Director Review of Institution Decisions Moving Forward

Patent

by Dennis Crouch

In re Palo Alto Networks, Inc., 22-145, — F.4th — (Fed. Cir 2022)

In Arthrex, the Supreme Court found the Congressionally created IPR scheme unconstitutional because it gave too much authority to PTAB judges.  United States v. Arthrex, Inc., 141 S. Ct. 1970 (2021).  In a hope for some political accountability, the Constitution requires Officers of the Government to be appointed by the US President.  U.S. Constitution, Art. II, § 2, cl. 2. The problem–PTAB judges have authority to cancel substantial property rights but are not appointed by the President. Rather than rendering the AIA dead on arrival, the Supreme Court decided to cure the defect by taking some authority from the PTAB judges and handing it to the USPTO Director, who was properly nominated by the President and confirmed by the Senate.  Under the Arthrex model, any PTAB final written decision (in the AIA-trial context) can then be reviewed by the USPTO Director.

But, what about IPR institution decisions.  If you recall, inter partes review proceedings begin with an IPR Petition and an institution decision.  If the IPR is instituted then the case moves to trial and a final written decision by the PTAB.  If the IPR is not instituted, the case is closed with no right for appeal.  One quirk of all this involves the division of labor.  As mentioned above, the statute calls for the PTAB to decide the final written decision, but then in Arthrex the Supreme Court added the additional Director Review.  At the institution stage, the statute follows a different scheme calls for the USPTO Director to decide whether or not to institute. 35 USC 314.  Despite the statute, the USPTO Director has never personally signed an institution decision but rather issued regulations giving institution authority to the PTAB. The regulations do not allow for any subsequent director review. 37 C.F.R. § 42.71.  If the institution petition is granted, the Arthrex approach suggests eventual director review following a final written description. The USPTO has stated in its interim guidance documents that the USPTO “does not accept requests for Director review of decisions on institution.”

Although none of the issued rules or guidance suggests that the Director retains any authority, when Dir. Vidal took office, she issued a set of interim guidance documents stating that she has authority to review institution decisions.  Further, the new interim guidance documents state that the “Director has always retained and continues to retain the authority to review such decisions sua sponte after issuance (at the Director’s discretion).”  And, in recent months the Director has issued sua sponte review of two IPR institution decisions.

In 2021, Centripetal Networks sued Palo Alto Networks (PAN) for patent infringement.  PAN responded with two AIA trial petitions; IPR2021-01151 for U.S. Patent No. 10,659,572 and PGR2021-00108 for U.S. Patent No. 10,931,797.  The PTAB Denied institution. PAN attempted to seek director review, but was told that the USPTO dies not accept requests for Director Review of institution decisions and that “there will be no further review of the Board’s decision by the Office.”

By statute, institution decisions are not appealable, but can be reviewed on extraordinary writ — writ of mandamus.  PAN petitioned, but the Federal Circuit has now denied the petition.  On mandamus, the Federal Circuit concluded that “there is no structural impediment to the Director’s authority to review institution decisions either by statute or by regulation.”  Although the Director has delegated substantial decisionmaking authority, the court found that the Director is still the “politically accountable executive.”  Further, it apparently is of no concern that the system provides no formal mechanism for petitioning the Director for intervention.  The decision here suggests that in reality the Director has authority to intervene in any pending case before USPTO.

The majority decision was written by Judge Dyk and joined by Judge Chen. Judge Reyna wrote in concurrence and that “a categorical denial by the Director to accept any requests for review raises potential constitutional concerns.”  However, Judge Reyna suggested that the new director’s approach of sua sponte review might be enough.

When PAN’s briefing began, the USPTO’s position appeared clear cut of no director review of institution decisions, and their case was undermined by the interim actions by Dir. Vidal who decided to begin reviewing those as well. In his concurring decision, Judge Reyna writes: “We should not compel an agency to take specific action that the agency demonstrates it has already taken.”

Note: The two cases with pending director review of institution decisions are:

  • OpenSky Indus., LLC v. VLSI Tech. LLC, IPR2021-01064, Paper No. 41 (P.T.A.B. June 7, 2022);
  • Pat. Quality Assurance, LLC v. VLSI Tech. LLC, IPR2021-01229, Paper
    No. 31 (P.T.A.B. June 7, 2022).

In both of these cases, the PTAB granted institution.  Initial briefs in these director reviews are due on August 18, 2022.

LSI v. UMN: Binary Conversion, Eligibility, and “By Another”

Patent

by Dennis Crouch

UMN’s U.S. Patent No. 5,859,601 is super interesting because it is so similar to the patent rejected by the Supreme Court in Gottschalk v. Benson, 409 U.S. 63 (1972). Benson’s claims were directed toward a method of converting binary-coded decimal numbers into pure binary numbers.  Similarly UMN’s claims are directed also to a method for converting binary numbers–this time from “m-bit binary datawords into n-bit binary codewords” by applying “maximum transition run (MTR) codes.”  UMN’s basic idea is that researchers were finding long binaries with lots of transitions were more likely to lead to read-errors.  Example, 010101010101 has lots of transitions while 111111000000 has only one transition.  If the algorithm finds a long sequence of consecutive transitions then it does something (like adding a pause or transition code) to reduce the probability of error detection. The algorithm also adds an additional transition code at a regular interval.

UMN sued LSI for patent infringement in 2016 in the N.D. Cal.; LSI responded with its petition for inter partes review.  The IPR proceedings were initially delayed by UMN’s claim of sovereign immunity. In 2019, the Federal Circuit held that “state sovereign immunity does not apply to [IPR] proceedings.” Regents of the Univ. of Minnesota v. LSI Corp., 926 F.3d 1327 (Fed. Cir. June 14, 2019), cert. denied, 140 S. Ct. 908, 205 L. Ed. 2d 458 (2020).  Back on remand, the PTAB issued a split decision–finding independent claim 13 unpatentable but concluding that LSI failed to show that claims 14 and 17 were obvious.  These claims add the allegedly unique limitation that the maximum transition run size is somewhere between 1 and 10.

LSI appealed its loss on the dependent claims and the Federal Circuit has now affirmed.  LSI Corp. v. Regents of U. of Minnesota, 2021-2057, — F.4th — (Fed. Cir. Aug. 11, 2022).  The original 2019 decision was authored by Judge Dyk and joined by Judges Hughes and Wallach.  The Federal Circuit has an Internal Operating Procedure involving appeals following remand to attempt to reconstitute the same panel or one with at least two of the same judges.  Judge Wallach took senior status in 2021 and so Judge Reyna was added to the new 2022 panel. Judge Dyk again wrote the opinion.

Prior Art By Another: Seagate was a collaborator with the UMN inventors (Moon and Brickner). And, back in September 1995, the inventors submitted a report to Seagate about their work.  They filed their patent application April 1996–well within the 1-year statutory grace period.  But, in January 1996 Seagate filed a patent application (Tsang) that does not list the UMN inventors.  Tsang describes MTR coding in its background section and references the Seagate Report.  Tsang also provided further improvements on the MTR methodology.

Once Tsang published/issued, it became prior art as of its filing date. Pre-AIA Section 102(e).   Section 102(e) refers to “an application for patent . . . by another.”  Here, Tsang is clearly another, but the particular portion of Tsang referenced was clearly derived from the UMN inventors Seagate Report.  Under longstanding precedent, Section 102(e) has been interpreted exclude material derived from the inventors. In re Costello, 717 F.2d 1346 (Fed. Cir. 1983). In other words, regardless of the listed inventors on a purported prior art reference, we look to the actual underlying disclosure and ask whether that information was “by another.”  Still LSI argued that Tsang was a proper 102(e) reference

Tsang’s summary of, and reliance on, the earlier work of Dr. Moon and Dr. Brickner does not make Tsang an inventor of the earlier work.

Slip Op.  Thus, that portion of Tsang was properly excluded from prior art consideration.  The court’s interpretation of Section 102(e) stretches our statutory interpretation limits since 102(e)’s prior art test is at the application level, and the court here drills down to specific disclosures and portions of the application.  The AIA remedied this statutory stretching by creating the exception of 102(b)(2) that focuses on the disclosure level.

