CAFC: Prior Judicial Opinions Do Not Bind the PTAB

Novartis v. Noven Pharma (Fed. Cir. 2017)

This short opinion by Judge Wallach affirms the PTAB findings that the claims of two Novartis patents are invalid as obvious. See U.S. Patent Nos. 6,316,023 and 6,335,031.  Several prior court decisions (including those involving the petitioner here) had upheld the patent’s validity against parallel obviousness challenges.

The most interesting aspects of the decision are found under the surprising heading: Prior Judicial Opinions Did Not Bind the PTAB.  When taken out-of-context, we can all agree that the statement is silly and wrong. The PTAB is obviously bound by Supreme Court and other precedent.  In my view, the statement is still silly and wrong even when applied in context. 

The context: In Novartis Pharm. Corp. v. Noven Pharm., Inc., 125 F. Supp. 3d 474 (D. Del. 2015)), the district court considered Noven’s obviousness argument and fount it lacking merit. Same story in Novartis Pharm. Corp. v. Par Pharm., Inc., 48 F. Supp. 3d 733 (D. Del. June 18, 2014) and Novartis Pharm. Corp. v. Watson Labs., Inc., 611 F. App’x 988 (Fed. Cir. 2015), albeit with different parties.

In the Inter Partes Review, the USPTO concluded that those prior court decisions regarding obviousness need not be considered since the record was different at the PTAB – albeit admittedly ‘substantively the same.’   [edited] On appeal, the Federal Circuit rejected the PTAB’s reasoning as a trivial likely insufficient distinction, but instead found that the different evidentiary standard was what justified the result:

Nevertheless, even if the record were the same, Novartis’s argument would fail as a matter of law. The PTAB determined that a “petitioner in an inter partes review proves unpatentability by a preponderance of the evidence (see 35 U.S.C. § 316(e)) rather than by clear and convincing evidence[] as required in district court litigation,” meaning that the PTAB properly may reach a different conclusion based on the same evidence.

The idea here is that in litigation, invalidity must be proven with clear and convincing evidence while inter partes review requires only a preponderance of the evidence. As explained by the Supreme Court on Cuozzo, this may lead to different outcomes:

A district court may find a patent claim to be valid, and the [USPTO] may later cancel that claim in its own review. . . . This possibility, however, has long been present in our patent system, which provides different tracks—one in the [USPTO] and one in the courts—for the review and adjudication of patent claims. As we have explained . . . , inter partes review imposes a different burden of proof on the challenger. These different evidentiary burdens mean that the possibility of inconsistent results is inherent to Congress’[s] regulatory design.

Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2146 (2016) (citation omitted).

My view: As suggested here, we have a failure of system design – a party who challenges a patent’s validity in court and loses should not later be allowed to re-challenge validity. [Cite the 100’s of cases and articles supporting finality of judgments.]  In this situation, the PTAB / Federal Circuit should at least be required to distinguish its factual findings from those of the federal courts.

Obviousness Aside: A quirk of this case not addressed by the court is that it is an obviousness case – and obviousness is a question of law.  The differences in invalidation standards for courts and the PTAB are evidentiary standards and do not apply to questions of law. Rather, questions of law should be decided identically in both fora.

Supreme Court Update: Are Secondary Indicia of Invention Relevant to Eligibility?

by Dennis Crouch

The Supreme Court is on recess until Feb 17.

I don’t know if my end-of-April prediction will hold true, but I do expect Neil Gorsuch to become a Justice on the United States Supreme Court.  As a 10th Circuit Judge, Gorsuch never decided a patent case, but does have a handful of interesting IP cases.

There are a few petitions filed that we have not discussed here: 

 In its newest petition, DataTreasury takes 101 for a new spin by taking the 101/103 analysis to its next logical level.  If we are going to include a 103 analysis as part of the eligibility doctrine then lets go whole hog.  Thus, DataTreasury asks: whether a court must consider secondary indicia of invention as evidence in its eligibility analysis? In the case, the Federal Circuit had affirmed the PTAB judgment without opinion under R.36. A second eligibility petition is found in TDE Petroleum Data Solutions, Inc. v. AKM Enterprise, Inc., dba Moblize, Inc. TDE asks the court to “please reconcile Diehr and Alice.” (I’m not literally quoting here).  The patent at issue (No. 6,892,812) claims a four-step process of “determining the state of a well operation.” (a) store several potential “states”; (b) receive well operation data from a plurality of systems; (c) determine that the data is valid by comparing it to a threshold limit; and (d) set the state based upon the valid data.

In Wi-LAN v. Apple, the patentee revives both Cuozzo and Markman claim construction arguments – this time focusing on “whether claim terms used to define the metes and bounds of an invention are generally given their “plain and ordinary meaning,” or are redefined (limited) to match the scope of the exemplary embodiments provided in the specification.”

duPont v. Macdermid asks whether summary judgment of obviousness is proper because of the factual disputes at issue.  Similarly, in Enplas v. Seoul Semiconductor, the petitioner argues that a finding of anticipation by the PTAB must be supported by findings each and every element of the subject patent claim is disclosed in the prior art.  In Enplas, the Federal Circuit affirmed the PTAB on a R.36 Judgment Without Appeal — it difficult for the petitioner to point to the particular deficiencies.


=== THE LIST===

1. 2016-2016 Decisions:

  • Design Patent Damages: Samsung Electronics Co. v. Apple Inc., No 15-777 (Total profits may be based upon either the entire product sold to consumers or a component);  GVR order in parallel case Systems, Inc. v. Nordock, Inc., No. 15-978.  These cases are now back before the Federal Circuit for the job of explaining when a component

2. Petitions Granted:

3. Petitions with Invited Views of SG (CVSG): 

4. Petitions for Writ of Certiorari Pending:

  • Claim Construction: Wi-LAN USA, Inc., et al. v. Apple Inc., No. 16-913 (“plain and ordinary meaning”)
  • Is it a Patent Case?: Boston Scientific Corporation, et al. v. Mirowski Family Ventures, LLC, No. 16-470 (how closely must a state court “hew” federal court patent law precedents?) (Appeal from MD State Court)
  • Anticipation/Obviousness: Google Inc., et al. v. Arendi S A.R.L., et al., No. 16-626 (can “common sense” invalidate a patent claim that includes novel elements?) (Supreme Court has requested a brief in response)
  • Anticipation/Obviousness: Enplas Corporation v. Seoul Semiconductor Co., Ltd., et al., No. 16-867 (“Whether a finding of anticipation under 35 U.S.C. § 102 must be supported by findings that each and every element of the subject patent claim is disclosed in the prior art?”)
  • Anticipation/Obviousness: E.I. du Pont de Nemours and Company v. MacDermid Printing Solutions, L.L.C., No. 16-905 (summary judgment of obviousness proper)
  • Jury Trial: Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, et al., No. 16-712 (“Whether inter partes review … violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.”) [oilstatespetition]
  • Jury Trial: Nanovapor Fuels Group, Inc., et al. v. Vapor Point, LLC, et al., No. 16-892 (Can a party forfeit a properly demanded trial by jury without an explicit, clear, and unequivocal waiver?)
  • Is it a Patent Case?: Big Baboon, Inc. v. Michelle K. Lee, No. 16-496 (Appeal of APA seeking overturning of evidentiary admission findings during reexamination – heard by Federal Circuit or Regional Circuit?)
  • LachesMedinol Ltd. v. Cordis Corporation, et al., No. 15-998 (follow-on to SCA); Endotach LLC v. Cook Medical LLC, No. 16-127 (SCA Redux); Romag Fasteners, Inc. v. Fossil, Inc., et al, No. 16-202 (SCA Redux plus TM issue)
  • Eligibility: TDE Petroleum Data Solutions, Inc. v. AKM Enterprise, Inc., dba Moblize, Inc., No. 16-890 (Please reconcile Diehr and Alice)
  • Eligibility: DataTreasury Corporation v. Fidelity National Information Services, Inc., No. 16-883 (secondary indicia as part of eligibility analysis).
  • Eligibility: IPLearn-Focus, LLC v. Microsoft Corp., No. 16-859 (evidence necessary for finding an abstract idea)

5. Petitions for Writ of Certiorari Denied or Dismissed:


Medtronic: On Rehearing the Court Restates that IPR Termination Decision is Not Appealable

by Dennis Crouch

On rehearing in Medtronic v. Robert Bosch, the Federal Circuit panel has reaffirmed its earlier determining that the PTAB’s vacatur of an IPR institution decision is a decision as to “whether to institute an inter partes review” and therefore is “final and nonappealable.”  The original Medtronic decision had been released prior to Cuozzo v. Lee (2016) and the rehearing decision now explains that “nothing in Cuozzo is to the contrary.”

