Reasonably Continuous Diligence vs. Continuous and Reasonable Diligence

ATI Tech ULC v. Iancu (Fed. Cir. 2019)

On appeal, the Federal Circuit has sided with the ATI — finding the patentee’s Unifed Shader claims patentable over the prior art. U.S. Patents 7,742,053, 6,897,871, and 7,327,369 (Graphics processing architecture employing a ‘unified shader’).

These patents are pre-AIA and the patentee is claiming that its invention pre-dates the prior art.  The PTAB agreed that ATI’s conception was early enough, but concluded that the patentee lacked diligence.

One problem with the PTAB opinion was its statement requiring “continuous reasonable diligence” in reducing the invention to practice while the actual traditional standard is “reasonably continuous diligence.” The Federal Circuit has previously decided this exact point:

A patent owner need not prove the inventor continuously exercised reasonable diligence throughout the critical period; it must show there was reasonably continuous diligence.

Perfect Surgical Techniques, Inc. v. Olympus Am., Inc., 841 F.3d 1004 (Fed. Cir. 2016) (emphases original).

In the IPR, the inventor provided testimony and supporting document that showed that at least one person worked on the design of a working model embodying the invention every business day during the diligence period.  The PTAB, however, dismissed this evidence because at least some of the time was spent working on alternative chip designs and optional features not particularly claimed.

On appeal, the Federal Circuit severely chastized the PTAB, Solicitor, and PTO Director for rejecting diligence while failing to identify any delays or gaps in activity.

“We are directed to no view of the evidence that could support a conclusion that ATI set aside the development of the Unified Shader. The PTAB cited no basis for finding that this technology was not being diligently pursued. The Director seeks to excuse the PTAB’s absence of support for its holding, by stating that ATI bears the burden of proof of diligence. However, the Director does not explain where the burden of proof was not met, upon the extensive evidence of daily activity. . . . [T]he purpose of the diligence requirement is to show that the invention was not abandoned or set aside. Here, the Director does not point to the remotest suggestion of abandonment or setting aside of the Unified Shader technology.”

Reversed

30 thoughts on “Reasonably Continuous Diligence vs. Continuous and Reasonable Diligence

  1. 4

    Paul —

    That’s not fair. The “loudest objections” were directed to the loss of the grace period.

    I agreed with the AIA proponents, that in the under-100 cases per year, where two inventors invent and claim the SAME invention, at about the SAME time, and BOTH file patent applications on the SAME invention, the tie-breaker rule of pre-AIA 102(g) or new 102(a) makes no difference.

    What matters is the loss of a robust grace period, in a single-applicant case. The number of startups I’ve had to tell since 2012 “I have no idea what the law is, because the drafting of the AIA is so ambiguously screwed up, but I know it isn’t good, and you have to file before you know what the invention *is*” (and since January “You’re screwed, see Helsinn”)…

    The AIA was drafted by big pharma for big pharma, and to screw everyone else. I don’t know whether it’s working for big pharma the way Bob Armitage intended, but it’s sure working great to suppress disruptive new market entrants.

    There was a nice study by National Bureau of Economic Research on Canada, showing that the Canadian equivalent of the AIA grace period would suppress startups. 21st Century’s only response was to brazenly misquote it, and they didn’t get caught because the NBER study was behind a paywall.

    I just had another one this week, and I’m angry about what’s happened to American innovation. And angrier when usually-knowledgeable people misdiagnose the problem.

    1. 4.1

      How do you feel when the “misdiagnosis” is intentional?

      Yes, this blog is replete with those that despise what patents provide, proselytize endlessly about “bad patents” and those (gasp) wanting to make money by obtaining patents, and spew propaganda that is plainly anti-patent.

      Some even profess to be patent attorneys.

    2. 4.2

      Yes Dave, the changed grace period of the AIA was and still is also a contentious issue, and I would be interested in your comments on how that is working out in practice? As a leading law firm noted in 2012: “Under AIA § 102(b)(1)(A), an inventor has one year from the time he or she discloses an invention within which to file a patent application. This simply continues the one year grace period practice established under the statutory bar provision of the Patent Act of 1952. It’s the grace period afforded against third party disclosures, dubbed as the “grace period non-inventor disclosure” exception, that has the patent community talking. Under AIA § 102(b)(1)(B)…” The article went on to apparently suggest that the real problem is the PTO rulemaking and practice as to non-identical intervening third party disclosures. Has that ever been legally challenged?

