Policy Statement on Licensing Negotiations and Remedies for Standards-Essential Patents Subject to F/RAND Commitments

Patent

The USPTO has joined forces with the Department of Justice (DOJ) and National Institute of Standards (NIST) in creating a new draft policy statement on licensing of standards-essential patents (SEP) subject to voluntary F/RAND commitments.  The draft seeks further public comments.

The 2021 follows a long history of policy discussions on competition implications of patents in the standards market.

In 2013, a statement indicated that an “exclusionary remedy … may be inconsistent with the public interest” for F/RAND licensed patents.   The 2019 statement rejected that approach and instead explained that a F/RAND commitment should not “bar any particular remedy.”  The new proposal reverts back to 2013 and goes further — indicating that a patent holder who commits its patent as part of a standard-setting negotiation is making a promise that “it will not exercise any market power obtained through standardization.”

Opportunistic conduct by SEP holders to obtain, through the threat of exclusion, higher compensation for SEPs than they would have been able to negotiate prior to standardization, can deter investment in and delay introduction of standardized products, raise prices, and ultimately harm consumers and small businesses.

2021 Draft Statement.  At the same time, the new statement also indicates that implementers must also participate in good faith.

Regarding injunctive relief, the 2021 proposal interprets eBay and Federal Circuit holdings as follows:

Where a SEP holder has made a voluntary F/RAND commitment, the eBay factors, including the irreparable harm analysis, balance of harms, and the public interest generally militate against an injunction.

2021 Statement.

Comments due first week of January 2022 via regulation.gov. The agencies propose the following questions to spur comment:

  1. Should the 2019 Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments be revised?
  2. Does the draft revised statement appropriately balance the interests of patent holders and implementers in the voluntary consensus standards process, consistent with the prevailing legal framework for assessing infringement remedies?
  3. Does the draft revised statement address the competition concerns about the potential for extension of market power beyond appropriate patent scope identified in the July 9, 2021 Executive Order on Promoting Competition in the American Economy?
  4. In your experience, has the possibility of injunctive relief been a significant factor in negotiations over SEPs subject to a voluntary F/RAND commitment? If so, how often have you experienced this?
  5. Are other challenges typically present in negotiating a SEP license? If so, what information should be provided or exchanged as a practical matter to make negotiation more efficient and transparent?
  6. Are small business owners and small inventors impacted by perceived licensing inefficiencies involving SEPs? If so, how can licensing be made more efficient and transparent for small businesses and small inventors that either own, or seek to license, SEPs?
  7. Will the licensing considerations set forth in the draft revised Statement promote a useful framework for good-faith F/RAND licensing negotiations? In what ways could the framework be improved? How can any framework for good-faith negotiations, and this framework in particular, better support the intellectual property rights policies of standards-setting organizations?
  8. What other impacts, if any, would the draft revised statement have on standards-setting organizations and contributors to the standards development process?
  9. The draft revised statement discusses fact patterns intended to indicate when a potential licensee is willing or unwilling to take a F/RAND license. Are there other examples of willingness or unwillingness that should be included in the statement?
  10. Have prior executive branch policy statements on SEPs been used by courts, other authorities, or in licensing negotiations? If so, what effect has the use of those statements had on the licensing process, outcomes, or resolutions?
  11. Are there resources or information that the U.S. government could provide/develop to help inform businesses about licensing SEPs subject to a voluntary F/RAND commitment?

Chinese Firm Banned from USPTO and 15,000 TM cases Terminated

Patent

Over the past several years, the USPTO has been battling trademark applications that use fake specimens to establish a claim. Often these are low-quality photoshopped images, but can be more sophisticated.

This week, the UPSTO announced a final order for sanctions against the China-based law firm Shenzhen Huanyee Intellectual Property Co., Ltd. and the firm’s director Ms. Yusha Zhang associated with about 15,000 trademark applications many of which included “false and fraudulent submissions.”

Respondents have engaged in the unauthorized practice of law, provided false domicile information for applicants, impermissibly entered the signature of the named signatory on declarations and verifications, and violated other USPTO Rules and the USPTO’s website terms of use.

The sanctions are quite firm:

  1. Proceedings involving submissions filed by Respondents are terminated (this is about 15,000 TM registration cases, many are already registered others are pending).
  2. Respondents are precluded from further correspondence or submissions.

[Read the order here]

One part of the sanction that folks need to consider has to do with violation of TEAS terms of service and sharing USPTO.GOV accounts.

Respondents registered and shared access to at least three separate uspto.gov accounts including the name of Yusha Zhang. Respondents used these accounts to make submissions on behalf of others through TEAS in thousands of trademark matters. Given that many of the submissions were often filed through TEAS in rapid succession from the various accounts, it is clear that the accounts were used by multiple people, not just Ms. Zhang.

Final order.

Section 1052(c) of the Lanham Act: A First Amendment-Free Zone?

Patent

Guest Post by Samuel F. Ernst, Professor of Law, Golden Gate University School of Law.

Can you register a famous person’s name as your trademark without their consent? The Lanham Act seems to say no, and the U.S. Patent and Trademark Office interprets this to mean no, never, no matter what. 15 U.S.C. § 1052(c) provides, in pertinent part, that the PTO must deny federal registration to a trademark if it “[c]onsists of or comprises a name, portrait, or signature identifying a particular individual except by his written consent….” Unlike registration denials under Section 1052(a), the PTO denies registration without any inquiry into whether the mark suggests a false connection between the mark and the famous person. Nor does the PTO inquire into whether the famous person also sells the goods or services in question, as it does with private individuals under Section 1052(c). Rather, with respect to celebrities and world famous political figures, registration is denied based solely on the determinations that (1) “the public would recognize and understand the mark as identifying a particular living individual”; and (2) the record does not contain the famous person’s consent to register the mark.[1] Under this provision, the PTO routinely denies registration to marks that appear calculated to capitalize on the famous person’s name to sell products. For example, the PTO denied registration under Section 1052(c) to ROYAL KATE as applied to watches, cufflinks, jewelry, and other luxury products based solely on the determination that “ROYAL KATE identifies Kate Middleton whose identity is renowned.”[2] Id. And the PTO denied registration to OBAMA PAJAMA in connection with pajamas based on the examining attorney’s “excellent job marshalling a variety of press excerpts to demonstrate the obvious – namely, that President Barack Obama is extremely well known.”[3]

But the PTO also denies registration to marks under this provision even if they constitute political commentary, parody, or other public discourse at the heart of the First Amendment. For example, in 2020 the PTO denied registration to the mark TRUMP TOO SMALL in connection with T-shirts, even though the applicant argued that the mark was “political commentary about presidential candidate and president Donald Trump that the relevant consumer in the United States would not understand to be sponsored by, endorsed by, or affiliated with Donald Trump.”[4] In particular, the mark “is political commentary about [Trump’s] refutation at the March 3, 2016 Republican debate of presidential candidate Marco Rubio’s insinuation that Donald Trump has a small penis”; and “is also political commentary about the smallness of Donald Trump’s overall approach to governing as President of the United States.”[5]  The applicant appealed the PTAB’s denial to the Court of Appeals for the Federal Circuit, which is now deciding whether Section 1052(c) is unconstitutional in violation of the First Amendment,[6] as that court and the Supreme Court have already decided with respect to the provisions in the Lanham Act barring registration of scandalous, immoral, or disparaging marks.[7]

Unlike the bars on registration at issue in Tam and Brunetti, the PTO’s ban on registration under Section 1052(c) does not discriminate against speech based on the viewpoint expressed. Rather, the PTO bars registration whether the mark praises, criticizes, ridicules, parodies, or is neutral toward the famous person. Nonetheless, the bar is a content-based restriction because “its reach is defined simply by the topic (subject matter) of the covered speech”[8] – here, the topic being the famous person in question. And even if viewed as a regulation of purely commercial speech – and therefore not subject to strict scrutiny – the restriction would at least have to pass muster under the Supreme Court’s test in Central Hudson Gas & Electric Corp. v. Public Service Commission, which asks, in pertinent part, whether the regulation burdening speech directly advances a substantial government interest, and whether the regulation “is not more extensive than necessary to serve the interest.”[9] Section 1052(c), at least as broadly interpreted by the PTO, fails this test and is, therefore, unconstitutional.

