September 2017

PatentlyO Bits and Bytes by Anthony McCain

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Moving Forward: Next Steps on Claim Construction

In NobelBiz v. Global Connect, the Federal Circuit has asked the winning appellant Global Connect to respond to NobelBiz’s Petition for Rehearing en Banc with response due October 13.

The case here focuses on whether the district court should have particularly construed the claim term “replacement telephone number” (as the Federal CIrcuit majority ruled) or instead was it permissible for the district court to let the infringement case to go to the jury on the simple and ordinary term (as the District Court did and supported by Judge Newman’s dissent).   NobelBiz presents three questions:

  1. May a district court ever assign a “plain and ordinary meaning” construction? Or is an express construction required whenever a litigant asserts an O2 Micro “dispute,” as dictated by NobelBiz and Eon?
  2. May the Federal Circuit narrow claim scope without finding lexicography or prosecution disclaimer, by parsing the intrinsic record and relying on “extra-record extrinsic evidence,” as occurred in NobelBiz?
  3. May a district court refer the question of infringement to a jury when claim terms are assigned their plain and ordinary meaning?

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En Banc: Construing Claims

Please Define What you Mean by Ordinary Meaning


Reversing the Patent on Reverse Online Dating

For Friday enjoyment, I post Pirri v. Cheek. So far we only have a complaint associated with the dating site Cheekd that bombed on Shark Tank but is now gaining steam. [h/t Prof. Brian Love]

The idea behind Cheekd is “Online Dating in Reverse” – basically when you meet someone in person, you give them a business card links to your online dating profile. There is even a patent – U.S. Patent No. 8,543,465 claiming the process.  [US8543465]. You can read Claim 1 for yourself, but my quick review lets me classify the patent as quite low quality; very difficult to infringe; and likely invalid under 101 (abstract idea).

Now, here comes Alfred Pirri Jr, a mild-mannered “single man living in the New York tri-state area.”  Pirri had some difficulty finding a date — notably, he “keenly noted through his personal experiences that, although there were plenty of single people living in New York City, there were very few efficient ways a person could use to meet single people in order to date them.”  In particular, Pirri lamented that “In a crowded bar, a person could be standing 10-feet from the person’s future spouse and never know it.” Around 2006, Pirri then had the idea – of reverse online dating as described above although he never filed for patent protection, he did consult with a patent attorney who “confirmed that no identical nor similar ideas were ever disclosed in registered patents, pending patent applications and non-patent publications.”

Although Pirri kept his idea quite secret, he did disclose the details of his idea to his personal counselor Joanne Richards (a licensed clinical social worker).  According to the allegations, Richards disclosed the idea to a social acquaintance — “That social acquaintance was no other than Defendant Lori Cheek, one of the so-called inventors of the Cheek’d dating website and app.”



The tale goes on, but now we reach the lawsuit claiming:

  • Unenforceability of U.S. Patent No. 8,543,465 (for lying about inventorship);
  • Unjust Enrichment;
  • Breach of Fiduciary Duty;
  • Misappropriation of Trade Secrets;
  • Unfair Competition;
  • Conversion; and
  • Fraud.

So far, we only have a complaint, but it will be interesting to watch to see how this moves forward.   Assuming the allegations are are true, how do you rule?

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UPDATE: Lori Cheek has contacted me to say that the entire story is a bizarre fabrication. 

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1. A method for personal meeting comprising the steps of:
an initiator developing a profile with a central organization;
the central organization providing the initiator by computer with a number of cards on which are printed at least an icebreaker, a website designation, and a code comprising elements corresponding to the icebreaker printed on the card;
the initiator giving the card to at least one recipient;
the recipient going to the website designated on the card;
the recipient entering the code printed on the card at the designated website;
the recipient being given access to the initiator’s profile with the central organization;
the recipient sending a message to the initiator; and
the initiator tracking activity comprising:

the central organization storing data by computer corresponding to when the recipient enters the code from the card bearing the specific icebreaker;
the central organization storing data by computer corresponding to when the recipient sends the message to the initiator after the recipient has received the card bearing the specific icebreaker;
the central organization compiling data by computer corresponding to a number of times the recipient enters the code from the card bearing the specific icebreaker and a number of times the recipient sends the message to the initiator after the recipient has received the card bearing the specific icebreaker; and
the central organization displaying the compiled data by computer to the initiator.

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More Oil States History: First US Patent Case was a Revocation Proceeding

Prof. Christopher Beauchamp has added further to the historical analysis relevant to the question of whether it the AIA-trials – trial-like administrative patent revocations – are Constitutionally proper.  That question juxtaposes contemporary expansive administrative law against the Constitutional notion that “judicial power [rather than administrative power] shall extend to all cases” and the requirement that the 1791 right to a Jury Trial be preserved.  Although a law professor, Beachamp is also a legal historian (Ph.D. in History from Cambridge University) and his his legal publications center on questions of legal history.

Beauchamp’s newest essay focuses on the first known patent case in U.S. history.  Beauchamp writes:

The first known patent case in the United States courts did not enforce a patent. Instead, it sought to repeal one.

After reviewing a set of previously uncited archived decisions, Beauchamp concludes that

These sources suggest that the early statutory provisions for repealing patents were more widely used and more broadly construed than has hitherto been realized. They also show that some U.S. courts in the early Republic repealed patents in a summary process without a jury, until the Supreme Court halted the practice.