Shifting Arguments: LSI had Separately relied upon two tables found in a prior patent Okada.   The problem — although the petition relied upon Okada, petitioner’s reliance on the particular tables didn’t happen until the IPR Hearing.  In its decision the  board found that the new theory was both untimely and unpersuasive.  On appeal, did not address the untimely conclusion — only the persuasiveness.  The Federal Circuit did not like that approach and concluded that untimeliness was a separate and independent ground that LSI forfeited “by failing to challenge it in its opening brief on appeal.”

The case should now head back to the Northern District of California where UMN is asserting both surviving claims.  The lawsuit has been stayed for the past four years awaiting resolution to the IPR. Meanwhile, LSI’s motion for judgment on the pleadings that the asserted claims are patent-ineligible has remained undecided throughout that time.  LSI 101 Motion.

Patrick McElhinny (K&L Gates) argued the IPR appeal for UMN and Kristopher Reed (Kilpatrick) argued for LSI.   The same teams are also handling the underlying litigation.

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Narrowed Assignor Estoppel Still Bars Minerva Surgical from Challenging Validity

Patent

by Dennis Crouch

The defense of assignor estoppel has been in flux. The Federal Circuit had previously broadly applied the non-statutory doctrine to prevent a prior owner of patent rights (the “assignor”) from later challenging the validity of those rights. The basic idea was that the assignment of rights includes an implicit warranty.  In a 2021 decision, the Supreme Court shrunk the doctrine by creating important caveats. Minerva Surgical, Inc. v. Hologic, Inc., 141 S. Ct. 2298 (2021).  Although the Court retained the doctrine generally, it concluded that assignor estoppel is limited to situations where “the assignor’s claim of invalidity contradicts explicit or implicit representations made in assigning the patent.” Id.  The court noted potential situations of no-estoppel: (1) assignment made prior to the inventor even seeing the patent document; (2) a change in the law that renders the patent invalid; and (3) after the assignment, the new owner changes the scope of the patent claims that goes “beyond what the assignor intended to claim as patentable.” A key example of this would be claim changes that result in scope that is “materially broader” than those originally assigned.

On remand, the Federal Circuit concluded that estoppel still applies despite the Supreme Court’s added limitations. Hologic, Inc. v. Minerva Surgical, Inc., 19-2054, — F.4th — (Fed. Cir. 2022). In particular, the appellate court found that the claims at issue in the  litigation are not materially broader than what the assignor intended to claim at the time of the assignment.

The invention here relates to “an endometrial ablation device used to treat abnormal uterine bleeding (menorrhagia) by destroying targeted cells in the lining of the uterus.” Slip Op.  The invention generally proposed use of a “fluid permeable elastic member” for moisture removal; except that one claim in the application did not require the use of the permeable member.  (Claim 31).

Prior to the assignment at issue, the examiner had a restriction requirement and the patentee cancelled Claim 31 so that all of the remaining claims required the permeable member.  The patent application was in this state — with only permeable member claims — when the assignment at issue took place. Later, the patentee obtained a patent covering the invention without the permeable member and then sued the assignor who had formed a competing company.  In the litigaiton, the defendant challenged the broader claims as lacking written description, but the district court barred those challenges.

On appeal, the Federal Circuit found that in this context, the cancelled claim should still be considered part of the invention that the assignor expected to be patented.

[T]his 2002 cancelation in response to the Examiner’s restriction requirement says nothing, implicitly or explicitly, about the patentability of claim 31. Put another way, Mr. Truckai canceled claim 31 for reasons other than patentability. Indeed, an assignee would have understood that the restriction requirement and subsequent cancelation in response to the restriction requirement meant that the patent applicant could later prosecute claim 31’s subject matter. . . . Although claim 31 was canceled for purposes of further prosecution of the ’072 application, cancelation did not nullify the claim, as it remained viable for further prosecution in a divisional application filed by whomsoever owned the ’072 application. . . . The 2004 assignment assigned not just the rights to the ’072 application, but also the rights to any continuation, continuation-in-part, or divisional patent applications not yet filed. For certain, canceled claim 31 traveled with the ’072 application and its assignment to Hologic.

Slip Op.  Thus, to understand changes in the patent claims, the court will delve into the prosecution history to uncover the reasons for any changes to claim scope and then make some conclusions about whether those reasons fit within the assignor’s implicit intent-to-claim.  In a footnote, the opinion reserves the particulars for another day:

Our holding in this regard is limited to the facts of this case. We do not address whether a claim canceled for  reasons other than to comply with a restriction requirement would be part of the 2004 assignment.

Slip Op., Note 4.

I’ll note that the facts of Hologic do not reflect an ordinary patent case.  The assignment at issue was part of a $300 million company sale and thus was highly lawyered.  The assignment particularly included an express warranty that the IP rights being assigned were both valid and enforceable.  In the ordinary case, the inventor will be assigning rights to their employer pre-filing without the particular warranty or level of knowledge.

Reissue, Recapture, and Skirting Eligibility

Patent

by Dennis Crouch

Prior to 1952, the Reissue Statute text only allowed for (1) narrowing claim scope and (2) fixing a “defective or insufficient” specification.  The 1952 Patent Act edited the law to allow for reissue for “error[s]” where the patentee claimed either “more or less than he had a right to claim.” Thus, for the first time the statute expressly permitted broadening reissues.  At the time, Congress also added a  statutory caveat that broadening reissue must be applied for within two years of the patent grant.  On paper, these changes might appear significant, but they were not overly controversial since the Patent Office and Courts had already allowed broadening reissues along  with the two-year laches caveat.

The 1952 Act remained silent on another broadening caveat — the rule against recapture that the courts had developed in the 1880s in response to perceived abusive practices.  Following the ’52 Act, courts concluded that the rule against recapture remained effective, and in recent years have expanded its scope. The most recent expansion is found with In re McDonald, 2021-1697, — F.4th — (Fed. Cir. Aug. 10, 2022) (applying recapture to amendments to overcome eligibility rejections).

The recapture rule has ordinarily been used to prohibit later recapture of scope that had been eliminated in an attempt to avoid a prior art rejection.  Carl Moy’s treatise explains the rule against recapture as follows:

[The rule against recapture] seeks to hold the patentee to the positions she impliedly took during prosecution of the original patent regarding the scope and cont[ent] of the prior art.  Specifically, where the patentee relinquished claims of a given scope in the original application, in response to a rejection based on the prior art, this is taken as  tantamount to her admission that the relinquished claim is in fact unpatentable over the art. The patent owner is later held to that admission during reissue.

5 Moy’s Walker on Patents § 16:107 (4th ed.); See also, Robert A. Matthews, §4 Annotated Patent Digest § 25:76 (“Surrender arises from a patentee’s canceling or amending a claim to avoid a prior art rejection and relying on the amended matter as avoiding the prior art.”).

Likewise, the MPEP finds impermissible recapture only when the original surrender relied on by the patent applicant to overcome the prior art.

If an original patent claim limitation now being omitted or broadened in the present reissue application was originally relied upon by applicant in the original application to make the claims allowable over the art, the omitted limitation relates to subject matter previously surrendered by applicant.  The reliance by applicant to define the original patent claims over the art can be by presentation of new/amended claims to define over the art, or an argument/statement by applicant that a limitation of the claim(s) defines over the art.

MPEP 1412.02 (flowchart below as well).  See also, Mentor Corp. v. Coloplast, Inc., 998 F.2d 992, 996 (Fed. Cir. 1993) (“Error under the reissue statute does not include a deliberate decision to surrender specific subject matter in order to overcome prior art.”); Medtronic, Inc. v. Guidant Corp., 465 F.3d 1360, 1372–73 (Fed. Cir. 2006) (“[T]he deliberate surrender of a claim to certain subject matter during the original prosecution of the application for a patent made in an effort to overcome a prior art rejection is not such ‘error’ as will allow the patentee to recapture that subject matter in a reissue.”); Cubist Pharm., Inc. v. Hospira, Inc., 805 F.3d 1112, 1121 (Fed. Cir. 2015) (“the recapture rule applies only if the patentee surrendered subject matter in the original prosecution in order to overcome a prior art rejection.”); In re Clement, 131 F.3d 1464, 1469 (Fed. Cir. 1997) (“we look to … changes to the claims made in an effort to overcome a prior art rejection.”); QXMedical, LLC v. Vascular Sols., LLC, 408 F. Supp. 3d 996, 1005 (D. Minn. 2019) (applying the Cubist rule); Stephen G. Kunin & Kenneth M. Schor, The Reissue Recapture Doctrine: Its Place Among the Patent Laws, 22 Cardozo Arts & Ent. L.J. 451, 456 (2004) (the doctrine applies “if a patent applicant narrowed the scope of the claims during the prosecution of an application to overcome art of record (i.e., to distinguish the claims from the art)”).