The PTO’s asserted justification for this total ban on registration is “to protect the intellectual property right of privacy and publicity that a living person has in his/her identity.”[10] Putting aside whether the PTO has a legitimate interest under the Lanham Act in protecting intellectual property rights that are creatures of state law, these justifications plainly fail on their merits.

With respect to the right of privacy, the government does not have a legitimate interest in protecting public figures, such as former President Trump, from speech that criticizes, ridicules, or even praises them. Rather, the First Amendment recognizes “a profound national commitment to the principle that debate on public issues should be uninhibited, robust, and wide-open, and that it may well include vehement, caustic, and sometimes unpleasantly sharp attacks on government and public officials.”[11]

And even if the government has a legitimate interest in guarding the state right of publicity, the Lanham Act’s absolute bar on registering the name of a famous individual absent written consent is far more extensive than necessary to serve that interest. No state recognizes such a sweeping right of publicity that it is subject to zero countervailing First Amendment protections. As Jennifer Rothman observes, “[a]t least five balancing approaches have been applied to evaluate First Amendment defenses in right of publicity cases.”[12]:

  • The Eighth Circuit’s general balancing test, requiring “that state law rights of publicity must be balanced against first amendment considerations.”[13] Under this framework, the Eighth Circuit decided that a fantasy baseball company’s First Amendment right to use the names, statistics, and biographical information of major league baseball players “supersede[d] the players’ rights of publicity.”[14] TRUMP TOO SMALL would pass this test because it is core political speech at the heart of the First Amendment that outweighs any right of publicity.
  • Missouri’s predominant purpose test, which inquires into whether the predominant purpose of using the famous person’s name or identity is to exploit its commercial value; or whether “the predominant purpose of the product is to make an expressive comment on or about a celebrity.”[15] Under this test, the Missouri Supreme Court found that the defendants did not have the First Amendment right to use the name of a famous hockey player as the name of a villain in a comic book because such use was “predominantly a ploy to sell comic books,” and “not a parody or other expressive comment or a fictionalized account.”[16] TRUMP TOO SMALL would pass this test because its predominant purpose is to critique Donald Trump, not to exploit his identity to sell T-shirts.
  • The California test, which borrows from copyright’s fair-use analysis the consideration of “whether the new work merely supersede[s] the objects of the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is transformative.”[17] Under this test, the court held that the defendant’s free speech rights did not allow him to sell lithographs and T-Shirts with highly realistic depictions of the Three Stooges.[18] TRUMP TOO SMALL would pass this test because Elster’s T-Shirts says more than simply “Trump”; they add the transformative political critique “TOO SMALL” to Trump’s name.
  • An approach adopted by the Third and Ninth Circuits inquiring into whether the use of the plaintiff’s identity was not merely imitative, but rather for purposes of lampoon, parody, caricature, or fanciful and creative, and therefore entitled to First Amendment protection.[19] Under this test, Electronic Arts’ use of images of athletes in video games was too imitative to qualify for First Amendment protection against right of publicity claims.[20] TRUMP TOO SMALL passes this test, because it is for the purpose of lampooning Trump, and does not merely parrot his name standing alone.
  • The test adopted by the Restatement (Third) of Unfair Competition, which allows the use of a person’s identity “in news reporting, commentary, entertainment, works of fiction or nonfiction, or in advertising that is incidental to such uses,” but not “if they are used in advertising the user’s goods or services, or are placed on merchandise marketed by the user, or are used in connection with services rendered by the user.”[21] Under this test, Ginger Rogers and the estate of Fred Astaire could not prevent a filmmaker from using the title “Ginger and Fred” in a fictional film because the use was “clearly related to the content of the movie and is not a disguised advertisement for the sale of goods or services or a collateral commercial product.”[22] TRUMP TOO SMALL passes this test because it is commentary on TRUMP, not a disguised advertisement that is merely incidental to Donald Trump.

Accordingly, the PTO’s absolute ban on the registration of marks such as TRUMP TOO SMALL is far more extensive than necessary to protect the right of publicity, which would not prevent the use of TRUMP TOO SMALL under any state’s right of publicity regime.

These various free speech defenses to the right of publicity have been criticized by scholars for providing an inadequate, misleading patchwork of First Amendment protections.[23] But the PTO’s application of Section 1052(c) is even worse: the PTO takes no countervailing interests into account before denying registration to a mark. The PTO fails to consider: whether registration of the mark would likely cause consumer confusion; whether it would cause dilution of the public figure’s brand; whether the mark suggests a false connection with the person (as separately provided by other provisions); whether there is unjust enrichment or any other type of unfair competition; whether the use of the famous person’s name constitutes news, political commentary, parody, or entertainment speech at the heart of the First Amendment; and indeed without considering any First Amendment defense or legitimate Lanham Act policy whatsoever.

Hence, the PTO’s interpretation of Section1052(c) is a First Amendment-free zone. But what remedy should the Federal Circuit provide? Should the statute be construed so as to require source confusion, dilution, or a false connection with the celebrity before denying registration?[24] Such an interpretation is not plausible because there are separate provisions preventing registration under these circumstances, such that this interpretation would render Section 1052(c) duplicative of Sections 1052(a), (d), and (f).[25] Should the Federal Circuit remand with instructions that the PTO apply one of the First Amendment defenses to the right of publicity detailed above before declining to register a mark, even though those defenses are roundly criticized by scholars?; or perhaps one of the First Amendment defenses that are recommended by scholars?[26] Which one? Is the PTO capable of applying First Amendment balancing tests such as transformative use or fair use in routine registration decisions?; determinations that befuddle and confuse Article III federal courts? Is the PTAB the right body to make such determinations? Do we really want the PTO to be judging distinctions between political speech and purely commercial speech, or might that result in new speech discrimination issues? If the PTO cannot apply a First Amendment test in a reliable, predictable way, must the statute be invalidated because it is impermissibly vague with respect to what speech it burdens?[27]

Or have we gotten this whole question exactly backwards? Perhaps the prohibition on registering famous persons’ names serves in some way to protect political speech. After all, if the PTO registers a mark that is political commentary about a famous person, this gives the registrant certain nationwide rights allowing the registrant to burden other speakers from using the political speech in commerce to the extent it would result in likely confusion. Hence, in some circumstances registration of famous person’s names could perhaps result in less political speech, not more. One thinks of a potential 2024 Marco Rubio presidential campaign that seeks to sell T-Shirts saying TRUMP TOO SMALL, but is burdened by the national registration of that mark by Mr. Elster. As Judge Reyna wrote in dissent in In re Tam, “if the expressive content of the mark precludes regulation, on what authority may the government grant Mr. Tam the exclusive right to use this mark in commerce?”[28] Perhaps the courts should analyze statutes such as this one in the flexible way Justice Breyer suggests in his partial dissent in  Brunetti: by focusing on “the interests the First Amendment protects” and considering whether the harm to those interests is “disproportionate in light of the relevant regulatory objectives.”[29] But these are mere dissents, not the law. The government has not met its burden of advancing such a pro-speech rationale. If protecting political speech were the true government interest behind Section 1052(c), it is a wholly insufficient vehicle for protecting that interest. It is insufficient protection because it still allows the political figure himself to register the political speech including his name, thereby burdening others from using that speech in commerce. Moreover, the PTO can register all kinds of marks that constitute political speech so long as they do not contain the name of a famous person without his consent. The binding precedent of the Federal Circuit and the Supreme Court requires the conclusion that denying the benefits of national registration to marks constituting political speech under these circumstances constitutes an impermissible burden on free speech in violation of the First Amendment.

[1] In re Nieves & Nieves LLC, 113 USPQ2d 1629, 2015 WL 496132, *12 (TTAB 2015).

