I recently wrote about Apple’s pending petition to the Supreme Court on the NHK-Fintiv Rule. Now Mylan Labs has followed up with an additional petition focusing on the same issues:
Mylan Labs. Ltd. v. Janssen Pharmaceutica, N.V. (Supreme Court 2021) [Petition]
by Dennis Crouch
* These notes come from a set of recently decided ex parte appeals that I have been working throuhg – DC
Recent Headlines in the IP World:
Commentary and Journal Articles:
New Job Postings on Patently-O:
Bennett Regulator Guards, Inc. v. Atlanta Gas Light Company (Fed. Cir. 2020)
This case has been up to the Supreme Court and is now back down.
Bennet owns U.S. Patent No. 5,810,029 (Anti-icing of gas pressure regulators, now expired). Back in 2012, Bennett sued Atlanta Gas for patent infringement. That case had been filed in N.D. Ohio and the court there dismissed for lack of personal jurisdiction over the Georgia-based defendant. Three years later (2015), Atlanta Gas filed for inter partes review (IPR). The PTO Granted review and the PTAB eventually found the challenged claims unpatentable. In a 2018 appeal, the Federal Circuit vacated — holding that the statutory time-bar precludes the PTO from instituting a petition in this case. 35 U.S.C. § 315(b) (“An [IPR] may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner … is served with a complaint alleging infringement of the patent.”). Atlanta Gas then petitioned for Supreme Court review and in April 2020, the Supreme Court issued the following decision:
Petition GRANTED. Judgment VACATED and case REMANDED for further consideration in light of Thryv, Inc. v. Click-to-Call Technologies, LP, 590 U. S. ___ (2020).
In Thryv, the Supreme Court held particularly that the § 315(b) time-bar is part of the institution decision that is not subject to appeal. Thus, on remand, the Federal Circuit has now altered its holding — writing: “Thryv precludes our review of the Board’s ‘application of § 315(b)’s time limit,'”
Its original decision did not reach the merits of the appeal because it dismissed on the time-bar ground. Now, the court has affirmed the PTAB decision that the claims are both anticipated and obvious.
The claims here are directed to the skirt assembly 40 designed to reduce ice formation at the outlet tube.
In its argument to avoid the prior art, Bennett argued that its claim terms should be narrowly construed in order to preserve their validity — since the patent is expired and thus cannot be amended. On appeal, the Federal Circuit appears to agree with the general notion that this canon of claim construction should apply to IPR proceedings, but concluded that it does not apply in this case. In particular, the court explained that the narrow-to-preserve-validity canon only applies if claims are “still ambiguous” after being construed using the standard tools of claim construction. Quoting LiebelFlarsheim Co. v. Medrad, Inc., 358 F.3d 898 (Fed. Cir. 2004). Here, the particular terms – “diaphragm-type gas pressure regulator” and “outside gas pressure regulator” were not ambiguous.
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In its appeal, Bennett also detailed a “litany of APA violations by the Board.” The APA requires the board to establish an evidentiary basis for its factually findings; to actually make those factual findings; and then to explain the connection between the findings and the outcome of the case. For the most part, these arguments came-down to the PTAB not expressly considering Bennett’s evidence presented on each point. On appeal, the Federal Circuit found that the PTAB had done enough:
The Board did not specifically discuss th[e] particular testimonial evidence supporting Bennett’s argument, but the Board did explain that it found Bennett’s argument unpersuasive when it credited Atlanta Gas’s evidence. That is enough. The Board need not expressly discuss every single bit of evidence proffered by the parties, so long as we can reasonably discern its path.
Slip Op.
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One oddity of the PTAB decision involved a sanctions award against Atlanta Gas. During the IPR proceeding, Atlanta Gas merged with Southern Co. However, Atlanta Gas did not notify the PTAB until after the Final Written Decision had issued. At that point, one of the PTAB judges had to recuse himself and a new panel-member was added (who signed on to the opinion as written). The PTAB awarded sanctions (but did not state the amount yet) but refused to terminate the IPR.
On appeal, the Federal Circuit stayed its hand — explaining that “we lack jurisdiction” in this case because the sanction amount is “unquantified” and is therefore not yet final. “On remand, the Board may, at its discretion, further consider its order given the outcome of this appeal. But until the Board quantifies any sanctions, we will not review its decision granting them.”
I previously discussed Fote v. Iancu. Charles Fote has now petitioned the Supreme Court for certiorari — asking the following question:
Whether a court of appeals must provide an opinion explaining its reasoning in an appeal that involves a complex and unsettled area of the law and in which a written opinion would likely provide the appellant with a viable basis for seeking rehearing, rehearing en banc, or certiorari.
by Dennis Crouch
Allen v. Cooper (Supreme Court 2019)
In this copyright case, the Supreme Court is wrestling with the question of sovereign immunity. Does the 11th Amendment shelter States (North Carolina in this case) from copyright infringement lawsuits. The plaintiff — Frederick Allen — documented the 1998 salvage of the Pirate Blackbeard’s ship Queen Anne’s Revenge that sank near the North Carolina coast in 1718. North Carolina wanted to use Allen’s copyrighted material, but didn’t want to pay. The state legislature stepped in with “Blackbeard’s Law” — designating all photos, videos, and other documentary materials of shipwrecks to be public records. Allen then sued N.C. for infringement (Cooper is N.C. Governor).