      1. 4.2.1

        Paul —

        Interesting — the article you cite is titled “The Not-So-Amazing Grace Period Under the AIA ” link to finnegan.com It’s primarily a warning piece — warning that the AIA grace period is too tenuous to rely on. That’s the advice I give my clients – “It’s like the morning-after pill — the best of bad options after an accident, but useless to planning as a business matter.”

        And of course you know that this is an issue of substantive law — by rulemaking, the only two things the PTO can do is instruct its own personnel, and confuse issues.

        How’s it working out in practice? At least once a month since 2012 I’ve had to advise a client “The AIA is almost deliberately ambiguous. I have no idea what the law is. To be better safe than sorry, we could do both (whatever the two options are).” Since Helsinn, I’ve had to advise several “You’re screwed.”

        1. 4.2.1.1

          Dave, Hesinn was a continuation of existing statutory bar secret sales law for application filings delayed more than one year after, not any AIA grace period change. In Hesinn Heathcare v. Teva the Sup. Ct. in 2019 affirmed the 2017 Fed. Cir. Hesinn decision re-applying pre-AIA Fed. Cir. Special Devices, Inc. v. OEA, Inc., 270 F. 3d 1353, 1357.

          1. 4.2.1.1.1

            Helsinn was a judicial mess – choosing to IGNORE the context of the changes in the AIA in order to merely arrive at a desired Ends.

            It was an “Ends justifies the Means” case – something that any attorney worth their salt should disparage.

          2. 4.2.1.1.2

            Paul —

            Of course. Helsinn is not a grace period change per se, it’s only a confirmation that the rump grace period left by the AIA is too flimsy to rely on. Becasue of lousy drafting, we got the harshest elements of pre-AIA American law, combined with the harshest elements of European law. There used to be offsetting harshness and grace, each of the two in different ways, but each workable. The combination of harsh + harsh is not, at least not for small companies and startups.

            I think that’s all I said.

            But that’s pretty far off the point.

        2. 4.2.1.2

          I think that from the article, this is the “key” phrase:

          According to the USPTO’s Proposed Rules, the § 102(b)(1)(B) exception can only be invoked if the subject matter in the third party disclosure is substantially identical to the subject matter previously disclosed by the inventor. The Proposed Rules specify that even if the only differences between the inventor’s disclosure and the third party disclosure “are mere insubstantial changes, or only trivial or obvious variations,” the exception under §102(b)(1)(B) does not apply.

          As has been discussed previously (including by me+++), what this turns into is a “no patent for anyone” situation for those who publish prior to filing and then turn around and expect that their publication creates a strong grace period (and another swoops in with a quick publication of their own, as long as there is SOME trivial difference).

          As the quote I provide indicates, the “substantially identical” translates to only a “novelty” protection (if a third party merely “re-publishes” that which the first inventor/publisher publishes.

          But the protection disappears — and disappears completely if the second publisher publishes anything that may fall to (and perversely, create a block back to***) an obviousness rejection rather than a novelty rejection.

          The second publisher cannot obtain a patent on his published material in light that it would be obvious in view of the first published material.

          Here is where the *** comes in though:

          The first publisher can no longer obtain a patent EITHER.

          This is because “publishing” simply is not the same a “filing,” and it is the small difference that moves the second publisher’s work from being an example of “novelty – or lack thereof – to being an example of “obviousness.” That difference now traps the first publisher, because now the obvious portion of the second publisher creates a FULL PRIOR ART stance against the first publisher along the lines of obviousness – this is NOT limited to any trivial addition, but now includes the portion to which any trivial addition was added to – the portion that otherwise was entirely novel and non-obvious on its own.

          Since “substantially identical” only protects against a two-way flow of novelty, the “protection” does NOT create a two-way flow against obviousness.