[2] Id. at *12-*14.

[3] In re Hoefflin, 97 USPQ2d 1176, 2010 WL 5191373, *3 (TTAB 2010).

[4] In re Elster, No. 20-2205, Doc. 43 (Corrected Joint Appendix) at 111 (Response to Office Action of Feb. 19, 2018) (Fed. Cir.) (available on Pacer).

[5] Id.

[6] See In re Elster, No 20-2205 (Fed. Cir.).

[7] See In re Tam, 808 F.3d 1321 (Fed. Cir. 2015) (en banc) (holding that 15 U.S.C. § 1052(a) is unconstitutional with respect to the bar on disparaging marks), aff’d, Matal v. Tam, 137 Sup. Ct.1744 (2017); In re Brunetti, 877 F.3d 1330 (Fed. Cir. 2017) (holding that 15 U.S.C. § 1052(a) is unconstitutional with respect to the bar on immoral and scandalous marks), aff’d, Iancu v. Brunetti, 139 Sup. Ct. 2294 (2019).

[8] In re Tam, 808 F.3d at 1334 (citing Reed v. Town of Gilbert, 135 S.Ct. 2218, 2230 (2015)).

[9] 447 U.S. 557, 566 (1980). See also Matal, 137 Sup. Ct. at 1764 & n. 17 (opinion of Alito, J.) (“[W]e leave open the question whether Central Hudson provides the appropriate test for deciding free speech challenges to provisions of the Lanham Act” because “the disparagement clause cannot withstand even Central Hudson scrutiny”); Brunetti, 139 Sup.Ct. at 2298 (The Court in Tam held that viewpoint discrimination is unconstitutional but “could not agree on the overall framework for deciding the case”); In re Tam, 808 F.3d at 1364-68 (Dyk, J., concurring in part and dissenting in part) (purely commercial speech can be regulated subject to the Central Hudson test).

[10] In re Hoefflin, 2010 WL 5191373, *1.

[11] New York Times Co. v. Sullivan, 376 U.S. 254, 270 (1964).

[12] Jennifer Rothman, The Right of Publicity 145 (Harvard U. Press 2018).

[13] C.B.C. Distribution & Mktg., Inc. v. Major League Baseball Advanced Media, L.P., 505 F.3d 818, 823 (8th Cir. 2007).

[14] Id. at 824.

[15] Doe v. TCI Cablevision, 110 S.W.3d 363, 374 (Mo. 2003) (quoting Mark S. Lee, Agents of Chaos: Judicial Confusion in Defining the Right of Publicity-Free Speech Interface, 23 Loy. L.A. Ent. L. Rev. 471, 500 (2003)).

[16] Id. at 374.

[17] Comedy III Prods., Inc. v. Gary Saderup, Inc., 25 Cal. 4th 387, 404 (2001) (internal citations and quotation marks omitted).

[18] Id. at 409-10.

[19] See, e.g., Davis v. Electronic Arts., 775 F.3d 1172 (9th Cir. 2015).

[20] Id.

[21] Restatement (Third) of Unfair Competition § 47. Rothman refers to this as the “relatedness test.” Rothman, Right of Publicity 146.

[22] Rogers v. Grimaldi, 875 F.2d 994, 1004–05 (2d Cir. 1989).

[23] See, e.g., David Franklyn & Adam Kuhn, Owning Oneself in a World of Others: Towards a Paid-for First Amendment, 49 Wake Forest L. Rev. 977, 1011 (2014) (“The right [of publicity] is growing unchecked, and attempts to balance it against the First Amendment have resulted in a patchwork of misleading potential defenses.”); Rothman, The Right of Publicity at 145 (“The uncertainty of what a speaker can do has itself chilled speech because content creators do not want to risk litigation or liability.”); Stacey L. Dogan & Mark A. Lemley, What the Right of Publicity Can Learn from Trademark Law, 58 Stan. L. Rev. 1161, 1162 (2006) (“[T]he courts have developed no meaningful counterweight to this ever-expanding right [of publicity]. Instead, they have created a few ad hoc exceptions in cases where the sweeping logic of the right of publicity seems to lead to results they consider unfair.”); Eugene Volokh, Freedom of Speech and the Right of Publicity, 40 Hous. L. Rev. 903, 930 (2003) (“[T]here is good reason to think… that the right of publicity is unconstitutional as to all noncommercial speech, and perhaps even as to commercial advertising as well.”)

[24] See Brunetti, 139 Sup.Ct. at 2304 (Breyer, J., concurring in part and dissenting in part) (“Our precedents warn us against interpreting statutes in ways that would likely render them unconstitutional”).

[25] See In re Brunetti, 877 F.3d at 1355 (“It is thus permissible to construe a statute in a manner that preserves its constitutionality only where the construction is reasonable.”); Brunetti, 139 Sup. Ct. at 2302 & note * (declining to narrowly construe the bar on registering scandalous marks to avoid unconstitutionality).

[26] See, e.g., Franklin & Kuhn; Dogan & Lemley, supra note 23.

[27] See In re Tam, 808 F.3d at 1358 (O’Malley, J., concurring) (opining that the disparagement provision of Section 1052(a) should be invalidated because it is impermissibly vague in violation of the Fifth Amendment).

[28] In re Tam, 808 F.3d at 1378 (Reyna, J., dissenting).

[29] Brunetti, 139 Sup.Ct. at 2306 (Breyer, J., concurring in part and dissenting in part).

What Evidence can the PTAB Use to Decide an IPR?

Patent

by Dennis Crouch

Inter partes review (IPR) is an incredibly powerful process for cancelling patent rights. We have a set of expert judges who are not afraid of digging into the details of a complex obviousness analysis.  Still, IPR petitions are strictly limited to petitions based upon obviousness and anticipation theories and “only on the basis of prior art consisting of patents or printed publications.”  35 U.S.C. 311(b).

Successful IPR petitions always focus on prior art as the central basis for cancelling the patent claims.  And yet, the petitioner usually also presents additional evidence to contextualize the prior art — most typically this comes in the form of expert testimony.

In its new petition for certiorari, Baxter Corp. argues that the statute does not permit supplemental evidence such as expert testimony.  Question presented:

Whether the Federal Circuit’s practice of allowing IPR petitioners to rely on evidence other than patents and printed publications, such as expert testimony, to fill in gaps in the prior art violates the plain text of § 311(b).

Baxter Corp. v. Becton, Dickinson and Co. (Supreme Court 2021) (petition).

In this case, the PTAB sided with the patentee and upheld the validity of Baxter’s U.S. Patent No. 8,554,579.  The Federal Circuit reversed that judgment on appeal. Although the prior art did not show all of the claimed elements, BD’s expert witness testified that the missing material would have been obvious. The Federal Circuit found the testimony credible and unrebutted and therefore rendered the claim obvious.

The case here comes down to one of statutory interpretation.  On the one hand, Baxter argues that 311(b) bars IPR petitioners from asserting of any evidence beyond the prior patents and publications in their original challenge grounds.  A broader approach would interpret the statute as purely focusing  on available prior art, but then permitting other forms of evidence directed toward other elements of the obviousness or anticipation analysis (such as level of skill in the art; likelihood of success; etc.).

(b) Scope. A petitioner in an inter partes review may request to cancel as unpatentable 1 or more claims of a patent only on a ground that could be raised under section 102 or 103 and only on the basis of prior art consisting of patents or printed publications.

35 U.S.C. 311(b).

Baxter also raises a second question in its petition focusing on the Federal Circuit’s approach here of imposing its own view of the facts:

Whether the Federal Circuit’s practice of resolving contested issues of patentability on appeal from Board decisions—rather than remanding those issues for the agency to decide in the first instance—violates the “ordinary remand rule.”

