Search Results for: "sas institute"

End of the Road for Ethicon’s Anti-Delegation Argument?

Patent, , ,

by Dennis Crouch

In a 10-1 decision, the Federal Circuit has rejected Ethicon’s petition for en banc rehearing on the question of  whether the USPTO Director improperly delegated IPR institution decisionmaking. Ethicon will likely petition the Supreme Court for its views.  The case raises interesting, but ones that I expect will ultimately fail.  Chief Judge Prost likely held the decision release to await the Cuozzo affirmance that implicitly supports the court’s ruling here.

Inter Partes Reviews (IPRs) can be broken down into a two step process. At the institution stage, the Patent Office Director is tasked with determining whether to institute the proceeding. 35 U.S.C. § 314. Once instituted, the Patent Trial and Appeal Board (PTAB) holds trial and makes a final determination of merits. 35 U.S.C. § 316(c).  Despite the statutory separation, the Director has delegated the entire procedure to the PTAB – including the institution decision.  In its failed petition, Ethicon questioned this delegation – asking: “Does the Patent Act permit the [PTAB] to make inter partes review institution decisions?”

The decision in Cuozzo does not directly address the challenge issues here, but the court’s loose language does suggest that it would side with the Federal Circuit.  In particular, the court repeatedly refers to actions by the “Patent Office” regarding institution and other decision rather than using the statutory language “Director.”  Although not as consistent, the court also repeatedly refers to actions by the PTAB as by the “Patent Office.”  In his dissent, Judge Alito addresses the issue directly and without criticism, although failing to note that Director Lee is a woman:

The Director of the Patent Office has delegated his authority to institute inter partes review to the Patent Trial and Appeal Board (Board), which also conducts and decides the inter partes review. See 37 CFR §§42.4(a), 42.108 (2015); 35 U. S. C. §§316(c), 318(a). I therefore use the term “Patent Office” to refer to the Director, the Board, and the Patent Office generally, as the case may be.

Alito dissent at footnote 2.

 

Ethicon: What Powers Can the Director Delegate to the Patent Trial & Appeal Board?

Patent, , ,

By Dennis Crouch

This is my second post[1] on the Federal Circuit’s 2016 decision Ethicon.[2]  The case focuses on the institution and later proceedings of inter partes reviews (IPRs).  The first stage is known as institution that, according to the statute, is within the purview of the “Director” of the USPTO.  Once instituted, the case moves to the second stage where the Patent Trial and Appeal Board (PTAB) is tasked the trial and the final decision.  Despite the statutory separation, the USPTO has created a process where the PTAB (rather than the Director) makes both the institution and final decision.  In its panel decision, the Federal Circuit has agreed that the statute provides the Director with authority to make the institution decision, but found that she had properly delegated that authority to the PTAB.

Developing an Efficient Process: After the IPR statute was enacted as part of the 2011 AIA, the USPTO implementation team concerned itself with the practicalities of implementation.  A major concern whose impact is apparent throughout the IPR implementation rules stems from the statutory one-year deadline for issuing a final written decision.  That one-year deadline placed efficiency and timeliness as top USPTO priorities.  The Director saw one way to create efficiencies was to link the institution with the trial and final decision.  The setup then was (and is) to have PTAB judges decide the institution stage and then have those same judges handle the trial and final determination of patentability.  This structure gives a head-start on the one-year timeline and avoids any waste-of-resources involved requiring multiple individuals to get-up-to-speed on the issues for a particular case.  The majority agrees with this assessment: “The PTO has determined that, in the interest of efficiency, the decision to institute and the final decision should be made by the same Board panel.”  I buy into this efficiency argument – the question though is (1) whether it violates the decision-maker-separation written into the statute or (2) leads to unfair results.

Delegation by the Director: The Patent Act includes a number of roles of the USPTO Director, including issuing and rejecting patents[3], making copies of patent documents, classifying patents, etc.  The Director does not personally make these decisions, but delegates them to the Commissioner for Patents and other PTO employees.  That structure is usual for administrative agencies and also highlighted by the statutory structure.[4]  Both the commissioner and the “other employees” are – by statute – placed into the role of general management and duties.

The Patent Trial and Appeal Board and its associated Administrative Patent Judges are different.  Their authority is particularly spelled out as follows: The Patent Trial and Appeal Board shall—

  • on written appeal of an applicant, review adverse decisions of examiners upon applications for patents pursuant to section 134(a);
  • review appeals of reexaminations pursuant to section 134(b);
  • conduct derivation proceedings pursuant to section 135; and
  • conduct inter partes reviews and post-grant reviews pursuant to chapters 31 and 32.[5]

With regard to IPR proceedings, note here that the PTAB authority is to “conduct” IPR proceedings and not “institute” those proceedings.  As the Federal Circuit has previously held, those are distinct activities under the statute.  The Administrative Patent Judges are also somewhat different than ordinary PTO employees – they are judges and they are deemed Officers under the U.S. Constitution appointed by the Secretary of Commerce (rather than PTO director).[6]  Certainly, it would have been improper to take-away statutory authority from PTAB, the question though is whether it was proper for the Director to add these new duties.

The Statutory Structure Separating Institution from Proceedings: I described above how Section 6 of the Patent Act seems to limit the authority of the PTAB to IPR proceedings (rather than institutions).  The statute goes further into this: the Director determines whether an IPR review is to be instituted. 35 U.S.C. § 314(a).  If instituted by the Director, the Board then conducts the trial. 35 U.S.C. § 316(c).  The separation here, is further emphasized by the fact that the institution proceeding is not appealable while the final decision is appealable.  The idea that these are separate roles fit within the history and structure of the agency where no decision-making roles (beyond that authorized by Section 6) have been given to the PTAB other than this institution decision. Thus, the PTAB does not decide petitions (other than those directly related to PTAB operations), reissues, or reexaminations (except on appeal).

The majority opinion in this case was penned by Judge Dyk and joined by Judge Taranto glosses-over all of these arguments, writing:

There is nothing in the statute or legislative history of the statute indicating a concern with separating the functions of initiation and final decision. Ethicon ignores the longstanding rule that agency heads have implied authority to delegate to officials within the agency, even without explicit statutory authority and even when agency officials have other statutory duties.

The court particularly fails to consider the role of the PTAB and of its Judges and whether those bodies should be considered separate and distinct from other USPTO employees.  A request for rehearing is almost certainly coming that may well be followed by a petition for writ of certiorari.

I wonder if the court would have changed direction if the statutory structure of the IPR process had begun with a determination by the Director followed by a right of appeal to the PTAB (rather than institution followed by final decision). In that situation, would the Director be permitted to delegate the initial decision to the PTAB?

The decision here is not in a vacuum.  Rather, most believe that a separation-of-roles would reduce the likelihood of cancelling claims in IPRs.  This result will help to divide the parties doing the arguing according to whether they are enforcing patents or challenging patents.

= = = = =

[1] Read the first post: Crouch, Due Process and Separating Powers within an Agency, Patently-O (January 13, 2016) at https://patentlyo.com/patent/2016/01/process-separating-within.html.

[2] Ethicon Endo-Surgery v. Covidien, — F.3d —, 2016 WL 145576, (Fed. Cir. 2016) http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/14-1771.Opinion.1-8-2016.1.PDF.

[3] 35 U.S.C. §§ 131 and 132.

