Kanye West and Yeezy v. Walmart (California State Court 2021)
West helped to design the YZY Runners — a shoe that I would never have imagined possible. Walmart’s version are clearly knock-offs and West has sued. [WestvsWalmartYeezyComplaint]
The problem for West is that there is no underlying design patent, utility patent, or copyright registration. So, the lawsuit alleges Unfair Competition and Quantum Meruit both based on California law.
Defendants sold an imitation version of the popular and distinctive YEEZY FOAMRUNNER, notwithstanding comments by consumers that were or should have been sufficient to alert Walmart to the presence of imitation goods on its website. Further, Walmart traded off of the popularity and goodwill of West and the YEEZY brand in marketing, selling, and profiting from the sale of the Imitation Shoe. . . . [Walmart’s conduct] was immoral, unethical, oppressive, and/or unscrupulous in that it was designed to confuse consumers and profit off of the YEEZY brand.
Complaint.
It appears that the shoes are no longer available either from Yeezy or Walmart. The timing of the lawsuit appears to coincide with a new Yeezy model being released now:
We have one remaining Supreme Court patent case this term: Minerva Surgical Inc. v. Hologic Inc. (Supreme Court 2021) on whether the court will maintain the doctrine of assignor estoppel.
The court has been deciding other interesting cases. Here are a few notes:
Mahoney Area School Dist. v. B.L.: In this free speech case, the school district punished a high school student for her limited-distribution Snapchat post stating “Fuck school fuck softball fuck cheer fuck everything.” The post was copied and shared with school officials who suspended her from the cheer squad. In its decision, the Supreme Court found that the school overreached in its pursuit of “teaching good manners” since the speech here was “under circumstances where the school did not stand in loco parentis. . . . [and] the school has presented no evidence of any general effort to prevent students from using vulgarity outside the classroom.”
Van Buren v. US: In this computer-hacking case, the Supreme Court narrowly interpreted the Computer Fraud and Abuse Act in cases involving prohibited “exceeding authorized access.”
Lange v. California: In this criminal procedure case, an officer flashed his lights at Lange who did not stop but instead to his house, entered his attached garage and began closing the garage door. The Office prevented the garage from closing and then conducted a sobriety test. Lange was over the legal limit and was arrested. The lower courts found no problem with the Officer’s warrantless invasion of the home based upon a categorical rule, but the Supreme Court has vacated — holding that a fleeing suspect does not always permit home invasion. “An officer must consider all the circumstances in a pursuit case to determine whether there is a law enforcement emergency. On many occasions, the officer will have good reason to enter—to prevent imminent harms of violence, destruction of evidence, or escape from the home. But when the officer has time to get a warrant, he must do so—even though the misdemeanant fled.”
National Collegiate Athletic Assn. v. Alston: In this antitrust case, the Supreme Court found that the NCAA cannot prohibit schools from providing education-related benefits (internships; scholarships; laptops; musical instruments; etc.). The case did not decide the issue of direct payment for playing.
Fulton v. City of Philadelphia: In this free-exercise-of-religion case, the City of Philadelphia barred Catholic Social Services (CSS) from serving as a private foster care agency because the organization categorically refused to certify any same-sex couples to be foster parents based upon CSS’s religious doctrine regarding marriage. The Supreme Court held that the City’s action violates CSS’s religious freedom.
Intellectual Property legislation and oversight in the Senate goes through the Intellectual Property Subcommittee of the Judiciary Committee. On June 22, the Subcommittee heard testimony on the topic of ongoing problems with “low quality patents.”
Written testimony:
Testimony of Bridget Asay (Litigator, Lead counsel for Vermont’s consumer-protection case against patent trolling)
It is tough to figure out the status of a patent and identity of the patent owners.
Discussion of the Theranos-Holmes problem (patents issued and asserted even after criminal fraud indictment) — see Contreras Testimony. But generally, the problem is not seen as fraud but low-quality patents.
Contreras — there should be more focus on reduction to practice at the examination stage.
In an Inter Partes Review (IPR), the PTAB generally focuses on whether or not the claims have been proven unpatentable. If the patentee, the PTAB has a general approach of issuing a declaratory order that the claims “have not been shown, by a preponderance of the evidence, to be unpatentable.” The evidentiary-and-burden caveats from the PTAB leave substantial wiggle room about whether the claims are valid or invalid in any more abstract sense. We would be better off if the PTAB was able to make a positive statement — concluding that the claims are patentable.
The AIA calls for the Board to “issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner.” 35 U.S.C. § 318(a). This portion of the statute suggests to me that the Board’s declaration should be a more direct decision about patentability. That interpretation is bolstered by § 318(b) which suggest that every challenged claim will have either been “determined to be unpatentable” or “determined to be patentable.”
Section 318(b) referred to above particularly calls upon the USPTO director to receive the Board’s decision and then issue an Inter Partes Review Certificate “canceling any claim of the patent finally determined to be unpatentable, confirming any claim of the patent determined to be patentable, and incorporating in the patent by operation of the certificate any new or amended claim determined to be patentable.” Following the language of the statute, the PTO Director has a practice stating that claims maintained by the PTAB “are found patentable.” Thus, the Official Certificate appears to makes a claim about patentability (as required by the statute) rather than merely about the level of evidence provided.
