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.
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…)
I believe that today was the first time that I’ve seen the Federal Circuit issue a no-opinion affirmance in a case that included three amicus briefs along with briefs from three parties. The case, New Vision Gaming v. LNW Gaming, 20-1400 (Fed. Cir. 2024).
by Dennis Crouch
The Supreme Court is set to consider several significant patent law petitions addressing a range of issues from the application of obviousness standards, challenges to PTAB procedures, interpretation of joinder time limits IPR, to the proper scope patent eligibility doctrine. Here’s a brief overview of each case, followed by more details:
More detail on each case below: (more…)
by Dennis Crouch
The pending case of Jump Rope Systems v. Coulter Ventures is fascinating to me as someone who teaches both property and civil procedure. The basic questions: (1) As an inter partes review (IPR) proceeding draws to a close – toward cancellation – at what point are the claims no longer enforceable? (2) What is the effect of cancellation, in particular, is it like canceling a magazine subscription where the former subscriber isn’t off the hook for past-due bills; or, is it like an annulment – an Ab Initio Extinguishment? The case also (3) raises a straight-up due process challenge to the IPR system.
A typical IPR where the petitioner prevails includes the following three-step sequence:
The first question — if the patentee is involved in concurrent district court infringement litigation, at what step is the patent no longer enforceable?
Clearly, the patent claim is canceled at Step-3 and by that point cannot be enforced going forward. The Federal Circuit though has held that the claim is already unenforceable at Step-2 based upon the court’s questionable application of collateral estoppel. I call it questionable because of the different standards of proof applied in the PTAB vs the District Court. The affirmed PTAB decision found the claim invalid with a preponderance of the evidence. But, in district court litigation invalidation requires clear and convincing evidence, a substantially higher standard. And, a conclusion of invalidity under a lower standard does not conclusively tell us that the same claim would have been proven invalid under a higher standard. Using a standard approach such as found in the Restatement (Second) of Judgments, collateral estoppel would not apply here because of the difference in standards. Here, we tend to use an exacting standard for res judicata principles because of their due process implications — the result bars a party from making their argument in court. The Federal Circuit’s fudging of the rule makes some practical sense – the statute appears to make the issuance of the cancellation certificate a ministerial process with its “Director shall” language. And yet, fudging the rules in a way that undermines due process is troubling. I’ll note here that courts appear to generally be waiting for the appeal decision before announcing preclusion, although it is unclear whether that approach is somehow required or simply prudential (since district courts generally see the Federal Circuit as unpredictable). I’ll also note that I previously called out the Federal Circuit for improper expansion of preclusion law with regard to the Kessler Doctrine – they did not listen to me there either.
The second question at issue in Jump Rope Systems involves the impact of cancellation — what about infringement that occurred (and lawsuits pending) prior to the cancellation?
The reissue system is a somewhat-close relative to inter partes review and has the benefit of 150 years of case law, including numerous Supreme Court decisions. With reissues, courts have clearly held that cancellation of claims during reissue render those claims entirely moot. See, for instance, Moffitt v. Garr, 66 U.S. 273, 283 (1861) and Meyer v. Pritchard, 23 L. Ed. 961 (1877). But, the reissue system has a significant difference — a reissue begins with a patentee surrendering its patent as required by statute. 35 U.S.C. 251. It is that surrendering that makes the cancellation of claims in a reissue so dramatic.
With inter partes review, the patentee does not surrender the patent and so we have a potentially different situation. Still, courts have regularly treated cancellation of claims as voiding the claims backward and forward through time. But, it is not so clear that approach is correct and there are many situations where the courts have given “cancel” to only prospective effect. In its briefing, Jump Rope cites a long string of cases in various areas of law as well as simple plain meaning of the word:
Plain English is in accord. “Canceling” a magazine subscription stops future deliveries, but past issues remain in hand.
Jump Rope Reply Brief. If Jump Rope wins on this, an IPR petition that cancels claims would only cut-off prospective damages and injunctive relief. The patentee could still recover pre-cancellation damages so long as the defendant failed to prove the claims invalid in district court at the higher standard.
= = =
The briefing also includes an important due process challenge — arguing that the use of IPRs to prevent infringement lawsuits violate due process. In Oil States, various the patentee raised various challenges to the system, but did not bring a due process challenge. Oil States Energy Servs., LLC v. Greene’s Energy Group, LLC, 138 S. Ct. 1365 (“We emphasize the narrowness of our holding. . . . Oil States [has not] raised a due process challenge.”).