Although I continue to cringe at the prospect of no appeal, the decision here makes logical sense based upon the statutory and procedural structure. Here, the termination decision was based upon the petitioner’s failure to identify all real parties at interest — a core requirement of a complete petition.  Base upon that failure, the Board determined that the petitions were incomplete and therefore “cannot be considered.”  With that conclusion, the Board terminated the petitions and vacated the prior institution decisions.   In this framework, it makes sense for the termination/vacatur to be a decision on institution and thus not subject to appeal.  I could imagine a different scenario where the PTAB terminates an IPR based upon some other ground that is not a petition requirement — such as failure to prosecute or improper post-institution attorney conduct. In that hypothetical situation, the termination would be substantially divorced from the institution and – in my view – would no longer fall under the no-appeal requirement.

An additional difficulty with all of this stems from the pending Ethicon petition and the difference between action by the Director and action by the PTAB.  The statute separates the roles – indicating that the PTO Director’s role is in determining “whether to institute” an IPR.  Under the statute, the PTAB then steps in to conduct the trial.  Those separate roles were then combined by PTO regulation which states “The Board institutes the trial on behalf of the Director.” 37 CFR 42.4.   A question – unanswered in this case – is whether the Director’s regulatory delegation above should be interpreted to also extend to vacating and terminating petitions.  I’m not sure that it does. 

End of the Road for Ethicon’s Anti-Delegation Argument?

by Dennis Crouch

In a 10-1 decision, the Federal Circuit has rejected Ethicon’s petition for en banc rehearing on the question of  whether the USPTO Director improperly delegated IPR institution decisionmaking. Ethicon will likely petition the Supreme Court for its views.  The case raises interesting, but ones that I expect will ultimately fail.  Chief Judge Prost likely held the decision release to await the Cuozzo affirmance that implicitly supports the court’s ruling here.

Inter Partes Reviews (IPRs) can be broken down into a two step process. At the institution stage, the Patent Office Director is tasked with determining whether to institute the proceeding. 35 U.S.C. § 314. Once instituted, the Patent Trial and Appeal Board (PTAB) holds trial and makes a final determination of merits. 35 U.S.C. § 316(c).  Despite the statutory separation, the Director has delegated the entire procedure to the PTAB – including the institution decision.  In its failed petition, Ethicon questioned this delegation – asking: “Does the Patent Act permit the [PTAB] to make inter partes review institution decisions?”

The decision in Cuozzo does not directly address the challenge issues here, but the court’s loose language does suggest that it would side with the Federal Circuit.  In particular, the court repeatedly refers to actions by the “Patent Office” regarding institution and other decision rather than using the statutory language “Director.”  Although not as consistent, the court also repeatedly refers to actions by the PTAB as by the “Patent Office.”  In his dissent, Judge Alito addresses the issue directly and without criticism, although failing to note that Director Lee is a woman:

The Director of the Patent Office has delegated his authority to institute inter partes review to the Patent Trial and Appeal Board (Board), which also conducts and decides the inter partes review. See 37 CFR §§42.4(a), 42.108 (2015); 35 U. S. C. §§316(c), 318(a). I therefore use the term “Patent Office” to refer to the Director, the Board, and the Patent Office generally, as the case may be.

Alito dissent at footnote 2.


Pending Supreme Court Patent Cases 2016 (January 12 Update)

by Dennis Crouch

As of January 12, the Supreme Court has granted two petitions for certiorari for this term. Both Halo and Stryker cover the same topic of enhanced damages, a.k.a. willfulness. Another 17 petitions remain pending. Following its latest conference, the Court denied two low-quality petitions (Arunachalam and Morgan) and also the SpeedTrack case which had focused on interesting but esoteric preclusion issues involving the “Kessler doctrine.”

The important inter partes review case Cuozzo survived its first conference and is up on the blocks for a second round this week. This type of immediate “relisting” occurs in almost all cases where certiorari is granted and raises the odds of grant to >50%. Because the US Patent Office is a party in the case, there would be no call for the views of the Solicitor General before granting / denying certiorari. Nine amici briefs were also filed at the petition stage – a factor that also raises the likelihood that certiorari will be granted.

1. Petitions Granted:

2. Petitions for Writ of Certiorari Pending:

  • Design Patents: Samsung Electronics Co. v. Apple Inc., No 15-777 (design patent scope and damages calculation)
  • InducementLife Technologies Corporation, et al. v. Promega Corporation, No. 14-1538 (whether an entity can “induce itself” under 271(f)(1))(CVSG, awaiting government brief)
  • InducementMedtronic Sofamor Danek USA, Inc., et al. v. NuVasive, Inc., No. 15-85 (Commil re-hash – mens rea requirement for inducement)
  • Inducement: Arthrex, Inc. v. Smith & Nephew, Inc., et al., No. 15-559 (Commil re-hash – if actions were “not objectively unreasonable” can they constitute inducement?)
  • Post Grant AdminCuozzo Speed Technologies, LLC v. Michelle K. Lee, No. 15-446 (BRI construction in IPRs; institution decisions unreviewable)
  • Post Grant AdminAchates Reference Publishing, Inc. v. Apple, Inc., et al., No. 15-842 (IPR institution decisions unreviewable, even when addressed in a final written decision by PTAB)
  • Post Grant AdminInterval Licensing LLC v. Michelle K. Lee, No. 15-716 (Can the Patent and Trademark Office appropriately apply the “broadest reasonable interpretation” standard in construing patent claims in post-grant validity challenges?)
  • Preclusion or Jurisdiction: Vermont v. MPHJ Technology Investments, LLC, No. 15-838 (Federal court jurisdiction in anti-troll consumer protection case)
  • Preclusion or JurisdictionAlexsam, Inc. v. The Gap, Inc., No. 15-736 (appellate jurisdiction over patents that were dropped from case pre-trial) (New Petition)
  • Preclusion or Jurisdiction:
    ePlus, Inc. v. Lawson Software, Inc., No. 15-639 (what happens with a finally-determined permanent injunction after PTO cancels the patent claim?)
  • Preclusion or Jurisdiction: Alps South, LLC v. The Ohio Willow Wood Company, No. 15-567 (If patent ownership is fixed after the filing of a complaint, can jurisdiction be cured by a supplemental complaint)
  • Preclusion or Jurisdiction: Biogen MA, Inc. v. Japanese Foundation for Cancer Research, et al., No. 15-607 (Whether AIA eliminated federal district courts’ jurisdiction over patent interference actions under 35 U.S.C. § 146.)
  • Eligibility Challenges: Retirement Capital Access Management Company, LLC v. U.S. Bancorp, et al., No. 15-591 (Whether subject matter eligibility under 35 U.S.C. § 101 is a ground specified as a condition for patentability under 35 U.S.C. § 282(b)(2))
  • Claim Construction: Media Rights Technologies, Inc. v. Capitol One Financial Corporation, et al., No. 15-725 (Claim Construction: whether there a strong presumption against construing terms as subject to 35 U.S.C. § 112p6 that do not recite the term “means.”)
  • Patent Term Adjustment Dispute: Daiichi Sankyo Company, Ltd. v. Michelle K. Lee, No. 15-652 (Patent Term Adjustment – whether the 180 day deadline applies; could bleed into admin law issues)
  • Damages: STC, Inc. v. Global Traffic Technologies, No. 15-592 (Whether marking the packaging of a patented article with patent notification satisfies the marking provision of 35 U.S.C. § 287(a) where the patented article itself is undisputedly capable of being marked.)
  • Damages: Innovention Toys, LLC v. MGA Entertainment, Inc., et al., No. 15-635 (Stryker/Halo follow-on)

