CenTrak v. Sonitor Tech (Fed. Cir. 2019) is a quirky case that basically stands for the (wrongheaded) proposition that the Written Description Requirement does not usually require a description of how to make the invention actually work. Here, largely the court relied on the broad language of Alcon Research Ltd. v. Barr Labs., Inc., 745 F.3d 1180, 1191 (Fed. Cir. 2014) (“written description is about whether the skilled reader of the patent disclosure can recognize that what was claimed corresponds to what was described; it is not about whether the patentee has proven to the skilled reader that the invention works, or how to make it work, which is an enablement issue.”).
The district court dismissed this infringement lawsuit on summary judgment — finding the asserted claims invalid for lack of written description or not infringed (or both). On appeal the Federal Circuit reversed that determination — finding both issues ripe with “genuine disputes of material fact.”
The patent at issue here claims the use of ultrasound signals to track location of a mobile device (typically a patient in a hospital). U.S. Patent 8,604,909. There are several reasons why ultrasound can be a better option than WIFI or infrared (IR) signals for location detection within a small area. For example, the steeper proximity decay makes it much less likely that a distant base-station would pick-up the signal. Thus, location can be discovered and without needing triangulation or highly precise equipment. Both the patentee and accused infringer deal in ultrasonic location equipment.
All the claims are directed to the ultrasound approach. However, it does not appear that the inventor initially cared much about the ultrasound approach. Rather, the original provisional application does not mention ultrasound at all [60881269]. While the subsequent priority non-provisional application also focuses primarily on the use of IR and RF signals, it does does include two-sentences disclosing ultrasound signalling:
Although IR base stations 106 are described, it is contemplated that the base stations 106 may also be configured to transmit a corresponding BS-ID by an ultrasonic signal, such that base stations 106 may represent ultrasonic base stations. Accordingly, portable devices 108 may be configured to include an ultrasonic receiver to receive the BS-ID from an ultrasonic base station.
The original priority filing also included one claim directed to ultrasonic detection. That claim was the subject of a restriction requirement and withdrawn. The patent at issue is the resulting divisional application filed with a set of 25 claims all directed to ultrasonic detection.
At trial, the inventor admitted that the invention did not describe an ultrasonic portable device:
Q. But there’s no ultrasonic portable device that is actually described in the ’909 patent; right?
A. This is correct, yeah.
But, the inventor indicated (supported by expert testimony) that a person of skill in the art would have little trouble adapting the disclosure to build the ultrasound system.
[To make the invention] You have to understand how to drive an ultrasonic transmitter, how to receive an ultrasonic signal, and how to process them. But this is known art to people who are knowing ultrasound.
In its invalidity decision, the district court focused on the testimony of no example device and concluded that the mere mention of ultrasonic techniques was not sufficient to satisfy the written description requirement. The court explained, for instance, that the claims include timing synchronization elements that were explained for IR, but that timing could be quite different for ultrasound of speed (speed of light vs speed of sound) and reflection differences.
= = =
The written description requirement is a test of for sufficiency of disclosure — The disclosure must “reasonably convey . . . that the inventor had possession of the claimed subject matter as of the filing date.” Ariad. The basic question is whether the specification as originally filed provides evidence that that the inventor actually invented what is being claimed.
In looking at the evidence on appeal, the Federal Circuit found a “genuine issues of material fact” as to whether “disclosure of the implementation details” is necessary to satisfy the written description requirement. According to the court, written description does not demand examples, or actual reduction to practice. Rather, the law only requires “identif[ication] of the claimed invention . . . in a definite way” quoting Ariad.
Here, the court concluded, “the specification at least mentions base stations and receivers that use ultrasound,” and in many cases such a mention is sufficient to satisfy WD. One question that arises from Ariad is the level of detail required. In that case, the court explained that “the level of detail required to satisfy the written description requirement varies depending on the nature and cope of the claims and on the complexity and predictability of the relevant technology.” Here, the court concluded that the level of complexity and predictability is a factual issue in dispute and thus that it should go to trial rather than be decided on summary judgment.
In this process, the court noted that on remand, the district court should also consider the separate doctrine enablement that may bear more teeth in this type of situation.
On infringement, the district court also dismissed the case for lack of infringement. The claims require use of wireless computer network, including a backbone, Wi-Fi access points, and server hardware. The accused infringer does not supply this material but instead piggy-backs its systems as an add-on to the already existent network. The district court found that no single entity had “made” the system and so Sonitor could not be liable as a direct infringer.
