Normally, a notice of appeal filed in federal appellate court does not include details on what particular issues are being appealed. That comes later in the appellant’s opening brief.
One exception is found in R. 44 of the Federal Rules of Appellate Procedure (FRAP). R. 44 requires notice of any Constitutional Challenge of a Federal or State statute. This must be provided “immediately upon the filing of the record or as soon as the question is raised in the court of appeals.” That constitutional challenge notice is then sent over to the US Attorney General (or respective state counterpart) who may want to intervene to defend the statute. Depending upon a few factors, the constitutional challenge notice may be due prior to the opening brief. This type of certification was provided in all the Arthrex-style challenges of PTAB appointments.
A second exception that is patent-law-specific is found in within the set of rules and regulations promulgated by the USPTO. 37 C.F.R. 90.2(a)(3)(ii). The rules require that the notice of appeal of any IPR, CBM, or Post-Grant Review “provide sufficient information to allow the Director to determine whether to exercise the right to intervene in the appeal pursuant to 35 U.S.C. 143, and it must be served as provided in § 42.6(e) of this title.” An example of this type of notice can be seen in the following notice of appeal. [ExampleNoticetoPTO].
My thought: It seems to me that the USPTO does not possess authority to require an applicant include certain elements within its notice of appeal. The contents of the notice of appeal are governed by statutory law along with the rules of appellate procedure and the Federal Circuit’s own local rules of procedure. None of those authorities require or suggest that the notice-of-appeal include the substantive elements required by the USPTO. The US Courts are generally in control of determining their own procedures, and the PTO has no authority to amend those procedures for its own convenience.
Does this matter? In general, this is a rather small point, and the PTO’s approach is a practical and efficient solution. The key issues though are timing and strategy. The PTO rule forces the appellant to figure out its appellate position 30-days early and also to disclose that position to the opposing party 30-days early.
Editor’s Note: Avery Welker is a 1L at Mizzou and likely a future patent attorney. He is starting a new series linking law school canonical cases with intellectual property counterparts. You can email ideas for future posts to avery@patentlyo.com. – Dennis Crouch
By Avery Welker
“That doesn’t look too bad,” I thought to myself while scanning through my Civil Procedure reading assignment over Rule 56, Summary Judgment. Fed R. Civ. P. 56 (2020). Then I had the pleasure of reading Celotex Corp. v. Catrett and discovered that if you don’t pay attention to which party bears the burden of proof, you could be in trouble. Celotex Corp. v. Catrett, 477 U.S. 317 (1986). This is where Exigent Technology, Inc. (Exigent) found themselves in 2006 in the process of pursuing an infringement action against Atrana Solutions, Inc. (Atrana). Exigent Tech., Inc. v. Atrana Sols., Inc., 442 F.3d 1301 (Fed. Cir. 2006).
Exigent owned U.S. Patent No. 6,651,885, a “multi-function transaction processing system,” which includes a transaction processing system with the ability to attach a payment to a user account, among other functions, and alleged infringement literally or through the doctrine of equivalents. U.S. Patent No. 6,651,885 (filed Jun. 8, 2000; issued Nov. 25, 2003); Exigent Tech., Inc., 442 F.3d at 1303-04. The general idea was to expand the traditional debit/credit card transactions by issuing “authorization codes” to purchasers on a card, which could have other purchases attributed and stored on it. U.S. Patent No. 6,651,885. The system was designed to rid merchants of the cost of selling multiple cards that only contained singular access codes, like a pre-paid minutes card for calling long-distance, and put them all on one larger card assembly (shown below). Id. The above illustration shows a familiar looking terminal (20) but includes a large card printer (where the purchased information is stored) (37). Id. at fig.1.
The below figure is where the magic happens: The entire “card assembly,” (50) is a large sheet that contains a detachable physical card (e.g., for pre-paid phone minutes) (52), any merchant promotions, or other purchases (e.g., (55), (56)). Id. at fig.2. All in the name of efficiency.