In some ways, this is all semantics, but I would suggest that can matter quite a lot to a later tribunal to see a positive statement of patentability as opposed to a caveat filled statement regarding a claim not-proven-unpatentable. At the same time, asking the PTAB to positively rule on patentability suggests opening-the-door to broader patentability questions.
iLife Technologies, Inc. v. Nintendo of America, Inc., No. 20-1760 (Supreme Court 2021) [Petition]
iLife’s recent petition for writ of certiorari matches those found in American Axle’s pending petition:
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?
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?
The petition’s linkage is strategic since in Am. Axle the Supreme Court has asked the U.S. Government (Solicitor General) to offer its views on these same questions. The SG’s office (under president Trump) previously suggested that the Court should rehear a case on eligibility because of the ongoing uncertainty and resulting market disruption.
= = = = =
iLife’s asserted U.S. Patent No. 6,864,796 covers a mobile device having a motion detection system to evaluate body movement and determine whether the movement “is within environmental tolerance.” The patent makes clear that “methods for determining specific movements of a body that use a variety of devices, apparatus and systems are, generally speaking, known.” The improvement then is the ability to determine whether any particular movement is outside of a normal tolerance and perhaps indicative of injury:
[The prior art is not] capable of evaluating body movement to determine whether the [movement] is normal or abnormal; and if abnormal, whether such movement is so abnormal to be beyond tolerance, for instance, to be damaging, destructive, crippling, harmful, injurious, or otherwise alarming or, possibly, distressing to the body.
‘796 Patent. Nintendo challenged the claims via IPR, but the PTAB sided with iLife. The IPR challenge focused on obviousness and anticipation.
Later in court, Nintendo argued that the claims were invalid for lack of enablement and written description, but the jury denied those defenses and instead awarded iLife $10 million in infringement damages.
Finally though the district court issued a post-verdict judgment as a matter of law — holding the claims ineligible as directed to the abstract idea of “gathering, processing, and transmitting information.” On appeal, the Federal Circuit affirmed, holding that the claims recite the abstract idea of “a motion sensor system that evaluates movement of a body using static and dynamic acceleration information.” Stripped away from pseudo-technical language, the court found this simply gathering, processing, and transmitting information.”
= = = =
At its heart, I see the invention here as a method of diagnosis much like that rejected in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012). In Mayo, the level of 6-thioguanine was measured to determine whether the patient needed more thiopurine drug. Although the link between body-levels of 6-thioguanine and thiopurine was an important discovery, that link was an unpatentable law of nature. In iLife, the correlation between certain accelerometer measurements and distress of a human body. But, the result is the same — that correlation itself cannot be patentable.
I have been repeating this mantra for quite a while – patents are political. In US v. Arthrex, the Supreme Court added an exclamation point. By design, the US governmental system places presidential political appointees at the top of each executive agency, including the US Patent & Trademark Office so that the US President can then be held directly accountable for the successes and failures. Note here that the accountability we’re talking about is political accountability.
The Federalist Papers (Hamilton) repeatedly focused on this issue, albeit not in the patent context: “The blame of a bad nomination would fall upon the President singly and absolutely.” Federalist 77, for example. Now, in the words of the Supreme Court, the Presidentially Appointed USPTO Director “is the boss.”
The Supreme Court has confirmed that PTAB Judges yield unreviewable authority during inter partes review and therefore acting as Principal Officers under the US Constitution. Therefore the APJs should have been nominated by the President and confirmed by the Senate.
BUT, the Court solved the problem in a new way–by making PTAB determinations reviewable by the USPTO Director. This leaves the PTAB system in-place, but will place major insider political pressure on the PTO Director (and current Acting Director).
One irony here is that the person with new political accountability is Drew Hirshfeld. Although he is sitting in the Director’s seat, Hirshfeld was not appointed as PTO Director by anyone. Although the Supreme Court refers to him as “Acting Director,” the administration has taken pains to clearly state that he is not the acting director. Rather, Hirshfeld’s title is a person “Performing the functions and duties of the Under Secretary of Commerce for Intellectual Property and Director of the USPTO.”
= = =
Chief Justice Roberts wrote the Majority Opinion.
Parts I and II Concludes that APJs were acting as Principal Officers. This portion was joined by Justices Alito, Gorsuch, Kavanaugh, and Barrett. (5 Justices)
Part III provides a judicial remedy by rewriting the statute to give the USPTO Director power to directly review PTAB decisions. That portion was only joined by Justices Alito, Kavanaugh, and Barrett. (only 4 Justices). However, Justice Breyer, Sotomayor and Kagan agreed in a separate opinion that the remedy was proper (although they disagreed about whether it was needed at all).
Justice Gorsuch disagreed with the remedy — He would have simply set-aside the PTAB decisions and let Congress fix the problem.
Justice Thomas dissented from the whole majority approach – finding that Congress expressly identified APJs as inferior officers and that they are two steps below the president (i.e., pretty far down on the chain). “For the very first time, this Court holds that Congress violated the Constitution by vesting the appointment of a federal officer in the head of a department.” In addition, Justice Thomas argued that the remedy is inappropriate: “If the Court truly believed administrative patent judges are principal officers, then the Court would need to vacate the Board’s decision.”
= = =
It is telling that Chief Justice Roberts opinion does not begin with a discussion of “rights” but rather Congressional intent to create “a workable patent system.” Here, the court attempts to keep the train on the tracks, but does create real potential trouble by placing the USPTO Director in the political cross-hairs.