3. Petitions for Writ of Certiorari Denied:

  • Allvoice Developments US, LLC v. Microsoft Corp., No. 15-538
  • OIP Technologies, Inc. v., Inc., No. 15-642
  • Fivetech Technology Inc. v. Southco, Inc., No. 15-381
  • Tyco Healthcare Group LP, et al. v. Ethicon Endo-Surgery, Inc., No. 15-115
  • Nautilus, Inc. v. Biosig Instruments, Inc., No. 15-561
  • Chunghwa Picture Tubes, Ltd., et al. v. Eidos Display, LLC, et al., No. 15-288
  • Kenneth Butler, Sr. v. Balkamp Inc., et al., No. 15-273    
  • Arthrex, Inc. v. KFx Medical Corporation, No. 15-291
  • Daiichi Sankyo, Inc., et al. v. Apotex Inc., No. 15-281
  • Mylan Pharmaceuticals Inc. v. Apotex Inc., No. 15-307
  • Luv N’ Care, Ltd. v. Munchkin, Inc., No. 15-242
  • Automated Merchandising Systems, Inc. v. Michelle K. Lee, Director, United States Patent and Trademark Office, No. 15-326
  • I/P Engine, Inc. v. AOL Inc., et al., No. 14-1358
  • Interval Licensing LLC v. AOL Inc., et al., No. 14-1362
  • Content Extraction and Transmission LLC v. Wells Fargo Bank, National Association, et al., No. 14-1473
  • W.L. Gore & Associates, Inc. v. Bard Peripheral Vascular, Inc., et al., No. 15-41
  • NetAirus Technologies, LLC v. Apple Inc., No. 14-1353
  • Muffin Faye Anderson v. Kimberly-Clark Corporation, No. 14-10337
  • MobileMedia Ideas LLC v. Apple Inc., No. 15-206
  • SpeedTrack, Inc. v. Office Depot, Inc. et al., No. 15-461 (Kessler doctrine)
  • Rodney K. Morgan, et al. v. Global Traffic Technologies LLC, No. 15-602
  • Lakshmi Arunachalam v. JPMorgan Chase & Co., No. 15-691

4. Prior versions of this report:


In re Papst Licensing: Federal Circuit Speaks on Claim Construction

By Jason Rantanen

In re Papst Licensing Digital Camera Patent Litigation (Fed. Cir. 2015) (Download In re Papst)
Panel: Taranto (author), Schall, Chen

In its first precedential opinion addressing claim construction after Teva v. Sandoz, a panel of Judges Taranto, Schall and Chen take the approach that it is business at usual for the court—at least, as long as only intrinsic evidence is involved.

The most significant aspect of this opinion is the relationship between this appeal and Teva.  Here, the district court heard from the parties’ experts on the technical background, but “declined to admit expert testimony or to rely on an expert declaration from Papst, stating that ‘the intrinsic evidence—the claims, the specification, and the prosecution history—provide the full record necessary for claims construction.”  Slip Op. at 7.  Given this posture, the Federal Circuit comfortably applied a de novo standard of review.  From the opinion:

We review the grant of summary judgment of noninfringement de novo, applying the same standard used by the district court. See Bender v. Dudas, 490 F.3d 1361, 1366 (Fed. Cir. 2007). The infringement inquiry, which asks if an accused device contains every claim limitation or its equivalent, Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 29 (1997), depends on the proper construction of the claims. See Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1454 (Fed. Cir. 1998) (en banc). In this case, we review the district court’s claim constructions de novo, because intrinsic evidence fully determines the proper constructions. See Teva Pharm. U.S.A. Inc. v. Sandoz, Inc., 135 S. Ct. 831, 840–42 (2015). As we have noted, the district court relied only on the intrinsic record, not on any testimony about skilled artisans’ understandings of claim terms in the relevant field, and neither party challenges that approach.

Slip Op. at 8.  Operating within this framework, the court drew upon its “familiar approach to claim construction”:

“We generally give words of a claim their ordinary meaning in the context of the claim and the whole patent document; the specification particularly, but also the prosecution history, informs the determination of claim meaning in context, including by resolving ambiguities; and even if the meaning is plain on the face of the claim language, the patentee can, by acting with sufficient clarity, disclaim such a plain meaning or prescribe a special definition.”…We apply, in particular, the principle that “[t]he construction that stays true to the claim language and most naturally aligns with the patent’s description of the invention will be, in the end, the correct construction.”

Slip Op. at 9-10 (internal citations omitted).  Using that approach, the Federal Circuit reversed all of the district court’s claim constructions at issue.

While this appeal appears to involve Teva‘s paradigmatic scenario in which de novo review is appropriate, future appeals are less likely to offer such a relatively simple posture.   Rather, the expectation is that district judges will seek to insulate themselves from review by relying upon evidence that the Supreme Court said is due deferential review.  This increasing reliance on extrinsic evidence by district courts will result in appeals that intertwine the intrinsic with the extrinic.  That said, the above sections of the opinion suggest to me that the court is probably going to focus its review on the intrinsic evidence first and, if that is clear, will decide the appeal on that ground alone.

There’s another layer of complexity going on here that relates to the starting meaning* of words.  In Teva, the Court observed that:

Construction of written instruments often presents a “question solely of law,” at least when the words in those instruments are “used in their ordinary meaning.”…But sometimes, say when a written instrument uses “technical words or phrases not commonly understood,” id., at 292, those words may give rise to a factual dispute. If so, extrinsic evidence may help to “establish a usage of trade or locality.” []. And in that circumstance, the “determination of the matter of fact” will “preced[e]” the “function of construction.”…This factual determination, like all other factual determinations, must be reviewed for clear error.

Teva v. Sandoz at 5-6 (internal citations omitted).  A tension that emerges from this passage is the tension between “ordinary meaning” and “technical words or phrases not commonly understood.”  The latter, the Court’s opinion states, may be due deference; but when “ordinary meaning” is involved, it is a “question solely of law.”

Here, the claim construction did require some discussion of the ordinary meaning of words.  At issue was the meaning of the claim term “virtual files,” which the district court construed as meaning “files that appear to be but are not physically stored; rather, they are constructed or derived from existing data when their contents are requested by an application program so that they appear to exist as files from the point of view of the host device.”  Slip Op. at 21.  This construction, in the district court’s eyes, limited “the “virtual files” of the “virtual file system” to files “not physically stored on the interface device,” whose content is data “originating from the data transmit/receive device.”  Id.

In reversing the district court’s construction, the Federal Circuit began with its —not the district court’s—ordinary meaning.   “‘Virtual’ conveys some kind of as if action, one thing emulating another; the term was prominently used that way in the computer field at the time of the inventions here.  See CardSoft v. Verifone, Inc., 769 F.3d 1114, 1117–18 (Fed. Cir. 2014) (discussing Java Virtual Machine in patent dating to 1998).”  Slip Op. at 22.  With this meaning as the starting point, the CAFC concluded that the patent identifies this emulation as not turning “on whether data in a ‘virtual file’ is physically located in the interface device or a data device when the host seeks it.”  Id.

The district court, however, relied on a different source for its starting meaning:

The 1993 New IEEE Dictionary defined the term similarly to the construction proposed by the Camera Manufacturers. In the context of a “virtual record,” “virtual” was defined as: “a record that appears to be but is not physically stored; rather, it is constructed or derived from existing data when its contents are requested by an application program….The Court adopts the definition from the New IEEE Dictionary as the most clear and pertinent….”

In re Papst Licensing GmbH & Co. KG Litig., 670 F. Supp. 2d 16, 60 (D.D.C. 2009).  It’s unclear why the Federal Circuit didn’t address the district judge’s choice of starting meaning, substituting its own with no explanation of why.  It’s also not clear to me that the different starting point really matters for the ultimate issue of whether the claim term excludes files stored on the interface device.  But this kind of dispute, where a district judge relied on an extrinsic source for its starting point when construing a claim term, seems to be one that parties will try to make hay with in future appeals on claim construction.

*I’m using “starting meaning” to refer to the meaning that the party construing the claim term begins with; it may or may not be the “ordinary meaning.”  For some words, that may be our individual “mental lexicons,” as Kristen Osenga has described ; for other words, those meanings may come about when we look up the word in a dictionary.  For court opinions on claim constructions, the court will sometimes, but not always, state what it’s using as the starting meaning for a term.  Here, the Federal Circuit started with its meaning from the cited case, while the district court began from the point of the IEEE dictionary and the OED.

Backdating at the Board: Provisionals & Prior Art

by Dennis Crouch

Merck Sharp & Dohme Corp. v. Microspherix LLC (Fed. Cir. 2020)

The Federal Circuit here affirms the PTAB IPR final determination that Merck failed to prove the Microspherix claims invalid. US9636401; US9636402; US8821835. Microspherix sued Merck — accusing Merck’s implantable contraceptive of infringing. Merck responded with the three IPR petitions.

The patents here cover implantable therapeutic/diagnostic devices that also have a radiopaque marker that helps find the device after insertion.  As originally filed, the claims were directed to “brachytherapy” — slow release of radioactive agents to treat cancer.  However, the claims were expanded in various continuation applications to broadly claim any “therapeutic, prophylactic, and/or diagnostic agent”

The interesting legal question on appeal has to do with the timing of the asserted prior art reference Zamora. The chart below shows the patent filings in question, and each party argued that the opposing non-provisional applications could not properly claim priority to their respective provisional applications.