One of Beauchamp’s most interesting conclusions here is that the early (i.e., pre-Bill-of-Rights) revocation proceedings should probably be seen as creating a break from prior English tradition.  Thus, for patent revocation, the focus should be on the jury right as contemplated by the repeal process found in Section 5 of the 1790 Patent Act, which allowed for any member of the public to seek cancellation. Unfortunately for clear resolution of the Oil States question, the original Patent Act is ambiguous as to whether the repeal should be tied to a jury trial.

There is much more to learn from this short (34 page) paper. [Download Here]



FY2017: Record Year for PTO Grant Numbers

The USPTO has completed its patent issuances for Fiscal Year 2017 which ends for the Federal Government on September 30, 2017.  The primary raw number  315,386 utility patents issued in FY 2017. This is the most patents issued by the USPTO in a single year and tops the record set in FY 2016 by 11k – a healthy but still modest 3.5% increase.  Although the PTO has slightly reduced its number of patent examiners, the allowance-rate for 2017 is at an all-time-high (71.4%)

USPTO Backlog of unexamined applications remains steady at about 540,000 – this is slightly more than the number of disposals (allowances + abandonments) completed by the PTO in a year.  PTO’s reported grant rate


What’s Your Body Type: Broadest Reasonable Construction vs. Broadest Possible Construction

BodyDrawingIn re Smith Int’l (Fed. Cir. 2017)

The validity of Smith’s patent turns on proper definition of the claim term “body” as used in U.S. Patent No. 6,732,817. With the basic question being: what is the “broadest reasonable interpretation” of the term “body” as used by the patentee.  In its decision here, the Federal Circuit has reversed the PTAB unpatentability conclusion (ex parte reexam) — holding that the PTO had seemingly forgotten that BRI requires a “reasonable” construction.

The patent is directed to an oil drilling tool that can collapse down to fit through a small borehole and then expand-out to fill a larger borehole.  Claim 28 shown below shows that the claim basically includes two elements, a body and an arm. The claim itself does not include any further express limitations on the Body.  Still, it is clear from the patent document that the claimed US06732817-20040511-D00004body is something totally different from the human figure shown above-right (from a different patent).  Rather, the specification describes “a generally cylindrical tool body 510 with a flowbore 508 extending therethrough” and “one or more moveable, non-pivotable tool arms 520.”

The PTO interpreted the term in-context but still in a broad manner – finding that the term “Body” can encompass additional components such as the mandrel and cam-sleeve and noting that the specification does not actually define the term.  The Board noted that the term is generic – similar to “member” or “element” that “by itself provides no structural specificity.”  Here, in particular, the claim was directed to the entire tool, but only claimed two parts – the body and arm.  It was perfectly reasonable, according to the Board, for the examiner to interpret Body as including other unclaimed elements of the tool. This broad definition made it easy to find the claims unpatentable based upon a single prior art reference.

On appeal, the Federal Circuit has reversed – holding that the Board’s construction was “unreasonably broad.”  Here, although reasonableness is – in most circumstances – usually a question of fact, because it is part of claim construction the Federal Circuit calls it a question of law with de novo appellate review.  Here, the court found that “body” should be more narrowly construed — even at its broadest reasonable scope.  In reaching its conclusion, the Federal Circuit found that the Board erroneously based its broad interpretation upon the fact that the specification did not “in and of itself proscribe the Examiner’s construction.”  On appeal, the Federal Circuit noted that the BRI is does not extend so far as to cover all definitions not prohibited by the specification:

The correct inquiry in giving a claim term its broadest reasonable interpretation in light of the specification is not whether the specification proscribes or precludes some broad reading of the claim term adopted by the examiner. And it is not simply an interpretation that is not inconsistent with the specification. It is an interpretation that corresponds with what and how the inventor describes his invention in the specification, i.e., an interpretation that is “consistent with the specification.”

Slip op., quoting In re Morris, 127 F.3d 1048 (Fed. Cir. 1997).  The court went on to reiterate that a term’s ‘broadest reasonable interpretation’ is narrower than the the logically ‘broadest possible interpretation’ of a claim.

Looking through the specification it does appear, indeed, that the patentee did not use the “body” term as a generic “member,” but used it consistently to refer to a cylindrical tool body that was separate and distinct from the other elements of the tool.  However, one important issue that the court did not discuss is that of claim differentiation.  Pointedly, many the claims focus on particular bodies: “tubular body”; “tool body”; and “a body including a plurality of angled channels.”  The court does not consider here whether those seemingly more narrow recitations of the element should be seen as broadening the definition of the bare “body.”

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Claim 28:

28. An expandable downhole tool for use in a drilling assembly positioned within a wellbore having an original diameter borehole and an enlarged diameter borehole, comprising:

a body; and

at least one non-pivotable, moveable arm having at least one borehole engaging pad adapted to accommodate cutting structures or wear structures or a combination thereof;

wherein said at least one arm is moveable between a first position defining a collapsed diameter, and a second position defining an expanded diameter approximately equal to said enlarged diameter borehole.



Joe Matal: Patents for Humanity Awards Now Open for Applications

The following comes from Joe Matal’s Director’s Forum Blog.  Matal is acting as Director of the PTO (“Performing the Functions and Duties”) pending Senate Confirmation of Andrei Iancu.

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Patents for Humanity, the USPTO’s top honor for patent owners and licensees who use game-changing technology to meet humanitarian needs, is now accepting applications for the 2017 – 2018 cycle. Anyone who owns or licenses a U.S. patent or patent application is eligible. Winners receive an acceleration certificate to expedite proceedings at the USPTO, as well as public recognition of their work.

Patents for Humanity recognizes inventions that address global development issues such as medicine, nutrition, sanitation, energy, and living standards. We invite innovators of all kinds to tell their stories of helping underserved communities through the power of technology. Individuals, corporations, nonprofits, small businesses, academic institutions, and government agencies are all welcome to apply.