In the background is the Copyright Remedy Clarification Act (CRCA) of 1990 that expressly abrogates state immunity in the area of copyright law:
Any State … shall not be immune, under the Eleventh Amendment [or] any other doctrine of sovereign immunity, from suit in Federal Court … for a violation of any of the exclusive rights of a copyright owner….
17 USC 511(a). The basic question in the case is whether CRCA is unconstitutional:
Whether Congress validly abrogated state sovereign immunity via the CRCA in providing remedies for authors of original expression whose federal copyrights are infringed by states.
In some ways this case can be seen as a follow-on to Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, 527 U.S. 627 (1999). In that patent case, a 5-4 Supreme Court held that Congress had improperly authorized patent infringement lawsuits against States. The area of law has seen further development since 1999, including an important bankruptcy-related decision in Central Virginia Community College v. Katz, 546 U.S. 356 (2006).
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The Supreme Court held oral arguments in the case on November 5, 2019.
Allen’s basic argument is that state immunity is inconsistent with constitutional power of “securing … exclusive rights.” Further, the 14th Amendment is seen as providing additional power to Congress to ensure that each state provides due process and equal protection. However, the Supreme Court requires actual constitutional violations before Congress can legislate in this area. [Oral Argument Transcript]
Arguing on behalf of the copyright holder, Derek Shaffer explains:
MR. SHAFFER: Exclusive against whom, Your Honors? Exclusive against all comers, exclusive against the world, including the government and including states.
The key problem with N.C.’s argument is that it goes against the Court’s reasoning in Florida Prepaid.
JUSTICE GINSBURG: All — all that is — would be highly persuasive if we didn’t have the patent decision, the Florida Prepaid decision. It is the very same clause. It’s the very same secure. It’s the very same exclusivity.
MR. SHAFFER: Correct, Justice Ginsburg. But the Court was not examining the text. The Court was not examining the clause. . . . That wasn’t before the Court. It wasn’t even raised before the Court.
JUSTICE KAGAN: If you are right, we would then have to go back to Florida Prepaid, right, and topple that rule?
MR. SHAFFER: It would be certainly open to folks in patent cases to make that argument, Justice Kagan.
JUSTICE ALITO: So, basically, you’re asking us to overrule Florida Prepaid?
MR. SHAFFER: I’m asking this Court to follow Katz, Justice Alito, where I think Florida Prepaid was [already] overruled. [See Central Virginia Community College v. Katz, 546 U.S. 356 (2006) (Does the Bankruptcy Clause of the U.S. Constitution (Article I Section 8), waive the states’ sovereign immunity?)]
Arguing on behalf of N.C., RYAN PARK added his thoughts:
JUSTICE ALITO: Mr. Park, can I take you back to the interesting suggestion that perhaps Congress could have justified what it did in this act by saying that we predict that a high percentage of copyright infringements are intentional and, therefore, violate due process. If we were to accept that, is there any reason why the same reasoning would not apply in patent litigation?
MR. PARK: No, I don’t believe there is any — any distinction there. [DC: note, this is wrong since patent law does not have a copying requirement.]
Due Process and Takings are not expressly raised in this case are interesting. Even without CRCA, a copyright holder may be able to bring a Federal Due Process or Takings case against a state who infringes the copyright. A major difference here is that copyright damage and injunction statutes go far beyond what is required for a due process violation or taking. Mr. Park explained for the State how the copyright-owner friendly damage regime is one reason to protect sovereign immunity (and taxpayer money).
MR. PARK: My friend has failed to identify any historical evidence that anyone at the founding remotely contemplated that the intellectual property clause would allow for damages lawsuits against states. . . . Congress could not commandeer state legislatures and force them to pass copyright protective laws, nor could they, under separation of powers principles, vest judicial review of copyright claims in the Senate Judiciary Committee. And, likewise, state sovereign immunity limits Congress’s authority to expose state treasuries to the Copyright Act’s exorbitant financial remedies. . . . And liability under the Act is expansive. It’s vastly greater than anything required by the Due Process Clause. It includes statutory damages of up to $150,000 per infringement, even if the plaintiff cannot prove she suffered any actual harm. . . .
JUSTICE BREYER: [For N.C. to win] we’ve got to decide how copyright, copying, and the due process clause fit together, which, to my knowledge, this Court hasn’t really gone into. And it sounds like a pretty good mare’s nest.
From the copyright holder’s perspective, the damage award is inherent to the copyright clause:
MR. SHAFFER: Clearly the framers’ contemplation is these are exclusive rights that anyone who may infringe has to pay for.
JUSTICE SOTOMAYOR: — the latter part you’re assuming. It says securing the copyright, but it doesn’t say making sure that the copyright owners are paid.
MR. SHAFFER: To promote progress. To promote progress, Justice Sotomayor. It is a preamble that is not echoed anywhere else in Article I.