In McDonald, the court rejected these treatises and statements found in a large number of prior cases limiting unavailable recapture to the “prior art” context. Instead, the court applied the doctrine to prevent recapture of scope relinquished to overcome an eligibility rejection.

McDonald filed his patent application back in 2008 claiming a computer-implemented method of displaying primary and secondary search results.  In 2010, the examiner rejected the claims as lacking eligibility and the applicant amended the claims to add a requirement that the search algorithms are “executed by a processor.”  That amendment was enough for the PTO to overcome the eligibility issue.  A patent eventually issued (in a continuation application), but the patentee later figured out that its “a processor” amendment was going to tie the claims to operating both queries on a single processor.  The patentee then filed its reissue application within the two-year timeline, but sought to recapture the scope that had been amended-away.   The PTO refused to allow the amendment as impermissible recapture. On appeal, the Federal Circuit has affirmed — holding that the court’s repeated prior statements limiting the rule to overcoming prior art were merely context specific dicta.

The public’s reliance interest on a patent’s public record applies not only to subject matter surrendered in light of § 102 or § 103 rejections but also to subject matter surrendered in light of § 101 rejections. Mr. McDonald focuses on the “prior art” language of certain decisions—citing language describing the initial amendments as made in an effort “to overcome a prior art rejection”—in an attempt to limit the recapture rule to § 102 or § 103 rejections. Although we previously addressed cases centered on prior art rejections, this does not mean that the recapture rule is limited to that context.

Slip Op.  The court has previously held that the recapture prohibition did not apply to amendments made to overcome a Section 112 indefiniteness rejection.  Cubist Pharm., Inc. v. Hospira, Inc., 805 F.3d 1112, 1121 (Fed. Cir. 2015).  In Cubist though the court gave two reasons for rejecting the recapture rules: (1) amendment were not for the purpose of avoiding prior art; and (2) amendment was not actually  broadening. Cubist.  In McDonald, the Federal Circuit recharacterized Cubist as a case only about the broadening question. Similarly, the court rejected the MPEP as having any authority.

In Cubist, the court wrote that the “recapture rule applies only if the patentee surrendered subject matter in the original prosecution in order to overcome a prior art rejection.”  On appeal here, however, the court concluded that none of its prior cases “expressly prohibit the recapture rule from applying to amendments made for other purposes.”  Slip Op.

Although the court has not previously applied the recapture doctrine in the eligibility context, there are a number of cases that don’t state the “prior art” requirement.  For example:

Where an applicant for a patent to cover a new combination is compelled by the rejection of his application by the patent-office to narrow his claim by the introduction of a new element, he cannot after the issue of the patent broaden his claim by dropping the element which he was compelled to include in order to secure his patent.

In re Byers, 230 F.2d 451 (C.C.P.A. 1956).

Because there is no express statutory rule here other than the word “error,” the court appears to be willing to consider policy arguments in making its conclusions.  In its decision, the appellate panel reflects that McDonald offered no persuasive justification for distinguishing amendments to avoid Section 101 rejections from amendments made to avoid prior art.  The largest consideration here is likely that that this issue appears already well settled — with the Federal Circuit previously treating the rule as “rigid.”

The doctrine here has its roots in equity and concern that a reissue will operate as a “trojan horse” to by an “unscrupulous attorney” to cover competing products after the original patent issued and expectations had been settled.  Of course, in the area of eligibility expectations were not settled at the time. Further, we should recognize that during this time Congress also amended the reissue statute to eliminate the patentee’s “deceptive intent” as a hurdle to obtaining reissue.  (Do be clear, there is no suggestion that McDonald’s attorneys acted improperly in any way).

I believe that there is a good chance that McDonald will petition for en banc rehearing.

Calling New Patent Law Professors

Patent

by Dennis Crouch

Every year, law schools advertise open faculty positions via a Faculty Appointments Register sponsored by the American Association of Law Schools (AALS).  This year’s list was just released, and lots of schools are looking to hire patent and IP professors. The list includes:

Akron, American University, Barry University, Baylor, Chicago-Kent, Drake, Duquesne, Florida A&M, GWU, Hawaii, Louisville, New England, New York Law School, Northern Kentucky, Oklahoma, Ole’ Miss, Seattle, Stetson, Suffolk, Suffolk, Texas Tech, U Florida, U Mass, UC Davis, UC LA, UIC (Chicago), UNH (Franklin Pierce), USC, & U San Francisco.

Note that top ranked law schools rarely advertise for particular subject matter areas.  For the most part, new tenure-track law professors will have already published law review articles and have some sort of teaching experience.  A number of schools though are also considering clinical and administrative positions that would have different expectations.  The hiring process is a bit cumbersome at most schools because the faculty as a whole typically vote on whether to extend an offer.  At Mizzou, we begin the recruitment process in late August and then usually vote in early December.  The new hire then starts work the following summer.  We’re not hiring in IP this year, but are looking to hire several candidates folks — primarily focusing on the areas of Criminal Law/Procedure; Evidence; Constitutional Law courses (including First Amendment); Contracts; Dispute Resolution; and Veterans benefits (clinic).

Functional Claiming Question

Patent

by Dennis Crouch

What do folks think of this claim that is now pending on appeal to the Federal Circuit in Steuben Foods, Inc. v. Vidal, No. 20-1083 (Fed. Cir. 2022)?:

19. A method for automatically aseptically bottling aseptically sterilized foodstuffs comprising the steps of:

providing a plurality of bottles;

aseptically disinfecting the bottles at a rate greater than 100 bottles per minute, wherein the aseptically disinfected plurality of bottles are sterilized to a level producing at least a 6 log reduction in spore organism; and

aseptically filling the bottles with aseptically sterilized foodstuffs.

US6945013.  It appears to me that the only point of novelty is the effective 100 bottles per minute feature, which is claimed here in purely functional form. I.e., it claims the result rather than how it actually happens.  According to the briefing, the invention here is the “first high speed aseptic bottling system that would meet the FDA’s regulations related to aseptic packaging, which are the most stringent in the world.”  According to the briefing, the real novel feature has to do with careful management of airflow “to ensure that air flows away from the bottle filling station of the aseptic bottling machine.” The drawing below shows the big vacuum tube (60) that sucks the air away. While that feature seems important, it is not actually claimed (by the broader claims being challenged).

Note that this case is IPR2014-01235, based upon an IPR petition filed in 2014. The court previously reversed the PTAB’s finding in favor of the patentee. On remand, the PTAB found the claim obvious.  Nestle filed the IPR, but the parties eventually settled their dispute. The USPTO has intervened to defend its decision on appeal.

SteubenFoodOpeningBrief.

 

Intellectual Ventures v. HP stays in Waco

Patent

by Dennis Crouch

In re HP (Fed. Cir. 2022) (non-precedential)

The Federal Circuit has denied HP’s petition for mandamus in its attempt to escape Judge Albright’s W.D.Tex. courthouse.  Intellectual Ventures sued HP for patent infringement in 2021 for infringing its United States Patent No. 6,779,082.  The lawsuit focuses on HP’s SimpliVity data storage solution. The HP product was mostly developed by the SimpliVity Corp in Massachusetts.  HP bought SimpliVity in 2017 and moved further development to India.  Still, in the litigation HP argued that Massachusetts was clearly more convenient than Texas.

On mandamus, the Federal Circuit gave deference to Judge Albright’s refusal to transfer and concluded that HP had not proven its case.  In particular, HP “failed to identify any specific documents in Massachusetts.”  I’ll reiterate my prior thoughts that, for patent cases, courts should rethink the notion the storage facility location for electronic documents should not be much of a factor (if any) regarding convenience unless the location somehow places the documents outside of the legal reach of the US court system.