On appeal, the Federal Circuit rejected that analysis — finding material evidence that Sonitor was the “final assembler” of the system and thus could be held liable for “making” the invention. I’ll note here that the hospitals themselves could be held liable, but the patentee would rather extract rents from its direct competitor rather than its potential clients.
IBG LLC v. Trading Technologies Int’l (Fed. Cir. 2019) (non-precedential)
This appeal stems from Covered Business Method (CBM) Review decisions on four related patents owned by TT. The PTAB instituted all four CBM reviews. However, by the time of final decision, two of the challenged patents had been already upheld on eligibility by the Federal Circuit. For those two patents, the PTAB followed the court’s lead and found the patents were directed to eligible subject matter. However, claims of the second set of patents were ruled invalid as ineligible and obvious.
On appeal, the Federal Circuit took a shortcut. Rather than directly addressing the underlying patentability question, the court vacated the PTAB determinations on jurisdiction grounds. The court held that the inventions at issue are “technological” and therefore not “covered business methods.”
Section 18 of the America Invents Act (AIA) creates the “Transitional Program for Covered Business Method Patents.” The program, which sunsets in 2020 allows broad challenges of business method patents — including challenges on eligibility grounds. However, the law includes a strict and limited definition of what counts as a “covered business method patent.”
The term “covered business method patent” means a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.
18(d)(1).
In its prior statement on the TT patents, the Federal Circuit ruled that the user interface patents were “directed to a specific improvement to the way computers operate.” Here, the court found its prior holding (as adopted by the PTAB) automatically leads to a conclusion that “the patents are also for a ‘technological invention’ under any reasonable meaning of that term.” The Board’s holding otherwise, according to the court, is “internally inconsistent and therefore arbitrary and capricious.” The result here is that the PTAB does not have authority to conduct a CBM review of these patents because they are “technological.”
CONFLICT DISCLOSURE: While in practice at the MBHB firm, I represented Trading Technologies and personally filed several infringement complaints asserting some of the patents at issue here. MBHB is also the primary financial sponsor of Patently-O. – DC
Momenta Pharma v. Bristol-Myers Squibb Co. (Fed. Cir. 2019)
In this recent decision, the Federal Circuit dismissed Momenta’s appeal — finding that the company lacks standing to appeal its loss before the PTAB. The decision stands on fairly controversial grounds and in some tension with Supreme Court jurisprudence on appellate jurisdiction requirements. Still, I suspect it will be cabined-in by its facts and not have a large precedential impact.
In 2015, Momenta petitioned for inter partes review of US Patent 8,476,239 owned by BMS. The patent covers a particular immunosuppressive formulation sold as ORENCIA . At the time, Momenta was exploring an ORENCIA biosimilar as part of a partnership with Mylan. And, over the years, Momenta has apparently conducted clinical trials on aspects of the product. According to Momenta, during that time the ‘239 patent has been a clear obstacle to the project’s success.
Back to the administrative action: In the IPR, the PTAB sided with the patentee BMS — finding that the claims were not proven invalid (i.e., confirming the claims). Momenta appealed.
The Patent Act allows for any “person” to file IPR petitions and also indicates that the losing party of an IPR (here the patent challenger) has a right to appeal the decision to the Federal Circuit. Although the statute provides a right to appeal, the U.S. Constitution has a further standing requirement before the courts are allowed to step in and pass judgment. In particular, the Case and Controversy clause of Article III requires a genuine material dispute between the parties that can be resolved by the litigation.
By the time the appeal rolled around, Momenta’s clinical trials turned out to be a failure and BMS filed for dismissal — arguing that Momenta was no longer planning to use the invention and thus had no stake in the validity/invalidity of the patent. Momenta first responded that it was still intent on producing an ORENCIA biosimilar, but later the court was updated with information showing that Momenta was exiting its partnership with Mylan and was no longer developing the biosimilar. Momenta did not provide any further explanation as to whether it had standing — and the Federal Circuit ultimately determined that Momenta no longer had standing. Thus, the appeal was dismissed for absence of standing/jurisdiction and for mootness.
A party filing an appeal must have a “concrete and particularized” interest at stake in order for a court to have Constitutional jurisdiction over the case (“Article III Jurisdiction”). This interest required during all parts of the litigation. Here, the court ruled that Momenta may have once had an interest at stake, but that interest “has now been eliminated by Momenta.”