JUSTICE SOTOMAYOR: Some would say that injunctive relief promotes progress.
MR. SHAFFER: James Madison’s conception reflected in the text of what the monopoly would achieve is that the authors and inventors would get paid for their inventions. They would get paid for their creations. And as the Court, as I indicated, back in 1888 recognized, it is antithetical to that to say that government of any kind, certainly the federal government, can infringe those exclusive rights that — that Congress is to be securing.
Justices Kavanaugh and Breyer finally focused on potential realistic outcomes of the case — rampant state infringement?
JUSTICE KAVANAUGH: Justice Breyer’s point is that it could be rampant, states ripping off copyright holders. And how can that be squared with the exclusive right, if states can do this, which presumably a ruling in [N.C’s] favor will do nothing but encourage them to do?
I’m looking for a decision in the case in early 2020.
by Dennis Crouch
Liqwd, Inc. v. L’Oreal (Fed. Cir. 2019) [CAFC Decision][PTAB Decision]
Liqwd’s U.S. Patent 9,498,419 covers a method for bleaching hair that includes maleic acid (0.1% – 50% by weight) alongside a bleaching formulation and without any hair coloring agent. The maleic acid apparently protects the hair from some damage caused by the bleaching agent. L’Oreal filed a post grant review (PGR) challenge soon after the patent issued, and the PTAB eventually concluded that the claims would have been obvious.
On appeal, the Federal Circuit has vacated and remanded — holding that the Board did not give proper weight to evidence of copying by L’Oreal in its obviousness analysis.
The gory setup is that Liqwd’s founder Dean Christal and the ‘419 inventor (Eric Pressley) met with L’Oreal folks in pursuit of a deal; provided L’Oreal with a copy of the then-confidential parent patent application; and disclosed to L’Oreal various technical details — all subject to a non disclosure agreement. Although L’Oreal has argued that it independently invented its product, the PTAB found copying — that L’Oreal’s use of maleic acid was “because of L’Oreal’s access to Liqwd’s confidential information.”
To be clear, L’Oreal did not copy Liqwd’s product (Liqwd didn’t have one at the time covered by the patent), but rather copied (allegedly copied) Liqwd’s technology after obtaining a copy of its yet-unpublished patent application.
Copying by a competitor is a classic objective indicia of nonobviousness. As the story goes, if the innovation were obvious, the competitor wouldn’t have needed to copy. Here, however, the PTAB ruled that this copying didn’t count because ““copying
requires the replication of a specific product” and “cannot be established without showing that Petitioner copied a patented product, rather than Patent Owner’s technology generally.” PTAB Final Written Decision, quoting Iron Grip Barbell Co., Inc. v. USA Sports, Inc., 392 F.3d 1317 (Fed. Cir. 2004). On appeal, the Federal Circuit has rejected that analysis — narrowing its interpretation of Iron Grip to the following one-liner:
In other words, more is needed than merely showing that similarity exists between the patent and the competitor’s accused product.
Liqwd. The basic copying-of-a-product focus was designed by the court to avoid an undue overlap between proof of infringement and the nonobviousness secondary indicia of copying. Copying is often proven by the combination of access + resulting similar product, the court felt that the doctrine could get out of hand if proof of infringement + access to the patent document were sufficient. In Liqwd, the court looked back to its prior cases on this issue and summarized:
Our primary concern in each of these cases has been to avoid treating mere infringement as copying simply because the claims of a patent arguably read on a competitor product.
Id.
Evidence of Access vs Evidence of Copying: In Liqwd, the court found a different situation than many prior cases because the copying was not based simply upon access and resulting product, but instead found “evidence of actual copying efforts.” When such evidence exists, “that evidence is always relevant.”
The evidence presented by Liqwd shows more than merely a “competing product that arguably falls within the scope of a patent.” Wyers. Determining that this evidence is relevant does not implicate our concern with avoiding every infringement suit turning into a confirmation of the nonobviousness of a patent. Because this evidence of actual copying efforts is relevant, the Board erred by disregarding its finding.
Id. On remand, the PTAB will now need to give weight to the copying in the obviousness analysis and ask whether that shift is enough to tip the scales in favor of patentability.
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David Lat has a great new podcast with Judge Pauline Newman and asks listeners to “evaluate the 96-year-old jurist’s mental acuity for yourself by listening to this podcast.”: https://davidlat.substack.com/p/integrity-an-interview-with-judge-pauline-newman
Lat also includes several video clips for those who would like to see Judge Newman as she speaks: https://davidlat.substack.com/p/6-video-clips-of-judge-pauline-newman
by Dennis Crouch
The Federal Circuit has remanded the Xencor appeal — allowing USPTO leadership an opportunity to re-focus on the written description requirement for both Jepson claims and means-plus-function claims in the antibody art. I have several prior posts about the case:
by Dennis Crouch
Sawstop v. Vidal, — F.4th — (Fed. Cir. 2022)
This is a Patent Term Adjustment (PTA) case. Back before 1995, patents were awarded a term of 17-years following issuance. As part of an international negotiation and with some anti-submarine policy justifications, the US switched over to a 20-year term that starts counting days as of the application’s filing date. The 20-year term from filing date was seen as roughly equivalent to 17-years from issuance since most patent applications take about three years to issue. In the end, this kept overall patent term roughly the same. But, it also allowed for some major variability. Some patent applicants were concerned that delays by the USPTO due to backlogs or unreasonable examination practices might effectively cut into the patent term. Congress heard those concerns and created the PTA system that adds extra days to the patent term when those delays exist. 35 U.S.C. § 154(b). Unfortunately, the PTA statute is not a model of clarity and has been the subject of numerous court battles over various quirky elements.