= = =

The patent application was filed back in 2001 and was originally owned by ADC who sold that division to SS8.  In 2006, SS8 sold the patent to the “Imaginex Fund I”, an Intellectual Ventures shell.  In 2012, IV merged Imaginex back into an IV fund.  Claim 1 is written quite broadly to cover cloud computing:

1. A data storage system comprising:

a network;

a plurality of distributed data storage units coupled to the network … having a plurality of external inputs and outputs; and

an object management system (OMS) manager unit coupled to the plurality of distributed data storage units via the network,

the OMS manager unit and the plurality of distributed data storage unit implementing an object management system, wherein the object management system preferentially selects a first one of the plurality of distributed data storage units for file access in response to a file access request provided that the file access request is associated with an external input/output of the first distributed data storage unit;

wherein the object management system is configured such that, in response to a file retrieval request that is associated with a data file and an external output of the first distributed data storage unit, the object management system preferentially returns a hostname and pathname of a copy of the data file that is stored within the first distributed data storage unit.

HP filed for inter partes review (IPR) and the board granted the petition to institute.  HP’s motion to stay litigation pending IPR is now pending before Judge Albright. The brief makes three key points:

  1. If HP wins the IPR, it will end the lawsuit or at least greatly simplify the case.
  2. The patent is expired — that means that the only potential prejudice is delay in obtaining damages.  This will not unduly prejudice IV.
  3. The lawsuit is at an early stage.

This is one that appears a good candidate for stay, although would push-back the trial scheduled for March 2023.

Novartis En Banc and Amicus Support

Patent

by Dennis Crouch

The Federal Circuit is now considering a pending en banc petition in Novartis Pharm. Corp. v. Accord Healthcare, Inc., Docket No. 21-1070; petition from 38 F.4th 1013 (U.S. Fed. Cir. 2022).  The case involves a negative limitation added to a drug treatment method claim during prosecution, and substantive question on appeal is whether the claim limitation lacks written description support. The original Federal Circuit opinion penned by Judge O’Malley sided with the patentee; Chief Judge Moore wrote in dissent.  Judge O’Malley subsequently retired and Judge Hughes was added to the panel to consider Accord’s rehearing petitioning.  The new panel flipped the outcome with Judge Hughes joining the Chief’s position that the claims are invalid. We already have several posts on the case in Patently-O:

Two groups of law professors have each filed an amicus brief in support of the petition. The first focuses on substantive written description issues and the second focuses on problematic appellate procedure presented by the panel recomposition.

Substance: The key substantive controversy centers on Chief Judge Moore’s restatement of the written description doctrine–that it requires all claim limitations be disclosed in the original specification either (a) expressly or (b) inherently in a fashion where the “particular limitation would always be understood by skilled artisans as being necessarily” present in the disclosure.  The patentee in the case argues that inherency is too strict a standard and that it goes beyond what is required by the statute and prior precedent.

The Novartis patent claims a particular long-term drug dosage for a chronic disease. During prosecution the examiner rejected the claims based upon a prior art reference that began with a loading dosage before dropping down to a similar long-term dosage.  The patentee amended the claims to state that its dosage does not follow a loading dose. “[A] daily dosage of 0.5 mg, absent an immediately preceding loading dose regimen.”  Prior to that amendment, the specification had not previously disclosed any information about loading dosages.  But loading doses were already known to be useful for this particular class of drug, and four experts testified that the original specification implicitly disclosed no-loading dose examples.  On appeal though, the Federal Circuit concluded that implicit disclosure does not rise to the level of inherent disclosure.

I substantive amicus was is signed by a number of law professors with all-but-one having ongoing ties to George Mason University’s Antonin Scalia Law School.  Professor Emily Michiko Morris was a primary author and so I’m calling it the “Morris Brief.” The Morris Brief argues that that the panel opinion reflects a new standard for the written description requirement:

[T]he Federal Circuit—until now—has never suggested that, absent in haec verba disclosure, the written description requirement can only be met through inherent disclosure, wherein the specification “necessarily” or “always” includes a positive limitation or excludes a negative one.

Morris Brief.   The brief argues that a more flexible approach allowing for patentees to claim a non-expressed invention if PHOSITA would find the invention sufficiently disclosed based upon the “text, structure and technological context of the specification” and “without wooden rules.”   The brief also argues that the decision “erroneously places the burden of proving validity upon the owner of an issued patent.”

This case is typical of written description arguments centered on whether amendments to avoid prior art were sufficiently disclosed.  The Morris Brief notes that the ability to amend claims using negative limitations is an important feature of the patent system, and the decision here will limit the ability of applicants to make those amendments.  The brief finally argues that the new panel improperly disregarded  fact finding by the district court and instead effectively treated written description as an issue of law.  Written description is a question of fact, and that the panel made a number of factual findings based upon evidence presented at the bench trial.  On appeal though, the Moore court rejected these conclusions based upon its legal determination of no inherency and that “testimony from a skilled artisan as to possibilities or probabilities that the recited element would be excluded would not suffice, lest such testimony could effectively eliminate the written description requirement.” Slip op.

Procedure: The second brief focuses on appellate procedure and was filed by a group of CivPro / IP professors including Prof. David Hricik.  The Hricik Brief spells out the arguments as follows:

This case presents an extraordinary circumstance in which, after a three-judge panel issued a 2-1 decision affirming the district court, a new panel was created for purposes of rehearing. That panel, with one new judge, reached a result opposite from the first. In effect, the majority opinion became the dissent, and the dissent the majority. This series of procedural events was contrary to this Court’s rules and precedent. The events here also run against longstanding tradition in the federal courts that panel rehearing may be granted only with the vote of at least one judge in the original majority. Numerous decisions from around the country show that where the departure of one of a panel’s original members leaves a 1-1 split, a petition for rehearing must be denied unless the remaining judge who had been in the majority changes his or her mind. In addition, the second opinion in this case violates the law-of-the-circuit doctrine, which provides that one three-judge panel must abide by prior panel decisions, absent en banc or Supreme Court rulings. . . .

The result here is all the more concerning because of a lack of transparency in the process. The second opinion did not acknowledge the change in panel, much less explain it. There was no notice to the parties as to why a different panel was needed to decide a petition for rehearing, let alone how the law authorized a different panel to address the petition.

The panel should grant rehearing and vacate the June 21 decision, thereby restoring the January 3 decision. Alternatively, the Court should grant rehearing en banc.

Hricik Brief.  Accord is unlikely to file a responsive brief unless requested by the Court. FRAP 35(e).

Documents:

Claim at issue:

1. A method for reducing or preventing or alleviating relapses in Relapsing-Remitting multiple Sclerosis in a Subject in need thereof, comprising orally administering to said Subject 2-amino-2-2-(4-octylphenyl)ethylpropane-1,3-diol, in free form or in a pharmaceutically acceptable salt form, at a daily dosage of 0.5 mg, absent an immediately preceding loading dose regimen.

Reviewing the Patent Eligibility Restoration Act of 2022

Patent

by Dennis Crouch

Section 101 has some magic to it.  The short provision has remained essentially unchanged since it was originally handwritten in the 1700s and signed into law by President George Washington.

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 the conditions and requirements of this title.

35 U.S.C. 101.  But the courts have taken the general provision and given it substantial meaning beyond the text.

Senator Tillis has introduced legislation that would re-write Section 101 — taking back authority from the courts and detailing the scope of eligibility as broadly extending to technology-based innovation.  Because the Supreme Court’s interpretation of Section 101 is largely atextual, the proposed amendment does not change the core text cited above. Rather, the Bill adds detail in the form of “eligibility exclusions” and notes that the broad provisions of Section 101 are subject “only to” the statutory exclusions.”  In his press release, Senator Tillis indicates that the proposal “is the product of almost four years of consensus driven stakeholder conversations from all interested parties.”

Unfortunately, due to a series of Supreme Court decisions, patent eligibility law in the United States has become confused, constricted, and unclear in recent years. This has led to inconsistent case decisions, uncertainty in innovation and investment communities, and unpredictable business outcomes. This has resulted in a wide range of well-documented negative impacts.

Tillis.  The Bill does not include a statement about whether its impact would be retroactive to apply to already issued patents and pending applications.  If it is retroactive, the legislation would have an immediate impact on many thousands of of patents and pending applications.

The Bill lists four particular eligibility exclusions that would be codified within a new Section 101(b)(1).  In particular, the statute would deny patent protection “for any of the following, if claimed as such:”

(A) A mathematical formula, apart from a useful invention or discovery.

(B) A process that— (i) is a non-technological economic, financial, business, social, cultural, or artistic process; (ii) is a mental process performed solely in the human mind; or (iii) occurs in nature wholly independent of, and prior to, any human activity.

