Got Milk? Forget about Patent Eligibility

February 15, 2023Patenteligibility, en banc, patent law, product of nature, Section 101Dennis Crouch

Guest Post by Jordan Duenckel. Jordan is a second-year law student at the University of Missouri, head of our IP student association, and a registered patent agent. He has an extensive background in chemistry and food science.

The Federal Circuit weighed in on the amorphous topic of subject matter eligibility in the recent opinion ChromaDex, Inc., V. Elysium Health, Inc., — F.4th —, Docket No. 2022-1116. Writing for a unanimous panel, Judge Prost affirmed a grant of summary judgment that U.S. Patent No. 8,197,807 (“the ’807 patent”) was directed to unpatentable subject matter and therefore ineligible based on 35 U.S.C. § 101.

ChromaDex’s ‘807 patent concerns nicotinamide riboside (“NR”), a form of vitamin B3 found naturally in cow’s milk. When ingested, a human body converts NR into the coenzyme nicotinamide adenine dinucleotide, or NAD+. Claim one of ‘807 states:

1. A composition comprising isolated nicotinamide riboside in combination with one or more of tryptophan, nicotinic acid, or nicotinamide,

wherein said combination is in admixture with a carrier comprising a sugar, starch, cellulose, … or polyanhydride,

wherein said composition is formulated for oral administration and increased NAD+ biosynthesis upon oral administration.

ChromaDex isolates and concentrates naturally occurring NR — selling dietary supplements that contain elevated levels of NR. The levels found in these supplements is significantly above natural levels present in milk or any other food. Although the claims require isolated NR, they do not require a specific high-concentration, only enough to “increase[] NAD+ biosynthesis upon oral administration.” In its decision, the Federal Circuit focuses on the breadth of the claim and its ability to include natural milk (a product of nature) as the key ingredient providing the NR.

The Supreme Court has two key product of nature cases from the past 45 years: Diamond v. Chakrabarty, 447 U.S. 303 (1980) and Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013).

Under these cases, a determination that milk is within the scope of the claims is not, by itself fatal to eligibility. Chakrabarty requires that to be patentable the claimed composition must “ha[ve] markedly different characteristics [from the natural phenomenon] and have the potential for significant utility.” 447 U.S. at 310. The chemical composition of isolated NR is not structurally or functionally different from NR found in milk. ChromaDex’s argument at the district court that the characteristics of isolated NR are purportedly different from naturally occurring NR— stability, bioavailability, sufficient purity, and therapeutic efficacy was rejected because these improvements were not required by the claim language. On appeal, ChromaDex insists in their brief that the claims have “markedly different characteristics” that render them patent eligible, specifically that (1) NR is found in milk in only trace amounts, i.e., one part per million, and (2) what little NR is found in milk is not bioavailable because it is bound to the lactalbumin whey protein. Again though, ChromaDex’s argument is thwarted by the overly broad claim language. The claims do not require either a minimum level of NR or even that the isolated NR is more bioavailable by separation from the lactalbumin.

The corollary to Chakrabarty is Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013) and is more similar to the subject matter of ChromaDex. In Myriad, the isolation of specific DNA fragments was found to be patent ineligible. ChromaDex faces the same problem. The act of isolating the NR compared to how NR naturally exists in milk is not sufficient, on its own, to confer patent eligibility.

Federal Circuit held that this Chakrabarty analysis was dispositive on the question of § 101 eligibility and affirmed the grant of summary judgment. One open question is whether the same two-step analysis of Alice/Mayo applies in the product-of-nature eligibility arena. Without fully deciding that question, the Federal Circuit conducted a subsequent analysis under the Alice/Mayo two-step test and reached the same conclusion — that the claims are ineligible. As noted by this court, the Alice/Mayo test is functionally the same as the Chakrabarty analysis, especially when a composition of matter is at issue.

It appears to me that the primary issue is a patent drafting problem. The ‘807 patent was filed on April 20^th, 2006, long before the clarifying guidance from Myriad (2013), Alice (2014), and Mayo (2012). At the time of filing, the isolation and reformulation was not subject to the explicit subject matter restriction in Myriad. However, the patent drafter should have been aware of Chakrabarty (1980). Claim one was written so broadly that potential embodiments include far more than dietary supplement pills.

The Federal Circuit distinguished the current case from Nat. Alts. Int’l, Inc. v. Creative Compounds, LLC, 918 F.3d 1338 (Fed. Cir. 2019). In Natural Alternatives, “natural products ha[d] been isolated and then incorporated into a dosage form”—“between about 0.4 grams to 16 grams”—“with particular characteristics to effectively increase athletic performance.” Id. at 1348–49. The patentee may have also avoided an eligibility problem by providing evidence in the specification that the NR concentration in milk was insufficient to increase NAD+ biosynthesis as claimed, but that higher levels of concentration did provide that benefit. To be most clear, the claims could have also added a limitation that the NR is provided in an “effective amount” to achieve the claimed NAD+ synthesis.

Knowledge of a True Name brings Magical Power — but is it Patent Eligible?

February 9, 2022PatentDennis Crouch

by Dennis Crouch

PersonalWeb has added a second petition for certiorari to the Supreme Court docket. The first case focuses on res judicata and the Federal Circuit’s peculiar Kessler doctrine. That case has seen some action and is awaiting the views of the Solicitor General. See Resorbing Patent Law’s Kessler Cat into the General Law of Preclusion.

The new petition focuses on eligibility and asks the Supreme Court to reaffirm two separate pathways for computer-implemented business method inventions:

Improving “the functioning of the computer itself;” and/or
Causing an improvement in “any other technology or technical field.”

PersonalWeb argues that the Federal Circuit has focused only on the first prong, and only in a limited sense. [Petition].

In Alice Corp., the Supreme Court used these terms in its Step 2 (something-significantly-more) analysis:

The method claims do not, for example, purport to improve the functioning of the computer itself. Nor do they effect an improvement in any other technology or technical field. Instead, the claims at issue amount to “nothing significantly more” than an instruction to apply the abstract idea of intermediated settlement using some unspecified, generic computer.

Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014) (quoting Mayo). During the prior appeal, PersonalWeb argued that its “True Name” file structuring system offered significant improvements to the technical field of computer network operations, but that argument was disregarded by the Federal Circuit who concluded that the invention was a “pure” abstract idea.

= = =

The patents at issue here are part of the patentee’s “True Name” family. U.S. Pat. Nos. 6,415,280; 7,802,310; and 7,949,662. The patent begins with a description of traditional haphazard computer file storage systems where each user picks a different name and location for files. This works fairly well for well-memoried individuals, but gets a bit crazy with distributed multi-user systems. “[U]sers could save the same file with different filenames, or different files with the same filename, leading to unnecessary duplication, and confusion as to which files are actually in the system.” The inventors here apparently learned of recent “fingerprinting” algorithms that were being used for public-key encryption and then had the idea that the same technology could be used for creating unique file identifiers for computer file systems — i.e., “true names.” But truthfully, appears to be just a hash. The asserted claims use the true names to control file access; retrieve files based upon their content; and remove duplicate files on the system. The claims require use of a “content-dependent name”:

[T]he content-dependent name being based, at least in part, on at least a function of the data in the particular data item, wherein the data used by the function to determine the content-dependent name comprises at least some of the contents of the particular data item, wherein the function that was used comprises a message digest function or a hash function, and wherein two identical data items will have the same content-dependent name.

‘310 Patent, Claim 24. Claim 24 is a retrieval function that retrieves a file using the content-dependent name. The claim also includes an authorization check (such as a copyright license check) and will not permit access when “not authorized.” The patentee here explains how the security check is facilitated by the True Name system.

The technical improvement that this invention provided over conventional file systems is clear. In conventional systems—where files are identified by user-selected file
names—a user could easily circumvent this authorization check simply by changing the file name. By using True Names, however—which always uniquely identify each file—the system ensures that only authorized users can access the file.

Petition. The Federal Circuit also heard these arguments, but concluded that everything there “is all abstract.”

Printed Matter, Mental Steps, and Functional Relationships: Oh My!

May 18, 2018PatentobviousnessDennis Crouch

Guest post by Professor Kevin Emerson Collins, Washington University School of Law.

Praxair Distribution, Inc. v. Mallinckrodt Hospital Products IP LTD., 2018 U.S. App. LEXIS 12707 (Fed. Cir. 2018)

In a divided opinion, the Federal Circuit held that all of the claims challenged in an IPR were obvious, upholding the PTAB’s obviousness determination with respect to most of the claims but reversing its nonobviousness determination with respect to a few. Praxair Distribution raises of a number of distinct, yet interrelated, issues concerning the cryptic, yet essential, printed matter doctrine: the opinion addresses the doctrine’s extension to mental steps, its implications for the relationship between sections 101 and 102/103, and the breadth of its functional-relation exception.

U.S. Patent 8,846,112 covers methods of distributing nitric oxide gas cylinders for pharmaceutical applications. Inhaling nitric oxide dilates blood vessels in the lungs and improves blood oxygenation, and it is approved for treating neonates with hypoxic respiratory failure. The prior art taught that inhaled nitric oxide may lead to pulmonary edema, a serious adverse event, in neonates with left ventricular dysfunction. The claims of the ‘112 patent address methods that build on this prior art. Roughly, the claims can be sorted into three groups: the informing claims, the informing-and-evaluating claims, and the informing-and-discontinuing-treatment claims. This commentary addresses each of these three groups of claims in turn.

The Informing Claims: Easy Cases?

In gross, the informing claims recite supplying nitric oxide to a medical provider and providing the medical provider with information relevant to the clinical use of the nitric oxide on neonatal patients. Claim 1, for instance, includes the steps of:

“supplying the cylinder containing compressed nitric oxide gas to a medical provider responsible for treating neonates” and
“providing to the medical provider (i) information” about the recommended dose for neonates with hypoxic respiratory failure “and (ii) information” about the risk of that dose for neonates with left ventricular dysfunction, wherein “the information of (ii) [is] sufficient to cause a medical provider … to elect to avoid treating one or more” neonates with left ventricular dysfunction in order “to avoid putting [them] at risk of pulmonary edema.”

The PTAB held, and the Federal Circuit affirmed in a majority opinion authored by Judge Lourie and joined by Chief Judge Prost, that the informing claims were unpatentable as obvious under the printed matter doctrine. Under recent Federal Circuit precedent, the informing claims present an easy case of unpatentability. The printed matter doctrine states that “[c]laim limitations directed to printed matter are not entitled to patentable weight unless the printed matter is functionally related to the substrate on which the printed matter is applied.” Opinion at *9. If a limitation is not given patentable weight, it cannot be relied upon to distinguish the claimed invention from the prior art in the novelty or nonobviousness analyses. In claim 1, the limitations apart from the providing-information limitation are obvious in light of the prior art as an ordered combination, and the providing-information limitation cannot be given patentable weight. Federal Circuit precedent clearly establishes that printing information about how to use a product onto that product as a substrate does not create a functional relationship between the printed matter and the substrate. See, e.g., In re Ngai, 367 F.3d 1336 (Fed. Cir. 2004). But see In re Miller, 418 F.2d 1392 (CCPA 1969) (finding a functional relationship between volumetric indicia and the measuring spoons on which they were printed). Importantly, the printed matter doctrine still applies even though the providing-information limitation does not require the information to be in the form of printed matter per se. In King Pharmaceuticals v. Eon Labs and In re Kao, the Federal Circuit had already extended the printed matter doctrine to encompass the conveyance of information in non-printed forms, such as verbal speech or sign language. See, Kevin Emerson Collins, An Initial Comment on King Pharmaceuticals: The Printed Matter Doctrine as a Structural Doctrine and Its Implications for Prometheus Laboratories, 2010 Patently-O Patent L.J. 111.

