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Patently-O Bits and Bytes by Juvan Bonni

Bits and Bytes, Patent

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Patents and Drug Availability

Patent

by Dennis Crouch

Amarin Pharma, Inc. v. Hikma Pharmaceuticals USA Inc., Docket No. 21-02024 (Fed. Cir. 2021) is up on appeal again.  The district court found Amarin’s asserted patent claims obvious and the Federal Circuit affirmed that holding in a R.36 affirmance without opinion.

Following the Federal Circuit’s decision, an ad-hoc group of doctors, patients, and Amarin stock holders (collectively known as EPA Drug Initiative II) moved to intervene in the lawsuit and asked the court to vacate its judgment based upon “multiple fatal statistical errors in analyzing and interpreting the prior art.”  The group argues that

The invalidation of Amarin’s patents could potentially cost hundreds of thousands of American lives, as Amarin has been deprived of  the incentive to promote Vascepa in the U.S., and Defendants can neither sell generic Vascepa to a large segment of the patient population, nor promote generic Vascepa, as those activities would violate Amarin’s other patents.

[EPADI Motino to Intervene] [EPADI Motino to Vacate].  The district court denied the motions and those issues are now on appeal before the Federal Circuit.  I expect EPADI to lose its appeal, but it raises an ongoing interesting question about the role of patents in the availability and pricing of drugs and biologics.  The intervenors are calling for patent rights in order to better ensure that the drug is available.

One reason that I expect EPADI to lose is that it had requested permission to file an amicus brief in the original appeal as had the Biotechnology Innovation Organization (BIO). The Federal Circuit denied EPADI’s request but permitted BIO’s.

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One idea here goes back to the days of Edmund Kitch with his prospect theory of patenting as a special form of the tragedy-of-the-commons. Edmund Kitch, “The Nature and Function of the Patent System,” Journal of Law and Economics, 1977, 20, pp. 265.

Patents are Political

Patent

By Dennis Crouch

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.”

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AIA Patents Update

Patent

The chart above should be no surprise. Most pending applications before the PTO are now post-AIA patent applications. These are applications that were filed on or after March 16, 2013 and don’t claim priority to any prior patent filing. Note here that the PTO does not appear to enter the final AIA-status for some new applications filed with missing parts and so the numbers for the recently published cases may shift somewhat. The bulk of U.S. patents issue within four years of their priority filing date. However, there is a fairly long-tail. The patent with the longest pedigree for 2020 (thus far) is US10539396 for a dual-mode seeking missile (using both IR and RF sensors to direct a missile. The patent application was kept confidential on Gov’t order from 1976 – 2018.

Validity Goulash: Functional Claim Language, Patent Eligibility, and Pick-up Truck Drive Shafts

Patent

by Dennis Crouch

In American Axle, the Federal Circuit found the patented method of manufacturing drifeshafts to be patent ineligible.  U.S. Patent No. 7,774,911. The claims “tuned” the shafts in order to reduce multiple forms of vibrational resonance, and the court held that the claims were improperly directed to “Hooke’s law, and possibly other natural laws.” The majority opinion was written by Judge Dyk and joined by Judge Taranto; while Judge Moore wrote a vigorous dissent identifying the majority opinion as “validity goulash” (and not the good tasting kind).

The majority worries about result-oriented claiming; I am worried about result-oriented judicial action.

Judge Moore writing in Dissent.

Hey Mechanical Engineers: Your Patents are Also Ineligible

American Axle has now petitioned for en banc review and has the support of six amici briefs.  Judge Moore largely wrote the brief here via her dissenting opinion, but the patentee does a good job of explaining (1) the “realness” of its invention and (2) how the accused infringer copied their approach.

  • AAM Rehearing Petition.
  • Amicus brief of 12 law professors. (The court’s opinion here does not fit with either Morse (1853) or the Bell patent case (1888).)
  • BIO amicus brief. (“Nothing in the claims or specification of the ‘911 patent recites or implies that an application of Hooke’s law to a liner is necessary or sufficient to tune the liner in accordance with the claim.”)
  • IPO amicus brief. (“The decision may open the floodgates to section 101 challenges to mechanical inventions, which have not been the subject of recent eligibility decisions of this Court or the Supreme Court.”)
  • U.S. Startups & Inventors for Jobs. (“From the standpoint of many entrepreneurs, inventors and investors that comprise the Invention Community, the U.S. Patent System appears to be on life support.”)
  • Michel amicus brief. (Former Chief Judge Michel argues that the decision here ignores core rules of summary judgment – disputed issues of material fact.)
  • Doerre amicus brief. (Patent attorney Jeremy C. Doerre argues (inter alia) that the law-of-nature exception does not present a fruitful approach to eliminating broadly drafted claims — the better approaches rely upon written description.)

The petition itself raises three questions:

  1. Must the court identify the “precise ineligible concept the claims are allegedly directed to.”
  2. Must the court consider disputed facts regarding the invention when determining whether the claims are directed toward an inventive concept?
  3. Should the court interpret Section 101 narrowly in order to avoid “swallow the enablement [and written description] requirements of Section 112?”

Truthfully, these questions are rather weak because they they have all been addressed by most members of the court in some form. The strongest aspects of AAM’s arguments are the facts of the case.

With the ’911 patent, AAM invented novel and unconventional methods of manufacturing improved driveshafts that include “liners”—low cost, hollow tubes made of a fibrous material (such as cardboard).

Before the ’911 patent, it had only been well understood to use liners in driveshafts to attenuate a single type of vibration called “shell mode” vibration. Neapco admitted that prior art liners had only attenuated shell mode vibration, and “presented no argument or evidence to contradict that” fact on appeal. As explained in the ’911 patent, prior art liners were not suitable (let alone well understood) to attenuate another type of vibration called “bending mode” vibration. And liners certainly were not well understood to attenuate both bending and shell mode vibration.