(C) An unmodified human gene, as that gene exists in the human body.

(D) An unmodified natural material, as that material exists in nature.

These four exclusions are the only exceptions to Section 101’s broad text. The provision goes on with additional “CONDITIONS” that endeavor to ensure that the exclusions are narrowly read:

(2) CONDITIONS.—

(A) CERTAIN PROCESSES.—Notwithstanding paragraph (1)(B)(i), a person may obtain a patent for a claimed invention that is a process described in such provision if that process is embodied in a machine or manufacture, unless that machine or manufacture is recited in a patent claim without integrating, beyond merely storing and executing, the steps of the
process that the machine or manufacture perform.

‘(B) HUMAN GENES AND NATURAL MATERIALS. … a human gene or natural material that is isolated, purified, enriched, or otherwise altered by human activity, or that is otherwise employed in a useful invention or discovery, shall not be considered to be unmodified [i.e., is patentable].

The Bill would also add a process for determining whether or not an invention is eligible.

(c) ELIGIBILITY.—

(1) IN GENERAL.—In determining whether, under this section, a claimed invention is eligible for a patent, eligibility shall be determined—

(A) by considering the claimed invention as a whole and without discounting or disregarding any claim element; and

(B) without regard to—(i) the manner in which the claimed invention was made; (ii) whether a claim element is known, conventional, routine, or naturally occurring; (iii) the state of the applicable art, as of the date on which the claimed invention is invented; or (iv) any other consideration in section 102, 103, or 112.

The proposed amendment makes clear that invalidity via eligibility is still potentially available via motion to dismiss.

Finally, the provision also modifies and adds definitions to Section 100 of the Patent Act:

 (b) [Amended] The term “process” means process, art or method, and includes a new use, application, or method of manufacture of a known or naturally occurring process, machine, manufacture, composition of matter, or material.

(k) [New] The term ‘useful’ means, with respect to an invention or discovery, that the invention or discovery has a specific and practical utility from the perspective of a person of ordinary skill in the art to which the invention or discovery pertains.

Read the legislation yourself here.

Only Humans are Inventive?

Patent,

By Dennis Crouch

A few years ago I read a great series of fantasy books, The Wandering Inn.  A key series storyline involves the protagonist meeting with ant-like Antinium and, through their interactions, transforming some of more computer-like hive members into individuals.  The word individual is important for U.S. Patent Law, because the U.S. Patent Act was amended in 2011 to expressly require that inventors be “individuals.” 35 U.S.C. § 100(f) (2022). For Antinium, becoming individual meant breaking away from the hive-mind.  In its newest decision on the topic, the Federal Circuit declares instead, for the purposes of patent law, an inventor must be human.

Here, there is no ambiguity: the Patent Act requires that inventors must be natural persons; that is, human beings.

Thaler v. Vidal, 2021-2347, 2022 WL 3130863 (Fed. Cir. Aug. 5, 2022). In the case, Thaler claims to own a computer named DABUS, and that DABUS conceived-of two patentable inventions.  But, Thaler refused to claim credit as the inventor.  And, the USPTO refused to issue a patent without a listed human inventor.

In my mind, it was always clear that the Federal Circuit would refuse Thaler’s petition, but it remains a fascinating topic in my mind.  American legal personhood continues to ingenerate debate well beyond AI, including the contexts of legal fictions such as corporations, pre-birth human, and even non-human organisms (such as rivers).  The result here shuts-down the debate – at least for the patent law concept of inventorship.

Of all the arguments presented, I thought that Thaler’s best relied upon Section 103’s statement that patentability shall not depend upon “the manner in which the invention was
made.” Thaler argued that the PTO was, in fact, refusing to issue a patent because the invention was made by an AI rather than a human.  On appeal, the Federal Circuit held that provision should be limited only to apply to the obviousness context. “Section 103 is not about inventorship. Instead, it provides, in relevant part, that inventions may still be nonobvious even if they are discovered during ‘routine’ testing or experimentation.” Slip Op.

The court went on to expressly explain that it is only interpreting the words given by Congress. If someone wants to change the rules, the correct path is through legislation.  Thaler will petition to the Supreme Court, but is unlikely to win.

* Thanks to Avery Welker for helping with this post.

Law School Canons: FRE 403

Patent

Editor’s Note: Avery Welker is a rising 3L at Mizzou and likely a future patent attorney. He authors a series linking law school canonical cases with intellectual property counterparts, and the views expressed are his own. You can email ideas for future posts to avery@patentlyo.com.  – Dennis Crouch

By Avery Welker

TecSec, Inc. v. Adobe Inc., 978 F.3d 1278 (Fed. Cir. 2020) [decision link]

Last semester, I took a class on the Federal Rules of Evidence. We began the course by learning about relevance. As we progressed through the semester, relevance continued to stay, well, relevant! Many evidentiary analyses ended with the great gatekeeper of Federal Rule of Evidence 403, and our professor said that Rule 403 requires the dangers listed in Rule 403 to substantially outweigh the probative value of the evidence.[1] Our professor taught us that the Rule can limit relevant evidence but doesn’t always result in a sweeping exclusion, much to TecSec, Inc.’s delight during a 2020 appeal to the Federal Circuit.[2]

In 2010, TecSec asserted several patents against Adobe covering file-encryption methods transmitted over a data network.[3] The district court construed several terms in the patents on March 3, 2011, resulting in a judgment of noninfringement for Adobe.[4] However, the Federal Circuit reversed the judgment and construction of a term, remanding for further proceedings under the new term construction.[5] The case bounced up and down from the district court to the Federal Circuit.[6]

In October 2018, before trial, Adobe submitted a motion in limine to exclude any evidence of Adobe’s intent or willfulness to infringe TecSec’s patents between March 3, 2011 and October 18, 2013 unless TecSec agreed to allow the March 3, 2011 stipulation of noninfringement, order, and judgment, which Adobe argued were relevant to determining an infringer’s state of mind.[7] The district court granted Adobe’s motion and barred the evidence, stating that allowing TecSec to argue inducement of infringement is too prejudicial to Adobe without allowing Adobe to introduce the three documents it requested, and, if the court admitted the evidence, it would prejudice TecSec and confuse the jury.[8] Finally, the dispute went to a jury trial in late 2018.[9] After entering final judgment for Adobe (see a previous Patently-O post regarding this judgment here), TecSec (among other issues) appealed Adobe’s previous motion in limine.[10]

On appeal, Adobe attempted to protect the district court’s ruling on the motion in limine by arguing that the court was permitted to exclude the evidence because Rule 403 allowed the court to prevent unfair prejudice and avoid confusing the jury.[11] However, the Federal Circuit noted that Adobe’s presented applications of the Rule did not support such a sweeping exclusion of evidence.[12] The district court erroneously excluded an entire class of evidence (evidence of induced infringement after March 3, 2011) instead of excluding a piece or fixed set of evidence that would allow TecSec to present any other relevant and admissible evidence on the issue of induced infringement.[13]

Adobe’s motion scope addressed only whether Adobe could admit the March 3, 2011 claim construction results and TecSec’s stipulation; it did not bring up TecSec finding all evidence of inducement intent to determine a triable issue of infringement inducement after March 3, 2011.[14] The Federal Circuit found that Adobe’s motion in limine did not give the district court the basis to take the extreme measure of preventing the admission of all evidence of infringement inducement after March 3, 2011.[15]

Additionally, the Federal Circuit found that the district court determined that admitting the documents Adobe requested would unduly prejudice TecSec, but TecSec never indicated that it would drop its inducement claim after March 3, 2011 if the documents were introduced into evidence.[16] The Federal Circuit noted that the district court should have listened to whether TecSec would drop its inducement suit for the post–March 3, 2011 time frame before determining that the evidence would be too prejudicial to TecSec.[17] The Federal Circuit reversed the district court’s decision to exclude evidence of infringement inducement post–March 3, 2011.[18]

[1] Fed. R. Evid. 403.

[2] TecSec, Inc. v. Adobe Inc., 978 F.3d 1278 (Fed. Cir. 2020).

[3] Id. at 1282–83.

[4] Id. at 1283.

[5] Id.

[6] Id. at 1283–85.

[7] Id. at 1284.

[8] Id. at 1284–85.

[9] Id. at 1283–85.