Not only is the lack of patentable weight for “informing”-type limitations settled law, but it is good policy, as well. As I have repeatedly argued elsewhere, the core of the printed matter doctrine, as well as its expansion to information conveyed through speech and other non-print media, is necessary to ensure that the knowledge disclosed in patent specifications remains free for all to use qua knowledge during the term of the patent. Kevin Emerson Collins, The Structural Implications of Inventors’ Disclosure Obligations, 69 Vand. L. Rev. 1785 (2016); Kevin Emerson Collins, The Knowledge/Embodiment Dichotomy, 47 U.C. Davis L. Rev. 1279 (2014). Claim limitations that read on communicative acts can restrain the diffusion of the teachings contained in patent disclosures, so a broad interpretation of the printed matter doctrine is necessary to ensure that patentee’s exclusive rights to claimed inventions cannot interfere with the free dissemination of the informational content of patent specifications.

The Informing-and-Evaluating Claims: Mental Steps and Patent Eligibility

The informing-and-evaluating claims depend from the informing claims, adding a number of steps to be performed, presumptively, by medical providers who use nitric oxide. (Bracket the divided infringement issue afoot here.) For example, claim 3 adds inter alia the following limitations to claim 1:

identifying a neonate with hypoxic respiratory failure,
determining whether the neonate has left ventricular dysfunction, and
“evaluating the potential benefit of treating” that neonate with nitric oxide “vs. the potential risk” of doing so.

The PTAB and the Federal Circuit both identify the evaluating limitation as a mental step performed in a medical provider’s mind. They then both extend the printed matter doctrine to preclude giving patentable weight to mental steps and, as a result, hold the informing-and-evaluating claims obvious. The Federal Circuit breaks new ground by extending the printed matter doctrine to mental activity in this manner, and Judge Newman’s concurrence argues that the extension is not proper. Simply put, “[m]ental steps are mental, not printed.” Concurrence at *1. (The concurrence may also be read more broadly to suggest that even the extension of the printed matter doctrine to spoken information in King Pharmaceuticals, discussed in the previous section addressing the informing claims, is legal error.)

Given the policy concerns discussed above for extending the printed matter doctrine to speech, however, I believe that its extension to at least some mental steps is a logical and justifiable move. As Judge Louie correctly notes, the evaluating limitation:

requires a medical provider to think about the information claimed in the providing information limitation of claim 1. But adding an ineligible mental process to ineligible information still leaves the claim limitation directed to printed matter. To hold otherwise would make the printed matter doctrine a dead letter, requiring no more than a “think about it” step to give patentable weight to a claim limitation directed to information content. There is no meaningful distinction between claim limitations directed to written information … verbal information … and mentally-processed information.

Opinion at *13. In brief, the extension of the printed matter doctrine to encompass “mentally-processed information” prevents form from trumping substance.

Although Praxair Distribution does not expressly make this point, it seems to revive some variant of the historical mental steps doctrine. In the mid-twentieth century, the mental steps doctrine did for mental steps what the printed matter does today for printed matter: it invalidated claims that relied on the content of mental processes to establish a distinction from the prior art. See, e.g., In re Abrams, 188 F.2d 165, 165 (C.C.P.A. 1951). The PTAB cited to some of these mid-century mental steps cases to support its extension of the printed matter doctrine to mental steps. 2016 WL 3648375 at *10 (2016). The Federal Circuit, however, did not, most likely because the CCPA abandoned the mental steps doctrine decades ago in the course of grappling with the patent eligibility of software, In re Musgrave, 431 F.2d 882, 889 (C.C.P.A. 1970), and the Federal Circuit has refused to reinstate it, Prometheus Labs. v. Mayo Collaborative Servs., 628 F.3d 1347, 1358–59 (Fed. Cir. 2010). Nonetheless, in practice, if not in name, Praxair Distribution plainly reinvigorates some variant of the mental steps doctrine. Technically, the opinion could be read narrowly so that the printed matter doctrine only extends to mental steps when claims recite both a printed matter limitation with certain informational content and a think-about-it limitation to the same informational content. However, the argument that the informational content of an evaluating, think-about-it limitation should be given patentable weight if the informing limitation is removed from the claim is difficult to fathom.

Another interesting aspect of Praxair Distribution is that it opens a new front in the ongoing debate concerning the intermixing of sections 102 and 103, on the one hand, and section 101, on the other hand. The Supreme Court’s opinions on patent eligibility in Mayo and Alice are highly controversial, in part, because their “inventive concept” analysis—i.e., what is now known as Mayo/Alice “step 2″—requires consideration of the advance over the prior art, a factual issue that is usually addressed in the novelty and nonobviousness analyses. Mixing the patentability requirements in the other direction—that is, using 101 concerns to inform 102/103 doctrine—has to date not received much attention. However, the printed matter doctrine has long mixed in this other direction, and Praxair Distribution brings this other-direction mixing into the spotlight:

Claim limitations directed to the content of information and lacking a requisite functional relationship are not entitled to patentable weight because such information is not patent eligible subject matter under 35 U.S.C. § 101. Cf. Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 90 (2012). While the doctrine’s underlying rationale is in subject matter eligibility, its application has been in analyzing other patentability requirements, including novelty … and nonobviousness.

Opinion at *10. (Interestingly, the European Union, too, mixes patent-eligibility concerns into the inventive step analysis with its requirement that that the inventive step reside in a technical effect. European Patent Office, Guidelines for Examination, Part G, Chapter VII.5.2.) The printed matter doctrine reveals that, at least under limited circumstances, what are often conceived of as the rigid statutory silos of patent law must break down. As Judge Newman notes in her concurrence, the printed matter doctrine started out as a prohibition on patenting business forms that was administered as part of the doctrine of patent eligibility. Concurrence at 2–3. However, over time, as patent applicants attempted to claim printed matter in combination with otherwise patent-eligible subject matter, the doctrine developed the two statutory branches that it has today: it is administered via section 101 in cases that involve claims to printed matter per se and via sections 102 and 103 in cases that involve claims to printed matter in combination with statutory processes, machines, manufactures, or compositions of matter. The extension of the printed matter doctrine to mental steps merely further highlights the mixing that is already occurring because mental processes are today, understood, well-understood to be the basis of patent-eligibility rejections. The mental steps doctrine, that the printed matter doctrine now resembles, was administered entirely as a section 101 doctrine, employing the equivalent of a patentable-weight analysis as part of patent eligibility. It never partially migrated from section 101 into sections 102 and 103 like the printed matter doctrine did.

Finally, the dispute underlying the Praxair Distribution opinion also reveals an overlap between sections 102 and 103 and section 101 in yet another way. The parallel district court proceeding invalidated all claims of the ‘112 patent that were at issue for lack of patent eligibility under Mayo, although the representative claim was a more conventional diagnostic claim from a different patent. 2017 WL 387649, *14–*20. The PTAB, of course, could consider this section 101 ground because it is limited in IPRs to 102 and 103 grounds.

The Informing-and-Discontinuing-Treatment Claims: An Expansive Functional-Relation Exception

Like the informing-and-evaluating claims, the final group of claims also depends from an informing claim. Technically, however, these claims depend from a claim that requires slightly different information to be provided to the medical provider with the nitric oxide cylinders, namely information in the form of a “recommendation that, if pulmonary edema occurs in a [neonate] who has pre-existing left ventricular dysfunction … the treatment with … nitric oxide should be discontinued.” Again like the informing-and-evaluating claims, they add further steps presumptively performed by medical providers to the steps performed by nitric oxide distributors. The representative claim here is claim 9. After reciting the limitations of identifying a neonate with hypoxic respiratory failure and determining whether the neonate has left ventricular dysfunction, it adds treatment and treatment-cessation steps:

“treating the neonatal patient with left ventricular dysfunction with … nitric oxide, whereupon the [neonate] experiences pulmonary edema; and
in accordance with [the information provided], discontinuing the … nitric oxide due to the neonatal patient’s pulmonary edema.”

The PTAB held claim 9 not unpatentable as obvious. It construed the “in accordance with” language to mean that the discontinuation of the treatment was performed “based on, or as a result of” the information/recommendation provided with the nitric oxide cylinders. It then concluded that the fact that the information was the reason or motivation for the medical provider to discontinue treatment created a functional relationship between the information and the discontinuing-treatment step. Opinion at *6. In turn, the PTAB held that the functional-relation exception to the printed matter doctrine applied, that the information provided could be given patentable weight, and that claim 9 was not obvious.

The Federal Circuit approved of the PTAB’s interpretation of the functional-relation exception to the printed matter doctrine as well as its application to claim 9. Opinion at *17. However, the Federal Circuit reversed the PTAB’s ultimate nonobviousness determination, concluding that, even when the content of the information is given patentable weight, the claim is obvious in light of the prior art. The prior art taught that nitric oxide may be given to patients with left ventricular dysfunction as long as those patients are monitored during treatment. The information provided—namely that nitric oxide should be discontinued for patients with left ventricular dysfunction upon pulmonary edema—was too small of an advance over the prior art to render the claim patentable.

The point of agreement between the PTAB and the Federal Circuit on the expansive interpretation of the functional-relation exception raises an interesting—and possibly troubling—precedent for future cases. The logical reason for a real-world, extra-mental action can now distinguish a claim reciting the action from the prior art. That is, the “invention” of a nonobvious mental motivation for a human actor to perform an already-known, real-world (i.e., non-mental) action, like discontinuing treatment, can give rise to a patentable method claim.

Consider a simple hypothetical. Assume that doctors routinely decrease the dosage of a drug when a metabolite of the drug in a patient’s bloodstream exceeds a certain threshold because of a known potential for a serious adverse event, namely liver problems. Now assume that a researcher discovers that, unexpectedly, the same metabolite in a patient’s bloodstream exceeding the same threshold also raises the risk of a different, serious adverse event, namely heart problems. The researcher claims a method of a medical provider: (a) administering a dose of a drug to a patient from a package with a printed indication that a metabolite level exceeding a threshold creates a medically unacceptable risk of heart problems, (b) determining the level of the drug’s metabolite in the patient’s bloodstream, and (c) reducing the dosage of the drug “in accordance with” the printed indication (i.e., due to the risk of heart problems) if the threshold is exceeded. Even though the medical provider infringing the claim performs conduct that, to an external observer, cannot be differentiated from the prior art (except for the printed indication on the drug package), the claim is patentable. The functional-relation exception to the printed matter doctrine allows the content of the printed matter be given patentable weight because the information conveyed motivates the medical provider’s conduct, and the unexpected nature of the connection between high metabolite levels and heart problems strongly supports nonobviousness.

To be clear, even if one finds the patentability of this hypothetical claim to be problematic—and reasonable minds may differ on whether it is problematic—there is no reason to question the Federal Circuit’s actual holding concerning claim 9 in Praxair Distribution. The Federal Circuit held the claim unpatentable for obviousness even when it gave the content of the printed (or spoken or thought) matter patentable weight. By necessity, it therefore would have reached the same holding if it had refused to give that content patentable weight. The expansiveness of the functional-relation exception in Praxair Distribution will only become outcome-determinative in future cases when a claim recites information that provides an unexpected reason or motivation for a real-world, extra-mental action that, standing alone, is known or is merely an obvious departure from the prior art.

Inversely, a narrow interpretation of the functional-relation exception—one that does not label the content of information as functionally related to an action recited as a limitation when the action is performed because of the information—would not widely undermine patentability. In particular, it would not invalidate most claims to actions that are motivated by newly discovered information. For example, consider a researcher who discovers that, unexpectedly, a particular genetic mutation means that a patient should be taking a lower dosage of a drug. The researcher may claim a method of a medical provider: (a) testing a patient for the mutation and (b) administering the lower drug dosage to the patient if the mutation is present. The printed matter doctrine is irrelevant to the nonobviousness of this claim because the claim does not recite the content of printed information (or a mental state of a doctor who thinks about the information) as a limitation. Such an information limitation is not required for validity, and would thus be unnecessary drafting surplusage, because the real-world (non-mental) conduct of testing and administering under the specified conditions is sufficient to distinguish the claim from the prior art. Although it is not recited as a claim limitation, the newly discovered information still provides an explanation for why the claimed invention is useful and why it produces unexpected results. (Further highlighting the interconnection of the printed matter doctrine and patent eligibility, compare the outcome in this hypothetical to the Federal Circuit’s recent holding in Vanda Pharmaceuticals Inc. v. West-Ward Pharms Int’l Ltd., 887 F.3d 1117 (Fed. Cir. 2018), which upheld the patent eligibility of a hybrid diagnostic/treatment claim under Mayo.)