Petition, Question 2.   Here, the “ordinary remand rule” is an approach to appellate review of agency decisions. The approach is that a rejected agency decision “should
typically return the matter to the agency to address any outstanding questions in the first instance.” Petition;  See, e.g., INS v. Orlando Ventura, 537 U.S. 12, 16-18 (per curiam); Christopher J. Walker, The Ordinary Remand Rule and the Judicial Toolbox for Agency Dialogue, 82 Geo. Wash. L. Rev. 1553 (2014).

Rounding Errors in Patent Law

Patent

by Dennis Crouch

Astrazeneca AB v. Mylan Pharmaceuticals Inc. (Fed. Cir. 2021)

This case helps show that patent law has arrived at Nerdsville.  Actually, I’ve been here for a while and so welcome to all you newcomers.  In my view, the case also suggests that our claim construction doctrine has gone too far attempting to discern meaning where none exists.  Rather, I would suggest that the issues here are really about infringement rather than claim construction.

The claims require “0.001%” of a formulation be the inactive ingredient PVP K25.  The allegedly infringing formulation is slightly different — lets say 0.0008% — but it is within standard rounding error if 0.001% is seen as having one significant digit (0.0005 to 0.0014).  Mylan argued that 0.001% should be given a narrower range — “the precise number, with only minor variation.”  Mylan’s outcome would result in a range of something like 0.00095 to 0.00104.

The district court sided with the patentee — holding that standard scientific notion indicates that a physical measure such as this includes the rounding error according to the number of significant digits shown. If they had wanted a more precise number, then scientific notation permits the addition of more significant digits — such as 0.0010%.  On appeal though the majority rejected that approach based upon statements from the specification comparing 0.001% against 0.0005% (a value that should be within the rounding error).

Thus, taken as a whole, the intrinsic record supports a narrower construction of 0.001% to reflect that term’s application to the PVP concentration in particular, and the testing evidence in the written description and prosecution history showing that very minor differences in the concentration of PVP—down to the ten-thousandth of a percentage (fourth decimal place)—impact stability.

Slip Op.  The court noted that the patentee could have used the term “about” to extend the range.  Judge Stoll wrote the majority opinion that was joined by Judge Hughes.

Judge Taranto in dissent first noted the uncontested conclusion that the ordinary meaning follows the broader rounding range:

The significant-figure convention for real-world-measurement situations supplies an answer by giving a well-defined interval as the ordinary meaning, in the art, of a statement of a single number like the statement at issue here. Under this ordinary-meaning approach, the significant-figure interval meant by “0.001%” is 0.0005% to 0.0014%, based on rules of rounding and the single significant figure at the third decimal place.

Dissent.

Judge Taranto then argues that the proposed “minor variations” limit creates confusion because it lacks precision.  Of course, we’re talking about rounding and measurement errors here and so they already lack precision.

This video was suggested by a friend as relevant:

Federal Circuit Draws a Hard Line Against “Obvious to Try” Analysis

Patent,

by Dennis Crouch

Teva Pharmaceuticals, LLC  v. Corcept Therapeutics, Inc., Dockt No. 21-1360 (Fed. Cir. 2021)

This is an interesting pro-pharma obviousness decision coming out of the PTAB regarding obviousness of particular drug dosages.  Here, the particular drug was known to work well, but there were concerns about drug safety.  And, there were a couple of particular tests that clearly would have been obvious to try.  In fact, the patentee was legally required by the FDA to conduct the tests in order to ensure drug safety.  Still, the outcome of the tests were not predictable. Nobody knew whether the particular dosage being was going to turn out to be “safe.” (Here “safe” is interpreted as having “an acceptable risk-benefit profile.”)  The patentee ran the tests, found the dosage to be safe, and then patented a method of administering that safe-dosage to patients.  Teva challenged the patent, but the PTAB and the Federal Circuit both sided with the patentee. They held that the unpredictable outcome of the test meant that the outcome was not obvious since there was no “reasonable expectation of success.”

I expect that the Supreme Court would reject the hard line drawn in this case in the same way that it rejected the TSM requirement in KSR v. Teleflex.  I.e., obviousness is a flexible, open analysis asking “is there an invention here?”  Former Kennedy clerk J.C. Rozendaal handled the appeal for Teva, and so I won’t be surprised to see a petition for writ of certiorari in 2022.

The rest of the story: Corcept’s patent covers a method of treatment of some Cushing’s syndrome  symptoms with the drugs mifepristone and ketoconazole (a “strong CYP3A4 inhibitor”).  U.S. Patent No. 10,195,214.  The basic problem is that these two drugs can interact in problematic ways, and the patent calls for a reduced dose of mifepristone when being taken alongside ketoconazole.  When taken alone, mifepristone is prescribed in dosages of up to 1,200 mg per day; but when taken with ketoconazole, the patent calls for reduction of down to 600 mg per day.

The prior art all comes from earlier interaction between Corcept and the FDA.  Initially, Corcept filed a New Drug Application (NDA) seeking to market mifepristone in dosages of 300, 600, 900, and 1,200 mg per day.  The FDA gave its approval, but suspected interaction with ketoconazole.  That suspicion led to the two key prior art references:

  1. The Korlym Label: The FDA-approved label for Corcept’s original drug product Korlym allowed for dosage of mifepristone at 300, 600, 900, or 1,200 mg increments and also offered a warning against co-administration with a strong CYP3A.  In particular it limited the “mifepristone dose to 300 mg per day when used with strong CYP3A inhibitors.”  Thus, an easy reading of the label seems to be a strong suggestion that dosages of 600, 900, or 1,200 might be problematic.  This label also appears to totally anticipate a dose of 300 mg when taken along with a strong CYP3A inhibitor.
  2. The FDA Suggestion (“Lee”): The FDA also suggested the possibility of interaction between CYP3A and mifepristone and required Corcepts to study that interaction.

When I think about these two references, I see a strong suggestion of an interaction between the drugs, and also a strong motivation to look into that interaction. In fact, the first two research questions implicitly demanded by the prior art is (1) whether a 300 mg dose interacts with CYP3A and (2) whether a 600 mg dose interacts with CYP3A.  Yet, while the two references expressly call for research, the references do not suggest the outcome of the 600 mg test.  If anything, the original label suggested that 600 mg dose would be a problematic — since the FDA limited dosage to only 300 mg if also taking the other drug.

The PTAB followed these lines of analysis and eventually concluded that the references failed to prove obviousness.  In particular, the Board hung its hat on “reasonable expectation of success” — finding that the references did not suggest that 600 mg would be a safe dosage.

On appeal, the Federal Circuit has affirmed — holding that invalidating the claim would require proof of “a reasonable expectation of success in achieving the specific invention claimed, a 600 mg dosage.”

Because there was no expectation of success for any dosage over 300 mg per day, there was no expectation of success for the specific 600 mg per day dosage.

Slip Op.  Affirmed.

Note – Mifepristone is new name for the drug RU-486.

Ski at Vail: January 5-8, 2022 (and talk IP Law)

Patent

I’m looking forward to being part of the revitalized Colorado IP&SKI this winter in Vail.  The program is chaired by Scott Alter (Michael Best) and David Bernstein (Debevoise).  I’ll be speaking there along with a bunch of greats — including Judges Chen (CAFC) and Andrews (D.Del); Erika Arner (Finnegan); Dale Cendali (K&E); Deanne Maynard (MoFo); and William Jay (Goodwin); David Gooder (Comm’r for TM); and more.

See you there. EVENT LINK.

Venue over Foreign Defendant; and Seeking Rehearing before Mandamus

Patent

by Dennis Crouch

In re: accessiBe Ltd., Docket No. 22-113 (Fed. Cir. 2021) (non-precedential)

This mandamus petition has been denied, although the Federal Circuit has suggested that Judge Albright reconsider his denial of venue transfer. [2021.10.29 56 Public Version – Memorandum Opinion]

AudioEye sued accessiBe for patent infringement (US10423709, et al.) as well as claims under the Lanham Act (false advertisement & product disparagement) and under New York State Law (product disparagement, tortious interference, etc).  But, instead of suing in New York, AudioEye sued in W.D. Tex.  The focus here is on screen-reader used to help individuals with disabilities better access the internet.  The software particularly helps to fix non-compliant websites to make them more accessible.