[4] 35 U.S.C. § 3(b).

[5] 35 U.S.C. § 6(b).

[6] Following professor John Duffy’s 2007 article on-point, these roles have been tightened-up. https://patentlyo.com/media/docs/2011/10/Duffy.BPAI.pdf.

Pending Supreme Court Patent Cases 2016 (January 12 Update)

Patent, , , , , , , , ,

by Dennis Crouch

As of January 12, the Supreme Court has granted two petitions for certiorari for this term. Both Halo and Stryker cover the same topic of enhanced damages, a.k.a. willfulness. Another 17 petitions remain pending. Following its latest conference, the Court denied two low-quality petitions (Arunachalam and Morgan) and also the SpeedTrack case which had focused on interesting but esoteric preclusion issues involving the “Kessler doctrine.”

The important inter partes review case Cuozzo survived its first conference and is up on the blocks for a second round this week. This type of immediate “relisting” occurs in almost all cases where certiorari is granted and raises the odds of grant to >50%. Because the US Patent Office is a party in the case, there would be no call for the views of the Solicitor General before granting / denying certiorari. Nine amici briefs were also filed at the petition stage – a factor that also raises the likelihood that certiorari will be granted.

1. Petitions Granted:

2. Petitions for Writ of Certiorari Pending:

  • Design Patents: Samsung Electronics Co. v. Apple Inc., No 15-777 (design patent scope and damages calculation)
  • Inducement: Life Technologies Corporation, et al. v. Promega Corporation, No. 14-1538 (whether an entity can “induce itself” under 271(f)(1))(CVSG, awaiting government brief)
  • Inducement: Medtronic Sofamor Danek USA, Inc., et al. v. NuVasive, Inc., No. 15-85 (Commil re-hash – mens rea requirement for inducement)
  • Inducement: Arthrex, Inc. v. Smith & Nephew, Inc., et al., No. 15-559 (Commil re-hash – if actions were “not objectively unreasonable” can they constitute inducement?)
  • Post Grant Admin: Cuozzo Speed Technologies, LLC v. Michelle K. Lee, No. 15-446 (BRI construction in IPRs; institution decisions unreviewable)
  • Post Grant Admin: Achates Reference Publishing, Inc. v. Apple, Inc., et al., No. 15-842 (IPR institution decisions unreviewable, even when addressed in a final written decision by PTAB)
  • Post Grant Admin: 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?)
  • Preclusion or Jurisdiction: Vermont v. MPHJ Technology Investments, LLC, No. 15-838 (Federal court jurisdiction in anti-troll consumer protection case)
  • Preclusion or Jurisdiction: Alexsam, Inc. v. The Gap, Inc., No. 15-736 (appellate jurisdiction over patents that were dropped from case pre-trial) (New Petition)
  • Preclusion or Jurisdiction:
    ePlus, Inc. v. Lawson Software, Inc., No. 15-639 (what happens with a finally-determined permanent injunction after PTO cancels the patent claim?)
  • Preclusion or Jurisdiction: 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)
  • Preclusion or Jurisdiction: 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.)
  • Eligibility Challenges: 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))
  • Claim Construction: 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.”)
  • Patent Term Adjustment Dispute: Daiichi Sankyo Company, Ltd. v. Michelle K. Lee, No. 15-652 (Patent Term Adjustment – whether the 180 day deadline applies; could bleed into admin law issues)
  • Damages: 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.)
  • Damages: Innovention Toys, LLC v. MGA Entertainment, Inc., et al., No. 15-635 (Stryker/Halo follow-on)

3. Petitions for Writ of Certiorari Denied:

  • Allvoice Developments US, LLC v. Microsoft Corp., No. 15-538
  • OIP Technologies, Inc. v. Amazon.com, Inc., No. 15-642
  • Fivetech Technology Inc. v. Southco, Inc., No. 15-381
  • Tyco Healthcare Group LP, et al. v. Ethicon Endo-Surgery, Inc., No. 15-115
  • Nautilus, Inc. v. Biosig Instruments, Inc., No. 15-561
  • Chunghwa Picture Tubes, Ltd., et al. v. Eidos Display, LLC, et al., No. 15-288
  • Kenneth Butler, Sr. v. Balkamp Inc., et al., No. 15-273    
  • Arthrex, Inc. v. KFx Medical Corporation, No. 15-291
  • Daiichi Sankyo, Inc., et al. v. Apotex Inc., No. 15-281
  • Mylan Pharmaceuticals Inc. v. Apotex Inc., No. 15-307
  • Luv N’ Care, Ltd. v. Munchkin, Inc., No. 15-242
  • Automated Merchandising Systems, Inc. v. Michelle K. Lee, Director, United States Patent and Trademark Office, No. 15-326
  • I/P Engine, Inc. v. AOL Inc., et al., No. 14-1358
  • Interval Licensing LLC v. AOL Inc., et al., No. 14-1362
  • Content Extraction and Transmission LLC v. Wells Fargo Bank, National Association, et al., No. 14-1473
  • W.L. Gore & Associates, Inc. v. Bard Peripheral Vascular, Inc., et al., No. 15-41
  • NetAirus Technologies, LLC v. Apple Inc., No. 14-1353
  • Muffin Faye Anderson v. Kimberly-Clark Corporation, No. 14-10337
  • MobileMedia Ideas LLC v. Apple Inc., No. 15-206
  • SpeedTrack, Inc. v. Office Depot, Inc. et al., No. 15-461 (Kessler doctrine)
  • Rodney K. Morgan, et al. v. Global Traffic Technologies LLC, No. 15-602
  • Lakshmi Arunachalam v. JPMorgan Chase & Co., No. 15-691

4. Prior versions of this report:

 

Akin Gump Files Petition to Institute Derivation Against Former Vendor Alleging Its Lawyer’s “Idea” was Stolen

Ethics

By David Hricik, Mercer Law School

First, some background to the technology for this interesting set of disputes. In some legislatures, a bill that changes an existing statute doesn’t do it by redline: the bill does not show new language by underlining and deletions to existing text by strike throughs. Instead, in some legislatures, a bill must say something like “in 28 USC 1332, strike ‘$75,000’ and replace it with “$100,000”.  That can get complicated, especially if there are statutes that cross-reference each other, different enactment dates, and so on.  There are systems that are used to write bills, but even the people who design them hadn’t solved how to do the “replace X with Y” type of bill drafting and the need to do so had apparently been known in the field for a while.

Xcential Legislative Technologies is a company that provides bill drafting (and other) technology to legislatures.  Akin Gump is a law firm that does a lot of lobbying.  In 2019, an Akin Gump lawyer apparently reached out to Xcential to request a demo of its bill-drafting technology. NDAs in place, Xcential met with an Akin Gump lawyer and, among other things, he described that known problem that, again, a problem that apparently people in this field had known about but which no one had solved, or at least solved in a good way: how to design a system that would generate bills that conformed with the “strike through X and replace with Y” mode required by some legislative bodies.

If I understand the facts correctly, Xcential then set out to solve the problem in order to sell services to Akin Gump.  According to Akin Gump’s suit (discussed below), when Xcential returned to demonstrate its solution to the Akin Gump lawyer, the Akin Gump lawyer upon seeing it repeatedly said “holy shit”… but balked at Xcential’s price tag.

They went their separate ways.

Xcential then filed a patent application naming its long-time coding and legislative drafting expert as the sole inventor. The patent application is here.

