Guest post by Howard Skaist, founder of Berkeley Law & Technology Group, LLC.

In 2014, two months after Alice was decided by the Supreme Court, a post that I wrote appeared on Patently-O proposing an approach to claim drafting in light of the Alice decision using a “thought experiment” as an illustration.  A hypothetical in that post suggested trying to claim the original computer spreadsheet VisiCalc before the Alice decision and then after the Alice decision.  The conclusion of the post as to Section 101 was summarized at the time, as follows:

“…from a formal perspective, it is necessary that innovative aspects of the invention, as implemented or intended to be implemented, be on the face of the claim …” (emphasis supplied)

One problem, however, as illustrated starkly by the hypothetical is that claims drafted in light of the Alice decision are generally narrower than they would have been otherwise. Today, perhaps, one could write better (e.g., broader) claims to pass muster under the MayoAlice Framework than the example claims provided in that 2014 post.  However, the point of this post is not to attempt to do that, but rather to consider the pre-Alice claim provided as an illustration and ask the following two questions.

First, how would the pre-Alice claim from that original post fare under the subject matter eligibility guidance recently published in January 2019? Second, how might that claim (or claims) be re-drafted to hopefully significantly improve the chances that the claim (or claims) will pass muster under that same new guidance?

To refresh, the ‘before’ claim of the post was:

  1. A method comprising:  implementing a spreadsheet on a computer.

The primary change under the new subject matter guidance is to so-called step 2A (using the terminology of the US Patent Office) — whether the claim is directed toward a judicial exception such as an abstract idea.  The new subject matter guidance adds a first prong and a second prong to Step 2A.  Following the first prong, an examiner is to determine whether the claim recites a judicial exception, in this case an abstract idea, by referring to subject matter groupings. The subject matter groupings are specified as: mathematical concepts, certain methods of organizing human behavior, and mental processes.

I note that the guidance is quite specific in saying that the claim must “recite” matter that falls within the enumerated groupings.  Thus, here, I would say it does not.   Nonetheless, I have to question if an examiner would take that view.  While the claim clearly does not recite a mathematical concept, I could imagine an examiner asserting that the claim recites a mental process.  While I would not agree with this latter conclusion, I could imagine that an examiner might say, for example, that a spreadsheet can be a mental process and that the language “implementing … on a computer” is nothing more than clever patent drafting.

How, then, might the claim be re-drafted to overcome such a rejection, but still retain some measure of breadth?  To challenge ourselves, and perhaps, recite slightly more than necessary, how about this claim?

  1. A method comprising:  implementing a spreadsheet via a computer, including determining contents of one or more cells thereof, based at least in part on one or more user-specified operations to be applied to signals and/or states to be provided as operands for the one or more user-specified operations.

This re-drafted claim at least arguably does not recite a mental process.  Rather, the claim language is pretty specific to make it clear that physical processes are taking place.  Thus, at least two out of three groupings have been drafted around.

Still, an examiner might say that a spreadsheet is a long-standing, fundamental economic practice or one that is a method of organizing human activities, demonstrating one danger with this particular grouping. It is, by its very nature, a bit vague.  Without making any admissions, thus, it would not be not entirely unreasonable for an examiner to suggest that a spreadsheet might fall into this grouping.

Fortunately, all is not lost.  Even if one fails to pass muster under the first prong, an opportunity to satisfy section 101 under the second prong remains.  Here, the new guidance says that if the recited exception is integrated into a practical application, then the claim is still patent-eligible.

Specifically, the guidance says that to meet the second prong the claim is to integrate the judicial exception into a practical application that imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort to monopolize the judicial exception.  Being an advocate, my position would be that we have met this already with the claim above.

However, again, to be especially hard on ourselves, perhaps we need to make it clear that some sort of result is generated, so that, as a whole, the claim comprises an improvement over a spreadsheet generated by hand, perhaps, as follows:

  1. A method comprising:  implementing a spreadsheet via a computer, including: determining contents of one or more cells thereof, based at least in part on one or more user-specified operations to be applied to signals and/or states to be provided as operands for the one or more user-specified operations; and generating output signals and/or states based at least in part on the determining, wherein the generating includes generating a report that comprises at least a table portion or a sub-portion of the spreadsheet.

Now, it seems that it would be challenging to assert that a practical application with meaningful limits has not been claimed.  Furthermore, if needed, more dependent claims could be used to flush out more application specific features.  Thus, it would seem, we have successfully written or could successfully write a claim that is patent-eligible under the new guidance.

Given the length limitations of a post such as this, it is important that I now quickly move to the point of my prior musings.  So, I have three general observations to make in light of my “thought experiment” above.