[10] Id. at 1286. The motion in limine resulted in the court excluding TecSec’s expert witness deposition testimony of Adobe’s alleged induced infringement after March 3, 2011. Id.

[11] Id. at 1288.

[12] Id.

[13] Id.

[14] Id.

[15] Id. at 1288–89.

[16] Id. at 1289.

[17] Id.

[18] Id.

Patently-O Bits and Bytes by Juvan Bonni

Bits and Bytes, Patent

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

The Sound of Silence and the Inherency Doctrine for Written Description

Patent

by Dennis Crouch

The basic issue in Novartis v. Accord is quite familiar. A new limitation was added to the claims during prosecution that is not found expressly in the specification, but would be expected by someone of skill in the art.  Does the claim violate the written description requirement of 35 U.S.C. 112? In its most recent statement, the Federal Circuit finds failure of written description unless the invention is either expressly or inherently disclosed in the original specification. Novartis Pharm. Corp. v. Accord Healthcare, Inc., 38 F.4th 1013 (Fed. Cir. 2022) (rehearing decision). One quirk here is that the court identifies the particular limitation as a “negative claim limitation” and there are wide ranging policy views on how those limitations should be treated. However, the Novartis court explained that its express-or-inherent holding here applies regardless of whether claim limitations are expressed in positive or negative form.  Novartis has no petitioned for en banc rehearing.

The appellate procedure in this case is strange and important to its current status: The district court sided with Novartis (infringed + not-invalid) and the Federal Circuit affirmed on appeal in a January 2022 decision.  That original CAFed decision was penned by Judge O’Malley and joined by Judge Linn.  Chief Judge Moore wrote in dissent — arguing that the majority had been way too lenient.

By January 2022, Judge O’Malley had already announced her plans to retire from the judiciary in early March 2022. The appellant’s rehearing petition would have ordinarily been due on Groundhog Day, February 2, but HEC requested and was granted a 21-day delay and that meant that Novartis’s response would not be due until after Judge O’Malley’s retirement.  Rather than waiting for the deadline, Novartis  filed its responsive brief with a four-day turn around.  But to no avail; Judge O’Malley retired before acting on the rehearing petition.

After Judge O’Malley’s retirement, the court added Judge Hughes to the panel to decide the rehearing.  Of any judge that might have been added, Judge Hughes was one very likely to find against the patentee in this situation.  My understanding is that the court did not announce Judge Hughes addition to the panel until it issued a revised panel opinion on June 21, 2022.  Presumably in this case, there was some randomness in Judge Hughes’ selection, but the rules don’t expressly require that.

The panel re-composition flipped the outcome.  Chief Judge Moore had previously written in dissent, but now Judge Hughes joined her opinion–putting her in the majority. With the loss of Judge O’Malley, Judge Linn’s position flipped to the dissent.  Thus, the new opinion sided with the accused infringer–concluding that the district court “clearly erred” in finding the claims not invalid.   The decision here is apparently the first time that a Federal Circuit panel has flipped the outcome following a change in panel composition.

Now, Novartis has filed its petition for rehearing.  The petition raises two issues: one on the merits of the written description issue; and a second focusing on the unusual appellate procedure.

  1. Patent Law Merits: Whether 35 U.S.C. §112 and this Court’s precedent require that, to have adequate written description, a claim limitation must be either expressly disclosed in the specification or necessarily present in some express disclosure, even if a skilled artisan would otherwise read the specification to disclose possession of the limitation.
  2. Appellate Procedure: Did the court procedurally err by issuing the new decision on rehearing.

Lets start with procedure and panel dependence. The other circuits have an internal rule or practice that a panel rehearing will not be ordered unless at least one judge in the majority votes for the rehearing.  The idea behind a panel rehearing to raise issues that the majority can recognize that it “overlooked or misapprehended.” FRAP 40(a)(2). But, no one in the majority changed their outlook. Rather, the addition of Judge Hughes provided an end-run around the majority by adding a new panel member.

The Federal Circuit has previously written about this issue – but not in a self-reflective way. Rather the court was in its then supervisory role of the US Claims Court. Universal Restoration, Inc. v. U.S., 798 F.2d 1400 (Fed. Cir. 1986).  In Universal, one panel member of the Claims Court had been replaced following its original determination.  That recomposition resulted in a flipped the outcome on rehearing.   On appeal, the Federal Circuit reversed on the merits, but in a footnote explained that the recomposition was improper:

Where the original panel reconsiders and changes a decision, a member of the original majority must vote for the change. In the Supreme Court where less than a majority may order rehearing, a member of the original majority must vote for the rehearing. These procedures are readily acceptable as “fair.” Sup.Ct.R. 51.1 (1980); Ambler v. Whipple, 90 U.S. (23 Wall.) 278, 281–82 (1874). . . . What appears to be the case here is that there was in fact no reconsideration. A different panel simply disagreed with the first decision.

Id.  The Federal Circuit does have a rule regarding replacement of a missing panel member. Federal Circuit Rule 47.11. That rule calls for the Chief Judge to secure an additional judge in situations where “a judge of a panel that has heard oral argument or taken under submission any appeal, petition, or motion is unable to continue with consideration of the matter.”  If the remaining two judges are unable to resolve the matter,  then the chief judge should appoint another judge.  Id.  In its petition, the Novartis argues that this rule is inapplicable based upon the aforementioned general tradition and because panel rehearing petitions are not “argued” or “taken under submission.”

On the merits: The petition argues that the new majority opinion improperly creates an “express-or-inherent rule:” That the invention as claimed must be either expressly or inherently disclosed within the specification.  Chief Judge Moore explained:

[I]t is possible that the written description requirement may be satisfied when a skilled artisan
would understand the specification as inherently disclosing the negative limitation. . . [However], testimony from a skilled artisan as to possibilities or probabilities that the recited element would be excluded would not suffice, lest such testimony could effectively eliminate the written description requirement. If silence were generally sufficient, all negative limitations would be supported by a silent specification. If, however, a patent owner could establish that a particular limitation would always be understood by skilled artisans as being necessarily excluded from a particular claimed method or apparatus if that limitation is not mentioned, the written description requirement would be satisfied despite the specification’s silence.

Id.   The petition argues that Judge Moore has improperly created a bright-line rule in an area where “there are no bright-line rules.”

The new majority’s inflexible heightened standard conflicts with a substantial body of precedent. It makes written description turn not on what the specification “reasonably conveys to those skilled in the art,” but on what the specification expressly or necessarily discloses. And because the new majority expressly declined to limit its holding to negative claim limitations, that holding could be applied to reverse any written-description finding.

Novartis En banc Petition.

What is the invention: Fingolimod was a known immune suppressant.  In its patent, Novartis claims a method of treating multiple sclerosis (RRMS) by administering fingolimod at a particular daily dosage of 0.5 mg.

Many drug regimens begin with a loading-dose to quickly raise the blood-level. The dosage is then reduced to a lower maintenance dosage. During prosecution some prior art was uncovered that started with a loading dose and then reduced dosage down to a level close to that claimed by Novartis. But the Novartis invention did not require a loading dose.  Prosecutors amended the claims to make that clear: “a daily dosage of 0.5 mg, absent an immediately preceding loading dose regimen.”

The Sound of Silence: The problem identified by Chief Judge Moore is that the Novartis patent application documents never mention loading doses or the absence of loading doses. They don’t say anything one-way-or-the-other.  Novartis provided evidence that loading doses in this area were common and that PHOSITA would have understood that silence regarding loading doses was actually a disclosure that no-such loading doses were required.  Judge Moore rejected this argument; holding instead that “Silence is not disclosure.”  Further, Judge Moore adopted the inherency doctrine as a limiting rule. That doctrine is quite tight and only finds  disclosures inherent if they necessarily flow from express teachings.

Infringement via Multiple Product Lines

Patent

by Dennis Crouch

Vocalife LLC v. Amazon.com, Inc. (Fed. Cir. 2022) (non-precedential)

Vocalife’s patent covers an enhanced microphone system that identifies the location of a target sound source and then uses beamforming to improve sound collection from the target. U.S. Patent No. RE 47,049. The method for locating the sound requires an array of microphones that record relative timing of receiving sounds. The delay is then used to calculate the location and then direct the beamforming operations.

A key element of the claims is thus the requirement of “determining a delay between each of said sound sensors . . . wherein said determination of said delay enables beamforming for said array of sound sensors in a plurality of configurations.” RE47,049, Claim 1.