Although momenta still has a potential of receiving royalties on a future biosimilar impacted by the patente, the court agreed with the patentee that interest was “too speculative to support standing.”
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There are a long line of Supreme Court and DC Circuit cases that involve situations parallel to this that begin with a statutory right to an administrative action. In those cases, the standing issue arises when the party attempts to appeal a negative administrative decision. The basic rule in these cases is that a concrete and particularized interest needs to exist before the court will get involved. That said, the courts have allowed for a reduced standing requirement in these appeal cases as compared with what is required for a new district court action.
My concern with this case is the basic notion that Momenta’s standing to challenge the patent completely disappeared based solely on a mid-appeal SEC filing stating that a particular deal had fallen-through. From that front, this appears to be a rash decision by the Federal Circuit. On the other hand, I think that the better frame for seeing this case is to recognize that Momenta could have (but did not) update and explain its standing argument based upon its withdrawal from the Mylan-biosimilar project. In Federal Court each party is expected to affirmatively make its case, and Momenta simply did not make its case.
Perhaps Momenta did not provide any explanation because it no longer cared about the case — providing a precise primary justification for the standing rule in the first place.
On February 11, 2019, the USPTO released “Progress and Potential: A profile of women inventors on U.S. patents,” a report on the trends and characteristics of U.S. women inventors named on U.S. patents granted from 1976 through 2016. The report shows that women still comprise a small minority of patent inventors. Further, it highlights the untapped potential of women to spur U.S. innovation. Women, like other under-represented groups, are among the “lost Einsteins”—people who may contribute valuable inventions had they been exposed to innovation1 and had greater access to the patent system.
The share of patents that include at least one woman as an inventor increased from about 7 percent in the 1980s to 21 percent by 2016.
Even with this increase in patent counts, women inventors made up only 12 percent of all inventors on patents granted in 2016.
Gains in female participation in science and engineering occupations and entrepreneurship are not leading to broad increases in female patent inventors.
Technology-intensive U.S. states, and those where women participate more in the overall workforce, show higher women inventor rates.
Women inventors are increasingly concentrated in specific technologies and types of patenting organizations, suggesting that women are specializing where female predecessors have patented rather than entering into male-dominated fields or firms.
American businesses have the lowest women inventor rates among the various categories of U.S. patent owners.
Women are increasingly likely to patent on large, gender-mixed inventor teams, highlighting the growing importance of understanding the relationship between gender and innovative collaboration.
1 Alex Bell, Raj Chetty, Xavier Jaravel, Neviana Petkova, John Van Reenen; Who Becomes an Inventor in America? The Importance of Exposure to Innovation, The Quarterly Journal of Economics, forthcoming, https://doi.org/10.1093/qje/qjy028(link is external)
Claim-construction used to be the bread-and-butter of Federal Circuit decisions. That standard was of course upset by the onslaught of eligibility decisions from district courts and BRI obviousness cases out of the PTAB.
The patents at issue here all relate to circuit board construction – and dealing with the problem of delamination. The claimed solution is uses “a unique surface structure . . . comprised of teeth that are preferably angled or hooked like fangs or canine teeth to enable one layer to mechanically grip a second layer.” The figure below from the patent provides an example of how the layers might fit together.
The toothy layers can be formed in various ways — etching
Step 6, as discussed subsequently in greater detail, involves the etching cavities, veins, openings, or gaps in the applied dielectric material 8, or more particularly an outermost surface thereof, to accommodate the teeth. One technique for forming the teeth is somewhat similar to what has been known as the swell and etch or desmear process, except that contrary to all known teachings in the prior art, in effect, a “double desmear process” is utilized.
During prosecution, the patentee also explained that the invention uses “two separate swell and etch steps” to form the teeth. However, the claims themselves do not expressly require the double pass process.
In the first decision in this case, the district court considered the claims, specification, and prosecution history and found that the claims should be interpreted to require a double pass — even though not expressly required by the claims. Because the accused infringers only used a single-pass, non-infringement was then an easy finding.
On appeal, the Federal Circuit has rejected the narrow claim construction. As is its process, the court began with the claim language — finding that ” at least based on the plain language, the claims are not limited to a repeated desmear process.” Moving then to the specification, the court found no “clear and unmistakable disclaimer” of the claim scope covering a single-pass method. For the court here, the deciding factor appears to be the patent attorney’s care in drafting the specification. Here, the specification calls double desmear “one technique” that the invention “can be carried out” and “for example” rather than calling the approach “the invention.”