The Federal Circuit’s expansive interpretation of the functional-relation exception to the printed matter doctrine in Praxair Distribution can be traced to a recent shift how the Federal Circuit articulates that exception. Traditionally, the functional-relation exception was applied only when there was a functional relationship between the content of the printed matter “the substrate on which the printed matter is applied.” Opinion at *9 (emphasis added). For example, in one of the few non-software cases in which the Federal Circuit actually held that the functional-relation exception allowed the content of printed matter to receive patentable weight, the content of a series of numbers printed on a loop of paper was held to be functionally related to the substrate/paper because the numbers themselves were a looping series. In re Gulack, 703 F.2d 1381 (Fed. Cir. 1983). In contrast, the PTAB and the Federal Circuit in Praxair Distribution looked for, and found, a functional relationship between the content of the printed matter and a different limitation in the claim other than the printed-matter limitation, namely the discontinuing-treatment limitation. From my quick research, Praxair Distribution appears to be the first case in which the functional-relation exception has been found to apply based on a functional relationship between printed matter and a claim limitation directed to something other than the printed matter’s substrate. Both King Pharms. and Kao use language that suggest the possibility of such a non-substrate relationship satisfying the functional-relation exception, but neither finds that it exists on the facts presented. If the functional-relation exception were limited to claims in which there is a functional relationship between the printed matter and the substrate in particular, then claims to new motivations for already-performed conduct would not be patentable under the printed matter doctrine.

Berkheimer En Banc: HP Asks Whole Court to Consider whether Eligibility is Predominately Factual

March 13, 2018PatentDennis Crouch

by Dennis Crouch

In its February 2018 decision in Berkheimer v. HP, the Federal Circuit – led by Judge Moore – held that fundamental aspects of the patent eligibility test question are based upon questions of fact. That holding appears in tension with prior Federal Circuit holdings, such as Intellectual Ventures I LLC v. Capital One Fin. Corp., 850
F.3d 1332 (Fed. Cir. 2017) and OIP Techs., Inc. v. Amazon.com, Inc.,
788 F.3d 1359 (Fed. Cir. 2015).

In its new petition for en banc rehearing, HP asks the court to reconser — raising particular questions:

Is the threshold inquiry of patent eligibility under 35 U.S.C. § 101 a question of law without underlying factual issues that might prevent summary judgment?
Is the appropriate inquiry under Alice’s step 2 whether the claims transform an abstract idea into a patent-eligible application, or merely “whether the invention describes well-understood, routine, and conventional activities”?
Is a statement in a patent specification reciting that the invention is new and improves upon the prior art enough to create a genuine issue of material fact that precludes summary judgment as to patent eligibility under 35 U.S.C. § 101?

The case has good shot at being heard by the whole court. I expect that the court would agree with Judge Moore that underlying factual issues are possible in the eligibility analysis, but would also hold that the exercise is not “a predominately factual one that ‘opens the door in both steps of the Alice inquiry for the introduction of an inexhaustible array of extrinsic evidence, such as prior art, publications, other patents, and expert opinion.'” (HP Petition, quoting Judge Reyna’s dissent in Aatrix).

Read HP’s petition here: Berkheimer_v._HP_Inc.
Amicus filings have a quick timeline for en banc petitions (~~7 days~~ 14 days?)
The brief quoted my blog post statement that the decision is “in substantial tension with prior treatment of eligibility analysis.”

Patent Eligibility: Underlying Questions of Fact

New Guidance to Examiners: Follow Enfish and TLI.

May 19, 2016PatentAbstract Idea, Subject Matter EligibilityDennis Crouch

by Dennis Crouch

The Enfish case is important in the way that it gives teeth to step-one of the Alice/Mayo test for subject matter eligibility. Notably, the unanimous panel of Judges Moore, Taranto, and Hughes (author) held that neither the software-implemented data structure nor its method of creation were “directed to a patent-ineligible abstract idea” and thus did not pass Step-1 of Alice/Mayo. Prior courts usage of the “gist” analysis for Step-1 left many of us with the feeling that almost all inventions could be boiled-down to an ineligible concept. Enfish rejects that conclusion and instead held that that Step-1 is designed as a meaningful test.

With quick-response, the USPTO has issued a set of examiner guidance – asking examiners to immediately begin implementing the Federal Circuit’s re-interpretation of Alice/Mayo. The guidance also highlights the contrasting May 17 decision in TLI. The challenged claims in TLI involved recording, administration and archiving of digital images, and the appellate panel (again with Hughes as author) held that the claims were directed to the abstract idea of classifying and storing digital images in an organized manner.

The guidance is copied in full below, but I thought I would begin with the conclusion:

In summary, when performing an analysis of whether a claim is directed to an abstract idea (Step 2A), examiners are to continue to determine if the claim recites (i.e., sets forth or describes) a concept that is similar to concepts previously found abstract by the courts. The fact that a claim is directed to an improvement in computer-related technology can demonstrate that the claim does not recite a concept similar to previously identified abstract ideas.

I would suggest that the PTO would have more accurately followed the Enfish guidance by affirmatively stating in its summary that an “improvement in computer-related technology” can include a software implementation as well as a new data structure.

In any event, these cases are tough ones for the Federal Circuit because they require line-drawing that is inherently policy based and that lack full guidance from the USPTO. However, it appears that the court is endeavoring to accomplish its task of providing improved guidance to the USPTO while simultaneously fully following binding Supreme Court precedent.

The holding in Enfish also offers additional support to the PTO’s initially questionable call of suggesting that examiners limit their abstract idea constructs to only concepts “similar to concepts previously found abstract by the courts.”

The Guidance in full:

On May 12, 2016, the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) in Enfish, LLC v. Microsoft Corp. held that the claimed database software designed as a “self-referential” table is patent eligible under 35 U.S.C. § 101 because it is not directed to an abstract idea. While the decision does not change the subject matter eligibility framework, it provides additional information and clarification on the inquiry for identifying abstract ideas (Step 2A of the subject matter eligibility examination guidelines).

In reaching its conclusion, the Federal Circuit highlighted several important points regarding the subject matter eligibility analysis, in particular regarding whether a claim is directed to an abstract idea (Step 2A). First, the court noted that when determining whether a claim is directed to an abstract idea, it is appropriate to compare the claim to claims already found to be directed to an abstract idea in a previous court decision. Second, the court emphasized that the “directed to” inquiry applies a filter to claims, when interpreted in view of the specification, based on whether their character as a whole is directed to a patent ineligible concept. Third, the Federal Circuit cautioned against describing a claim at a high level of abstraction untethered from the language of the claim when determining the focus of the claimed invention. Fourth, the court stated that an invention’s ability to run on a general purpose computer does not automatically doom the claim. The subject matter eligibility examination instructions, as set out in the 2014 Interim Eligibility Guidance, July 2015 Update, and May 4, 2016 memorandum to examiners, are consistent with these points.

The Federal Circuit in Enfish stated that certain claims directed to improvements in computerrelated technology, including claims directed to software, are not necessarily abstract (Step 2A). The court specifically noted that some improvements in computer-related technology, such as chip architecture or an LED display, when appropriately claimed, are undoubtedly not abstract. Explaining that software can make non-abstract improvements to computer technology just as hardware can, the court noted that claims directed to software, as opposed to hardware, also are not inherently abstract. Therefore, an examiner may determine that a claim directed to improvements in computer-related technology is not directed to an abstract idea under Step 2A of the subject matter eligibility examination guidelines (and is thus patent eligible), without the need to analyze the additional elements under Step 2B. In particular, a claim directed to an improvement to computer-related technology (e.g., computer functionality) is likely not similar to claims that have previously been identified as abstract by the courts.

The claims of the patents at issue in this case describe the steps of configuring a computer memory in accordance with a self-referential table, in both method claims and system claims that invoke 35 U.S.C. § 112(t). The court asked whether the focus of the claims is on the specific asserted improvement in computer capabilities (i.e., the self-referential table for a computer database), or instead on a process that qualifies as an “abstract idea” for which computers are invoked merely as a tool. To make the determination of whether these claims are directed to an improvement in existing computer technology, the court looked to the teachings of the specification. Specifically, the court identified the specification’s teachings that the claimed invention achieves other benefits over conventional databases, such as increased flexibility, faster search times, and smaller memory requirements. It was noted that the improvement does not need to be defined by reference to “physical” components. Instead, the improvement here is defined by logical structures and processes, rather than particular physical features. The Federal Circuit stated that the Enfish claims were not ones in which general-purpose computer components are added after the fact to a fundamental economic practice or mathematical equation, but were directed to a specific implementation of a solution to a problem in the software arts, and concluded that the Enfish claims were thus not directed to an abstract idea (under Step 2A).

Closely following Enfish, the Federal Circuit decided TLI Communications LLC v. A. V. Automotive, LLC on May 17, 2016, which provides a contrast between non-abstract claims directed to an improvement to computer functionality and abstract claims that are directed, for example, to generalized steps to be performed on a computer using conventional computer activity. Specifically, the court stated that the TLI claims describe steps of recording, administration and archiving of digital images, and found them to be directed to the abstract idea of classifying and storing digital images in an organized manner (Step 2A). The court then found that the additional elements of performing these functions using a telephone unit and a server did not add significantly more to the abstract idea because they were well-understood, routine, conventional activities (Step 2B).

In summary, when performing an analysis of whether a claim is directed to an abstract idea (Step 2A), examiners are to continue to determine if the claim recites (i.e., sets forth or describes) a concept that is similar to concepts previously found abstract by the courts. The fact that a claim is directed to an improvement in computer-related technology can demonstrate that the claim does not recite a concept similar to previously identified abstract ideas.

We will continue to cover these issues in some depth over the next few weeks.

Cardpool: Amending Claims in Reexam after Court Judgment of Invalidity

April 6, 2016PatentAffirmed Without Opinion, anticipation, Federal Circuit En Banc, obviousness, Supreme CourtDennis Crouch

by Dennis Crouch

The timing of a settlement is sometimes really important for patentees — especially if a court is about to find your patent invalid.

Slightly complex story: In Cardpool v. Plastic Jungle, the district court ruled on summary judgment that Cardpool’s gift-card-exchange patent claims invalid under 35 U.S.C. 101 and dismissed the case with prejudice. U.S. Patent No. 7,494,048. That decision was initially affirmed by the Federal Circuit in a R.36 Judgment Without Opinion. Shortly thereafter, however, the USPTO issued a reexamination certificate finding the claims (as amended in reexam) patentable (of course, the PTO did not consider eligibility but only novelty and nonobviousness).

The timing of the reexamination certificate gave Cardpool the opportunity to request rehearing from the Federal Circuit. The appellate court agreed and vacated its prior summary affirmance (although not the district court’s opinion) and remanded to the district court to consider the impact of the reexamination changes.

The parties apparently came to some agreement and thus on remand the parties jointly moved for the district court to vacate its invalidity judgment since the claims had been amended and since the PTO certificate issued before the appellate mandate. See Fresenius USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330, 1346 (Fed. Cir. 2013).

However, the district court rejected the plea for vacatur — finding that the PTO decision does not “displace a district court judgment” and that it would be “against the public interest” to allow a patentee to overcome an invalidity judgment simply by “amending its invalid claims.”

No Vacation: Now, on appeal again, the Federal Circuit has affirmed the lower court ruling that vacatur is not necessary or proper:

The Supreme Court counsels that “vacatur must be decreed for those judgments whose review is . . . ‘prevented through happenstance’—that is to say, where a controversy presented for review has ‘become moot due to circumstances unattributable to any of the parties.’” U.S. Bancorp Mortg. Co. v. Bonner Mall P’ship, 513 U.S. 18, 23 (1994).