This year marks the fourth cycle of the Patents for Humanity program. Previous awardees have improved lives worldwide. Winners from the last round include Case Western Reserve University, for a low-cost malaria detection device, and startup company GestVision, Inc., for a quick diagnostic test for preeclampsia, a potentially life-threatening pregnancy complication.

If your organization uses patented technology to help address basic human needs, we encourage you to participate. The USPTO will accept applications through December 8. Please submit your completed application online through the Patents for Humanity page of the USPTO website. You can send any questions to

New IP reading from law professors: 

StarAthleticaPeter Menell and Daniel Yablon, Star Athletica’s Fissure in the Intellectual Property Functionality Landscape.  The article advises courts to “disregard the unsubstantiated dicta in Star Athletica” that potentially promotes the “protection for functional features of useful articles outside the auspices of the utility patent system.”  For practitioners, the professors’ concerns should likely be considered as strategies for layering of intellectual property rights.

Stefano Comino, et al., The Diffusion of New Institutions: Evidence from Renaissance Venice’s Patent System. The article finds that even in ancient Venice, the patent system was used by outsiders while insiders (here, medieval religious confraternities) preferred to regulate entry and competition through guild statutes.  I see this article as an extension of the interesting work by Sichelman and O’Connor. See, Patents as Promoters of Competition: The Guild Origins of Patent Law in the Venetian Republic.

BursteinSSarah Burstein, The ‘Article of Manufacture’ TodayBurstein argues, inter alia, for the historical meaning of the phrase “article of manufacture” in interpreting and applying 35 U.S.C. § 289. The article is relevant to Step 1 of the Supreme Court’s design patent analysis from Samsung v. Apple: identify the ‘article of manufacture’ to which the infringed design has been applied.

Graham Dutfield, Collective Invention and Patent Law Individualism, 1877-2012; or, the Curious Persistence of Inventor’s Moral Right. The book chapter is actually a few years old, but is interesting in how it considers the question of “Why do inventors continue to be named in patents when most are owned by firms rather than individuals?”

Eric Johnson, The Case for Eliminating Patent Law’s Inequitable Conduct Defense. Arguing that, “in the real world, the inequitable conduct defense can make a mess of things.”


Helsinn En Banc Status


Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc. (Fed. Cir. 2017)

An invention that is “on sale” prior to the associated patent’s critical filing date is not patentable. 35 U.S.C. 102.  Although the AIA used the same “on sale” wordage as pre-AIA 102(b), many believe that it should interpreted differently.  The particular question is whether private and non-public offers-to-sell still count as prior art post-AIA. In Helsinn, the Federal Circuit did not fully answer the question since some information regarding Helsinn’s pre-filing sale had been made public — still the invention was not publicly disclosed.  Thus, Helsinn made the limited holding that “after the AIA, if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of the sale.”

In its petition for en banc review, Helsinn asks the following question:

Does mere public disclosure of the “existence” of a sale trigger the on-sale bar under 35 U.S.C. § 102(a)(1) of the America Invents Act (“AIA § 102(a)(1)”), even though the invention was not made “available to the public” before the critical date?

In June, Helsinn filed for en banc review with support from the big players:

  • Helsinn-Petition
  • Teva-Response
  • AIPLA (prior “on sale” activity must make the invention available to the public)
  • BIO (negative consequences will flow from the panel decision)
  • Boston (court should take the case and decide the issue)
  • IPO (court should rule en banc, decision is contrary to MedCo)
  • PhRMA (the legislative history “reflects [Congress’s] unmistakable intent to limit the invalidating effect of the on-sale bar to public activities”)
  • Lamar Smith (arguing that the statute now limits “on sale” to sales activity that makes the invention available to the public)


I agree that the Federal Circuit should hear the case en banc, reconcile with MedCo, and substantially settle the law.

Single Reference Obviousness

Idemitsu Kosan Co., Ltd., v. SFC Co. Ltd. (Fed. Cir. 2017).

The decision here is important as one example of a single-reference obviousness decision upheld by the Federal Circuit on appeal.  Here, the prior-art is a published international patent application also owned by the patentee and with overlapping (but not identical) inventorship. 

Idemitsu’s U.S. Patent No. 8,334,648 covers an organic LED and claims priority back to a July 19, 2002 Japanese patent application.  The asserted prior art is an international application (PCT) publication from a two-weeks prior – July 4, 2002. International Publication WO 02/052904 (claiming priority to December 2000 and named Arakane).  At this point it is unclear why, but Idemitsu never challenged the status of prior-art status of Arakane.

In its obviousness analysis, the Board found that Arakane taught all of the elements of ‘648 patent’s challenged claims and that it would have been obvious to combine them in the way claimed. On appeal, the Federal Circuit has affirmed – holding that the Board had made reasonable conclusions both on the facts and the law.

The case includes a couple of procedural findings — importantly the Court permitted (at least in this situation) the PTAB to reach factual and legal conclusions not directly addressed in the petition.

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Note: The opinion here does not discuss why the single-reference decision was based upon OBVIOUSNESS rather than ANTICIPATION.

Patent Venue: Cyberspace does not Expand Place of Business

Important mandamus order narrowing patent venue. In re Cray (Fed. Cir. 2017) [Read the Case]

Following the Supreme Court’s decision in TC Heartland, the debate has moved to interpretation of the requirement that an infringement defendant have either residence or “a regular and established place of business” in the chosen venue.

Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business. 28 U.S.C. § 1400(b).

