printed publications. As I discussed in my original post, around 13% of anticipation invalidations and 34% of obviousness invalidations rely on art in this category. (The numbers may be a touch higher than that, as a result of invalidations for which we could not determine the prior art supporting the court’s conclusion). For more background on this project, you can find the full paper here.

The potential sweep of this prior art category is breathtaking. By the terms of the statute—both before and after the America Invents Act—a printed publication found anywhere in the world can qualify as prior art. Moreover, under Federal Circuit precedent, this category includes a number of things that would seem to stretch the colloquial meaning of “publication.” For example, a single copy of a doctoral thesis stored in a university library, a drawing available only by travelling to another country’s patent office, and a posterboard displayed for several days at a conference have all been held to constitute “printed publications.” In dicta, the Federal Circuit has even suggested that a transient display of slides, or a billboard (!?) could, on certain facts, count as a printed publication.

When I teach patent law, our discussion of the printed publications category tends to dwell on these extreme possibilities. But how often do these non-traditional publications actually invalidate patents in practice?

To get a handle on this question, we further classified printed publication prior art into several sub-categories:

This chart illustrates the percentage of invalidations relying on printed publications in each sub-category, as a share of invalidations relying on printed publications at all. Encouragingly, the majority of invalidations based on printed publications relied on traditional reference publications. Just over half of anticipating publications were categorized as regularly published books and journals. Among obviousness invalidations citing a printed publication, 68% cited at least one regularly published book or journal. (The percentages of obviousness invalidations sum to more than 100% because of invalidations citing publications in multiple sub-categories.)  Though some of these regularly published books and journals may have come from obscure outlets, they are at least the kind of documents that a library might collect and an interested researcher might access.

The next sub-category—catalogs, manuals, and brochures—consists of documents distributed to teach the public about the features or availability of a product. This category is conceptually interesting for two reasons. First, though catalogs and manuals are typically mass-produced and widely disseminated, they are not usually collected in research libraries. By their nature, many publications in this category are intended to be transient. These characteristics suggest that publications in this sub-category would likely be much more difficult for a hypothetical prior art searcher to find than a regularly published book or journal.

The second reason that the catalog, manuals, and brochures category is conceptually interesting is that these documents are often evidence of a different kind of prior art entirely—that is, prior uses and sales. In fact, in a few cases we found it unclear whether a product manual was coming in as a distinct prior art reference, or as evidence about the features present in a prior sale. The fact that district courts sometimes rely on publications in this category suggests that activity prior art may be even more important than our top-level analysis suggested.

That said, catalog, manuals, and brochures were fairly insignificant in the larger scheme of things. About a quarter of anticipating printed publications fell into this sub-category. But since only 13% of anticipation events cited a printed publication, that means only about 3% of anticipation events overall relied on a catalog, manual, or brochure. Likewise, though 15% of obviousness events citing a printed publication relied on a catalog, manual, or brochure, that comes out to only about 5% of obviousness events overall. So whether one conceives of these cases as invalidity by prior sale or invalidity by printed publication, the high-level picture of prior art does not change very much.

The next sub-category—“other”—includes all identifiable printed publications not falling into the other two sub-categories. For example, we found patents that had been invalidated by poster board displays, industry whitepapers, proposals circulated at working group meetings of technical standards bodies, doctoral dissertations, and postings on Internet discussion forums. (We did not, for the record, find any cases of patents invalidated by billboards.) The good news was that reliance on potentially obscure or idiosyncratic documents like these appeared to be rare. About 19% of anticipating printed publications fell into this sub-category, amounting to just about 2% of anticipation events overall. A little more than a quarter of obviousness invalidations citing a printed publication included one in the “other” category. These constituted about 9% of obviousness invalidations overall.

There were, however, some publications that defied further classification—usually because sealed court records prevented us from finding more than a shorthand reference to the relevant document. For anticipation, this was rare enough that it could not change our results very much. But this happened frequently enough in cases of obviousness that we must acknowledge some potential uncertainty. If all of the unidentifiable publications turned out to be non-traditional publications, it’s possible that up to 16% of obviousness invalidations may have relied on a publication in the “other” category.

Finally, it’s important to remember that this data only tells us how district courts invalidate patents—not how many or why patents might be invalid in general. It is possible that cases involving non-traditional publications are more likely to settle than other cases, or, for that matter, that they’re less likely to settle. There is a significant possibility of selection effects here, which prevents us from making any inferences about patent quality overall. So, in the end, I’ll have to keep teaching those cases about slide presentations and unpublished college theses, even if “publications” like those only rarely invalidate patents in court.