Here, the mootness is due to amendments made by the patentee. As such, the appellate court refused to vacate the district court judgment.

= = = = =

Res Judicata: What is unclear here is the level of claim & issue preclusion that will apply going forward when Cardpool asserts the patent against some third party. Claim 1 was found invalid by a final judgment. However, Claim 1 has now been amended. Could Cardpool sue Plastic Jungle (or its assigns) on the revised Claim 1? Could Cardpool sue an unrelated alleged infringer? Writing for the majority, Judge Newman suggests (but does not hold) that Cardpool will be able to do so:

On the facts and procedures of this case, the issue of validity of the reexamined claims remains to be addressed in any future proceeding. In the initial proceeding the original claims were adjudicated only on the ground of subject matter eligibility under section 101. As in Aspex, the effect of a prior judgment rendered on specific issues as applied to the original claims, depends on the facts and issues of the reexamination, and invokes equity as well as law.

I pulled-up the reexamined claims and found that they were extensively amended to require that the method be computer-implemented using a processor, computer program, data requests, validation process by the processor, etc. I would be truly surprised, if these amendments are sufficient to overcome the Alice Corp. test for eligibility (as implemented).

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

June 23, 2015PatentAbstract Idea, Affirmed Without Opinion, anticipation, Subject Matter EligibilityDennis Crouch

by Dennis Crouch

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

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

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

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

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

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

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

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

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

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

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

= = = = =

Judges Moore and Reyna joined Judge Newman on the panel.

= = = = =

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

= = = = =

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

Eligibility 101: Motion to Dismiss Ends Another Patent

June 15, 2015PatentAbstract Idea, Claim Construction, First to Invent, Subject Matter EligibilityDennis Crouch

OIP v. Amazon (Fed. Cir. 2015)

In a short-but-important opinion, the Federal Circuit has affirmed a district court’s finding (on motion-to-dismiss) that OIP’s patent claims are invalid as lacking patent eligible subject matter.

The claims are directed to a multi-step process of using an offer-based inquiry method for setting product price. (U.S. Patent No. 7,970,713). The basic problem is that it is difficult to figure-out the profit-maximizing price for any given product. The inventor’s insight here is that, unlike a land-based grocery store where prices are publicly labeled, an internet-based store can offer a different price to each consumer. The invention spells out a method of testing various price-points by actually offering the product for sale to consumers different consumers being given different prices. The results of those offers (whether or not consumers purchased at the given price) can then be used to automatically calculate the price-point.

In reviewing the claimed invention, the Federal Circuit found it to be “no more than an abstract idea coupled with routine data-gathering steps and conventional computer activity.” As such, the claims are ineligible for patent protection.

Following the two-step approach of Alice Corp v. CLS Bank, the Federal Circuit first found that the claims did encompass an abstract idea — namely the abstract idea of “offer-based price optimization.” We know that the price optimization is an abstract idea because it is similar to the “fundamental economic practices” that the Supreme Court has previously found to be abstract ideas. (Note – here the appellate panel misquotes the Supreme Court as saying “fundamental economic concepts” rather than practices.) The court also states: the fact that “the claims do not preempt all price optimization or may be limited to price optimization in the e-commerce setting do not make them any less abstract.”

The second step of Alice Corp considers whether the claims include an additional inventive concept sufficient to transform the abstract idea into a patent eligible invention. Here, the court finds that additional limitations and concepts are all well understood, routine, and conventional activities that merely require conventional computer technology. “[R]elying on a computer to perform routine tasks more quickly or more accurately is insufficient to render a claim patent eligible.”

The opinion of the court was penned by Judge Hughes and joined by Judge Taranto. Judge Mayer published an additional concurring opinion indicating that eligibility is properly addressed at the motion-to-dismiss stage.

Failure to recite statutory subject matter is the sort of “basic deficiency,” that can, and should, “be exposed at the point of minimum expenditure of time and money by the parties and the court,” Twombly, 550 U.S. 544 (2007). Addressing 35 U.S.C. § 101 at the outset not only conserves scarce judicial resources and spares litigants the staggering costs associated with discovery and protracted claim construction litigation, it also works to stem the tide of vexatious suits brought by the owners of vague and overbroad business method patents. Accordingly, where, as here, asserted claims are plainly directed to a patent ineligible abstract idea, we have repeatedly sanctioned a district court’s decision to dispose of them on the pleadings. . . . I commend the district court’s adherence to the Supreme Court’s instruction that patent eligibility is a “threshold” issue, Bilski v. Kappos, 561 U.S. 593 (2010), by resolving it at the first opportunity.

Still fighting against this tide, Judge Gilstrap (E.D. Tex.) requires an accused infringer to must obtain leave of the court after showing good cause before filing a motion to dismiss on patent eligiblity. (Joe Mullin Article).

Despite the suggested cost of patent litigation, I expect that winning on motion-to-dismiss is considerably less expensive than the IPR/PGR/CBM process.

Copyrighting Software? Google v. Oracle

November 10, 2014PatentCopyright, LicensesDennis Crouch

by Dennis Crouch

When Google wrote its program-interface (API) for Android, the company made a strategic decision to mimic the method call structure of Java. Java is an extremely popular and powerful programming language and Google determined that free-riding on Java popularity would facilitate its catch-up game in the third-party app marketplace. As an example, Google used the Java method header “java.lang.Math.max(a,b)”. When called, the “max” function returns the greater of the two inputs. In Android’s API, Google copied a set of 37 different Java “packages” that each contain many classes and method calls (such as “max()”). Overall, Google copied the header structure for more than six-thousand methods. Although Java is offered for both open source and commercial licenses, Google refused to comply with either regime.

Java’s originator Sun Microsystems was known for broadly sharing its creations without enforcing its IP rights. That aura changed when Sun was purchased by Oracle and certainly when Oracle sued Google for copyright infringement, inter alia.

In the Copyright lawsuit, the district court held that the API method headers were not protectable under copyright. However, the Federal Circuit reversed on appeal — finding the Java API taxonomy copyrightable as a whole. In particular, the appellate panel led by Judge O’Malley rejected the idea/expression merger doctrine since there are many other ways that functionally equivalent method-calls could have been constructed besides those found in Java. “Merger cannot bar copyright protection for any lines of declaring source code unless Sun/Oracle had only one way, or a limited number of ways, to write them.”

Now, Google has petitioned the Supreme Court for a writ of certiorari asking:

Whether copyright protection extends to all elements of an original work of computer software, including a system or method of operation, that an author could have written in more than one way.

Here, Google references 17 U.S.C. 102(b) which bars copyright protection for “any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of [its] form [of expression].” And, Google pushes-back against the notion that the merger doctrine accounts for the limits of 102(b) as suggested by the Federal Circuit.

Google also interestingly notes that the Federal Circuit opinion here “erases a fundamental boundary between patent and copyright law.” However, rather than supporting software patents, Google argues that copyright protection here would serve as an end-run around the limitations set by Alice Corp.

Just last Term, this Court confirmed that, while some software-related patent claims may be eligible for patent protection under 35 U.S.C. § 101, many are not. Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014). Like Section 102(b) of the Copyright Act, Section 101 of the Patent Act protects future innovation by preventing anyone from “ ‘inhibit[ing] further discovery by improperly tying up the future use of’ the[] building blocks of human ingenuity.”

Extending copyright protection to methods and systems of operation would undermine the limits on patent protection.

The argument is interesting because it turns the usual analysis on its head. Ordinarily folks argue that copyright and patent should be complementary and that overlap should be avoided. Here, however, the petitioner argues that copyright should not cover a particular subject matter area precisely because it is not covered by patent. This also generally suggests that the case will have an impact on software patent eligibility.

The petition was filed by Daryl Joseffer’s team at King & Spalding and I give a more-likely-than-not chance of grant. In this type of case, the Supreme Court is likely to request input from the Solicitor General and I would expect that the SG/White-House would support grant. If granted, the Federal Circuit will almost certainly be reversed. The merger doctrine is a mess and genuinely needs clarity. The difficult question in my mind is whether the court will be able articulate a reasoned boundary between software that is protectable and that which is not.

In an amicus brief (supporting certiorari) a group of computer scientists (with the Electronic Frontier Foundation) argues that companies should not be able to use copyright to prevent others from interfacing with their systems.

Petition Briefs:

Guest Post: Publishing Design Patent Applications: Time to Act

August 24, 2014PatentAIA Trials, anticipation, Damages, design patent, obviousness, PGR, Trade SecretsJason Rantanen

Gary L. Griswold

Mr. Griswold is a Consultant residing in Hudson, WI and was formerly President and Chief Intellectual Property Counsel for 3M Innovative Properties Company. The essay reflects the views of the author. He wishes to thank Bob Armitage and Mike Kirk for their excellent contributions to the essay.

Overview

Design patenting has come of age. According to a recent World Intellectual Property Organization (WIPO) study, the filing of design patent applications more than doubled between 2004 and 2011.[1] The stakes in design patent litigation today can be enormous. One commentator on the recent Apple-Samsung iPhone IP wars noted, “After operating in the intellectual property backwaters for years, design patents took center stage in the epic battle.”[2]

Enterprises of all sizes have come to recognize the value to be had from securing patents on their innovative designs. This also means that more businesses now need to consider whether design patents of others might impair their freedom to operate when placing a new product on the market.

Unlike conventional (“utility”) patent applications, design patent applications are not subject to the “publication” provisions that were placed in the U.S. patent law in 1999 with the enactment of the American Inventors Protection Act (AIPA). Utility patent applications, with a few exceptions, must all be published and made publicly available within 18 months after filing.[3] However, all design patent applications are required to be kept in secret in the United States Patent and Trademark Office (USPTO) until the patent issues on the application.

Today this secrecy can have significant and negative consequences – for the design’s creator and for those who commit resources to manufacture a similar product before the issuance of the design patent. Unlike most utility patents today, the first inkling that a patent is being sought on a new product’s design may come with grant of a design patent, in other words come at the end of the examination process in the USPTO.

The growing importance of design patents suggests that this exclusion from publication with respect to design patent application publication should be rectified by Congress. This can best be done by requiring that all pending design patent applications be made available to the public by publishing these applications at 6 months after the date that they were originally filed.

Doing so would put the public on notice, shortly after the design patent application is filed, that a new product’s design may be protected. The growing prominence of design patenting, as well as other developments in the law since 1999, now make it timely for Congress to act.

Background

Two major pieces of patent legislation over the past 15 years have worked to make the U.S. patent law operate with vastly greater transparency, predictability and simplicity. The AIPA, with its requirement that most new non-design patent filings must be published at 18-months after their original filing dates was followed by a host of even more significant patent reforms. These were contained in the Leahy-Smith America Invents Act (AIA) of 2011.[4]

Key provisions of the AIA were designed to allow inventors to accurately assess whether they could secure – or had secured – a valid patent. For utility patents, access to earlier-filed patent applications comes though the AIPA’s publication provisions. Clearly, since some patents can take years to issue, holding earlier-filed patent applications in secrecy in the United States Patent and Trademark Office (USPTO) until a patent issued meant that an inventor might mistakenly invest based on the apparent validity of a patent that might then evaporate upon the issuance of a patent on a never-published, earlier-filed patent application.

The AIA also sought to assure that members of the public could more effectively participate in the patenting process. It allowed members of the public to be involved in the determination of whether a claimed invention in a patent application can be validly issued as a patent, both before the patent issues and after the patent issuance.

If action is taken promptly after a pending patent application is published, the AIA permits a member of the public to make a “pre-grant submission” of relevant prior art that the patent examiner handling the patent application must consider in deciding whether a patent should issue on the application.[5] These submissions, most notably include the earlier-sought patent applications of other inventors that have been published under the AIPA’s provisions.

In addition, the new “post-grant review” or “PGR” provisions of the AIA permit a member of the public to raise in a USPTO proceeding any issue of a patent’s validity that could be raised in court by someone accused of infringing the patent. However, these PGR provisions, like the pre-grant submission provisions, require that an individual act promptly. In this case, the PGR petition must be filed within nine months of the issue date of the patent that is being opposed.