In Raytheon v. Cray, the defendant is a Washington corporation with facilities in Austin and Houston – both of which are outside of the Eastern District of Texas. Still, E.D. Texas Judge Gilstrap found the company to fit within the regular and established place of business venue requirement based upon evidence that. Two Cray sales executives worked from home within the district – developing new sales and accounts worth ~ $350 million over the past 7 years.  The execs received reimbursement for certain utilities and charges within the district and publicly advertised their “office” phone numbers within E.D. Texas.

In the process of deciding its case, Judge Gilstrap also set forth an open four-factor test finding a regular and established place of business: physical presence, defendant’s representations, benefits received, and targeted interactions with the district.

As a general matter, Judge Gilstrap’s interpretation appears fairly broad, and on writ of mandamus, the Federal Circuit has rejected Gisltrap’s analysis and directed that he transfer the case to a more appropriate venue.

As a patent-focused statute, the Federal Circuit applies its own law to interpret the scope of 1400(b).  Here, the Federal Circuit interprets the requirement of a “regular and established place of business” to require three key elements: (1) a physical place within the district (2) that is a regular and established place of business (3) of the defendant.  The key focus here – regular and established place of business – i.e., a place of business that is both regular and established. According to the appellate panel these elements are requirements of the statute and all of them “must be present” for venue to be proper under the provision.   Thus:

The district court’s four-factor test is not sufficiently tethered to this statutory language and thus it fails to inform each of the necessary requirements of the statute.

According to the appellate panel, a court’s venue inquiry walk step-by-step through each of the requirements of the statute to ensure that each is present. “We stress that the analysis must be closely tied to the language of the statute.”

In looking at the application in this particular case, the Federal Circuit found that the home office and local sales were not sufficient to fill the statutory requirements.

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The decision here further solidifies the impact of the TC Heartland case — spreading jurisdiction out and away from E.D. Texas.

Of note, in its analysis, the Federal Circuit paid special attention to historical application of the statute that was originally adopted in 1897.  At that time, one congressman indicated its purpose was to “give original jurisdiction to the court where a permanent agency transacting the business is located.” 29 Cong. Rec. 1900 (1897) (statement of Rep. Lacey).  The court favorably cited pre-Federal-Circuit cases from the various circuits. Phillips v. Baker, 121 F.2d 752, 756 (9th Cir. 1941) (“A ‘regular place of business’ is, obviously, a place where such business is carried on ‘regularly’ and not merely temporarily, or for some special work or particular transaction.”); Knapp-Monarch Co. v. Casco Prods. Corp., 342 F.2d 622, 625 (7th Cir. 1965); Remington Rand Bus. Serv. v. Acme Card Sys. Co., 71 F.2d 628, 629 (4th Cir. 1934);  Am. Cyanamid Co. v. Nopco Chem. Co., 388 F.2d 818, 820 (4th Cir. 1968); Grantham v. Challenge-Cook Bros., Inc., 420 F.2d 1182, 1185–86 (7th Cir. 1969); Univ. of Ill. Found. v. Channel Master Corp., 382 F.2d 514, 516 (7th Cir. 1967); Shelton v. Schwartz, 131 F.2d 805, 808 (7th Cir. 1942).  In addition, the court revisited its important Cordis decision on point: In re Cordis Corp., 769 F.2d 733 (Fed. Cir. 1985).

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The opinion here is by Judge Lourie and joined by Judges Stoll and Reyna, and the basic holding is that the statute means the same as it did in 1897 and the same as it did in the 1940s and the same as it did in the 1980s (the last time it was interpreted directly).  Even if taken en banc, I would not expect any significant departure from this result.

Joy, Are you Happy about This Lawsuit?

Daniels v. Disney (C.D. Cal. 2017)

Depending upon your mood, this case might make you happy, sad, angry, or afraid — perhaps even fill you with love.

Daniels is known for creating the Moodsters – five anthropomorphic color-coded, gendered characters each representing a single abstract emotion that live in an world inside a child’s mind.


This might sound familiar if you have watched the Disney/Pixar movie Inside Out.

InsideOut The recently amended complaint alleges Copyright Infringement and Breach of Implied Contract:

Daniels conceived of The Moodsters, a children’s animated television pilot (“The Moodsters Pilot”) starring five color-coded anthropomorphic characters, each individually representing a single emotion: happiness, sadness, anger, fear, and love. These characters live in an abstract world inside a child. For instance, early materials about The Moodsters explain that “[s]omewhere deep down inside every child is a wonderous world where The MoodstersTM live.”

According to the allegations, Moodsters was pitched to several folks at Disney/Pixar 2005-2009. In 2010, Disney began work on Inside Out.

Read the complaint: [First Amended Complaint_Moodsters]


Inventorship and Third-Party Prototype Production

NFC Tech v. Matal (Fed. Cir. 2017)

Following an IPR administrative trial, the Patent Trial & Appeal Board (PTAB) concluded that the challenged claims of NFC’s U.S. Patent 6,700,551 are unpatentably obvious.  The focus of the dispute is on a pre-AIA inventorship claim — The PTAB rejected NFC’s attempt to claim priority to its date of invention.

Although the Patent Act itself has never directly defined inventorship, a substantial body of cases have worked through the problem.  In general, the courts have determined that invention is a two-step process that begins with a complete mental conception of the invention and concludes with reducing the invention to practice (i.e., creating a working model).  Most of the inventions claimed within patent documents are not actually reduced to practice prior to the application filing.  Rather, that substantial majority relies upon the judicially created exception that the filing of a patent application should be deemed (in the eyes of the law) a reduction to practice.