Here, the patentee makes two arguments:
Great questions from petitioner.
Robert Greenspoon (Dunlap Bennett) is counsel for the patentee Jump Rope Systems. Louis DiSanto (Banner Witcoff) is representing the accused infringer Coulter Ventures. Their offices are a few blocks apart in downtown Chicago.
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by Dennis Crouch
In re Google, 22-1611 (Fed. Cir. 2022) (non-precedential order)
In Arthrex, the Supreme Court rewrote the Patent Act, charging the USPTO Director with authority to review final written decisions stemming from inter partes and post grant review proceedings (IPR/PGR). One open question is the Director’s role in mill run patent applications that have been rejected by the Board. There are two particular actions that Directors have taken in recent decades:
Google’s pending Application No 15/487,516 claims video processing method using adaptive composite intra-prediction. In its decision, the Board construed three key claim limitations as “conditional limitations.” The Board generally gives no patentable weight to conditional method steps in the anticipation/obviousness analysis. See Ex Parte Schulhauser, 2016 WL 6277792 (PTAB Apr. 28, 2016) (precedential). Google filed its notice of appeal to the Federal Circuit and must have had some discussions with the Solicitors office because the agency filed its request for remand even before Google filed an opening brief.
I have included the claim below, but the basic setup is that the claim includes the following stylized step:
A method comprising …
in response to a determination that a first block is available, generate a pixel value …
The basic question here is whether this claim limitation requires any action. The PTAB read it as merely conditional — effectively replacing it with the following:
A method comprising …
if the system determines that a first block is available, then generate a pixel value …
The Board explained its position that the claims did not recite a step of “determining” that the first block exists and so it is not required by the claims.
[W]e understand the phrase “in response to a determination that” a condition exists to be equivalent to a recitation of “if” that condition exists because claim 1 does not affirmatively recite a step of determining that the first prediction pixel is available prior to reciting the step that is performed in response to—i.e., when or if—such a condition exists.
PTAB Appeal 2020-005221. The PTAB then applied Schulhauser to conclude that “the Examiner need not present evidence of the anticipation of any of the disputed conditional method steps, because they are not required to be performed under the broadest reasonable interpretation of the method steps recited in representative independent claim 1.” Google sought reconsideration, but the Board stuck to its original decision.
Now before the Federal Circuit, the Director has concluded that the Board erred. Through the SG, the Director submitted an interesting reason for its determination–that a close reading of the specification shows that the first determination step is present in “every embodiment.” Thus, according to the Director, the PTAB’s reading of the claims as conditional limitations “would be inconsistent with the specification.”
Upon review, and under the specific facts of this case, the Director acknowledges that the Board erred in designating L1 and L2 as conditional limitations governed by Schulhauser because such a reading would be inconsistent with the specification, which teaches that for every embodiment a first prediction pixel is available and a determination of whether a second prediction pixel is available is made.
Dir Motion to Dismiss. This statement from the Director appears somewhat contrary to the usual approach of Broadest Reasonable Interpretation (BRI) which avoids importing limitations into the claims simply because they are present in each disclosed embodiment.
Google did not object to the dismissal and the Federal Circuit has ordered a remand.
One important caveat to this case — the application itself appears to still be unpublished. Thus, the information that I’m reporting comes only from public documents filed with the Federal Circuit. I don’t have the application itself or any of the briefs filed with the PTAB. I do have the challenged claim:
A method comprising:
generating, by a processor in response to instructions stored on a non-transitory computer readable medium, a decoded current block by decoding an encoded current block, wherein decoding the encoded current block includes adaptive composite intra-prediction, and wherein adaptive composite intra prediction includes:
in response to a determination that a first prediction pixel from a first block immediately adjacent to a first edge of the encoded current block is available for predicting a current pixel of the encoded current block:
determining whether a second prediction pixel from a second block immediately adjacent to a second edge of the encoded current block is available for predicting the current pixel, wherein the second edge is opposite the first edge; and
in response to a determination that the second prediction pixel is available, generating a prediction value for the current pixel based on at least one of the first prediction pixel or the second prediction pixel;
generating a reconstructed pixel corresponding to the current pixel based on the prediction value; and
including the reconstructed pixel in the decoded current block; and
outputting or storing the decoded current block.