This case focuses on Inter Partes Revew proceedings that are decided by the Patent Trial and Appeal Board (PTAB) whose Administrative Patent Judges (APJs) are appointed by the Secretary of Commerce. This setup though has a Constitutional problem because APJs issue opinions on behalf of the U.S. Government in cases involving private property interests potentially worth billions of dollars. An individual with that power is an Officer of the United States and must generally be appointed by the US President and Confirmed by the Senate, just like is done with Federal Judges and heads of office. We obviously have some big due process problems when improperly appointed judges issue opinions deciding rights.
Regarding the Appointments Clause, Hamilton wrote that the President should appoint the officers so that the President can be held directly accountable for the good and the bad. “[S]ole and undivided responsibility of one man will naturally beget a livelier sense of duty and a more exact regard to reputation.” The Federalist No. 77.
In its opinion, the Federal Circuit found that APJ’s were improperly appointed, but then issued a savings-severance. The appellate court invalidated the tenure protections for APJs guaranteed by statute and concluded that was enough to reduce APJs to inferior officers who did not need presidential appointment. On reflection, the Supreme Court wrote “This satisfied no one.”
Edmond v. United States, 520 U. S. 651 (1997), is Supreme Court’s key case-on-point regarding principal-officer vs inferior-officer vs no-officer-at-all. Here, the court applied Edmond – finding that the PTO Director has substantial authority over APJs – finding that “he is the boss” in most ways. BUT, there is one big exception, the PTAB director does not have authority to review the actual APJ decisions.
He is the boss, except when it comes to the one thing that makes the APJs officers exercising “significant authority” in the first place—their power to issue decisions on patentability.
Slip Op. The Appointments Clause requires politically accountable individuals be responsible in a way that leads directly to the President, and the current setup does not allow for that result. “[T]he public can only wonder ‘on whom the blame or the punishment of a pernicious measure, or series of pernicious measures ought really to fall.'” Slip Op., quoting The Federalist No. 70. The court also looked to the history of the U.S. Patent System:
When it comes to the patent system in particular, adjudication has followed the traditional rule that a principal officer, if not the President himself, makes the final decision on how to exercise executive power. Recall that officers in President Washington’s Cabinet formed the first Patent Board in 1790. 1 Stat. 109–110. The initial determination of patentability was then relegated to the courts in 1793, but when the Executive Branch reassumed authority in 1836, it was the Commissioner of Patents appointed by the President with the advice and consent of the Senate—who exercised control over the issuance of a patent. The patent system, for nearly the next hundred years, remained accountable to the President through the Commissioner, who directed the work of his subordinates by, for example, hearing appeals from decisions by examiners-in-chief, the forebears of today’s APJs.
Slip Op. All of this leads to the conclusion that APJs are acting like principal officers:
We hold that the unreviewable authority wielded by APJs during inter partes review is incompatible with their appointment by the Secretary to an inferior office.
Note here that the court does not exactly state that “APJs are principal officers” but only that they are acting as such when deciding IPRs. Regardless, it is improper for them to act-as-such because they are not principal officers.
For a solution, the court rejecting the Federal Circuit’s approach because it does not solve the unreviewability problem. The Supreme Court offers its own solution: “Decisions by APJs must be subject to review by the Director.” Here is what the court tells us: Once the PTAB makes its decision, the PTO Director then has the power to review the case and “reach his own decision.” The PTO director’s decision is then reviewable in court.
When reviewing such a decision by the Director, a court must decide the case “conformably to the constitution, disregarding the law” placing restrictions on his review authority in violation of Article II. Marbury v. Madison, 1 Cranch 137, 178 (1803).
Slip Op. The Supreme Court also makes clear that its decision only directly applies to IPR proceedings. “We do not address the Director’s supervision over other types of adjudications conducted by the PTAB, such as the examination process for which the Director has claimed unilateral authority to issue a patent.”
On remand, the Supreme Court is not requiring the PTAB to rehear any of the prior decisions. But, the PTO Director will need to issue decisions in each case indicating whether or not the office will be rehearing the case.
In deciding the cases, the PTO Director should be careful to avoid calling it a rehearing since “Only the Patent Trial and Appeal Board may grant rehearings.” 35 U.S.C. 6.
= = = =
Big questions for the patent system going forward: how does this Director-Review work and how much political lobbying is appropriate?
= = = =
I noted above that Part III – the remedy portion – of Chief Justice Robert’s opinion only garnered four votes. Not a majority. However, Justice Breyer wrote a separate opinion joined by two others that “agree with its remedial holding.” I have not parsed through how this statement differs from simply joining Part III.
= = = = =
The court notes and the Thompson v. Haight decision from Judge Van Ness that I quoted a couple of weeks ago:
Judge William Van Ness—who before taking the bench had served as second to Aaron Burr in his duel with Alexander Hamilton—lamented that Congress had left the door “open and unguarded” for imposters to secure patents, with the consequences of “litigation and endless trouble, if not total ruin, to the true inventor.” Thompson v. Haight, 23 F. Cas. 1040, 1041–1042 (No. 13,957) (CC SDNY 1826). Congress heeded such concerns by returning the initial determination of patentability to the Executive Branch, see 5 Stat. 117–118, where it remains today.
Slip Op.
= = = = =
One interesting bit I saw in the opinion was the note that the Court of Customs and Patent Appeals (CCPA) was “an entity within the Executive branch until 1958.” In Ex parte Bakelite Corp., 279 U. S. 438 (1929), the Supreme Court called the CCPA a “legislative court and not a constitutional court.” As such, there was no standing requirement under Article III of the Constitution. “Even if the proceeding is not such a case or controversy, the Court of Customs Appeals, being a legislative court, may be invested with jurisdiction of it.” In 1958, Congress overturned that decision with a statement that the CCPA “is hereby declared to be a court established under article III of the Constitution
of the United States.” 72 Stat. 848.