AAM solved these problems. It was the first to discover that liners could be “tuned” to attenuate bending mode vibration, or the combination of both bending and shell mode vibration. The claims of the ’911 patent recite these solutions.

Petition for rehearing.

The difficulty for AAM is that the point-of-novelty for the method claims is specified as a result rather than as a process:

tuning at least one liner to attenuate at least two types of vibration transmitted through the shaft member; and positioning the at least one liner within the shaft member such that the at least one liner is configured to damp shell mode vibrations in the shaft member by an amount that is greater than or equal to about 2%, and the at least one liner is also configured to damp bending mode vibrations in the shaft member,

‘911 patent Claim 1. The real question here is whether these functional claim limitations should be seen as too abstract.  Or, instead, are they effective at providing a clear and limited scope once coupled with the specification disclosure and the knowledge of a skilled artisan?

 

Hikma Case Set for Supreme Court Consideration

Patent

by Dennis Crouch

Hikma Pharmaceuticals USA Inc. v. Vanda Pharmaceuticals Inc. (Supreme Court 2019)

Briefing is now complete in this important eligibility case pending before the Supreme Court. Hikma’s petition presents the following question:

Whether patents that claim a method of medically treating a patient automatically satisfy Section 101 of the Patent Act, even if they apply a natural law using only routine and conventional steps

Hickma’s question clearly mischaracterizes the Federal Circuit opinion – a common approach these days.  In its opposition brief, the patentee Vanda calls-out the intentional error:

Hikma’s Petition wrongly asserts that the Federal Circuit declared all method-of-treatment claims to be “automatically” patent-eligible under Section 101. . . [Hickma’s] Question is not presented by the decision
below or any other decision.

Although Hickma does a good job of nit-picking, the underlying reality is important — the Federal Circuit’s decision in Vanda is not easily reconciled with its Ariosa decision or the Supreme Court’s decision in Mayo v. Prometheus.  And, the Federal Circuit and USPTO have effectively green-lighted patents on methods of treatment that would be ineligible if recharacterized as methods of diagnosis or creating a treatment plan.

The amicus briefs in this case all focus on the same issue — arguing that the Federal Circuit’s Vanda decision conflicts with Mayo and Flook. The Law Prof brief explains:  “The Federal Circuit’s decision effectively overturns this court’s precedents, thwarts the proper development of patent eligibility law, and will lead to countless improperly issued patents.”  The Law Professor Brief was filed by Stanford’s IP Clinic – although neither Mark Lemley nor Lisa Larrimore Ouellette signed-on.  Professors Josh Sarnoff (DePaul) and Katherine Strandburg (NYU) substantially drafted the brief.  Top pharma-patent litigator Douglass Hochstetler (KelleyDrye) filed the AAM brief.

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In a previous post, I explained that Vanda’s drug dosage claims that have two basic steps:

  1. Determining whether a patient is likely a poor metabolizer of the drug iloperidone based upon DNA analysis (i.e., determine if the patient has has the CYP2D6 genotype)
  2. Administering iloperidone at a lower dose to predicted poor metabolizers in order to reduce the risk of “QTc prolongation” for poor metabolizers.

In the case, iloperidone was already known as a drug treatment and it was also known that some folks were poor metabolizers in a way that created the particular health risk and that a lower dosage is still effective for poor metabolizers (since the drug stays in the body longer).  A remaining problem solved by the inventors was how to predict who should get the low dosage.  The core discovery here is that a genetic difference substantially explains the risk.  The inventors made that important discovery and then implemented it with straightforward administration steps.  The question then is whether this approach is patent eligible.

Patent Term Adjustment: Erroneous and later Withdrawn Restriction Requirement Still Counts as a Section 132 Notice

Patent,

 

By Dennis Crouch

Pfizer v. Lee (Fed. Cir. 2016) [PfizerLee Opinion]

In this case, the Federal Circuit has refused Wyeth’s (now Pfizer’s) plea for more patent-term-adjustment (PTA).[1]

The basic issue is involves the “A-Delay” category of patent term adjustment that provides for term adjustment when the PTO fails to issue its first office action within fourteen months from the application filing date.

Here, the patent examiner’s first qualifying action was a restriction requirement mailed in August 2005.  However, after a discussion with Wyeth’s attorneys, in February 2006 the examiner withdrew the restriction requirement and issued a corrected version.

The question then is whether the original restriction requirement qualifies to cut-off the A-Delay even though it was later withdrawn as insufficient.

The term adjustment statute indicates that A-Delay will stop accruing once the USPTO  “provide[s] at least one of the notifications under Section 132.”[2]  Section 132(a) in turn provides:

Whenever, on examination, any claim for a patent is rejected, or any objection or requirement made, the Director shall notify the applicant thereof, stating the reasons for such rejection, or objection or requirement, together with such information and references as may be useful in judging of the propriety of continuing the prosecution of his application.

In prior cases, the court has offered some guidance as to when Section 132 is met.  In particular, the court has held that the notice does not have to present a winning argument or overwhelming factual evidence.  Rather, the rule is simply that the notice must be sufficient to permit the applicant to recognize the grounds for rejection/objection.[3]  In Chester v. Miller, the Federal Circuit wrote that Section 132 simply requires that the applicant “at least be informed of the broad statutory basis for [the rejection of] his claims, so that he may determine what the issues are on which he can or should produce evidence.”

Coming back to the facts of this case: The failure of the original restriction requirement divided the 100+ claims into twenty one distinct groups, but the restriction requirement failed to expressly categorize of the six dependent.  On appeal, the Federal Circuit found, despite the examiner’s error, that the mailing was still sufficient to meet the notice requirement.