Suing a Non-Resident for Patent Infringement: In TC Heartland, the Supreme Court severely limited the scope of “proper venue” in patent cases.  Generally, the patentee can only sue a defendant in either (1) its state of incorporation or (2) some venue where it has a regular-and-established place of business.  These limitations stem back more than 100 years, and the “limitation” offered in TC Heartland might be more properly seen as a rejection of venue-expansion by the Federal Circuit.  One gap in the Supreme Court’s analysis in TC Heartland is how to treat foreign companies.  The answer though is pretty clear under Brunette Machine Works, Ltd. v. Kockum Industries, Inc., 406 U.S. 706 (1972).  In Brunette, the Supreme Court held that the more-expansive rules of the general law (Section 1391) apply when the defendant is not a US entity.  In particular, the statute states plainly that venue is proper in any judicial district:

(3) a defendant not resident in the United States may be sued in any judicial district …

28 USC 1391(c)(3).  Obviously, the court must also satisfy the constitutional requirement of personal jurisdiction.  And, the defendant may also pursue a change-of-venue based upon inconvenience under 28 USC 1404(a).

Motion to Transfer: accessiBe moved to transfer the case to W.D.N.Y. as a “clearly more convenient forum” under section 1404(a).   But, the statute only permits transfer to a venue where the case “might have been brought.”  In his decision, Judge Albright concluded that the movant had not shown personal jurisdiction was proper in NY state court — and therefore denied the transfer motion.  The mandamus motion indicates that neither party had argued that particular issue and instead that Judge Albright had “go[ne] out of [his] way to contrive a basis for denying accessiBe’s request for a transfer.” [Petition for Mandamus]

The Federal Circuit has now denied the mandamus petition, but has suggested that the petitioner first request reconsideration from the district court:

To obtain mandamus relief, this court must be satisfied that a petitioner has no “adequate alternative” means to obtain the desired relief. Mallard (1989). Here, we cannot say that it would be futile for accessiBe to ask the district court to first reconsider its decision in light of its arguments. We therefore deny the petition without prejudice to refiling after accessiBe first asks the district court for reconsideration. Any new petition for a writ of mandamus from the district court’s ruling on reconsideration will be considered on its own merits.

Slip Op.

Personal Jurisdiction: At the district court, the defendant had also argued for dismissal of the non-patent claims for lack of personal jurisdiction.  A court needs personal jurisdiction over the parties before moving forward.  Due process fails absent personal jurisdiction — and that’s a Constitutional violation.   The Supreme Court has offered three paths for finding personal jurisdiction in a court housed in a particular state: (1) waiver (the plaintiff is generally thought to waive personal jurisdiction by filing the lawsuit; defendants also waive by not immediately complaining); (2) general jurisdiction (defendant is truly resident in the jurisdiction); or (3) specific jurisdiction (the actions that led to the cause-of-action are directed to the state).  Here, the theory is specific jurisdiction.

Specific jurisdiction over the patent claims is easier to show. The defendant has Texas-based customers and is alleged to infringe the patent by providing services to those folks.  In other words, intentional infringement of the patent in TX ==> personal jurisdiction over the patent claims in TX.

The difficulty though with specific jurisdiction is that we also look at specific jurisdiction on a claim-by-claim basis. The defendant argues that the NY State claims are based upon actions that are somewhat separate from just selling software (alleged tortious interference activity beyond just selling software).   Still, Judge Albright found that “accessiBe’s website is sufficient to establish specific personal jurisdiction over accessiBe in Texas” with regard to most of the Lanham Act claims. The court then decided to exercise “pendent personal jurisdiction” over the New York state law claims since they “share a common nucleus of operative fact.”  The defendant did not petition for mandamus on the personal jurisdiction questions and so that issue appears dead until a post-judgment appeal.

 

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:

Easy Patent law Quiz for 2021:

Patent

You should be able to easily answer these questions: 

Prof. Crunch stays fit with his rebounder (a mini-trampoline).  These already exist, but Crunch has designed a new model that includes a handle (for stability) and also a touchscreen control that can be used to stream audio/video instructions.  (These are shown in the figure below). He plans to sell a higher end model that includes displaying the bouncing-tempo on the screen and also energy-exerted (using movement-sensors in the rubber-bands or springs).

Crunch recently filed a utility patent application (February 2021) with the USPTO seeking to patent the following two claims:

1. An exercise apparatus comprising: 
  a mini-trampoline; 
  a support handle secured to the mini-trampoline that includes a grip-bar; and
  a touch-screen electronic device attached to the support handle and configured with software for displaying real-time exercise instructions. 

2. The apparatus of claim 1, further comprising motion sensors attached to the mini-trampoline and configured to provide data to the touch-screen electronic device and wherein the touch-screen electronic device is configured to use the data provided to calculate and display energy-exerted by a user in real-time.

Crunch admits that all of the elements of his invention were individually available in the prior art.  In particular, mini-trampolines with handles were already available, as were touch screens for displaying real-time instructions. Likewise, motion sensors are available, as well as algorithms for calculating energy use while trampolining.  However, he has not seen any prior art that combines everything together in this particular way.

Question 1. (100 words) Are Crunch’s claims directed toward eligible subject matter?

Question 2. (80 words) Provide a concise argument why the USPTO should reject claim 1 as indefinite.

Question 3. (300 words) Based upon what you know so far, do Sections 102 or 103 create any hurdle to patentability?

Question 4. (100 words) Five years later … Crunch has obtained his patent exactly as claimed above and business is booming.  Crunch recently found that GummyBearCo is selling a product that he thinks is infringing his claim 1. The only differences are that (1) it is a large 15-foot trampoline and (2) there is no “handle” per se. Rather, the screen is simply mounted to a pole at the edge of the trampoline. Also, although the GummyBearCo product is sold in the USA, it is actually manufactured in China. Can he prove infringement?

COVID Patents at the Federal Circuit (Moderna Loses)

Patent

by Dennis Crouch

Moderna Therapeutics v. Arbutus BioPharma (Fed. Cir. 2021) (20-1184 Decision) (20-2329 Decision)

Arbutus owns several patents related to a lipid-based delivery system for nucleic-acid-based treatments.  U.S. Patent 8,058,069 and 9,364,435 are the two at issue here. The claims are directed to the creation of a “acid-lipid particle” that includes some RNA along with lipids to stabilize the sequence, including particular percentages of cationic lipids, non-cationic lipids, and conjugated lipids.

COVID: If you have been following the news, you know that the COVID-19 vaccines distributed by Moderna and Pfizer deliver mRNA to the cells using lipid nanoparticles.  Although Arbutus has apparently not threatened Moderna with an infringement action, it has apparently requested a broader license agreement and refused to issue a covenant-not-to-sue.  Moderna recognizes “a substantial risk” that Arbutus will assert the patents in an infringement lawsuit “targeting Moderna’s COVID-19 vaccine.”

Pre-COVID: Moderna had been working on mRNA delivery systems and had previously licensed the patents for research work using a milestone payment scheme.  Moderna challenged the patents via IPR in 2018 and 2019 so that it could use the inventions without royalty payments or other reporting.  IPR2018-00739;  IPR2019-00554. This was all before COVID, but the risk and value have ramped-up exponentially.  The PTAB granted the IPR petitions but substantially sided with the patent holder:

  • ‘069 patent — all claims confirmed (not proven invalid); and
  • ‘435 patent — claims  7–8, 10–11, 13, and 16–20 are confirmed; Claims 1–6, 9, 12, and 14–15 invalid as anticipated.

The parties appealed their respective losses, and the Federal Circuit has now affirmed on all grounds — although a portion of its decision is a procedural shortcut.  Because the patents were left largely intact, we have a good likelihood of further litigation between these parties over the patents (or else a new license in the background). 

