Genius, Gratitude, and the Patent System

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I want to wish everyone a happy Thanksgiving 2024 from Columbia, Missouri. While I write about inventors and inventions daily, I rarely pause to express gratitude for their profound contributions to our lives. Though patent law often dwells on technical minutiae and legal boundaries, today I want to recognize the remarkable human elements that drive innovation forward.  Thank you!

I extend special thanks to the innovators who purposefully work to transform our society in a positive direction; to those who bring forth new knowledge and understanding from the ether; and to those who dedicate their creative energies to solving humanity’s most pressing challenges. Their work transcends mere technological advancement to serve higher purposes. The patent system’s genius lies in how it channels individual creativity toward collective benefit—promoting the progress of science and useful arts.

I have found inspiration in mythologist Michael Meade’s perspective on genius. Rather than viewing it as the exclusive domain of celebrated inventors, Meade, drawing from ancient philosophy, suggests that each person carries within them an innate genius—a unique gift waiting to unfold. Finding and expressing one’s genius becomes an act of self-discovery, akin to finding one’s dharma or true calling. When uncovered, this genius enables individuals to contribute meaningfully to society. Yet in our current era, many find themselves constrained by perceived limitations and inner doubts. As we gather with family and friends this holiday, I encourage each of us to reflect on how we might better harness our own innovative capacities while creating space for others to discover and express their own genius.

Happy Thanksgiving!

Dennis Crouch

Howard Lutnick and the Patent System

Patent

by Dennis Crouch

The USPTO's position within the Department of Commerce means that Commerce Secretary nominees warrant careful attention from the patent community. President-elect Trump's nominee for Secretary of Commerce, Howard Lutnick, brings particularly relevant experience to the role, shaped by extensive involvement with the U.S. patent system both as a prolific inventor and as CEO of Cantor Fitzgerald, a company that has operated on multiple sides of patent disputes.

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The Federal Circuit’s Oracle: When Silence Speaks Louder Than Words

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by Dennis Crouch

The Supreme Court currently has two cases that each provide opportunity to address a longstanding problem with the Federal Circuit’s practice of issuing no-opinion summary affirmances in patent cases. In ParkerVision v. TCL Industries Holdings Co., No. 24-518, and Island Intellectual Property LLC v. TD Ameritrade, Inc., No. 24-461, the petitioners challenge the Federal Circuit’s use of Rule 36 judgments – where the court simply affirms the lower tribunal’s decision without any written opinion. Both petitions are well drafted by expert counsel and both have recently received strong amicus support.

The cases present the issue from different angles. ParkerVision focuses on appeals from the Patent Trial and Appeal Board (PTAB), arguing that the Federal Circuit’s use of Rule 36 violates 35 U.S.C. § 144’s explicit requirement that the court “shall issue . . . its mandate and opinion” when deciding appeals from the Patent Office. The case arose after the Federal Circuit summarily affirmed PTAB decisions invalidating ParkerVision’s wireless communication technology patents. Island IP, on the other hand, challenges a Rule 36 affirmance of a district court’s summary judgment invalidating its patent under 35 U.S.C. § 101. Island IP argues that the one-word affirmance masked the district court’s failure to properly apply summary judgment standards to disputed factual issues underlying the eligibility determination.

Both cases highlight how the Federal Circuit’s frequent use of Rule 36 undermines transparency and accountability in patent law. In ParkerVision’s case, the practice allows the court to sidestep its statutory duty to oversee administrative patent judges through reasoned decision-making. For Island IP, the summary affirmance obscures whether the court properly reviewed the district court’s handling of disputed factual evidence in the summary judgment context.

The timing of these petitions is particularly significant, as both cases have recently received substantial amicus support highlighting distinct but complementary concerns about the Federal Circuit’s Rule 36 practice. In ParkerVision, two friend-of-the-court briefs filed on November 20, 2024, emphasize national security implications and statutory interpretation. Meanwhile, in Island IP, three briefs amici were filed on November 22, 2024, along with a responsive brief on opposition. These parallel sets of briefs provide the Court with robust arguments for why intervention is needed to address what many view as a troubling lack of transparency in patent appeals. (more…)

Supreme Court Requests Response in Edwards Safe Harbor Case

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Dennis Crouch

Following my recent post examining the Edwards v. Meril safe harbor challenge, the Supreme Court has requested a response from Meril after initially receiving only a waiver. The Court's November 20, 2024 request suggests that at least one Justice sees potential merit in Edwards' challenge to the Federal Circuit's broad interpretation of Section 271(e)(1)'s safe harbor provision.  It's important to note that a request for response does not guarantee that the Court will grant the petition. In fact, the case still has a <50% odds of being granted certiorari.