This is not a patent case, but it is strange enough to need some thought. Sarah Vestal was an IRS employee. In 2018, the IRS planned to suspend her based upon “discourteous and unprofessional conduct.” In preparing her defense, Vestal sent the Record from a Taxpayer’s File to her private attorney. That record included private information that Vestal was not permitted to share outside the office. She was then fired as a consequence of sharing the information with her attorney. On appeal, the Federal Circuit has affirmed:
Ms. Vestal intentionally disclosed taxpayer information to an unauthorized person for her own benefit.
The writing of the decision is interesting (or perhaps odd) because it appears to treat IRS confidentiality as “sacrosanct,” but not attorney-client communication. Recognize here that the IRS might have permitted her to disclose some aspects of the case to her attorney — but only after redaction and approval.
This type of issue is important and relevant to anyone operating in a confidential environment (such as almost every company) who might need to privately consult an attorney.
On Saturday, June 12, I did a little experiment to see what information I could find about patents that I knew to have been challenged. I first searched for U.S. Patent No. 7,446,338, issued in 2008 to Casio for a “Display Panel.” As expected, the official USPTO Patent Full-Text and Image Database provided me with the text of the patent document and a link to its PDF image. The USPTO’s new PatentsView interface gave me a bit more information, mostly about forward citations of the patent, including a spiffy world map locating the citations geographically. Google Patents indicates when a patent has expired or is scheduled to expire and displays a timeline of litigation involving the patent. The ’338 patent was subject to litigation in the Western and Eastern Districts of Texas and at the Patent Trial and Appeal Board (PTAB). Clicking on these entries took me to a database run by Unified Patents, which lists docket entries in these matters and is accessible via a free sign-up. But to see the Complaint in one of the West Texas matters, Unified Patents redirected me to a database operated by MaxVal-IP, which, on the day I searched, gave me the dreaded error “404- File or directory not found.” I then moved on to PTAB action IPR2020-00320, filed on Dec. 18, 2019. The Unified docket showed the IPR as terminated following a Mar. 12, 2021 settlement between Apple and the patent owner (now a company called Solas OLED) and allowed me to access the Termination Order. But when I searched Lex Machina, the paid IP litigation analysis engine now owned by LexisNexis, I found that Samsung, one of the IPR plaintiffs, continued the IPR action after Apple settled, and that on June 6, the PTAB issued a Final Written Decision finding all challenged claims (1-3 and 5-13) to be unpatentable (the patent has a total of 22 claims).
When I searched for U.S. Pat. No. 5,710,001, one of Myriad Genetics’ BRCA1 gene patents issued in 1998, several claims of which were invalidated in Assn. for Molecular Pathology v. Myriad Genetics, 569 U.S. 576 (2013), Google Patents displayed the initiation of the earlier district court litigation on its timeline, but the link took me to the paid Darts-IP database run by Clarivate, to which I don’t have access. Lex Machina only includes data about district court cases, but did correctly report that the District Court found all challenged claims of the Myriad patent to be invalid. The LexisNexis TotalPatent One service, which also allows patent searches, added information about patent families, fee status, assignees and, not surprisingly, links to judicial decisions and dockets.
And when I searched for U.S. Pat. No. 10,533,994, one of the fluidic system patents originally assigned to Theranos and asserted in 2020 against the maker of a COVID-19 diagnostic test, I found no indication that the founders of Theranos were under federal indictment for fraud, that they never developed the patented device, or that the current owner of the patent, Fortress Investments, had publicly pledged to license it royalty-free to anyone offering COVID-19 tests.
Contextual Patent Information
All of the information about a patent beyond its four corners – the validity status of its claims, whether it has been pledged to the public, licensed, made available for licensing, abandoned, declared essential to a technical standard, declared unenforceable for inequitable conduct and much more – is what Professor Colleen Chien has termed “contextual” patent information (Contextualizing Patent Disclosure, 69 Vand. L. Rev. 1849 (2016)). This type of information can be extremely useful to innovators, researchers, litigants, businesses and other members of the public. As Professor Chien writes, “contextual information can … signal which inventions are important from an economic point of view, are unimportant from a risk management perspective (insofar as they are expired or pledged to defensive uses), and may be the subject of broader technology and know-how transfers” (p. 1854).
Some contextual information, to the extent that it has been properly reported by the patent holder, is already relatively easy to find – this includes patent assignment records (through USPTO Patent Assignment Search and TotalPatent One), government interest statements (through the USPTO’s Patent View system), and maintenance/expiration data (through Google Patents and TotalPatent One). This is a good start.
But as my informal Saturday morning experiment illustrates, contextual information is not always readily accessible or consistent, and even in the best case it is spread across a variety of public and private data sources (even the USPTO could do a better job of consolidating available information about a patent into a single record). Thus, there is significant room for improvement.
The Genius of Shepard’s
I am pretty sure that every law student in the United States still learns to use the venerable Shepard’s citation system. Those of us who were educated during the Bronze Age and earlier know Shepard’s as a set of ponderous, maroon-bound volumes that were last seen as set pieces for Harry Potter. Today’s law students recognize Shepard’s as a component of the ubiquitous LexisNexis legal search engine. But its basic function has remained the same. Look up a judicial decision and Shepard’s will tell you, using simple color-coded icons (red stop sign, yellow triangle, green diamond, etc.) whether the case has been overruled, upheld, questioned and/or cited. (For a fascinating history of Shepard’s and legal citation indices in general, see Patti Ogden, Mastering the Lawless Science of Our Law: A Story of Legal Citation Indexes, 85 L. Libr. J. 1 (1993)).