In the lawsuit, the defendant Atrana moved for summary judgment, arguing that the patentee Exigent would not be able to prove infringement. Exigent Tech., Inc., 442 F.3d at 1303. The trial court agreed and granted summary judgment stating that there was no evidence on the record that Atrana infringed the patent. Id. at 1305. Upon a motion from Atrana, the trial court amended the summary judgment order to clarify that Exigent had the burden of proving infringement on every element of the claims. Id. at 1305. Exigent appealed, claiming that Atrana’s summary judgment motion of non-infringement was not sufficiently supported by the evidence. Id. at 1305-06.
Enter Celotex. If summary judgment is the treasure you seek, Celotex is your treasure map. It is the Supreme Court’s definitive guide to supporting a summary judgment motion when the non-moving party holds the burden of proving its case at trial. Celotex arose out of a wrongful-death complaint brought by the respondent, Catrett, who alleged that her husband’s exposure to asbestos-containing products (including those manufactured by Celotex) caused his death. Celotex Corp., 477 U.S. 317 at 319.
Celotex moved for summary judgment asserting that Catrett produced no evidence that any Celotex product was the proximate cause of her husband’s death, and that Catrett could not identify any witnesses that could testify to her husband’s exposure to Celotex’s asbestos-containing products, thus there was no genuine issue of material fact. Id. at 319-320. The trial court granted the motion, but the D.C. Circuit reversed, holding that since Celotex did not try to produce evidence in support of their motion (i.e., prove that Catrett’s husband was not exposed to Celotex’s products), they were not entitled to summary judgment. Id. at 321-22. The Supreme Court then reversed again, holding that summary judgment was proper in that instance. Id. at 328. The Court reasoned that where the nonmoving party has the burden of proof of a dispositive issue at trial, the moving party need only point out to the trial court that there is no evidence supporting the nonmoving party’s case, which discharges the moving party’s usual burden to show an absence of genuine dispute of material fact. Id. at 325.
The Court noted the spirit of Rule 56 in the holding of Celotex:
Rule 56 must be construed with due regard not only for the rights of persons asserting claims and defenses that are adequately based in fact to have those claims and defenses tried to a jury, but also for the rights of persons opposing such claims and defenses to demonstrate in the manner provided by the Rule, prior to trial, that the claims and defenses have no factual basis.
Id. at 327.
Celotex turned out to be bad news for Exigent, who argued in the Federal Circuit that Atrana did not properly support their summary judgment motion with admissible evidence showing non-infringement. Exigent Tech., Inc., 442 F.3d at 1308. This was in reference to an arguably inadmissible declaration from Atrana’s CEO. Id. The Federal Circuit noted that it ultimately did not matter whether the declaration was admissible as evidence because Atrana, the moving party, successfully discharged their burden of proof on the dispositive issue of non-infringement, by pointing out that Exigent had no evidence of infringement. Id. at 1309. The Federal Circuit held that Exigent did not advance any argument or bring any evidence of infringement, and therefore summary judgment was proper. Id.
Summary judgment is a remedy that arguably helps the courts “secure the just, speedy, and inexpensive determination of every action and proceeding.” Fed. R. Civ. P. 1 (2020). The irony is not lost on me that a remedy that can speed up an action resulted in further litigation, stringing out the action for both parties.
In its October 2020 decision in EcoServices v. Certified Aviation, the Federal Circuit issued a somewhat muddled nonprecedential opinion. The en banc petition has now been briefed and awaiting action from the court.
The patents at issue cover methods and systems for washing a jet engine. A jury sided with the patentee and the district court awarded $2 million in back-damages, and $400 per infringing wash in ongoing royalties.
[Federal Circuit Decision] On appeal, the Federal Circuit affirmed on validity — rejecting the defendant’s eligibility and obviousness argument — as well as infringement. The appellate court did find problems with the ongoing royalty (as well as the award of supplemental damages for ongoing infringement during the course of the lawsuit). However, the appellate found problem’s with the ongoing royalty because one of the two-infringed patents has now expired. “Here, the record does not support that a later jury would have calculated a royalty of $400 per wash as a royalty award for infringement of the ’262 patent alone.” The majority opinion was penned by Judge Schall and joined by Judge O’Malley. Judge Dyk wrote in dissent — arguing that the claims should be deemed invalid as directed toward an unpatentable abstract idea.