The case has garnered my attention for its potential to reshape how courts interpret the "solely for uses reasonably related" language in Section 271(e)(1). The dispute arose from what might seem like a minor incident - two transcatheter heart valve systems that were brought to San Francisco from abroad for a medical conference but, as the Federal Circuit noted, ended up spending their week-long U.S. visit sitting unused in a hotel closet and storage room before heading to Europe.  Still importation is a form of infringement.

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The Art of Attribution and Three Unlikely Theories of AI Authorship

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by Tim Knight and Dennis Crouch.

In 2018, Dr. Stephen Thaler, creator of the ‘Creativity Machine’ AI system, sought copyright registration for an AI-generated image, listing the Creativity Machine as author. The Copyright Office rejected the application, citing the necessity of a human author under copyright law. After two failed requests for reconsideration, Thaler sued to compel registration. United States District Judge Beryl Howell ruled against Dr. Thaler. The case is now pending before the D.C. Circuit Court of Appeal, with the parties recently presenting oral arguments before Judge Patricia Millett, Judge Judith Rogers, and former patent litigator Judge Robert Wilkins. The graphic work itself is undeniably original and fixed in tangible form – key traditional elements for copyright protection. 17 U.S.C. 102 (“Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression”).  And unlike naturally occurring beauty, the work exists only because of human creative endeavors. The rub though is that Dr. Thaler’s human creativity was directed toward developing the AI system, a major step removed from originating the artwork itself.

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Senate Committee Advances PREVAIL Act

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by Dennis Crouch

In a tight 11-10 vote, the Senate Judiciary Committee approved the PREVAIL Act (Promoting and Respecting Economically Vital American Innovation Leadership Act) that would make substantial changes to Patent Trial and Appeal Board (PTAB) proceedings. The bill addresses perceived anti-patentee imbalances in the current inter partes review (IPR) system. However, a number of Senators raised concerns and were seeking assurances about a negative impact on generic drug prices. The Bill as adopted by the Judiciary Committee included a friendly amendment by the Bill's co-sponsor Sen. Coons that attempted to address some of the drug-pricing concerns by expanding the scope of who can file IPR/PGR petitions. In particular, the original bill allowed only those sued or accused of infringement to challenge patents. As discussed below, the new approach is designed to enable petitions by generic-drug makers and non-profit patient groups. The major changes in the bill include raising the burden of proof to "clear and convincing evidence," implementing strict timing requirements for PTAB decisions, requiring greater independence of PTAB judges, establishing a "single forum" rule preventing parallel validity challenges, and strengthening estoppel provisions against repeat challenges.

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Paws and Effect: Federal Circuit Rejects Indirect Causation Theory in Furbo Infringement Case

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by Dennis Crouch

The Federal Circuit has affirmed summary judgment of non-infringement in DoggyPhone LLC v. Tomofun LLC, agreeing to narrowly construe the claim as requiring direct rather than indirect causation. The case involves U.S. Patent 9,723,813, which covers an "Internet Canine Communication System" that allows pet owners to remotely interact with and deliver treats to their dogs. DoggyPhone accused Tomofun's popular Furbo device of infringement, but both the district court and Federal Circuit found the accused product operates differently than what was claimed. Writing for the unanimous panel, Judge Hughes focused particularly on one key limitation requiring that the system "begins transmission to the remote client device of at least one of the audio or video of the pet in response to input from the pet."

At the heart of the dispute is a basic infringement question - whether Furbo's notification system satisfied the "begins transmission" limitation. When a dog barks, the Furbo sends a text notification to the owner's phone, but critically, no audio or video transmission begins until the owner actively clicks on that notification.  The Federal Circuit agreed with the district court that this setup does not meet the claim limitation because "transmission begins not in response to the pet's activity, but in response to the user's decision to click on the notification—making transmission responsive to the user's input, not the pet's."