Question 1: Does 102(e) (pre-AIA) apply in inter partes review?: 35 U.S.C. 311 limits IPR validity challenges “the basis of prior art consisting of patents or printed publications.”  Under 102(e), Zamora’s 2001 non-provisional application became prior art once the resulting patent issued. However, as of its 2001 filing date, the application was neither a “patent or printed publication.”  In its decision here, the court simply assumed that 102(e) prior art counts under the IPR statute (as it has done in prior cases as well) See In re Cuozzo Speed Techs., LLC, 793 F.3d 1268, 1281 (Fed. Cir. 2015), aff’d sub nom. Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016).  Post-AIA 102(a)(2) does not have the same problem because the statute makes clear that it is the patent / published application that is the prior art.

Question 2: Does Zamora’s provisional date allow for further back-dating of the 102(e) date?: Here, the court explains that Zamora would get the 2000 prior art date of its provisional “if it was entitled to the date of the Zamora provisional.” The court quoted Drinkware, LLC v. Nat’l Graphics, Inc., 800 F.3d 1375, 1381 (Fed. Cir. 2015) in explaining that the “‘reference patent is only entitled to claim the benefit of the filing date of its provisional application if the disclosure of the provisional
application provides support for the claims in the reference patent in compliance with’ the written description requirement.”  Here, the court noted that 2001 Zamora claimed three options for placement of a radiopaque medium, but one of those was not present in the provisional application.  That failure of written decription meant that Zamora’s prior art date was 2001, not Jan. 2000.

Question 3: Does Microspherix’s provisional date work as a priority date?: In considering priority claims, the courts generally operate on a claim-by-claim basis.  Thus, in a complex patent family, a single patent may include claims with a variety of priority dates. One problem with our current system is that a patent only tells us the earliest claimed priorty date — not the actual priority date.  The actual date is only realized and determined through ex post litigation.  Here, Merck argued that some of the claims went beyond the provisional disclosure. On appeal, the Federal Circuit disagreed — explaining that the the written description requirement requires the disclosure to “reasonably convey” possession of the invention.

Here, the particular written description argument focused on the length of the claimed strands that were inserted into a body.  The original provisional disclosed a variety of strand lengths, but none of them were longer than 1 cm (10 mm).  Some of the patent claims claim strands without any length limitation, and Merck argued that Microspherix was not in possession of such a broad range of strand lengths. On appeal, the Federal Circuit agreed with the PTAB that the description found int he provisional “adequately supports the claimed strand recited in Microspherix’s patent

Federal Circuit Backtracks (A bit) on Prior Art Status of Provisional Applications and Gives us a Disturbing Result

No Appeal of Real-Party-In-Interest Errors

by Dennis Crouch

Esip Series 2, LLC v. Puhzen Life USA, LLC (Fed. Cir. 2020)

In its decision here, the Federal Circuit has applied Thryv, Inc v. Click-To-Call Techs., LP, 140 S. Ct. 1367 (2020) and refused to consider whether the USPTO erred in its real-party-in-interest analysis.

In Cuozzo (2016), the Supreme Court held that this Court is precluded from reviewing Board decisions concerning the “particularity” requirement under § 312(a)(3). The Court explained that § 314(d) bars appellate review of “questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review.” The Court further explained that “where a patent holder grounds its claim in a statute closely related to that decision to institute inter partes review, § 314(d) bars judicial review.”

[I]n Thryv (2020) … the Supreme Court held that § 314(d) also precludes judicial review of the agency’s decision whether to apply the one-year time bar set forth in § 315(b)). . . .

In view of Cuozzo and Click-to-Call, we find no principled reason why preclusion of judicial review under § 314(d) would not extend to a Board decision concerning the “real parties in interest” requirement of § 312(a)(2). ESIP’s contention that the Board failed to comply with § 312(a)(2) is “a contention that the agency should have refused to institute an inter partes review.” Indeed, ESIP expressly argues that the agency should have refused to institute inter partes review because of Puzhen’s failure to identify all “real parties in interest.”

Slip Op. Here, the statute requires that a petition for inter partes review “may be considered only if” the petition identifies all real-parties-in-interest.  In the case, ESIP argued that doTERRA should be considered a real-party-in-interest because the company is a co-defendant in the underlying litigation, sells the accused Puhzen product, and agreed to be bound by the IPR estoppel.  The Board’s approach to the issue will stand without considering whether it is in accordance with the law.

Thryv was released after briefing and oral arguments had been complete.  The court did accept the supplemental authority, but those are severely limited.  In its statement to the court, patentee ESIP argued that it wasn’t (only) appealing the institution decision but rather (also) whether the petition met the statutory requirements: “[We] contend that Puzhen’s IPR Petition did not satisfy the statutory requirement in 35 U.S.C. § 312(a)(2).”

= = = =

On the underlying merits, the Federal Circuit affirmed the PTAB’s obviousness final decision regarding the claimed “method for introducing a scent into breathable air,” US9415130; IPR2017-02197.

Interpreting the Interpretation of the Broadest Interpretation

By Dennis Crouch

Nestle USA v. Steuben Foods (Fed. Cir. 2017) (nonprecedential)

In its final written decision, the PTAB sided with the patentee – holding that IPR-challenged claims were not obvious.  U.S. Patent No. 6,945,013 claims 18-20 (aseptic bottling at > 100 bottles per minute).  On appeal, Nestle has successfully argued that Board incorrectly construed the claim term “aseptic.”

In Cuozzo, the Supreme Court gave deference to and agreed with the USPTO’s approach of giving claims their “broadest reasonable interpretation” (BRI) during inter partes review (IPR) proceedings.[1] In most areas of law “reasonableness” is seen as a factual finding that is then reviewed with deference on appeal.  Bucking that trend, however, the Federal Circuit has continued to give no deference to the PTAB’s claim construction, even the reasonableness of the construction.  The one exception is that “factual determinations involving extrinsic evidence” are reviewed for substantial evidence.[2]

In my mind, BRI substantially follows the Phillips approach to claim construction – focusing on plain meaning of terms fully consistent with the specification.  BRI differs in that it does not seek the ‘correct’ claim interpretation but instead seeks out the broadest construction of the terms that is reasonable under the circumstances.  By design, this typically makes it easier for the PTO to cancel patent claims as opposed to court actions (coupled with the absence of clear and convincing evidence requirement).

Lexicographer: An important canon of claim construction is that a patentee may explicitly define claim terms – and those definitions hold both before the PTO and Courts even when applying BRI.  Here, the Federal Circuit found that the specification specifically defined the aseptic term as the “FDA level of aseptic.”  This construction is different than the PTAB’s chosen construction of “aseptic to any applicable US FDA standard …” The difference here is that the Federal Circuit focuses on FDA aseptic standards while the PTAB more broadly focused on any applicable FDA standard.

Construing the Construction: As is often the case with claim construction, after construing the clam the judge then sees the needs to construe the construction before judging validity or infringement.  Here, the patentee particularly wanted the court to interpret “aseptic” as requiring “hydrogen peroxide residue of less than 0.5 ppm.”  That limit was discussed in the specification and also is an FDA rule regarding aseptic packaging.

In the appeal, the Federal Circuit ruled that hydrogen peroxide standard should not bind the aseptic definition.   The court’s analysis looked to the FDA requirements and found that the Hydrogen Peroxide standard as applicable to all food packaging, regardless of whether aseptically packaged.   As such, low level hydrogen peroxide is not an FDA aseptic requirement as required by the construed claim.  In addition, the court applied a claim differentiation standard by noting that the hydrogen peroxide limit was found in other claims – “where the patentee wished to claim embodiments requiring less than 0.5 ppm of hydrogen peroxide residue, it did so using express language.”

Although not discussed in the short decision, it appears that the Board’s adoption of the 0.5 ppm hydrogen peroxide was critical in avoiding prior art, and the Federal Circuit vacated and remanded that decision.  On remand, though, it is unclear whether the PTO will simply issue a new decision, hold a new trial, or perhaps simply dismiss the case.

= = =

[1] Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016).

[2] See Teva; Microsoft Corp. v. Proxyonn, Inc. 789 F.3d 1292 (Fed. Cir. 2015).

Oil States Energy Services v. Greene’s Energy Group

The Supreme Court has asked for the USPTO’s input on whether it should hear the pending dispute Oil States Energy Services v. Greene’s Energy Group (Supreme Court 2017).  The case again raises constitutional questions as to the power of an executive agency (the USPTO) to cancel issued patent rights. [petition][opposition][reply]

Questions presented:

1. Whether inter partes review … violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.

2. Whether the amendment process implemented by the PTO in interpartes review conflicts with this Court’s decision in Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016), and congressional direction.

3. Whether the “broadest reasonable interpretation” of patent claims–upheld in Cuozzo for use in inter partes review–requires the application of traditional claim construction principles, including disclaimer by disparagement of prior art and reading claims in light of the patent’s specification.