Given the formidable requirements for requesting a PGR, most individuals making a PGR request will benefit from advance notice that a patent is about to issue. This notice, of course, is automatic when the patent application has been published under the AIPA’s provisions.

The manner in which the AIA built upon the AIPA’s provisions, both with pre-grant submissions and with post-grant review, work to benefit patent owners and their potential competitors alike. However, while these new pre-grant and post-grant provisions technically apply both to design and utility patents, the lack of any “publication provision” for design patents means that these provisions are now significantly less effective for designs.

The Rationale for Excluding Design Patents from the AIPA Publication Provisions No Longer Makes Sense

When the AIPA was enacted, there were two significant exceptions to the rule that pending applications for patent would be published and made publicly accessible. First, these provisions allowed inventors seeking only U.S. patents to opt-out of the publication requirement. This was done for inventors interested in patent protection only for the U.S. market on the assumption that at least some of them might not want their inventions publicly disclosed if they were ultimately not going to be able to receive a valid patent. However, for almost all such inventions, marketing the invention necessarily discloses to the public what the invention is and, in fact, discloses much more about the invention to the public than would normally be found in an inventor’s patent application if published.

Thus, this rationale, particularly today, makes little sense. The inventor can be “protected” from public disclosure by opting-out of the publication provisions of the AIPA only in the situation where the invention is never commercialized and essentially has no economic value, or in the limited situations where the invention can be effectively practiced as a trade secret. Consequently, it is a protection that seldom affords any economic value to the inventor.

Under the AIA, the publication of an invention in a pending patent application provides an inventor with a guarantee that no one else will be able to successfully secure a patent on the same or a similar invention based on an application filed after the inventor’s patent filing. Where someone subsequently files for a patent, the earlier-filed application limits the later-filing inventor to validly patenting only subject matter both novel and non-obvious over what was disclosed in the earlier-filed application.

Design patents were totally excluded from the 18-month publication provisions. The rationale for the design patent exclusion can be found in the legislative history of the AIPA: “Since design applications do not disclose technology, inventors do not have a particular interest in having them published.” That statement, whatever its validity then, was made before design patenting came of age and has little relevance today, as evidenced by the litigation between Apple and Samsung.

Another reason given for the design exception was that “The Hague Agreement Concerning the International Registration of Industrial Designs” was being revised and that any change to the design patent law should await the outcome of that exercise. That outcome is now clear; Congress has acted to remove the exception for design patents filed under The Hague Agreement.[6]

Yet another reason that design patents may have been left out of the mix when the publication provisions of the AIPA were being drafted was the short pendency of a design patent application. “Pendency” is the time taken by a patent examiner between filing and issuance of the design patent. With pre-grant submissions of prior art and post-grant review under the AIA now in place, that relatively shorter pendency before the Patent Office for design applications versus utility applications makes it much more important to have design applications not only published, but published quite promptly, i.e., at six months from the patent filing.[7]

The last reason Congress may have excepted design patents from publication is that some manufacturers may not have wanted the designs for new products to be prematurely disclosed, prior to market introduction.[8] Under the AIA, however, the filing of a design patent application assures that no similar designs can be patented based upon a later-filed design patent application. In addition, early publication puts competitors on notice that there is a “patent pending” on the design so that they dare not copy the design without the risk of infringing a subsequently issued design patent. Instead of a problem for manufacturers, pre-grant publication carries with it undeniably important benefits.

In addition to the “notice” function that arises from publishing a design patent application, inventors whose design patent applications publish secure yet another benefit under the AIPA. They can qualify for “provisional rights” – that is the right to collect reasonable royalty damages from anyone who uses the design during the period from the date the user received notice of the published design application until issuance of the patent on the design.[9] This again reflects the upsides of publication, much potential gain with a negligible prospect of incurring any pain.

Conclusions

The AIA increased the openness and transparency of the patent system by providing for pre-grant submissions and post- grant review. These provisions work to protect the public against patents that lack valid claims – and similarly protect the inventor from making investments in reliance on patents that could never be successfully enforced. Those aspects of the AIA are premised in part on the publication of pending patent applications. Whatever reasons can be cited for excluding design patent applications from these important provisions of the AIPA, such reasons now have only historic significance. Today, all design patent inventors deserve equal treatment. The availability of the benefits of publishing pending design patent applications should not depend on where a design patent inventor seeks patent protection.

In sum, the agreement to allow publication of design patent applications filed by U.S. inventors under The Hague Agreement represents a significant step by the United States toward achieving the open, transparent 21^st century patent system contemplated by the AIPA and AIA. The increase in design patent application activity – and the prominence of design patent enforcement efforts – renders this a perfect time to remove the exclusion from publication of those design patent applications filed only in the United States.

[1] According to WIPO, in 2012, “the 1.22 million industrial designs contained in applications grew by 17%—the highest growth on record.” http://www.wipo.int/export/sites/www/freepublications/en/statistics/943/wipo_pub_943_2013.pdf, at p. 4.

[2] See http://designpatentattorney.com/wp-content/uploads/2013/01/Carani-Lanslide-Article-Design-Patents-Take-Center-Stage-Jan-Feb-2013.pdf.

[3] Most utility patent applications must be published under the AIPA’s publication provisions. The time period set for publishing utility patents is 18 months after the initial patent filing date. 35 U.S.C. § 122(b).

[4] The United States adopted a so-called first-inventor-to-file system as the principle for determining what subject matter can represent “prior art” to a claimed invention. Also, a number of subjective and non-transparent aspects of the rules on patenting were removed.

[5] Because prior art can be submitted to the USPTO anonymously, members of the public and competitors of the applicant are normally comfortable in making such submissions. Since the processing time is shorter for design patent applications than that of utility patent applications, a narrower time window (e.g., before the earlier of a notice of allowance and the later of (1) the first rejection or (2) 2 months after publication) would be necessary for submitting third party submissions.

[6] The implementing legislation for the Geneva Act of The Hague Agreement has been enacted by the United States and rules for its implementation are being finalized by the USPTO. Once the rules are completed, the formal process for membership will be initiated and completed. The Common Regulations Under the 1999 [Geneva] Act and the 1960 Act of The Hague Agreement provide for publication of international applications six months after the date of the international Registration (which occurs upon receipt by WIPO of the international application). This publication of the international application will be considered a publication in the U.S. under 35 USC 390. The U.S. will not allow deferral of publication. Thus, any concerns related to the early publication of design patent applications as a policy matter have already been decided by Congress in favor of publication.

[7] As with utility patent applications, the public may well be aware of better prior art for design patent applications than the USPTO. If design patent applications were published, interested members of the public could submit prior art to the USPTO with the result that any issuing design patents would have been more thoroughly examined, benefiting both the applicant and public.

[8] Because of the speed of issuance, design applications filed only in the U.S. would need to be published 6 months after their U.S. filing date. Any concern with timing of publication relative to commercialization would seem to be handled by a 6 month period between filing and publication, which mirrors The Hague Agreement, and the relatively rapid grant (typically 15 months) of design patents.

[9] By providing that publication under The Hague Agreement will be deemed a publication under 35 USC 122(b), the implementing legislation (35 U.S.C. 390) makes such design patent applications eligible for provisional rights under 35 USC 154(d).

Teva v. Sandoz: Standard of Review for Claim Construction(?)

June 26, 2014PatentClaim Construction, EnablementJason Rantanen

By Jason Rantanen

While many eyes will be on the Supreme Court on Monday when it releases its decision in Hobby Lobby v. Sebelius, the term is over for patent cases. Over the past few months, the Court issued an astonishing six patent law-related opinions (almost 10% of the Court’s docket), covering ground from claim definiteness (Nautilus) to the exceptional case standard in Section 285 (Octane, Highmark) to multi-actor infringement (Limelight) to the burden of proof in noninfringement declaratory judgment actions (Medtronic) to the ever-present patentable subject matter case (Alice). Three of these opinions (Alice, Highmark, and Limelight) resolved deep intra-circuit splits at the Federal Circuit. Altogether, this term profoundly altered the landscape of patent law jurisprudence. Perhaps more important than the substance of the Court’s opinions was the change itself: through opinions such as Nautilius and Alice, the court made it clear to participants that the law of patents can be a dynamic, changing thing, an organicness that forward-thinking patent attorneys and agents – even more than litigators – will be forced to grapple with.

I’ll be talking more about this year’s developments in patent law at the Wisconsin State Bar Association’s annual Door County Intellectual Property Academy in a few weeks, and the Supreme Court will certainly take center stage. Dennis will be there as well.

For now, though, the next major event in patent law jurisprudence is likely to be the Court’s opinion in Teva v. Sandoz, in which the Petitioner posed the question:

Whether a district court’s factual finding in support of its construction of a patent claim term may be reviewed de novo, as the Federal Circuit requires (and as the panel explicitly did in this case), or only for clear error, as Rule 52(a) requires.

But this case is more complex than the (relatively) simple issue of deference in appellate review of claim constructions. At the trial court level, the district judge did not simply construe the claim in a way unfavorable to Sandoz, the accused infringer. Rather, the district judge rejected Sandoz’s argument that the claim term “Average Molecular Weight” was indefinite and construed the claim in Teva’s favor. On appeal the Federal Circuit reviewed the issue of claim definiteness without deference and concluded that the term was indefinite (applying it’s pre-Nautilus standard of “not amenable to construction” or “insolubly ambiguous”).

Herein lies the sticky part: If one takes the view that questions of claim definiteness and claim construction are effectively one and the same, then this case squarely presents a question about the appropriate standard of review for claim construction. This seems intuitive: both revolve around determining claim meaning.

But treating issues of claim definiteness and construction as if they are just different sides of the same coin runs into a glitch if there is a factual component: one issue (definiteness) arguably comes with a “clear and convincing” evidentiary standard while the other (claim construction) does not. (While there is a canon that claims should be interpreted to preserve their validity, it’s a weak one that only operates as a last resort. See Phillips v. AWH Corp., 415 F.3d 1303, 1327 (Fed. Cir. 2005) (“While we have acknowledged the maxim that claims should be construed to preserve their validity, we have not applied that principle broadly, and we have certainly not endorsed a regime in which validity analysis is a regular component of claim construction.”).) If different evidentiary standards are being applied to the factual components of each, then claim definiteness and claim construction must be separate issues.

If this logic is sound and claim definiteness and construction are distinct issues, then Teva v Sandoz is really only about the standard of review on the issue of claim definiteness, not about the standard of review of claim construction. But the observation about evidentiary standards notwithstanding, it seems counterintuitive to say that the question of whether “a patent’s claims, viewed in light of the specification and prosecution history, inform those skilled in the art about the scope of the invention with reasonable certainty” is somehow different from how those skilled in the art would interpret the claims. And Teva’s Brief, which I’ll summarize tomorrow, treats indefiniteness and claim construction as if they were the same thing.

How, then, could the Court escape this conundrum of different evidentiary standards for what is essentially the same determination, aside from concluding both are pure issues of law, a position that would be at odds with Markman and probably Nautilus? First, the Court could conclude that indefiniteness does not implicate the clear-and-convincing evidence standard. The Court went halfway there in Nautilus, observing that the “presumption of validity does not alter the degree of clarity that §112, ¶2 demands from patent applicants,” but left open the question of whether subsidiary issues of definiteness trigger the clear-and-convincing evidence standard. A second possibility would be for the Court to implement a “clear-and-convincing” evidentiary standard for issues of fact in claim construction (although how that would work in a form other than the current pro-validity canon, I have no idea).

There are also some less-than-helpful options that would further churn up the muddy bottom of patent law. It’s entirely possible that the Court could issue an opinion solely addressing the issue of whether or not the appellate court must grant deference to district court factual findings on the issue of indefiniteness, and leave unanswered the question of whether deference is appropriate in the context of claim constructions. Or, it could avoid discussing the appropriate evidentiary standards for claim construction and indefiniteness (as it did in Nautilus), instead leaving folks to ponder whether they are the same or different.