Here, NFC’s near-field communication patent application claims priority back to an original French patent application filed March 25, 1999, while the primary prior art reference has an effective date of February 8, 1999.   If the patent in question was a post-AIA patent, NFC would easily lose.  Here, however, NFC has the opportunity to claim back to its date of invention because its patent fits under the old law.

Under the old law, the inventor could claim priority back to that initial date of conception. However, that was generally a difficult prospect because the courts also required extensive post-conception diligence on the part of the patentee to reduce that invention to practice.  It is much simpler if the patentee did actually reduce the invention to practice prior to filing because diligence is no longer required post-RTP (just no suppression, abandonment, or concealment).  Although this ability to claim back to a date-of-invention is a benefit to patentees, it is usually thought of as something of a trap because of the high evidentiary burden placed on the inventor for proving prior conception, diligence, and reduction to practice.


Here, NFC argued that the named inventor (Charrat) and his team had reduced the invention to practice as of November 1998 by creating a device embodying the invention.  The PTAB rejected the argument — holding that a portion of the prototype had been built by a third party chip fabricator (Concept Electronique – CE) and, therefore, Charrat isn’t the one who reduced it to practice.  According to the Board, when a third-party reduces the invention to practice, that RTP only inures to the inventor if the inventor can show that he had already conceived of the invention and communicated that to the third party.  “For Charrat to receive the benefit of that reduction to practice, the Board read [the Federal Circuit] precedents as requiring that Charrat conceived the claimed invention and communicated the underlying subject matter to CE.”

On appeal, the Federal Circuit has reversed – finding that NFC had provided sufficient evidence of conception.

Here, Charrat provided testimony of his conception, but oral testimony alone is insufficient to prove prior invention.  Charrat also provided a data-sheet order to CE. The Board found that the data sheet had “no named author” – on appeal, however, the Federal Circuit credited the document’s statement “By BC” (BC are Charrat’s initials).  “Thus, contrary to the Board’s finding, the data sheet does name an author.”

The PTAB also found it odd that there was not more specific evidence (such as an email) from Charrat to CE that provides information on how to build the circuit (if Charrat had actually been the inventor).  The Federal Circuit rejected that analysis:

Here … Charrat’s account of a period of a few months, nearly twenty years ago, is nonetheless supported by documentary evidence. The relevant period and presence of documentary evidence places this case closer to Loral Fairchild Corp. v. Matsushita Electric. . . . [W]e characterized the inventor’s inability to submit [production] documents as “not surprising” given the amount of time that had passed. Here, similarly, Charrat’s account is corroborated by the initial data sheet that began the project, communications with CE, and documents generated after Charrat and INSIDE received the prototype and began to test it. “[C]orroboration of every factual issue contested by the parties is not a requirement of the law.” In re Jolley, 308 F.3d 1317, 1328 (Fed. Cir. 2002). On these facts, and particularly considering the amount of time that has passed, we determine that Charrat’s account was adequately corroborated.


In a typical murder mystery plot, the accused criminal wins by successfully pointing the finger toward the true killer.  Here, the appellate panel suggests that the the PTAB should have also considered that approach.  In particular, the Federal Circuit asks “who, if not Charrat, designed the prototype. . . . Charrat is the only source identified by the evidence for the design of the prototype. Indeed, there is no record evidence of any other INSIDE employee communicating with CE. Under the rule of reason, the totality of the evidence establishes the credibility of Charrat’s account.”

On remand, it looks like the IPR case will continue — in its original analysis, the PTAB did not actually determine whether the prototype embodied the claimed invention since it dismissed on other grounds.  Thus, NFC is simply one step closer to success.


The Alternate Reality of Prior Art

Thought pioneer Dan Abelow fits within an interesting designation.  So far in 2017, his U.S. Patent Publication No. 2012/0069131 – mysteriously titled “Reality Alternate” – is the Most-Oft examiner cited U.S. prior art reference.  The document – now patented as U.S. Patent No. 9,183,560 – covers a method of providing “a portal for a user … to be present simultaneously in two or more different non-fictional alternate realities that are distinct from a non-fictional physical reality of the user.”  [Here, I’m looking at Examiner citations rather than those submitted by Applicants]

The Abelow document reads something like science-fiction novel — defining a new Alternate Reality world both in terms of its incredible impact and technical specifications.  From the abstract:

Just as fiction authors have described alternate worlds in novels, this introduces an Alternate Reality—but provides it as technical innovation. This new Alternate Reality’s “world” is named the “Expandaverse” which is a conceptual alteration of the “Universe” name and a conceptual alteration of our current reality. Where our physical “Universe” is considered given and physically fixed, the Expandaverse provides a plurality of human created digital realities that includes a plurality of human created means that may be used simultaneously by individuals, groups, institutions and societies to expand the number and types of digital realities—and may be used to provide continuous expansions of a plurality of Alternate Realities. To create the Expandaverse current known technologies are reorganized and combined with new innovations to repurpose what they accomplish and deliver, collectively turning the Earth and near-space into the equivalent of one large, connected room (herein one or a plurality of “Shared Planetary Life Spaces” or SPLS) with a plurality of new possible human realities and living patterns that may be combined differently, directed differently and controlled differently than our current physical reality.

In addition to being written in a way that draws diverse connections (helpful for obviousness conclusions), the reference is also 750 pages long! (The patentee paid an extra $4,000+ in filing costs for the extra page length).  One of the best patent attorneys in the country – David Feigenbaum – filed this case and helped push it through to issuance.


The second-most examiner cited reference thus-far in 2017 is a much more mundane “Control Channel Interference Management and Extended PDCCH for Heterogeneous Network” from Canadian-Based Research-in-Motion. 