USPTO Seeks Comments on Proposed Changes to Motion to Amend Practice in AIA Trials

Patent

From the USPTO: The United States Patent and Trademark Office (USPTO) has published a Request for Comments (RFC) about a proposed procedure for motions to amend filed in inter partes reviews, post-grant reviews, and covered business method patent reviews (collectively AIA trials) before the Patent Trial and Appeal Board (PTAB).  In essence, the proposal includes:  providing the parties with the Board’s initial assessment of the proposed amendment early in the process; providing meaningful opportunity to revise, and oppose, proposed amendments; and ensuring that the amendment process concludes within the 12-month statutory timeline. The proposal is based upon six years of experience conducting AIA trials during which time more than 350 motions to amend have been filed.

 A timeline of the proposal can be reviewed here.

Specifically, the USPTO seeks public input on a proposed amendment process that would involve a preliminary non-binding decision by PTAB regarding the merits of a motion to amend.  Such information may include whether the motion, in view of petitioner’s preliminary opposition, is reasonably likely to meet statutory and regulatory requirements and whether the proposed substitute claims are reasonably likely to meet patentability requirements. The proposed process would also provide an opportunity for a patent owner to revise, and petitioner to oppose, its motion to amend and proposed substitute claims in view of the preliminary amendment decision. The USPTO also seeks comments on the proposed timelines, designed to ensure completion within 12-months from institution. The USPTO also seeks comments in response to a number of specific questions included in the RFC. 

In addition, the USPTO seeks input regarding whether PTAB should continue to allocate the burden of persuasion regarding patentability of substitute claims as set forth in Western Digital Corp. v. SPEX Techs., Inc., Case IPR2018-00082 (Paper 13) (PTAB April 25, 2018) (informative), as well as any comments on motion to amend practice before PTAB generally. 

The USPTO seeks written comments on these topics on or before December 14, 2018.  Written comments should be submitted to TrialRFC2018Amendments@uspto.gov. 

The full text of the Request for Comments on the motion to amend proposal is published in the Federal Register.

Burden Shifting at the PTAB and the Obviousness of Ranges

Patent

2,5-Furandicarboxylic acid.pngby Dennis Crouch

The new DuPont v. Synvina decision is important for its specific application obviousness of claim ranges.  It also creates some amount of tension with prior cases — particularly Dynamic Drinkware and Magnum Oil – regarding burden shifting within Inter Partes Review proceedings.

E.I. DuPont de Nemours v. Synvina C.V. (Fed. Cir. 2018)

In its Inter Partes Review (IPR) final decision, the Board sided with the patentee — finding that DuPont hadn’t proven Synvina’s challenged chem-prep patent obvious. (Claims 1-5 and 7-9 of U.S. Patent 8,865,921.)  On appeal, the Federal Circuit has reversed — um actually, the claims are obvious.

Claim 1 is directed to a method of preparing FDCA — an organic compound known since 1876.  FDCA can be made from plant-sugars and then used to make plastic and other polymers.

The claim requires only one step — “contacting a feed . . . in the presence of an oxidation catalyst . . .  at a temperature between 140° C. and 200° C. [and] at an oxygen partial pressure of 1 to 10 bar.”   The claim particularly defines the “feed” (“a compound selected from the group consisting of [HMF], an ester of [HMF], [5MF], . . .  and a mixture of two or more of these compounds with an oxygen-containing gas” as well as the catalyst (“both Co and Mn, and further a source of bromine”) and indicates that the claimed contacting takes place in the presence of “acetic acid or acetic acid and water mixture”.

One-step methods were already known for preparing FDCA, but disclosed different temperature, pressures, solvents, and catalysts.  The closest identified prior art references are listed below as comparisons to the aforementioned claim 1.

In a number of prior cases, even pre-KSR, the Federal Circuit has found a “prima facie case of obviousness” when ranges within the prior art overlap with that of the claimed invention.

A prima facie case of obviousness typically exists when the ranges of a claimed composition overlap the ranges disclosed in the prior art.

In re Peterson, 315 F.3d 1325 (Fed. Cir. 2003).  That prima facie case may be overcome by evidence from the patentee — by providing evidence of unexpected results, for example.  Here, however, the PTAB did not apply this burden-shifting approach — rather, the Board cited Dynamic Drinkware and Magnum Oil as prohibiting this old-style burden-shifting framework in the IPR context.