I’ll also make the observation that after the Court granted certiorari in this case, it issued Nautilus v. Biosig, which lowered the standard for finding claims indefinite. Even if the Court were to reverse in this case – ruling that factual issues in claim construction and claim definiteness are entitled to deference – it would seem that the inevitable result would be a remand to the Federal Circuit, and then probably to the district court, to apply the new standard.

Kalo on the main page, and some thoughts learned from Jonathan Turley

May 9, 2014EthicsanticipationDavid

If you read the discussion on the main page, you’ll miss the key point: when Funk Bros. was decided, there was no section 102 or 103. There was (what is now only) 101. For a long time, however, the courts construed the word “invention” to require more than just novelty, even though “new” and “useful” were the only words in (what was then) 101.

In 1952, Congress did its level best to destroy the word “invention” and replace it with 102/103. Read Chief Judge Rader’s opinion in CLS Bank.

So, Kalo was deciding the substantive meaning of a word that, after 1952, should have none.

I hate this mess the supremes have made by not reading the statute!

Which brings me to the next point, quite related. I had the great pleasure of listening to Professor Turley speak on the Supreme Court the other night at our IP Inn here in Atlanta. He made several wonderful points in describing why we should expand to 19 Justices (he persuaded me, but that’s beside the point). Among them, he said that wherever he goes lawyers complain that they cannot implement the Court’s decisions. That statement, of course, reverberated greatly with 101 “jurisprudence,” where we get silly things like the Court saying the rate at which the body metabolizes a man-made drug is a “law of nature,” or that the phrase “whoever invents or discovers” a new method using an old product doesn’t mean what it says.

So, there you go. I’m looking forward to CLS Bank. Maybe then Congress will say “we really did mean what we did in 1952.”

Federal Circuit Splits on Venue Transfer Issues

February 27, 2014PatentLicenses, VenueDennis Crouch

By Dennis Crouch

In re Apple Inc. (Fed. Cir. 2014); In re Barnes & Noble (Fed. Cir. 2014)

In a pair of decisions, the Federal Circuit has denied two different petitions for writ of mandamus that sought appellate oversight in the transfer motions. Both cases involved identical split panels with Judges Reyna and Prost in the majority (denying mandamus) and Judge Newman in dissent. Over the past several years, a number of § 1404 transfer petitions have been filed at the Federal Circuit following the court’s 2008 TS Tech decision. See, In re TS Tech USA Corp., 551 F.3d 1315, 1319 (Fed. Cir. 2008).

In both cases here, the majority found that the movant had failed to “meet its exacting burden to demonstrate that the district court was clearly and indisputably incorrect in concluding that the case should not have been transferred” by the District Court judge.

Judge Newman’s dissents are interesting she writes in Apple:

The plaintiff, Core Wireless Licensing, S.A.R.L., is a Luxembourg company having one employee. Core Wireless maintains a wholly-owned subsidiary, Core Wireless USA, a Texas corporation with 6 employees who live in or near Plano, Texas. Core Wireless USA’s employees manage Core Wireless’s patent portfolio, including any licensing agreements deriving therefrom. Neither Core Wireless nor Core Wireless USA makes, uses, or sells the patented subject matter in Texas or elsewhere.

The accused products are versions of Apple Incorporated’s iPhone and cellular iPad products. Apple has been headquartered in Cupertino, California since 1976. Apple’s management and primary research and development facilities are also located in Cupertino where Apple employs over 13,000 people. The record also states that the research, design, and development of the accused products took place in Cupertino and that virtually all Apple business documents and records relating to the research, design, development, marketing strategy, and product revenue for the accused products are located in or near Cupertino. Additionally, Apple has stated that its foreseeable witnesses with knowledge of the research, design, and development of the accused products reside or work in or near Cupertino. (more…)

IDEA Act (S.632)

April 30, 2021PatentDennis Crouch

I previously mentioned the IDEA Act (S.632) that is pending before the Senate. The proposal would have the PTO collect demographic information about patent inventors. This includes “including gender, race, military or veteran status, and any other demographic category that the Director determines appropriate.” The information is to be kept confidential and away from the application file (so that examiners are not biased).The proposal states that the collection is “voluntary . . . [information] related to each inventor … may be submitted voluntarily by that inventor.”

Sen. Ted Cruz proposed an amendment that would require written consent from the inventor before a patent applicant submitted the demographic information. In addition, the proposed amendment would have prohibited employers from retaliating against an employee who refused to provide demographic information. The video below shows the hearing where this is all discussed:

Cruz’s amendment was not adopted, and the proposal passed through the judiciary committee. It will next move to the senate floor for consideration.

Customer Value Not Just Limited to the 20 Year Patent Term.

February 11, 2021PatentDennis Crouch

by Dennis Crouch

cxLoyalty, Inc. v. Maritz (Fed. Cir. 2021)

Maritz is in the business of designing employee incentive plans and other reward programs. The company’s U.S. Patent No. 7,134,087 claims a computer system for using “award points” to purchase goods at a regular store by using a “shadow credit card.” cxLoyalty is a competitor — focusing primarily on customer loyalty. Their creepy motto: “we increase customer lifetime value.” At least they’re not focused on true zombies.

Maritz sued cxLoyalty for infringement back in 2018. In response, the defendant filed a petition for covered-business-method review (CBM) and argued that the claims lack patent eligibility. The PTAB offered a split result:

Claims 1-15 ineligible;
Substitute claims 16-23 eligible.

On appeal, the Federal Circuit has reversed — finding that none of the claims recite patent eligible subject matter under 35 U.S.C. 101 and Alice.

The claims each occupy 3+ pages of text, but basically spell out the “computerized system” as shown below in Figure 2. The original claim 1 was written at roughly the same level of generality used in the figure below. The substituted claim added several limitations: requiring a “program database”; requiring the GUI to use an “internet connection”; and formatting the information from the vendor so that it can be used by the GUI system. For the PTAB, those changes were sufficient to surpass the eligibility threshold. On appeal, however, the Federal Circuit disagreed.

In its analysis, the PTAB found all the claims directed to the abstract idea of facilitating a commercial transaction — “a fundamental economic practice long prevalent in commerce.” Quoting Alice. However, according to the PTAB, the substitute claims included an additional concept under the USPTO’s 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019).

The eligibility guidance is generally seen as Former Dir. Iancu’s attempt to limit ongoing damage to patent applicants based upon expansive readings of Alice & Mayo. However, it was (and is) apparent that the guidance does not closely follow binding Federal Circuit caselaw but rather takes several opportunities to favor a conclusion of patent eligibility.

On appeal, the court first noted that the eligibility guidance “is not, itself, the law” and “does not carry the force of law.” Further, the court explained that Federal Circuit caselaw controls PTAB judgments on eligibility — not the PTO guidance.

On appeal here, the Federal Circuit concluded that the claims are ineligible — and, in particular, that the claims fail Alice Step Two.

Maritz attempts to distinguish claim 16 at both steps one and two on the basis of its added requirement that the GUI “is able to convert vendor-related information into information formatted for the GUI, which GUI-formatted information may then be provided to the claimed participants.”

Maritz argues that the added limitation constitutes a technological solution to a technological problem. However, Maritz does not contend that the claimed invention improves the use of computers as a tool by reciting a new way for computers to conduct format conversion. Nor do the claims provide any guidance as to how this purported function is achieved. Thus, claim 16 does not claim a patent-eligible technological solution to a technological problem.

At the trial, Maritz presented unrebutted expert testimony that the information conversion was not “well-understood, routine, or conventional.” On appeal, the Federal Circuit gave no weight to that conclusory testimony and rather found that the testimony did not actually present anything to support the conclusion other than an argument that the invention as a whole was novel. “But, as explained previously, our cases are clear that a patent claim is not eligible under § 101 merely because it recites novel subject matter.”

New PatentlyO Law Journal Essay: Is There Any Need to Resort to a § 101 Exception for Prior Art Ideas?

April 22, 2019Journal, PatentJason Rantanen

New PatentlyO Law Journal Essay by Jeremy C. Doerre. Mr. Doerre is a patent attorney with the law firm of Tillman Wright, PLLC.

In the wake of Alice, many observers have suggested that the implicit judicial exception to 35 U.S.C. § 101 for abstract ideas is now sometimes being used as a judicial or administrative shortcut to invalidate or reject claims that should properly be addressed under 35 U.S.C. § 103. This article notes that “the concern that drives this exclusionary principle [is] one of pre-emption,” and queries whether, given the Supreme Court’s “standard approach of construing a statutory exception narrowly to preserve the primary operation of the general rule,” the implicit statutory exception to 35 U.S.C. § 101 for abstract ideas should be narrowly construed to not apply for prior art ideas because 35 U.S.C. § 103 already ensures that claims do not “’disproportionately t[ie] up the use of [] underlying’ [prior art] ideas.”

Read Jeremy C. Doerre, Is There Any Need to Resort to a § 101 Exception for Prior Art Ideas?, 2019 PatentlyO L.J. 10. (2019.Doerre.AnyNeed)

Prior Patently-O Patent L.J. Articles:

Colleen V. Chien, Piloting Applicant-Initiated 101 Deferral Through A Randomized Controlled Trial, 2019 Patently-O Patent Law Journal 1. (2019.Chien.DeferringPSM)
David A. Boundy, Agency Bad Guidance Practices at the Patent and Trademark Office: a Billion Dollar Problem, 2018 Patently-O Patent Law Journal 20. (Boundy.2018.BadGuidance)
Colleen Chien and Jiun-Ying Wu, Decoding Patentable Subject Matter, 2018 PatentlyO Patent Law Journal 1.
Paul M. Janicke, Patent Venue: Half Christmas Pie, And Half Crow, 2017 Patently-O Patent Law Journal 13. (Janicke.2017.ChristmasPie.pdf)
Paul M. Janicke, The Imminent Outpouring from the Eastern District of Texas, 2017 Patently-O Patent Law Journal 1 (2017) (Janicke.2017.Venue)
Mark A. Lemley, Erik Oliver, Kent Richardson, James Yoon, & Michael Costa, Patent Purchases and Litigation Outcomes, 2016 Patently-O Patent Law Journal 15 (Lemley.2016.PatentMarket)
Bernard Chao and Amy Mapes, An Early Look at Mayo’s Impact on Personalized Medicine, 2016 Patently-O Patent Law Journal 10 (Chao.2016.PersonalizedMedicine)
James E. Daily, An Empirical Analysis of Some Proponents and Opponents of Patent Reform, 2016 Patently-O Patent Law Journal 1. (Daily.2016.Professors)
Tristan Gray–Le Coz and Charles Duan, Apply It to the USPTO: Review of the Implementation of Alice v. CLS Bank in Patent Examination, 2014 Patently-O Patent Law Journal 1. (GrayLeCozDuan)
Robert L. Stoll, Maintaining Post-Grant Review Estoppel in the America Invents Act: A Call for Legislative Restraint, 2012 Patently-O Patent Law Journal 1 (Stoll.2012.estoppel.pdf)
Paul Morgan, The Ambiguity in Section 102(a)(1) of the Leahy-Smith America Invents Act, 2011 Patently-O Patent Law Journal 29. (Morgan.2011.AIAAmbiguities)
Joshua D. Sarnoff, Derivation and Prior Art Problems with the New Patent Act, 2011 Patently-O Patent Law Journal 12 (sarnoff.2011.derivation.pdf)
Bernard Chao, Not So Confidential: A Call for Restraint in Sealing Court Records, 2011 Patently-O Patent Patent Law Journal 6 (chao.sealedrecords.pdf)
Benjamin Levi and Rodney R. Sweetland, The Federal Trade Commission’s (FTC) Recommendations to the International Trade Commission (ITC): Unsound, Unmeasured, and Unauthoritative, 2011 Patently-O Patent Law Journal 1 (levi.ftcunsound.pdf)
Kevin Emerson Collins, An Initial Comment on King Pharmaceuticals: The Printed Matter Doctrine as a Structural Doctrine and Its Implications for Prometheus Laboratories, 2010 Patently-O Patent Law Journal 111 (Collins.KingPharma.pdf)
Robert A. Matthews, Jr., When Multiple Plaintiffs/Relators Sue for the Same Act of Patent False Marking, 2010 Patently-O Patent Law Journal 95 (matthews.falsemarking.pdf)
Kristen Osenga, The Patent Office’s Fast Track Will Not Take Us in the Right Direction, 2010 Patently-O Patent L.J. 89 (Osenga.pdf)
Peter S. Menell, The International Trade Commission’s Section 337 Authority, 2010 Patently-O Patent L.J. 79
Donald S. Chisum, Written Description of the Invention: Ariad (2010) and the Overlooked Invention Priority Principle, 2010 Patently‐O Patent L.J. 72
Kevin Collins, An Initial Comment on Ariad: Written Description and the Baseline of Patent Protection for After-Arising Technology, 2010 Patently-O Patent L.J. 24
Etan Chatlynne, Investigating Patent Law’s Presumption of Validity—An Empirical Analysis, 2010 Patently-O Patent L.J. 37
Michael Kasdan and Joseph Casino, Federal Courts Closely Scrutinizing and Slashing Patent Damage Awards, 2010 Patently-O Patent L.J. 24 (Kasdan.Casino.Damages)
Dennis Crouch, Broadening Federal Circuit Jurisprudence: Moving Beyond Federal Circuit Patent Cases, 2010 Patently-O Patent L.J. 19 (2010)
Edward Reines and Nathan Greenblatt, Interlocutory Appeals of Claim Construction in the Patent Reform Act of 2009, Part II, 2010 Patently‐O Patent L.J. 7 (2010) (Reines.2010)
Gregory P. Landis & Loria B. Yeadon, Selecting the Next Nominee for the Federal Circuit: Patently Obvious to Consider Diversity, 2010 Patently-O Patent L.J. 1 (2010) (Nominee Diversity)
Paul Cole, Patentability of Computer Software As Such, 2008 Patently-O Patent L.J. 1. (Cole.pdf)
John F. Duffy, The Death of Google’s Patents, 2008 Patently O-Pat. L.J. ___ (googlepatents101.pdf)
Mark R. Patterson, Reestablishing the Doctrine of Patent Exhaustion, 2007 Patently-O Patent L.J. 38
Arti K. Rai, The GSK Case: An Administrative Perspective, 2007 Patently-O Patent L.J. 36
Joshua D. Sarnoff, BIO v. DC and the New Need to Eliminate Federal Patent Law Preemption of State and Local Price and Product Regulation, 2007 Patently-O Patent L.J. 30 (Download Sarnoff.BIO.pdf)
John F. Duffy, Are Administrative Patent Judges Unconstitutional?, 2007 Patently-O Patent L.J. 21. (Duffy.BPAI.pdf)
Joseph Casino and Michael Kasdan, In re Seagate Technology: Willfulness and Waiver, a Summary and a Proposal, 2007 Patently-O Patent L.J. 1 (Casino-Seagate)