This approach here is properly seen as a patent drafting trick rather than an improved disclosure or invention. We know this because, although the specification called its double-pass approach “one technique” it did not describe any other technique — except for the prior art single-pass technique that the specification bemoaned as inferior.
Still, the Federal Circuit sided with the patentee and found that the words of ambiguity sufficient to avoid a claim scope narrowing.
Heeding the warning in Phillips to keep in mind that a goal of the specification is to provide a best mode to make and use an invention, phrases such as “one technique,” “can be carried out,” and “a way” indicate that using Probelec XB 7081 is only one method for making the invention and does not automatically lead to finding a clear disavowal of claim scope. We have also “expressly rejected the contention that if a patent describes only a single embodiment, the claims of the patent must be construed as being limited to that embodiment.” Id. . . . Additionally, distinguishing the double desmear process as “contrary to” or “in stark contrast” with the single desmear process, which again appears within the context of disclosures of the preferred embodiment, are not clear and unmistakable limiting statements. We have held that “[m]ere criticism of a particular embodiment . . . is not sufficient to rise to the level of clear disavowal.”
I’ll note that this decision is an example of the rhetorical approach of disassembly. After the appellee pointed to ten different reasons for limiting claim scope, the court walked through each one individually — and concluding that each offered “mere” subtleties and not a “clear disclaimer.” The court did not consider the impact of the whole. This is an easy criticism of the court’s decision, but the reality is that the court is now in a tough position. I would have also criticized the decision if it had gone the other way (which it could have based upon an alternative statement of the case and reading of precedent). The bigger problem here is that we need to step back and repeatedly ask – how can we build up this system in ways that truly encourage beneficial innovation and do not simply encourage extensive lawyering. This case is also a clear failure of the examiner who was told by the patentee that a particular aspect of the innovation was important, but then allowed the patent to issue without requiring that it be expressed in the claims.
Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC (Fed. Cir. 2019)
There is a lot to unpack in this decision, and so this is just a small discussion of an important Federal Circuit opinion – DC
Mayo is involved in another diagnostic method patent dispute — and again has come out on-top with a finding that the asserted patent claims are ineligible under 35 U.S.C. 101. That district court finding has now been affirmed on appeal, although subject to a strong dissent from Judge Newman.
The named inventors on Athena’s patent were working on a subset of Myasthenia gravis (MG) patients who did not exhibit the usual acetylcholine receptor antibodies. The researchers discovered that these patients were instead generating excess antibodies to a muscle-specific tyrosine kinase (MuSK) that the body uses in neuromuscular junctions. So, the key discovery here was the relationship between MuSK autoantibody production and MG.
The patent at issue is not directed a this relationship per se, but rather a method for diagnosing MuSK related disorders by looking for those MuSK autoantibodies. The particular claims at issue include a basic diagnostic method involving: mixing a person’s “bodily fluid” with a labeled antigen to the MuSK antibodies; immunoprecipitating any MuSK complexes from the fluid; and then looking for the label in the precipitate. Some claims indicate that the label is a radioactive iodine isotope.
Conventional Techniques: As we get into the eligibility analysis, it makes sense to note here that the claimed method is basically the one that any biochem PhD researcher would have come up with after learning about the importance of the MuSK autoantibody — i.e., it probably would be obvious if the relationship between MuSk and MG were in the prior art. However, the claimed method does involve creating non-naturally-occurring labeled antigens and then causing a chemical reaction that does not naturally-occur.
Under Mayo v. Prometheus, 566 U.S. 66 (2012) a law of nature may not be patented. In that case, the provided an example of a law of nature — the correlation between the a blood metabolite and the appropriate treatment dosage. The court explained explain that it is proper to have a claim “directed to” a law of nature, so long as the claim also includes “something more” such as an inventive practical application. In other words: “Laws of nature are not patentable, but applications of such laws may be patentable.” Athena.
Here, the Federal Circuit agreed with the lower court that the claims at issue are directed to a law of nature: “the correlation between the presence of naturally-occurring MuSK autoantibodies in bodily fluid and MuSK-related neurological diseases like MG.” This correlation exists in nature, even if only recently discovered by humans, and “there can thus be no dispute that it is an ineligible natural law.”
Here, although the claims include “certain concrete steps,” the court still determined that they were – as a whole – directed to the abstract idea “because the claimed advance was only in the discovery of a natural law, and . . . the additional recited steps only apply conventional techniques to detect that natural law.” To support this conclusion, the court cited to portions of the specification explaining that “the actual steps [are] known per se in the art” or are “standard techniques in the art.”