The request for the USPTO’s input in the case is not, however as amicus but instead as respondent.  In December, the USPTO waived its right to respond to the action.  USPTO’s brief is due March 29, 2017.

So far, no amicus briefs have been filed in the case and the deadline had been long past to support petitioner.  However, the Supreme Court’s new request for response from the PTO resets the timeline. Under Supreme Court rules, briefs in support of petitioner (or neither party) can be filed within 30 days from the February 27, 2017 request.

The Patent at issue in the case is U.S. Patent No. 6,179,053 that covers a lockdown mechanism for well tools.

Wi-Fi One v. Broadcom: Mine-Runs and Shenanigans in Inter Partes Review

by Dennis Crouch

Wi-Fi One v. Broadcom (Fed. Cir. 2017)

First en banc order of the year: the Federal Circuit will review the following question:

Should this court overrule Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015) and hold that judicial review is available for a patent owner to challenge the PTO’s determination that the petitioner satisfied the timeliness requirement of 35 U.S.C. § 315(b) governing the filing of petitions for inter partes review?

en banc order. Briefs of amicus curiae may be filed without consent.

One Year Filing Deadline: Section 315(b) creates a statute of limitations for inter partes review proceedings – indicating that the petition for IPR must be filed within one-year of “the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.”  Here, Wi-Fi argues that Broadcom was in privity with entities involved in parallel district court litigation involving challenged patents — creating a time bar under 315(b).

The PTAB rejected Wi-Fi’s argument and call for discovery on the issue — holding that the “privy” requirement could only be met if Broadcom had the right to control the District Court litigation.

No Appeal: On appeal, the Federal Circuit affirmed – holding Section 314(d) prohibits appellate review of the institution issue.  In particular Section 314(d) states that

The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.

In Achates, the court ruled that the one-year-deadline determination is an institution decision – “even if such assessment is reconsidered during the merits phase of proceedins and restated as part of the Board’s final written decision.”

In the background stands the 2016 Supreme Court decision in Cuozzo.  In that case, the Supreme Court gave effect to the no-appeal provision of 314(d).  However, the Supreme Court noted that unusual questions – such as constitutional questions – might still be appealable.  The foundation for the en banc review decision will be its interpretation of the following Cuozzo excerpts:

We conclude that [314(d)], though it may not bar consideration of a constitutional question, for example, does bar judicial review of the kind of mine-run claim at issue here, involving the Patent Office’s decision to institute inter partes review. . . .

Nevertheless, in light of §314(d)’s own text and the presumption favoring review, we emphasize that our interpretation applies where the grounds for attacking the decision to institute inter partes review consist of questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review. See §314(d) (barring appeals of “determinations . . . to initiate an inter partes review under this section” (emphasis added)). This means that we need not, and do not, decide the precise effect of §314(d) on appeals that implicate constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond “this section.” . . .  Thus, contrary to the dissent’s suggestion, we do not categorically preclude review of a final decision where a petition fails to give “sufficient notice” such that there is a due process problem with the entire proceeding, nor does our interpretation enable the agency to act outside its statutory limits by, for example, canceling a patent claim for “indefiniteness under §112” in inter partes review. Such “shenanigans” may be properly reviewable in the context of §319 and under the Administrative Procedure Act, which enables reviewing courts to “set aside agency action” that is “contrary to constitutional right,” “in excess of statutory jurisdiction,” or “arbitrary [and] capricious.”

The question then for court is whether we have a shenanigan here.



Supreme Court denies Certiorari in Obviousness Case

The Supreme Court has denied certiorari in Cubist Pharma v. Hospira.  In the case, the patentee had challenged the Federal Circuit’s increasingly strong limits on the use of secondary indicia of non-obviousness.  Bill Lee’s well written petition argued that the Federal Circuit’s approach conflicted with the flexible doctrine outlined in 35 U.S.C. 103 and explained by Deere and KSR.  [CubistPetition].

Question Presented:

In Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966), this Court recognized the relevance of “objective indicia” of nonobviousness (also known as “secondary considerations”) – including the long-felt need for the patented invention, the failure of others to arrive at the invention, and the invention’s subsequent commercial success – in determining whether a patent’s claims were obvious to a person of ordinary skill in the art. In this case, the district court created, and the Federal Circuit affirmed, two categorical limitations on the consideration of objective indicia of nonobviousness that exist nowhere in the Patent Act or this Court’s jurisprudence. The questions presented are:

1. Whether a court may categorically disregard objective indicia of a patent’s nonobviousness merely because the considerations apply to one commercial embodiment of a patented invention, rather than all embodiments.

2. Whether a court may categorically disregard objective evidence of a long-felt need for a patented invention merely because the need is not expressly recited in the patent claims.

In its successful opposition, Hospira explained that both the district court weighed the secondary indicia of non-obviousness and found them “not sufficiently strong to overcome the showing of obviousness arising from an analysis of the prior art.”  To Hospira, the petition was basically a request that the Supreme Court conduct its own factual analysis.

I had previously written that “[a]part from the AIA Trial challenges, the most potential life changing case on the docket for patent attorneys is Cubist v. Hospira that focuses on the role of secondary indicia of non-obviousness. As with most Supreme Court patent cases over the past decade, Cubist argues that the Federal Circuit’s rules are too restrictive and should instead follow a looser factor-based analysis when considering the issue.”

In today’s action, the court also denied certiorari in the subject matter eligibility case of Vehicle Intelligence v. Mercedes-Benz.  Although scheduled for conference, the court took no action in the Cuozzo follow-on case of Stephenson v. Game Show Network, LLC, et al. — GVR is likely following release of the Cuozzo decision.


Wegner’s Top Ten Pending Patent Cases

Hal Wegner has updated his top-ten list of pending cases:

  1. Impression Products v. Lexmark (cert petition pending) (post-sale and international exhaustion)
  2. Sequenom v. Ariosa Diagnostics (cert petition pending) (patent eligibility)
  3. Samsung v. Apple (cert granted) (design patent damages)
  4. Cuozzo Speed v. Lee (awaiting Supreme Court decision) (claim construction at the PTAB)
  5. Halo Electronics v. Pulse and Stryker v. Zimmer (awaiting Supreme Court decision) (requirements to prove willful infringement)
  6. SCA Hygiene v. First Quality Baby Prods (cert granted) (when does laches apply in patent cases)
  7. Life v. Promega (cert petition pending) (active inducement for export of component)
  8. Cooper v. Lee (cert petition pending) (direct challenge to PTAB administrative review)
  9. MCM Portfolio v. Hewlett-Packard (cert petition pending) (direct challenge to PTAB administrative review)
  10. Helsinn Healthcare v. Teva Pharm. (Federal Circuit case) (whether Metallizing Engineering was overruled by statute – i.e., what is the prior art impact of secret pre-filing commercialization by patentee).

Read Wegner’s Writings published by the Los Angeles Intellectual Property Law Association.  A full list of pending Supreme Court patent cases is available on Patently-O.


PTO Brief – Looking for Supreme Support for its AIA Trial Regime

Oral arguments in Cuozzo v. Lee are set for April 25, 2016 addressing two particular questions:

  1. Whether the PTO may require that, during an inter partes review, the claims in a patent will be given the “broadest reasonable construction” consistent with the patent’s specification [as opposed to the standard construction for issued patents].
  2. Whether a party may seek to overturn the PTO’s final decision in an inter partes review based on an alleged error in the PTO’s threshold decision to institute the review, which Congress provided “shall be final and nonappealable,” 35 U.S.C. 314(d).

The briefs are available now on ScotusBlog.

The U.S. Government has also filed its responsive merits brief.  The brief appears to be a joint effort of the Solicitor General (DOJ) and the USPTO and does a solid job of justifying its positions:


  1. Historical: The PTO has “long applied the broadest reasonable-construction standard in all agency proceedings in which patent claims may still be amended.”
  2. Statutory: Here, although claim amendments have allowed in only exceedingly rare cases, the IPR statute does suggest that amendments are possible.  (Of course, once the motion to amend is denied, then claims cannot ‘still be amended.’
  3. Deference: The USPTO was given rulemaking authority in this area (AIA procedures) and the BRI standard is a exercise of that delegated authority.  (It is unclear what happens if the court would find this ‘substantive’ rather than ‘procedural’ and what level of deference should apply in either case).

On Appeal of Decision to Institute:

  1. Statutory: “The statute bars all judicial review, not just interlocutory appeals, of the PTO’s decision whether to institute an inter partes review.”  Rather, judicial review is limited to the Agency’s final decision on patentability.
  2. Policy: The no-review approach fits the AIA-Trial purpose of being “an efficient non-judicial alternative for testing the patentability of issued claims.”