Commissioner Hirshfeld on Increasing Certainty in US Patent Law

June 7, 2018PatentDennis Crouch

Guest Post by Stephen C. Glazier, Partner at Akerman LLP

On April 26, 2018 the U.S. Patent Commissioner, Andrew Hirshfeld, spoke at our webinar regarding current developments at the U.S. Patent Office. [Link Below]

A major theme of Commissioner Hirshfeld’s remarks was the PTO’s revived focus on increasing reliability, certainty, and enforceability of issued patents and the application process. The underlying goal here is to further increase the value of patents and their beneficial impact on innovative products and businesses.

The Commissioner stated that a first step toward this policy goal will be pursued by new PTO guidance to Examiners and the applicants regarding the application of the Alice-Mayo test for patent subject matter eligibility under Section 101. Other possible PTO guidance is also being considered on various current issues.

The Commissioner pointed out that a first result in this effort was the very recently published PTO guidance, the “Berkheimer Memorandum“, which can be viewed at this link: https://www.uspto.gov/sites/default/files/documents/memo-berkheimer-20180419.PDF. This memo addresses the question of whether an additional element, or combination of elements, represents “well-understood, routine and conventional” activity in a claim directed to an abstract idea, for example, and hence constitute “something more” under the Alice-Mayo test (i.e., patent eligible subject matter). The memo requires examiners to expressly support their positions with a citation to show an element is well-understood, routine or conventional. This should mitigate the volume of Alice rejections. The Commissioner indicated that this memo can currently be used as guidance, despite the fact that it is in the period for public comment until Aug. 20, 2018.

Many commentators feel that this will benefit software and medical diagnostic patents, since Alice rejections are concentrated in these technologies.

The Commissioner commented on volume and other metrics at the PTO. The number of new patent applications has increased every year since 2009, with about 450,000 new cases filed last year (or about 600,000 if RCE’s are counted). However, the percentage of RCE’s is declining. The average time to first action is now about 15 months, and the final time to conclusion of prosecution is about 24 months. Average pendency of Track One applications until issuance is only about 12 month from filing; although, the allowance rate for Track One is about the same as for regular applications. The annual number of new Track One applications is down slightly, but remains near the historical maximum of about 10,000 annually. There are currently about 8,200 patent examiners, of which about 4,700 are primaries. There are approximately 500 art units.

Related issues and other questions were addressed by the Commissioner in the webinar. Some of these issues include: (1) recent Supreme Court patent decisions, (2) material differences in the allowance rates of various examiners, art units and technology centers, and (3) the process for assigning applications to examiners, art units and technology centers.

A video recording of the Commissioner’s opening remarks, and the subsequent Q&A session with the Commissioner, may be reviewed in their entirety at this link: https://www.youtube.com/watch?v=svxQH7a3SwM&feature=youtu.be

Guest Post: Fixing Patent Eligibility by Limiting Scope to Disclosed Embodiments

June 4, 2018PatentDennis Crouch

Guest Post by Benjamin C. Stasa, Shareholder, Brooks Kushman PC, Southfield, Michigan and David C. Berry, Director, Patent Procurement Clinic, Wayne State University Law School, Detroit, Michigan

The U.S. Supreme Court decisions in Alice[1] and Mayo[2], and subsequent attempts to apply those decisions, continue to create some uncertainty in the availability of patent protection for certain technical fields. Although recent guidance has somewhat clarified the issue, eligibility questions continue to vex practitioners, and reflect an all-or-nothing approach to patentability. As a result, commentators and national intellectual property law associations have proposed amending 35 U.S.C. §101. These proposals range from eliminating § 101[3] to amending the Patent Act to codify a broader definition of eligible subject matter.[4]

We offer an alternative approach for amending § 101 to allow some range of patentability for inventions directed to judicially-recognized eligibility exceptions. Rather than attempting to redefine the line between eligible and ineligible subject matter (a revision that preserves the current all-or-nothing approach), we propose amending §101 to implement disclosure-based limits on the scope of claims directed to judicially-recognized exceptions (abstract ideas, laws of nature, and natural phenomena).

Section 112(f) as a Model

Preemption is a common concern raised in eligibility cases. For example, claims directed to a law of nature should not be so broad as to preempt subsequent attempts by other researchers to develop other applications exploiting the law of nature. But preemption concerns may be addressed adequately by disclosure-based limits on claim scope, rather than by precluding patentability in toto. Furthermore, the Patent Act already contains a workable model for disclosure-based limits on claim scope: 35 U.S.C. §112(f).

Currently, if an applicant opts to rely on functional claim language, the claims are limited by the content of the applicant’s disclosure under § 112(f). Borrowing the same approach to limit claims directed to abstract ideas, laws of nature, or natural phenomena, § 101 could be adapted to prevent an applicant from claiming a judicially-recognized exception per se, while permitting claims essentially limited to specific embodiments disclosed in the specification.

Proposed Amendment to Section 101

101. Inventions patentable

(a) Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to subsection (b) and the conditions and requirements of this title.

(b) A claim directed to a judicially-recognized exception to subsection (a) hereof shall be construed to cover the structures, materials, or acts described in the specification and equivalents thereof.

Application

Under § 101 as amended, an examiner that considers a claim to be directed to a judicially-recognized exception would identify it as being subject to § 101(b) and point out the corresponding specific structures or processes disclosed in the specification to be covered by the claims, if any. The applicant could then attempt to refute the § 101(b) characterization through amendment or argument, or both, as is common practice under the current § 101 scheme. Alternatively, the applicant could acquiesce to the examiner’s characterization and possibly identify additional specific structures or processes disclosed in the specification to be covered by the claims. So limited, the claim would be eligible under § 101(b), and the disclosure would delimit claim scope for patentability and infringement.

Advantages

This proposed amendment would not affect an application for a process, machine, manufacture, or composition of matter that is not directed to a judicially-recognized exception to eligibility. On the other hand, claims directed to a law of nature or other judicially-recognized exception per se (claims without a corresponding disclosure of a specific working embodiment) would be indefinite under § 112(b) and thus not be patentable. The proposal improves predictability during patent prosecution, since most eligibility concerns will result in narrower claim scope, rather than the prospect of across-the-board ineligibility. Additionally, this proposed amendment preserves the central role of § 101 in governing eligibility, applies consistently across all fields of invention, and can be efficiently managed by the examining corps since they are already familiar with the operation of § 112(f).

Conclusion

The evolving nature of technology makes eligible/ineligible line-drawing difficult. Rather than just focusing on that boundary, attention can be directed to the consequences of stepping over that line. The proposed amendment of § 101 would clarify the scope of claims directed to a judicially-recognized exception, rather than simply rejecting those claims as wholly unpatentable.

– – – – –

[1] Alice Corp. v. CLS Bank International, 573 U.S. __, 134 S. Ct. 2347 (2014).

[2] Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. ___, 132 S. Ct. 1289 (2012).

[3] See https://www.law360.com/articles/783604/kappos-calls-for-abolition-of-section-101-of-patent-act.

[4] See http://admin.aipla.org/resources2/reports/2017AIPLADirect/Documents/AIPLA%20Report%20on%20101%20Reform-5-12-17.pdf (AIPLA proposal); https://www.americanbar.org/content/dam/aba/administrative/intellectual_property_law/advocacy/advocacy-20170328-comments.authcheckdam.pdf (ABA IPL Section proposal).

Judge Lourie and Newman: Call for Congress to Act

June 1, 2018PatentobviousnessDennis Crouch

by Dennis Crouch

As part of the court’s en banc denial in Berkheimer v. Hp Inc., 2018 U.S. App. LEXIS 14388 (Fed. Cir. 2018), Judges Lourie and Newman joined together in an interesting concurring opinion that argues for some higher power to revisit the doctrine of patent eligibility to provide clarification and policy guidance. The opinion is republished below:

Lourie, Circuit Judge, with whom Newman, Circuit Judge, joins, concurring in the denial of the petition for rehearing en banc.

I concur in the court’s declining to rehear this case en banc. There is plausibility to the panel holding that there are fact issues potentially involved in this case concerning the abstract idea exception to patent eligibility. And the panel, and the court, are bound to follow the script that the Supreme Court has written for us in § 101 cases.

However, I believe the law needs clarification by higher authority, perhaps by Congress, to work its way out of what so many in the innovation field consider are § 101 problems. Individual cases, whether heard by this court or the Supreme Court, are imperfect vehicles for enunciating broad principles because they are limited to the facts presented. Section 101 issues certainly require attention beyond the power of this court.

We started from the statute that provides for patents on “any new and useful process, machine, manufacture, or composition of matter.” 35 U.S.C. § 101. The Supreme Court put a gloss on this provision by excluding laws of nature, natural phenomena, and abstract ideas. Le Roy v. Tatham, 55 U.S. (14 How.) 156, 174-75 (1852) (“[A] principle is not patentable. A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right.”); Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980) (“The laws of nature, physical phenomena, and abstract ideas have been held not patentable.”). So far, so good. Laws of nature (Ohm’s Law, Boyle’s Law, the equivalence of matter and energy), properly construed, should not be eligible for patent. Nor should natural phenomena (lightning, earthquakes, rain, gravity, sunlight) or natural products, per se (blood, brain, skin). Of course, the latter are also unpatentable as lacking novelty under § 102.