The defendant subsequently petitioned for en banc rehearing on eligibility grounds, asking “whether the bare idea of automating a known, manual process using a generic machine is a patent-eligible invention.” Here is claim 1 of Certified Aviation’s US9162262.
1. A system for washing turbine engines comprising:
a washing unit for providing a washing liquid to the turbine engines;
an information detector configured to gather information related to engine type; and
a control unit configured to accept the information related to engine type from the information detector and to determine a washing program to be used as a function of the information relating to engine type from a set of preprogrammed washing programs, and further configured to regulate the washing unit according to washing parameters associated with the washing program used.
Reading this claim, you can see that it includes three elements: a “washing unit” that delivers soapy-water to the turbine; an “information detector” such as an RFID or Bar Code reader; and a “control unit.” The information detector detects the engine type and then the control unit runs a particular “washing program.”
The improvement here is the automation of the of the washing-process by automatically detecting the engine-type and then selecting parameters depending upon the engine type. But, the particular detection scheme was a very well known approach (RFID or Bar Codes); and the particular wash parameters for any given turbine are not specified in the patent document. The patent explains that this type of activity was already being done in the field — but was using humans to identify/select rather than an automaton. This had the added benefit of “completely eliminating subjectivity” and thus avoiding user-error in the wash approach. (Quoting the inventor’s testimony at trial). Before this invention, the “human operator would consult a card for the type of engine to be washed, and [manually] enter the established flow parameters for the engine type.” Quoting Judge Dyk’s dissent.
In his dissent, Judge Dyk cites prior precedent to the point that “mere automation of manual processes using generic computer components” is an abstract idea, even if the automation provides substantial advantages. The majority disagreed and found instead that the claims “are directed to an improved system for washing jet engines and not to an abstract idea.”
In other words, the claims … do not recite the mere desired result of automated jet engine washing, but rather, recite a specific solution for accomplishing that goal.
Slip Op. The court released its decision as non-precedential. That means that its outcome will have little impact on the overall jurisprudence of this area, it also means that the decision was not (likely) distributed to the other Federal Circuit judges prior to release.
The en banc petition largely follows Judge Dyk’s dissent, but offers an interesting bit of analysis regarding the point-of-novelty link to eligibility.
This Court has held that the eligibility inquiry begins by “understand[ing] the problem facing the inventor and, ultimately, what the patent describes as the invention.” ChargePoint. This point-of-novelty inquiry guards against drafting efforts to patent abstract ideas by hiding them among prior art or otherwise insignificant elements.
Here, the defendant argues is that the point of novelty is the automation, and automation is an abstract idea. The Federal Circuit asked for a response from the patentee, and that has now been filed as well.
PhRMA has filed an interesting brief arguing that proper-venue in ANDA patent-infringement cases under §271(e)(2) should be determined under the general venue statute (28 U.S.C. §1391) rather than the patent-specific venue statute (28 U.S.C. §1400(b)).
Section 1400(b) is an exception to the general venue statute, 28 U.S.C. §1391. It should be construed narrowly and extended to §271(e)(2) actions only if doing so is consistent with the text and purpose of both statutes. But the text of §1400(b) cannot be reconciled with §271(e)(2); the enacting Congress in 1897 did not contemplate hypothetical acts of infringement; and extending §1400(b) to §271(e)(2) actions would conflict with the Hatch-Waxman Act’s purpose. Maxims of statutory interpretation therefore indicate that the general venue statute should govern §271(e)(2) actions.
PhRMA Brief on Venue. Section 1400(b) offers much narrower venue choices than that available under §1391, and PhRMA members are arguing for a broader forum selection choices for suing generic oncomers. Valeant Pharmaceuticals v. Mylan Pharmaceuticals. In its original decision, the Federal Circuit applied the narrow venue of 1400(b), but an en banc petition is pending before the court.