Google NOA with PTAB Decisions Attached.
Schulhauser involved a heart-monitoring method claim with the following conditional step:
triggering an alarm state if the electrocardiac signal data is not within the threshold electrocardiac criteria;
Ex parte Schulhauser, APPEAL 2013-007847, 2016 WL 6277792 (Patent Tr. & App. Bd. Apr. 28, 2016) (precedential). The panel concluded that step in conditional form can be ignored for anticipation purposes. The Board relied particularly on the Federal Circuit’s non-precedential decision in Cyber settle, Inc. v. Nat’l Arbitration Forum, Inc., 243 Fed. Appx. 603, 607 (Fed. Cir. 2007) where the court explained that: “If the condition for performing a contingent step is not satisfied, the performance recited by the step need not be carried out in order for the claimed method to be performed.” Id. Schulhauser distinguished this method-claim from system claims that include the same conditional functionality since the system “still requires structure for performing the function should the condition occur.” Id. The MPEP now reflects this same approach:
The broadest reasonable interpretation of a method (or process) claim having contingent limitations requires only those steps that must be performed and does not include steps that are not required to be performed because the condition(s) precedent are not met. For example, assume a method claim requires step A if a first condition happens and step B if a second condition happens. If the claimed invention may be practiced without either the first or second condition happening, then neither step A or B is required by the broadest reasonable interpretation of the claim. If the claimed invention requires the first condition to occur, then the broadest reasonable interpretation of the claim requires step A. If the claimed invention requires both the first and second conditions to occur, then the broadest reasonable interpretation of the claim requires both steps A and B.
MPEP 2111.04 (II). The Board has relied upon Schulhauser in hundreds of decisions. However, there appears to be some ongoing debate within the PTAB about the scope of the case, with a number of cases having dissents on this point. See., e.g., Ex Parte Botman, APPEAL 2021-004052, 2022 WL 4093710 (Patent Tr. & App. Bd. Sept. 2, 2022); Ex Parte Gopalan, APPEAL 2017-007009, 2018 WL 2386111 (Patent Tr. & App. Bd. May 21, 2018); Ex Parte Erhart, APPEAL 2019-004505, 2021 WL 195811 (Patent Tr. & App. Bd. Jan. 8, 2021).
In the appeal, Google was represented by Jonathan Tietz and Andy Dufresne (Perkins). The per curiam order was issued by Judges Lourie, Chen, and Stark.
The Supreme Court has not granted a writ of certiorari in any patent cases this term, and has now denied certiorari in two dozen. Still, there are a number of important cases pending that could be transformative if granted.
Two leading petitions before the court are:
In both of these cases, the Supreme Court has requested that the Solicitor General offer the views of the U.S. Gov’t on whether the court should grant certiorari. Although I am not privy to the exact timeline, I believe that there is a good chance that the SG’s brief in American Axle will be submitted by the end of December 2021. The PersonalWeb brief is unlikely to be submitted until later in the spring. American Axle clearly has the largest potential impact if the Supreme Court were to either (1) change course on eligibility; or (2) double-down on an expansive doctrine.
Two petitions will be considered by the court in upcoming days:
I believe that American Axle is a better vehicle for Section 101 issues rather than ENCO, and I expect that the Supreme Court not will give much consideration to the ENCO petition. It will likely denied even before any action taken on American Axle. Ultratec is interesting to me personally because it relates to some of my prior academic work, and the Supreme Court called for responsive briefing in the case. That said, the Gov’t brief in opposition is extremely dismissive of Ultratec’s arguments. This suggests that the Supreme Court will not hear the case.
The Supreme Court has requested responsive briefing in three additional cases:
Responsive briefs are expected in the next couple of weeks for these cases. Although a request for responsive briefing is indicative of some interest in the case, the threshold is quite low and so it is much too early to suggest that these cases are likely to be granted certiorari. Infinity could be quite big if the Supreme Court took the case and again recalibrated the doctrine of indefiniteness. In Nautilus, the Supreme Court found that the lower court was too easy on patentees; Infinity argues that the court is now being too hard on patentees.
The remaining four patent petitions are listed roughly in order of their likelihood of being granted certiorari (in my opinion). I expect that the Mylan and Apple petitions would be granted as a pair, if granted at all.
There is one final case that has some filings at the Supreme Court:
Apple has not yet filed its petition but did indicate its plan to do so in a request for extension of time. Its initial petition is now due November 17, 2021.