The PTO is looking for a strong decision in this case to effectively shut-down the myriad challenges it is currently facing.


Federal Circuit: Our Muscles Are Not Working :{}

by Dennis Crouch

Shaw Industries v Automated Creel Systems[1] involves several interesting issues involving inter partes review proceedings.

One Year Filing Bar: The first involves the one-year deadline for inter partes review petitions following the service of a complaint to the future-petitioner.[2]  “An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.”

Here, the patentee ACS had filed an infringement lawsuit and served Shaw more than one year before the IPR filing.  However, the parties voluntarily dismissed the lawsuit without prejudice in a joint filing.  In considering the issue, the Board determined that the voluntary dismissal “nullifie[d] the effect of the alleged service of the complaint on Petitioner.” As such, the Board was free to institute the inter partes review proceeding.

On appeal the Federal Circuit followed its prior ruling Achates[3] that the appellate court lacks jurisdiction to the Board’s decision on whether the time-bar of Section 315 applies.  The panel[4] did not support the PTO’s decision and noted that the Supreme Court’s decision in Cuozzo[5] “may affect this court’s holding regarding the reviewability of the decision to institute in Achates.”

As an aside, a petition for writ of certiorari had been filed in Achates, that case, however, has settled. We’ll see if ACS takes the case up here.

The Non-Doctrine of Redundancy: The second issue involves the PTAB’s non-doctrine of redundancy.  Shaw filed two IPR petitions and in each petition the Board implemented the IPR on one ground for each claim, but declined to implement IPR on the additional grounds because they were ‘redundant’ without further explanation of that redundancy. The redundant arguments included anticipation grounds found redundant to obviousness grounds. Oddly, the PTO has stated repeatedly in the case that “there is no redundancy doctrine.”

In the appeal, the Federal Circuit again stated that it has no authority to review the Board’s decision to institute an IPR.

In the case, Judge Reyna joined the court’s opinion but also penned a judgment “concurring specially” to reflect his “deep[] concern[] about the broader impact that the Redundancy Doctrine may have on the integrity of the patent system.”  Here, the doctrine’s existence is expressly denied by those applying it. The PTO argues that it need not explain what’s happening because “the Director has complete discretion to deny institution . . . and [does] not even have to state in our institution decisions why were choosing not to go forward.”[6] Judge Reyna responds:

The PTO’s claim to unchecked discretionary authority is unprecedented. It bases this claim on the statute that makes institution or denial of inter partes review “final and nonappealable.” See 35 U.S.C. § 314(a), (d). Regardless of appealability, administrative discretion is not and never can be “complete” because it is always bounded by the requirement that an agency act within the law and not violate constitutional safeguards. See 35 U.S.C. § 2(b)(2) (PTO “may establish regulations, not inconsistent with law”). There is good reason for this. “Expert discretion is the lifeblood of the administrative process, but unless we make the requirements for administrative action strict and demanding, expertise, the strength of modern government, can become a monster which rules with no practical limits on its discretion.” Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 167 (1962) (internal quotation marks omitted).

Indeed, regardless of whether the Board’s institution decisions can be appealed, the Board cannot create a black box decisionmaking process. Conclusory statements are antithetical to the requirements of the Administrative Procedures Act (“APA”), which the PTO and its Board are subject to. 35 U.S.C. § 2(b)(2)(B); see also Dickinson v. Zurko, 527 U.S. 150, 154 (1999). The APA requires “reasoned decisionmaking” for both agency rulemaking and adjudications because it “promotes sound results, and unreasoned decisionmaking the opposite.” Allentown Mack Sales & Serv., Inc. v. N.L.R.B., 522 U.S. 359, 374– 75 (1998) (citation omitted). The APA requires that Board decisions evince both its authority to render the decision and a reasoned basis for rendering that decision. Id. at 372 (“Not only must an agency’s decreed result be within the scope of its lawful authority, but the process by which it reaches that result must be logical and rational.”). The problem here is not that the Board’s reasoning is illogical or irrational; the problem is that there is no reasoning at all.

Judge Reyna pushes further by highlighting the impact of the PTO’s non-decision on the eventual estoppel issues. The PTO suggested in the case that estoppel would not attach to the non-instituted redundant grounds since they were not instituted, but that argument makes little sense to me.[7]   And, as Judge Reyna points out, “[w]hether estoppel applies, however, is not for the Board or the PTO to decide. . . . These tribunals should not have to parse cryptic statements or search out uncited [and denied] doctrines to make this determination.”

= = = = =


[1] Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., Appeal No. 2015-1116 (Fed. Cir. March 23, 2016), on appeal from the United States Patent and Trademark Office, Patent Trial and Appeal Board in Nos. IPR2013-00132, IPR2013-00584 challenging validity of U.S. Patent No. 7,806,360.

[2] 35 U.S.C. §  315(b).

[3] Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015).

[4] Opinion authored by Judge Moore and joined by Judges Reyna and Wallach.

[5] Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 890 (2016).

[6] Quoting PTO brief and oral arguments.

[7] The PTO’s argument does have some logical merit. The statute creates estoppel for arguments “raised or reasonably could have [been] raised during that inter partes review.”  Although the denied arguments were actually raised, there were raised during the institution proceeding and not the actual review.  And, since the PTO denied institution on those grounds, the party was then prohibited from raising those grounds during the review itself.

Pending Cases at the Supreme Court

As we sit here today, there are no pending patent cases before the Supreme Court where the court has granted certiorari.  That said, there are a large number of pending petitions.  These include Cuozzo & Pulse that I have previously discussed. WilmerHale has been covering these, but is a few months behind.

The following are a few recently filed petitions:

Teva Follow-On: FiveTech v. SouthCo: (1) Can the Federal Circuit limit the role of the intrinsic evidence in construing patent claims under the exacting “lexicography and disavowal” standard; (2) Does the “lexicography and disavowal” standard improperly circumscribe the objective standard of the person of ordinary skill in the art in construing claim terms.

Teva Follow-On: Chunghwa Picture Tubes v. Eidos: Whether a district court’s factual finding(s) underlying its construction of a patent claim term must be reviewed for clear error under Rule 52(a)(6) as this Court held in Teva, or is an exception created to clear error review where the appellate court finds the intrinsic record clear after a de novo review of that record, as the Federal Circuit held in this case.

Attorney Fees in Copyright:

Kirtsaeng v. John Wiley (Kirtsaeng II): What is the appropriate standard for awarding attorneys’ fees to a prevailing party under § 505 of the Copyright Act?

Omega v. Costco (Costco II): (1) Can Copyright attorney fees be based on a finding that petitioner engaged in copyright misuse when the issue of misuse was appealed but left undecided on appeal? (2) Can the pursuit of a claim of copyright infringement constitute “copyright misuse” when the allegedly infringing copy is a “pictorial, graphic, or sculptural work” that is reproduced in a “useful” article.

Inter Partes Review Challenges:

Automated Merchandising v. Michelle Lee: (1) Must the federal judiciary await the substantive conclusion of an agency proceeding before it can evaluate whether an express statutory limitation on that agency’s jurisdiction requires that agency to terminate its proceeding? (2) Did the Federal Circuit err in refusing to order the USPTO to terminate the subject inter partes reexaminations under 35 U.S.C. § 317(b)?

Luv N’ Care v. Munchkin: Did the Federal Circuit err by affirming a PTAB administrative judgment based on new issues raised sua sponte by the PTAB at the Final Hearing, thus depriving the patent owner of notice and a meaningful opportunity to respond?

ANDA Loophole Cases:

Mylan v. Apotex:  (1) Whether Article III’s case or controversy requirement can be satisfied by a suit which seeks a judgment of non-infringement of a disclaimed patent. (2) Whether Congress can create Article III jurisdiction by imposing statutory consequences that turn on obtaining a judgment of non-infringement of a disclaimed patent.

Daiichi Sankyo v. Apotex: Whether an action seeking a declaration judgment of non-infringement presents a justiciable case or controversy under Article III of the Constitution where the patent at issue was previously disclaimed and thus cannot be enforced.

Design Patent Summary Judgment: Butler v. Balkamp: Is summary judgement proper in a District Court when a factual dispute exists in a Design Patent action and the District Court substitutes its own opinion for that of the ordinary observer?

Reasons to Combine and Obviousness: Arthrex v. KFX Medical: (1) Is the “reason to combine” inquiry a subsidiary question of fact, subject to deferential review on appeal, or a legal question for the court, and reviewed de novo. (2) Should the ultimate legal issue of obviousness be resolved by the court rather than submitted to the jury for resolution.

