Cert Denied Feb 2021

Two patent cases denied certiorari today:

  1.  GS Cleantech Corporation, et al. v. Adkins Energy LLC, et al., No. 20-769 (Standard of review when appealing an issue decided on summary judgment that later served as the basis for an inequitable conduct finding).
  2. adidas AG v. Nike, Inc., No. 20-728 (are PTAB judges principal officers?)

The adidas decision confused me a bit – the court has held over other cases on the same question awaiting the outcome in Arthrex that is set for Oral arguments on March 1, 2021.  Nike’s patents are challenged. U.S. Patent No. 7,814,598 and No. 8,266,749.  The claims appear to be broadly directed to making a shoe-upper from cloth made in a circular knitting machine.

 

PTAB Violates US Const. Appointments Clause

by Dennis Crouch

We have a more complete post coming on Monday, but wanted to highlight Arthrex v. Smith & Nephew (Fed. Cir. 2019). In Arthrex, the Federal Circuit held that the PTAB Judge (APJ) appointments process “violates the Appointments Clause, U.S. Const., art. II, § 2, cl. 2.”  In particular, the court held that APJs are “principal officers” and thus require appointment by the President rather than merely the Secretary of Commerce.  The court cited and relied upon Prof. John Duffy’s paper that started this whole process: John F. Duffy, Are Administrative Patent Judges Constitutional?, 2007 Patently–O Patent L.J. 21, 25 (2007) (concluding that administrative patent judges are officers as opposed to mere employees).

In the case, the court also provided a remedy — invalidating a portion of the statute that limited the PTO’s ability to remove APJs from the board. By making removal easier, the PTAB Judges are then re-classified as inferior officers — and thus were properly appointed.

[Decision]

Duke Law Conference – Constitutional Principals: Administrative Adjudication and Arthrex

Jason Rantanen

In United States v. Arthrex, Inc., the Supreme Court will consider the application of the Appointments Clause to Patent Trial and Appeal Board judges–specifically, whether PTAB judges are principal officers who must be appointed by the President and confirmed by the Senate, and whether the proper remedy is to sever their statutory removal protections.

To address these issues, The Center for Innovation Policy at Duke Law and the Duke Law Program in Public Law will host a Zoom discussion on Friday, February 12, noon to 1:30 p.m. Commentators will include the Honorable Timothy B. Dyk and renowned academics whose scholarship has focused on the key patent, administrative, and constitutional issues.  Below are the details.

February 12, 2021
12:00 noon – 1:30 p.m.
Virtual [
Register here]

12:00 noon–12:45 p.m. | Panel I: IP and Innovation Policy
The Honorable Timothy Dyk
Professor John Duffy
Professor Melissa Wasserman
Moderator: Professor Arti Rai

12:45 p.m.–1:30 p.m. | Panel II: Administrative and Constitutional Law
Professor Michael Asimow
Professor Jennifer Mascott
Professor Nina Mendelson
Professor Christopher Walker
Moderator: Professor Stuart Benjamin

Contact Balfour Smith (bsmith@law.duke.edu) or Kelli Raker (kelli.raker@law.duke.edu) for more information.

 

 

IPRs and the APA: Review of Director’s Discretion to Initiate IPRs

By Jordan Duenckel.  Jordan is a second-year law student at the University of Missouri School of Law and a registered patent agent. 

Apple brought an action against the USPTO Director Vidal in district court under the Administrative Procedure Act (APA), 5 U.S.C. §§ 701– 706, challenging the Director’s instructions to the Board regarding exercise of discretion in IPR institution decisions. In Apple v. Vidal, 2022-1249, — F.4th — (Fed. Cir. Mar. 13, 2023), Judge Taranto (joined by Judges Lourie and Stoll) largely affirmed the district court’s dismissal, confirming that the Director’s instructions are unreviewable.  The court did separately reverse a tertiary challenge to allow Apple to proceed on a claim related to the note-and-comments procedure of the APA. 

Apple and other repeat players in patent infringement litigation often use the inter partes review process under 35 U.S.C. §§ 311–319 to challenge the validity of asserted patents. The statute provides a two-step IPR process: Step 1 is the institution decision by the Director under § 314(b); Step 2 is the trial and final written decision by the PTAB.   