The basic idea here is that this area of innovation is extremely tricky and unpredictable.  Thus, although the “general conditions for a nucleic acid-lipid particle were disclosed in the prior art,” the particular claimed lipid profile would not “have been achievable through routine optimization.”

Standing to Appeal: It is pretty clear that at this point the post-COVID relationship between the parties is such that Moderna has standing in court to challenge these patents.  However, as I mentioned, the IPRs were filed pre-COVID and the 2018 IPR was appealed in November 2019 — well before Moderna had an inkling that it would be making a COVID-19 vaccine.  The problem for Moderna here is that the appellate court can only hear cases involving an “actual case or controversy” between the parties.  And, that actual case-or-controversy must persist throughout the entire appeal (from beginning to end).  What Moderna needs to show is that the patent served as a concrete and immediate threat as of that November 2019 date.   I mentioned that there was a license agreement, but the court found that any payments due under that agreement too speculative to generate standing since – at the time – Moderna was not actually doing the planned research.  Further, the patentee (at the time named Protiva) “emphasized that it had never initiated a patent infringement action or directly accused Moderna of infringing its patents.”

Things had changed dramatically by the time Moderna filed its opening brief in May 2020.  But, as I mentioned, courts require continuous standing throughout a lawsuit, and it just wasn’t there in November of 2019.  The result then is that Moderna was not permitted to appeal its loss in the ‘435 case.

 

Question Presented: Is Parker v. Flook Still Good Law?

Patent

Yu v. Apple (Supreme Court 2021)

A new petition for certiorari asks the court whether Parker v. Flook, 437 U.S. 584 (1978) is still good law.

Quick answer from Crouch: Yes, it is still good law.

Flook is a divide-and-conquer case that looks a lot like the Alice test itself. The claims were directed setting of “alarm limits” for a catalytic conversion process and the court identified the only novel feature to be a mathematical formula.  The mathematical formula was an abstract idea, and thus offered no patentable weight.  And, the remaining features were admittedly known in the art.

Respondent’s process is unpatentable under § 101 not because it contains a mathematical algorithm as one component, but because, once that algorithm is assumed to be within the prior art, the application, considered as a whole, contains no patentable invention.  Thus, the claim as a whole was ineligible.  Although the court recognized that it had disected the claim into component parts, it also concluded that this approach still took the claim “as a whole:”

Our approach [is] not at all inconsistent with the view that a patent claim must be considered as a whole. Respondent’s process is unpatentable under § 101 not because it contains a mathematical algorithm as one component, but because, once that algorithm is assumed to be within the prior art, the application, considered as a whole, contains no patentable invention. Even though a phenomenon of nature or mathematical formula may be well known, an inventive application of the principle may be patented. Conversely, the discovery of such a phenomenon cannot support a patent unless there is some other inventive concept in its application.

Id.  To be clear, the Federal Circuit treated Flook as effectively repudiated by Diamond v. Diehr, 450 U.S. 175 (1981), but that was apparently never the view of the Supreme Court. I should note here the actual question presented is as follows:

Whether, when applying the test for patent eligibility set forth in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012), a patent claim should be considered “as a whole” in accordance with Diamond v. Diehr, 450 U.S. 175 (1981), or instead, whether all conventional elements of the claim must be disregarded prior to determining its “point of novelty” as set forth in this Court’s older precedent in Parker v. Flook, 437 U.S. 584 (1978).

Read the petition here: 20211129141853759_USSCPetitionforWritofCertiorari.

 

Biden Patent Nominees

Patent

On December 1, 2021, the Senate Judiciary Committee held a hearing on two of President Obama’s Biden’s patent related nominees:

  • Judge Leonard P. Stark — Nominated to be a Circuit Judge on the the Court of Appeals for the Federal Circuit.
  • Katherine Vidal — Nominated to be Director of the USPTO and Undersecretary of Commerce for Intellectual Property.

Both nominees have substantial experience handling patent cases. Stark as a district court judge in the patent-heavy district of Delaware (2000+ patent cases) and Vidal as a patent attorney and patent litigator in Silicon Valley.  And, importantly, I expect both nominations  will be swiftly confirmed by the Senate, although Judge Stark will not be seated until after Judge O’Malley retires in March 2022.  Vidal’s testimony offered some clues, suggesting that she may consider rolling back some of the pro-patentee procedural changes to IPRs implemented by Dir. Iancu. But, as is usual with nomination hearings today no concrete details were provided.

Watch it here: https://www.judiciary.senate.gov/meetings/11/24/2021/nominations

 

 

Trees for the Forest: Claiming Endpoints of a Range and Written Description

Patent

by Dennis Crouch

In his 1967 Ruschig decision, Judge Rich applied a colorful woodsman metaphor to the written description requirement:

It is an old custom in the woods to mark trails by making blaze marks on the trees. It is no help in finding a trail or in finding one’s way through the woods where the trails have disappeared—or have not yet been made, which is more like the case here—to be confronted simply by a large number of unmarked trees. Appellants are pointing to trees. We are looking for blaze marks which single out particular trees. We see none.

In re Ruschig, 379 F.2d 990, 994–995 (C.C.P.A. 1967).

In Biogen Int’l GMBH v. Mylan Pharma Inc. (Fed. Cir. November 30, 2021), the Federal Circuit has extended that metaphor and found Biogen’s patents invalid for lack of written description.  In the case, Judge Keeley (N.D.W.Va.) held a bench trial and concluded that the asserted claims Biogen’s MS treatment-method patent invalid for lack of written description.  On appeal, a divided Federal Circuit then affirmed, with Judge Reyna penning the majority opinion joined by Judge Hughes, and Judge O’Malley writing in dissent.

Biogen’s U.S. Patent 8,399,514 covers a method of treating multiple sclerosis using the drug dimethyl fumarate (DMF). The claimed method has one step: administering about 480 mg of DMF per day along with an excipient.  Claim 1 is reprinted below:

1. A method of treating a subject in need of treatment for multiple sclerosis comprising orally administering to the subject in need thereof a pharmaceutical composition consisting essentially of (a) a therapeutically effective amount of dimethyl fumarate, monomethyl fumarate, or a combination thereof, and (b) one or more pharmaceutically acceptable excipients, wherein the therapeutically effective amount of dimethyl fumarate, monomethyl fumarate, or a combination thereof is about 480 mg per day.

‘514 patent.

The question in the case is whether the dosage requirement (~480 mg/day) was sufficiently disclosed in the original specification so that it can be specifically claimed.  For this type of analysis, the courts look to the Written Description requirement as one way to ensure that a patent’s exclusive rights are commensurate with what was actually invented.  The doctrine requires that the patent application show “possession of the invention” as judged from the perspective of a person of skill in the art considering the entire original specification, including “words, structures, figures, diagrams, formulas, etc.”  Lockwood v. Am. Airlines, Inc., 107 F.3d 1565, 1572 (Fed. Cir. 1997).  Originally filed claims are seen as part of the specification, and so most often it is sufficient to show that claim limitations were found in the original application.  But see, Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336 (Fed. Cir. 2010) (en banc) (original claims can still fail). Despite Ariad, we most often see the power of written description in situations where the claims have been amended to add some limitation that is not clearly expressed in the original specification.

Here, for prior art purposes, the patentee needs to claim priority back to its original provisional application filed back in 2007.  That original application is focused on use of DMF for a variety of neurological conditions, including MS and did not include the ~480 mg/day limitation within any of the included claims.

The ~480 mg/day dosage is listed once in the original specification, describing an effective dose of DMF without particularly specifying that the dosage is for MS.

For example, an effective dose of DMF … can be from about 0.1 g to 1 g per pay, 200 mg to about 800 mg per day (e.g., from about 240 mg to about 720 mg per day; or from about 480 mg to about 720 mg per day; or about 720 mg per day). For example, the 720 mg per day may be administered in separate administrations of 2, 3, 4, or 6 equal doses.