In 2022, Akin Gump filed a petition to institute derivation, asserting that its lawyer had in fact conceived of the claimed invention. Those petitions are pretty rare and this one is here.

In addition, Akin Gump sued Xcential and the named inventor individually (here). Depending on who you believe, the lawyer — who allegedly doesn’t have any coding experience — had conceived of the claimed invention before it was shown to him by Xcential and he said “holy shit.” You can read more about this suit here. A press release from the company is here. (I don’t see anything on Akin Gump’s site talking about the suit, or I would include it.)

Xcential has filed counterclaims against Akin Gump (here).  Among other things, it asserts Akin Gump misappropriated Xcential’s confidential information, committed slander of title, and includes other claims.

In the suit, Akin Gump moved for preliminary injunction. I may be missing something, but its theory is that its lawyer’s “idea” to draft a bill to meet the “replace X with Y” required format was a “trade secret” and the Xcential patent application (with all of the support necessary to solve the problem) is the theft of that “secret.”  Akin Gump’s preliminary injunction motion is here.  Xcential’s rather, um, direct response to it, here.

Call me skeptical — or maybe it’s because I’ve written a book on statutory interpretation, worked in the US House, and worked in the Arizona State Senate — but the “idea” to draft legislation drafted in the “replace x with y” way was kinda widely known and not “revolutionary” (as Akin Gump’s preliminary injunction motion says). Further, at least under the trade secret laws I’ve looked at, knowing a problem exists isn’t a trade secret. It’s the solution that might be.

Finally, and perhaps it is just coincidence, but the firm that had been representing Akin Gump withdrew and Akin Gump is now representing itself.

Stay tuned…

CLE Opportunity: Patent Law Institute 2020: Critical Issues & Best Practices

Ethics

By David Hricik, Mercer Law School

In part shameless self-promotion (wait, I didn’t get paid to do it…!?), but I’m also betting a lot of you need CLE and need it virtually.  I speak about 15 times a year at CLEs on ethical issues in patent practice and general practice, and did so at this Practicing Law Institute CLE recently. It has a lot of good and varied coverage and the on-line format lets you have a lot of flexibility in topics between the East and West coast versions. The link is here.

Here’s their description:

What You Will Learn

  • New! Review of ITC patent practices by industry specialists
  • New! IP-specific AI tools for corporations and law firms
  • New! Perspectives on patents from three different judicial vantage points
  • Recent court decisions shaping patent law
  • Latest USPTO rules and guidelines
  • Patent subject matter eligibility of computer-implemented inventions
  • Latest developments in patenting medical therapies
  • Corporate counsel discuss the effects and concerns of recent court decisions/ USPTO activity
  • Building a strong patent portfolio

Houston: 34th Annual Fall Institute on IP Law

Patent

I’m looking forward to the upcoming 34th Annual Fall Institute on IP Law hosted by the University of Houston Law Center (law.uh.edu/ipil) and HIPLA (hipla.org) in Galveston on Sept 27, 2018.  I am keynote speaker – with what I think is a fun topic: 

“The Life-Changing Magic of Tidying Up [our Patent System and your Patent Portfolio], with apologies to Marie Kondo.”  

I’ll post my materials after the talk.

The committee has put together a great program with 30+ speakers.  Most are patent focused, but I’m particularly looking forward to Robert Cote’s talk on Funding IP and Seth Jaffe’s discussion of CyberSecurity.  See you in Galveston!

2016 Corporate IP Institute

Patent

CrouchCoopBy Dennis Crouch

I have greatly reduced my travel schedule this fall – spending time instead milling lumber and building my chicken coop (as well as teaching patent law & internet law).

I am, however, looking forward to returning to Atlanta in two weeks to take part in the 2016 Corporate IP Institute at Georgia State University. (October 25-26).

Image result for georgia stateChason Carroll, Jeff Kuester, and Perry Binder have put together a great program. In addition to Professor Hricik’s ethics talk, I’m particularly looking forward to the discussions of cybersecurity.  I’ll be doing an IP Year-in-Review (Cases, Legislation, Regulation, etc.)  The event typically has a high turnout of in house IP attorneys.   See you there.

Georgia Annual Corporate IP Institute October 27-28 in Atlanta

Current Affairs, Ethics, Patent

By David Hricik

On October 27-28, 2015, the Ninth Annual Corporate IP Institute® is being held in Atlanta.  I’ll be speaking along with a lot of other folks.  As usual, the Intellectual Property Owners Association (IPO) has organized a panel for the event for corporate IP management best practices.  Registration for the Institute (and a bonus charity golf game, the CIP CUP® — these folks obviously have trademark and marketing lawyers around) is available here.

 

Genetics Institute v. Novartis Vaccines

Patent

By Jason Rantanen

Genetics Institute, LLC v. Novartis Vaccines and Diagnostics, Inc. (Fed. Cir. 2011)
Panel: Lourie (author), Plager, Dyk (dissenting in part)

The Science: In the 1980's, scientists raced to develop a truncated version of Factor VIII, an essential blood-clotting protein.  Two companies, Genetics and Novartis, successfully developed and patented truncated versions of this 2,332 amino acid protein.  Genetics' patent, with a 1985 priority date, included claims directed at a version of the protein that removed between 581 and 949 amino acids in the region between amino acid 740 and 1690, while Novartis's patents, with a 1986 priority date, retained amino acids 1 to 740 and 1649 to 2332.  The retention of amino acids 1649 to 1689 later turned out to be significant because this range binds to von Willebrand factor ("vWF"), an association that is critical for the optimal regulation of the blood coagulation.

Procedural Background: In 2008, Genetics sued Novartis to determine priority of invention under 35 U.S.C. § 291.  Novartis argued that the district court lacked subject matter jurisdiction because the PTO's extension of the patent term from 2006 to 2010 under 35 U.S.C. § 156 applied to fewer than all of the patent claims, and that there was no interference-in-fact.  The district court rejected Novartis's jurisdictional challenge but agreed there was no interference.

Appellate jurisdiction: Seeking to terminate the appeal at the outset, Novartis contended that the CAFC itself lacked subject matter jurisdiction because the Genetics patent expired three days after the district court's entry of judgment.  None of the judges were persuaded.  Distinguishing an earlier case in which the court held that it lacked subject matter jurisdiction because of a claim disclaimer, the CAFC held that the expiration of Genetics' patent "following the district court's final decision does not strip our court of jurisdiction over the present appeal." 

Section 156 extension applies to the entire patent: The panel likewise affirmed the district court's finding of subject matter jurisdiction, rejecting Novartis's argument regarding the scope of the patent term extension.  Although Section 156(b) limits the effect of the extension, it does not limit the extension to specific claims.  "A patent as a whole is extended even though its effect may be limited to certain of its claims."  Slip Op. at 17 (emphasis added).

No prima facie case of obviousness: To determine whether an interference-in-fact exists, courts apply a two-way validity test, i.e.: whether the claims of one patent invalidate the claims of the other and vice-versa.  Both directions must be established.  In this case, the court focused on whether the claims of Genetics' patent rendered obvious the claims of Novartis's patents. 