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USPTO Implements Substantial Fee Increases for 2025: Revenue Needs and Behavioral Incentives

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by Dennis Crouch

The USPTO has issued the final rules that include significant fee increases for patent applicants (and patent challengers), all set to take effect January 19, 2025 -- the final day of the Biden Administration. While some changes appear purely driven by inflation and cost recovery, others seem designed also to modify applicant behavior in controversial ways.

Because of the timing, I believe there is some chance that parties will challenge aspects of the fee increase in court -- particularly the increased fees for late-filed continuation applications.  In my opinion, the key purpose of such an action would be to postpone implementation of the fees in order to allow a Trump appointed director to reconsider their application.

A key aspect of the America Invents Act of 2011 (AIA) provided the USPTO with fee setting authority.  Section 10 of the AIA. Every USPTO patent fee change since then has stated that the AIA fee setting authority "includes flexibility to set individual fees in a way that furthers key policy considerations."  (Citing Section 10).  If it exists, that flexibility is purely implicit.  The law itself states: "Fees may be set or adjusted . . . only to recover the aggregate estimated costs to the Office for processing, activities, services, and materials relating to patents."

Barring delayed implementation, applicants (and patent challengers) will save some dollars by ensuring that their filings beat the January 19, 2025 deadline.

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The NHK-Fintiv Saga Continues: USPTO and Amicus Defend Discretionary Denials

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by Dennis Crouch

The Federal Circuit is poised to address a significant administrative law question in Apple v. Vidal regarding whether the USPTO's NHK-Fintiv framework for discretionary IPR denials required notice-and-comment rulemaking under the APA. The case comes after the Federal Circuit's 2023 decision finding the procedural challenge reviewable while affirming dismissal of substantive challenges to the framework. Apple Inc. v. Vidal, 63 F.4th 1 (Fed. Cir. 2023).  The case takes on added significance given Director Vidal's recent resignation announcement. Her likely Trump appointee replacement may return to former Director Iancu's more aggressive approach to discretionary denials.

Under the AIA, the USPTO director has discretion to deny IPR petitions, even in cases where the case otherwise meets the statutory requirements for an inter partes review.  The Director has delegated authority to the PTAB to decide these issues, including discretionary denials. The NHK-Fintiv framework emerged through two precedential PTAB decisions that guide discretionary denials of IPR petitions when parallel district court litigation is pending. In NHK Spring Co. v. Intri-Plex Technologies, Inc., IPR2018-00752, Paper 8 (P.T.A.B. Sept. 12, 2018), the Board first articulated that the advanced state of parallel district court proceedings could justify denying institution. Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (P.T.A.B. Mar. 20, 2020) then established six factors for evaluating such situations: (1) whether a court stay is likely; (2) proximity of the court's trial date to the Board's projected statutory deadline; (3) investment in the parallel proceeding; (4) overlap between issues raised in the petition and in the parallel proceeding; (5) whether the petitioner and the defendant in the parallel proceeding are the same party; and (6) other circumstances and merits. Director Vidal later modified (and somewhat weakened) this framework through guidance emphasizing merits-based considerations and limiting denials based solely on trial scheduling. See Interim Procedure for Discretionary Denials in AIA Post-Grant Proceedings with Parallel District Court Litigation (June 21, 2022).  However, this guidance was issued without notice-and-comment rulemaking.

Apple v. Vidal: APA Compliance in IPR Discretionary Denial Rules

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Safe Harbor at a Crossroads: Examining Regulatory Development Shield of 271(e)(1) in Edwards v. Meril

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by Dennis Crouch

The Federal Circuit's divided ruling in Edwards Lifesciences Corp. v. Meril Life Sciences is now before the U.S. Supreme Court -- focusing on the scope of the Hatch-Waxman Act's safe harbor provision. At issue is whether 35 U.S.C. § 271(e)(1)'s regulatory development shield extends to activities conducted for both regulatory and commercial purposes. The statutory text excuses certain acts that would otherwise be considered patent infringement if conducted "solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products." While Congress intended to ensure competitors could efficiently prepare for post-patent market entry through necessary regulatory compliance work, an expansive reading arguably erodes patent rights by immunizing activities far beyond pure regulatory preparation. The safe harbor thus sits with the uncomfortable tension of promoting timely competition and protecting innovation incentives.