On appeal, the majority classified the disclosure of 480 mg/day as a “sole reference . . appear[ing] at the end of one range among a series of ranges.”  The court contrasted the 480 mg/day disclosure with the specification’s disclosure of 720 mg/day that was specifically identified and elsewhere in the patent shown to be effective.  The inventor also provided testimony that those ranges in the specification could not be extrapolated to a clinical dose.  Based upon all of this, the court affirmed that “a skilled artisan would not have recognized, based on the single passing reference to a DMF480 dose in the disclosure, that DMF480 would have been efficacious in the treatment of MS, particularly because the specification’s only reference to DMF480 was part of a wide DMF dosage range and not listed as an independent therapeutically efficacious dose.”

Biogen later established that the 480 mg/day was effective, but by then prior art was already available and so a new application would have been ineffective.

In a recent decision, the Federal Circuit ruled that written description failed for a claim covering a range of values since the specification only disclosed several points within the range. Indivior UK v. Dr. Reddy’s Labs (Fed. Cir. 2021).  This case is a flip-side — the specification discloses a range, and the court rules that, without more, written description also fails for a claim directed to an endpoint of the disclosed range.

Writing in dissent, Judge O’Malley focused on a separate district court error that, she concludes, tainted its written description analysis.  In particular, the district court applied the doctrine of judicial estoppel to bar the patentee from distinguishing from clinical efficacy (required for FDA approval) and therapeutic effect (as claimed in the patent).   O’Malley concludes that the district court’s analysis erroneously focused on requiring a showing that 480 mg/day was clinically effective and that improperly resulted in invalidity.

Genus-Species in Trademark Law Usage

Patent

Brittex Financial v. Dollar Financial (Fed. Cir. 2021)

This is a trademark case. Dollar Financial holds registered trademarks for MONEY MART – the name it uses for its payday and title loan venders as well as pawn shops and pawn brokerages.  The company had been using the name for several years in the payday loan business, and in 2012 expanded into pawn shops and then filed for registration for that usage in 2013.  The USPTO then granted the registrations associated with the new uses.

Brittex had been using its own version of the mark on its south-Texas pawn shops since the early 1990s: MONEY MART PAWN.  In 2015, Brittex petitioned for cancellation of the mark based upon the likelihood of confusion between the two marks.  In particular, Section 2(d) of the Lanham Act bars registration of a mark that:

so resembles . . . 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).

There is no question that these marks are confusing vis-à-vis one another. They are virtually identical and associated with identical services.

The dispute in the case is about priority.  Dollar was the first user of the mark, albeit only in the payday loan and loan financing sphere. Dollar holds an incontestable mark in that area.  On the other hand, Brittex was the first to use the mark in the pawn business.

In its decision, the TTAB sided with Dollar — holding that pawn shop services are “covered or encompassed by loan financing.”  The Board reasoned that a major aspect of the pawn business is making collateralized loans.  That expansive reading of financial services meant that Dollar’s prior use and registration served as direct priority for the new pawn-shop registrations.

On appeal, the Federal Circuit rejected the TTAB’s conclusions — holding that the TTAB went too far in creating new law.  In particular, the court found that the registration of a mark generally covering a broad category (genus) of uses did not necessarily establish priority over a specific (species) use covered by the broad category.   The TTAB provided no “sound legal basis” for a conclusion “that a registrant has priority as to a specific service it was second to offer just because it was first to offer a different specific service that is a species of a genus that covers both specific services.”  Further, even if a genus does provide coverage, that does not necessarily mean that the genus holder has rights to register a specific species over a competitor’s prior use.

The court also rejected the Board’s factual finding of overlap.  While there certainly is some overlap, the court found no support for complete overlap — that all pawn shop business is a form of loan financing.

On remand, Dollar might still win the case based upon a separate argument not yet decided by the TTAB. In particular, there is a separate doctrine of “natural expansion” that can also permit a priority claim for an earlier similar use.

Written Description: Four Points Are Not A Range

Patent

This is an important written description case involving ranges, and highlights a tension within the court over when special disclosure is required within the specification.

Indivior UK v. Dr. Reddy’s Labs (Fed. Cir. 2021)

IPR challenges are limited only to obviousness and anticipation arguments, and so a patent cannot be directly challenged via IPR for lack of enablement or written description. However, Section 112(a) issues do arise in situations where the challenged patent purports to claim priority back to a prior filing.  The priority claim fails if the earlier filing fails to support the challenged claims, and this permits  assertion of intervening prior art.

Dr. Reddy challenged Invidior’s U.S. Patent 9,687,454 via IPR. The patent claims priority to a chain of prior applications:

  • The ‘454 patent is a continuation of application No. 14/715,462, filed on
    May 18, 2015, now abandoned;
  • The ‘462 Application is a continuation of application No. 14/478,786, filed on
    Sep. 5, 2014, now abandoned;
  • The ‘786 Application is a continuation of application No. 13/964,975, filed on Aug. 12, 2013, now abandoned;
  • The ‘975 Application is a continuation of application No. 13/923,749, filed on Jun. 21, 2013, now abandoned;
  • The ‘749 Application is a continuation of application No. 12/537,571, filed on Aug. 7, 2009, now Pat. No. 8,475,832.

The challenged patent covers a sublingual film containing some drug treatment.   The claims include several different limitations regarding the amount of polymeric matrix used for the film.

  • Claim 1: “about 40 wt % to about 60 wt % of a watersoluble polymeric matrix”;
  • Claims 7 & 12: “about 48.2 wt % to about 58.6 wt %”; and
  • Claim 8: “about 48.2 wt %”;

The problem though is that the original specification does not recite any of these amounts or ranges directly. The specification does include two tables that collectively include four examples that, when calculated-out, all fall within the range of 48.2-58.6%.  However, that calculation process is not express in the specification and the specification does not note particular reason why the particular endpoints form a “range.”  On appeal, the court agreed with the PTAB that “written  description support of a claimed range” requires “more clarity.”

Here, one must select several components, add up the individual values, determine the aggregate percentages, and then couple those aggregate percentages with other examples in the ’571 application to create an otherwise unstated range. That is not a written description of the claimed range.

Slip Op. The court also notes that the specification provided no additional support for particular ranges and instead indicated that “[t]he film may contain any desired level of . . .polymer” and that in one embodiment it is “at least 25%.”

[The patentee] failed to provide persuasive evidence demonstrating that a person of ordinary skill would have understood from reading the ’571 application that it disclosed an invention with a range of 48.2 wt % to 58.6 wt %. A written description sufficient to satisfy the requirement of the law requires a statement of an invention, not an invitation to go on a hunting expedition to patch together after the fact a synthetic definition of an invention. “[A] patent is not a hunting license. It is
not a reward for the search, but compensation for its successful conclusion.” Brenner v. Manson, 383 U.S. 519, 536 (1966).

Slip Op. Although the ranges were not supported, the court did find sufficient evidence to affirm the PTAB’s determination that the individual point of “about 48.2 wt %” was supported by the original specification: “given that claim 8 does not recite a range, but only a specific amount, which can be derived by selection and addition of the amounts of selected, but identified, components, we accept that there is substantial evidence to support the Board’s decision concerning claim 8.”  Without that priority, the claims were clearly invalidated by prior art published between 2009 and 2015.

The majority opinion was filed by Judge Lourie and joined by Judge Dyk.

Judge Linn wrote in dissent, arguing that the majority’s approach creates “an overly demanding standard for written description of ranges” and is contrary to cases such as In re Wertheim, 541 F.2d 257 (C.C.P.A. 1976) and Nalpropion Pharms., Inc. v. Actavis Labs. FL, Inc., 934 F.3d 1344 (Fed. Cir. 2019).  The majority had recognized the value of those precedents, but argued that written description is an intensely fact intensive question.

 

Recoveries in Patent Suits

Patent

A patent right is the only property which can be trespassed upon without the owner’s knowledge, in every part of the country, by an innumerable number of trespassers at the same time. The owner can neither watch it, nor protect it by physical force, nor by the aid of the police or of the criminal law. He thus necessarily requires more efficient civil remedies than those do the protection of whose property does not depend upon civil remedies alone.