On appeal, the Federal Circuit holds here that the traditional obviousness burden-shifting associated with ranges applies to IPR proceedings.  To be clear, the patentee never has the burden of proving non-obviousness.  But, once a prima facie case of obviousness is established, the claims will be cancelled unless the patentee provides evidence to support its position.  The court explains:

While a patentee technically has no “burden” to do anything to defend the validity of its patent other than hold the patent challenger to its own burden of persuasion, that burden of persuasion is necessarily satisfied when there is no evidentiary reason to question the prior art’s disclosure of a claimed range. Magnum Oil is not to the contrary.

Having articulated the standard, the court then looked at evidence presented — finding that “[t]he ranges disclosed in the prior art overlapped with those of claim 1.”  In particular, the court pieced together the cited references above to show overlap — when taken as a whole.  That overlap created a prima facie case of obviousness — and the patentee was unable to present evidence to unseat that initial conclusion. “At bottom, this case involves a strong case of obviousness based on very close prior art and weak evidence of nonobviousness.”

Coming Soon: Annual Bar Dues and CLE Requirements

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The USPTO has quietly proposed adding new annual bar dues ($240 – $410) for patent practitioners as well a continuing legal education (CLE) requirement.  The proposal is buried in the Table of Proposed Fees that will serve as the basis for an upcoming September 6, 2018 PPAC meeting on fees.

The Agency has not yet released any other information regarding the proposal. However, the suggestion from the fee requirement here is that the CLE requirement would only be a “soft” requirement — if you complete the CLE then the Annual Active Patent Practitioner Fee would be reduced.  The USPTO previously proposed annual fees back in 2003.

Rejoining Written Description and Enablement in Amgen v. Sanofi

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by Dennis Crouch

In July 2018, Amgen filed its petition for certiorari asking the Supreme Court to reject the Federal Circuit’s imposition of separate “written description” and “enablement” requirements along with their various requirements and standards.  Amgen argues that the Court should simply follow the statute — requiring “a written description of the invention . . . in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains . . . to make and use the same.”  Amgen Inc. v. Sanofi, Aventisub LLC, SCT Docket No. 18-127 (Petition filed July 23, 2018) (Cert Petition).

The basic push here is against the “possession” standard that serves as the core of the Federal Circuit’s written description requirement.  Apart from any policy arguments — Amgen argues that the statute spells out the test — and it is enablement, not possession.  Rather than focusing on what the inventor possesses, the Act requires the specification simple teach others — “as to enable an person skilled in the art . . . to make and use” the invention.

The brief provides a statutory linguistic argument that makes sense — the “grammatical structure [is] inescapable” and shows that statute provides one standard for judging the written description — the enablement standard.

This statutory argument goes a long way, but in my view will lack compelling force to the Supreme Court (as it did for the Federal Circuit in Ariad).  Rather, for 112(a), historical cases are the key since the language of 112(a) all stems directly from the Patent Act of 1793.  A grammar diagram (seemingly based upon modern language usage) is a rather weak argument for interpreting this olde language.  Rather, a successful argument here should seen in light of the history of the statute and how it has been directly addressed by the Supreme Court over the past 225 years.  In Ariad, the Supreme Court looked particularly to the Supreme Court decision in Schriber-Schroth Co. v. Cleveland Trust Co., 305 U.S. 47 (1938) as recognizing a separate written description (possession) requirement that goes beyond mere enablement.  Although the cert petition repeatedly cites Schriber-Schroth it doesn’t actually address the portion relied upon by the Federal Circuit that served as the crux of its decision.

 

Commissioner Hirshfeld on Increasing Certainty in US Patent Law

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Guest Post by Stephen C. Glazier, Partner at Akerman LLP

On April 26, 2018 the U.S. Patent Commissioner, Andrew Hirshfeld, spoke at our webinar regarding current developments at the U.S. Patent Office. [Link Below]

A major theme of Commissioner Hirshfeld’s remarks was the PTO’s revived focus on increasing reliability, certainty, and enforceability of issued patents and the application process.  The underlying goal here is to further increase the value of patents and their beneficial impact on innovative products and businesses.

The Commissioner stated that a first step toward this policy goal will be pursued by new PTO guidance to Examiners and the applicants regarding the application of the Alice-Mayo test for patent subject matter eligibility under Section 101.  Other possible PTO guidance is also being considered on various current issues.