No Federal Cause of Action in Patent Assignment Dispute

First Data Corp. and Frank Bisignano v. Eric Inselberg and Inselberg Interactive (Fed. Cir. 2017).

Interesting tale: Back in 2010 Frank Bisignano loaned Inselberg Interactive (Interactive) $500,000 – a loan personally guaranteed by the company’s owner Eric Inselberg as well as by a security interest in the patents owned by Interactive at the time.

INselberg Patent Image

By 2011, the federal authorities were after Inselberg and charged him with criminal sports memorabilia fraud.  Those charges were later dropped after witnesses recanted Inselberg convinced prosecutors that the witnesses had lied.  [UPdate  By that time, however, Interactive had defaulted on the loan to Bisignano.  As a consequence, “Inselberg and Bisignano entered into an agreement that purported to convey Interactive’s patent portfolio to Bisignano.”  [USPTO Assignment Records]

Bisignano later became CEO at First Data and First Data (arguably) began to make use of some of the patents in Inselberg’s former portfolio.  Inselberg then approached Bisignano and requested that First Data pay a license fee (and also claiming that the prior assignment was invalid).   After being threatened with a lawsuit, Bisignano and First Data filed for declaratory judgment in Federal Court upholding the assignment and thus denying infringement.  Inselberg responded with a New Jersey state court action asserting that – under N.J. State Law – that the assignment was invalid.  In the state court case, Bisignano asserted non-infringement as a counter claim and then removed that case to federal court as well.

The two federal cases were both docketed before Judge McNulty who dismissed them both — finding no federal cause of action.  McNulty wrote:

Inselberg and Interactive acknowledge that they are not now the owners of the patents. They agree that they do not currently possess standing to sue for infringement. [Rather, they seek] a declaratory judgment that the assignment was invalid under state law.

Thus, according to the district court, the only issue truly at hand now is who owns the patents (with a side issue of whether the assignment included further duties).   Since transfer of patents is a matter of state law – there is no federal cause of action.  [Inselberg District Court Dismissal].

On appeal, the Federal Circuit has affirmed the dismissal – following its prior Jim Arnold decision. Jim Arnold Corp. v. Hydrotech Systems, Inc., 109 F.3d 1567 (Fed. Cir. 1997).

[In Jim Arnold], the plaintiff attempted to assert an infringement claim, but that claim was contingent on the success of the plaintiff’s state law claim that its prior assignment of the patents was void. We concluded that the district court did not have jurisdiction over the infringement claim . . . until ownership is restored in the assignor.

The approach here then is for the State Court to first figure out ownership.  Then, if it decides that Interactive is the owner, an infringement case can return to Federal Court.

Brian Brooks founder of Clinton Brooks represented the prevailing party Inselberg while William Adams led the Quinn Emanuel team on the other side. 

Foreign Lawsuit Does not Itself Create DJ Jurisdiction in US over Family-Member Patent

Allied Mineral v. OSMI and Stellar Materials (Fed. Cir. 2017)

US-based Allied manufactures a cement specially designed for lining aluminum furnaces.  Allied distributes both in the US and in Mexico (through Ferro Alloys and Pyrotek).  The patentee Steller is also US-based.  However, rather than suing Allied for infringing its US patent, Steller sued only the Mexican distributors in Mexico on its Mexican family member patent. U.S. Patent No. 7,503,974; Mexican Patent No. 279757.


Allied then filed a declaratory judgment action in the US — asking for a declaration that, inter alia, the US patent is invalid, not infringed, and unenforceable.  In the appeal here, the Federal Circuit has affirmed a lower court ruling that the DJ action is not based upon a “case of actual controversy” as required both by the Declaratory Judgment Act as well as the US Constitution.

Courts consider a totality-of-the-circumstances on the case-or-controversy question — asking whether “there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”  Citing to MedImmune v. Genentech, 549 U.S. 118 (2007).

Here, the Mexican lawsuit was quite relevant since a parallel patent was asserted accusing Allied products.  Those same products are also sold Allied in the US, and the main parties are all in the US.   However, after reviewing those facts, the Federal Circuit ruled that they were insufficient to create a sufficient controversy.  Importantly, there was no evidence that (1) the patentee had ever approached Allied; or (2) ever threatened to sue on its U.S. patent.   In Arkema Inc. v. Honeywell International, Inc., 706 F.3d 1351 (Fed. Cir. 2013), the Federal Circuit relied on foreign litigation in finding the a case-or-controversy.   Here, the court distinguished Arkema by pointing to parallel US litigation in that case.  There, “the combination of the German litigation and the U.S. litigation over a related patent” were sufficient to find a case-or-controversy.

Patentlyo Bits and Bytes by Anthony McCain

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Waymo v. Uber: Federal Circuit Denies Uber’s Arbitration Claim – Trial Moves Foreward

Waymo v. Uber (Fed. Cir. 2017)

The Federal Circuit has released a pair of decisions (2017-22352017-2130) in this patent / trade secret case.  Waymo (Google) sued Uber (Ottomotto) for patent infringement and trade secret misappropriations. “Specifically, Waymo alleges that its former employee, Mr. [Anthony] Levandowski, improperly downloaded thousands of documents related to Waymo’s driverless vehicle technology and then left Waymo to found Ottomotto, which Uber subsequently acquired.”