At least two prerequisites assist the Director in deciding to grant review: [1] a reasonable likelihood that the petitioner would prevail in 35 U.S.C. § 314(a) and [2] a petition must be filed within one year after service of the infringement complaint. § 315(b). Even if these conditions are met, the Director has unreviewable discretion over whether to initiate an IPR. The statutory text is seemingly as clear as a statute can be: “The determination by the Director whether to institute an inter partes review under [§ 314] shall be final and non-appealable.” 35 U.S.C. § 314(d); see also United States v. Arthrex, Inc., 141 S. Ct. 1970, 1977 (2021).   

From the outset of the IPR program, the Director delegated institution authority to the Board. 37 C.F.R. § 42.4(a). Practically, without this delegation, Director Vidal would spend a disproportional amount of time reviewing IPR petitions at the expense of other duties of the office, although she could have delegated responsibility to other agency departments such as the petitions division.  The right of delegation of the institution is settled law. See Ethicon Endo-Surgery, Inc. v. Covidien LP, 812 F.3d 1023, 1031–32 (Fed. Cir. 2016).  

At issue in Apple v. Vidal are the so-called Fintiv instructions issued by the Director based on Apple Inc. v. Fintiv, Inc., IPR2020-00019, 2020 WL 2126495 (P.T.A.B. Mar. 20, 2020) which provides six factors for analysis of whether to institute an IPR parallel to pending litigation.   

Proposing an analysis under the arbitrary and capricious standard, Apple and the other petitioners are directly focused now not on the denial of a specific petition for IPR review but as a general challenge to the Director’s instructions to the PTAB about how to exercise the delegated discretion.   

Slip Op. The district court ruled that 35 U.S.C. § 314(d) “precludes judicial review” of the challenged agency actions, bringing the case within the APA exclusion stated in 5 U.S.C. § 701(a)(1). According to this court, the IPR statute’s preclusion was settled by the Supreme Court in Arthrex and encompasses review of content-focused challenges to the Fintiv instructions. § 314(d) provides the clearest congressional delegation of nonreviewable discretion possible and the panel rightfully relied on plain-meaning and clear Supreme Court precedent.    

While affirming the dismissal of the content-based claims, the court separates the procedural requirements set forth in the APA. Reversing the district court in part, Judge Taranto’s panel opinion reopened Apple’s claim that the Director was required, by 35 U.S.C. § 116 together with 5 U.S.C. § 553, to promulgate institution instructions through notice-and-comment rulemaking procedures.  Slicing the procedure from the underlying substance of the rule, Taranto relies on Lincoln v. Vigil, 508 U.S. 182, 195 (1993) to clarify that the 5 U.S.C. § 553 provides the basis for rulemaking through the notice-and-comment procedure for the Director’s instructions and is a separate analysis of reviewability from the substance of the instructions. 

Standing was also preemptively addressed for the remand proceedings. Lujan provides the three-step test: injury-in-fact, causation, and redressability. In search of a particularized, concrete injury, the court takes notice that Apple is a repeat player with a history of IPR claims being denied. This past injury was used to show the eminency of future injury resulting from the denial of the benefits of IPRs linked to the concrete interest possessed by an infringement defendant. Redressability and causation were met because there is a genuine possibility that the instructions would be changed in a way favorable to Apple in notice-and-comment rulemaking.  

The Federal Circuit may have reached a bit to find standing in an effort to effectively resolve concerns about a heavily used procedure: the IPR process. On remand, the district court might rightly decide that a traditional notice-comment rulemaking procedure is required to redress harms or prophylactically provide clarifications for the patent system that can accomplish the goals of using agency resources effectively. Allowing the frequent fliers of the IPR system to at least have an appearance of input in the procedure would create a process with more certainty and produce more long-term economic efficiency.  

Patent Law and Institutional Choice

On his wonderful Fed Circuit Blog, Professor Taylor is hosting an interesting online symposium on the topic of Patent Law and Institutional Choice with the following nine thought provoking essays:

 

Missing Decisions and the Federal Circuit

By Jason Rantanen

Last week the Federal Circuit issued two interesting orders in appeals from the USPTO.   In the first, In re Zhu (Appeal No. 2021-1761), Sept. 13, 2021, the Federal Circuit vacated the decision of the PTAB and remanded the case to the PTO “for reconsideration of whether the claims are directed to an improvement in computer functionality, especially in light of this court’s recent case law.”  (internal quotations and brackets removed).  The context of this, according to Tiffany Hu, was the Federal Circuit’s 2020 Uniloc v. LG ruling together with the PTO’s own request for a remand “to permit further proceedings” – i.e: this was a patent eligible subject matter issue that the PTO decided to take another look at while the appeal was pending.