Here, the examiner’s detailed descriptions of the 21 distinct invention groups outlined in the examiner’s initial restriction requirement were clear, providing sufficient information to which the applicants could have responded. Indeed, the applicants never challenged the content of the invention groups defined by the examiner. And, significantly, the examiner’s defined invention groups remained identical between the two restriction requirements. Viewed as a whole, the restriction requirement provided adequate grounds on which the applicants could “recogniz[e] and seek[] to counter the grounds for rejection.” Chester. Therefore, because the examiner clearly defined to the applicants the invention groups available for election and further prosecution, the applicants were placed on sufficient notice of the reasons for the examiner’s restriction requirement.

As for the six claims whose classifications were omitted from the initial restriction requirement, Wyeth could have taken direction for their classification from the fact that their respective independent claims were each included in the initial restriction requirement. Here, the dependent claims would naturally have been classified in a subset of the invention groups to which the claims they depend from belong.[4]

The PTO’s position is somewhat strengthened by its own MPEP statements that a restriction requirement which fails to classify all of the claims still counts as providing a section 132 notice.

The majority opinion was written by Judge O’Malley and joined by Judge Dyk.  Judge Newman wrote in dissent — arguing that this was a case of clear error by the examiner and should not count as a proper notice.  If Judge Newman is correct, Wyeth would been within its rights to simply sit on its hands not respond until the USPTO issued its notice of abandonment.

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Coming out of this case (and others), we know that even a very low quality mailing from a patent examiner will be counted sufficient notice and thus force a response on threat of abandonment.  Where a procedural error exists, the best practice action then is to quickly contact the examiner and identify the error.   Here, Wyeth waited until four days before the deadline to respond.

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[1] The case involves U.S. Patent No. 8,153,768 that issued from U.S. Patent Application No. 10/428,894.

[2] 35 U.S.C. § 154(b).

[3] Chester v. Miller, 906 F.2d 1574 (Fed. Cir. 1990).

[4] In a footnote, the Federal Circuit suggests that failure to classify and independent claim could possibly fail the notice requirement of Section 132.

Pending Supreme Court Patent Cases

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by Dennis Crouch

1.   Petition Granted:

2.   Petition for Writ of Certiorari Pending:

  • Life Technologies Corporation, et al. v. Promega Corporation, No. 14-1538 (Can an entity “induce itself” under 271(f)(1)?)(CVSG)
  • Allvoice Developments US, LLC v. Microsoft Corp., No. 15-538 (“Do patent claims addressed directly to software that is inherently in a computer-readable medium qualify as a ‘manufacture’ under 35 U.S.C. § 101 without express recitation of the medium?”)
  • OIP Technologies, Inc. v. Amazon.com, Inc., No. 15-642 (Do the rules of civil procedure apply when defendant raises a Section 101 eligibility “defense” in a motion-to-dismiss for failure to state a claim upon which relief can be granted?)
  • Fivetech Technology Inc. v. Southco, Inc., No. 15-381 (What is the proper role of intrinsic evidence in claim construction?)
  • Medtronic Sofamor Danek USA, Inc., et al. v. NuVasive, Inc., No. 15-85 (Commil re-hash – mens rea requirement for inducement)
  • SpeedTrack, Inc. v. Office Depot, Inc. et al., No. 15-461 (Kessler doctrine – enhanced preclusion)
  • Cuozzo Speed Technologies, LLC v. Michelle K. Lee, No. 15-446 (BRI construction in IPRs; institution decisions unreviewable).
  • Arthrex, Inc. v. Smith & Nephew, Inc., et al., No. 15-559 (Commil re-hash – if actions were “not objectively unreasonable” can they constitute inducement?)
  • Alps South, LLC v. The Ohio Willow Wood Company, No. 15-567 (If patent ownership is fixed after the filing of a complaint, can jurisdiction be cured by a supplemental complaint)
  • STC, Inc. v. Global Traffic Technologies, No. 15-592 (Whether marking the packaging of a patented article with patent notification satisfies the marking provision of 35 U.S.C. § 287(a) where the patented article itself is undisputedly capable of being marked.)
  • Retirement Capital Access Management Company, LLC v. U.S. Bancorp, et al., No. 15-591 (Whether subject matter eligibility under 35 U.S.C. § 101 is a ground specified as a condition for patentability under 35 U.S.C. § 282(b)(2))
  • Biogen MA, Inc. v. Japanese Foundation for Cancer Research, et al., No. 15-607 (Whether AIA eliminated federal district courts’ jurisdiction over patent interference actions under 35 U.S.C. § 146.)
  • ePlus, Inc. v. Lawson Software, Inc., No. 15-639 (what happens with a finally-determined permanent injunction after PTO cancels the patent claim?)
  • Interval Licensing LLC v. Michelle K. Lee, No. 15-716 (Can the Patent and Trademark Office appropriately apply the “broadest reasonable interpretation” standard in construing patent claims in post-grant validity challenges?)
  • Media Rights Technologies, Inc. v. Capitol One Financial Corporation, et al., No. 15-725 (Claim Construction: whether there a strong presumption against construing terms as subject to 35 U.S.C. § 112p6 that do not recite the term “means.”)
  • Daiichi Sankyo Company, Ltd. v. Michelle K. Lee, No. 15-652 (Patent Term Adjustment – whether the 180 day deadline applies)
  • Innovention Toys, LLC v. MGA Entertainment, Inc., et al., No. 15-635 (Stryker/Halo follow-on)
  • Morgan, et al. v. Global Traffic Technologies LLC, No. 15-602 (unclear)
  • Arunachalam v. JPMorgan Chase & Co., No. 15-691 (unclear)

Nautilus Submerges Again — Upcoming Supreme Court Cases

Patent,

That was quick: The Supreme Court has denied certiorari in Nautilus v. Biosig (round II).  I discuss that case here.

The Supreme Court also denied cert in Tyco v. Ethicon (15-115) (under pre-AIA law, does prior conception under 102(g) count as prior art under 103(a)?) and denied the certiorari rehearing request in Netairus v. Apple (14-1353) (when does a device infringe a method claim?).