First, that my re-drafted claim would pass the MayoAlice Framework under the close scrutiny of a court at best is unclear.  Thus, as one conclusion, even if you are able to draft a claim to pass the new subject matter guidance, it seems prudent to include, as dependent claims, features that you believe more clearly pass the patent eligibility test being applied by courts. 

As a second conclusion, in an attempt to provide greater certainty, it appears that the new guidance permits one to present broader patent-eligible claims to the US Patent Office than previously.  To rephrase this latter point, the Patent Office has provided guidance intended to ferret out the more egregious cases of patent-ineligibility, thereby leaving it to courts to sort out closer question situations, as this example might illustrate.

As a third conclusion, with respect to the new guidance, the “money,” so to speak, resides in meeting the second prong. More specifically, while a patent drafter should certainly attempt to draft claims to comply with the first prong and the second prong; still, given the vagueness at the edges of the first prong groupings, efforts by a patent claim drafter to comply with the second prong appear to me to be more likely to succeed.

Tabbed Spreadsheet — Patent Eligible

Patenting a Spreadsheet

Alice Corp. and Patent Claiming: A Simple Example

Patent Litigation 2019

We are only 21 days into 2019, but trajectories in patent infringement lawsuits appear to be following the same patterns as 2018 — with the top-four venues staying in the same almost identical rank-order:

  1. D.Del
  2. E.D.Tex.
  3. C.D.Cal.
  4. N.D.Cal.

For 2018, N.D. Cal. slightly outranked C.D.Cal.  That result is flipped thus far in 2019.  For 2018 and 2019, these five venues represented 55% and 57% of total case filings respectively. (Data compiled from LexMachina Dockets)

The New Judge in town is Alan Albright. Albright was a long-time patent litigator and is now the lone federal judge in the Waco division of the W.D. Texas.  If you file your patent case in Waco, it will be heard by an experienced patent litigator. Congratulations Judge Albright.


Federal Circuit: Where are the Precedential Decisions?

The Federal Circuit is not off to an auspicious start in 2019 in terms of its opinions and decisions in patent cases.  Of the 20 patent decisions issued thus far, only 4 (20%) are precedential.  The majority (65%) are actually no-opinion judgments known as R.36 judgments with three more (15%) short non-precedential decisions added to the mix. Hopefully this trend will not continue.

For the whole of 2018, the stats are approximately as follows:

  • 30% Precedential Opinions
  • 30% Non-Precedential Opinions
  • 40% R.36 Judgments without Any Opinion

Likelihood of Confusion for Two Businesses In Operation for 40 Years

In re Guild Mortgage Company (Fed. Cir. 2019)

Guild Mortgage’s above-pictured mark was refused registration was refused based upon a Trademark Trial & Appeal Board (TTAB) conclusion of a likelihood of confusion with the registered mark “GUILD INVESTMENT MANAGEMENT.”

On appeal, the Federal Circuit has vacated that decision — holding that the TTAB “failed to consider relevant argument and evidence directed to DuPont factor 8.”

Under Lanham Act § 2(d), the USPTO refuses to register marks that are likely to cause confusion or mistake based upon a resemblance to a prior used or registered mark.

No trademark … shall be refused registration on the principal register on account of its nature unless it—(d) Consists of or comprises a mark which so resembles a mark registered in the [USPTO], or a mark or trade name previously used in the United States by another and not abandoned, as to be likely, when used on or in connection with the goods of the applicant, to cause confusion, or to cause mistake, or to deceive.

15 U.S.C. § 1052(d). The Federal Circuit’s predecessor court – the CCPA – set out a series of factors in a case captioned In re E.I. DuPont DeNemours & Co., 476 F.2d 1357 (C.C.P.A. 1973) (defining the DuPont Factors).

Those factors are:

(1) The similarity or dissimilarity of the marks in their entireties as to appearance, sound, connotation and commercial impression.

(2) The similarity or dissimilarity and nature of the goods or services as described in an application or registration or in connection with which a prior mark is in use.

(3) The similarity or dissimilarity of established, likely-to-continue trade channels.

(4) The conditions under which and buyers to whom sales are made, i.e. “impulse” vs. careful, sophisticated purchasing.

(5) The fame of the prior mark (sales, advertising, length of use).

(6) The number and nature of similar marks in use on similar goods.

(7) The nature and extent of any actual confusion.

(8) The length of time during and conditions under which there has been concurrent use without evidence of actual confusion.

(9) The variety of goods on which a mark is or is not used (house mark, “family” mark, product mark).

(10) The market interface between applicant and the owner of a prior mark . . . .

(11) The extent to which applicant has a right to exclude others from use of its mark on its goods.

(12) The extent of potential confusion, i.e., whether de minimis or substantial.