Trademark issues aside, there is no reason that Shepard’s (or a variation thereof – maybe using yellow moons, orange stars, pink hearts and green clovers?) can’t be adapted for patents. The concept is simple. The record for every U.S. patent could include a set of regularly-updated signals conveying key contextual information for that patent. As with cases, the signals themselves would not convey detailed information, but would indicate that the interested reader should seek additional information (preferably through a hyperlink within the signal itself).
The implementation of such a system would admittedly require substantial up-front work, but several organizations including LexisNexis/Shepard’s/Lex Machina, Google and the USPTO, or some combination thereof, would be well-situated to undertake such a project.
If implemented, here are some of the contextual information categories that would be useful for such a patent signaling system:[1]
Invalidity – have some or all of the patent claims been disclaimed as invalid under 35 U.S.C. §§ 253(a) or 288, or challenged or invalidated by the PTAB or a court, or have claims survived challenges in litigation? The appealability/finality of these determinations could be indicated, as could the ground for invalidity (e.g., 101, 102, 103, 112).
Enforceability – has the patent been rendered, or challenged as, unenforceable for other reasons, such as inequitable conduct, patent misuse or standards deception?
Licenses – has the patent been licensed on an exclusive or non-exclusive basis? While many licenses are not publicly disclosed, licenses that are material to the business of publicly-traded companies are accessible through the Securities and Exchange Commission’s EDGAR database. Other licenses can become available through litigation discovery, freedom of information requests and other means (see discussion here).
Pledges and Dedications to the Public – has the patent been pledged by its owner for public use (see, e.g., the Open COVID Pledge, which I discuss at length here, subjected to a binding “covenant not to sue” (as was the trademark in Already, LLC v. Nike, Inc., 568 U.S. 85 (2013)), or dedicated to the public under 35 U.S.C. § 253(b)? There is currently no centralized repository for information regarding such commitments (see my proposal for creating a registry of pledges here), though various academic and nonprofit organizations maintain informal lists.
Standards Declarations – has the patent been declared essential to a technical standard? If so, the patent holder may have committed to license it on royalty-free or fair, reasonable and non-discriminatory (FRAND) terms. While some SDOs have searchable public databases of declared essential patents (e.g., ETSI and IETF), and some academic projects have consolidated some of this information, it is not generally linked to individual patent records.
***
In a world where patents play an increasingly important role in the technology development and innovation landscape, it is critical that reliable information about the status and history of patents be made available to the public. The USPTO has made a public commitment to the “discoverability, accessibility, and usability of public patent and trademark data”, and as such it can help to collect, organize and display contextual patent data in a simple and user-friendly fashion. A uniform “Shepardization” system for patents, which clearly flags issues for potential licensees, defendants and innovators and alerts the public to the potential investment and threat value of individual patents, would help to make the markets in which patents exist more transparent and efficient.
[1]Chien, p. 1877, Table 2, offers a comprehensive taxonomy of many types of contextual patent information that exist, though not all of these lend themselves to the simple signaling system suggested here and some (such as assignment, maintenance, expiration and government interest status) are already be available in a relatively (though not perfect) format.
Here is another mandamus writ coming out of Judge Albright’s Waco Texas courthouse. A basic repeated complaint against Judge Albright is that he appears to work quickly regarding issues that move the case toward trial, but acts more slowly to decide motions to dismiss transfer. I personally don’t put much weight in this complaint because truthfully he’s deciding all of the issues more quickly than most other judges.
This case:
August 2020, GreatGitz sued Freelancer for patent infringement and then filed an amended complaint just before Thanksgiving (November 23, 2020). U.S. Patents Nos. 6,662,194 and 7,490,086 (Providing job searching and recruitment services).
Two months later (January 21, 2021) Freelancer filed a motion to dismiss for failure to state a claim upon which relief can be granted.
Briefing ended on the eligibility question in March 2021. At that time, Freelancer also moved to stay all other proceedings in the case until the 12(b)(6) motion was decided.
It is now June 2021 and Judge Albright had not ruled on either the substantive motion to dismiss or the procedural motion to stay. But, claim construction briefing is moving forward.
June 10, 2021 Freelancer petitioned to the Federal Circuit to force Judge Albright to decide the 12(b)(6) motion and stop all other activities until that is decided.
The mandamus was assigned to a panel that has now denied the petition, holding that Freelancer has not shown a “clear legal right to a stay of all proceedings premised solely on the filing of a motion to dismiss the complaint.” Likewise, Freelancer did not establish that the delay is “so unreasonable or egregious as to warrant mandamus relief.” Slip Op.
Note here that the 12(b)(6) motion is not about eligibility but rather infringement. “The Complaint fails to put Freelancer on proper notice of how its products or services infringe either of the two asserted patents.” Although the complaint alleges infringement against particular activity, it does not do a claim-chart walk through showing how each limitation is met. Freelancer argues that “this generic, nonspecific language fails to meet the pleading standard set forth by Twombly, Iqbal, and the Federal Rules of Civil Procedure.”
In its responsive briefing, the patentee points to some amount of claim-term-linking in the pleadings — locating various components within “the so-called Aurora Database Cluster, Elasticache, Cloudwatch, Kinesis, and Redshift.”