= = =
A few non-patent IP cases pending before the Supreme Court of some interest:
by Dennis Crouch
In a June 2021 decision, the Federal Circuit supported the USPTO in its arguments that Gilbert Hyatt long-pending patent applications could be rendered moot based upon the doctrine of Prosecution Laches. Hyatt v. Hirshfeld, 998 F.3d 1347 (Fed. Cir. 2021). Those cases are now on remand and the district court is setting up for trial on the question of whether the 20+ year delay in prosecution was due to Hyatt’s unreasonable behavior and whether the delay has resulted in prejudice. The parties now are arguing about whether the court will allow a full presentation of new evidence or limit the trial only to Hyatt’s justifications of his actions.
Hyatt has now also filed additional Section 145 actions seeking a district court order that the USPTO issue his patents in two other pending applications.
Each of these cases involve a PTO refusal to issue the patent based upon prosecution laches.
Another E.D.Va. patent case recently filed against the USPTO is Daiichi Sankyo, Inc. et al v. United States Patent and Trademark Office et al, Docket No. 1:21-cv-00899 (E.D. Va. Aug 05, 2021). Daiichi Sankyo is an Administrative Procedure Act (APA) case arguing that the PTO has adopted two AIA-trial-related rules rules that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). Challenged rules:
by Dennis Crouch
Sen. Leahy and Sen. Cornyn have introduced the “Restoring the America Invents Act” designed to further address problems caused by the USPTO’s issuance of “poor-quality patents.”
The proposal is basically a wish list of patent-killers seeking to cancel patent rights via inter partes review.
Key elements of the proposal:
by Dennis Crouch
So far, the Supreme Court has not granted certiorari in any patent cases for its 2021-2022 Term. Still, there are a couple dozen cases pending that may offers some interest. On September 27, 2021, the court is meeting privately for what is known as the “long conference” to decide the fate of the petitions for writ of certiorari that have piled-up over the summer. There are also a host of additional petitions scheduled for a later conference or not yet scheduled. Although the total number of petitions is down from last year, there is much more diversity since we have now largely moved past the appointments-clause issues.
Capacity to Sue: My favorite pending case is Tormasi v. Western Digital. Tormasi is a convicted murderer and also a patentee seeking to enforce his disk-drive patent. The Federal Circuit held that Tormasi lacked the “capacity to sue” under Fed. R. Civ. Pro. 17(b). That provision states that an individual’s capacity to sue is determined by “the law of the individual’s domicile.” Tormasi lives in New Jersey (state prison) and the administrative rule in N.J. bars a prisoner from conducting business activities without the Wardon’s approval. The courts held that his enforcement action is an “unauthorized patent monetization business” and thus that he has no capacity to sue. Tormasi argues that this conclusion violates his due process and other constitutionally protected rights. There are other standing-related cases pending in the trademark context: Naked TM, LLC v. Australian Therapeutic Supplies Pty. Ltd. (standing to petition cancel a TM registration); See also Kaszuba v. Hirshfeld (pro se, standing of USPTO to intervene in TM appeal).
Eligibility: The Supreme Court has shown the most interest in hearing American Axle & Manufacturing, Inc. v. Neapco Holdings LLC by Calling for the Views of the Solicitor General (CVSG). I expect for the SG to file a brief by the end of calendar year 2021. And, there is a good chance that the SG brief will support the petition. At that point, there would still be time for the Court to grant certiorari and decide the case before the end of June 2022. American Axle asks two questions:
1. What is the appropriate standard for determining whether a patent claim is directed to” a patent-ineligible concept under step 1 of the Court’s two-step framework for determining whether an invention is eligible for patenting under 35 U.S.C. § 101?
2. Is patent eligibility (at each step of the Court’s two-step framework) a question of law for the court based on the scope of the claims or a question of fact for the jury based on the state of art at the time of the patent?
There are Am.Axle follow-on cases asking the same questions: iLife Technologies, Inc., v. Nintendo of America, Inc.; VoIP-Pal.com, Inc. v. Apple, Inc. (also raising 112/101 coordination issue). See also Mohapatra v. Hirshfeld (pro se)
Preclusion: I am generally interested in the concept of preclusion. This typically comes in the forms of issue and claim preclusion. In patent law, we also have the “Kessler doctrine,” which sits between the two. PersonalWeb Technologies, LLC v. Patreon, Inc. challenges the ongoing viability of Kessler, especially as expanded by the Federal Circuit in recent cases. Kessler allows for non-mutual issue preclusion even in cases where the particular issue was not actually litigated or decided.