The provision at issue in Sawstop has to do with PTA added for PTAB appeals and district court challenges. Under the law, added term is triggered by the following:
(iii) appellate review by the [PTAB] or by a Federal court in a case in which the patent was issued under a decision in the review reversing an adverse determination of patentability,
35 U.S.C. § 154(b)(1)(C)(iii).
I have written previously about Sawstop technology that covers a safety feature for power saws “that instantly stops the saw blade upon contact with flesh.” The appeal here is a consolidated appeal regarding two Sawstop patents. Sawstop is struggling because its patents are all expiring and competitors are hot-on-its-heels.
In the first case (‘476), the applicant had appealed an obviousness rejection by the examiner. The PTAB rejected the examiner’s decision, but simultaneously issued a new ground of rejection on obviousness. Thus, the ultimate conclusion was that the rejection was affirmed, albeit for different reasons. On remand, the claims eventually issued, but only after an RCE (which cut-off further PTA). After the patent issued, the owner asked for PTA associated with the PTAB appeal, but the PTO refused as did the district court.
In the appeal, the Federal Circuit has also sided against Sawstop. The rule quoted above is triggered by “a decision in the review reversing an adverse determination of patentability.” On appeal, the Federal Circuit found no reversal by the PTAB — although it did “cast aside the examiner’s basis for rejecting claim 11,” the Board simultaneously established reasoning for rejecting that same claim. The result was that the claim remained rejected. The Federal Circuit here focused on the substantive outcome — the patentee’s appeal was not successful and therefore there was no reversal.
The Federal Circuit also addressed a second element of the test — that the “patent was issued under a decision in the [appellate] review.” The court has interpreted that requirement as mandating that at least one claim considered by the PTAB have found its way into the issued patent without significant or substantive post-appeal amendments. Here, the patentee had amended the claims after the PTAB decision in order to achieve allowance. Thus, no Type-C PTA.
The second case (‘796) is a bit more complicated, the applicant had appealed rejections of claims 1 and 2 for anticipation a non-statutory double patenting (provisional). The Board issued a partial-reversal–holding that claim 1 was no good, but claim 2 was patentable. But Sawstop really wanted claim 1 and so filed a civil action with the DC District Court–and won that case. The one caveat is that the civil action focused only on anticipation and did not address non-statutory double patenting. Back at the Office, the PTAB maintained its double-patenting rejection and Sawstop was given a choice: (1) drop claim 1 or (2) file a terminal disclaimer. Sawstop chose the latter, and cancelled claim 1. But again, filed an RCE with several further amendments to other claims and the specification before eventual allowance.
The USPTO awarded PTA for the successful PTAB appeal, but refused any PTA for delay in getting the district court decision. On appeal, the Federal Circuit affirmed this analysis again on two grounds. First, although the district court did reverse the anticipation claim, it did not decide that claim 1 was “patentable.” As such, the court did not “revers[e] an adverse determination of patentability.” Sawstop had argued that – at the time – the OTDP rejection was only provisional and thus should not count. The Federal Circuit might have bought this argument if Sawstop also explained that it was somehow barred from including the issue in its Section 145 Civil Action, but Sawstop did not provide such an explanation. The second reason for agreeing with the PTO is that Claim 1 (the Subject of the District Court civil action) never issued in the patent. And, as discussed above, the court has interpreted the rule to only apply when the claim at issue in the ‘appeal’ ends up in the issued patent. Thus, no Type-C PTA for this one either.
Throughout this process, the Federal Circuit repeatedly justified its ruling as a plain language interpretation of the rule. I’ll note, however, that the court does not do so with the “appellate review” portion of the statute. A Section 145 civil action is not an appellate review of the PTAB decision, but rather separate action. See Kappos v. Hyatt, 566 U.S. 431 (2012). But, the court appears to have no trouble seeing it as an appeal in this context.
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Judge Linn wrote the decision here joined by Judges Newman and Chen. Sawstop was represented by Jared Newton and his team from Quinn Emanuel as well as David Fanning, SawStop’s inhouse counsel. Hugham Chan the E.D. Va. US Attorney’s Office argued for the Gov’t. Chan & Newton both graduated from GWU Law in 2010 & 2011 respectively. Chan is a former clerk of Judge Chen; Newton is a former patent examiner.
by Dennis Crouch
Every year, law schools advertise open faculty positions via a Faculty Appointments Register sponsored by the American Association of Law Schools (AALS). This year’s list was just released, and lots of schools are looking to hire patent and IP professors. The list includes:
Akron, American University, Barry University, Baylor, Chicago-Kent, Drake, Duquesne, Florida A&M, GWU, Hawaii, Louisville, New England, New York Law School, Northern Kentucky, Oklahoma, Ole’ Miss, Seattle, Stetson, Suffolk, Suffolk, Texas Tech, U Florida, U Mass, UC Davis, UC LA, UIC (Chicago), UNH (Franklin Pierce), USC, & U San Francisco.