The new petition for certiorari in Samaranayake v. Iancu (Supreme Court 2021) has little chance of being granted, but it does offer some insight on USPTO procedure. I mentioned 35 U.S.C. § 144 in a prior post this week. This case also focuses on Section 144 and asks whether the Federal Circuit exceeded its statutory jurisdiction by creating its own record rather than relying solely on the record before the USPTO. The statute:
[T]he Federal Circuit shall review the decision from which an appeal is taken on the record before the Patent and Trademark Office. . . .
35 U.S.C. § 144. The question presented to the Supreme Court stems directly from the statute:
Whether, in creating the required evidentiary record de novo rather than merely reviewing the agency Record below, … the Federal Circuit exceeded its statutory jurisdiction under 35 U.S.C. § 144.
Haritha Samaranayake is the first listed inventor on U.S. Patent Application No. 13/877,246 along with several other Finland-based inventors who were apparently working under Prof. Seppo Ylä-Herttuala. The application claims a 2011 UKIPO priority filing date and is now owned by a Gliotherapy Limited. As the company-name suggests, the patent here claims a method for treating malignant gliomas.
1. A method of treating cancer in a human patient, said method comprising:
diagnosing a cancer in a human patient,
administering to said human patient a viral gene therapy vector having a transgene, and
within about 30 days of said administration of said viral gene therapy vector, administering to said human patient a cytotoxic agent other than gancylovir.
The basic procedural setup in the case:
Examiner twice rejected claims as obvious and Applicant appealed to PTAB.
In her Answering Brief, Examiner conceded that the Evidence of Record did not support the rejection, but offered a new rejection based upon new prior art (not previously of record in the case). Of note, the Examiner provided a citation to the cited non-patent-literature, but did not actually provide a copy of the references in the record.
The PTAB agreed with the examiner and found the claims obvious.
On appeal to the Federal Circuit, and now before the Supreme Court, the Applicant argued/argues that those references were never made of-record, and thus cannot serve as the basis for Affirmance on Appeal. For its part, the Federal Circuit affirmed the rejection without opinion (R.36); and denied the en banc rehearing petition without opinion.
This case comes down to the basic question of what counts as the USPTO’s “record” when handling an appeal. Although we lack a decision from the Federal Circuit, the USPTO Solicitor’s Office makes the simple argument that prior art becomes “of record” if the full scientific citation is provided by the examiner and the reference is reasonably (or actually) available to the applicant. Likewise, the PTAB concluded in its rehearing decision that the reference “was made of record in the Examiner’s Answer because the Examiner provided a full citation to it.”
Not mentioned here, the patentee did not properly raise the full record issue until after-the-fact and also clearly had the references in-hand when drafting its reply brief.
I’ll mention here that the new Second Gentleman Doug Emhoff is an litigator, and has handled a number of intellectual property cases. These were primarily entertainment related copyright and trademark cases, although he has worked on a few patent cases as well.
Examples:
Jukin Media, Inc. v. Viumbe, LLC et al. (2017). In this case, Emhoff represented the copyright holder Jukin Media. Jukin media apparently finds popular user-generated content online and then helps the creators license it for money.
GMYL, L.P. v. James Martin et al. (2016). Emhoff represented Francis Ford Coppola’s company GMYL in a TM case regarding the COPPOLA mark. (Disclosure, I did some work for these folks while in practice as well).
The Estate of James J Marshall v. Thierry Guetta et al (2012). This is a pretty interesting copyright case. Marshall has a number of iconic photographs of famous musicians. (Coltrane; Sonny Rollins; Thelonious Monk; etc.) Guetta stylized those photos and started making money from them. Emhoff represented Guetta. The parties settled with an unspecified payment from Guetta.
Note, I’m calling these folks “ACTING ____” because it is simpler and makes sense. BUT, the “acting” title is a term of art defined within the US Code. To avoid some of the legal requirements associated with being an “acting director,” the temporary leadership is using the longer title of someone “Performing the functions and duties of ____”
Acting Director – Drew Hirshfeld. Hirshfeld started at the PTO back in 1994 as a patent examiner and rose through the ranks. Has held a number of leadership positions within the Office: Director of TC2100 (computer architecture and software), Deputy Commissioner for Patent Examination Policy; Chief of Staff to Director Kapps; and Commissioner of Patents. For over 100 years, the position of Commissioner of Patents was the head of the Patent Office. In 1999, the PTO Director / Deputy Director positions were created.