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Coming up this month for consideration by the court:

  • Fivetech Technology Inc. v. Southco, Inc., No. 15-381 (what is the proper role of intrinsic evidence in claim construction?)
  • Allvoice Developments US, LLC v. Microsoft Corp., No. 15-538 (is software stored on a computer-readable medium a “manufacture” under Section 101?)
  • OIP Technologies, Inc. v. Amazon.com, Inc., No. 15-642 (do the rules of civil procedure apply when defendant raises a Section 101 eligibility “defense” in a motion-to-dismiss for failure to state a claim upon which relief can be granted?)

Guest Post: To File a CON? Empirical Popularity and Prosecution Outcomes

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Guest Post by Kate S. Gaudry, Ph.D and Thomas D. Franklin, Kilpatrick Townsend & Stockton LLP.  The opinions expressed in this article are those of the authors and do not necessarily reflect the views of Kilpatrick Townsend & Stockton LLP or its clients. This article is not intended to be and should not be viewed as legal advice.

An increasing number of statistics are available on trends in patent application filings and prosecution outcomes. However, it is uncommon to see the data segregated based on type of application. Specifically, how frequently are continuation applications filed? And does previous prosecution experience with a parent application result in favorable prosecution outcomes?

Answers to these questions may be pertinent when developing strategies as to whether to file a continuation application. Frequent continuation filings may indicate that competitors consider it important to have the claiming flexibility of keeping a family alive or a trend toward filing omnibus applications (disclosing multiple ideas or idea aspects per specification). Meanwhile, any advantage of a continuation must be considered in view of its cost, which depend in part on prosecution expectations.

Accordingly, we requested data from the USPTO that identified, for each fiscal year and technology center (TC), the number of new applications filed (excluding RCEs) that were: (1) a continuation application; (2) a divisional application; (3) a continuation-in-part application; or (4) none of the above. Further, we requested, for each of these application types: (1) the number of patents issued and number of abandonments between July 1, 2014 and July 8, 2015 (to generate a final-disposal allowance rate for this time period); and (2) the average number of office actions issued for each application that received a notice of allowance during this time.

Continuation Applications: Increasingly Common

Overall, in fiscal year 2015, 20% of the filed applications were continuation applications. Divisionals comprised 6% of the data set, and continuation-in-part applications accounted for 3% of the applications. The remaining 72% lacked a priority claim to another non-provisional U.S. application. (FIG. 1)

FIG. 1

FIG. 1

FIGs. 2A and 2B respectively show the unnormalized and normalized distributions of filing types per fiscal year. The percentage of applications that were continuations doubled from 9% in 2005 to 18% in 2015.

Patently-O App-Type FIG 2

FIG. 2

The increased popularity of continuation applications is observed across all TCs. (FIG. 3.) The most substantial increases is observed in TCs 2100 (Computer Architecture, Software, and Information Security) and 2600 (Communications), where the contribution of continuation applications to total filings increased by 142% and 132%, respectively, between 2005 and 2015.

Patently-O App-Type FIG 3

FIG. 3

Continuation applications were most common in TCs 1600 (Biotechnology and Organic Chemistry), 2100 (Computer Architecture, Software, and Information Security) and 2400 (Computer Networks, Multiplex Communication, Video Distribution and Security), where continuation applications accounted for 29%, 28% and 30% of the applications, respectively. Continuation applications were least common in TC 3600 (Transportation, Construction, Electronic Commerce, Agriculture, National Security and License & Review), accounting for only 14% of the applications. The infrequency of TC 3600 continuation applications may be due, in part, to the rarity of allowances in the business-method art units.[1]

Continuation and Original Applications have Similar Prosecution Statistics

Potentially, experience with a parent application (and, typically, a same examiner) may guide claiming strategy for a continuation. Thus, perhaps, continuations represent a two-fold cost-savings opportunity: a savings in drafting and in prosecution costs. Assessing the latter potential savings requires evaluating allowance rates and office-action counts of continuation applications. Accordingly, we evaluated prosecution statistics from a recent time period (July 2014-July 2015) for each of the application types.

Overall, the final-disposal allowance rate for continuations is slightly higher than that for original applications (80% versus 74%). (FIG. 4A.) The average office-action count per patent is slightly lower for continuation applications (1.85 versus 1.96). (FIG. 4B.)

FIG. 44

FIG. 4

Discussion: Why and How to File Continuations

Continuation applications provide a variety of advantages, including an opportunity to seek a new scope of protection in view of business priorities and to strategically draft claims in view of ongoing or threatened challenges to a patent. This latter upside is becoming increasingly significant as the number of post-grant challenges continues to grow.

Should an applicant decide that the advantages of keeping a family alive are sufficiently important, claiming strategy for the child application must then be identified. Slightly tweaking an allowed claim may result in minimal prosecution costs. However, a fast allowance will lead to an overall cost of the family exploding (assuming repeated continuation filings). Seeking substantially broader protection, meanwhile, may lead to extended and frustrating prosecution. Our data showing that continuation and original applications have similar prosecution statistics suggest that applicants are not consistently choosing an easy or hard continuation-claiming path, though it may be explained by split uses of these types of claim-drafting techniques.

Another approach to continuations is to seek protection of a completely different idea in the specification. This could allow a resulting patent family to provide diverse protections towards different elements of an applicant’s technology. However, a new focus requires that the new idea be supported and enabled by the original specification. In an era where flat fees and legal bidding wars are common, it is our hypothesis that few applicants are willing to pay the higher drafting fees for preparation of such enhanced applications. However, we believe that this is a strategic approach and should be more frequently used.

Consider a case where an applicant is seeking patent protection of two ideas. A traditional approach is that separate patent applications be drafted for each idea. Another approach is to draft a single “omnibus” patent application that describes both ideas. One idea can be the focus of an original filing, and another the focus of a continuation filing. Then, by investing in keeping a single family alive (via the original and continuation filings and/or additional continuation applications), claiming flexibility for each idea is preserved. Further, if ideas within an omnibus application are related, drafting fees may be less than preparing two independent applications. The application may also illuminate synergies and interactions between the ideas, which may further expand claiming possibilities.