A jury sided with Vocalife–finding that Amazon induced its customers to infringe through their use of the Echo product and award $5 million in damages.  Judge Gilstrap upheld the verdict–denying Amazon’s renewed motion for Judgement as a Matter of Law (JMOL).  On appeal however, the Federal Circuit has reversed finding that the evidence didn’t prove these key limitations.

Amazon states in its documentation that its echo devices include multiple microphones that enable beamforming.  The problem though is that each echo device has a particular physical arrangement and thus does not meet the requirement that the system works “in a plurality of configurations.”  As explained by Judge Gilstrap: “Amazon argues that, even if the Accused Products determine a delay in the manner Vocalife contends, such is done for a single geometric layout of microphones and not for a plurality of layouts.”  But at trial, Amazon’s own witness explained that the microphone configuration “varies from product-to-product. Anywhere from two to eight microphones are in our products today.”  Vocalife’s expert then testified that the code is designed in a way that it is operable across the various Echo devices–i.e., it works “in a plurality of configurations” as required by the claims.  The same code operates regardless of the configuration.  So, we have a basic  claim construction issue as to whether a single device needs to be capable of working in a plurality of configurations.  Amazon argues that this is answered by claims themselves that state that the approach enables “the said array of sound sensors in a plurality of configurations.”  On the other hand, the patent itself discloses embodiments that appear to use fixed relative sensor locations – as in the microphone array shown below.

Amazon did not appeal the jury verdict directly, but rather the district court’s refusal to grant JMOL whose standard asks whether there was sufficient evidence presented at trial such that a reasonable jury could have ruled in the same way that the actual jury ruled. The jury must be given a strong benefit-of-the-doubt and the courts must take care to avoid “re-examining” any fact tried by the jury since that is prohibited by the U.S. Constitution Seventh Amendment.  The typical approach then looks to the elements that the winning party had to prove in order to win its case and consider whether any elements suffers from a complete absence of evidence. Here though there was some evidence supporting the jury verdict — in that setup, the district court should only grant JMOL when “the facts and inferences point so strongly and overwhelmingly in favor of one party that the court concludes that reasonable jurors could not arrive at a contrary verdict.” Orion IP, LLC v. Hyundai Motor Am., 605 F.3d 967 (Fed. Cir. 2010) (applying Fifth Circuit law).

In its short decision, the Federal Circuit implicitly determined the claim construction question (even though claim construction was not appealed) and determined that  Amazon’s selling of multiple products would not induce infringement. Rather, the court found that infringement evidence must show that “a given Echo device” must enable beamforming “in a plurality of configurations.”  Perhaps the next reissue will be able to fix the claims once again.

= = =

Intervening Rights and Method Claims: As noted above, the patent at issue here is a reissue patent. Reissue involves surrendering the original patent and then going through a new prosecution process that, in this case, involved several amendments to the claims.  The district court found that some of the patentee’s back-claims from prior to the reissue were barred by the doctrine of absolute intervening rights defined by 35 U.S.C. § 252.

[A]ny person . . . who, prior to the grant of a reissue, made, purchased, offered to sell, or used within the United States, or imported into the United States, anything patented by the reissued patent, to continue the use of, to offer to sell, or to sell to others to be used, offered for sale, or sold, the specific thing so made, purchased, offered for sale, used, or imported unless the making, using, offering for sale, or selling of such apply to certain Echo products.

35 U.S.C. 252.  In a cross appeal, the patentee argued that the this provision should not apply in its case because the claims are directed toward a method rather than a product.  “Absolute intervening rights apply only to patented products made, used, or
sold before the issuance of the reissue, and not to processes or methods.” Patentee brief.

The Federal Circuit has not particularly addressed this question of how the intervening rights apply to method or process claims.  On appeal here, the Federal Circuit refused to engage. Its finding of non-infringement rendered the issue moot.

 

CareDx v. Natera: A Response To Professor Holman

Patent

Guest Post by Edward Reines.  Reines Co-Chairs the nationwide Patent Litigation practice at Weil Gotshal. He represents CareDx and Stanford in the pending patent lawsuits.

Professor Holman’s recent post on the Federal Circuit’s CareDx v. Natera opinion is a thoughtful addition to Professor Crouch’s review of that decision.  Professor Holman concludes that the Stanford inventions were doomed from the start because they can be labelled as “molecular diagnostics methods” and are thus patent ineligible under Federal Circuit law.  Professor Holman’s conclusion is troubling.  It would limit the patentability of new inventions in an entire scientific discipline merely based on a label.

This labelling mode of analysis is fundamentally flawed because the Supreme Court’s Alice decision mandates a two-step test focused on the claimed advance of the patent, no matter the field of invention.  The test is designed to “distinguish between patents” that would pre-empt a field by broadly claiming “[l]aws of nature, natural phenomena, and abstract ideas” and patents that do not pose this risk because they add to these concepts with “human ingenuity.” There is thus nothing inherent about molecular diagnostics that precludes their patentability and merely labelling a method as “molecular diagnostics” should not be a kiss of death.

Take the Stanford patents.  Those patents document that the natural correlation between organ rejection and elevated levels of cell-free DNA of the organ donor was known for almost a decade before the inventions.   The patents then explain that numerous scientists motivated to measure that increase in cell-free DNA failed to come up with the patented measurement methods.   The patents cite an article published right before the Stanford patent filing that concluded that it was altogether “impractical” to measure cell-free DNA to monitor organ rejection.

The Stanford patents distinguish the failed prior art measurement efforts and describe new inventions on how to better measure cell-free DNA using advanced DNA analysis techniques.  The claimed inventions are better measurement methods that previously eluded the field – not the discovery of the natural correlation itself.  And there was no claim that they posed the pre-emption risk that animated Alice.

Federal Circuit law places at the heart of Alice step one whether the “claimed advance” is the natural law.  In CareDx, as Magistrate Judge Burke had originally concluded, the claimed advance of the Stanford patents is an improved human-devised measurement method.  The Federal Circuit’s opinion failed to properly focus on the “claimed advance” analysis and failed to squarely address that the patents describe numerous prior art failures. This prior art history is irreconcilable with the panel’s conclusion that the patented measurement methods are so conventional as applied to the natural correlation that they could not possibly qualify as patent-eligible human invention.

Instead, the Federal Circuit imported the “conventionality” analysis from step two into step one in lieu of a proper “claimed advance” analysis of Federal Circuit precedent.  As originally contemplated in Mayo, the “conventionality” analysis was akin to determining if the claims included mere trivial additions on top of discovery of a natural law.   Here, the conventionality analysis instead became a short-cut obviousness analysis.  Yet, even that fails because the decade of prior failures at measuring the cell-free DNA for a good organ rejection test proves that it was not conventional to use the patented measurement methods for this purpose – otherwise the many groups working on the problem would have arrived at that solution ultimately invented by the Stanford team.  And the supposed disclaimers in the patents never even suggest that applying the claimed measurement techniques to the tough context of cell-free DNA somehow was not an invention.  Everything about the description of the inventions is inconsistent with that conclusion.

The Federal Circuit cannot blame the Supreme Court for this latest constriction of molecular diagnostic patenting even though many Federal Circuit judges have bemoaned the stinginess of the Supreme Court’s Alice test in this area.  As explained long ago in Diamond v. Diehr, and as repeated in Bilski and Mayo, the Supreme Court recognizes that: “It is now commonplace that an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.”  Even if the Stanford measurement methods were known (and the prior art history calls that into serious doubt) their application to a natural law can certainly be patent eligible if it is the product of human innovation, as claimed by the patents.

Professor Holman’s conclusion that the Federal Circuit labelling method may have controlled the CareDx outcome should give real pause to the patent law community.   Such labelling might be useful to describe the inventions at issue in prior decisions, but it is not a basis to proscribe whether an invention is eligible for patenting.   The Stanford patents are plainly directed to a better measurement method that evaded many motivated prior artists.  Such human innovation is the claimed advance and is patent eligible under Alice even if it can be labelled as a molecular diagnostic method.