See Figs. 1-6 (describing the apparatus comprising data centers with servers, which further comprise the Aurora database cluster (memory/processing device), Amazon Elasticache (processing device/receiver/transmitter), Cloudwatch (processing device), Kinesis (processing device/receiver/transmitter), and Redshift (memory/processing device)).
Amended Complaint. In addition, the patentee explained that it has done enough for a complaint and that further details “are quite obviously not subject to specific identification without fact discovery and source code review.”
Companies who play corporate games creating and shifting shell companies sometimes face serious consequences when painted into a corner. In Cirba, Inc. (DBA Densify) and Cirba IP v. VMWare (D. Del. 2020), a jury sided with the patentee Cirba Inc. and awarded $235 million in damages. That verdict though has been vacated because Cirba Inc.’s subsidiary Cirba IP actually owns the patent rights. According to the filings, the transfer to Cirba IP was done for “uncontroversial tax reasons.”
Although the jury awarded the money, Judge Leonard P. Stark did not enter judgment for the millions. Rather, Judge Stark found that Cirba Inc. (“INC”) did not actually have rights to enforce the patent and thus dismissed the case for lack of Article III standing. According to Stark, INC had transferred rights to its wholly owned subsidiary Cirba IP (“IP”). And, although IP was a co-plaintiff Judge Stark ordered a new trial — finding that the presence of INC so materially changed the trial that “it is quite probably that the outcome would … have been different.” Basically, the theme of INC’s case was about competition against the much larger VMWare, but IP is only a patent holder. Thus, all is not lost for Cirba, but juries are quite unpredictable.
A timeline of events is shown above, and one basic question for standing is whether that license-back included enough grit to give INC standing.
The new trial order is not a final judgment — the case is still ongoing. That means that there is no right to appeal the case immediately. However, Cirba has petitioned the Federal Circuit for writ of mandamus, arguing that the dismissal on standing was improper. The petition particularly focuses on the Supreme Court’s Lexmark decision and the Federal Circuit’s two subsequent decisions of Lone Star and Schwendimann. In particular, the plaintiff argues that under those decisions, the patent ownership is not a jurisdictional/standing question. “[D]ecisions treating the prerequisites of the Patent Act as jurisdictional were wrong.” Schwendimann. “Whether a party possesses all substantial rights in a patent does not implicate standing or subject-matter jurisdiction.” Lone Star.
The Thompson decision was released on January 1, 1826 and penned by Judge Van Ness who died later that year. Van Ness was perhaps most famous for being Aaron Burr’s second at Burr’s duel with Alexander Hamilton, but this opinion shows further sign of his character. Van Ness argues that the U.S. patent system at the time was being overrun by large numbers of trivial inventions. Although it required invention in name, it was really just becoming a replacement to monopolies barred by the Statute of Monopolies (1624).
Van Ness further explains that the plethora of low quality patents harms the genuine inventors, because all patents are suspect.
It is unnecessary to look farther than to see the fate of Whitney, Evans, and above all, Fulton, or those who represent him. Instead of deriving peace, honour, and affluence from their incessant labour and incomparable skill, they have sunk under vexation and the pressure of litigation. Patent upon patent and privilege upon privilege have been granted, infringing the original rights, until their hopes and anticipated rewards were converted into despair and poverty. In the degrading conflict, even the laurels they had fairly won withered amidst the wreck of their fame and their fortunes.
Id. Van Ness called for a rigorous examination system and, once examined, patents should then be deemed secured:
They should only be granted, as I conceive, upon due examination into the merits of the application, and then the rights granted should be well secured, and well protected.
FocusVision Worldwide v. Information Builders Inc. (Fed. Cir. 2021)
The Federal Circuit has affirmed the TTAB’s decision refusing to register FocusVision’s eponymous mark FOCUSVISION after being opposed by IBI based upon its FOCUS marks. The appeal focused in part on the similarity of goods, trade channels, and sales.
IBI is a software company known for its FOCUS database programming language. FocusVision does market research and was attempting to register its mark in three different classes:
Class 42 – in particular for online software for market research, including data analysis for marketing, market research, and focus groups.
Class 35 – in particular for market research.
Class 38 – in particular for streaming or broadcast of market research interviews.
IBI opposed only the Class 42 request and the tribunals all found the complaint valid. IBI’s mark registration generally covers computer software for database management and decision support systems. Although FocusVision’s Class 42 submission is limited to market research, the court still found substantial overlap. “Even if FocusVision’s services are not identical to IBI’s goods, they are still closely enough related to support a finding of likelihood of confusion.” See In re Detroit Athletic Co., 903 F.3d 1297 (Fed. Cir. 2018) (“while the goods and services are not identical, they substantially overlap, which weighs in favor of finding a likelihood of confusion”).
IBI’s lowest cost service is $30,000 for its “WebFocus” tool. A full “Focus” is significantly more expensive. FocusVision argued that the high price, major commitment associated with the purchase, and sophistication of the buyers all suggested against confusion. On appeal, the Federal Circuit noted that “even sophisticated purchasers may be confused by marks that are sufficiently similar.” Slip Op. (finding substantial evidence supporting the conclusion that this factor is “neutral” in the DuPont analysis).
Finally, although there was no proof of any actual confusion, the court also found this “neutral” because the products had only been overlapping on the market for four years. “Here, the relevant period during which actual confusion could have occurred was relatively short—from June 2014 to January 2018.”
It appears that we have not yet seen the most invasive nature of contemporary patent eligibility doctrine. Case in point: Yu v. Apple Inc. (Fed. Cir. June 11, 2021) [Yu vs Apple].