(13) Any other established fact probative of the effect of use.

Stone Lion Capital Partners, LP v. Lion Capital LLP, 746
F.3d 1317, 1321 (Fed. Cir. 2014).

In this case – the particular factor being debated is Number 8 – longstanding “concurrent use without evidence of actual confusion.” Here, Guild Mortgage and Guild Investment have been using their marks concurrently in Southern California for more than 40 years without any evidence of confusion.  Guild Mortgage presented testimony from its CEO to the following :

Guild [Mortgage] has never received any communication from Guild Investment Management, Inc., or from any third party contending that Guild’s use of its mark has infringed upon Guild Investment Management Inc’s mark, or has caused confusion with regard to any other business which uses or incorporates the word “Guild” in its mark, in any way. Guild has no knowledge of ever receiving any inquiries from consumers regarding investment management services of any kind. Guild has never received any communication from consumers or any third party inquiring as to whether Guild was in any way affiliated with Guild Investment Management, Inc.

However, in its consideration of the DuPont factors, the TTAB did not address Factor 8 or the 40-year concurrent use. “The Board’s opinion does not mention factor 8, let alone address Guild’s argument and evidence directed to that factor. The Board erred in failing to consider Guild’s arguments and evidence.”

One factor here is whether the uncorroborated statement from Guild Mortgage’s CEO should be given any weight. Here, the Federal Circuit held that it should be given weight.

In this case, although Guild did not submit declarations from the owner of the registered mark or other parties testifying as to the absence of actual confusion, Guild nonetheless presented evidence of concurrent use of the two marks for a particularly long period of time—over 40 years—in which the two businesses operated in the same geographic market—southern California—without any evidence of actual confusion.

On remand, the TTAB will add-in its analysis of the 8th factor and then see whether its likelihood-of-confusion analysis sticks.

= = = = =

Similar issue in my hometown of Pittsburg Kansas with 70+ years of next-door competition between Chicken Annie’s and Chicken Mary’s. Fried Chicken War.


Supreme Court Asked Whether “Control” over the IPR is Required to Trigger the 315(b) Time Bar

by Dennis Crouch

WesternGeco LLC, v.  ION Geophysical Corp. (Supreme Court 2019) [Petition]

In 2018, WesternGeco seemingly won its international-patent-damages case against ION — with the court agreeing that lost-profit damages are available even for extra-territorial sales.  After winning its $100 million trial against ION, WesternGeco sued another competitor, Petroleum Geo-Services (PGS), for infringement.  PGS then challenged the asserted patents in an Inter Partes Review (IPR) proceeding that resulted in all of the claims being cancelled as obvious or anticipated.

35 U.S.C. §315(b) bars the Patent Office Director from instituting an IPR proceeding on a petition “filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.”  By the end of its infringement trial, ION was time-barred — however, PTO still allowed ION to join PGS’s case once instituted – but gave it “spectator status.” Still, ION (but not PGS) defended the Board’s decision on appeal.

The Federal Circuit affirmed the Board decision, finding that unpatentability findings supported by substantial evidence, and that the Section 315(b) time-bar didn’t apply since ION did not have any direct or indirect control PGS’s IPR filings and PGS had a separate legitimate reason to file the IPR other than protecting ION.

WesternGeco presented evidence that the two companies worked together to launch the infringing product, and that their agreement included an indemnity agreement — with ION making a “product assurance pledge” for products delivered by PGS.  The Federal Circuit, however, disregarded the evidence as insufficient to create the specific privity needed to trigger the Section 315(b) time-bar.

Now, WesternGeco is back before the Supreme Court asking for review on the real-party-in-interest question. Here is how WesternGeco frames the question:

ION worked closely for years with another company, PGS, as its “launch partner,” to develop a product found to willfully infringe WesternGeco’s patents. ION and PGS shared an indemnity relationship, with ION making a “product assurance pledge” regarding the accused product and the asserted patents. After ION lost at trial and was concededly time barred from pursuing IPRs, PGS filed petitions (which ION later joined), resulting in the invalidation of many of WesternGeco’s patents. The Patent Office not only denied WesternGeco discovery into details of the PGS-ION relationship, it prohibited WesternGeco from even filing a motion for such discovery because WesternGeco did not already have evidence that ION “controlled” these IPRs. The Federal Circuit applied a “control” test in affirming.

The questions presented are:

1. Whether the court of appeals and agency erred by holding that “real party in interest, or privy of the petitioner” refers only to others who “control” the petitioner’s litigation before the agency.

2. Whether the Patent Office. may deny discovery—or even leave to file a discovery motion—designed to meaningfully test whether that statutory prohibition applies, and then invalidate a patent.