Inter Partes Review: Winning by Losing

By Dennis Crouch

Garmin v. Cuozzo, IPR2012–00026, (P.T.A.B. 2013) Download Notice-15

In what appears to be the first Inter Partes Revew petition decided on the merits, the USPTO Patent Trials and Appeal Board (PTAB) has granted Garmin's petition for inter partes review of only claims 10, 14, and 17 of US Patent 6,778,074 owned by Cuozzo Speed Technologies LLC.  [See UPDATE BELOW] This is a mixed opinion because Garmin had requested IPR of claims 1–20. Inter Partes Review is a spawn of the America Invents Act (AIA) and serves as a more robust and rapid version of inter partes reexamination. In order to grant an IPR petition, the USPTO must determine that the petition shows "a reasonable likelihood that the petitioner would prevail." Now that the petition has been granted, the PTAB will move forward with the trial to determine whether those three claims are valid. Under the statute, the PTAB's determination as to whether to institute a PGR cannot be appealed. 35 U.S.C. § 314.

Cuozo originally sued Garmin, Tom Tom and several automakers for patent infringement in a New Jersey federal court. That lawsuit is still in the early stages of discovery, but the basic allegation is that Garmin's navigation systems infringe the '074 claims that are directed toward the use of encoded speed limit indicators. 

For Garmin, this may be a case of winning-by-losing.  In its IPR petition, Garmin suggested that the PTO use the broad claim construction suggested by Couzo's infringement allegations for the claim requirement that a "speedometer" and a "colored display" be "integrally attached".

The Patent Owner has taken a very broad view of the meaning of the claims based upon the allegations set forth in its complaint against the products of the real parties in interest here. The "broadest reasonable construction" of the challenged claims must be consistent with the allegations set forth in Patent Owner's civil complaint. Petitioner submits, for the purposes of the IPR only, that the claim terms are presumed to take on their ordinary and customary meaning that the term would have to one of ordinary skill in the art in view of Patent Owner's civil complaint and the Specification of the '074 Patent.

The PTO rejected the notion that the patent owner's post-patent-issuance civil complaint has any bearing on the claim construction and also found that the claim scope suggested unduly broad.

Petitioner does not make known its construction of "integrally attached." Instead, Petitioner states that the term has to mean, in this proceeding, what the Patent Owner asserts it means in the infringement suits the Patent owner has filed against various parties including Petitioner. That argument is without merit. The meaning of claim terms is not governed by what the Patent Owner says they mean in filing an infringement suit based on the '074 Patent. There is no reason to assume that the Patent Owner's litigation position is correct. Litigation positions taken subsequent to issuance of the patent are unreliable. . . .

On this record, we construe "integrally attached" as applied to the colored display and the speedometer in the context of the disclosure … as meaning that the two elements are discrete parts physically joined together as a unit without each part losing its own separate identity. In the combined unit, the colored display is still the colored display and the speedometer is still the speedometer; each retains its own separate identity.

The PTAB went on to particularly find that a single display screen showing both the speedometer and colored display would not satisfy the integrally attached limitation as construed above.

The single electronic display screen of Aumayer showing both the image of a speedometer and a colored scale mark indicating the current speed limit does not meet the claim recitation "integrally attached" as applied to a speedometer and a colored display. There, the speedometer and the colored display are not discrete and separately recognizable parts that are "integrally attached" to each other. Rather, the liquid crystal display screen is itself a single component which performs the function of both the speedometer and colored display.

In the context of the inter partes review, the result is that the suggested references do not show the claims unpatentable. Garmin's gambit, however, is that the same narrow claim construction will carry-over to the litigation and result in a finding of non-infringement. Although the district court will not be bound by this construction, it is likely to be instructive and at least cognitively limiting to the New Jersey judge – especially since the PTO's interpretation is the 'broadest reasonable construction.'

UPDATE: It turns out that the PTAB has released at least one earlier petition decision – in IPR2012–00026 involving Microsoft’s challenge of ProxyConn’s Patent No. 6,757,717. In that decision, the PTAB granted the IPR for claims 1, 3, 10, and 22–24, but denied the petition to review claims 11, 12, and 14.

= = = = =

Under 35 U.S.C. § 316, the USPTO has one year from now to make a final determination in the case. The USPTO has scheduled for the trial to be complete in August 2013.

Guest Post: Silicon Valley’s APA Challenge to PTAB Discretion

Guest post by Saurabh Vishnubhakat, Professor at the Texas A&M University School of Law and College of Engineering.  Professor Vishnubhakat was formerly an advisor at the USPTO, but his arguments here should not be imputed to the USPTO or to any other organization.

This week, four iconic Silicon Valley technology companies—Apple, Cisco, Google, and Intel—sued the USPTO under the Administrative Procedure Act.  The lawsuit challenges the USPTO’s so-called NHK-Fintiv rule, named after a pair of inter partes review decisions in the PTAB that the agency previously designated as precedential.

The 23-page complaint, docketed as Case No. 5:20-cv-06128 in the Northern District of California, is worth reading in full.  Yet what is especially striking about the lawsuit, and worth considering more deeply, is a particular pair of arguments at the heart of the challenge.  One is that the NHK-Fintiv rule is contrary to the policy and text of the AIA and therefore exceeds the Director’s authority.  The other is that the NHK-Fintiv rule is procedurally infirm because it was not promulgated through APA notice-and-comment rulemaking.

The NHK-Fintiv Rule

The disputed USPTO policy allows the PTAB to deny institution of an inter partes review petition based on how far a parallel U.S. district court proceeding on the same patent has already gone.

NHK Spring v. Intri-Plex

The policy was first articulated in NHK Spring Co. v. Intri-Plex Techs., No. IPR2018-00752, Paper 8 (Sept. 12, 2018).  There, a panel of the PTAB declined to institute NHK Spring’s petition against an Intri-Plex patent where a parallel infringement suit was already pending between the same parties in the Northern District of California.

In denying institution, the panel cited its discretion under 35 U.S.C. § 325(d) as well as under § 314(a).  First came § 325(d), which empowers the Director to “determine the manner in which the post-grant review or other proceeding or matter may proceed, including providing for the stay, transfer, consolidation, or termination of any such matter or proceeding.”  Here, the panel applied the nonexclusive factors of the PTAB’s prior informative opinion in Becton, Dickinson and concluded that the art and arguments now asserted in the PTAB were already considered (and overcome) during examination.

Though it found this analysis sufficient on its own, the panel then also went on to exercise its discretion under § 314(a), which makes a “reasonable likelihood” of invalidating at least 1 of the challenged claims a necessary—but not sufficient—condition for instituting review.  Where review is permissible, the Director may still decide in his discretion to deny review, and the NHK panel found it compelling that the parallel proceeding in U.S. district court was “nearing its final stages”—with a five-day jury trial already set for six months before the PTAB’s own proceeding would conclude.

The principle of NHK—that the “the advanced state of the district court proceeding is an additional factor that weighs in favor of denying the Petition under § 314(a)”—forms the first part of the policy now being challenged.

Apple v. Fintiv

That policy was further elaborated in Apple Inc. v. Fintiv, Inc., No. IPR2020-00019, Paper 11 (Mar. 20, 2020).  There, a panel of the PTAB ordered supplemental briefing at the institution stage of Apple’s petition against a Fintiv patent where a parallel infringement suit was pending between the same parties in the Western District of Texas.  Fintiv had already argued in its preliminary response that the “advanced state” of the parallel proceeding warranted discretionary denial under NHK, as the same issues were before the district court and trial there had already been set.  (The setting of a trial date had come after Apple’s petition but before Fintiv’s response, making additional briefing appropriate.)

The panel then set out a number of factors to consider when evaluating whether the state of a parallel proceeding warrants discretionary denial under NHK:

  • whether the court granted a stay or evidence exists that one may be granted if a proceeding is instituted;
  • proximity of the court’s trial date to the Board’s projected statutory deadline for a final written decision;
  • investment in the parallel proceeding by the court and the parties;
  • overlap between issues raised in the petition and in the parallel proceeding;
  • whether the petitioner and the defendant in the parallel proceeding are the same party; and
  • other circumstances that impact the Board’s exercise of discretion, including the merits.

NHK was designated as precedential in May 2019 and Fintiv in May 2020.  Taken together, the NHK-Fintiv rule represents a policy of denying institution where a parallel district court proceeding is so far along and so substantially similar in art and argumentation that it would be best to conserve USPTO resources rather than undertake a largely or entirely duplicative review.

The Policy and Text of the AIA

That policy choice is firmly rejected in the opening argument of the APA challenge.  The plaintiffs identify the inter partes review system as a “centerpiece of Congress’s efforts to strengthen the U.S. patent system” through post-grant error correction.  By their account, the system of PTAB adjudcation responded to an environment where “questionable patents were too easily obtained and too difficult to challenge through existing procedures”—and, indeed, this language aptly cites the AIA House Judiciary Committee Report.  Thus, to deny institution under the NHK-Fintiv framework weakens the very purpose of PTAB review through artificial limits that are “found nowhere in the AIA.”  However, though there is much to agree with in the line of argument that follows, it suffers from at least two important weaknesses.