Arbitration: In this lawsuit, Waymo sued Uber but not Levandowski himself.  However, Levandowski intervened into the lawsuit to defend his personal interests.  Uber then filed a motion to compel arbitration based upon the arbitration clause found in the employment agreement between Levandowski and Waymo. Although the agreement’s terms do not extend to Uber, Uber argues that the agreement should equitably apply since the complaint alleges that the misappropriation was conducted “by virtue of [Levandowski’s] job at Waymo.”  In order to avoid an arbitration order, however, Waymo promised that it would not affirmatively rely upon “any employment or other agreement with Levandowski containing an arbitration clause” throughout the lawsuit (unless the documents are first raised by Uber).  The District Court (Alsup) then rejected the motion to compel arbitration.   Under the Federal Arbitration Act, denial of arbitration is immediately appealable.

On appeal here, the Federal Circuit affirmed — holding that as a matter of California Contract Law, the arbitration clause did not apply to Uber, and that equitable estoppel does not apply since Waymo has disclaimed any affirmative use of the employment contract in its case against Uber.

California law establishes that reliance on the contract bearing the arbitration clause is fundamental to compulsion by a non-party to arbitrate.

Here, Waymo has expressly stated that it is not relying upon the contracts containing the clause — thus successfully foreclosing the estoppel theory arbitration.

The second case involves a petition for Writ of Mandamus by Levandowski fighting-off a discovery order.  The particular document at issue is a report created by the Stroz Friedberg firm in the lead-up to the Uber-Otto merger regarding prior Waymo employees.  Importantly, the report was requested by Uber and Otto – not Lefandowski himself. The district court ordered discovery of the Stroz Report.  In the appeal, the Federal Circuit rejected the petition — holding that Levandowski failed to show the urgent nature of the interlocutory appeal.

Mr. Levandowski contends that disclosure of the Stroz Report would be “particularly injurious or novel.” . . .  His arguments are unpersuasive, for it is apparent that Mr. Levandowski cannot invoke attorney-client privilege or work-product protection.

Regarding injury, Mr. Levandowski fails to articulate any persuasive reasons why disclosure of the Stroz Report should be barred in this civil litigation, for the possibility of admissions against his interest is a valid function of civil discovery.  While Mr. Levandowski claims that the District Court would be unable to “cleanse the trial of all taint from the improper disclosure,” such an unsupported assertion is insufficient. Moreover, we take note that the District Court, reviewing the Stroz Report in camera, declined to exclude it, and as explained above, the Supreme Court has indicated that appellate courts can remedy an improper disclosure of privileged information by vacating an adverse judgment and remanding for a new trial.

Slip opinion, internal citations removed.   Thus, the outcome here is that the lawsuit will continue before the district court without interruption.  The court is preparing for trial, with ongoing allegations of discovery abuse as well as a pending partial summary judgment motions.  A recent order from the court is as follows:

By SEPTEMBER 15 AT NOON, counsel for plaintiff Waymo LLC shall file a declaration under oath responding to each and every accusation of discovery misconduct by Waymo [made by] defendants Uber Technologies, Inc., and Ottomotto LLC’s (collectively, “Uber”).

Respond fully to each and every allegation therein. Be complete and accurate. Counsel shall also state the extent, if any, to which it is true that Waymo “still has not produced a privilege log” (id. at 4).

Also by SEPTEMBER 15 AT NOON, counsel for Uber shall file a declaration under oath in support of the aforementioned accusations.

Further, a fascinating article by Mark Harris was published this week in IEEE’s Spectrum about the lawsuit titled: Could a Pair of Earrings Hurt Waymo’s Lidar Trade Secrets Lawsuit?


Claim construction by any other name…

By Jason Rantanen

is still claim construction in my book.  This is true even when the claim construction focuses less on the specific meaning of individual words or phrases and more on construing the invention as a whole.


One of the most enjoyable things about teaching a course like Patent Law, which I’m doing again this fall, is that you get to re-read all the old classics and work through them from first principles with students who are not (yet) locked in the dogma of accepted narratives.  In other words, to see cases such as Mayo, Myriad, and Alice through fresh eyes, or to explore the evolution of post-Markman claim construction from Markman to Cybor to Phillips to Teva.  Today we worked through some of the examples that the PTO has published–for those who aren’t aware, there’s a host of them on the PTO’s website.

As I’ve read through the patent eligible subject eligibility cases again, I’m struck by the extent to which the courts engage in what I can only describe as claim construction–but a very different type of claim construction than what’s contained in the countless opinions deciding the meaning of individual claim terms over the last two decades.  Those cases address the meaning of individual terms or phrases in a patent claim, often in a way that is dispositive of an infringement, novelty or nonobviousness issue.

The different type of claim construction that I’m talking about is what courts necessarily do when conducting a patent eligible subject matter analyses (and perhaps nonobviousness and enablement as well): construe the invention from the claims rather than interpret a particular word or phrase. None of the judicial opinions talk about what they’re doing as claim construction, but that seems to me to be exactly what it is.

The idea that courts describe patent claims in words other than those of the claims themselves during patent eligible subject matter inquiries is nothing new–to the contrary, it’s a frequent complaint about the Supreme Court’s patent eligible subject matter cases.  Usually, it’s referred to as determining what the claims are “directed to,” or, in the second part of the Mayo/Alice inquiry, the search for an “inventive concept.”

But if claim construction is understood as the translation  of the words of a patent claim into text that will have meaning for the person deciding a legal issue such as infringement or validity, then discussions of the patent claims in the context of patent eligible subject matter analyses would seem to be exactly that.  Alice offers an obvious example: there, the Supreme Court explained that “[o]n their face, the claims before us are drawn to the concept of intermediated settlement,” (an abstract idea, failing Mayo step 1), and that “viewed as a whole, petitioner’s method claims simply recite the concept of intermediated settlement as performed by a generic computer” (thus failing Mayo step 2).  Put another way, the Court took the words of the claim, gave them legally operative meaning, and then assessed whether that legally operative meaning against the criteria of abstract idea and inventive concept.  That’s claim construction.