I see this as a good case for the Supreme Court to take and hear – especially since the court is already familiar with the patents and parties in question.  I find it interesting how the Federal Circuit identified the indemnification provision as “fairly standard” and not specific enough to trigger the real-party-in-interest or privity clauses of 315(b).

One issue of importance in this area is the implied Warranty Against Infringement found in Article 2 of the Uniform Commercial Code.

Unless otherwise agreed a seller who is a merchant regularly dealing in goods of the kind warrants that the goods shall be delivered free of the rightful claim of any third person by way of infringement or the like but a buyer who furnishes specifications to the seller must hold the seller harmless against any such claim which arises out of compliance with the specifications.

UCC 2-312(3).  Although the UCC does not apply to WesternGeco’s case, it likely applies in many others as a potential way to show sufficient privity to trigger the time-bar against against a supplier.

How is the USPTO Operating During the Federal Government Shutdown?

by Dennis Crouch

Absent a more creative solution, the current Federal Government shutdown will continue until a new appropriations law is passed by Congress and signed by the President (or veto-overridden).  The Patent Office (USPTO) is caught-up in this, but in a little bit of a quirky way.

The USPTO is a fee funded agency.  Generally, patent applicants pay the USPTO, and the USPTO uses that money to pay the examiners.  However, Congress has not provided USPTO with authority to simply spend whatever it collects. Rather Congress declares annual appropriation amounts that may be spent – if collected.  If the USPTO brings-in more funds than appropriated then it can put those funds in a “Patent and Trademark Fee Reserve Fund” held by the US Treasury.

And, under the Patent Act, the USPTO can only spend funds that have been appropriated to the Agency.  As a consequence, the USPTO cannot spend new-money coming in the door and it cannot spend money in the aforementioned Reserve Fund (that is empty anyway).

So, how is the USPTO Operating:  The USPTO has continued to operate for the past 25 days without much of any slowdown — paying its employees and contractors. Over the past several years, the PTO has begun placing some amount of appropriated spending into an “Operating Reserve” — treating the money as spent for the purposes of appropriations, even though it hasn’t really been spent.  The Administration has determined that it is proper to save that money on an annual basis and to spend the money now on operations despite the lack of an appropriations bill.  This same approach has been used in the recent prior shutdowns as well and is a primary justification for the fund in the first-place.

Although the Agency’s goal is to have three-months operating reserve, it only had about five-weeks set aside (~$320 million) at the start of the shutdown.  Funds have not yet run-out, but they are now dwindling.

The chart below comes from the 2018 PPAC Annual Report. In that report, the PPAC suggested that the optimal balance be boosted to $700 million+. Once the reserve reaches that amount, the PPAC would then consider suggesting reduction in fees.

When the Funds Run Out: The USPTO has indicated that once those funds are too-low, the PTO will shut down examination activity.  However, the Agency will keep a small-staff working (perhaps unpaid) “to receive new applications and any other examination, post-examination, post-issuance, and PTAB or TTAB filings; receive payments related to such filings; and maintain IT infrastructure, among other functions.”

Congratulations to the PPAC members, PTO Directors, and especially Tony Scardino (PTO Chief Financial Officer since 2010) for their forethought and dedication to this important issue that is now serving the patent community.

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Did You Know: Reducing USPTO Fees

The America Invents Act requires the USPTO Director to consider reducing Patent Office fees each fiscal year.  In particular, the Act requires that the Director:

(1) shall consult with the Patent Public Advisory Committee and the Trademark Public Advisory Committee on the advisability of reducing any fees [subject to USPTO Fee Setting Authority] and (2) after the consultation required under paragraph (1), may reduce such fees.

This requirement is not codified in the U.S. Code because it is part of the temporary fee-setting-authority granted by the AIA for 7-years and then extended this year by the USPTO FEES Act for an additional 8-years (ending in October 2016).


Obviousness without a Motivation to Combine

by Dennis Crouch

Realtime Data, LLC v. Iancu (Fed. Cir. 2019)

Interesting obviousness case here regarding motivation-to-combine.

The PTAB’s obviousness finding is based upon two prior art references. However, the references are not being combined so-to-speak. Rather, the Board found that the first reference (O’Brien) teaches all limitations of the lossless encoding scheme in Realtime’s claim 1.  The second reference (Nelson) was used essentially to show that the “string encoding” described in O’Brien was the same as the “dictionary-based encoding” in Realtime’s claims.


On appeal, Realtime argued a lack of “motivation to combine” the references — based upon longstanding precedent that a “factfinder must further consider the factual questions of whether a person of ordinary skill in the art would be motivated to combine those references.” Dome Patent L.P. v. Lee, 799 F.3d 1372 (Fed. Cir. 2015).