Concluding Thoughts

Our data shows that continuation-application filings are becoming increasingly common. Filing continuation applications offers many advantages, particularly now that patents are frequently challenged. However, blindly filing continuation applications will lead to an explosion in costs. Strategic filing of omnibus continuation applications, however, will offer long-term cost savings and prosecution advantages. Therefore, applicants should consider intelligently identifying and organizing sets of ideas into omnibus applications.

[1] Gaudry KS. 2015. Post-Alice, Allowances are a Rare Sighting in Business-Method Art Units. IPWatchDog. <http://www.ipwatchdog.com/2014/12/16/post-alice-allowances-rare-in-business-method/id=52675/>

Hughes on Obviousness: The Problem Motivates the Solution

Patent, , ,

by Dennis Crouch

Dome Patent v. Michelle Lee in her capacity as Director of the USPTO (Fed. Cir. 2015)

Patent No 4,306,042 issued in 1981 and expired in 1998, but is still being litigated.  The patent covers a method of making oxygen-permeable material used for contact lenses. Back in December 1997, the patent owner (Dome) sued a set of defendants for infringement.  That lawsuit has been stayed since 1999 pending resolution of an ex parte reexamination requested by one of the defendants. In a 2006 final ruling, the USPTO confirmed patentability of claims 2-4, but cancelled claim 1 as obvious.  Dome then filed a civil action in DC challenging the PTO ruling. That case – filed in 2007 – concluded in July 2014 with the district court’s de novo determination that claim 1 was obvious over a combination of three prior art patents.  On appeal here, the Federal Circuit has affirmed that ruling – finding that “district court did not commit reversible error in its determination that the claimed subject matter would have been obvious to a person of ordinary skill during the relevant time period.”  Judge Hughes penned the opinion that was joined by the two other panel members, Judges Reyna and Schall.

In typical close cases, each of the major elements of a claimed invention are found in a collection of prior art — leaving the question of whether the combination as claimed would have been obvious to a person of ordinary skill in the art.   An important intermediary factual question is whether there is any evidence showing why a skilled artisan might or might not be inclined to combine the references.   In the Supreme Court’s KSR decision, the Supreme Court indicated that the motivation question involves an ‘expansive and flexible’ analysis and can consider the common sense of the skilled artisan.  Citing KSR, Judge Hughes writes:

If all elements of a claim are found in the prior art, as is the case here, the factfinder must further consider the factual questions of whether a person of ordinary skill in the art would be motivated to combine those references, and whether in making that combination, a person of ordinary skill would have had a reasonable expectation of success.

Evidence of a motivation to combine prior art references may flow from “the nature of the problem to be solved.”  Here, the district court found that the motivation came from the prior art evidence indicating a search for high oxygen permeability in contact-lens materials. That finding was then affirmed on appeal: “This understanding would have motivated a person of ordinary skill to combine the Tris monomer disclosed in Gaylord with the Tris-type cross-linking agent disclosed in Tanaka to increase the oxygen permeability of a contact lens.”  There was also some amount of teaching away (the non-Tris prior art outlined the problems of using Tris), but the appellate court affirmed the obviousness finding.

It was important for the appeal here that the ‘motivation’ found by the district court was seen as an issue of fact — a subset of some unnamed Graham factor — rather than a question of law.  Thus, although the appellate court may have disagreed with some aspects of the original decision, the district court’s findings were not “clearly erroneous.”

 

Review of Civil Action: As I mentioned above, the case began as a reexamination and, after losing, the patentee filed a civil action in district court who reviewed the case de novo.  Under i4i, a court patent may only invalidate a patent after being presented with clear and convincing evidence proving that result. See also 35 U.S.C. 282(a) (“In General. – A patent shall be presumed valid.”).  On the other hand, the USPTO operating in reexamination mode only requires a preponderance of the evidence to render the claims null and void.  These competing standards came to a head in the civil action challenging the reexamination finding.  On appeal here, the Federal Circuit affirmed that in this situation only a preponderance is necessary. 

“‘[A reexamination] is in essence a suit to set aside the final decision of the board.’ Fregeau v. Mossinghoff, 776 F.2d 1034 (Fed. Cir. 1985).

[I]f the Patent Office decides after an ex parte reexamination that a preponderance of the evidence establishes the claimed subject matter is not patentable, § 145 authorizes the district court to review whether that final decision is correct. The § 145 action in such a case does not concern the different question of whether, as part of a defense to an infringement action, clear and convincing evidence establishes that an issued and asserted patent should be held invalid.

Somewhat oddly, the court ruled that Section 282 does not apply here because that section only relates to defenses in patent infringement litigation. “The § 145 action before the district court did not involve a defense to a charge of infringement of an issued patent. Section 282 therefore does not apply in this instance.

Judge Newman: Functional Claim at Point of Novelty => Abstract Idea

Patent, , ,

by Dennis Crouch

Internet Patents Corp. v. Active Networks (Fed. Cir. 2015)

In an opinion by Judge Newman, the Federal Circuit has affirmed the lower court dismissal of IPC’s infringement lawsuit — holding that the claims of U.S. Patent No 7,707,505 are invalid for lacking patent eligible subject matter under 35 U.S.C. 101 as interpreted by Alice Corp.

The claims are directed to a method of providing a multi-pane (tab) user interface with icons as follows:

1. A method of providing an intelligent user interface to an online application comprising the steps of:

furnishing a plurality of icons on a web page displayed to a user of a web browser, wherein each of said icons is a hyperlink to a dynamically generated online application form set, and wherein said web browser comprises Back and Forward navigation functionalities;

displaying said dynamically generated online application form set in response to the activation of said hyperlink, wherein said dynamically generated online application form set comprises a state determined by at least one user input; and

maintaining said state upon the activation of another of said icons, wherein said maintaining allows use of said Back and Forward navigation functionalities without loss of said state.