I can see some pushback here from folks who think of claim construction solely as the process of determining the meaning of individual words or phrases in a claim–in other words, as  questions of accuracy about the meaning of words.  The sharp focus on the meaning of individual claim terms has dominated thinking about patent law for the last two decades, but I think it’s a mistake to view claims only as individual limitations.  That approach is useful for inquiries such as literal infringement or novelty, but it’s of less use when conducting other types of patentability or validity analyses.  I’m not suggesting that claim term interpretation is irrelevant to patent eligible subject matter or enablement inquiries–sometimes the meaning of individual terms matters quite a bit.  But what I see courts doing again and again in the patent eligible subject matter cases is to read the claims to arrive at a construction of the invention, rather than resolve disputes about the meaning of particular terms.

My thinking in this area is heavily influenced by Andres Sawicki’s forthcoming article The Central Claiming Renaissance.  Professor Sawicki argues that the Supreme Court’s re-invigoration of patent eligible subject matter has been accompanied by a rebirth of “central claiming”: the idea that “courts use both the specification and the claims to situate the inventor’s work in the context of the technological field to understand just what it is that the inventor contributed.”  Id. at 10.  Sawicki observes that the Mayo/Alice analysis necessarily requires a determination of the inventor’s contribution–and particularly, whether that is the type of thing that is patent eligible subject matter.  Consistent with the idea of central claiming, he suggests that in identifying the inventor’s contribution, the Supreme Court looked mostly to the the specification when making this determination in Bilski, Mayo, and Alice,  even as he acknowledges the important role the claims play in what the Court was doing.  Id. at 23-35.

While I mostly agree with Professor Sawicki’s analysis of the Supreme Court’s patent eligible subject matter cases,  I think the article gets over-invests in the concept of “central claiming.”  As Sawicki recognizes, even when conducting the Mayo/Alice analysis, courts are still construing the actual claims, not the written description, to identify the invention.   They draw on the written description, but so too does conventional claim term interpretation.  I’m also hesitant because what’s involved isn’t “claiming;” it’s the process of construing an existent claim.   That said, I don’t have any sticky words to describe this alternate approach to claim construction.  The best I’ve come up with are “whole claim construction,” “invention-focused construction,” or “inventive contribution construction” as contrasted with “claim term interpretation.”


Why does it matter whether we call what the court’s doing “claim construction?” After all, a rose by any other name still smells as sweet.

There are a few reasons.  First, the old adage that “the name of the game is the claim” is just as true when courts are construing the claims in a general sense as it is when courts are engaged in term-based constructions.  As patent practitioners know, how the court articulates the claims for Mayo steps 1 and 2 matters–and can even be dispositive, as the recent case of Visual Memory LLC v. NVIDIA Corp. shows.  Recognizing that the courts are engaged in type of claim construction has the benefit of focusing the parties’ arguments on an issue that may determine the outcome of the case.

A second benefit from recognizing that courts are engaged in claim construction in the patent eligibility inquiry is that the discussion can then turn to what constitutes an abstract idea.  Sure, the court’s construction matters, but so too does the question of what an abstract idea actually is.  Untangling these two issues–the construction of the claim and the meaning of “abstract idea”–may bring clarity to the second one.

A third reason why we should acknowledge that there’s a type of claim construction going on in patent eligible subject matter analysis is because the Federal Circuit’s opinions don’t.  Recognizing that the courts are engaged in a type of claim construction raises an important question: we have a complex methodology and approach to interpreting claim terms; what then is the methodology for this other type of claim construction that the courts are doing?  As the patent eligible subject matter jurisprudence develops, methodological variants are emerging that reflect sharp differences in the way that claims are being construed when conducting the patent eligible subject inquiry.  Some of these divisions present the same types of issues as the conventional claim term interpretation cases raise, such as “how much weight to give the specification?,” while others present new divisions, such as the question of “at what level of generality the claims should be read?”

As a first pass at this idea, here are a few different ways that “invention-focused construction” can be done:

  • At one extreme is the ipsis verbis methodology: to repeat the words of the claim and nothing but.  Only those words, and perhaps interpretations of some key terms, suffice.  One might picture an attorney standing before a judge who repeatedly asks “what’s the invention?” while the attorney dutifully recites the words of the claim again and again, neither understanding why the other doesn’t get it.
  • At the other extreme is a claim construction untethered from the claims themselves.  An example might be to construe a claim to a typewriter as being to a hot dog.  While this example is absurd, the point is to illustrate that there is a range from ipsis verbis to a construction of the invention that has no connection to the claims.
  • Another dimension of the invention-focused construction involves the degree to which the construction hones in on the inventor’s contribution.  To borrow from the USPTO’s gunpowder example, the “inventive concept” of a claim to “an intimate finely-ground mixture of 75% potassium nitrate, 15% charcoal and 10% sulfur” isn’t the individual ingredients; those already exist in nature.  Rather, the “invention” is the combination of the ingredients, or the specific ratios, or that they are finely ground in the mixture.
  • Alternately, the court may treat the claim as a whole as the “invention,” not caring about which part of it constitutes the inventor’s contribution to the art.  I struggle with applying this approach: how do you conduct an analysis of whether the invention is eligible subject matter when you aren’t focusing in on what is new?

In my next post I’ll write more about how these different approaches recently manifested in the Visual Memory case that Dennis blogged about last month.