Acting Deputy Director – Coke Morgan Stewart. Stewart’s permanent role is Senior Counsel to the PTO Director and was previously in the PTO Solicitor’s office where she handled a number of Federal Circuit appeals. She was previously a patent litigator at Kaye Scholer.
The Federal Circuit and Supreme Court are both closed today. Although inauguration day is not a nationwide federal holiday, it is a holiday for non-essential federal employees who work in the Washington DC Area.
Congratulations to President Biden! We’ve got some work to do.
This morning I was looking for inauguration related patents and stumbled across Facebook’s recently issued US10855640, which essentially claims combining a live video with parallel live social media responses. This patent is part of a family claiming a 2009 priority date, and at least three other patents have also issued.
The image from the patent is really fascinating. It shows a line-drawing of the Washington Mall and reports on the inauguration of Barack Obama. The drawing also shows several reactions. The names of the people here are not made-up. Kevin Werbach is a popular Business-Tech professor at Wharton; Ryan Merket is a start-up guy; as is Tariq Krim, Monty Metzger, and Chris Sacca; Peter Rothman is a computational guru.
It turns out that at least some of folks didn’t know that FB had used their names or posts. I heard from Prof. Werbach who indicated he did actually post “Obama coming out now.” But, that post was at 11:43 a.m. instead of 11:47 AND, it was on TWITTER, not Facebook. I’m wondering whether there are any rights of publicity or false-light issues associated with using someone’s likeness in your patent application.
The original drawings filed with the PTO are actually images of these posts, and the line-drawing was created later.
In any event, it is hard to believe that this patent issued since claim 1 just seems obvious AND likely fails the Alice test.
More on twitter:
Facebook recently obtained a patent on participating in the presidential inauguration via social media. US10855640 issued December 2020 "Interface for sharing posts about a live online event among users of a social networking system."https://t.co/CsyaIqq5BLpic.twitter.com/rKkymwfash
— Prof. Dennis Crouch ⚖️ Patent Law & AI (@patentlyo) January 19, 2021
As expected and is usual, Andrei Iancu has stepped-down from his post as Undersecretary of Commerce and USPTO Director a few hours before the conclusion of Donald Trump’s four years as president. Iancu will be remembered as being professional and engaged with the IP community throughout his three-year leadership. Every day Iancu spoke about the storied history of our patent system and its future potential. Iancu has been seen as more “pro-patentee” than his predecessor Michelle Lee, especially in ways that he transformed elements of the Patent Trial & Appeal Board (PTAB).
Iancu wrote the following letter to his PTO Colleagues announcing his resignation:
Dear colleagues,
It is with great pride and respect that I bid you farewell as Director of this remarkable agency, the nation’s epicenter of intellectual property policy and the guardian of America’s innovation economy. Thank you for the privilege to serve with you these past three years.
We have accomplished much together, and all of it was made possible by your exemplary professionalism, hard work, and dedication to public service. Everywhere I went during my tenure as Director, I received accolades about our agency and its employees. The USPTO has a unique culture of excellence that is second to none. And it is all because of you.
Together, we have balanced and strengthened America’s IP system, clarified some of its thorniest issues, and increased the reliability and predictability of the patents and trademarks we issue. Together, we have overcome challenges and navigated a government shutdown due to a lapse in funding, as well as the ongoing pandemic, without interruptions to our services. And through the National Council for Expanding American Innovation and other efforts, together we have laid the groundwork for a renaissance in American innovation, and for an IP ecosystem in which all Americans can partake irrespective of their geographic location or demographic status.
Born of the Constitution and steeped in history, America’s IP system is a crown jewel, a gold standard. You are its guardians. What you do here enables the greatest minds in the world to create and bring to market the tools that improve the human condition. It is hard to imagine a more consequential mission.