The second, In re Boloro (Appeal nos. 2019-2349, -2351, -2353), Sept. 16, 2021, was an order by the Federal Circuit remanding the case to allow Bolero to request Director rehearing of the final written decisions in light of the Supreme Court’s decision in United States v. Arthrex, Inc., 141 S.Ct. 1970 (2021).   The Federal Circuit had previously issued an order remanding the case for assignment to a different panel, its earlier remedy for the Constitutional appointments issue with patent judges.  As Andrew Karpan recently wrote, this order extends the effects of Arthrex to ex parte appeals.

On their own, neither of these orders are that notable.  They are nonprecedential orders that contain little more explanatory reasoning than a summary affirmance under Rule 36.  On the other hand, they were enough for Law360 authors to write about.

What’s more interesting is that neither was posted to the Federal Circuit’s website.  They’re only available in PACER.  This is not itself all that unusual.  Historically, dispositive orders like these would vanish into the ether – becoming what Merritt McAlister recently characterized as Missing Decisions.  They are never published in reporters, including the Federal Appendix, and aren’t in the major research databases.  Indeed, I didn’t find either of these decisions in Westlaw or Lexis when I searched yesterday afternoon.  Yet, they are judicial decisions, and in an age where lawyers, judges and scholars have come to think that all law (or at least, all appellate decisions) is easily accessible, they highlight that it’s not.

In a forthcoming essay response to Professor McAlister’s Missing Decisions, I examine the one federal appellate court that for technical reasons McAlister didn’t  include: the Federal Circuit.  What I find is that the Federal Circuit is quite good about putting its opinions and Rule 36 summary affirmances on its website.  But there are also a lot of missing decisions, which are concentrated in certain areas.  This is concerning if our frame of reference for judicial decisionmaking is defined by what’s readily available on court websites and commercial legal databases.

Here are my main findings:

  • Based on a comparison of docketed appeals filed between 2008 and 2018 to decisions posted to the Federal Circuit’s website, 45% of docketed appeals are decided in an opinion released on the court’s website, 17% are decided in a Rule 36 summary affirmance released on the court’s website, and the remaining 37% have neither an opinion nor Rule 36 available on the court’s website.
  • The number of documents released by the court on its website are about the same as the number of documents available in the big commercial legal databases (Westlaw, Lexis & Bloomberg).  This may be because, as McAlister describes, these sites tend to pull directly from the same pool that is posted to the court’s website or just collect directly from the court’s website.
  • Taking a closer look at appeals filed in 2015, of the 497 docketed appeals without a terminating document available on the court’s website (31% of the total), a large portion involved voluntary dismissals by the appellant (303) or the parties jointly or dismissal for failure to prosecute (72).  However, there were a moderate number of appeals dismissed for lack of appellate jurisdiction (31), transferred (23), and even decided by a merits order (16).  None of these were released on the court’s website and when I looked for some of them in Westlaw and Lexis, they weren’t there either.  All were designated as “nonprecedential.”

The bottom line is that when it comes to substantive merits decisions and decisions designated by the court as “precedential,” almost all of these appear to be on the court’s website.  But there’s a host of other nonprecedential decisions–many dealing with jurisdictional issues–that aren’t.  There are also decisions in petitions for writs of mandamus, which the court currently appears to mostly be releasing on its website although that hasn’t always been the case.

Given all this, my recommendation parallels that of McAlister: the Federal Circuit should release all dispositive orders on its website, not just decisions labeled as “opinions” or summary affirmances under Rule 36.  This would be consistent with both its practice of releasing Rule 36 summary affirmances (which contain less judicial reasoning than most of the dispositive orders that it doesn’t release) and the overall goal of judicial transparency about decisions.  And for those who think that having access through PACER alone is enough, Prof. McAlister and others have described in depth why that’s not the case.

There’s more in the essay itself, which also contains links to the data I used archived on the Harvard Dataverse.    Here’s a link to the preprint of the essay: Missing Decisions and the Federal Circuit.

Thanks to Dmitry Karshtedt for calling these two Law360 articles to my attention.  And here are copies of In re Zhu and In re Boloro that I pulled from PACER.

Comments on this post are closed.