Judge Lourie, joined by Judge Plager, concluded that they did not, as the lack of any reason to create a truncated protein that incorporated the 1649-1689 region supported the district court's finding of no prima facie case of obviousness.  Any motivation, they reasoned, would have been in the opposite direction – to create a shorter protein and eliminate more amino acids, not to create a longer protein.  Nor was the mere existence of a cleavage site (a natural point for cutting proteins) sufficient to provide the requisite reason to cut the protein at that point to make the claimed truncated protein.

Judge Dyk disagreed, pointing to cases holding that structural relationships may provide the requisite reason to modify compounds and can give rise to a case of prima facie obviousness.  "[T]he truncated Factor VIII proteins of the Novartis patents are not merely homologs, analogs, or isomers – they are all variants of the exact same protein, exhibiting the exact same procoagulant functions."  Dissent at 5 (emphasis in original). 

The use of post-invention "unexpected results": The majority further supported their conclusion by citing to the unexpected result of the 1649-1689 region binding to vWF.  The problem, however, lay in the lack of appreciation of this role until well after the priority date of Novartis's patents.  Undisuaded, the majority pressed on, holding that such evidence was nonetheless relevant to nonobviousness: "[E]very property of a claimed compound need not be fully recognized as of hte filing date of a patent application to be relevant to nonobviousness."  Slip Op. at 29.  In other words, "evidence of unexpected results may be used to rebut a case of prima facie obviousness even if that evidence was obtained after the patent's filing or issue date."  Id.

Again, Judge Dyk disagreed.  "The majority's finding of nonobviousness is based entirely on hindsight and happenstance, and not on what the inventors knew at the time the Novartis patents were filed.  See 35 U.S.C. § 103(a) (stating that an invention cannot be patented if 'the subject matter as a whole would have been obvious at the time the invention was made')."  Dissent at 10 (emphasis in quotation).  In Judge Dyk's view, the "unexpected properties must either be set forth in the specification or contemporaneously known to the inventors, rather than being discovered long after the fact."  Id. at 12.

Judge Dyk's citation of Section 103 notwithstanding, it seems reasonable to look to post-filing or issuance evidence with respect to at least some secondary indicia of nonobviousness.  Commercial success, for instance, would be difficult to establish if only pre-filing evidence were able to be considered.  But I think he's right on the question of unexpected results.  In my mind, a valid distinction can be drawn between discoveries of unexpected results – which really go to the fundamental question of obviousness – and commercial success, which must necessarily rely on the invention's post-filing success in the marketplace.

Practice note: Infringement defense attorneys writing discovery requests may want to take note of the majority's holding on unexpected results to press for either post-filing/issuance discovery on this point or a stipulation that such evidence will not be relied upon by the patent holder.

  

Franklin Pierce IP Summer Institute

Patent

For most of the month of June, I will be teaching the basic US Patent Law course at Franklin Pierce’s 21st annual Intellectual Property Summer Institute (IPSI). Other (more specialized) courses available include, inter alia, IP Management (Dellenbaugh); International Patent Law (Becker); Patent Data Mining (Cavicchi); Practice before the Federal Circuit (Whealan); Licensing (Weikers, Jorda); Trademark Law (LaFrance); and IP Valuation (Smith). I’m hoping to sit-in on a couple of these for my own edification.

For those of you who don’t know, Concord, New Hampshire is absolutely beautiful in the summer. Since Pierce is the only law school in the state and is located in the capital city, there is also a good chance that you’ll get to meet your favorite presidential candidate.

International: Pierce Law also offers an international summer perspective. Professor Bill Hennessey (probably the leading US scholar on Chinese patent law) is leading the IPSI program at Tsinghua University in Beijing. (June 25 – July 27). This is one of the very-top programs on Asian-IP issues, and Tsinghua is one of the highest rated universities in all of mainland China.  For a more European approach, Pierce Law also has an eLaw program in Cork, Ireland.

Links:

Democracy on Trial: Chestek and the Future of USPTO Accountability

Patent, , , , , , , , ,

by Dennis Crouch

The pending petition for certiorari in Chestek v. Vidal focuses on the extend that the APA requires the USPTO to follow notice-and-comment requirements when promulgating regulations under 35 U.S.C. § 2(b)(2). In its decision below, the Federal Circuit held that the USPTO is exempt from these requirements because the types of rules it is authorized to issue under Section 2(b)(2) are procedural in nature, and the APA excuses “rules of agency … procedure” from the requirements.  There are two ways that the Federal Circuit potentially erred:

  1. The TM applicant home-address requirement being challenged here is not the type of procedural rule exempted under the APA; and
  2. Even if it is procedural, the particular requirements of the Patent Act’s section 2(b)(2) requires following the notice and comment requirements.

The Federal Circuit agreed that 35 U.S.C. § 2(b)(2) requires USPTO regulations to be “made in accordance with” the APA — but disagreed that this requires notice-and-comment for all new regulations. The court concluded that the APA inherently includes an exception for procedural requirements and so the USPTO was not required to follow notice-and-comment rulemaking when promulgating the trademark applicant home-address rule, because the court deemed it to be a procedural rather than substantive rule exempt from those APA requirements.

Five amicus briefs were recently filed in support of the petitioner, arguing that Supreme Court review is warranted to correct the Federal Circuit’s erroneous decision, arguing that the Federal Circuit’s interpretation of Section 2(b)(2) is flawed and undermines important principles of administrative law. (more…)

Codifying Discretionary Denial of IPR Petitions

Patent, , , ,

by Dennis Crouch

The USPTO recently released yet another Notice of Proposed Rulemaking (NPRM) — this one focusing on codification of IPR/PGR rules associated with non-merits based “discretionary denials” of institution as well as termination due to settlement.  This is a controversial area because of that word ‘discretion.’  Unrestricted discretion by government officials is concerning because of the potential for arbitrary or biased decisions, lacking transparency and accountability.  In that frame, these rules are beneficial because they structure and limit discretion – hopefully making the outcomes more predictable and justifiable.  A key note – the rules here focus primarily on procedure (separate briefing for discretionary denials) and substantive issues relating to parallel, serial, and cumulative petitions. Although this is an important step, they do not address discretionary denials associated with parallel litigation (or other outside factors) under Fintiv and subsequent director guidance. This is likely the most controversial area of discretionary denials that is being left out for now.

Congress clearly intended the USPTO to have substantial discretion (more…)

Plagiarism Police come for Winston & Strawn

Patent

Hsuanyeh Law Group v. Winston & Strawn, 23-cv-11193 (S.D.N.Y. 2024)

A recent copyright infringement lawsuit filed by small Boston intellectual property boutique Hsuanyeh Law Group PC (HLG) against international giant Winston & Strawn LLP focuses a dividing line that can highlight when copying the work of another firm is permissible.  I believe that Winston & Strawn will eventually prevail based upon a fair use defense, but it is still an embarrassing situation for the firm and attorneys involved.  I hope that they did not overbill the client.  The role of attribution is also receiving increasing focus as attorneys begin to rely more heavily on AI outputs for their legal documents.