The case is currently proceeding through the Supreme Court's certiorari process, with Edwards having filed its petition in October 2024.  As is common in Supreme Court practice, respondent Meril waived its right to respond to the petition, and the case has been distributed for the Justices' conference on December 6, 2024, where they will consider whether to grant review.  This is a case where I expect

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The Team-Based Reality of Modern Innovation: Average Patent Now Lists More Than Three Inventors

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by Dennis Crouch

New data from the USPTO shows that the amazing transformation in patent inventorship continues: the average number of inventors per utility patent has reached 3.2 in 2024, nearly double the 1.7 inventors per patent seen in 1976. This steady rise in team-based inventing reflects fundamental changes in how innovation occurs and how the patent system operates.

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Patent Claim Count

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The updated patent claim count data through 2024 reveals a continuing trend toward standardization in claim counts, with both the median and mean hovering around 16-17 claims per patent. The perhaps the most striking feature of this longitudinal data is the dramatic reduction in variance – from a standard deviation of about 15 claims in the mid-2000s to just about 7 claims today. This compression suggests that patent drafting has become increasingly standardized, likely driven by USPTO fee structures that discourage exceeding 20 claims and the professionalization of patent prosecution practice that pushes up on the claim count. Particularly notable is the steady rise in the median claim count from 7 claims in the 1970s-80s to today’s 17 claims, while the mean has shown more modest growth over the past decade — and a drop from the highs in the early 2000s where many patentees were seeking jumbo patents with hundreds of claims.

Read more here:

Central Tendency in US Patent Claim Counts

 

 

USPTO Timeliness Slipping: Patent Term Adjustment Data Shows Growing Examination Delays

Patent

by Dennis Crouch

The USPTO has two traditional functions: (1) quality examination to ensure applications satisfy the demanding statutory requirements of patentability; and (2) timely and efficient processing of those applications. Recent data suggests the Office is struggling with the second of these mandates, as reflected in a sharp uptick in Patent Term Adjustment (PTA) awards. [Charts below]

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The Rise of ‘Non-Transitory’ Claims: How a Single Word Became Key to Software Patent Eligibility

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by Dennis Crouch

Recent patent prosecution data reveals a striking trend: the percentage of utility patents containing "non-transitory" software claims continued to increase -- from virtually zero 15 years ago to nearly 22% in 2024. This dramatic rise illustrates both the central role of software in our patent system and the peculiar formalistic requirements that have emerged around software patent eligibility under 35 U.S.C. § 101.

The story behind this trend begins with

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Raw Story v. OpenAI: The Constitutional Hurdle That Tripped Up Raw Story’s AI Lawsuit

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by Dennis Crouch

In my view, some of the weakest anti-AI copyright claims have fallen under 17 U.S.C. § 1202(b)(1) – an element of the Digital Millennium Copyright Act (DMCA) that prohibits intentional removal or alteration of copyright management information (CMI).  The statute broadly defines CMI to include not just copyright notices, but also titles, author information, owner information, terms of use, and other identifying information conveyed with copies of works.  Any violation also requires proof that the CMI-remover had “reasonable grounds to know” that such removal would enable or conceal copyright infringement.

In Raw Story v. OpenAI, the online news organization alleged that OpenAI violated § 1202(b)(1) by removing copyright management information (CMI) from thousands of their news articles when incorporating them into training datasets for ChatGPT. Notably, the plaintiffs did not bring direct copyright infringement claims, instead focusing solely on alleged CMI removal. The articles in question were published online with author, title, and copyright information, which plaintiffs claimed OpenAI stripped away when creating its training sets. While OpenAI has not published the contents of these training sets, plaintiffs relied on “approximations” suggesting their articles appeared without CMI. They argued this evidenced intentional CMI removal, reasoning that if ChatGPT had been trained on articles with intact CMI, it would output such information when generating responses.

The most recent news in the case is that S.D.N.Y. Judge Colleen McMahon has dismissed the claims brought by Raw Story (and AlterNet Media) — holding that the plaintiffs lacked Article III standing to pursue the case.