Waco is Waning

Patent

by Dennis Crouch

If you want a pro-patent judge, the conventional wisdom since 2018 has been to file your complaint in the Waco Courthouse of the Western District of Texas.  Judge Alan Albright is the only federal judge stationed in Waco and so he hears the case. This setup has led to substantial consternation among accused infringers who don’t really like Waco and especially don’t like Judge Albright.  With increasing political pressure, W.D.Texas Chief Judge Orlando Garcia has changed the rules.  Going forward patent cases filed in Waco go on the wheel and be randomly assigned to one of twelve judges.

 

TAMU Copyright Infringement — No Liability

Patent

by Dennis Crouch

Canada Hockey LLC (Michael Bynum) v. Texas A&M University (Supreme Court 2022)

E. King Gill started the TAMU Aggie’s “12th Man” tradition back in 1921 by coming down from the stands back ready to step-in and play after a player injury.

Michael Bynum spent over 1,500 hours preparing a book on Gill.  The book included a short biography of Gill written by Whit Canning (under a work-made-for-hire agreement).  Bynum was seeking more materials from TAMU and sent a PDF draft version of the book to TAMU athletics publicity folks. The email and PDF included several statements indicating it was copyrighted and not for redistribution.

TAMU publicity liked the 1-page biography and so retyped it; changed the byline to “by Whit Canning, special to Texas A&M Athletics”; and sent it out electronically to 100,000+ folks (all without permission or notification).

Bynum sued for copyright infringement.  But, the action was stymied by the Supreme Court’s decision in Allen v. Cooper, 140 S. Ct. 994 (2020).  That case held that sovereign immunity protected states from copyright infringement liability despite direct Congressional statements otherwise.  In his new petition for certiorari, Bynum presents two end-runs around Allen:

  1. Actual Violation of the 14th Amendment.  Even if Congress did not have the power to entirely eliminate sovereign immunity for copyright infringement, a copyright holder still has an action if the infringement itself constitutes an actual violation of the 14th Amendment under United States v. Georgia, 546 U.S. 151 (2006).
  2. Taking. Although a state might not be liable under a copyright infringement theory, it may still be liable for a Fourteenth Amendment taking.

[Petition for Certiorari]

In rejecting the actual due-process violation claim, the 5th Circuit concluded that the plaintiff’s copyright claims were
“viable [as a] takings claim against TAMU for copyright infringement under the Texas Constitution.” Canada Hockey, L.L.C. v. Texas A&M U. Athletic Dept., 20-20503, 2022 WL 445172, at *8 (5th Cir. Feb. 14, 2022).  Since the state provided an adequate potential remedy, the 5th Circuit found no due process violation by the state of Texas. The court did recognize that the Texas Supreme Court recently rejected a copyright takings claim in Jim Olive Photography v. Univ. of Hous., ––– S.W.3d ––––, 2021 WL 2483766, at *9 (Tex. June 18, 2021).  But, the 5th circuit pointed to a concurring opinion that it is possible that – in some circumstances – the state might find copyrights to have been unduly taken.

Federal Takings Claim: Likewise, the 14th Amendment due process clause also makes the 5th amendment takings clause applicable to the states.  But, states retain sovereign immunity in this context if they provide an adequate remedy under state law.  Here, the 5th Circuit court found again that Texas takings law suffices and so no due process problem.

= = =

Background Law:

  • The Eleventh Amendment states that “The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.”
  • The Copyright Remedy Clarification Act of 1990 (“CRCA”) indicates that individual states can be held liable for copyright infringement and “shall not be immune, under the Eleventh Amendment of the Constitution of the United States or under any other doctrine of sovereign immunity, from suit in Federal court by any person . . . for a violation of any of the exclusive rights of a copyright owner.”
  • In Allen v. Cooper, the Supreme Court held that congress lacked power to prophylactically abrogate sovereign immunity.
  • In United States v. Georgia, 546 U.S. 151 (2006), in the context of applying ADA to state prisons, the court held that Congress had power to apply the law to state prisons in situations where the conduct actually violates the 14th amendment on a claim-by-claim basis.  This is a distinct justification from the prophylactic approach discussed in Allen. The Allen court did not directly address the US v. Georgia arguments.

Patently-O Bits and Bytes by Juvan Bonni

Bits and Bytes, Patent

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

Enjoining Patent Prosecution

Patent

by Dennis Crouch

Steven Young and Carl Hewitt developed technology for monitoring infant biometrics.  Later, they began working with Sleep Number Corp. who eventually purchased their company.  The result was SleepIQ technology for Sleep Number smart beds.

Eventually Young & Hewitt decided to leave the company and start out on their own once again and founded a new venture UDP Labs–still focusing on sleep biometric data integrated into hospital/medical furniture. However, the pair had not fully exited from their Sleep Number contract.  Rather, they had both signed consulting agreements with Sleep Number that included quite a broad scope.  In particular, the agreement required disclosure and assignment of “any ideas, conceptions, inventions, or plans relating to sleep, mattresses, bedding, sleep monitoring, health or wellness as it relates to sleep (including biometric monitoring relating to sleep), or bedroom or sleep technologies.”  The agreement expressly excluded some areas: “monitoring technologies for sudden infant death syndrome” and “blood pressure.”

UDP Labs quickly filed a provisional patent application for Young and Hewitt’s new inventions. The pair tried (unsuccessfully) to get Sleep Number to agree that their UDP work wasn’t covered by the consulting agreement; and ultimately terminated the consulting agreement.  More patent applications filed rather quickly, all claiming priority back to that original application filed during the consulting agreement period. One complicating issue is that the patent applications list three other inventors who were (apparently) not subject to the agreements with Sleep Number.

Lawsuit: In 2020, Sleep Number sued Young & Hewitt along with UDP Labs seeking (1) declaration of “ownership of the inventions” as well as claims of (2) breach of contract and (3) conversion (by failing to disclose the information); (4) trade secret misappropriation; etc.

The lawsuit is ongoing, but in March 2021 Minnesota district court issued a preliminary injunction. Barring the defendants from prosecuting, amending, or abandoning any claims that claim priority to one of the early provisional applications.  The order further includes a mechanism for avoiding abandonment:

Defendants shall not respond or reply to any Office Action. . . After the fifth month but prior to the six‐month deadline to respond … Defendants shall (1) pay any and all necessary fees for a three‐month extension and (2) file a continuation … that does not remove or limit any claims of priority nor alter or abandon any claims.

Sleep No. Corp. v. Young, 532 F. Supp. 3d 793 (D. Minn. 2021), aff’d, 33 F.4th 1012 (8th Cir. 2022). On appeal, the 8th Circuit has affirmed. Sleep No. Corp. v. Young, 33 F.4th 1012 (8th Cir. May 11, 2022).  The appellate panel agreed that Sleep Number had a fair chance of prevailing since the contract “clearly and unambiguously places the inventions described in the patent applications within” its scope.

With regard to irreparable harm due to patent prosecution, the appellate panel agreed with the district court that the parties incentives are not aligned and, as such, UDP Labs “might respond to a future Office Action in a way that prejudices Sleep Number’s purported patent rights.”

The court noted that the potential for irreparable harm was demonstrated by “curiously timed” prosecution actions by UDP Labs to narrow certain claims and eliminate the priority claims.  The district court explained:

In November 2020, after this suit was filed, UDP filed several “Request[s] for Corrected Filing Receipt” with the United States Patent and Trademark Office (“USPTO”) seeking to amend the ‘087, ‘367, ‘385, and ‘848 Applications to eliminate their claims of priority to the ‘613 Application, leaving only the claims of priority to the ‘623 Application. As a result of UDP’s amendment to the applications’ claims of priority, the ‘087, ‘367, ‘385, and ‘848 Applications now only claim priority to an application filed after Young and Hewitt terminated their Consulting Agreements. Additionally, by moving the priority date forward, the applications are now subject to several additional months’ worth of potentially invalidating prior art.

Sleep No. Corp. v. Young, 532 F. Supp. 3d 793, 798 (D. Minn. 2021).

The court considered the balance-of-harms.  On UDP Labs side, it identified the only harm as “a mere delay in participation in the patent-prosecution process.”  That statement omits consideration of patent term and patent term adjustment. On February 2, 2022, the USPTO issued a non-final rejection in one of the pending actions.  The six-month date will come within the fortnight.

In May 2022, the district court also amended its preliminary injunction order to prohibit the defendants “from taking action-including selling, transferring, assigning, conveying, etc.-that would cause a change in ownership and/or interfere with Plaintiff’s asserted rights with respect to the Inventions-at-Issue.”