Process-by-Product Claim: In Biogen MA Inc., Petitioner v. EMD Serono, Inc., the Federal Circuit found the claimed treatment method anticipated by use of a naturally occurring protein. But, the claims required use of a “recombinant” protein — i.e., genetically modified. Can Biogen distinguish the prior art by simply adding a “man made” limitation? “Whether courts may disregard the express claim term “recombinant” so as to render a method-of-treatment patent anticipated—and thus invalid—in light of prior-art treatments that used the naturally occurring human protein, where it is undisputed that the recombinant protein was not used in the prior art?”
Printed Publication: A core patent law question is what can qualify as a printed publication under 35 U.S.C. § 102(a). Centripetal Networks, Inc. v. Cisco Systems, Inc., asks whether a user-manual counts for a machine that costs $25,000. (The Federal Circuit said “yes, it counts.”)
Writing Opinions: A few years ago, I wrote a paper arguing that the Patent Act requires the Federal Circuit to actually write opinions when judging appeals from the USPTO. Although dozens of briefs have subsequently argued this point, the Federal Circuit has refused to make any statement regarding its ongoing practice of no-opinion R.36 judgments. Ultratec, Inc. v. CaptionCall, LLC asks the Supreme Court to weigh in on the question of whether the use of Federal Circuit Rule 36 to summarily affirm decisions from the PTAB “without opinion” violates 35 U.S.C. § 144. A second case, Bobcar Media, LLC v. Aardvark Event Logistics, Inc., also argues that R.36 decisions are improper, although relies upon Constitutional principles rather than statutory guidance.
IPR Issues: Ultratec, Inc. v. CaptionCall, LLC (retroactive application of IPR to already issued patents). Mylan Laboratories Ltd., v. Janssen Pharmaceutica (appealing institution denials); Apple Inc. v. Optis Cellular Technology, LLC (appealing institution denials); Infineum USA L.P. v. Chevron Oronite Company LLC (post-arthrex timing issue)
Utility: Hu v. Hirshfeld, focuses on a heightened utility requirement that seems to appear when a patentee seeks rights covering an invention that pushes the bounds of traditional scientific principles. Hu’s inventions, for instance, cover various ways to make use of quantum entanglement. Hu argues that the court moved the standard from a preponderance of the evidence to something akin to “a statistical certainty.”
Indefiniteness: Rain Computing, Inc. v. Samsung Electronics America, Inc. focuses on the intersection of Sections 112(b)/112(f). The Federal Circuit uses an algorithmic approach: if a claim is interpreted under Section 112 and the specification fails to include corresponding structure, then the claim is invalid as indefinite. Rain says ‘not so fast.’ The court is forgetting to ask the actual pertinent question: whether the scope is reasonably certain to a person of skill in the art. The petition also argues that underlying issues of fact tending to show invalidity must be proven with clear and convincing evidence. Infinity Computer Products, Inc. v. Oki Data Americas, Inc. also raises an indefiniteness question — again arguing that the Federal Circuit took a shortcut in its analysis and refused to give deference to factual findings.
Piano Factory v. Schiedmayer Celesta GmbH (Fed. Cir. 2021)
The Schiedmayer family has been making and selling pianos since the 1700s, although the current version of the company makes only Celestas and Glockenspiels, not the 88 key Piano Forte that is popular in the US. The last Schiedmayer family pianos were apparently built and sold back in 1980. For a few years the Japanese company Kawai also sold some Schiedmayer branded pianos (apparently without license).
Piano Factory’s director noted around 2001 that nobody was making Schiedmayer brand pianos any longer and assumed the mark must have been abandoned. So, Piano Factory began branding labelling unbranded pianos with the Schiedmayer brand and selling them to the public. The following is Piano Factory’s explanation of its own operation:
When a SCHIEDMAYER branded piano was needed on the showroom floor, a quality piano from those in the warehouse, such as an unbranded piano manufactured by companies like American Sejung Corp, had a SCHIEDMAYER brand nameplate placed on it.
Piano Factory Brief.