IPR Games: RPI; No Appeal; and Analogous Arts

CyWee Group v. Google (Fed. Cir. 2021)

Google won its IPR challenge against CyWee’s U.S. Patent Nos. 8,441,438 (claims 1 & 3-5) and 8,552,978 (claims 10 & 12). On appeal, the Federal Circuit has affirmed with a short opinion by Chief Judge Prost focusing on three discrete issues:

Real Party in Interest: The patentee argued that Google did not disclose all real parties in interest as required by statute 35 U.S.C. § 312(a)(2).  On appeal, the Federal Circuit held that institution stage real-party-in-interest questions are institution related and thus is not reviewable under the no-appeal provision of 35 U.S.C. § 314(d).  This issue was previously decided in ESIP Series 2, LLC v. Puzhen Life USA, LLC, 958 F.3d 1378 (Fed. Cir. 2020).   One difference here from ESIP is that the challenge was not raised to the institution decision itself, but rather as part of a post-institution motion to terminate based upon newly discovered evidence.  On appeal though, the Federal Circuit found the new motion equivalent to a request to reconsider the institution.  The court also held that the Board’s refusal to allow ESIP additional discovery was “similarly unreviewable” because the discovery ruling is tightly associated with the institution decision.

The court did not delve into the RPI issue, but CyWee was complaining about a coordinated effort by defendants in the district court litigation (including Samsung and Google) to ensure that Backmann was only seen by the Board and not also by Judge Bryson who was sitting by designation in the district court.

Approximately one month after Google filed its IPR petitions, Samsung dropped Bachmann from its invalidity contentions in the Samsung Litigation. This is consistent with what appears to be a coordinated effort between Samsung and
Google to block consideration of Bachman in the Samsung Litigation before Judge Bryson. Due to Bachmann’s shortcomings, neither wanted a summary judgement decision issuing from the district court, as CyWee’s lawsuit against Samsung was speeding toward trial and would outpace the Google IPRs. Dropping Bachmann from the Samsung Litigation assured that it could be addressed solely by the Board. This plan became more evident in January 2019 when, after the Google IPRs had been filed, Samsung moved to join the Google IPRs, thereby resurrecting its ability to rely on the Bachmann.

The PTAB concluded that this timing alone was not sufficient to find Samsung to be a Real Party in Interest and likewise found no RPI even though Samsung was being accused of infringement based upon its use of Google’s Android product.  In its decision, the PTAB noted that the fact that Patent Owner had sued each company separately, in a separate lawsuit, also provided evidence that they are not real parties in interest. (I’d call this final conclusion quite tenuous).

Appointments Violation: The patentee raised an appointments clause issue, that was rejected under Arthrex (Fed. Cir. 2019). In particular, the Federal Circuit’s Arthrex decision purported to cure all appointments clause issues for AIA Trials that had not yet reached a final written decision. It is possible that this issue will get new legs once the Supreme Court issues its opinion in the case.

Obviousness: On the merits of the obviousness case, the patentee argued that the key prior art reference was not “analogous art” and therefore could not be used for obviousness.  There are traditionally two ways to find a reference “analogous”:

  1. If the art is from the same field of endeavor, regardless of the problem addressed; or
  2. If the art is “reasonably pertinent to the particular problem with which the inventor is involved.” Bigio.

The CyWee patents cover a “3D Pointing Device” that uses a particular comparison algorithm for improved error compensation.  The prior art (Bachmann, U.S. Patent No. 7,089,148), was created by the Navy and is directed to motion tracking of bodies. Thus, the PTAB found that it was not from the “same field or endeavor.”

The PTAB did, however, conclude that Bachmann was “reasonably pertinent to the particular problem with which the inventor is involved.”  In particular, Bachman discloses a comparison algorithm for improved error compensation associated with the movements of a 3D pointing device.  Note here, if you look at the image above, you don’t see any “pointing”, but the Board broadly defined the term to include a device to “control actions on a display.” Thus, we have a reference addressing the particular problem addressed in CyWee’s patents — and thus it is analogous.  On appeal, the Federal Circuit affirmed on substantial evidence. (Analogous arts determination is a question of fact).

CyWee argued that there were too many differences between its invention and Bachmann to allow the reference to be considered analogous.  The Federal Circuit rejected that argument — holding that “a reference can be analogous art with respect to a patent even if there are significant differences between the two references.” Quoting Donner Tech., LLC v. Pro Stage Gear, LLC, 979 F.3d 1353 (Fed. Cir. 2020).