Yanbin Yu and Zhongxuan Zhang are the inventors and owners of U.S. Patent No. 6,611,289 (‘Digital cameras using multiple sensors with multiple lenses’). The pair sued Apple and Samsung for patent infringement, but the district court dismissed the cases for failure-to-state-a-claim. In particular, the court found the claims directed toward an abstract idea and thus invalid under 35 U.S.C. § 101. On appeal, the Federal Circuit issued a 2-1 decision affirming with Judge Prost and Taranto in the majority and Judge Newman in dissent.
The asserted claims are directed to a digital camera having multiple analog image sensors with lenses mounted on the image sensors. The claims also include analog-to-digital circuitry to digitize images from each camera so that they can be stored in memory. The claims then require creation of a “resultant digital image” based upon images from the two different cameras. Note, the patent application was filed back in 1999; issued in 2003; and has now expired.
On appeal, the Federal Circuit affirmed that the claims at issue are merely directed to the following abstract idea:
“claim 1 is directed to the abstract idea of taking two pictures (which may be at different exposures) and using one picture to enhance the other in some way.”
The problem, according to the majority, is that claims “merely invoke generic processes and machinery.” (Quoting Smart Sys.) In some ways, the patent’s specification also suggests an abstraction — especially the following line: “there is a great need for a generic solution that makes digital cameras capable of producing high resolution images without enormously incurring the cost of photo-sensitive chips with multimillion photocells.” ‘289 Patent. But, I would suggest reading the specification for an understanding that this is a technological solution.
The appellate panel suggests that the specification probably does include a patent eligible invention in the form of “a four-lens, four-image-sensor [including] a black-and-white sensor.” But, the claims at issue do not require four sensors or the B/W sensor.
In dissent, Judge Newman explains:
This camera is a mechanical and electronic device of defined structure and mechanism; it is not an ‘abstract idea.’ . . . [C]laim 1 is for a digital camera having a designated structure and mechanism that perform specified functions; claim 1 is not for the general idea of enhancing camera images. The camera of the ’289 patent may or may not ultimately satisfy all the substantive requirements of patentability, for this is an active field of technology. However, that does not convert a mechanical/electronic device into an abstract idea.
Slip Op. Newman’s dissent also walks into the bigger picture of Section 101 jurisprudence:
In the current state of Section 101 jurisprudence, inconsistency and unpredictability of adjudication have destabilized technologic development in important fields of commerce. Although today’s Section 101 uncertainties have arisen primarily in the biological and computer-implemented technologies, all fields are affected. The case before us enlarges this instability in all fields, for the court holds that the question of whether the components of a new device are well-known and conventional affects Section 101 eligibility, without reaching the patentability criteria of novelty and nonobviousness.
The digital camera described and claimed in the ’289 patent is a mechanical/electronic device that easily fits the standard subject matter eligibility criteria. Neither the panel majority nor the district court decided patentability under Section 102 or Section 103, having eliminated the claims under Section 101. The ’289 claims warrant review under the substantive criteria of patentability—a review that they have never received.
The fresh uncertainties engendered by the majority’s revision of Section 101 are contrary to the statute and the weight of precedent, and contrary to the public’s interest in a stable and effective patent incentive.
= = = = =
1. An improved digital camera comprising:
a first and a second image sensor closely positioned with respect to a common plane, said second image sensor sensitive to a full region of visible color spectrum;
two lenses, each being mounted in front of one of said two image sensors;
said first image sensor producing a first image and said second image sensor producing a second image;
an analog-to-digital converting circuitry coupled to said first and said second image sensor and digitizing said first and said second intensity images to produce correspondingly a first digital image and a second digital image;
an image memory, coupled to said analog-to-digital converting circuitry, for storing said first digital image and said second digital image; and
a digital image processor, coupled to said image memory and receiving said first digital image and said second digital image, producing a resultant digital image from said first digital image enhanced with said second digital image.
2. The improved digital camera as recited in claim 1, wherein said first image sensor sensitive to said full region of visible color spectrum.
4. The improved digital camera as recited in claim 1, wherein said analog-to-digital converting circuitry comprises two individual analog-to-digital converters, each integrated with one of said first and second image sensors so that said first and second digital images are digitized independently and in parallel to increase signal throughput rate.
The Journal of the Patent & Trademark Office Society has been publishing intellectual property scholarship for 100+ years (since 1918). Originally it was the Journal of the Patent Office Society, the journal changed its name in 1985 to expressly include trademarks. The US Patent & Trademark Office (formerly the US Patent Office) had changed its name in 1975.
The first issue included an two articles and several notes:
Wm. I. Wyman, Thomas Jefferson and the Patent System, 1 J. Pat. Off. Soc’y 5 (1918).
F.W.H. Clay, The relation of the examiner to the inventor and his attorney, 1 J.
Pat. Off. Soc’y 8 (1918).
Three of my favorite articles in the journal are all historical pieces by Edward Walterscheid.
Edward C. Walterscheid, The Early Evolution of the United States Patent Law: Antecedents (Part 1), 76 J. Pat. & Trademark Off. Socy. 697 (1994).
Edward C. Walterscheid, The Early Evolution of the United States Patent Law: Antecedents (Part 2), 76 J. Pat. & Trademark Off. Socy. 849 (1994).
Edward C. Walterscheid, Patents and Manufacturing in the Early Republic, 80 J. Pat. & Trademark Off. Socy. 855 (1998).