Regarding the required creation and use of a man-made molecule. The court held that “the use of a man-made molecule is not decisive if it amounts to only a routine step in a conventional method for observing a natural law.” I will note here that the molecule itself would likely be eligible — to the extent they were created by the researchers.
In its analysis, the court also distinguishes its recent decision in Vanda, which found a method of treatment based upon genotype to be eligible.
We consider it important at this point to note the difference between the claims before us here, which recite a natural law and conventional means for detecting it, and applications of natural laws, which are patent-eligible. See Vanda Pharm. Inc. v. West-Ward Pharm. Int’l Ltd., 887 F.3d 1117, 1133–36 (Fed. Cir. 2018) (holding that method of treatment by administering drug at certain dosage ranges based on a patient’s genotype was not directed to a natural law). Claiming a natural cause of an ailment and well-known means of observing it is not eligible for patent because such a claim in effect only encompasses the natural law itself. But claiming a new treatment for an ailment, albeit using a natural law, is not claiming the natural law.
Within step-one of the Mayo/Alice analysis the court basically answered step-two as well — does the claim include “something more.” Here, the court appears to have added the notion that step-one should focus only on the claim as a whole while step-two includes an element-by-element analysis. Regardless, the court found that the application steps were all simply recitations of steps known in the art.
Because the specification defines the individual immunoprecipitation and iodination steps and the overall radioimmunoassay as conventional techniques, the claims fail to provide an inventive concept. . . . [A]pplying standard techniques in a standard way to observe a natural law does not provide an inventive concept.
Although conventionality can now be seen as an issue of fact, the court found that it was effectively admitted within the specification.
Judge Lourie penned the majority opinion and was joined by Judge Stoll. Judge Newman wrote in dissent. Judge Newman argued that the claims should be seen at face value:
The claims … preparation of the new radioactive entities and their chemical reactions to detect autoantibodies to the protein muscle-specific tyrosine kinase (MuSK).
This, according to Judge Newman is “not a law of nature.”
Note here Footnote 4 from the majority opinion — agreeing with the dissent that “the public interest is poorly served by adding disincentive to the development of new diagnostic methods” and lamenting their inability to act. “Our precedent leaves no room for a different outcome here.”
President Trump’s State of the Union Speech included only a small focus on intellectual property rights — and only in the international sphere:
We are now making it clear to China that after years of targeting our industries, and stealing our intellectual property, the theft of American jobs and wealth has come to an end. . . .
Our new U.S.-Mexico-Canada Agreement — or USMCA — will replace NAFTA and deliver for American workers: bringing back our manufacturing jobs, expanding American agriculture, protecting intellectual property, and ensuring that more cars are proudly stamped with four beautiful words: made in the USA.
This appeal stems from a pending E.D.Tex. infringement lawsuit filed in 2017. SEVEN Networks, LLC v. Google LLC, 2:17-CV-00442 (E.D. Tex. Aug. 22, 2017). In the case, SEVEN accused Google of infringing ten of its patents:
8,078,158, titled “Provisioning Applications for a Mobile Device”
8,811,952, titled “Mobile Device Power Management in Data Synchronization Over a Mobile Network With or Without a Trigger Notification”
9,325,600, titled “Offloading Application Traffic to a Shared Communication Channel for Signal Optimization in a Wireless Network for Traffic Utilizing Proprietary and Non-Proprietary Protocols”
9,351,254, titled “Method for Power Saving in Mobile Devices by Optimizing Wakelocks”
9,386,433 titled “System and Method for Providing a Network Service in a Distributed Fashion to a Mobile Device”
9,444,812, titled “Systems and Methods for Authenticating a Service”
9,516,127, titled “Intelligent Alarm Manipulator and Resource Tracker”
9,553,816, titled “Optimizing Mobile Network Traffic Coordination Across Multiple Applications Running on a Mobile Device,”
Google filed for dismissal under TC Heartland — arguing that it did not reside in E.D. Texas, and had no “regular and established place of business” within the district as required for proper venue under 28 U.S.C. § 1400(b).
However, the district court found venue to be proper. The crux of the conclusion was based upon the fact that Google owns and uses computer servers within the district — “edge nodes” — that Google operate to quickly deliver content to its users within the district. Note here that, although Google owns the servers, it rents the rack space within various ISP server hubs.