Note. Jay Kesan handled the appeal for the patentee; Matthew A. Smith for Google.

Note 2. The diagram looks a lot like a Wii. CyWee’s patents claim priority back to 2010 (Wii was released in 2006). [UPDATE – I had a big typo with a 2001 priority date. That would make a bit difference. Sorry.]

 

Finjan’s Claims in IPR

Palo Alto Networks, Inc. v. Finjan, Inc. (Fed. Cir. 2020)

Note – I originally misread this decision as applying the Phillips standard for claim construction. On review, I realize that I misread the decision. The court explains:

For petitions for inter partes review filed on or after November 13, 2018, the Board applies the Phillips district court claim construction standard. 37 C.F.R. § 42.100(b) (2018); Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc); Immunex Corp. v. Sanofi-Aventis U.S. LLC, 977 F.3d 1212, 1216 & n.2 (Fed. Cir. 2020). For petitions for inter partes review filed before November 13, 2018, like Palo Alto’s, we apply the broadest reasonable interpretation claim construction standard.

So, my original opinion–that the change in claim construction made the difference–is obviously wrong.

= = = =

This appeal stems from an IPR proceedings filed by Palo Alto (PANW) against Finjan’s US. Patent No. 8,141,154.  Back in 2017, the Board originally sided with Finjan and confirmed patentability of the claims (not proven unpatentable). In a 2018 appeal, however, the Federal Circuit vacated that decision under SAS.  The IPR had only been partially-instituted and the Supreme Court in SAS held that partial-institution is improper.   On remand, the Board expanded its institution to all challenged claims and then again sided with the patentee — finding none of the challenged claims were proven unpatentable.  On appeal here, the Federal Circuit has affirmed. (more…)

En Banc Denial.

As courts continue to streamline their operations, the Federal Circuit has denied three petitions for en banc rehearing:

  • 19-1177 Koninklijke Philips N.V. v. Google LLC (obviousness: propriety of using a prior art reference to show ‘general knowledge’ and thus avoid the the need to consider limitations on combining prior art.)
  • 18-1768 Polaris Innovations Limited v. Kingston Technology Co. Inc. (Arthrex redux)
  • 19-2026 Mirror Imaging, LLC v. Fidelity Information Services (Arthrex redux)

The question I’m posing in civil procedure: What are other ways that we can streamline our legal process to still provide equal protection and substantial justice while avoiding the current difficulties created by COVID-19? Can we use this as an inflection point to build a better system?

Officers of the United States Shall be Appointed by the President

Hearings tomorrow in the House of Representatives on PTAB Appointments Clause Issues arising from the Federal Circuit’s recent decision in Arthrex, Inc. v. Smith & Nephew, Inc., No. 2018-2140 (Fed. Cir. Oct. 31, 2019).  We have a law professor heavy panel with Professors John Duffy, Arti Rai, and John Whealan along with Bob Armitage (who tends to speak like a professor).

The basic framework is that the Constitution requires all “Officers of the United States” to be nominated by the President with “Consent of the Senate.”  U.S. Const. Article II, Section 2. The so-called appointments clause has a caveat that “inferior Officers” may be appointed by Courts or Heads of Departments if Congress so allows.  Currently PTAB Judges (Administrative Patent Judges) are treated as inferior officers by statute — appointed by the Secretary of Commerce.  However, the increased responsibility of AIA Trials has pushed their role into the territory of Principal Officers that must be appointed by the President.


 

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

by Dennis Crouch

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

The held-over cases include: (more…)

The Sound of Silence and the Inherency Doctrine for Written Description

by Dennis Crouch

The basic issue in Novartis v. Accord is quite familiar. A new limitation was added to the claims during prosecution that is not found expressly in the specification, but would be expected by someone of skill in the art.  Does the claim violate the written description requirement of 35 U.S.C. 112? In its most recent statement, the Federal Circuit finds failure of written description unless the invention is either expressly or inherently disclosed in the original specification. Novartis Pharm. Corp. v. Accord Healthcare, Inc., 38 F.4th 1013 (Fed. Cir. 2022) (rehearing decision). One quirk here is that the court identifies the particular limitation as a “negative claim limitation” and there are wide ranging policy views on how those limitations should be treated. However, the Novartis court explained that its express-or-inherent holding here applies regardless of whether claim limitations are expressed in positive or negative form.  Novartis has no petitioned for en banc rehearing.