(more…)

Supreme Court on Patent Law: November 2023

Patent,

by Dennis Crouch

The Supreme Court is set to consider several significant patent law petitions addressing a range of issues from the application of obviousness standards, challenges to PTAB procedures, interpretation of joinder time limits IPR, to the proper scope patent eligibility doctrine. Here’s a brief overview of each case, followed by more details:

  1. MacNeil v. Yita (No. 23-494): This case examines the Federal Circuit’s reversal of a PTAB obviousness decision.  Petitioner argues that the appellate court substituted its own findings in the reversal rather than vacating and remanding.  This could be an important case for revitalizing the importance of secondary indicia of non-obviousness.
  2. Intel v. Vidal (No 23-135): This case challenges the “Fintiv rule” that restricts the initiation of inter partes review in cases where parallel district court litigation is pending.  The PTO is changing its approach, but Intel argues that the Agency isn’t going far enough.
  3. VirnetX v. Mangrove Partners Master Fund (No. 23-315): This case questions the Federal Circuit’s interpretation of time limits for joining IPR partes. Apple joined the petition long after it would have been barred from filing its own.  Although I sympathize with the petition, I believe the Federal Circuit got the statutory interpretation correct.
  4. Realtime Data v. Fortinet (No. 23-491): Here, Realtime Data challenges what it sees as lower court improper expansion of eligibility doctrine.  It asks the court to reiterate that eligibility is generally quite broad, subject to some quite narrow judge-made exceptions.
  5. Tehrani v. Hamilton Technologies (No. 23-575): This case involves a dispute over the PTAB’s obviousness finding and the Federal Circuit’s affirmation, particularly focusing on the qualifications of an expert witness, the proper interpretation of claim terms, etc.  There is some really interesting parts of the petition and case, but the petition largely re-argues the evidence — typically a losing approach at the Supreme Court.
  6. Vanda v. Teva (No. 23-___): I expect Vanda to challenge the Federal Circuit’s decision on the obviousness of its patents covering methods of using a particular drug. Vanda will argue that the court was too quick to jump to its obviousness conclusion.  If cert is granted, this would be a very important case.
  7. Traxcell Techs. v. AT&T (No. 23-574): This case examines whether attorney fees can be awarded based on pursuing litigation deemed “baseless” after a magistrate judge’s non-infringement recommendation but before the district judge finalizes that recommendation.

More detail on each case below: (more…)

Shifting Arguments at the PTAB

Patent

by Dennis Crouch

The Federal Circuit’s new decision in Rembrandt Diagnostics, LP v. Alere, Inc., 2021-1796 (Fed. Cir. Aug 11, 2023) complements the court’s recent decision in Axonics, Inc. v. Medtronic, Inc., 2022-1532 (Fed. Cir. Aug. 7, 2023). Ordinarily, an IPR petitioner must stick to the arguments and reasoning that it sets forth in the original petition.  These two cases take a contrary position and permit the petitioner to shift as late as the  final reply brief. The court permits these changes only if responsive to new arguments by the patentee and sufficiently linked to previously raised arguments.

This post focuses on Rembrandt.  A prior post looked at Axonics.

Rembrandt was previously before the Federal Circuit on the full-institution issue that the Supreme Court addressed in SAS Institute.  The PTAB had originally instituted Alere’s IPR petition on some but not all grounds presented.  In its 2019 decision, the Federal Circuit affirmed the PTAB’s claim construction but remanded for the PTAB to consider non-instituted grounds.   On remand, the PTAB instituted on all grounds and eventually concluded that additional claims were also unpatentable as obvious. On appeal this time, the Federal Circuit has affirmed — finding that the PTAB had properly found the claims obvious.

Rembrandt owns U.S. Patent No. 6,548,019 related to assay test strip devices for testing biological fluids.  As the figure shows, the setup is quite simple and allows for multiple strips to be tested at once.

One of the key issues raised on appeal was the presentation of new theories mid-stream by the petitioner Alere.  In particular, Rembrandt pointed to Alere’s reply brief as offering new theories.

Rembrandt argued Alere raised new theories about cost/time savings as a motivation to modify the MacKay reference to hold multiple test strips. However, the Federal Circuit found this was responsive to Rembrandt’s argument that there was no motivation to modify MacKay. Further, the cost/time savings was viewed as properly expanding on Alere’s previous “efficiency” argument.

Alere’s reply argument discussing cost and time savings has a nexus to Rembrandt’s prior argument and is responsive. It refutes Rembrandt’s assertions that there is no motivation to add multiple test strips or an expectation of success. And by discussing time and cost savings as a form of efficiency, it also properly expands on and is a fair extension of its previously raised efficiency argument.

Slip Op.

The Federal Circuit found an alternative reason to affirm — holding that forfeited its argument.  Before the PTAB, Rembrandt had generally objected to new theories presented by Alere.  However, the Federal Circuit concluded that generic objection was insufficient to timely assert its right. The Federal Circuit’s position was bolstered by the fact that Rembrandt had made a very specific objection regarding another new-theory issue that is not on appeal. “We hold that Rembrandt’s generic objection is insufficient to constitute a proper objection—especially because Rembrandt expressly objected to other allegedly new theories without doing so here.”

In addition to these procedural issue, the court also concluded that the Board’s conclusions were supported by substantial evidence. A key here is that Rembrandt did not provide expert testimony to rebut Alere’s expert. The prior art and expert testimony provide substantial evidence to support the PTAB’s findings on the teachings of the prior art and motivation to combine.

Guest Post: Margo Bagley, The Diversity Pilots Initiative

Patent

Editor’s note: This post is the first in a series relating to the Diversity Pilots Initiative, a project co-organized by Professors Margo Bagley & Colleen Chien along with Professor Jillian Grennan that seeks to advance inclusive innovation through rigorous research. The preview blog in the series is here and resources from the first conference of the initiative, co-organized with the USPTO are available here. Below, Professor Bagley introduces herself, the project, and the series. – Jason Rantanen

By: Margo A. Bagley, Asa Griggs Candler Professor of Law, Emory University School of Law, co-inventor, and Principal, Diversity Pilots Initiative. Watch her video for Invent Together, entitled Challenges Encountered as a Diverse Inventor.

In addition to being Associate Dean for Research and Asa Griggs Candler Professor of Law at Emory University School of Law, I am an African-American woman, co-inventor on two patents, patent attorney and law professor, author of numerous articles, chapters, and books on patent law, and advisor on patent issues to governments and international organizations. And yet, it is my firsthand experience, as a member of groups that have been systematically underrepresented and overlooked in the innovation ecosystem, that gives me a deep understanding and resolve to champion diversity and inclusion in innovation and led me to co-organize, with Professor Colleen Chien and personnel from the USPTO, the first Innovator Diversity Pilots conference held at Santa Clara Law School on November 18, 2022. (video recordings and slides available here.) This blog post, and others to follow in the series, will highlight practices that have been or will be tried, tested and evaluated to increase diversity in innovation.

According to the USPTO, women represent over 50% of the workforce and 27% of STEM workers, but  comprise only 13% of inventors on patents. Moreover, while black inventors have made profound contributions to technological advances in America, it is estimated that from 1970 to 2006, black American inventors received six patents per million people, compared to 235 patents per million for all U.S. inventors.  These statistics provided part of the impetus for the conference, which was co-organized by the USPTO and co-sponsored by the law schools of Santa Clara University and Emory University, the Intellectual Property Owners Association, the US Intellectual Property Alliance, the National Academy of Inventors, the Institute for Progress, the Association of University Technology Managers, Meta, the Institute for IP and Social Justice, Finnegan, and Schwegman Lundberg & Woessner.