But it’s in the details that problems and uncertainties have arisen. The Court held in Mayo Collaborative Services v. Prometheus Laboratories, Inc., that the claim at issue “set forth laws of nature” and was ineligible under § 101 as “a drafting effort designed to monopolize the law of nature itself.” 566 U.S. 66, 77 (2012). That claim recited “[a] method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising” administering a drug and then measuring the level of a metabolite of the drug. Id. at 74-75 (quoting U.S. Patent 6,355,623).

The Supreme Court whittled away at the § 101 statute in Mayo by analyzing abstract ideas and natural phenomena with a two-step test, including looking for an “inventive concept” at step two, thereby bringing aspects of §§ 102 and 103 into the eligibility analysis. Id. at 72-73, 90. The decision we now decide not to rehear en banc holds that step two of the two-step analysis may involve the type of fact-finding that underlies §§ 102 and 103, further complicating what used to be a fairly simple analysis of patent eligibility under § 101. We now are interpreting what began, when it rarely arose, as a simple § 101 analysis, as a complicated multiple-step consideration of inventiveness (“something more”), with the result that an increasing amount of inventive research is no longer subject to patent. For example, because the Mayo analysis forecloses identifying any “inventive concept” in the discovery of natural phenomena, we have held as ineligible subject matter even meritorious inventions that “combined and utilized man-made tools of biotechnology in a way that revolutionized prenatal care.” Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015) (internal quotation marks omitted).

The case before us involves the abstract idea exception to the statute. Abstract ideas indeed should not be subject to patent. They are products of the mind, mental steps, not capable of being controlled by others, regardless what a statute or patent claim might say. Gottschalk v. Benson, 409 U.S. 63, 67 (1972) (“[M]ental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work.”). No one should be inhibited from thinking by a patent. See Letter from Thomas Jefferson to Isaac McPherson (Aug. 13, 1813) (“[I]f nature has made any one thing less susceptible, than all others, of exclusive property, it is the action of the thinking power called an Idea.”). Thus, many brilliant and unconventional ideas must be beyond patenting simply because they are “only” ideas, which cannot be monopolized. Moreover such a patent would be unenforceable. Who knows what people are thinking?

But why should there be a step two in an abstract idea analysis at all? If a method is entirely abstract, is it no less abstract because it contains an inventive step? And, if a claim recites “something more,” an “inventive” physical or technological step, it is not an abstract idea, and can be examined under established patentability provisions such as §§ 102 and 103. Step two’s prohibition on identifying the something more from “computer functions [that] are ‘well-understood, routine, conventional activit[ies]’ previously known to the industry,” Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2359 (2014) (alteration in original) (quoting Mayo, 566 U.S. at 73), is essentially a §§ 102 and 103 inquiry. Section 101 does not need a two-step analysis to determine whether an idea is abstract.

I therefore believe that § 101 requires further authoritative treatment. Thinking further concerning § 101, but beyond these cases, steps that utilize natural processes, as all mechanical, chemical, and biological steps do, should be patent-eligible, provided they meet the other tests of the statute, including novelty, nonobviousness, and written description. A claim to a natural process itself should not be patentable, not least because it lacks novelty, but also because natural processes should be available to all. But claims to using such processes should not be barred at the threshold of a patentability analysis by being considered natural laws, as a method that utilizes a natural law is not itself a natural law.

The Supreme Court also held in Association for Molecular Pathology v. Myriad Genetics, Inc., that claims to isolated natural products were ineligible for claiming “naturally occurring phenomena.” 569 U.S. 576, 590 (2013). The Court concluded that those claims “are not patent eligible simply because they have been isolated from the surrounding genetic material.” Id. at 596.

However, finding, isolating, and purifying such products are genuine acts of inventiveness, which should be incentivized and rewarded by patents. We are all aware of the need for new antibiotics because bacteria have become resistant to our existing products. Nature, including soil and plants, is a fertile possible source of new antibiotics, but there will be much scientific work to be done to find or discover, isolate, and purify any such products before they can be useful to us. Industry should not be deprived of the incentive to develop such products that a patent creates. But, while they are part of the same patent-eligibility problems we face, these specific issues are not in the cases before us.

Accordingly, I concur in the decision of the court not to rehear this § 101 case en banc. Even if it was decided wrongly, which I doubt, it would not work us out of the current § 101 dilemma. In fact, it digs the hole deeper by further complicating the § 101 analysis. Resolution of patent-eligibility issues requires higher intervention, hopefully with ideas reflective of the best thinking that can be brought to bear on the subject.

Berkheimer v. Hp Inc., 2018 U.S. App. LEXIS 14388 (Fed. Cir. 2018) (concurring opinion).

The call for higher authority to change the law is interesting here.

I believe the law needs clarification by higher authority, perhaps by Congress, to work its way out of what so many in the innovation field consider are § 101 problems. Individual cases, whether heard by this court or the Supreme Court, are imperfect vehicles for enunciating broad principles because they are limited to the facts presented. Section 101 issues certainly require attention beyond the power of this court.

For a federal appellate court, there are typically two such “higher authority” mechanisms for altering the law: (1) Supreme Court reinterpretations and (2) changes in the law itself. In the opinion, Judge Lourie rules out a reinterpretation by the Supreme Court as insufficient — thus leaving us with changing of the law.

Typically, the Patent Act is modified through typical Congressional legislative process. I wonder why Judge Lourie did not then simply call for Congressional action but rather called on action by “higher authority, perhaps by Congress.” An intriguing question here is what other higher authority might Lourie be calling upon? One potential is not for Congress to reexamine the law, but rather to provide the USPTO with rulemaking authority to reconsider the law of eligibility.

The Need for Legislative Reform: The Berkeley Section 101 Workshop

October 10, 2017PatentDennis Crouch

Assessing the Need for Legislative Reform of Patent Eligibility in the Mayo/Alice Era: Final Report of the Berkeley Center for Law & Technology Section 101 Workshop [Read the Full Report]

By Jeffrey A. Lefstin, Peter S. Menell, and David O. Taylor

Over the past five years, the Supreme Court has embarked upon a drastic and far-reaching experiment in patent eligibility standards. Since the founding era, the nation’s patent statutes have afforded patent protection to technological innovations and practical applications of scientific discoveries. However, the Supreme Court’s 2012 decision in Mayo Collaborative Services v. Prometheus Laboratories imposed a new limitation on the scope of the patent system: that a useful application of a scientific discovery is ineligible for patent protection unless the inventor also claims an “inventive” application of the discovery. The following year, the Court ruled that discoveries of the location and sequence of DNA compositions that are useful in diagnosing diseases are ineligible for patent protection. And in its 2014 Alice Corp. v. CLS Bank International decision, the Court ruled that software-related claims are ineligible for patent protection unless the abstract ideas or mathematical formulas disclosed are inventively applied.

These decisions sent shock waves through the research, technology, business, and patent communities. Medical diagnostics companies experienced a dramatic narrowing of eligibility for core scientific discoveries. Reactions within the information technology community have been mixed, with some applauding the tightening of patent eligibility standards on software claims and the opportunity to seek early dismissal of lawsuits, particularly those filed by non-practicing entities, and others criticizing the shift in patent eligibility. Several members of the Federal Circuit bluntly criticized the Supreme Court’s shift in patent eligibility standards on jurisprudential and policy grounds. Additionally, the Patent Office has struggled to apply the Supreme Court’s new and rapidly evolving standards.

As this sea change unfolded, many patent practitioners, scholars, PTO officials, and jurists hoped that the Supreme Court would provide fuller and clearer guidance on patent eligibility standards. In the aftermath of the Supreme Court’s rejection of the certiorari petition in Sequenom, Inc. v. Ariosa Diagnostics, Inc.—a case that many Federal Circuit jurists, scholars, and practitioners thought to be an ideal vehicle for clarifying patent eligibility standards, or for reexamining Mayo—we began planning a roundtable discussion among leading industry representatives, practitioners, scholars, policymakers, and retired jurists to explore the patent eligibility landscape and possible legislative solutions to the problems that have emerged.

We sought participants with significant knowledge and experience in the key industries affected by the shift in patent eligibility standards—principally the bioscience and software/information technology fields. To promote candid discussion among these participants, we established the following ground rules: (1) Participants would be free to use the information received, but neither the identity nor the affiliation of the speaker(s) could be revealed; (2) We would prepare a report describing the results of the workshop—and that report would not attribute statements or views to individuals (other than the co-convenors); and (3) The report would list the participants and be made available to the public through BCLT.

Our Report summarizes the presentations and discussions exploring the legal background and effects bearing on legislative action. Part I contains a lightly edited version of the background document circulated to participants prior to the workshop. Part II summarizes the four workshop sessions leading up to the discussion of legislative proposals: (A) legal background; (B) effects on research and development (R&D); (C) effects on patent prosecution; and (D) effects on patent assertion, litigation, and case management. Part III summarizes the discussion of legislative proposals and sets forth a framework for seeking compromise on reform legislation.

As explicated in the Report, a consensus emerged that the current state of patent eligibility jurisprudence is indefensible as a matter of legal principle and is seriously undercutting incentives in sectors of the biotechnology industry. The workshop revealed broad agreement that the Supreme Court’s patent eligibility jurisprudence has diverged from the Patent Act’s text and legislative history, as well as long-standing jurisprudential standards. The participants also agreed that the Supreme Court’s ostensible rationale for its § 101 jurisprudence lacks a sound foundation, and that its formulation of the inventive application standard is grounded on a profound misapprehension of key historical precedents.

Furthermore, the workshop revealed a consensus that it is unlikely that the Supreme Court will reconsider the patent-eligibility issue in the foreseeable future. Conferees also doubted that the Federal Circuit will confront the core concerns surrounding patent eligibility. The USPTO has tended to be reactive only, or has adopted what some conferees viewed as unduly rigid interpretations of the case law.

Thus, legislative reform will be necessary to effect significant change in patent eligibility standards. Participants largely agreed that legislation would be necessary to address the problems that have emerged for bioscience researchers. Nonetheless, there was disagreement on the need for legislative reform of patentable subject matter relating to software and information technology. Moreover, there was a lack of agreement on the best solution to problems, and none of the current legislative proposals garnered consensus.

While nearly all of the conferees recognized that this state of the law poses serious concerns for bioscience research and development, there existed substantial reluctance on the part of some software industry representatives about pursuing legislative reform that could increase patent assertion activity and raise defense risks and costs in the software field. Some participants also thought that the courts should be given time to develop an appropriate screen for the eligibility of software patents and saw some progress in the developing case law.

This suggests to the workshop convenors and authors of the report (the three of us) that the most fruitful approach to reform legislation would restore the traditional patent eligibility standard at least for bioscience advances—that is, establishing that conventional applications of scientific discoveries are eligible for patent protection—while addressing concerns about cumulative creativity and abusive patent assertion. Such additional provisions could include the following: (1) an expanded experimental use exception at least for doctors and medical researchers; (2) exclusion of non-technological subject matter, notably pure business methods (a technological arts test); (3) a mechanism to encourage courts to consider 12(b)(6) motions directed to § 112 issues (as opposed to § 101 issues) early in patent case management; (4) fee-shifting aimed at discouraging nuisance value patent lawsuits; (5) higher thresholds for enhanced damages in the software field; and/or (6) shorter duration for algorithm-based inventions—i.e., where the point of non-obviousness is a computer-implemented algorithm. We further note that compromise legislation might also address distinctive issues relating to affected industries that lie outside of the patent field, such as reimbursement policies relating to medical diagnostics.

Jeffrey A. Lefstin is Professor of Law and Associate Academic Dean at the University of California Hastings College of Law. Peter S. Menell is Koret Professor of Law and Co-director of the Berkeley Center for Law & Technology at the University of California at Berkeley School of Law. David O. Taylor is Associate Professor of Law and Co-Director of the Tsai Center for Law, Science and Innovation at the SMU Dedman School of Law. The full report is available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3050093