          Even though the first publication precedes the second, the second is Public prior to (and thus prior art under 103) the filing of the first inventor/publisher in the Office.

          And since it is FAR easier to create a situation of obviousness than a situation of lack of novelty, the manner in which the “grace period” is written eviscerates the grace period.

          One is ONLY protected by “exact” replications of another of one’s publication. ANY – and I mean most any “wrinkle” added by a second publisher prior to the first publisher actually filing IS prior art against that first publisher – even if that wrinkle is merely a painfully obvious wrinkle!

          +++ I note that the typical group of my naysayers also reacted against the fact that it was me putting forth this argument to spread their typical mindless ad hominem, instead of actually discussing the merits of the legal position put forth. I doubt that time has changed the ability (or willingness) of those reactionary people to have a cogent legal discussion.

          1. 4.2.1.2.1

            Which leads back to my original question, as to why this PTO practice has not been legally challenged as unintended by the subject AIA grace period statutory language, especially in a case in which it can be proven or admitted that the intervening 3d party filing date or public disclosure of the asserted 103 reference was based on the original publication and not independently generated? Is there legislative history supporting the PTO position?

            1. 4.2.1.2.1.1

              proven or admitted that the intervening 3d party filing date or public disclosure of the asserted 103 reference was based on the original publication and not independently generated?

              You miss the point here Paul.

              “based on” does not matter to incur the penalty under 103.

              The direct words of Congress (as p00rly written as the AIA is) ARE:

              substantially identical

              Those words ONLY speak to a novelty protection.
              Those words do NOT speak to a non-obviousness protection.

              You do not NEED to go to “legislative history,” as the plain words themselves settle the matter.

              Even if “based on,” but also includes even trivial obvious changes, the matter — as a whole — sinks the “protection,” and the first publication is denied a patent under 103.

              As I note – this is NOT something that requires anything but the plain words of the statute. There is NO “intention” position that can be advanced to overcome the plain words.

              As I also note, this is but one of the pitfalls that I had reached out to my elected representatives and explained during the time that the legislation of the AIA was before Congress. At least my representatives had been informed of this issue.

              1. 4.2.1.2.1.1.1

                And again, please point where you say the words “substantially identical” appear in the subject AIA 102(b)(1)(B) exceptions provisions? That is, where in the statute itself, as opposed to the PTO position?

                1. Sorry Paul – I misunderstood what you asked for (thought you wanted the article’s words).

                  The actual total words of the exception section for AIA 102 (my emphasis added to track what the article may likely be translating):

                  (b) EXCEPTIONS.—

                  (1) DISCLOSURES MADE 1 YEAR OR LESS BEFORE THE EFFECTIVE FILING DATE OF THE CLAIMED INVENTION.—A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if—

                  (A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed*** directly or indirectly from the inventor or a joint inventor; or

                  (B) the subject matter disclosed*** had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed*** directly or indirectly from the inventor or a joint inventor.

                  (2) DISCLOSURES APPEARING IN APPLICATIONS AND PATENTS.—A disclosure shall not be prior art to a claimed invention under subsection (a)(2) if—

                  (A) the subject matter disclosed*** was obtained directly or indirectly from the inventor or a joint inventor;

                  (B) the subject matter disclosed*** had, before such subject matter was effectively filed under subsection (a)(2), been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or

                  (C) the subject matter disclosed*** and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person.

                  *** In each of these instances, the “subject matter disclosed” is being treated on a one to one match, since the words do NOT indicate that non-exact subject matter (subject matter NOT of the first publisher’s but merely obvious in light of the actual subject matter) is included in the words written by Congress.

                  Do you think that “the subject matter” includes subject matter NOT included in the first publisher’s “subject matter?” How do you get to such a reading?

                2. As a follow-up Paul (not sure that you are still engaged on this point, but will still provide some additional food for thought):

                  The explicitly massive resetting of “prior art” and its various effects as a known cornerstone of the AIA effort (see, for example, the Soliloquy), can also be noted that the exceptions (as I noted above) are written directly in the tones of novelty (for which the phrase “substantially identical” DOES flow), and it is ONLY in the new 103 that a phrase “A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed” can be found.