The conference focused on piloting: temporarily introducing new practices to learn from, combined with rigorous research methods to evaluate their effectiveness.  The day comprised a lively mixture of “Firestarter” presentations describing pilots already completed or underway, along with academic “pitches” — proposals for new pilots across a range of entities and at a variety of points along the innovation timeline. It also included a thought-provoking keynote address by Professor John List (author of the Voltage Effect) (video), exploring the importance of successful scaling of pilots to achieve measurable results, and a fireside chat with dynamic USPTO Director Kathi Vidal whose unparalleled commitment to increasing the participation of members of underrepresented groups in the patenting process is already well underway and bearing fruit. (video)

An underlying theme of the conference was the important realization that growing the percentage of Americans of all backgrounds participating in the innovation system is not only the right thing to do, it is also critical to global economic competitiveness for the United States. For many who are aware of the dismal statistics cited above but are unsure of how to impact them, the conference provided (and through its preserved recordings still provides) an empowering opportunity to identify measurable, deployable ways to pilot low risk interventions.  It also facilitated the fostering of a community of practice, the bolstering of an evidence base for what works (and, importantly, what does not), all of which can inform policy and regulatory efforts to promote diversity and inclusion in innovation and invention.

Segments explored the why and how of diversity piloting, including the case for diversity in innovation and for rigorously piloting ways of advancing it.  Firestarters described, inter alia, diversity nudges and ways of addressing organizational barriers to diversity in the innovation ecosystem such as the measurable success of opt-out vs. opt-in invention disclosure systems; affinity group creation and support in the USPTO; the PTAB LEAP program (granting 15 additional minutes of argument to a party that allows a junior associate to participate in oral advocacy); and a “moneyball”-like fellowship program successful in bringing back into the legal profession more than 200 women who left it to raise children. Pitches covered attribution practices at the Office, mentorship, and adapting the diversity pledge to the legal academy. (video)

An intrinsic feature of the conference was its effectiveness in lifting up several successful initiatives already underway, as well as resources available to stakeholders seeking where or how to begin.  It built on and featured important early efforts like the USIPA Increasing Diversity in Innovation Pledge, signed by over 50 leading companies, the USPTO Council for Inclusive Innovation (CI2), IPO Diversity in IP Toolkit, and the Santa Clara Diversity in Innovation Best Practices Guide.

Important law firm and corporate initiatives highlighted at the conference during Session 5 include Adapt.legal’s mentorship and DEI program resources, Schwegman Lundberg & Woessner’s SLW Academy providing a comprehensive set of free patent training videos, as well as Harrity & Harrity’s multi-pronged approach to increasing innovator and patent practitioner diversity and capacity, including the Harrity Academy and Patent Pathways programs (volunteer here).  We hope at future conferences to feature even more of the work that these and other firms are doing that often is insufficiently publicized and lauded.

The conference also provided opportunities for sharing personal reflections.  Colleen Chien (the mastermind of the conference and diversity piloting approach) and I together shared ways that technical fields have provided opportunities for the advancement of women and people of color in our own families and journeys, but also stereotypes and roadblocks that may stymie progress.  We both found encouraging the variety of approaches presented during the day that bode well for the patent system’s ability to facilitate personal advancement for more Americans from all walks of life, while advancing our national interest in technological progress. (video presentation, slides)

Students in a Patent Law course I taught at Harvard Law School were assigned to watch a 1.5-hour conference segment of their choosing and write a short reaction paper on their impressions.  Their reactions were fascinating, featuring words like “shocking”, surprising”, “moving”, “jarring”, “heartening”, “wonderful”, “compelling”, “hopeful”, and “amazing”, and often linking what they heard in the conference pitches to their own lived experiences in research ecosystems prior to law school.

The second Innovator Diversity Pilots conference being planned for 2024 at Emory University School of Law, will build on the success and momentum of this first conference and will provide an opportunity to report learnings from pilots launched and/or continued in the interim.  Please check out the conference recordings and resources, stay tuned for future blog posts, and drop us a line to let us know how we can uplift your effective practices for increasing diversity in innovation too! (diversitypilots@gmail.com)

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IPRs and the APA: Review of Director’s Discretion to Initiate IPRs

Patent, , , ,

By Jordan Duenckel.  Jordan is a second-year law student at the University of Missouri School of Law and a registered patent agent. 

Apple brought an action against the USPTO Director Vidal in district court under the Administrative Procedure Act (APA), 5 U.S.C. §§ 701– 706, challenging the Director’s instructions to the Board regarding exercise of discretion in IPR institution decisions. In Apple v. Vidal, 2022-1249, — F.4th — (Fed. Cir. Mar. 13, 2023), Judge Taranto (joined by Judges Lourie and Stoll) largely affirmed the district court’s dismissal, confirming that the Director’s instructions are unreviewable.  The court did separately reverse a tertiary challenge to allow Apple to proceed on a claim related to the note-and-comments procedure of the APA. 

Apple and other repeat players in patent infringement litigation often use the inter partes review process under 35 U.S.C. §§ 311–319 to challenge the validity of asserted patents. The statute provides a two-step IPR process: Step 1 is the institution decision by the Director under § 314(b); Step 2 is the trial and final written decision by the PTAB.   

At least two prerequisites assist the Director in deciding to grant review: [1] a reasonable likelihood that the petitioner would prevail in 35 U.S.C. § 314(a) and [2] a petition must be filed within one year after service of the infringement complaint. § 315(b). Even if these conditions are met, the Director has unreviewable discretion over whether to initiate an IPR. The statutory text is seemingly as clear as a statute can be: “The determination by the Director whether to institute an inter partes review under [§ 314] shall be final and non-appealable.” 35 U.S.C. § 314(d); see also United States v. Arthrex, Inc., 141 S. Ct. 1970, 1977 (2021).   

From the outset of the IPR program, the Director delegated institution authority to the Board. 37 C.F.R. § 42.4(a). Practically, without this delegation, Director Vidal would spend a disproportional amount of time reviewing IPR petitions at the expense of other duties of the office, although she could have delegated responsibility to other agency departments such as the petitions division.  The right of delegation of the institution is settled law. See Ethicon Endo-Surgery, Inc. v. Covidien LP, 812 F.3d 1023, 1031–32 (Fed. Cir. 2016).  

At issue in Apple v. Vidal are the so-called Fintiv instructions issued by the Director based on Apple Inc. v. Fintiv, Inc., IPR2020-00019, 2020 WL 2126495 (P.T.A.B. Mar. 20, 2020) which provides six factors for analysis of whether to institute an IPR parallel to pending litigation.   

Proposing an analysis under the arbitrary and capricious standard, Apple and the other petitioners are directly focused now not on the denial of a specific petition for IPR review but as a general challenge to the Director’s instructions to the PTAB about how to exercise the delegated discretion.   

Slip Op. The district court ruled that 35 U.S.C. § 314(d) “precludes judicial review” of the challenged agency actions, bringing the case within the APA exclusion stated in 5 U.S.C. § 701(a)(1). According to this court, the IPR statute’s preclusion was settled by the Supreme Court in Arthrex and encompasses review of content-focused challenges to the Fintiv instructions. § 314(d) provides the clearest congressional delegation of nonreviewable discretion possible and the panel rightfully relied on plain-meaning and clear Supreme Court precedent.    