PTAB Review as an Alternative to the Courts

One weakness is that while the PTAB is desirable over the baseline of Article III courts, there are important and under-appreciated limits to this desirability.  It is certainly true that the PTAB was intended as “an improved alternative to litigation” on questions of patent validity.  Indeed, my coauthors and I have similarly argued that the PTAB offers a number of important advantages over the Article III courts, including lower barriers to standing, lower cost, lower delay, and lower rates of error.

However, it does not follow that PTAB review remains preferable regardless of what happens in the Article III courts.  By the time court litigation has reached a stage advanced enough that the NHK-Fintiv doctrine would apply, much of the cost of litigation has already been sunk, especially by the close of discovery and the scheduling of trial, as in NHK itself.  Meanwhile, the problem of delay is turned on its head, as it is the court that will now likely finish before the PTAB would.  The problem of Article III standing is largely irrelevant, as the defendant can point not merely to the threat of suit but the actual suit itself.  Much, though not all, of the marginal benefit from PTAB review relative to the federal courts is already dissipated.

Moreover, while it is true that decision making in the PTAB is done by administrative judges who have relevant technical as well as legal expertise, this benefit is also dissipated to some degree by a late-stage federal court proceeding.  By that time, considerable effort and investment has already been sunk into educating the judge or jury.  This, after all, is where much of the cost of litigation goes, and what makes expert administrative judges an attractive value proposition is that they do not require nearly so much education in each case.  The more that such investments have been made anyway, the less that PTAB review is a clear cost-saving.

Finally, there is the problem inherent to error correction, a problem starkly highlighted by the legislative design of PTAB review.  It is true, as the plaintiffs point out, that “while bad patents can be held unpatentable in IPR by a preponderance of the evidence . . . those same patents will survive litigation unless the challenger proves invalidity by clear and convincing evidence.”  But as I have pointed out in testimony before the FTC, the same is also true of good patents—and there is no way to distinguish the good from the bad up front.  If there were, error correction itself would be unnecessary.

Agency Discretion to Deny Review

The second weakness is that agency discretion carries not only significant structural benefits when protecting agreeable outcomes but also substantial obstacles when the outcomes go the other way.  The crux of the case against discretionary denials under the NHK-Fintiv rule is that “no provision in the AIA expressly requires or even permits the Director (or the Board as his delegee) to deny IPR petitions based on pending litigation involving the same patent claims.”

It is repeated throughout the argument, too, that the principle of NHK and the additional factors enumerated in Fintiv are to be found “nowhere in the AIA” and are, for that reason, outside the Director’s authority.  In this telling, what discretion the Director does have is limited to § 325(d), which is concerned more with managing multiple proceedings inside the agency itself than with doing so across an interbranch court-agency divide.  This matters because the NHK-Fintiv framework is an elaboration of institution authority specifically under § 314(a), not of case management authority under § 325(d).

However, the principle that § 314(a) gives the Director discretion—broad discretion—to deny otherwise meritorious petitions is, by now, fairly well established in Federal Circuit and Supreme Court case law.  For example, the two most significant cases involving the judicial unreviewability of the Director’s institution power—Cuozzo v. Lee in 2016 and Thryv v. Click-to-Call earlier this year—take just this view.  The Court in Cuozzo held explicitly that “the agency’s decision to deny a petition is a matter committed to the Patent Office’s discretion” and cited § 314(a) with an explanatory parenthetical that there is “no mandate to institute review.”  Likewise, the Court in Thryv expanded the scope of that unreviewable discretion to include conditions on institution as well—there, the condition in dispute was the one-year time bar of 35 U.S.C. § 315(b).

Indeed, some of the plaintiffs who now seek to cabin the Director’s institution-related discretion previously endorsed those very same positions before the Court.  In Cuozzo, Apple submitted a brief as amicus curiae supporting the USPTO Director’s assertion of unreviewable discretion in matters of institution.  Intel did the same in Thryv, arguing that a “decision not to institute review is committed to agency discretion.”

These complications in the case against the NHK-Fintiv rule cast serious doubt on the view that the policy choices embodied in that rule contradict the AIA.

The Choice of Rulemaking vs. Adjudication

Beyond the substance of the USPTO’s policy of sometimes denying inter partes review based on the status of parallel court litigation, there also lies an alternative argument that the policy is procedurally defective.  Here, the challenge springs from the familiar APA values of public input and transparency, which are traditionally accomplished by notice-and-comment rulemaking.  By contrast, the disputed USPTO policy was adopted “by designating the NHK and Fintiv decisions as precedential through a unilateral, internal process that involved no opportunity for public comment and no consideration by the Director of any public input.”

In this regard, the challenge to NHK-Fintiv certainly has merit as a matter of desirable administrative practice, but it is not at all clear that this makes the USPTO’s approach legally deficient.  For over 70 years, the Supreme Court has left the form of policymaking up to agencies themselves.  The Court’s 1947 opinion in SEC v. Chenery Corp. (Chenery II) explained that “the choice made between proceeding by general rule or by individual, ad hoc litigation is one that lies primarily in the informed discretion of the administrative agency.”

In Chenery II, the Court recognized that “problems may arise in a case which the administrative agency could not reasonably foresee, problems which must be solved despite the absence of a relevant general rule.”  The Court also pointed to a touchstone of agency practice that is especially important to the PTAB—expertise—and noted that “the agency may not have had sufficient experience with a particular problem to warrant rigidifying its tentative judgment into a hard and fast rule.”  Both of these considerations point to adjudication as an acceptable mechanism for making policy.

To be sure, rulemaking offers significant benefits, and not only the public participation and transparency that the present APA challenge cites.  Rulemaking also fosters greater predictability, both by specifying rules more fully in advance and by raising the agency’s own political costs from visibly changing course.  For these reasons, I have argued in my own recent work about Patent Office policymaking that setting PTAB policy through rulemaking, such as the USPTO’s 2018 change to the PTAB’s claim construction standard, will often be preferable to shifting and incrementalist adjudications.

Still, a well advised preference is not the same thing as a legal requirement.  Moreover, though notice-and-comment rulemaking is a direct and well established way of securing public input, it’s not as if PTAB adjudication does not allow for meaningful public input.  The plaintiffs themselves note that members of the public are entitled to nominate PTAB opinions for designation as precedential.

Beyond this, the PTAB has accepted and, at times, even invited amicus curiae briefs in cases of public importance, such as whether tribal sovereign immunity defeats inter partes review.  Similarly, under the current USPTO Standard Operating Procedure No. 2 (Rev. 10), cases before the agency’s Precedential Opinion Panel may also be opened for amicus curiae briefing.  In short, where the USPTO exercises its prerogative to make policy through adjudication, it need not ignore public input to do so.


The APA challenge to the NHK-Fintiv rule, like much of the USPTO’s own recent policymaking, balances a range of important considerations and reaches a position that is coherent and reasonable.  The weakness—if it can be called that—of the challenge is that it represents merely one reasonable position among several, especially given the Supreme Court’s views on agency discretion in general and USPTO discretion in particular.  If the challenge eventually fails to dislodge the disputed policy, then the reason will likely be that, like most agencies, the USPTO enjoys wide latitude that is difficult to paint as unreasonable.

What is a Condition of Patentability

RPost v. GoDaddy (Supreme Court 2017)

A new amicus brief supports RPost petition for writ of certiorari – arguing that lack-of-eligibility is not a proper defense to patentability. The brief has an interesting quote from P.J. Federico (co-author of the 1952 Patent Act) suggesting (by omission) that eligibility is not a litigation defense.

I’ll add a different quote from the same work where Federico explains that the old statutory provision was split into two sections: 101 (subject matter) and 102 (conditions of patentability):

One of the basic and most important sections of the old statute was R.S. 4886, which specified the subject matter for which a patent could be obtained and recited conditions for patentability. In the new code, this section has been divided into two sections, section 101 relating to the subject matter for which a patent may be obtained, and section 102 which defines statutory novelty and states other conditions for patentability.

The distinction here is important because Section 282 makes “conditions of patentability” defenses.

I will note that Federico’s commentary might not be the best source of evidence. The same passage as that quoted indicates that “lack of invention” remains a defense under the new law.  Elsewhere, Federico indicates that “the requirements for patentability of an invention are stated in sections 101, 102 and 103” and that utility, under 101 is a “condition.”

What are the Defenses to Patent Infringement?