The Federal Circuit then denied Google’s writ of mandamus in a non-precedential 2018 order — noting in dicta that the district court decision was fact-specific and reasoned:
Google owns and wholly controls the servers, located in the district under specific contracts with ISPs—which may not even tighten a screw without Google’s instruction. The location of the servers in the district serves Google’s business interests—by serving interests of Google’s ISP customers (e.g., in saving transport costs), Google’s end-user customers (e.g., in quick delivery of content), or both—as confirmed by Google’s advertising of its Edge Network and the Edge Nodes for efficient content delivery; and upon installation of the servers, Google places its inventory in (loads its content onto) those servers, and when Google’s end-user customers ask Google for that inventory, Google can and often does fulfill those requests from those local servers. And the server placement contracts provide Google very strong control to
keep the servers at their locations once they are installed.
Rather than ruling on the merits, the appellate panel court denied the writ — holding that mandamus is not warranted in this case. Rather, the majority approach is to wait until the conclusion of the trial and, if Google loses, it can then appeal the improper venue issue.
The mandamus denial was issued in a per curiam order by Judges Dyk and Taranto. Judge Reyna wrote in dissent — arguing that “Google’s petition presents fundamental issues concerning the application of § 1400(b) that have far reaching implications and on which district courts have disagreed.” Google persisted and filed a petition for en banc rehearing of its mandamus petition. That request has now also been denied, with the inclusion of another Judge Reyna dissent — this time precedential and joined by Judges Newman and Lourie.
The question poised before the court is whether Google’s servers … which have no physical interaction with Google employees or customers and are installed by third-parties in the facilities of third-party [ISPs] located in the Eastern District of Texas, constitute a regular and established place of business under 35 U.S.C. 1400(b) and this court’s decision in Cray.
In his dissenting opinion, Judge Reyna argues (1) this is an important question that should be addressed on mandamus; and (2) the answer is that servers likely do not count as a “regular and established place of business.”
[E]xclusive ownership and control over the servers may be insufficient under Cray. See Cray, 871 F.3d at 1363 (“Relevant considerations include whether the defendant owns or leases the place, or exercises other attributes of possession or control over the place.” (emphases added)). It is undisputed that no Google employee has ever visited the places where the servers are installed. Nor do those facilities resemble one of the many Google offices in other venues that would satisfy § 1400(b) under a straightforward application of the statute. See id. at 1364 (“A further consideration for this requirement might be the nature and activity of the alleged place of business of the defendant in the district in comparison with that of other places of business of the defendant in other venues.”). … For many [internet focused] companies, the reasoning of the district court’s holding could essentially reestablish nationwide venue, in conflict with TC Heartland, by standing for the proposition that owning and controlling computer hardware involved in some aspect of company business (e.g., transmitting data) alone is sufficient.
Here, Judge Reyna is not deciding the question, but suggesting that the answer is likely that venue is improper.
Back on the ground – the case has been proceeding throughout the entire mandamus process. Trial was set for January 2018. However, just before trial the parties asked for a stay of the case based upon an “agreement in principle” to settle the case. A full settlement is now likely within a few days.
Mylan Pharms. Inc. v. Research Corp. Techs., Inc. (Fed. Cir. 2019)
This post begins with an obviousness discussion, then moves to IPR standing, and finally talks about SAS.
Obviousness: In Mylan, the Federal Circuit affirms a PTAB decision siding with the patentee and holding that RCT’s pharmaceutical compound patent claims were not proven unpatentable (i.e., confirming patentability).
The patent at issue is directed toward an enantiomeric isomer (R configuration) of lacosamide. The dependent claims at issue are directed to the use of the drug for anticonvulsant effective (treating epilepsy symptoms).
As with most Inter Partes Review (IPR) decisions, the focus is obviousness. The listed inventor – Harold Kohn – is also the author of the lead prior art reference.
Harold Kohn et al., Preparation and Anticonvulsant Activity of a Series of Functionalized α-Heteroatom-Substituted Amino Acids, 34 J. Medicinal Chemistry 2444 (1991); J.A. 2404–12.
The article identifies a particular compound as the “most active” as a potential anticonvulsant whose structure is shown below.
Although the Board decided that there was sufficient similarity to institute the IPR, it ultimately ruled that the modification of the 1991 compound to create lacosamide was beyond ordinary skill in the art.
On appeal, the Federal Circuit affirmed — holding that even if the 1991 compound was an appropriate lead compound the challenger “failed to meet their burden to establish a motivation to modify.” Here, the challenger relied upon an organic chemistry drug design text for the principle that a developer would be motivated to replace an amine in the 1991 compound with a methylene link to form lacosamide.