                  Note that this provides the distinction that 103 is for “not identically disclosed” quite opposed to the 102 notion of “identical” (or even a modified “substantially identical”).

                  The plain words of the Statue directly support ONLY a protection for a novelty aspect, and ONLY for the direct items disclosed by the first publisher.

                  This very much is a problem for attempts to have that protection for an obviousness basis.

                  EVEN IF you wanted to somehow “squeeze in” some type of “intent” or “legislative history” those mechanisms do not come into play if the direct words are plain – as they are.

                  Is this a case of @wful writing?

                  Sure. Most all can agree with that view.

                  Does the fact that the writing is @wful CHANGE the plain meaning and provide a path to “interpret” what has been written to somehow include what has NOT been written?

                  Not without an actual re-writing by Congress.

                  (I do note that this limitation has NOT stopped the judicial branch from their intrusive re-writing of the statute anyway, but the point here is NOT what the Court may decide to do, but rather, what is the proper legal understanding here)

    3. 4.3

      I’m angry about what’s happened to American innovation.

      Here’s an idea, David: get a life.

      Because nothing at all has “happened to American innovation.” People are still innovating and people are still making money off their innovations.

      Maybe what you meant to say is “I’m angry that some of wealthy friends aren’t able to monetize their super sh tty patents as easily as they could ten years ago.”

      That would make more sense and be more in line with reality. Of course, very few people will share your feefees because, hey, the vast majority of the people who don’t live in your little bubble world have far more important things to worry about.

      1. 4.3.1

        Your cognitive dissonance is noted Malcolm.

        Most normal people are more like David here – that is, unless you really do NOT care for your clients and [extremely dislike] the work product that you produce for them (egads – personal property that is used to make money).

        People are still innovating and people are still making money off their innovations

        We all see how much that galls you. So much so that you rant endlessly – even about (especially about) the form of innovation most accessible to the non-wealthy.

  2. 3

    Another example of how widely misunderstood the case law requirements under 102(g) and Rule 131 [prior invention including interferences] was and still has been for the second to file, which caused some of the strongest objections to the AIA. Note “the extensive evidence of daily activity” that was provided here, but which so rarely was found adequate in patents obtained with Rule 131 declarations tested in litigation.

    1. 3.1

      More bad law from the Federal Circuit. Rule 131 does not apply in contested cases such as IPRs.

      1. 3.1.1

        Yes, it was somewhat surprising the Fed. Cir. cited here the requirements of AIA-removed Rule 131 for pending applications [versus 102(g)(2) and its case law] without noting either. But the Rule 131 text provides a handy list of what the PTO was for a very long time supposed to have required [but too often did not] for prior invention “swearing behind” 102(e) prior art, and a PTO statutory interpretation, which the Fed. Cir. apparently found handy to apply.

        1. 3.1.1.1

          But I also found that Rule 131 now has a paragraph (d) revised, 80 FR 17918, Apr. 2, 2015, effective May 13, 2015, which I find confusing but now intended to apply to patents.

          1. 3.1.1.1.1

            But when read in the context of “this section” — esp. 131(a) — 131(d) refers to an application or a “patent under reexamination” in which a claim is rejected. Neither of which applies in an IPR proceeding.

    2. 3.2

      Paul —

      That’s not fair. There is no reasonable confusion about 102(g) law here.

      I just did a case law search of Federal Circuit Law, and there’s no statement of “continuous reasonable diligence.” The PTAB made that up out of thin air. Rewriting “reasonably continuous diligence” as “continuous reasonable diligence?” You might see that in a brief from an advocate who’s got no good argument, so grasps at straws. But only at the United States Patent and Trademark Office do we see this kind of brazen rewriting in a decision of a supposedly-neutral adjudicatory tribunal.

      The problem is not that case law is poorly understood. The problem is the culture among PTO lawyers (both the lawyers in Office of GC, Office of Patent Legal Administration, and now the PTAB) of brazenly misquoting legal sources. It’s always a fairly subtle rewording, such as we see here. In the Office of Petitions, the favorite trick is to rewrite necessary conditions as sufficient conditions, or vice-versa. This kind of is near 100% consistent in petition decisions where PTO fees are at issue — it’s so consistently correlated to fees and always in the direction against the applicant that it can only be intentional lying. It’s troubling to see the practice spread to the PTAB.