James Storrow, Money Recoveries in Patent Suits, 13 American Law Review 1 (1879).

 

Guest Post: Design Protection and Functionality: Does the PTO or the Copyright Office Apply a More Rubbery Stamp?

Patent

Guest post by Peter S. Menell, Koret Professor of Law; Director, Berkeley Center for Law & Technology; Faculty Director, Berkeley Judicial Institute; University of California at Berkeley School of Law, and Ella Corren, University of California at Berkeley School of Law, J.S.D. Candidate

In Design Patent Law’s Identity Crisis, presented at the Berkeley Center for Law & Technology’s February 2021 “Design Patents” symposium, we traced the origins of design patent law’s ornamentality/non-functionality doctrine and showed how the Federal Circuit, the nation’s de facto design patent emperor over the past four decades, has turned the doctrine on its head: it has upended the 1902 Act’s intent and reversed three-quarters of a century of regional circuit jurisprudence. So much so that the post-1902 Act regional circuit design patent cases invalidating design patents on functionality grounds would come out oppositely under the Federal Circuit’s lax standards. Those standards led to the absurd result that Apple could disgorge Samsung’s profits on its smartphones because they employed rounded rectangular shapes. We showed that the Patent Act limited design protection to original, ornamental articles of manufacture, and excluded protection for functionality.

BCLT invited practitioners and academics to comment on our analysis. While none of the commentators questioned, no less refuted, our core finding that the Federal Circuit has flipped the ornamentality/non-functionality doctrine, several offered fig leaves to clothe the Federal Circuit’s lax standards for design patent eligibility and infringement. In responding to our article, practitioner Perry Saidman and Professor Mark McKenna suggested that the design patent regime can be justified in part based on the tighter functionality screen that the PTO applies to design patents than the low threshold that the Copyright Office applies to copyright registrations to useful articles.

We found the suggestion that the PTO is more rigorous than the Copyright Office in applying the functionality screen intriguing and decided to test it out: Does the PTO or the Copyright Office apply a more rubbery stamp?. This commentary presents some of our findings.

Before turning to some illustrations, we note that the Compendium of U.S. Copyright Practices, in contrast to the Manual of Patent Examining Procedure, implements limiting doctrines in relatively clear and concise terms. As regards originality, the Compendium states that copyright law does not protect “words and short phrases,” “familiar symbols and designs,” “mere variations of coloring,” spatial format and layout design, blank forms, and common geometric shapes, either in two-dimensional or three-dimensional form.” The Patent Office applies no such limitations, notwithstanding that the design patent statute specifically requires that articles of manufacture be original to obtain design patent protection.

Turning to our findings, we begin with Universal Robots’ “UR5” robot arm. In 2015, it sought copyright registration of this useful article as a sculptural work.

The Copyright Office refused registration on the ground that UR5 “is a ‘useful article’ which does not contain any separable authorship.” Universal Robots appealed the decision to the Copyright Office, arguing that the UR5 contains conceptually separable artistic elements that are not necessary to its performance of its utilitarian function, namely its “raised circular caps containing the stylized ‘UR’ design,” and the ‘“T’ shaped, modular interlocking wrist.” The Copyright Office affirmed its rejection, explaining that the UR5 “does not contain any separable, copyrightable features” because “the caps and wrist of the arm are both integrated parts of the ‘overall shape’ of the arm.” In September 2016, Universal Robots filed a second appeal for reconsideration, in which it contended that since the blue caps are “capable of being physically removed from the robotic arm without altering the useful aspects of the article,” and “are not necessary to the utilitarian functioning of the device,” they are “conceptually separable, artistic and protectable.” Universal Robots also asserted that the T-shaped piece was “designed to achieve a sleek, modem and aesthetically pleasing appearance,” is “not necessary to the utilitarian function of the article,” and could have been designed in many other ways, rendering this part protectable as well. Universal Robots claimed that these elements of the Work “embody more than the mere ‘modicum’ of creativity that is required for copyright registration,” highlighting that the designers are Danish and inspired by the Danish Modem movement.

In rejecting the second appeal, the Copyright Office concluded “that the elements Universal Robots identifies as expressive—namely the plastic caps and the T-shaped piece—could be visualized as works of authorship separate and independent from the Work’s utility.” And that “[e]ven if those features could be deemed separable, however, they simply are not sufficiently original to warrant copyright protection.”

Universal Robots then filed a design application for the UR5 in January 2020. See U.S. Design Patent No. D915,487 (Apr. 6, 2021). The Patent Office granted the design patent in April 2021.

Robotic arms with similar functional configuration have long been the subject of utility patents. See, e.g., U.S. Patent No. 4,273,506 (Jun. 16, 1981) (“Industrial Manipulator for Placing Articles in Close Proximity to Adjacent Articles”).

This pattern of copyright registration refusal/design patent grant is a common occurrence. In another poignant example, the Copyright Office declined registration for the Purple® pillow, concluding that the overall shape of the pillow—featuring an interior grid of hollow triangles—is unprotectable and not capable of conceptual separation from the useful article. The Copyright Office explained that the triangles have an “intrinsic utilitarian function” and thus are useful articles themselves,” noting that Purple’s marketing materials make “clear that these triangles are wholly utilitarian,” including that the Work’s “hundreds of little triangles . . . give the core of the pillow lateral strength so it retains its oh-so supportive, head-cradling comfort all night” and emphasizing the word ‘SCIENCE!’ in all capital letters; and “[e]ven if the grid of triangular prisms was not functional, however, it would not be a basis for copyrightability. The Copyright Office’s refusal to register quoted the Compendium of U.S. Copyright Practices: ‘The Copyright Act does not protect common geometric shapes’ including triangular prisms.”

Nonetheless, the design patent application for the Purple Pillow sailed through the Patent Office. See U.S. Design Patent 909,790 (Feb. 9. 2021) (“Pillow”).

The design patentee continues to emphasize the ergonomic advantages of its pillow design: “Unique to the Purple Harmony Pillow, the Deluxe Hex Grid is specially formulated and engineered for head and neck support. The soft hexagon-shaped air channels optimize the dynamic response and airflow for unbelievable comfort.”).

We explore these and other examples in The Design Patent Emperor Wears No Clothes: Responding to Advocates of Design Patent Protection for Functionality.

These minimalist designs raise serious functionality and originality concerns. They demonstrate the rubber stamp quality of the Patent Office and that the design patent system as currently administered results in significant overprotection of functional features and designs. And even though design patents have “only” 15 years of duration, that length of time can be an eternity in some design markets and substantially diminish competition. The utility patent supremacy/channeling principle is about preserving competition in exactly the same way as trademark’s functionality doctrine—the channeling of functionality protection exclusively to utility patents is meant to subject all other, not sufficiently innovative, functional features to unimpeded market competition.

Mandamus Monday

Patent

Four new mandamus orders from the Federal Circuit stemming from Judge Alan Albright’s court in Waco Texas.

  • In re Apple, 21-181 (Fed. Cir. Nov 15, 2021).  Abuse of discretion to deny transfer motion. No significant ties between the action and the W.D.Tex.  Apple does have thousands of employees in the district, but the key employees related to the infringement are not in the district.
  • In re Altassian Corp., 21-177 (Fed. Cir. Nov 15, 2021). Abuse of discretion to deny transfer motion even though defendant is from Australia and has a major Austin Office.  None of its employees who work in Austin, Texas possess unique knowledge about the accused products.
  • In re Google, 21-178 (Fed. Cir. Nov 15, 2021). Abuse of discretion to deny transfer motion even though defendant maintains a major office in Austin.  None of its Austin employees were involved with developing the accused functionalities.
  • In re Merkai Integrated Circuit (21-180).  Mandamus was moot, Judge Hughes wrote separately to chastise Judge Albright’s orders.  This case is interesting — can a defendant request transfer, but reserve the right to argue that the new court lacks personal jurisdiction?