Walking through the two-step analysis of Alice Corp., Judge Newman first identified the gist of the invention or “the basic character of the subject matter.”   In reading the patent document, the court found that it described the “most important aspect” of the invention is that it “maintains data state across all [browser] panes.”  In other words, the basic function of the invention is “the idea of retaining information in the navigation of online forms.”  Without further analysis, Judge Newman identified this basic function as an unpatentable abstract idea and immediately moved to Alice/Mayo step-2.

In Step 2, the Supreme Court instructs us to seek-out an “inventive concept” within the claims that goes beyond the unpatentable abstract idea and that is more than “well-understood, routine, conventional activities previously known.”  In reviewing the claim, Judge Newman could find nothing beyond conventional browser elements and the claimed end-result of “maintaining [the] state.”  However, that final and admittedly critical element of the invention was not limited to any particular method or mechanism and thus remained abstract.

The mechanism for maintaining the state is not described, although this is stated to be the essential innovation. The court concluded that the claim is directed to the idea itself—the abstract idea of avoiding loss of data. IPC’s proposed interpretation of “maintaining state” describes the effect or result dissociated from any method by which maintaining the state is accomplished upon the activation of an icon. Thus we affirm that claim 1 is not directed to patent-eligible subject matter.

The court also invalidated parallel system and computer claims — noting that “the statement that the method is performed by computer does not satisfy the test of ‘inventive concept.'”  The court also held that dependent claim limitations requiring differing responses to ‘quasistatic’ and ‘dynamically generated’ content was insufficient to overcome the Section 101 hurdle because they merely represent “the siting the ineligible concept in a particular technological environment.”

= = = = =

Judges Moore and Reyna joined Judge Newman on the panel.

= = = = =

Major case here that again appears to coincide with the ongoing battles over functional claim limitations.  Here, Judge Newman focuses on the reality that the admittedly fundamental aspect of the invention was claimed in functional form without providing any limitations as to its particular mechanism of function.  Result: unpatentable as an abstract idea.

= = = = =

Mike Borella covers the case at Patent Docs. (“The general rule that many of us follow post-Alice is to draft rich, detailed, technical specifications, and undoubtedly we will double-down on that approach in light of this decision.”)

 

 

USPTO Cancels Sensitive Application Warning System (SAWS)

Patent

by Dennis Crouch

USPTO management has announced the cancellation of its Sensitive Application Warning System (SAWS).  Writing in an internal email, Commissioner Focarino indicated that “the USPTO has decided to retire this program.”  This announcement is effective immediately and “applications currently in this program will now proceed through prosecution absent any additional SAWS-related processing.”

Focarino also promised that any future quality-enhancing initiatives on par with SAWS “will be disclosed to the public before implementation.”

As I wrote earlier, some ideas behind the SAWS Program offer potential benefits of better focusing resources. However, the downfall of the program was the lack of public accountability.  Congratulations to the USPTO for recognizing this issue and promising a more transparent future.

Focarino’s email alludes to the fact that the SAWS program began in 1994 – a time when pending applications were still kept secret.  “Today, unlike when the SAWS program was created, most applications are published eighteen months after submission, exposing them to public scrutiny and the potential for third-party submissions of prior art.”  Likewise, the public access has also pushed the USPTO further towards accountability in its operations.

[Update: Information has now been added to the USPTO website]

Getting SAWS Data from the USPTO

Patent

DoubleSecretProbationThe USPTO operates a Sensitive Application Warning System (SAWS) that internally flags pending applications that include “highly controversial” claims or that might create “unwanted media coverage” for the USPTO or the Administration.  Those flagged applications are apparently tiered and then, before allowance, must be approved by either a technology center director or upper PTO management.

In general, I agree with the USPTO’s policy of attempting to apply more examination firepower in areas where it is needed, either because of the difficulty of examination or a likelihood that issued patents will be highly disruptive to settled expectations.  However, I have concerns as to how the policy is being carried-out here, in the SAWS program. And, because the USPTO is ordinarily very forthcoming with its examination process and results, its attempts to hide its actions here tend to suggest that it has reasons to hide.

In January 2015, the USPTO denied my request for a list of all published patent applications that had been flagged for the SAWS program (as well as reasons for the flag), and whether USPTO political-appointees were reviewing particular applications.  I then appealed that decision internally to the USPTO general counsel’s office and that appeal has now been denied. [FOIA Appeal Denial A-15-00008].

The Freedom of Information Act requires Federal Agencies to, “upon any request for records … shall make the records promptly available to any person.”  5 U.S.C. 552(a)(3).   However, the law also includes a set of exceptions. Notably, the statute indicates that the agency is not required to disclose “(5) intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency.”  5 U.S.C. 552(b)(5).  The statutory exception is a bit oblique, but has been interpreted as a sort of privilege for executive agencies.  

Citing Exception 5, the USPTO has rejected my appeal – arguing that the requested list of applications is protected by both “quasi-judicial privilege” and “deliberative process privilege.”  [FOIA Appeal Denial A-15-00008]. In general, I do not believe that the USPTO’s list of SAWS applications fits into these definitions of privilege as defined by the case law.

The next step is to file a civil action, although I have not yet decided upon that course.

Accelerating ex parte PTAB Appeals: For a Fee

Patent,

By Dennis Crouch

The Patent Trial and Appeal Board (PTAB) is burdened with a statutory mandate to quickly reach final determination in its post-issuance review trials. To meet that requirement, the PTAB has put tremendous resources into its trial teams to ensure sufficient bandwidth to handle the hundreds of inter partes trials. At the same time, a 25,000 case backlog of pending ex parte appeals persists at the Patent Trial and Appeal Board.  Those cases do not have as clear of a statutory-mandate for rapid processing and, as a result, have clearly languished as the Board developed its post-issuance review trial program with most cases now waiting more than three years for a decision from the Board. (Notice-of-Appeal to Board Decision).  Rather than dealing with its poor statistics, the PTAB appears to have simply stopped publishing them.