      1. 3.2.1

        Dave, I have no way of knowing if the particular PTAB decision author here was confused or was doing re-writing of the 102(g) requirements for diligence from conception to filing. But the former seems far more likely, since I do know that few of the patent attorneys I worked with over many years were aware of that case law, because few patent attorneys ever handled any interferences [where diligence gets disputed, unlike most ex parte Rule 131 declarations].
        I also know that misquoting legal sources via subtle editing or rewording is not limited to the PTO, as I have seen it even in Fed. Cir. briefs, as sometimes noted in the Fed. Cir. decisions.

      2. 3.2.2

        in a decision of a supposedly-neutral adjudicatory tribunal

        I know that we can NOT state that (with a straight face).

        But should we state that?

        This may play to your strength in Admin Law, David, but we both know that the various administrative agencies have a spectrum of “hands-off” within each agency between the “oversight” (and influence) of the “political” leadership and any adjudicatory function within the administrative agency.

        Some agencies have an adjudicatory function sufficiently separated such that “neutral” may well apply.

        The USPTO as an administrative agency has always been NOT at that end of the spectrum, and in fact has been at the opposite end of the spectrum — at the point that “objective” (read that as hands-off) is NOT to be expected.

        This arrangement does vary from one administrative agency to another (and is a function of how the administrative agency is set up).

        For the Patent Office, the portion of the administrative agency geared to promulgating a particular policy – coupled with the lack of separateness of the adjudicatory function from the leadership (read that as control) of the Office would appear to be a case of “we are f00ling ourselves” IF we think that “supposedly-neutral” is some type of “given.”

        I say, better to recognize what we actually have right from the get-go.

      3. 3.2.3

        The problem is the culture among PTO lawyers (both the lawyers in Office of GC, Office of Patent Legal Administration, and now the PTAB) of brazenly misquoting legal sources.

        LOL

        Meanwhile, the Director of the PTO created a gigantic loophole in 101 that will unleash thousands of g@rbage patents on the public and (as a direct result) adversely affect people who are trying to use computers in their businesses. The costs of that adversity will, of course, be passed on to consumers.

        Got any outrage to spare for that? Because this business about “continuous diligence” is truly on the outside fringes of the margins of deep space patent law and it’s only going to become more obscure as time goes on.

        1. 3.2.3.1

          affect people who are trying to use computers in their businesses.

          Oh how so very “Big Box of Protons, Neutrons, and Electrons” of you.

          Feel free to actually engage in the Grand Hall experiment and let me know how “just use” is done without actually — you know — first changing the machine and configuring the machine to “just use.”

          Whether or not THIS issue (continuous diligence) is on the fringe or not really is not the point here, now is it? The fact of the matter is that the point is that an Ends is pursued regardless of the Means (of that very same brazenly misquoting legal sources).

          MOST all normal attorneys WOULD HAVE plenty of outrage to spare for that.

          Those, on the other hand that simply want their own Ends regardless of the Means will act, well will act like you.

          Go ahead and “go figure” and do your “[shrug]” thing, as you plod on with your same tired and trite ways. Your lack of really caring for innovation (and protecting innovators) screams above what you say anyway.

      1. 2.1.1

        anon,

        Yes it did…

        I made some comment about your demonstration of
        “reasonably unbroken inte11ectual honesty” (by referring to the difference as merely a “play on words”), to be contrasted with “unbroken reasonable inte11ectual honesty”…

        and I remarked that this was not intended as a “play on words”.

        The filter should let this through since it is “directed” at you … :)

        1. 2.1.1.1

          I cannot tell from your summary here which way your comment would have gone.

          While we have not always seen eye to eye, I think that we have agreed far more than we have disagreed.

  3. 1

    The “play on words” evidenced here between the two versions reminds me of the more day-to-day play on “Broadest Reasonable Interpretation” (which so often becomes Broadest Unreasonable Interpretation).

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