Note that top ranked law schools rarely advertise for particular subject matter areas. For the most part, new tenure-track law professors will have already published law review articles and have some sort of teaching experience. A number of schools though are also considering clinical and administrative positions that would have different expectations. The hiring process is a bit cumbersome at most schools because the faculty as a whole typically vote on whether to extend an offer. At Mizzou, we begin the recruitment process in late August and then usually vote in early December. The new hire then starts work the following summer. We’re not hiring in IP this year, but are looking to hire several candidates folks — primarily focusing on the areas of Criminal Law/Procedure; Evidence; Constitutional Law courses (including First Amendment); Contracts; Dispute Resolution; and Veterans benefits (clinic).
by Dennis Crouch
Steven Young and Carl Hewitt developed technology for monitoring infant biometrics. Later, they began working with Sleep Number Corp. who eventually purchased their company. The result was SleepIQ technology for Sleep Number smart beds.
Eventually Young & Hewitt decided to leave the company and start out on their own once again and founded a new venture UDP Labs–still focusing on sleep biometric data integrated into hospital/medical furniture. However, the pair had not fully exited from their Sleep Number contract. Rather, they had both signed consulting agreements with Sleep Number that included quite a broad scope. In particular, the agreement required disclosure and assignment of “any ideas, conceptions, inventions, or plans relating to sleep, mattresses, bedding, sleep monitoring, health or wellness as it relates to sleep (including biometric monitoring relating to sleep), or bedroom or sleep technologies.” The agreement expressly excluded some areas: “monitoring technologies for sudden infant death syndrome” and “blood pressure.”
UDP Labs quickly filed a provisional patent application for Young and Hewitt’s new inventions. The pair tried (unsuccessfully) to get Sleep Number to agree that their UDP work wasn’t covered by the consulting agreement; and ultimately terminated the consulting agreement. More patent applications filed rather quickly, all claiming priority back to that original application filed during the consulting agreement period. One complicating issue is that the patent applications list three other inventors who were (apparently) not subject to the agreements with Sleep Number.
Lawsuit: In 2020, Sleep Number sued Young & Hewitt along with UDP Labs seeking (1) declaration of “ownership of the inventions” as well as claims of (2) breach of contract and (3) conversion (by failing to disclose the information); (4) trade secret misappropriation; etc.
The lawsuit is ongoing, but in March 2021 Minnesota district court issued a preliminary injunction. Barring the defendants from prosecuting, amending, or abandoning any claims that claim priority to one of the early provisional applications. The order further includes a mechanism for avoiding abandonment:
Defendants shall not respond or reply to any Office Action. . . After the fifth month but prior to the six‐month deadline to respond … Defendants shall (1) pay any and all necessary fees for a three‐month extension and (2) file a continuation … that does not remove or limit any claims of priority nor alter or abandon any claims.
Sleep No. Corp. v. Young, 532 F. Supp. 3d 793 (D. Minn. 2021), aff’d, 33 F.4th 1012 (8th Cir. 2022). On appeal, the 8th Circuit has affirmed. Sleep No. Corp. v. Young, 33 F.4th 1012 (8th Cir. May 11, 2022). The appellate panel agreed that Sleep Number had a fair chance of prevailing since the contract “clearly and unambiguously places the inventions described in the patent applications within” its scope.
With regard to irreparable harm due to patent prosecution, the appellate panel agreed with the district court that the parties incentives are not aligned and, as such, UDP Labs “might respond to a future Office Action in a way that prejudices Sleep Number’s purported patent rights.”
The court noted that the potential for irreparable harm was demonstrated by “curiously timed” prosecution actions by UDP Labs to narrow certain claims and eliminate the priority claims. The district court explained:
In November 2020, after this suit was filed, UDP filed several “Request[s] for Corrected Filing Receipt” with the United States Patent and Trademark Office (“USPTO”) seeking to amend the ‘087, ‘367, ‘385, and ‘848 Applications to eliminate their claims of priority to the ‘613 Application, leaving only the claims of priority to the ‘623 Application. As a result of UDP’s amendment to the applications’ claims of priority, the ‘087, ‘367, ‘385, and ‘848 Applications now only claim priority to an application filed after Young and Hewitt terminated their Consulting Agreements. Additionally, by moving the priority date forward, the applications are now subject to several additional months’ worth of potentially invalidating prior art.
Sleep No. Corp. v. Young, 532 F. Supp. 3d 793, 798 (D. Minn. 2021).