Here, however, the Federal Circuit ruled that motivation-to-combine was not necessary since the obviousness finding did not combine two different disclosures. Rather, the Board used the second reference to help explain the first reference.

We conclude that, in this case, the Board was not required to make any finding regarding a motivation to combine given its reliance on O’Brien alone. . . . HP relied on Nelson merely to explain that O’Brien’s encoder is a type of dictionary encoder. . . . Under these circumstances, the Board was free to come to the very conclusion it reached: that O’Brien alone disclosed every element of claims 1–4, 8, and 28. And because the Board did not rely on Nelson for the disclosure of a particular element or teaching, the Board had no obligation to find a motivation to combine O’Brien and Nelson.

The CAFC noted that an anticipation determination rather than obviousness may have been more appropriate since O’Brien taught all of the elements of Realtime’s claim.  However, the court concluded that obviousness still worked — since  “a disclosure that anticipates under § 102 also renders the claim invalid under § 103, for ‘anticipation is the epitome of obviousness.’” Connell v. Sears, Roebuck & Co., 722 F.2d 1542 (Fed. Cir. 1983) (quoting In re Fracalossi, 681 F.2d 792, (CCPA 1982)).

= = = = =

Patent at issue: U.S. Patent No. 6,597,812, covering lossless data compression and decompression. Realtime sued HP and others back in 2015 and that led to the responsive IPR filing that is the subject of this appeal.





PTAB Must Consider All Claims AND All Grounds

by Dennis Crouch

AC Techs v. Amazon.com, Inc. (Fed. Cir. 2019)

This case focuses on AIA-Trial Procedure following SAS Institute, Inc. v. Iancu, 138 S.Ct. 1348 (2018).   In SAS, the Supreme Court held that the USPTO’s institution decision is binary — “either institute review or don’t.”  If the USPTO institutes an IPR then the PTAB must issue a final written decision regarding each claim challenged in the petition.  Prior to SAS, the USPTO commonly issued partial-institution orders — instituting the IPR on only a subset of challenged claims.

Here, Amazon’s petition was granted as to Grounds 1 and 2, but not Ground 3.  At institution stage, the Board found Ground 3 redundant — in part because the claims challenged by Ground 3 were already challenged by Ground 1.  Thus, we don’t have the same situation as SAS, but it is somewhat similar.  An important bit of information for the case is that Ground 3 did not present new prior art, but only an argument based upon an alternative claim construction.

In its final written decision, the Board invalidated a number of claims, but sided with the patentee for claims 2, 4, and 6 — the same claims challenged by not-instituted Ground 3.  On motion, the Board then issued a revised opinion considering Ground 3 and rejecting the remaining claims on that ground.

On appeal, the Federal Circuit confirmed that the Board had followed proper procedure — noting that “if the Board institutes an IPR, it must similarly address all grounds of unpatentability raised by the petitioner.” See BioDelivery Scis. Int’l, Inc. v. Aquestive Therapeutics, Inc., 898 F.3d 1205 (Fed. Cir. 2018) (“Post-SAS cases have held that it is appropriate to remand to the PTAB to consider non-instituted claims as well as non-instituted grounds.”).

The Federal Circuit also found no due process violation in the rehearing since the USPTO provided notice and allowed additional discovery and argument prior to considering Ground 3.

Court denies motion to clarify obligations when making permitted ex parte contacts

By David Hricik

The ABA Model Rules and most state rules divide the world into “persons represented by counsel,” who may not be contacted about a matter, and “unrepresented persons,” who may.  Speaking generally, a lawyer may not communicate about a matter with a person who is “represented by counsel” in that particular matter.  See, e.g., A.B.A. Model Rule 4.2.  This is true even if the represented person wants to talk to the lawyer: only the person’s lawyer may consent.

If a person is not “represented by counsel,” in a matter, a lawyer may communicate with that person, subject to requirements of Rule 4.3, which usually include explaining why the lawyer is communicating and not giving legal advice. A comment to that rule states: “In order to avoid a misunderstanding, a lawyer will typically need to identify the lawyer’s client and, where necessary, explain that the client has interests opposed to those of the unrepresented person.”

Two common problems arise with these rules.  One is that whether a person is “represented by counsel” is not always clear when an entity is the opposing lawyer’s client: if you’re suing my client, and my client is a huge multi-national corporation, is everyone at my client “represented” by me, or what?  The comment to ABA Model Rule 4.2 provides some clarity, but not a lot at the margins, by stating:

In the case of a represented organization, this Rule prohibits communications with a constituent of the organization who supervises, directs or regularly consults with the organization’s lawyer concerning the matter or has authority to obligate the organization with respect to the matter or whose act or omission in connection with the matter may be imputed to the organization for purposes of civil or criminal liability. Consent of the organization’s lawyer is not required for communication with a former constituent.