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Federal Circuit Summarily Affirms Invalidity of Geolocation Patent Under Section 101

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by Dennis Crouch

Sitting by designation in Delaware District Court, Federal Circuit Senior Judge William Bryson found claims 1-10 of GeoComply's U.S. Patent No. 9,413,805 ineligible under 35 U.S.C. § 101.  On appeal, the Federal Circuit has now affirmed that judgment -- albeit in a Rule 36 summary affirmance. GeoComply Sols. Inc. v. Xpoint Servs. LLC, No. 23-1578 (Fed. Cir. Nov. 13, 2024). The inventor, Anna Sainsbury, co-founded GeoComply in 2011 and has served as CEO for most of the past 13 years.  GeoComply processes billions of transactions annually - mostly for the online gaming (casino) industry.  The successful defendant in this case - Xpoint - is a key competitor.

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Damages Experts Analysis on the Front Burner: How Much Analysis is Enough for the Hypothetical Negotiation?

Patent

by Dennis Crouch

The Federal Circuit's pending en banc review in EcoFactor v. Google is heating up, to address fundamental questions about the reliability standards for expert damages testimony in patent cases. The case highlights growing tensions between robust judicial gatekeeping under Federal Rule of Evidence 702 and the Constitutional right to a jury determination of all facts at issue.  At base, Google is seeking to create additional  procedural hurdles and appeal off-ramps that help them avoid large damage awards.

In its en banc order, the court directed the parties to brief whether the district court properly applied Rule 702 and Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993) in admitting testimony from EcoFactor's damages expert deriving a per-unit royalty rate from portfolio license agreements. The case presents a critical opportunity for the Federal Circuit to clarify when damages theories "cross the line" from permissible approximation to unreliable speculation.

Google has now filed its opening brief, arguing that EcoFactor's damages testimony failed to meet Rule 702's reliability standards in two key respects: its use of portfolio license "whereas" clauses that contradicted the operative terms of the agreements and its unsupported assumption that various "pressures" on the royalty rate would offset each other. The brief emphasizes that these methodological flaws rendered Kennedy's opinions purely speculative and therefore inadmissible under both Daubert and the recently amended FRE Rule 702.

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USPTO Director Vidal Announces December Departure

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by Dennis Crouch

With Donald Trump’s reelection, leaders within the Biden administration will be stepping down over the next two months. USPTO Director Kathi Vidal has announced her departure from the agency, effective in December 2024. Deputy Director Derrick Brent will serve as Acting Director during the transition period.  Vidal’s announcement indicates that Brent will stay in the position until Trump’s replacement is confirmed.  Of course, that position serves at the pleasure of the president and so could change at any point.

Brent’s offer to stay-on after January 20, 2025 fits with President Biden’s resent statement that the American people deserve a peaceful and orderly transition.  In her  resignation announcement letter to colleagues at the USPTO, Vidal asked that those who remain “stand ready to work with the incoming administration’s team.”  This approach is exactly what is needed and fits the USPTO’s tradition of maintaining operational continuity through political transitions. (more…)

Supreme Court Patent Cases – November 2024

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by Dennis Crouch

Patent law cases continue to be brought to the Supreme Court's attention, even though the court has not granted certiorari in any patent case for some time.  Twelve potential cases have documents on file with the court. Currently, eight certiorari petitions are briefed and pending before the Court, while four additional petitions are anticipated in the coming months based on recently-filed extension requests.

As has been true in recent years, patent eligibility petitions occupy a substantial portion of the docket, mostly focusing on software patents. Two Hatch-Waxman cases are pending as is a case focusing on the on sale bar post-AIA and post-Helsinn.  In addition, two cases focus on the Federal Circuit's ongoing and unjustified use of summary affirmances for a large portion of its docket.

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IP Rights and AI Regulation: Finding the Right Balance

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by Dennis Crouch

I’m excited to share a new article I recently published examining the relationship between intellectual property rights and artificial intelligence regulation, recently published in Volume 89, Issue 3 of the Missouri Law Review. Before diving into the substance, I want to express my sincere gratitude to the Missouri Law Review editors and staff, not only for their exceptional editorial work on this article but also for their tremendous efforts in organizing our March 2024 symposium that I co-organized on “AI and Society: Government, Policy, and the Law.” The symposium brought together dozens of leading scholars to explore the pressing challenges of AI governance, and those discussions helped shape many of the ideas presented in the piece.

The article builds on foundational work of scholars, including Amanda Levendowski, who has explored how copyright law can address AI bias, as well as Mark Lemley and Bryan Casey, whose research on “fair learning” has shaped our understanding of AI training and copyright.  My article argues that we should be cautious about viewing IP as a primary regulatory tool. (more…)