One of my favorite books is “The Boys in the Boat,” the true Depression-era story of nine hard-working young Americans who overcame all the odds to win the gold medal in rowing at the 1936 Summer Olympics in Berlin. In order to succeed at the things that matter, their boat maker told them they had to give themselves up to it completely: “When you were done and walked away from the boat,” he said, “you had to feel that you had left a piece of yourself behind in it forever; a bit of your heart.”
I’m leaving a bit of my heart here, at the USPTO, forever.
With warm regards,
Andrei Iancu
Although I have not heard, I expect that Laura Peter (Deputy Director) will also be resigning by Noon on January 20. Under ordinary succession process, Drew Hirshfeld, Commissioner for Patents, would take charge as the acting director until a successor is nominated by the new President and confirmed by the Senate. Hirshfeld has continually shown himself to be a solid manager with deep understanding of the patent law issues — something needed for the 10,000+ person office.
A few years ago, I wrote an article arguing that 35 U.S.C. § 144 requires the Federal Circuit to issue an opinion when it decides cases on appeal from the USPTO.
The … Federal Circuit shall review the decision from which an appeal is taken on the record before the Patent and Trademark Office. Upon its determination the court shall issue to the Director its mandate and opinion, which shall be entered of record in the Patent and Trademark Office and shall govern the further proceedings in the case.
35 U.S.C. § 144. [My Article] The provision was amended in 1984 to particularly require a “mandate and opinion.” However, prior to that time the Federal Circuit and its predecessor always wrote opinions associated with every judgment. Although there is no legislative history, I believe that the fact of an opinion was assumed and simply codified into law.
In this case, Waterblasting, LLC appealed an adverse IPR decision cancelling claims 1-4 and 10 of its US7255116 (Stripe removal system). On appeal, Waterblasting argued that the PTAB had erred in its legal analysis and also made factual conclusions that were not supported by substantial evidence.
The Federal Circuit sided with the PTO and affirmed. However, rather than explaining its decision, the Federal Circuit simply issued its judgment without opinion as permitted under Federal Circuit Local Rule 36.
In its newly filed en banc petition, Waterblasting argues that no-opinion judgments are improper in this situation:
§ 144 should be interpreted consistent with its clear language and the panel’s issuance of an affirmance without opinion is inconsistent with the law.
Note here that following my article, more than a dozen parties have asked the Federal Circuit to consider this issue. So far, the court gone meta — remaining silent about its choice to remain silent.
I used to play golf fairly regularly and got into the habit of announcing “BOOM!” on every drive. It didn’t help my game. BOOM!’s great name here also didn’t save its patent from dancing the Alice Two Step. (Note: I was 15 years old at the time–on my high-school freshman team getting free-rounds for the season).
This case is another affirmance of a dismissal for lack of patent eligibility. Under Alice/Mayo, the Supreme Court’s patent eligibility analysis is a two step process. At Step 1, the court asks whether the claims at issue are “directed to” a patent-ineligible concept, such as an abstract idea. Claims that fail Step 1 can be saved by Step 2, looks for “something more” beyond the ineligible concept sufficient to transform the claim’s nature into a patent eligible invention.
The claims at issue here are somewhat similar to the exchange-settlement process found ineligible in Alice. In particular, Boom’s patents all claim “methods for confirming that a transaction has been consummated prior to releasing electronic payment.” U.S. Patents 8,429,084; 9,235,857; and 10,346,840. The ‘840 patent issued June 2019 and so the PTO should have gotten this one right. The examiner initially rejected claims 1 as ineligible (then listed as claim 21). The patentee made several minor “clarifying amendments” and the examiner then allowed the case. In its reasons for allowance, the examiner wrote the following:
The claims as amended have been analyzed under 35 U.S.C.101, and although directed at some level to an abstract idea, confirming that a proposed sale transaction has been consummated, the claims as currently amended are found to integrate the abstract idea into a practical application sufficiently that they are patent-eligible under §101. They do not amount merely to having a computer apply an abstract idea, or using communication between computers to carry out a commercial interaction that could plausibly be done without computers or telecommunication (“could not plausibly be done” does not require that there be no conceivable parallel without computers or telecommunication).