That’s likely why a comment states: “A lawyer who is uncertain whether a communication with a represented person is permissible may seek a court order.”

The second problem is that often what, exactly, a lawyer must say to a person who is not “represented by counsel,” can be unclear.  Obviously, a lawyer who wants the person not to reveal information will want the person to be given all sorts of information by opposing counsel — “you don’t have to talk to me and you shouldn’t reveal privileged information” and so on — while the lawyer wanting to make the contact wants to make the contact friendly and informal.

It’s not perfectly clear from the court’s order, but it appears that in Hoist Fitness Systems, Inc. v. TuffStuff Fitness International, Inc. (C.D. Cal. Jan. 7, 2019), a lawyer sought an order modifying the protective order to specify that certain persons were not “represented” and to clarify what the lawyers had to do to comply with Rule 4.3.  The court denied the request:

Defendant seeks to amend the Protective Order to require the parties to comply with the law – specifically, California Rule of Professional Conduct 4.37. Defendant “seeks clarification from the Court regarding the proper interpretation of Rule 4.3, and if it agrees with [Defendant’s] interpretation, grant [Defendant’s] request to amend the protective order to ensure compliance with Rule 4.3 by all counsel in this litigation.” Dkt. 147 at 1.

Pursuant to Local Rule 37-2.4, “[t]he Court will not consider any discovery motion in the absence of a joint stipulation or a declaration from counsel for the moving party establishing that opposing counsel (a) failed to confer in a timely manner in accordance with L.R. 37-1; (b) failed to provide the opposing party’s portion of the joint stipulation in a timely manner in accordance with L.R. 37-2.2; or (c) refused to sign and return the joint stipulation after the opposing party’s portion was added.” L.R. 37-2.4. Here, Defendant filed the instant Motion to Amend the Protective Order without a Joint Stipulation or the required declaration from counsel. Hence, the Court need not consider Defendant’s Motion to Amend the Protective Order.

In addition, the Court declines Defendant’s request to give an advisory opinion on whether Plaintiff’s counsel has violated California Code of Professional Conduct 4.3. Golden v. Zwickler, 394 U.S. 103, 108, 89 S. Ct. 956, 959, 22 L. Ed. 2d 113 (1969) (“‘(T)he federal courts established pursuant to Article III of the Constitution do not render advisory opinions.”). Moreover, there is no good cause to amend a stipulated protective order to include a requirement that counsel comply with the law. Fed. R. Civ. P. 26(c)(1) (“The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.”).

It’s hard to tell, but if the party seeking the modification had identified particular individuals and sought rulings as to them, then perhaps the cost of formal discovery could have been reduced, and the potential for future motion practice on this point, eliminated.

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What the Fu** — Supreme Court agrees to hear Brunetti Trademark Dispute

by Dennis Crouch

Erik Brunetti’s “FUCT” line of apparel doesn’t have much appeal to my sense of style, but the clothing certainly seem to make a statement.  The USPTO refused to grant Brunetti’s application to register the mark — finding that the mark “comprises immoral * * * or scandalous matter” and thus cannot be registered under Section 2(a) of the Lanham Act.

On appeal, the Federal Circuit sided with Brunetti — holding the statute unconstitutional as contrary to the Free Speech provision of the First Amendment.  In its decision, the court followed the Supreme Court’s lead in Matal v. Tam, 137 S. Ct. 1744 (2017). In Tam, the Supreme Court addressed disparaging marks — also prohibited under Section 2(a) — finding that the prohibition on registration to be contrary to free speech rights.  The Government then petitioned the Supreme Court to review the case, and the court has now granted certiorari with the direct question:

Whether Section 1052(a)’s prohibition on the federal registration of “immoral” or “scandalous” marks is facially invalid under the Free Speech Clause of the First Amendment.

In an unusual turn of events, Brunetti did not oppose the petition, but instead agreed that the Supreme Court should weigh-in — and additionally address the following additional question:

Whether Section 1052(a)’s prohibition on the federal registration of “immoral” or “scandalous” marks is unconstitutionally vague under the First and Fifth Amendments.

In granting certiorari, the Supreme Court did not indicate whether the court is addressing both questions, or only the one proposed by the the Government.  Since Tam, the Supreme Court has changes somewhat — Justice Kennedy is gone and Justices Gorsuch and Kavanaugh are now on the court.

Read these Eligibility Guidelines from the USPTO

by Dennis Crouch

The USPTO has released pair of examiner guidance documents for (1) examination of patent eligibility and (2) examination for definiteness of functional claim limitations (with a focus on software patents).