More than a decade later, the Schiedmayer Celesta company petitioned to cancel the mark, and the TTAB complied, finding that Piano Factory’s use of the mark created a false association. The TTAB also rejecting Piano Factory’s a laches defense. This case is now on appeal.
I first note the appeal because oral arguments included a fabulous bit of singing — apparently a first for the Federal Circuit. Listen and watch in the video.
The case argues the Arthrex issue for the TTAB, although its unclear what remedy Piano Factory is now seeking. I believe there is a good chance that the court will issue a statement in this case that the PTO Dir. has power to review certain TTAB decisions.
The merits argument basically boils down to two arguments: First argument is premised on evidence that one or more third parties were using the Schiedmayer name without permission for a decade before Piano Factory started on, and then Piano Factory used the name for 15 more years. Does this create (a) laches; (b) an inference of abandonment; or (c) an inference that maybe Schiedmayer doesn’t have exclusive rights. Second argument is that Schiedmayer’s current business (celestas and glockenspiels) isn’t close enough to Piano Factory’s business (pianos) to create likely confusion.
by Dennis Crouch
Normally, a notice of appeal filed in federal appellate court does not include details on what particular issues are being appealed. That comes later in the appellant’s opening brief.
One exception is found in R. 44 of the Federal Rules of Appellate Procedure (FRAP). R. 44 requires notice of any Constitutional Challenge of a Federal or State statute. This must be provided “immediately upon the filing of the record or as soon as the question is raised in the court of appeals.” That constitutional challenge notice is then sent over to the US Attorney General (or respective state counterpart) who may want to intervene to defend the statute. Depending upon a few factors, the constitutional challenge notice may be due prior to the opening brief. This type of certification was provided in all the Arthrex-style challenges of PTAB appointments.
A second exception that is patent-law-specific is found in within the set of rules and regulations promulgated by the USPTO. 37 C.F.R. 90.2(a)(3)(ii). The rules require that the notice of appeal of any IPR, CBM, or Post-Grant Review “provide sufficient information to allow the Director to determine whether to exercise the right to intervene in the appeal pursuant to 35 U.S.C. 143, and it must be served as provided in § 42.6(e) of this title.” An example of this type of notice can be seen in the following notice of appeal. [ExampleNoticetoPTO].
My thought: It seems to me that the USPTO does not possess authority to require an applicant include certain elements within its notice of appeal. The contents of the notice of appeal are governed by statutory law along with the rules of appellate procedure and the Federal Circuit’s own local rules of procedure. None of those authorities require or suggest that the notice-of-appeal include the substantive elements required by the USPTO. The US Courts are generally in control of determining their own procedures, and the PTO has no authority to amend those procedures for its own convenience.
Does this matter? In general, this is a rather small point, and the PTO’s approach is a practical and efficient solution. The key issues though are timing and strategy. The PTO rule forces the appellant to figure out its appellate position 30-days early and also to disclose that position to the opposing party 30-days early.
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by Dennis Crouch
Thousands of patents claims have been cancelled by the PTAB in inter partes review proceedings. These are cases where a third party was willing to pay hundreds-of-thousands-of-dollars to cancel a set of claims. A good number of those patents would have been enforced by a district court. In fact, a good number of those patents have been enforced in Federal Court.
Personal Audio, LLC v. CBS Corporation (Supreme Court 2020) again builds a montage of competing patent tribunals — a district court that enforces and an administrative court that undermines. This case adds an important third tribunal to the story — the jury. The disappointing climax is usually the same — spent on the Federal Circuit who sides with the administration.
In this case, the jury sided with Personal Audio — finding the asserted claims of its US8112504 both valid and infringed. (Verdict excerpt below from September 2014). The jury awarded $1.3 million.
By the time of the jury verdict, the IPR petition filed by the non-profit EFF had already been instituted by the PTAB. Tthe district court allowed post-judgment motions to flounder for months and by April, the PTAB had released its final judgment finding the same claims invalid. (Note, the PTO no longer institutes IPRs on patents that are close to trial).
The IPR was affirmed on appeal, and the district court relied upon that determination to cancel the jury verdict and enter a final judgment in favor of the Defendant. The Federal Circuit then affirmed based upon its prior precedent of XY, LLC v. Trans Ova Genetics, 890 F.3d 1282, 1294 (Fed. Cir. 2018); Dow Chemical Co. v. Nova Chemicals Corp. (Canada), 803 F.3d 620, 628 (Fed. Cir. 2015); ePlus, Inc. v. Lawson Software, Inc., 789 F.3d 1349, 1358 (Fed. Cir. 2015); Fresenius USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330 (Fed. Cir. 2013).