While affirming the dismissal of the content-based claims, the court separates the procedural requirements set forth in the APA. Reversing the district court in part, Judge Taranto’s panel opinion reopened Apple’s claim that the Director was required, by 35 U.S.C. § 116 together with 5 U.S.C. § 553, to promulgate institution instructions through notice-and-comment rulemaking procedures.  Slicing the procedure from the underlying substance of the rule, Taranto relies on Lincoln v. Vigil, 508 U.S. 182, 195 (1993) to clarify that the 5 U.S.C. § 553 provides the basis for rulemaking through the notice-and-comment procedure for the Director’s instructions and is a separate analysis of reviewability from the substance of the instructions. 

Standing was also preemptively addressed for the remand proceedings. Lujan provides the three-step test: injury-in-fact, causation, and redressability. In search of a particularized, concrete injury, the court takes notice that Apple is a repeat player with a history of IPR claims being denied. This past injury was used to show the eminency of future injury resulting from the denial of the benefits of IPRs linked to the concrete interest possessed by an infringement defendant. Redressability and causation were met because there is a genuine possibility that the instructions would be changed in a way favorable to Apple in notice-and-comment rulemaking.  

The Federal Circuit may have reached a bit to find standing in an effort to effectively resolve concerns about a heavily used procedure: the IPR process. On remand, the district court might rightly decide that a traditional notice-comment rulemaking procedure is required to redress harms or prophylactically provide clarifications for the patent system that can accomplish the goals of using agency resources effectively. Allowing the frequent fliers of the IPR system to at least have an appearance of input in the procedure would create a process with more certainty and produce more long-term economic efficiency.  

Supreme Court Taking Additional Look at Apple’s Estoppel Petition

Patent

by Dennis Crouch

The Supreme Court has added a fourth case to its list of potentials for 2023: Apple Inc., v. California Institute of Technology, Docket No. 22-203.  The case is extremely important for our patent system because it could define key aspects of the interplay between inter partes review (IPR) proceedings and parallel district court litigation.

IPR Estoppel Provision: In traditional patent infringement litigation, accused infringers almost always raise invalidity defenses — arguing that the patent fails to satisfy the conditions of patentability set forth in the Patent Act.  For the past decade, IPRs have offered an additional powerful tool to challenge validity.  As the IPR system was being developed, patent holders were concerned about repeat harassment and argued that patent challengers should be required to choose their battleground: either the PTAB or Court, not both.   Aspects of the eventual compromise are codified in the estoppel provision of 35 U.S.C. 315(e)(2).  The statute becomes effective once an IPR reaches a final written decision as to some claim in the challenged patent. At that point, the IPR petitioner is prohibited from asserting in court that any challenged claim is “invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.”  Id.  The question in the case is statutory interpretation – what did Congress mean by “could have raised during that inter partes review”?

Apple lost its IPR against CalTech’s patent and subsequently attempted to maintain further obviousness arguments in the parallel infringement litigation. The district and appellate courts applied 315(e)(2) estoppel to prohibit those additional obviousness arguments — concluding that Apple reasonably could have raised them in its initial IPR petition.  Apple’s appeal to the Supreme Court argues that the Federal Circuit misconstrued the statute. Apple’s argument hinges on three key points:

  1. The statutory estoppel applies only to grounds that could have been raised “during” the IPR;
  2. The IPR begins only at the point where the PTAB grants the petition to institute an IPR; and
  3. Once the IPR is instituted, the petitioner is barred from raising new grounds (except for rebuttal-type issues).

The Federal Circuit’s error (according to Apple) is that the court found that estoppel applies to any ground that could have been raised in the petition. But, the petition is pre-IPR and thus not “during” the IPR as the statute requires.  The petition for writ of certiorari asks the following question:

Whether the Federal Circuit erroneously extended IPR estoppel under 35 U.S.C. § 315(e)(2) to all grounds that reasonably could have been raised in the petition filed before an inter partes review is instituted, even though the text of the statute applies estoppel only to grounds that “reasonably could have [been] raised during that inter partes review.”

Petition.

What’s the news: The Supreme Court has issued a CVSG – Call for the Views of the Solicitor General – in the case.  What this means is that at least four justices think that case has potential but that they would like to hear the Biden Administration’s views on whether this is an appropriate vehicle. The SG’s office is already working on three other briefs. Two focus on eligibility (Interactive Wearables & Tropp), and the other addresses the PTO-FDA interaction involving skinny-label infringement (Teva v. GSK).

My view on the estoppel issue:

  1. Point for CalTech: The Federal Circuit’s solution here is the better policy.  Parties should not be given repeated affirmative opportunities to attempt invalidation of the same patent claims. Rather, the process should follow the general use-it-or-lose-it rule of litigation that forces parties to bring their best arguments to the table and see if they are good enough.  Here, Apple made a strategic decision to bring certain arguments to the PTAB — most likely because they were the best arguments.  It doesn’t help anyone to now let them bring on the third-string as a measure of patent invalidity.
  2. Point for Apple: A pure textual reading of the statute favors Apple. If the IPR does not start until initiated, “during” the IPR would not include any petition-stage actions.
  3. Match for CalTech: Apple’s reading removes essentially all meaning from the “reasonably could have raised” provision since petitioners basically cannot add any new grounds once the petition is granted. The statute’s purpose though was to prevent abusive and serial patent challenges.

I always hope that the Supreme Court takes patent cases because of both the drama and potential for meaningful and positive reform.  Likewise, I hope that the court takes this case, but then affirms.

Guest Post – All Together Now: The Innovator Diversity Pilots Conference (November 18, 2022 at Santa Clara University and online)

Patent

By: Colleen V. Chien, Professor of Law, Santa Clara University School of Law and Margo A. Bagley, Asa Griggs Candler Professor of Law and Associate Dean for Research, Emory Law School and Hieken Visiting Professor in Patent Law, Harvard Law School (visiting Fall 2022) 

Link for more Information and to Register for the Conference

Growing the percentage of Americans of all backgrounds participating in the innovation system is not only the right thing to do, it is also critical to global economic competitiveness for the United States. But currently,  while women represent over 50% of the workforce and 27% of STEM workers, they comprise only 13% of inventors, according to the USPTO’s influential Progress and Potential report.  A growing number of stakeholders are actively experimenting with ways to narrow these and other innovator-inventor gaps* in participation and diversify the profession. We invite you to participate in our inaugural Innovator Diversity Pilots Conference, which will build on efforts like the USIPA Increasing Diversity in Innovation Pledge, signed by over 50 leading companies, USPTO Council for Inclusive Innovation (CI2), IPO Diversity in IP Toolkit, and Santa Clara Diversity in Innovation Best Practices Guide, to foster a community of practice, bolster the evidence base for what works, and inform policy and regulatory efforts to promote diversity and inclusion in innovation and invention.

Our focus on piloting – temporarily introducing new practices to learn from them – and rigorous research methods like field experiments to evaluate effectiveness underscores that the work of diversity and inclusion is hard and requires not only a focus on results, but also iteration, refinement, humility, and collaboration.

Featuring keynote remarks by USPTO Director Kathi Vidal and Professor John List (author of the Voltage Effect), the event is co-organized by the USPTO and co-sponsored by the law schools of Santa Clara University and Emory University, the Intellectual Property Owners Association, the US Intellectual Property Alliance, the National Academy of Inventors, the Institute for Progress, the Association for University Technology Managers, Meta, the Institute for IP and Social Justice, and Schwegman Lundberg & Woessner.