The Commissioner pointed out that a first result in this effort was the very recently published PTO guidance, the “Berkheimer Memorandum“, which can be viewed at this link: https://www.uspto.gov/sites/default/files/documents/memo-berkheimer-20180419.PDF. This memo addresses the question of whether an additional element, or combination of elements, represents “well-understood, routine and conventional” activity in a claim directed to an abstract idea, for example, and hence constitute “something more” under the Alice-Mayo test (i.e., patent eligible subject matter).  The memo requires examiners to expressly support their positions with a citation to show an element is well-understood, routine or conventional.  This should mitigate the volume of Alice rejections.  The Commissioner indicated that this memo can currently be used as guidance, despite the fact that it is in the period for public comment until Aug. 20, 2018.

Many commentators feel that this will benefit software and medical diagnostic patents, since Alice rejections are concentrated in these technologies.

The Commissioner commented on volume and other metrics at the PTO.  The number of new patent applications has increased every year since 2009, with about 450,000 new cases filed last year (or about 600,000 if RCE’s are counted).  However, the percentage of RCE’s is declining.  The average time to first action is now about 15 months, and the final time to conclusion of prosecution is about 24 months.   Average pendency of Track One applications until issuance is only about 12 month from filing; although, the allowance rate for Track One is about the same as for regular applications.  The annual number of new Track One applications is down slightly, but remains near the historical maximum of about 10,000 annually.  There are currently about 8,200 patent examiners, of which about 4,700 are primaries.  There are approximately 500 art units.

Related issues and other questions were addressed by the Commissioner in the webinar.  Some of these issues include:  (1) recent Supreme Court patent decisions, (2)  material differences in the allowance rates of various examiners, art units and technology centers, and (3) the process for assigning applications to examiners, art units and technology centers.

A video recording of the Commissioner’s opening remarks, and the subsequent Q&A session with the Commissioner, may be reviewed in their entirety at this link: https://www.youtube.com/watch?v=svxQH7a3SwM&feature=youtu.be

 

 

President Donald J. Trump Proclaims April 26, 2018, as World Intellectual Property Day

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Statement by Donald J. Trump, April 26, 2018:

On World Intellectual Property Day, we not only celebrate invention and innovation, but also we recognize how integral intellectual property rights are to our Nation’s economic competitiveness. Intellectual property rights support the arts, sciences, and technology. They also create the framework for a competitive market that leads to higher wages and more jobs for everyone. The United States is committed to protecting the intellectual property rights of our companies and ensuring a level playing field in the world economy for our Nation’s creators, inventors, and entrepreneurs.

Our country will no longer turn a blind eye to the theft of American jobs, wealth, and intellectual property through the unfair and unscrupulous economic practices of some foreign actors. These practices are harmful not only to our Nation’s businesses and workers but to our national security as well. Intellectual property theft is estimated to cost our economy as much as $600 billion a year. To protect our economic and national security, I have directed Federal agencies to aggressively respond to the theft of American intellectual property. In combatting this intellectual property theft, and in enforcing fair and reciprocal trade policy, we will protect American jobs and promote global innovation. (more…)

Ned Heller – 1947-2018

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I learned today that Ned Heller has died.

Edward Peter (‘Ned’) Heller III, 70, of Aptos, California, died Tuesday, April 10, 2018, at University of California-San Francisco Medical Center in San Francisco, California.

Edward was a patent attorney and chief patent counsel for Alliacense Limited LLC, and previously was chief IP counsel for Seagate Technology and Control Data. He served on numerous advisory boards, including the Board of Directors of Intellectual Property Owners Association, for which he was chair of its Patent Law Committee; and was a longtime member of the Board of the Inventors Hall of Fame. Edward loved history and politics and spoke about them frequently. He could speak for hours on such topics, especially the Roman Empire.

It was Ned who initially researched and briefed the constitutional questions at issue in Oil States. Heller represented MCM v. HP in a parallel bid for consideration of the Article III issues.  He loved to debate the role of scire facias within the 18th and 19th Century Chancery court of England.

Over the years, Ned posted hundreds of comments on Patently-O, his final comment in March of this year was typical. He wrote:

Government is necessary to protect rights; but once we have government, those in power can use that power to feather their own nests by favoring the interests of the few, and the powerful, over the interests of the public.

Our founding fathers understood this well and tried to disperse power, and to balance it.