The court considered the balance-of-harms. On UDP Labs side, it identified the only harm as “a mere delay in participation in the patent-prosecution process.” That statement omits consideration of patent term and patent term adjustment. On February 2, 2022, the USPTO issued a non-final rejection in one of the pending actions. The six-month date will come within the fortnight.
In May 2022, the district court also amended its preliminary injunction order to prohibit the defendants “from taking action-including selling, transferring, assigning, conveying, etc.-that would cause a change in ownership and/or interfere with Plaintiff’s asserted rights with respect to the Inventions-at-Issue.”
by Dennis Crouch
NetChoice, LLC v. Paxton, 21A720, 596 U.S. ___, 2022 WL 1743668 (U.S. May 31, 2022)
The most recent news in this case is that a 5-4 Supreme Court has sided against Texas–issuing an emergency order to reinstitute the preliminary injunction against enforcement of the Social Media Censorship law known as HB20. The case is now back before the 5th Circuit who review the preliminary injunction order in a non-emergency fashion.
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The State of Texas enacted HB20 to regulate large social media platforms (>50 million users). The law has a number of reporting requirements and also prohibits large social media platforms from censoring users based upon that user’s viewpoint viewpoint. Here, “censor” is broadly defined “to mean to block, ban, remove, deplatform, demonetize, de-boost, restrict, deny equal access or visibility to, or otherwise discriminate against expression.”
NetChoice is a lobbying organization controlled by large media companies, including Google, Facebook, TikTok, Amazon & Twitter. Those companies argue that HB20 impinges upon their Constitutionally protected free speech rights. In particular, the large social media platforms argue that the First Amendment protects their rights to operate as editors making publication decisions.
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The Supreme Court’s decision against Texas was issued without an opinion by a 5-judge majority of Chief Justice Roberts along with Justices Breyer, Sotomayor, Kavanaugh and Barrett. Four justices dissented, including Justice Kagan who did so without any opinion. The only opinion then came from Justice Alito’s dissent that was joined by Justices Thomas and Gorsuch. This sort of decision here is quite wonky — it is an emergency order to vacate the 5th Circuit’s order to temporarily stay the district court’s preliminary injunction. Here, I want to just focus a bit on Justice Alito’s First Amendment suggestions, which he notes have not been finalized at this preliminary and emergency stage.
Justice Alito’s opinion identifies the first amendment issues at stake here to be important and novel. “It is not at all obvious how our existing precedents, which predate the age of the internet, should apply to large social media companies.” Although editorial control is certainly within the First Amendment, the court has previously allowed requirements to be placed on broadcast and cable television and even a shopping center. See PruneYard Shopping Center v. Robins, 447 U. S. 74 (1980) and Turner Broadcasting System, Inc. v. FCC, 512 U. S. 622 (1994).
Next step in the case is for the 5th Circuit to decide whether to cancel the preliminary injunction. I expect that the court will at least narrow the injunction if not entirely eliminate it. At that point the case will move back down to the district court. If Texas does begin enforcement then there will likely be a number of cases moving up through both State and Federal courts.
The Patent Public Advisory Committee (PPAC) forms a board of advisors for the USPTO Director. Nine members appointed by the Secretary of Commerce for three-year terms. Although PPAC does not have formal power to take action, the USPTO Director is required to cooperate with the committee, provide it with access to information, and consider its advice. Congress has declared that the committee should individuals representing both small and large entities, including at least independent inventor. The committee should also include individuals “with substantial background and achievement in finance, management, labor relations, science, technology, and office automation.”
Dir. Vidal has announced that the USPTO is seeking nominations for three new PPAC members. Due by July 1, 2022. For more information, contact Cordelia Zecher, Acting Chief of Staff for Director Vidal at 571-272-8600.
My four issues for this year:
Submit your nominees here [USPTO Link Currently Not Working].
By Jason Rantanen
The Administrative Conference of the United States (ACUS) is an independent federal agency that’s charged with recommending improvements to administrative process and procedure. The position of Chairman is currently vacant, so the Vice-Chairman, Matthew Lee Wiener, is serving as Acting Chair. A key aspect of ACUS is soliciting input from the public.
ACUS is conducting a study on behalf of the USPTO to examine “issues associated with and options for designing a small claims patent court.” It recently published a request for public comments on the idea of a small claims patent court. From the notice in the Federal Register:
Since at least the late 1980s, concerns have been raised that the high cost of
patent litigation deters small- and medium-sized enterprises, including
those owned by traditionally underrepresented groups, from seeking
to enforce their patents. Policymakers, scholars, and organizations have studied
whether a small-claims procedure is needed for resolving patent disputes.
They have reached different conclusions and proposed different actions.
The Department of Commerce has also considered the possibility of a
small claims patent court. Most recently, in December 2012, the USPTO
issued a Federal Register notice requesting public comment on ‘‘whether
the United States should develop a small claims proceeding for patent
enforcement’’ (77 FR 74830 (Dec. 18, 2012)).
Given ongoing interest in the topic, USPTO has engaged ACUS to conduct
an independent survey and analysis of issues associated with and options to
consider in designing a small claims patent court. A report resulting from the
study will ultimately be submitted to Congress and will address, among other
topics, whether there is a need for a small claims patent court, the feasibility
and potential structure of such a court, and the relevant legal, policy, and
practical considerations in establishing a small claims patent court.