This year’s all-day event will take place on Friday November 18, 2022 in-person at Santa Clara University and on-line. Remote participation is free and the program will feature the following sessions:

  • The Why and How of Diversity Piloting – the case for diversity in innovation and rigorously piloting ways of advancing it, presented in part by leading economist and MacArthur Fellow Heidi Williams.
  • Getting People off the Bench – Learning from Doing – companies, researchers, and the USPTO will report on diversity nudges, affinity groups, and other practices for engaging and developing diverse talent.
  • Getting the Data and Tools Needed to Make Progress – how data and tools can be used, in privacy-respecting ways, to advance diversity in innovation and invention.
  • Innovator Diversity Policy Pilots – initiatives at the university, agency, state, and federal, levels to develop and use evidence to advance broad-based economic growth through greater participation and inclusion in innovation and inventing.

Fireside Chat with USPTO Director Kathi Vidal:  “USPTO Diversity Initiatives Changing the Innovation Ecosystem”

  • Let’s Pilot Together – conference participants will draw upon research, their experience, and the proceedings to “pitch” the USPTO and other sponsoring organizations with their ideas for piloting regarding, for example, attribution practices at the Office, mentorship, and adapting the diversity pledge to the academy.
  • Diversity in the Profession and Pipeline – discussion of existing and emerging initiatives and approaches like the Council for Inclusive Innovation (CI2), Patent Pipeline Program, LEAP, and the Mansfield Rule for supporting diversity in the legal profession and beyond.

Background resources and background materials are available here. We have designed the day to be informative, educational, and interactive. We hope you will join us, online or in-person.

*The Gender Innovator-Inventor Gap (source: Redefining Progress and the Case for Diversity in Innovation and Inventing) 

Link for more Information and to Register

Updated to reflect additional co-sponsors.

Venue (and Changing Venue) in Criminal Trade Secret Cases

Patent

by Dennis Crouch

Timothy Smith v. US, 21-1576 (Supreme Court 2022)

Some commercial and recreational fishermen place artificial reefs in the Gulf of Mexico to attract fish and increase their chances of a successful catch.  StrikeLines is a small Pensacola, Florida business that collects and sells the coordinates of those artificial fishing reefs.  The folks who place the reefs want them to be kept secret, but StrikeLines indicates that it discovers the reefs properly through analysis of various sonar datasets.  Of some importance for this case, although Pensicola is in the Northern District of Florida, StrikeLines keeps its data on servers located in Orlando. Orlando is in the Middle District of Florida.

Smith is a software engineer from Mobile, Alabama.  In 2019, he was convicted by a N.D. Florida jury for criminal theft of trade secrets and extortion (found not guilty for violation of the CFAA).   Smith had discovered a vulnerability in the StrikeLines website and obtained many of the coordinates using a debugger known as “fiddler”.   Smith messaged his friends and shared coordinates with friends.  These facts constituted the basis for the trade secret theft charges.  Meanwhile, Smith got in contact with folks at StrikeLines telling them about the breach and that he had the data. After some back-and forth (via phone messaging), Smith indicated that he would accessing the data and sharing it if they would give him the coordinates of a great spot for deep grouper fishing.  This ‘ask’ served as the basis for the extortion charge.  And, in the end, Smith was sentenced with 18 months followed by one-year of supervised release.

Throughout this entire time, Smith was in Alabama, not Florida. In his pending petition before the U.S. Supreme Court, Smith argues that venue was improper in Florida.  The basis for his argument stems from the U.S. Constitution, which declares “The Trial of all Crimes . . . shall be held in the State where the said Crimes shall have been committed.” U.S. Const. art. III, § 2, cl. 3.   The Sixth Amendment narrows this down further to the particular judicial district–requiring “an impartial jury of the State and district wherein the crime shall have been committed.”  This same rule is found within Rule 18 of the Federal Rules of Criminal Procedure: “the government must prosecute an offense in a district where the offense was committed.”

Smith appealed his conviction and the 11th Circuit partially sided with the defendant–holding that venue was improper on the trade secrecy claim, but was proper for the extortion charge.

In analyzing proper venue in Federal criminal cases the courts have a two-step approach: (1) identify the essential conduct elements of the crime; and (2) determine where those conduct elements were committed.  Criminal trade secret theft has five elements:

  1. D intended to convert proprietary information for the economic benefit of someone other than the owner;
  2. The proprietary information is a trade secret;
  3. D Knowingly stole the trade secret or took it without authorization or by fraud or deception.
  4. D intended or at least knew that the offense would injure the owner of the trade secret; and
  5. The trade secret is related to interstate or foreign commerce.

Of these, elements 1 and 4 are mens rea elements rather than conduct elements and so the 11th Circuit found them irrelevant to the venue question.  Elements 2 and 5 are qualities of the information, not conduct elements.  Thus, the only conduct element is 3: “stole the trade secret or took it without authorization.”  Under the U.S. Constitution, that the criminal trial must take place wherever that conduct occurred.

In its decision, the 11th Circuit recognized that venue is certainly proper in Alabama (where Smith was located) and probably proper in Middle-District of Florida since that is where the data was located when it was “stolen.”  However, none of the essential conduct for trade secret theft occurred in Pensicola. Thus, “venue was not proper in the Northern District of Florida because Smith never committed any essential conduct in that location.”  U.S. v. Smith, 22 F.4th 1236, 1238 (11th Cir. 2022).   In the case, the Gov’t asked for an effects test — arguing that the company StrikeLines felt the effect of the theft in Pensicola.   The court noted that some doctrines do apply an effect test for venue, but only in situations where the conduct elements of a criminal offense are defined in terms of their effects.  Here, for instance, trade secret theft did not require harm to the TS owner as an element of the crime.

The extortion case was different since Smith had been directly communicating with folks via telephone in N.D. Florida.  In that scenario, it is clear that the crime can be charged in either Smith’s location or N.D. Fla.   The 11th Circuit also affirmed Smith’s jail term enhancement for obstruction of justice.  Smith had testified that his exchanges were a “negotiation” and not extortion, and the district court found that to be false testimony.

Smith’s new petition for writ of certiorari does not directly challenge any of the 11th Circuit findings.  Rather, Smith is concerned about what is next. In particular, the Government believes that a case thrown out for lack of venue can be retried in the proper venue. Smith argues here that venue was presented to the jury and that that the Gov’t should be barred from trying him again in Alabama.  Thus, the question presented:

The Constitution requires that the government prove venue. When the government fails to meet this constitutional requirement, should the proper remedy be (1) acquittal barring re-prosecution of the offense, as the Fifth and Eighth Circuits have held, or (2) giving the government another bite at the apple by retrying the defendant for the same offense in a different venue, as the Sixth, Ninth, Tenth, and Eleventh Circuits have held?

Smith Petition.  (Note the question above is the version used by the Amicus and is slightly more pointed). Another way to ask this question: What remedy is available for the Government’s violation of the constitutionally protected venue right?  As prosecution for cyber-crimes continues to rise, the questions here continue to increase in importance.

The Conservative Rutherford Institute and Libertarian Cato Institute joined with the National Association of Public Defenders in an amicus brief.  The brief argues that venue in criminal cases has been fundamental to criminal procedures for centuries dating back to the Magna Carta and that the 11th Circuit allowance for retrial undermines that right.

The Solicitor General’s brief in the case was due earlier this month, but the Court granted an extension until September 21.

The petition was filed by Samir Deger-Sen (Latham).