Which is why Oil States is so necessary to patent law. Removing the courts from patent validity concentrates too much power in the PTO. Even if that institution were not corrupt at the beginning, having so much power inevitably will lead to corruption.

Thank you Ned! I will be looking for you on your next go-round.

Proving the Factual Underpinnings of Eligibility

Patent

by Dennis Crouch

Director Iancu has made clear that the current state of patent eligibility jurisprudence is untenable.  Examiners need clear guidance — something he and I both see as lacking in the Supreme Court jurisprudence.  In addition to being ambiguous, we also share the perspective that the Alice/Mayo test unduly restricts the scope of eligible subject matter.  The PTO’s action here involves several fronts: (1) issuing guidance that is as-clear-as-possible for examiners and applicants; (2) working with Congress to legislatively broaden eligibility scope; (3) using the PTO’s to push public sentiment toward supporting strong and broad patent rights (when an underlying invention truly exists).

On the first front, the USPTO has: (1) issued a new “Berkheimer memorandum” focusing on the Federal Circuit’s holding in Berkheimer that”[w]hether something is well-understood, routine, and conventional to a skilled artisan at the time of the patent is a factual determination;” and (2) issued a Request for Public Comment on USPTO “subject matter eligibility guidance, and particularly … guidance in the Berkheimer memorandum to the Patent Examining Corps.”

The USPTO follows a multi-step process in determining patent eligibility.  First, the office considers whether the invention meets the express statutory requirements under Section 101 (“process, machine, manufacture, or composition of matter, or . . . improvement thereof”).  This first step is at times called either Step 0 or Step 1 of the eligibility analysis.  After satisfying the statute, the PTO must then consider whether the atextual limitations apply (abstract idea, law of nature, natural phenomenon).  In Alice/Mayo, the Supreme Court explained that this later inquiry involves two sub-steps identified as either (a) Alice/Mayo Step 1 and 2 or (b) Step 2A and 2B of the USPTO Eligibility Guidance.   In the two sub-steps, the Agency must first determine whether the claim is directed toward one of the eligibility exceptions. Then, if so directed, determine whether the claim includes “significantly more” than the ineligible concept — such as an “inventive concept.”

Although eligibility is considered a question of law, an open issue is the extent that  underlying elements are questions of fact.  In Berkheimer, the Federal Circuit started to answer this question — by holding that “whether a claim element or combination of elements is well-understood, routine and conventional to a skilled artisan in the relevant field is a question of fact.”

Running with that holding the Berkheimer memo requires examiners base any conclusion of well-understoodness upon evidence. Running in the background here is a reminder that patent examination begins with an assumption of patent eligibility unless the examiner shows otherwise.   In the memo, the PTO identifies four ways to prove that an element is well-understood in the art:

  1. An express admission by the applicant;
  2. A citation to a PTO-approved court decision holding that a the particular element at issue is well-understood in the art;
  3. “A citation to a publication that demonstrates the well-understood, routine, conventional nature of the additional element.” Here, the focus is not simply whether the element was known in the prior art, but whether it was “widely prevalent or in common use in the relevant field.” Here, the USPTO draws in written-description doctrine – noting that this is “comparable to the types of activity or elements that are so well-known that they do not need to be described in detail in a patent application to satisfy 35 U.S.C. 112(a); or
  4. Taking “official notice” of the well-understoodness of the element.  The memorandum cautions that “[t]his option should be used only when the examiner is certain, based upon his or her personal knowledge, that the additional element represents well-understood, routine, conventional activity engaged in by those in the relevant art, in that the additional elements are widely prevalent or in common use in the relevant field, comparable to the types of activity or elements that are so well-known that they do not need to be described in detail in a patent application to satisfy 35 U.S.C. 112(a).”  Further, if an applicant challenges the “official notice” then the examiner must provide direct evidence to satisfy the element.

The PTO is looking for commentary by August 20, 2018 to Eligibility2018@uspto.gov.

Some Laws Regarding Laws of Nature

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United States Declaration of Independence

When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

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Institutes of Justinian 2.1.1

By the law of nature these things are common to mankind—the air, running water, the sea and consequently the shores of the sea.

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Georgia Code § 5-5-41.

[DNA testing permitted if . . .]  (F) The testing requested employs a scientific method that has reached a scientific state of verifiable certainty such that the procedure rests upon the laws of nature; and

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La. Stat. Ann. § 15:422 (now repealed)

Judicial cognizance is taken of the following matters: . . . The laws of nature

(Note, in general, courts still take judicial notice of laws of nature).