The appellate procedure in this case is strange and important to its current status: The district court sided with Novartis (infringed + not-invalid) and the Federal Circuit affirmed on appeal in a January 2022 decision.  That original CAFed decision was penned by Judge O’Malley and joined by Judge Linn.  Chief Judge Moore wrote in dissent — arguing that the majority had been way too lenient.

By January 2022, Judge O’Malley had already announced her plans to retire from the judiciary in early March 2022. The appellant’s rehearing petition would have ordinarily been due on Groundhog Day, February 2, but HEC requested and was granted a 21-day delay and that meant that Novartis’s response would not be due until after Judge O’Malley’s retirement.  Rather than waiting for the deadline, Novartis  filed its responsive brief with a four-day turn around.  But to no avail; Judge O’Malley retired before acting on the rehearing petition.

After Judge O’Malley’s retirement, the court added Judge Hughes to the panel to decide the rehearing.  Of any judge that might have been added, Judge Hughes was one very likely to find against the patentee in this situation.  My understanding is that the court did not announce Judge Hughes addition to the panel until it issued a revised panel opinion on June 21, 2022.  Presumably in this case, there was some randomness in Judge Hughes’ selection, but the rules don’t expressly require that.

The panel re-composition flipped the outcome.  Chief Judge Moore had previously written in dissent, but now Judge Hughes joined her opinion–putting her in the majority. With the loss of Judge O’Malley, Judge Linn’s position flipped to the dissent.  Thus, the new opinion sided with the accused infringer–concluding that the district court “clearly erred” in finding the claims not invalid.   The decision here is apparently the first time that a Federal Circuit panel has flipped the outcome following a change in panel composition.

Now, Novartis has filed its petition for rehearing.  The petition raises two issues: one on the merits of the written description issue; and a second focusing on the unusual appellate procedure.

  1. Patent Law Merits: Whether 35 U.S.C. §112 and this Court’s precedent require that, to have adequate written description, a claim limitation must be either expressly disclosed in the specification or necessarily present in some express disclosure, even if a skilled artisan would otherwise read the specification to disclose possession of the limitation.
  2. Appellate Procedure: Did the court procedurally err by issuing the new decision on rehearing.

Lets start with procedure and panel dependence. The other circuits have an internal rule or practice that a panel rehearing will not be ordered unless at least one judge in the majority votes for the rehearing.  The idea behind a panel rehearing to raise issues that the majority can recognize that it “overlooked or misapprehended.” FRAP 40(a)(2). But, no one in the majority changed their outlook. Rather, the addition of Judge Hughes provided an end-run around the majority by adding a new panel member.

The Federal Circuit has previously written about this issue – but not in a self-reflective way. Rather the court was in its then supervisory role of the US Claims Court. Universal Restoration, Inc. v. U.S., 798 F.2d 1400 (Fed. Cir. 1986).  In Universal, one panel member of the Claims Court had been replaced following its original determination.  That recomposition resulted in a flipped the outcome on rehearing.   On appeal, the Federal Circuit reversed on the merits, but in a footnote explained that the recomposition was improper:

Where the original panel reconsiders and changes a decision, a member of the original majority must vote for the change. In the Supreme Court where less than a majority may order rehearing, a member of the original majority must vote for the rehearing. These procedures are readily acceptable as “fair.” Sup.Ct.R. 51.1 (1980); Ambler v. Whipple, 90 U.S. (23 Wall.) 278, 281–82 (1874). . . . What appears to be the case here is that there was in fact no reconsideration. A different panel simply disagreed with the first decision.

Id.  The Federal Circuit does have a rule regarding replacement of a missing panel member. Federal Circuit Rule 47.11. That rule calls for the Chief Judge to secure an additional judge in situations where “a judge of a panel that has heard oral argument or taken under submission any appeal, petition, or motion is unable to continue with consideration of the matter.”  If the remaining two judges are unable to resolve the matter,  then the chief judge should appoint another judge.  Id.  In its petition, the Novartis argues that this rule is inapplicable based upon the aforementioned general tradition and because panel rehearing petitions are not “argued” or “taken under submission.”