Although these guides do not have the force of law, they are quite important because they direct the bureaucratic process — telling examiners how to examine patent applications for these issues. Examiner performance will be adjudged based upon their ability to comply with the guidance.  In general, I would expect that examiners will be more quickly swayed by citations to the guidelines rather than to citations to particular court decisions.  Examiners will be trained in the upcoming weeks and training materials will be available at the PTO website.

Here, I will focus on the eligibility guidelines and leave definiteness for a separate post.

Prior iterations of eligibility guidelines focused on a listing of post-Alice cases as examples for examiners to follow.  Examiners are typically not attorneys and are not expected to read cases — that makes this case-focused approach problematic in the long-term.  In the new 2019 iteration, the PTO has attempted to synthesize case law in a way that is practical for examiners.  The PTO is also suggesting that this approach will be more reliable and more predictable.  The USPTO does not have the power to shift the legal definition of eligibility.  However, the Agency is given discretionary authority to design a practical administrative mechanism for implementing the law as given.  That is how I see the PTO’s approach here. Now lets look at two of the important changes from prior guidance documents: .

Categories of Abstract Ideas: The inquiry of Alice/Mayo Step 1 is whether the patent claim is “directed to” an “abstract idea” or other excluded area.  The first important guidance change here is to create three of categories or “groupings” of abstract ideas:

  • Mathematical Concepts
  • Methods of Organizing Human Activity
  • Mental Processes

Under the guidance, claims that do not recite matter within one of these three groups “should not [ordinarily] be treated as reciting abstract ideas.”  The guidance does note a “rare circumstance” where an abstract idea might fall outside these categories.  While this approach does not settle the ongoing question of what counts as abstract, it does go a long way toward helping examiners decide when to reject claims.

“Directed To” an Ineligible Concept: The PTO guidance has also focused-in on the Supreme Court’s “directed to” requirement that finds claims problematic only if “directed to” the ineligible concept.  For that element, the PTO asks examiners to consider whether the ineligible concept is “integrated into a practical application.”

A claim is not “directed to” a judicial exception, and thus is patent eligible, if the claim as a whole integrates the recited judicial exception into a practical application of that exception.

The guidance for analyzing this issue focuses on whether keywords of whether the claim uses the ineligible subject matter in a way “that imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception.”

Although the document is written primarily as examiner guidance, it is also being applied to PTAB judges and is being seen as a statement of PTO policy.

Shutdown for Years?

Although the PTO is permitted to spend its already collected fees.  It isn’t actually able to spend fees collected since the shutdown.  My understanding is that the Office is in cost-cutting mode based upon President Trump’s statement that the shutdown could last for “weeks or even years.”

Once funds run out, the PTO is looking for ways to keep the doors open enough to continue to accept new application filings — while shutting down examination and PTAB activities.  It is likely that a special PTO funding bill would receive bipartisan support — keeping the patent office rolling while other government services are shut-down.

What is the Role of the Objective Indicia of Nonobviousness

by Dennis Crouch

ZUP, LLC, Petitioner v.  Nash Manufacturing, Inc. is a nice teaching case because the invention is so simple.  Zup’s patent covers a wake-board with a particular handle configuration and a method of riding the board — using the handles to change positions. U.S. Patent No. 8,292,681.

In its decision, the Federal Circuit sided with the accused infringer Nash — affirming that the asserted claims are invalid as obvious.  In particular, the Federal Circuit agreed with the lower court ruling that Zup had simply combined well-known elements (handles & foot bindings, e.g.) to solve a longstanding watersport goal.  Zup presented evidence of secondary considerations of both long-felt but unresolved need and copying.  Zup explains its position:

Here, the defendant Nash had been in the field for over 50 years, obtaining numerous patents on water recreation devices similar to the ZUP Board. Nash had tried, but failed, to create a device that would allow broader participation in watersports like waterskiing. Nash praised the ZUP Board. Nash attempted to do business with ZUP, obtaining a ZUP Board from ZUP to analyze. Instead of partnering with ZUP, however, Nash decided to copy ZUP. The ZUP Board is nonobvious if Nash tried and failed to invent it for over 50 years and then copied it
after failing to partner with ZUP.

The appellate majority rejected Zup’s arguments and instead ruled that “The weak evidence of secondary considerations presented here simply cannot overcome the strong showing of obviousness.”  The majority was penned by Chief Judge Prost and joined by Judge Lourie.  Writing in Dissent, Judge Newman argued that the majority improperly treated secondary considerations as a rebuttal factor rather than an integral aspect of the obviousness analysis.