Although ACUS is seeking all comments on the topic, they’ve specifically pointed out these areas of interest:
1. Whether there is need for a small claims patent court;
2. The policy and practical considerations in establishing a small
claims patent court;
3. The institutional placement, structure, and internal organization of a
potential small claims patent court, including whether it should be
established within the Article III federal courts, as or within an Article I court,
or as an administrative tribunal;
4. The selection, appointment, management, and oversight of officials who preside over proceedings in a potential small claims patent court;
5. The subject-matter jurisdiction of a potential small claims patent court,
whether participation in such proceedings would be mandatory or
voluntary, and whether parties can remove cases to another administrative
tribunal or federal court;
6. The procedures and rules of practice for a potential small claims
patent court, including, as relevant, pleadings, discovery, and alternative
dispute resolution;
7. The remedies that a potential small claims patent court would be able to
provide;
8. The legal effect of decisions of a potential small claims patent court; and
9. Opportunities for administrative and/or judicial review of small claims
patent court decisions.
While I forsee lots of issues associated with a small claims patent court, I would imagine that the issue preclusion issues arising from an invalidity determination would be need especially carefully thought out, as well as whether patent owners could use this mechanism to bring large quantities of suits against consumers/end users who lack the resources to adequately defend themselves against a patent infringement claim.
Comments are due by July 5, 2022, and can be submitted at “info@acus.gov,” with “Small Claims Patent Court Comments” in the subject line of the message. Remember that submitted comments may be made publicly available.
Credit to Jeremy Graboyes for bringing this to my attention.
Spireon v. Procon Analytics (Supreme Court 2022)
Another new petition for certiorari has re-asked the American Axle questions:
[Petition] Spireon is the maker of LoJack and has millions of vehicle tracking systems in operation. Procon provides similar services as well.
Spireon’s U.S. Patent No. 10,089,598 is directed to a method of managing vehicle inventory at an auto dealership using a “location device” (such as a GPS receiver or other positioning system designed to be attached to the vehicle). Claim 1 includes the following steps:
In the case, Procon filed a declaratory judgment action. The district court dismissed the case on the pleadings — finding the claims directed to an abstract idea. The Federal Circuit then affirmed without opinion.
= = =
Off the Shelf: The patent specification indicated that “the location device may be an off-the-shelf tracking device for a vehicle, for example for use by an end user, for user-based insurance, for fleet management, for managing driver behavior, and/or the like.” The district court relied upon this statement to conclude that the location device did not include any inventive concept. In its petition, the patentee argues (I think correctly) that the “off-the-shelf” statement should be interpreted as contemplating the invented device being sold in retail stores, not that it could already be found on retail stores pre-invention.
= = =
1. A method for managing a vehicle inventory for a dealer implemented by a computer having a processor and a memory, the method comprising:
while a location device is not communicatively coupled with a vehicle, associating the location device with a dealer’s group of available location devices in the memory, wherein the dealer’s group of available location devices comprises location devices owned by the dealer that are not coupled with any vehicle;
communicatively coupling the location device with a vehicle;
in response to the location device becoming communicatively coupled with the vehicle, the location device transmitting a connection notice over a network, the connection notice comprising a vehicle identifier and a location device identifier;
receiving, by the computer, the connection notice from the location device over the network;
in response to the connection notice received by the computer, the processor: associating the location device identifier with the vehicle identifier in the memory; and disassociating the location device from the dealer’s group of available location devices in the memory; and
receiving, by the computer, current location information from the location device.
2. A method for managing a vehicle inventory according to claim 1, wherein the vehicle identifier comprises a VIN of the vehicle and the location device identifier comprises a location device serial number.
= = = =
Here is a fun chart showing the percentage of U.S. patents that cite to Wikipedia as prior art. I created this from data downloaded from the USPTO.
by Dennis Crouch
University of Strathclyde v. Clear-Vu Lighting LLC (Fed. Cir. 2021)
The Federal Circuit’s recent Strathclyde decision focuses on claim limitations that require the invention to be effective. One oddity of the decision is that the court (and the PTAB below) treat the limitation with full respect just like any other structural limitation.
Researchers at Strathclyde conducted a set of experiments and found that certain blue light (~405 nm wavelength) was effective at inactivating methicillin-resistant Staphylococcus aureus (MRSA) even at low intensity and without first applying a photosensitizing agent. The resulting method claim focuses on this discovery and includes one simple step — inactivating MRSA bacteria by exposing it to blue (400-420 nm) light and without using a photosensitizer. U.S. Patent No. 9,839,706.
It turns out that the prior art (Nitzan) discloses a series of experiments using the same blue light and testing its effectiveness at inactivating MRSA bacteria. The tests compared the response of untreated bacteria as compared with bacteria treated with a photosensitizing agent.