93219_16212317_05-23-2019_NOA. Claim 1 is pretty long, but it is directed to a computer system “for confirming that a proposed sale transaction has been consummated.” The system is programmed to do the following:
Receive/store a buyer’s payment information;
Receive a request from the buyer to purchase an item from an online store;
Generate a “transaction-specific buyer acceptance identifier” using human-readable characters
Provide the TSBA identifier to the buyer’s computer who apparently provides it to the seller when purchasing.
Receive from a seller an identifier of the transaction (as well as the buyer and seller identities);
Compare the transaction and identity information;
If everything corresponds, then charge an account associated with the buyer.
This is basically a passcode system or checksum.
In its decision, the district court found the claims directed to the abstract idea of authenticating sales through the use of a third-party intermediary, and without any sufficient additional inventive concept. On appeal, the Federal Circuit affirmed:
Boom argues that the claims are not directed to an abstract idea, but rather to a technological improvement over prior art systems for confirming and processing online payments. Specifically, Boom argues that the elements of the claims provide specific steps for processing an online payment, and therefore are not directed to the general concept of escrow. . . .
We agree with Stripe that the claims are directed to the abstract idea of payment escrow. They only describe steps of passing information back and forth by a computer. The very purpose of the patents, as explained in the written description, is verifying consummation of a transaction before releasing payment by a third party, which is the definition of escrow. . . . Indeed, the claims are reminiscent of those at issue in Alice.
Slip Op.
The patentee also disputed whether the case was properly dismissed at the pleading stage. Although eligibility is a question of law, some aspects of the determination may require a fact-finder to consider evidence (and thus creating a genuine issue of material fact that precludes dismissal on the pleadings). Here, the patentee particularly amended its complaint to allege that the claimed invention was not routine or conventional at the time of the invention. On appeal, the Federal Circuit disregarded those statements as conclusory because they were not supported by particularly “plausible factual allegations.”
Drilling-in on this, the complaint makes the following allegations:
The particularized manner in which the ‘transaction specific buyer acceptance identifier’ and ‘transaction consummation completion identifier’ of the claims of the Asserted Patents are generated, stored, used, and related to other identifiers was not well-understood, routine, or conventional at the time of Mr. Bogaard’s inventions.
The Federal Circuit identifies the assertion here as conclusory and thus gives it no weight in determining whether the complaint generates disputed material facts. This is a bit odd since we’re asking the patentee to prove a negative, but perhaps the patentee could have cited to the reasons-for-allowance within the complaint itself or submitted an affidavit from an expert on-point as an attachment to the complaint. At that point though we’re getting pretty far from the “short and plain statement of the claim” required by Fed. R. Civ. Pro. 8.
iLife Technologies, Inc. v. Nintendo of America, Inc. (Fed. Cir. 2021) (Non-Precedential Decision)
The Trial: The jury sided with iLife–finding Nintendo liable for infringing iLife’s U.S. Patent No. 6,864,796 and awarding $10 million in damages. At trial, Nintendo had argued that the patent was invalid for lack of enablement and written description, but the jury denied those defenses. Nintendo also challenged the patent in an IPR, but the claims not proven invalid.
Here, the claims are directed a safety-feature for systems that evaluate body-movement, such as Nintendo’s Wii Sports and Mario Kart 8. The basic idea is that the system will sense acceleration of a body and determine whether the associated movement is “is within environmental tolerance.” A “tolerance indicia” is then created and transmitted. The patent notes that movements beyond tolerance might “be damaging, destructive, crippling, harmful, injurious, or otherwise alarming or, possibly, distressing to the body.”
Eligibility: Pre-trial, Nintendo had also argued that the asserted claims were invalid as directed to the abstract idea of gathering and processing data. The district court refused to decide that issue pre-trial. However, after the trial, the court stepped-up and found the claims invalid. That decision eliminated the damages award. On appeal here, the Federal Circuit has affirmed.
[ILife’s] claim 1 of the ’796 patent is not focused on a specific means or method to improve motion sensor systems, nor is it directed to a specific physical configuration of sensors. It merely recites a motion sensor system that evaluates movement of a body using static and dynamic acceleration information.