Now, Zup has petitioned the Supreme Court for writ of certiorari — asking whether secondary considerations are properly relegated to rebuttal evidence.

Read the new petition here. SCOTUS.

The Role of Objective Indicia in Non-Obviousness Doctrine


Hikma Pharmaceuticals USA Inc., et al. v. Vanda Pharmaceuticals Inc., No. 18-817

Hikma has petitioned the Supreme Court for review of this important eligibility case.  In its decision, the Federal Circuit drew a fine line between Vanda’s personalized medical treatment claims (adjudged eligible) and the methods found in Mayo and Ariosa (adjudged ineligible).  Question presented (long form):

This Court has repeatedly held that “natural phenomena[] and abstract ideas are not patentable” under Section 101 of the Patent Act. E.g., Alice Corp. Pty. Ltd. v. CLS Bank, Int’l, 573 U.S. 208, 216 (2014). Thus, “a process that focuses upon the use of a natural law” must also contain other elements or a combination of elements, sometimes referred to as an ‘inventive concept,’ sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law itself.” Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 72-73 (2012). Mayo, for example, invalidated a medical diagnosis method patent that was just “an instruction to doctors to apply the applicable laws when treating their patients.” Id. at 79.

In the decision below, a divided Federal Circuit panel did exactly what Mayo forbids: it exempted all patent claims that are drafted as reciting a method of medically treating patients from this analysis. Citing the ruling, the Patent and Trademark Office has directed its examiners that “(1) ‘method of treatment’ claims that practically apply natural relationships should be considered patent eligible under * * * the USPTO’s subject matter eligibility guidance; and (2) it is not necessary for ‘method of treatment’ claims that practically apply natural relationships to include nonroutine or unconventional steps to be considered patent eligible under [Section 101].”

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

Read the Petition.

Eligibility: Dice Game Patent Craps Out

by Dennis Crouch

In re Marco Guldenaar Holdings B.V. (Fed. Cir. 2018)

Guldenaar is is seeking to patent his method of playing a dice game using specially marked dice.  U.S. App. No.  13/078,196.  The PTAB denied his patent on eligibility grounds and the Federal Circuit has now affirmed — holding that the method of game play is an abstract idea and the special markings on the dice represent unpatentable printed matter.  The decision here falls in line with In re Smith, 815 F.3d 816 (Fed. Cir. 2016) where the court held that the claimed method of playing and wagering-on a card game was an abstract idea. The patented method in Smith used a standard deck of cards, and the Federal Circuit noted that “shuffling and dealing a standard deck of cards are “purely conventional” activities. Citing Alice.

Guldenaar’s claim 1 is directed to a “method of playing a dice game” that begins with the provision of a set of three dice — each die having either one, two, or three identical marks. (See the figures above).  Someone then bets on whether or not the marks will appear face-up on the next role, and, after the roll, the bet is settled.  Pretty simple game. (Claim text below).

In applying Alice Step 1, the court found that the claims here are directed to the “rules for playing a dice game,” which is an abstract idea.  In the process, the court warned the PTO that its generalized approach to labeling “methods of organizing human activities” as abstract ideas, but found that this particular method fit the bill.

Under Alice Step 2, claims directed to an abstract idea can be patentable if the claims also include an “inventive concept” sufficient to transform the claimed abstract idea into a patent-eligible application.”  Here, one particular inventive concept appears to be the claimed set of dice that is arguably inventive, and at least not purely conventional.  On appeal, however, the Federal Circuit ruled that the die markings “constitute printed matter [that] fall outside the scope of § 101.”

In Smith, the claims were directed to a standard deck of cards and the court indicated that claims using an original deck of cards could survive Alice. “We could envisage, for example, claims directed to conducting a game using a new or original deck of cards potentially surviving step two of Alice.”   The panel here appears to reject that notion — holding instead that the the original set of dice cannot be seen as transformative since the original aspects

Judge Chen authored the majority opinion that was joined by Judge Bryson.  Judge Mayer filed a concurring opinion channeling Justice Stevens concurring opinion in Bilski.  In Bilski, Justice Stevens (joined by Justices Ginsburg, Breyer, and Sotomayor) argued for a categorical exclusion of business method patents. Here, Judge Mayer argues for a categorical exclusion to the patenting of games — “claims directed to dice, card, and board games can never meet the section 101 threshold because they endeavor to influence human behavior rather than effect technological change.”

= = = =

Claim 1:

1. A method of playing a dice game comprising:

placing at least one wager on at least one of the following: that the first die marking on the first die will appear face up, that the second die marking on the second die will appear face up, that the third die marking on the third die will appear face up, or any combination thereof;

rolling the set of dice; and

paying a payout amount if the at least one wager occurs.