Nitzan’s prior art procedure was identical to that claimed by Strathclyde with only one key difference. Nitzan found that none of the MRSA bacteria were killed by the blue light without first applying a photosensitizing agent. The patentee (Strathclyde) later used the same frequency of blue light without a photosensitizing agent, and this time it worked to inactivate MRSA.
Thus, the only difference between Strathclyde’s claimed invention and the prior art is the requirement that the invention actually work to “inactivate” the bacteria.
1. A method for disinfecting … by inactivating … pathogenic Gram-positive bacteria … comprising exposing the … bacteria to visible light without using a photosensitizer … and wherein a portion of the visible light that inactivates the … bacteria consists of wavelengths in the range 400-420 nm. . .
Claim 1 of the ‘706 patent. Traditionally, a functional “resulting” or “whereby” clause is only given patentable weight if it provides some structure or acts that are used to define the invention itself. For instance, in drug treatment cases, “effective amount” limitations can be used to define the amount of drug given to the patient. Here, however, the “inactivating” limitation does not appear to change any particular structure or acts and so, in my view, does not add patentable weight.
The invention here seems quite important–treating MRSA using otherwise harmless light and without potentially toxic chemical pre-treatment. And, Strathclyde should be able to patent the advances that it introduced that actually contributed to the success. I suspect that Strathclyde did do something different than Nitzan in terms of light intensity or frequency of treatment, or some other conditions. But, the claims here do not require a person of skill in the art to do anything different than Nitzan except achieve a different outcome. Clear-Vu did not make these patentable weight arguments to the Federal Circuit and the Federal Circuit did not raise them sua sponte.
This case was before the PTAB via IPR. The PTAB originally sided with the patent challenge Clear-Vu. The PTAB concluded that Nitzan taught all of the elements of the invention except for actual success at killing MRSA. However, another reference Ashkenazi suggested ways that someone of skill in the art would find obvious in terms of increasing light intensity to kill some of the bacteria. Thus, the PTAB found the claims obvious.
On appeal, the Federal Circuit has reversed and reinstated the patent. The court noted the complete absence of any prior art indicating that blue light alone would kill MRSA without a chemical pre-treatment to sensitize the bacteria. Further, there was evidence that such an approach would fail. Still Strathclyde succeeded and, according to the Federal Circuit, deserve its patent.
On this record, we conclude that no reasonable fact finder could have found that the combination of Ashkenazi and Nitzan discloses inactivating one or more Gram-positive bacteria without using a photosensitizer. The Board’s finding to the contrary is not supported by substantial evidence.
Slip Op.
Prior art treated MRSA with blue light, but it didn't work to kill the bacteria.
Inventor treated MRSA with blue light and it worked to kill the bacteria.
Can Inventor patent "effectively treating MRSA with blue light"? (Claims cover prior art except require success).
— Dennis Crouch (@patentlyo) November 5, 2021
Mobility WorkX v. Unified Patents (Fed. Cir. 2021)
In a 2-1 decision, the Federal Circuit has rejected Mobility’s argument that the PTAB Judges have an improper financial interest in instituting AIA proceedings. The baseline here is that the patentee presented evidence that Board members who institute more AIA proceedings receive better performance reviews and more bonus money. A higher institution rate also ensures job stability for administrative patent judges. The argument then is that those incentives to institute constitute a due process violation under cases such as Tumey v. Ohio, 273 U.S. 510 (1927) and Ward v. Monroeville, 409 U.S. 57, 60 (1972).
To be clear, none of the USPTO rules or practices provide expressly give more money or quota-points for initiating IPR. However, the only way to receive points for judging an IPR is to first institute the IPR. And, most of the quota-points are accumulated post-institution. Likewise, the PTO receives substantial fees for institution.
The majority entertained the arguments, but ultimately rejected them after concluding that any financial interest was too remote.
Amicus curiae US Inventor, Inc. presents a statistical study purportedly showing that there are more meritorious institution decisions in September (at the end of the APJ performance review year) than in October (at the beginning of the performance review evaluation period). This hardly establishes that APJs are instituting AIA proceedings to earn decisional units.
Slip Op. at Note 7.
The majority decision was authored by Judge Dyk and joined by Judge Schall.
Judge Newman wrote in dissent arguing that the status quo creates the potential appearance of bias and that it is the Federal Circuit’s responsibility to resolve the concerns.
A new president makes a lot of appointments. Although the Patent Office Director is an important position, it is still a fair way down the list in terms of urgency. One reason–that most PTO management decisions are not highly political (especially in the R vs D sense). Unlike for some agencies, President Biden has not vowed to reverse course on any particular USPTO policy. We also have a long tradition of career PTO employees stepping-up and capably leading the agency as Drew Hirshfeld is doing now. But, it is time for a nomination, and I expect that we’ll see one within the next month or so.
Looking back, President Trump nominated Andrei Iancu toward the end of August; President Obama nominated his first Director David Kappos in June; and President Bush nominated his first Director James Rogan in September.
Meanwhile, the USPTO is holding its PPAC meeting on Thursday, Aug 5, 2021. You can find the agenda and webex link here: https://www.uspto.gov/about-us/events/attend-patent-public-advisory-committee-quarterly-meeting-8