On the merits: The petition argues that the new majority opinion improperly creates an “express-or-inherent rule:” That the invention as claimed must be either expressly or inherently disclosed within the specification.  Chief Judge Moore explained:

[I]t is possible that the written description requirement may be satisfied when a skilled artisan
would understand the specification as inherently disclosing the negative limitation. . . [However], testimony from a skilled artisan as to possibilities or probabilities that the recited element would be excluded would not suffice, lest such testimony could effectively eliminate the written description requirement. If silence were generally sufficient, all negative limitations would be supported by a silent specification. If, however, a patent owner could establish that a particular limitation would always be understood by skilled artisans as being necessarily excluded from a particular claimed method or apparatus if that limitation is not mentioned, the written description requirement would be satisfied despite the specification’s silence.

Id.   The petition argues that Judge Moore has improperly created a bright-line rule in an area where “there are no bright-line rules.”

The new majority’s inflexible heightened standard conflicts with a substantial body of precedent. It makes written description turn not on what the specification “reasonably conveys to those skilled in the art,” but on what the specification expressly or necessarily discloses. And because the new majority expressly declined to limit its holding to negative claim limitations, that holding could be applied to reverse any written-description finding.

Novartis En banc Petition.

What is the invention: Fingolimod was a known immune suppressant.  In its patent, Novartis claims a method of treating multiple sclerosis (RRMS) by administering fingolimod at a particular daily dosage of 0.5 mg.

Many drug regimens begin with a loading-dose to quickly raise the blood-level. The dosage is then reduced to a lower maintenance dosage. During prosecution some prior art was uncovered that started with a loading dose and then reduced dosage down to a level close to that claimed by Novartis. But the Novartis invention did not require a loading dose.  Prosecutors amended the claims to make that clear: “a daily dosage of 0.5 mg, absent an immediately preceding loading dose regimen.”

The Sound of Silence: The problem identified by Chief Judge Moore is that the Novartis patent application documents never mention loading doses or the absence of loading doses. They don’t say anything one-way-or-the-other.  Novartis provided evidence that loading doses in this area were common and that PHOSITA would have understood that silence regarding loading doses was actually a disclosure that no-such loading doses were required.  Judge Moore rejected this argument; holding instead that “Silence is not disclosure.”  Further, Judge Moore adopted the inherency doctrine as a limiting rule. That doctrine is quite tight and only finds  disclosures inherent if they necessarily flow from express teachings.

Scope of AIA-Trial Director Review

by Dennis Crouch

New USPTO Director Kathi Vidal is working through the details of how to run the AIA-Trial Director Review program.  For now, she has promised transparency as the interim process is developed and is seeking public input.

Once an IPR is instituted, the statute calls for the PTAB to issue a written decision on whether to cancel the challenged claims.  That decision is then immediately appealable by the losing party, at least according to the statute.  In Arthrex, the Supreme Court held that PTAB judges are not proper principal Officers of the United States and therefore do not have authority to speak for the US on important matters such as cancelling private property rights.  The Supreme Court then offered a non-statutory solution of inserting a director-review process following the PTAB decision prior to appeal. The result then is that the decision will be given the imprimatur of the Director who is a Principal Officer since she was appointed by the President and Confirmed by the Senate.

As I mentioned, the new Director Review was created by the Supreme Court on the fly without setting any clear bounds for its procedure or Director reasoning.  Questions:

  • To what extent can the Director take into account outside lobbying or outside evidence? Lets say, for instance, that the Director reads NYTimes editorials.
  • To what extent can the Director base her decision on issues apart from those listed in the IPR statute (e.g,. novelty and obviousness). For instance, is it permissible for the Director to consider US global competitiveness and impact on the marketplace?
  • To what extent must the Director personally conduct and decide the reviews rather than delegate that responsibility.

Dir. Vidal is committed to make this an open process and the PTO will likely issue a Request for Comments in the coming weeks.

More from the PTO here.

Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

Day One Project: USPTO Proposals for the Biden Administration

Day One Project is not part of the BIDEN Transition, but the organization has put together a strong group of pro-BIDEN IP experts and relative insiders who have drafted and published a Transition Document for the United States Patent and Trademark Office.