According to Appellants, a person of skill in the art would then have been motivated to modify compound 3l by replacing the amine of its methoxyamino group with a methylene link to yield a more stable, synthetically accessible, pharmaceutically common and acceptable moiety.
On appeal, however, the Federal Circuit rejected this approach — holding that the PTAB decision was based upon substantial evidence. In particular, the Board looked at contemporaneous evidence that such a modification would have reduced therapeutic activity.
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The case includes an important discussion regarding standing to appeal and the one-year bar under 5 U.S.C. § 319. Here, Argentum filed the IPR petition in November 2015. Argentum had not ever been sued under the patent and arguably would not have Article III standing to challenge the patent in court. However, the IPR statute allows anyone to petition.
After institution, Mylan, Brekenridge, and Alembic all filed their own IPR petitions as well as petitions for joinder under 35 U.S.C. § 315(c).
(c) Joinder.— If the Director institutes an inter partes review, the Director, in his or her discretion, may join as a party to that inter partes review any person who properly files a petition under section 311 that the Director, after receiving a preliminary response under section 313 or the expiration of the time for filing such a response, determines warrants the institution of an inter partes review under section 314.
The joinder petitions were granted. One quirk here is that the Mylan, Brekenridge, and Alembic IPR petitions would not have been granted on their own since they were all time-barred under 35 U.S.C. § 315(b). Joinder, however, is a different matter — since the statute expressly indicates that “The time limitation set forth in [§ 315(b)] shall not apply to a request for joinder under subsection (c).”
In the appeal, the original petitioner Argentum dropped-out and did not appeal — and arguably could not have appealed. Only the newcomers, Mylan, Brekenridge, and Alembic, appealed.
On appeal, RCT called foul — on the challengers approach of cobbling together rights.
Argentum able to file IPR, but no right to appeal.
Mylan, et al., not able to file IPR on its own, but standing to appeal.
In the end though, the Federal Circuit found the approach proper under the statute. Once Mylan was joined as a petitioner, it had a statutory right to appeal.
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Final point to discuss here involves SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018). In that case, the Supreme Court held that the PTAB must either institute as to either (1) all challenged claims or (2) no claims. The Federal Circuit has expanded that holding to now include a requirement of instituting as to either (1) all grounds for challenge or (2) no grounds at all.
Here, the PTAB instituted as to all challenged claims, but only some grounds for challenge. In oral arguments (rebuttal), Mylan’s counsel requested, in the “alternative,” that the case be remanded for consideration of all grounds. On appeal, the Federal Circuit held that the right to remand had been waived. In particular, applicant waited more than 6-months until the rebuttal portion of oral arguments to request the remand. “Given the circumstances in this case, we find that Appellants have waived their request for remand.”
Chad Gilles at BigPatentData reports on the first handful of PTAB decisions considering eligibility under the 2019 Revised Subject Matter Eligibility Guidance. The outcome — 101 Rejection Affirmed in five of six cases. Gilles writes “If your claim can still be lumped into the very broad ‘certain methods of organizing human activity’ the new guidance may not be of much help.”
This image is a bit hard to read, but it shows the cross-border invention data mentioned in yesterday’s post — focusing on which nations tend to have collaborative inventors with which other nations. US is central here, but there are other clusters as well.
U.S. patents list the country of residence of the inventors at the time of patent issue — although I imagine that many applicants do not update residence during application pendency. The chart below looks at the first-listed inventor for recently issued patents and then reports the average number of inventors per patent for each country. An interesting caveat to this report is that about 8% of U.S. patents involve cross-border inventions. These are multi-inventor patents with at least two of the inventors residing in different countries.
Duncan Parking Techs., Inc. v. IPS Group, Inc. (Fed. Cir. 2019) and IPS Group, Inc. v. Duncan Solutions Inc. (Fed. Cir. 2019)
This decision involves parallel appeals from (1) a district court siding with the accused infringer on noninfringement grounds; and (2) a PTAB IPR decision siding with the patentee confirming patentability. On appeal, the accused infringer won on several grounds, but it appears that at least some of the claims will be found both infringed and valid.
In this post, I focus on the PTAB decision and self-harming prior art.