Here’s what I’m writing to announce: JPTOS was in a publishing hiatus over the past year, but is now back and ready to accept article submissions:
JPTOS is a publication written by and for the benefit of IP practitioners. We favor topical, practical articles that can be useful to our readers. There is no page length limit, however, articles greater than 40 double spaced pages may have to be split into separate articles.
We take article submissions pertaining to all areas of intellectual property, including patents, trademarks, copyrights, trade secrets, hybrids between all those forms, etc., as well as cutting-edge law & technology issues that may intersect intellectual property topics such as blockchain, cryptocurrencies, NFTs, artificial intelligence, robotics, 3D-printing, privacy/surveillance law, social media, bioengineering, pharmaceuticals, COVID vaccine patents or patent policies, the pandemic’s impact on IP laws/practice and much more. If you are a practitioner/lawyer, judge, law professor, law student, writer or anyone having an interest in the above areas, please submit by clicking the “Submit Manuscript” button above today!
Federal Circuit sends Walker-Process* Antitrust Litigation to Fifth Circuit. The case arose under antitrust law, not patent law. Chandler v. Phoenix (2021).
Google v. Oracle was appealed to the Federal Circuit because the case included patent claims (that were not appealed). The patent claims went to trial and Oracle lost.
Q: Still a patent case if the patent claims had been dismissed on 12(b)(6) for failure to state a claim?
We all might be working too hard. Patent law is supposed to be easy. See Black’s Law Dictionary (11th ed. 2019) (defining “patent” to mean obvious or apparent).
I practice a form kundalini yoga that is somewhat in the tradition of Yogi Bhajan. Bhajan died in 2004 leaving his widow (Puri) as well as an Administrative Trust (YBAT). In recent years, Bhajan’s history of sexual abuse has come to light as well.
Puri and YBAT have a fairly long history of litigation over ownership and control of Bhajan’s estate. The most valuable aspect today is probably YOGI TEA that is sold by a third party, the East West Tea Company, but with Puri and YBAT each having a 50% undivided ownership of intellectual property rights.
The dispute at issue here started when Puri, acting alone, filed a trademark registration application for the mark YOGI for bath and beauty products. YBAT opposed, and the PTAB sided with YBAT — holding that:
[Puri] did not have a bona fide intent to use the mark in commerce solely in her individual capacity at the time she filed her involved because, at such time, [Puri] was aware that both [YBAT] and [Puri] each had an undivided and equal interest in the applied-for mark for the identified goods. Accordingly, we find that the involved application is void ab initio.
[TTAB Decision – OPP_47]. On appeal, the Federal Circuit has affirmed, finding the Board’s legal conclusions “without error” and its factual findings supported by substantial evidence.
The basic legal rule here is that all owners of a trademark must at least consent to the filing of a use-based trademark application. Without consent, “the application
is void ab initio.” For this point, the TTAB cites to Kristin Marie Conolty d/b/a Fairway Fox Golf v. Conolty O’Connor NYC LLC, 111 USPQ2d 1302, 1310 (TTAB 2014) (“the involved application is void ab initio because applicant is not the sole owner of the mark”).
This basic rule is derived from the statute 15 U.S.C. § 1051(a), which requires the trademark owner be the one who files for registration. The statute goes on to require a statement from the owner that “no other person has the right to use such mark..” 15 U.S.C. § 1051(a)(3)(D). Here, although Puri as an owner of the mark, YBAT is also an owner with its own rights.
The professional conduct of US patent attorneys and agents are governed by the rules regarding “Representation of Others before the United States Patent and Trademark Office” found in the Code of Federal Regulations, Title 37, Part 11. 37 CFR 11.1 – 11.901. Patent attorneys are also regulated by the rules of professional conduct of their home states. Although there are some patent specific differences, the USPTO has been shifting its rules to be more in line with the ABA’s Model Rules of Professional Conduct that have been adopted, at least in part, by all fifty states.
In 2020, the USPTO proposed a number of changes to its rules to better align them with the ABA Model Rules. Recently, the agency finalized those proposals (with minor changes) to be effective June 25, 2021.
Section 11.106(b)(7): New provision permits the disclosure of client information “to the extent the practitioner reasonably believes necessary . . . (7) To detect and resolve conflicts of interest arising from the practitioner’s change of employment or from changes in the composition or ownership of a firm, but only if the revealed information would not compromise the practitioner-client privilege or otherwise prejudice the client.”
Section 11.106(d): New provision that practitioners “shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.”
Section 11.118: The amendment here focuses on prospective clients, and changes the rule from someone who “discusses” becoming a client to someone who “consults” with the practitioner about the possibility of forming a client-practitioner relationship. This is generally thought to narrow the definition.
Section 11.702: This provision focuses on attorney advertising. The changes conform more closely with the new ABA rules. I’ve compared the old and new below. The main changes here:
Advertising can include “contact information” rather than “office address.” The notes indicate that this might be a website or email address, although I don’t see a website as necessarily being “contact information.”
Nominal gifts will now be expressly permitted to someone who refers clients to you, so long as they are “neither intended nor reasonably expected to be a form of compensation.”
Certified as a Specialist: The rules limit a practitioner’s ability to state or imply that he or she is “certified as a specialist in a particular field of law.” It is not clear to me that “patent law” would count here, but I’m going to speak with OED to make sure.
Section 11.703 makes some changes to the meaning of “solicitation” and when it is appropriate. Importantly, prohibited solicitation is now expanded beyond “prospective clients.”