The following are a few of the key proposals: 

  • Increase international collaboration during patent examination, including simultaneous examination with IP5 offices.
  • Reorganize our IP engagement with China IP Engagement with a more coherent and effective approach.
  • Review of the non-patentability-factors used by the PTO to deny IPR institution (such as PTO money, and parallel litigation).
  • Expand IPRs to allow for consideration if indefiniteness and also double patenting.
  • Move forward with comprehensive patent eligibility reform.
  • Anonymous examination (examiners don’t know identity / race / gender / national origin of the patent applicant).
  • Fix PTAB Constitutionality (once Supreme Court decides Arthrex).
  • Studying diversity and working to incentivizing minorities (especially African-Americans) to invent and file for patent protection.
  • $$$:
    • Raising patent filing fees to address decline in maintenance fee payments (portfolio pruning) and also to “dampen frivolous filings.”
    • Further increasing maintenance fees to encourage release of patents to the public where the patentee is not making a sufficient return-on-investment.
  • Trademark: Make the process seriously user friendly.
  • Give USPTO Substantive Rulemaking Authority
  • Establish the USPTO Bureau of Economics
  • Small-Claims Patent Court
  • Expand Patents for Humanity Program

Read more here.

Is the Commissioner of Patents an Officer who Must be Appointed by The President?

by Dennis Crouch

For most of the history of the US patent system, the Commissioner of Patents was the head of the Patent Office and was seen as an Officer of the United States appointed by the President.  The 1952 Patent Act was written as follows:

A Commissioner of Patents, one first assistant commissioner, two assistant commissioners, and nine examiners-in-chief, shall be appointed by the President, by and with the advice and consent of the Senate.

35 U.S.C. 3 (1952).  In 1881 Congress created a national trademark law with registration via the Patent Office. This setup meant that the Commissioner of Patents was also in charge of trademarks.  This also created the oddity that registered trademarks were marked with the patent office name.

In 1975, the job title was changed to “Commissioner of Patents and Trademarks” and the office name was changed to the “Patent and Trademark Office.”  In 1999, Congress officially changed the office name to the “United States Patent and Trademark Office” and the position of “Director” (Deputy Undersecretary of Commerce) was created. At that time, the roles of Commissioner for Patents and Commissioner for Trademarks were pushed down as appointments by the Secretary of Commerce (with 5-year terms).

Question of the day:  Assuming that Arthrex wins and PTAB judges must be appointed by the President, does this also mean that the Commissioner of Patents must be appointed by the President?  Of note here, the Commissioner of Patents is also a member of the PTAB and comes with a 5-year term.*  However, unlike regular PTAB Judges, the Commissioner can be removed from office by the Secretary of Commerce for “misconduct or non-satisfactory performance … without regard to the provisions of title 5.”

= = = = =

* In what may be simply a longstanding error from the 1999 amendments, the Commissioner for Trademarks is also a member of the PTAB.

Quick Action to Fix Appointments Problem?

My newest email from US Inventor begins with the headline: “Our Enemies are Trying to Pull a Fast One.”  No, we’re not talking about Russia or North Korea, we’re talking about the USPTO, PTAB Judges, Bob Armitage, etc. . They write:

The IP Subcommittee of the House Judiciary Committee is meeting [Tuesday] afternoon to look at this. One of the witnesses they will listen to was actually a key person behind the passage of the America Invents Act, the bill that Congress was so mislead on and that created the patent killing PTAB!

[T]he same players who created the massive problem will be trying to tell Congress that everything is fine. Well, it isn’t, and we have to tell them. . . .

The Federal Circuit Arthrex … said that the PTAB judges are not legitimate. These “judges” have invalidated over 2,000 patents and destroyed the lives of many inventors. Please meet with Josh Malone and Randy Landreneau (Lan-druh-no) of US Inventor to get informed on this critical issue for America and American innovation.”

Randy Landreneau, Randy@USInventor.org

Josh Malone, Josh@USInventor.org

The basic idea here is that Congress is considering a quick statutory fix for the PTAB Judge issue — but US Inventor argues that such an solution should be tied more generally to reform of the AIA Trial process.

Officers of the United States Shall be Appointed by the President

 

Pfizer v. Sanofi: Applying the Results-Effective Variable Doctrine in Obviousness Analysis

by Dennis Crouch

The Federal Circuit has affirmed the PTAB’s finding that Pfizer’s pneumococcal vaccine patent is obvious, but has vacated and remanded the Board’s denial of Pfizer’s motion to amend certain claims. Pfizer Inc. v. Sanofi Pasteur Inc., No. 19-1871 (Fed. Cir. Mar. 5, 2024); U.S. Patent No. 9,492,559. Pfizer v. Sanofi Opinion.

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

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