For many patent applicants (though certainly not all), the appeal delay is costly because it extends a period of ambiguity and it delays issuance of the patent rights.  Certainly, the vast majority of long-pendency patent applications (those that issue more than 7 years after filing) spent considerable time in the appeal queue awaiting a reversal of an examiner rejection. Those late-issued patents have the potentially of being disruptive to marketplaces that have developed and grown in the absence of an issued patent.

A few months ago, I conducted what I called a “10-second”survey on Patently-O regarding the potential market for accelerated PTAB decisions in ex parte cases.  I asked:

Would you pay an extra $5,000 for accelerated PTAB decisions in ex parte cases that issue[] within nine months rather than waiting the standard 2 1/2 years?

I should note that the 2 ½ year figure had increased. The results are instructive and somewhat fit the model seen with the $4,000 fee for prioritized “track one” examination, although the market for accelerated appeals seems somewhat greater.  The vast majority of the 614 responses indicated that they would use the fast track in at least some cases – with most indicating that the fast track would be used in >5% of cases.

AcceleratedAppeals

Although not any final word on the market for accelerated appeals, the chart is indicative of a demand for accelerated appeals.  And, although not a solution to the docket problem, acceleration of a subset of appeals offers the potential of alieviating the most some of the more pointed needs.

I should note here that a subset of accelerated examination cases (“made special”) are also accelerated when pending before the PTAB. However, those do not include prioritized examination cases under the pay-for-speed program.  I do not have any statistics on how that acceleration impacts the timing of appeals.

Federal Circuit Sends Patent Case to Eighth Circuit

Patent,

By Dennis Crouch

US Water Services, Inc. v. ChemTreat (Fed. Cir. 2014)

The Federal Circuit has determined that it lacks subject-matter appellate jurisdiction over the patent infringement appeal and has thus transferred the case to its sister-court, the Court of Appeals for the Eighth Circuit.

The unusual outcome stems from the parties pleading posture that began pre-AIA. Under the law when the case was filed, the Federal Circuit has subject-matter appellate jurisdiction over cases that “arise under” federal patent law. Arising-under jurisdiction is a term of art that follows the “well-pled complaint rule” which requires the patent law question appear on the face of the plaintiff’s original complaint as outlined in the Supreme Court’s 2002 decision on point. Holmes Grp., Inc. v. Vornado Air Circulation Sys., Inc., 534 U.S. 826 (2002).

Here, the original complaint was filed by USWS against ChemTreat for trade secret misappropriation under Minnesota law. In a counter claim, ChemTreat alleged invalidity and non-infringement of one of USWS’s issued patents. The parties then settled the trade secret claim and the district court subsequently granted ChemTreat’s motion for summary judgment of non-infringement. USWS now appeals that noninfringement determination. Since the patent issue was first raised in the responsive pleading (rather than in the complaint), the case cannot be said to arise under the federal patent laws. The result then is that the Federal Circuit has no subject matter appellate jurisdiction over the appeal.

As the patentee with a technical argument on appeal, the USWS was looking for Federal Circuit jurisdiction. It raised two arguments on the appeal (1) that it consented to the counterclaim filing; and (2) that the counterclaim joined additional parties (the patent owners since USWS was merely the exclusive licensee) and thus should be seen as the equivalent to a complaint under the well-pled-complaint rule. In its decision here, the Federal Circuit rejected both of those arguments, finding instead that the rule is hard and inflexible. See also Wawrzynski v. H.J. Heinz Co., 728 F.3d 1374 (Fed. Cir. 2013).

tl;dr: patent issue was first raised in a counterclaim so the case did not arise under the US patent laws.

If the same lawsuit had been more recently filed, it is possible but still unlikely that the Federal Circuit would have subject matter appellate jurisdiction based upon the AIA amendments made in 2011. In particular, the Federal Circuit jurisdiction now additionally extends to cases where the patent law issue is raised only in a “compulsory counterclaim.” Although not expressly decided it does not appear that the patent issue here should be seen as compulsory under the rules of civil procedure but instead merely supplemental. As such, even the broader appellate subject matter jurisdiction rules of the AIA would not permit the Federal Circuit to hear the case.

= = = = =

The decision here was based upon appellate subject matter jurisdiction and did not reach the merits of the underlying appeal. Those underlying merits focused on whether the district court held declaratory judgment jurisdiction since (according to USWS), USWS never threatened patent infringement and the challenged patent was so different from ChemTreat’s activities that it would be silly to fear such an action.

Priority Claims in US Patents

Patent

By Dennis Crouch

Patentees are continuing to move away from the single-patent model toward a model that involves multiple patents in multiple jurisdictions. Today, over 75% of patent applications rely upon at least one prior patent filing as a priority document. I expect that figure to grow based upon incentives coming from the recently implemented first-to-file regime. Over the past 10 years, most of the change has been in increased PCT filing and increased use of US provisional patent applications. In the US, the largest users of the provisional patent applications are some of the largest strategic users of the patent system, including Qualcomm, LG, Broadcom, Marvell, Google, Apple, Samsung, Univ of California, and Texas Instruments. More than 40% of patents with a US assignee (or US inventor owned) claim priority to a provisional application. Expect that figure to rise as well.

President Obama Nominates Two to Serve on the US Court of Appeals for the Federal Circuit

Patent,

   

The following is the press release:

 

WASHINGTON, DC – Today, President Obama nominated Raymond T. Chen and Todd M. Hughes to the United States Court of Appeals for the Federal Circuit.

   

“ Raymond T. Chen and Todd M. Hughes have displayed exceptional dedication to public service throughout their careers,” President Obama said. “I am honored to nominate them today to serve the American people on the United States Court of Appeals. I am confident that they will be judicious and esteemed additions to the Federal Circuit.”