Now, Personal Audio is up before the U.S. Supreme Court with a few interesting questions. The basic argument is that collateral estoppel (issue preclusion) is not an open-and-shut business. Rather, any time a prior judgment of invalidity is invoked, the “patentee-plaintiff must be permitted to demonstrate, if he can, that he did not have a fair opportunity procedurally, substantively and evidentially to pursue his claim the first time.” Blonder-Tongue Laboratories, Inc. v. U. of Illinois Found., 402 U.S. 313, 332–33 (1971). The Restatement of Judgments § 29 further walks through a series of reasons and factors for issue preclusion might not apply to a later case.
Blonder-Tongue was a very big case for defendants supporting non-mutual issue preclusion. The point here, though is that it set limits and provided a contextual analysis while the Federal Circuit has moved to an if-then rule-based approach post-IPR.
Here, the patentee argues against estoppel because (1) the PTAB judges were unconstitionally appointed (via Arthrex); and (2) the PTAB determination overturns a prior jury’s finding of facts in a case protected by the 7th Amendment Right to Trial.
The trouble – as usual – is that the claims are pretty bad: Personal Audio’s patent claims a system for distributing “a series of episodes represented by media files via the Internet.” The new portion appears to be updating a compilation file of currently available episodes. The list of new episodes (and their links) are downloaded by a client computer that can then use the links to request the actual media files.
The other big difficulty here is a question of when does the jury verdict stick. Is it worthless until the judge enters final judgment?
The Supreme Court will rule on the petition later this Fall.
by Dennis Crouch
The Supreme Court is wrapping up its 2019-2020 term within the next couple of weeks. I’m expecting a decision in the trademark case of USPTO v. Booking.com during this time. [updated]. A second IP case to be decided is Google LLC v. Oracle America, Inc. (copyrightability and fair-use for programming language function calls). However, the court postponed oral arguments until next term (October 2020). In addition, the court’s actions suggest that it may dismiss the case on procedural right-to-jury-trial grounds. In particular, the court asked for additional briefing on the standard-of-review for a jury determination regarding fair use.
Prior to the end of June, the court is likely to rule on a number of patent-focused certiorari petitions:
In addition, petition-stage briefing is ongoing in a handful of patent cases.
Recent Headlines in the IP World:
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New Job Postings on Patently-O:
Recent Headlines in the IP World:
Commentary and Journal Articles:
New Job Postings on Patently-O:
The Chamberlain Group, Inc. v. Techtronic Industries Co. (Fed. Cir. 2019)
Chamberlain’s asserted patents cover various garage door opening inventions.
U.S. Patent No. 7,224,275 in particular claims a garage door opener that includes a status-condition-data-transmitter to know if the door is open or closed without looking. The jury found that Techtronic willifully infringed and the patent not invalid. The district court then awarded enhanced damages, attorney fees, and injunctive relief.
On appeal , the Federal Circuit has overturned the verdict — holding that the claims are invalid as directed toward the abstract idea of “wirelessly communicating status information about a system.” Alice Step 1. Further, the claims do not include any inventive concept under Alice Step 2. All of the physical elements in the claim were admittedly “well understood in the art” and claimed in a generic fashion. The only arguably new element is that the actual information being transmitted is “a status condition signal that: corresponds to a present operational status condition (open or closed).
Claim 1:
A movable barrier operator comprising:
a controller having a plurality of potential operational status conditions …;
a movable barrier interface operably coupled to the controller;
a wireless status condition data transmitter that is operably coupled to the controller, wherein the wireless status condition data transmitter transmits a status condition signal that:
corresponds to a present operational status condition defined, at least in part, by at least two operating states from the plurality of operating states; and
comprises an identifier that is at least relatively unique to the movable barrier operator, such that the status condition signal substantially uniquely identifies the movable barrier operator.
For its part, the N.D. Ill district court (Judge Leinenweber) had concluded that the claims are directed to “garage door openers that wirelessly transmit data . . . us[ing] a particular manner of sending and experiencing data.”