Slip. Op.
The patent itself includes more specific hardware and logical elements. Consider, for instance Figures 1 and 5 below. However, the asserted claims here were directed to a much broader abstraction.
As the district court held, the elements of claim 1, considered individually and as an ordered combination, fail to recite an inventive concept. Aside from the abstract idea, the claim recites only generic computer components, including a sensor, a processor, and a communication device. The specification’s description of
these elements confirms they are generic.
Id.
= = = =
Separating Out the Steps: The one quirk of this decision comes from the following statement: “The conventionality of the claim elements is only considered at step two” of the Alice/Mayo analysis. In finding the claims directed to an abstract idea, the district court had noted that claim 1 does not require “anything other than conventional sensors and processors performing conventional activities previously known to the industry.” It was error to consider conventionality at that stage of the analysis. Despite that error, the appellate panel still found the claim directed toward an abstract idea. Note that this is a non-precedential decision and so this line from the case won’t help yours.
= = = =
1. A system within a communications device capable of evaluating movement of a body relative to an environment, said system comprising:
a sensor, associable with said body, that senses dynamic and static accelerative phenomena of said body, and
a processor, associated with said sensor, that processes said sensed dynamic and static accelerative phenomena as a function of at least one accelerative event characteristic to thereby determine whether said evaluated body movement is within environmental tolerance
wherein said processor generates tolerance indicia in response to said determination; and
wherein said communication device transmits said tolerance indicia.
= = = = =
Michael Wilson (Munck Wilson Mandala) represented the patentee at trial and on appeal; Stephen Smith (Cooley) for the successful defendant.
July 4, 1776, the “united States of America” met and declared independence from Britain and its King who had worked to establish “an absolute Tyranny” over the thirteen colonies. Ever since, in the American mindset, tyranny demands revolution. “[W]henever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government.”
My Missouri Sen. Josh Hawley grabs hold of this rhetoric in his new book – Tyranny of Big Tech. Although Hawley’s publishing contract has been publicly cancelled, I’m sure he’ll find a way to publish it — even if it means he receives less money. Hawley is way-off the mark. As a person-in-power, he should have taken care to avoid revolutionary rhetoric for what is really a regulatory issue. He unfortunately raised tensions, raised them again, and then again.
BUT, the power of big tech is real. This week, Trump’s soap-box (twitter account) was been removed; Stripe stopped processing his donations; Parler was removed from major app stores (Google + Apple) and its web host denied (Amazon AWS) until the company complies with moderation policies. Parler says it won’t comply. You could imagine the owners of the internet backbone (Tier-1 ISPs) and as direct-to-customer-providers blocking communications from these services as well. This is the most public flexing of US internet might, but lower-key actions have been going on for years — especially toward traditional vices such as sex-workers, pornography, gambling, and marijuana sales. You could imagine next-level ramping up of tensions with pro-Trump shipping companies refusing to deliver for these companies. Ahh, but the legality of all of this may depend upon regulatory controls on speech and on common carriers.
Hawley has been calling these recent actions a violation of free speech rights. That is obviously wrong when it comes to First Amendment protections. The First Amendment does not require private companies publish Donald Trump’s speech or provide internet service Parler. That said, for years liberals have been calling for network neutrality regulations that would go a long way toward this end.
Free speech law does not begin-and-end with the U.S. Constitution. Rather, our internet has been structured as a reaction to common law principles later adapted by Congress. Those rules and regulations can change, and likely will change over the next four years.
For now though, I’m just looking for our democracy to survive the next 9 days. Good luck everyone!
Two competing patent eligibility petitions have been filed with the Supreme Court. In American Axle, the patentee argues that the Federal Circuit has gone too-far in finding its claimed method of manufacturing a frequency-tuned vehicle drive-shaft to be directed to a natural law (namely Hooke’s law). In Ariosa Diagnostics, the petition goes the other way and argues that the Federal Circuit has unduly narrowed its conception of a product-of-nature under Myriad. It would be interesting for the Supreme Court to take these cases as a pair in order to reconcile the law and explain the extent that product-of-nature analysis fits within the Mayo framework.