   

Raymond T. Chen:  Nominee for the United States Court of Appeals for the Federal Circuit

Raymond T. Chen currently serves as the Deputy General Counsel for Intellectual Property Law and Solicitor for the United States Patent and Trademark Office (USPTO), a position he has held since 2008. 

   

Chen received his B.S. in electrical engineering in 1990 from the University of California, Los Angeles, and his J.D. in 1994 from the New York University School of Law.  After graduating from law school, he joined Knobbe, Martens, Olson & Bear, a boutique intellectual property law firm in Irvine, California, where he prosecuted patents and represented clients in intellectual property litigation.  From 1996 to 1998, Chen served as a Technical Assistant at the United States Court of Appeals for the Federal Circuit, performing the functions of a staff attorney.  At the end of his two-year term, he joined the USPTO as Associate Solicitor and remained in that role until his promotion to Solicitor in 2008.   Since joining the USPTO, Chen has represented the agency in numerous appeals before the Federal Circuit and personally argued over 20 cases, issued guidance to patent examiners to ensure consistency with developing law, advised the agency on legal and policy issues, and helped promulgate regulations.  He has co-chaired the Patent and Trademark Office Committee of the Federal Circuit Bar Association and is a member of the Advisory Council for the United States Court of Appeals for the Federal Circuit. 

   

Todd M. Hughes:  Nominee for the United States Court of Appeals for the Federal Circuit

Todd M. Hughes is Deputy Director of the Commercial Litigation Branch of the Civil Division at the United States Department of Justice, a position he has held since 2007.  He also has served as an adjunct lecturer in law with the Cleveland-Marshall College of Law and as an instructor for Duke University’s writing program. 

   

Hughes received his A.B. from Harvard College in 1989 and completed a joint degree program with Duke University, earning both his J.D. with honors and his M.A. in English in 1992.  After graduating from law school, Hughes clerked for the Honorable Robert B. Krupansky of the United States Court of Appeals for the Sixth Circuit.  In 1994, he joined the Commercial Litigation Branch as a trial attorney.  Five years later, he was appointed to be Assistant Director for Commercial Litigation, a role he held until assuming the title of Deputy Director in 2007.  Throughout his career with the Department of Justice, Hughes’s practice has been devoted to matters of federal personnel law, veterans’ benefits, international trade, government contracts, and jurisdictional issues regarding the United States Court of Federal Claims.  He has extensive experience before the United States Court of Appeals for the Federal Circuit, the United States Court of International Trade, and the United States Court of Federal Claims, and he has garnered a number of special commendations from the Department of Justice and a special contribution award from the Department of Veterans Affairs.

MBHB Snippets

Patent,

My former law firm MBHB just released its quarterly snippets Review of Developments in Intellectual Property Law. A group of new associates started snippets around the time I started at the firm nine years ago (hard to believe). I have a short article in the newest volume discussing “Patent Data, Prior Art, and Operational Transparency at the USPTO.” Kevin Noonan of Patent Docs has written an interesting discussion of the advantages of trade secret protection (in certain situations). Other articles include (1) an international comparative analysis of software patents and (2) a discussion of some limits of KSR.

snippets 9:1, Table of Contents:

  • Considerations for Software Patent Claims in the United States, Europe, and Canada by Michael S. Borella, Ph.D., Daniel R. Bestor and Alan W. Krantz
  • Where (and Even When) Does KSR Belong in Obviousness Arguments? by Daniel P. Williams and Christopher D. Butts
  • While Not Right for Every Invention, Trade Secret Protection Has Its Appeal by Kevin E. Noonan, Ph.D.
  • Patent Data, Prior Art, and Operational Transparency at the USPTO by Dennis D. Crouch

Download it while it’s hot (PDF). You can fill-out a form to receive a hard copy.

Appealing BPAI Rejections to the Federal Circuit

BPAI, Obviousness, Patent, Patent Cases 2009

In re Baggett (Fed. Cir. 2009) (nonprecedential)

The Board rejected Bagget's patent claims as obvious. On appeal, the Federal Circuit largely affirmed – holding that the the administrative body's factual findings were supported by the requisite "substantial evidence" and that the Board had properly “articulated [its] reasoning with some rational underpinning to support the legal conclusion of obviousness" as required by KSR. (Quoting KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 418 (2007)).

The only portion vacated involves an error interpreting the term "memoization." The Board had initially misinterpreted the term as memorization. After a petition for rehearing, the Board corrected its mistake – but only as to one of the four claims containing the term. On appeal, PTO Solicitor Chen explained that Baggett had only addressed the one claim in the petition for rehearing, but offered that a remand would still be appropriate.

Notes:

  • This case may serve to emphasize the difficulty in appealing an obviousness decision from the Board of Patent Appeals & Interferences. The "substantial evidence" standard is low, i.e., "more than a mere scintilla of evidence." Likewise, the legal conclusion of obviousness now looks merely for "some rational underpinning."
  • In a note, Hal Wegner identifies four Federal Circuit appeals up for review that may focus on obviousness: In re Applied Materials Israel Ltd., Fed. Cir. No. 2009-1083 (argument July 7, 2009); In re Mettke, Fed. Cir. No. 2009-1125; In re Roth, Fed. Cir. No. 2009-1223; and In re Rivera, Fed. Cir. No. 2009-1123.
  • Although it may have been amended during prosecution, the original claim 1 reads as follows: 1. A method of producing constructed fares that includes an arbitrary added to a published fare, said method executed in a computer system, the method comprising: determining interior cities that appear with gateway cities in arbitraries for the airline; searching for gateway cities corresponding to the determined interior cities appearing in the arbitraries; and applying an arbitrary corresponding to one of the interior cities to a published fare involving one of the gateway cities to produce the constructed fare.
  • Read the decision: 09-1029.pdf