In reviewing the case, the Federal Circuit placed the invention here within the context of the art — finding that the “only described difference between the prior art movable barrier operator systems and the claimed movable barrier operator system is that the status information about the system is communicated wirelessly, in order to overcome certain undesirable disadvantages of systems using physical signal paths—additional cost, exposed wiring, and increased installation time.” From that framework, the court easily found the claim directed to an abstract idea.
On Alice Step 2, Chamberlain argued an inventive step — since it proposed a new garage door opener “that includes an integrated controller and a wireless transmitter to transmit a status signal.” Nothing of record in the case provided evidence that such a setup was “well-understood, routine and conventional to a skilled artisan.” On appeal, the Federal Circuit rejected this approach finding that the patentee “misunderstands our case law.”
The appropriate question is not whether the entire claim as a whole was “well-understood, routine [and] conventional” to a skilled artisan (i.e., whether it lacks novelty), but rather, there are two distinct questions: (1) whether each of “the [elements] in the claimed [product] (apart from the natural laws themselves) involve well-understood, routine, conventional activity previously engaged in by researchers in the field,” and (2) whether all of the steps “as an ordered combination add[] nothing to the laws of nature that is not already present when the steps are considered separately” Mayo. In other words, beyond the idea of wirelessly communicating status information about a movable barrier operator, what elements in the claim may be regarded as the “inventive concept”?
Here, the court found that once the abstract idea was removed, nothing in the claim remained except for conventional and well known elements.
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The lawsuit also included a second Chamberlain patent that that the jury had also found infringed and not anticipated. U.S. patent No. 7,635,966. The second patent was directed to a garage door opener that includes a rechargeable battery backup for use if the normal power supply is temporarily unavailable. On appeal, the Federal Circuit affirmed the no-anticipation jury verdict — holding that the single prior art reference was “less than clear” and thus the jury had room to make its factual determination.
On remand, the district court will need to re-do its remedies analysis, including enhanced damages, attorney fees, and injunctive relief now that only one of the patents is infringed.
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Improper Venue. Venue was apparently improper under TC Heartland. However, that decision was released only three months before trial. The defendant requested a transfer of venue within 30 days of the Supreme Court decision. However, that request was denied. On appeal, the Federal Circuit affirmed — holding that 28 USC 1406(b) provides the court with authority to reject venue transfer requests that are not “interpose[d] timely.” The court writes:
TTI waited almost thirty days after TC Heartland and two months before trial to file a motion to transfer venue. The district court did not abuse its discretion in denying TTI’s motion to transfer venue under the circumstances here.
Here, a 30 day delay isn’t bad at all — except in the context of upcoming trial.
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Final note on the case and evidence. The defendant had petitioned the PTAB for inter partes review of the ‘966 patent. The PTAB however, denied institution. The district court allowed that denial to be admitted as evidence. However, the judge gave a limiting instruction to the jury — that the legal standards may differ. On appeal, the Federal Circuit found no abuse of discretion.
by Dennis Crouch
As a member and supporter of the National Association of Patent Practitioners (NAPP), I am looking forward to the NAPP Annual Meeting and Conference scheduled for July 19-21 in Alexandria, Virginia at the USPTO Headquarters. I invite all those invested in protecting intellectual property rights to attend, especially folks who are deep in the day-to-day business of protecting patent rights. We have a remarkable line-up of speakers this year, including the USPTO Director, Kathi Vidal.
Delving deeper into the conference agenda, we kick off on July 19th with an optional tour of Old Town Alexandria, followed by expert-led discussions on a broad range of topics from the current USPTO Pilot Programs to how to protect your practice from cyber-attacks. Thursday, July 20th, will offer another full day of sessions covering everything from responding to prior art rejections, to cultivating diversity in patent law, and best practices for PTAB appeals. My patent law update is Thursday morning. Finally, on Friday, July 21st, we’ll wrap up with in-depth sessions on nonce words and means plus function, invention in the corporate environment, and patent term adjustment calculation, among other nerdy patent topics.
I particularly encourage law students to attend and take advantage of the steeply discounted rate for students and academics. It’s worth noting that attendance is free for the Judiciary and Federal Government employees such as PTAB Judges and Patent Examiners. Organizers have made arrangements for discounted accommodation at the Embassy Suites Alexandria Old Town for those who book early.
If you have not been part of NAPP, this is a wonderful opportunity to join a great organization for patent practitioners, network with industry professionals, and gain practical insights into the world of patent law. I hope to see you there!
For more information and registration, click here.