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The two patents in suit are related to single-space, credit-card enabled, solar-powered parking meters. U.S. Patents 8,595,054 and 7,854,310. Of the two, the ‘054 patent has the earlier effective filing date (December 2006) while the ‘310 patent’s associated application was not filed until 14 months later (February 2008). The two patents are both owned by IPS and have one overlapping inventor (King). However the patents also have several non-overlapping inventors. Relevant for this case, Schwarz is a listed inventor of the ‘054 patent but not the ‘310 patent.
Once the ‘054 patent published in 2009, it became prior art under pre-AIA 35 U.S.C. 102(e) with a prior art date of December 2006. 102(e) offers two additional tricks for our situation here: First, a published application or patent only counts as prior art if filed “by another”; and second, 102(e) prior art cannot be used for obviousness purposes if the purported prior art is owned by the same entity as the application/patent being challenged.
By Another: This gets a little bit tricky, but the baseline law is that a prior art application is “by another” if invented by someone not listed in the later application being challenged. Here, the purported prior art (the ‘054 patent) lists King and Schwarz as inventors — that counts as a different since Schwarz is not listed on the ‘310 patent. However, the court allows parties to get into the weeds on this point and ask — who actually invented the particular aspects of the disclosure being used. Here, the patentee argued that King (the overlapping inventor) is the one who created the particular disclosure. On appeal, the Federal Circuit agreed with the legal analysis, but disagreed on the facts:
If Schwarz is a joint inventor of the anticipating disclosure, then it is “by another” for the purposes of § 102(e). . . . Because the [later] ’310 patent claims clearly include elements previously disclosed in Figure 8 [of the prior ‘054 patent], the question is whether Schwarz conceived those elements as they were disclosed in the ’054 patent. . . .
While IPS argues that Schwarz’s role consisted of “drawing a schematic,” the record shows that creating the block diagram was not a minor task. Schwarz had to coordinate with D+I as they designed a device that could
physically fit within an existing parking meter housing. As a result of Schwarz’s contribution, the ’054 patent discloses a parking meter device with a detailed electrical system, a challenge King described as one of “two big hurdles” to the invention. Thus, Schwarz’s contribution, measured against the dimension
of the full invention, was significant.
Okay, based upon the Federal Circuit’s conclusion that Schwarz is an inventor of that disclosure in the ‘054 patent and not listed on the ‘310 patent, his contribution is “by another” and thus can count as 102(e) prior art.
Same Owner: The same-owner caveat on 102(e) is quite powerful. However, pre-AIA it only applied to limit the obviousness doctrine. Here, the challenge is anticipation and so the reference counts as prior art.
The result here is that the earlier application counts as prior art — as such, Federal Circuit reversed the PTAB decision and remanded for a finding that the claims should be cancelled.
= = = =
Note here that these details have been substantially changed by the America Invents Act. Under the new law, the same-company exception applies for both obviousness and anticipation. Thus, this case would have a different outcome.
In addition, the “by another” language was removed and replaced with “names another inventor.” I don’t believe that this second language actually changes the law.
= = = =
The result here is that the ‘310 patent is invalid, but the ‘054 patent remains strong and at least some of its claims appear infringed.
On February 26, the USPTO will be holding a 3-hour online training focused on the 2019 Revised Subject Matter Eligibility Guidelines. [Free – Sign-Up Here] This will basically parallel examiner training on the same subject matter and will be led by USPTO trainers. The Office has limited space, but has scheduled potential additional training on February 27 and 28. Sign-up by February 3, 2019.
Hikma Pharmaceuticals USA Inc., v. Vanda Pharmaceuticals Inc. (Supreme Court 2019)
I wrote earlier about the Federal Circuit’s decision on Vanda’s drug dosage claims that have two basic steps:
Determining whether a patient is likely a poor metabolizer of the drug iloperidone based upon DNA analysis (i.e., if the patient has has the CYP2D6 genotype)
Administering iloperidone at a lower dose to predicted poor metabolizers in order to reduce the risk of “QTc prolongation” for poor metabolizers.
In the case, iloperidone was already known as a drug treatment and that some folks were poor metabolizers in a way that created the risk. For poor metabolizers, the lower dose is still effective (since the drug stays in the body longer). A remaining problem though was how to predict who should get the low dosage. The core discovery here is that a genetic difference explains the risk, and the inventors made that discovery and then implemented it with its administration steps. The question then is whether this approach is patent eligible.
I previously explained my position in the case as follows:
(1) Vanda’s claims should be patent eligible [on policy grounds]; (2) but the claims are not patent eligible under Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012) and Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014).
The Federal Circuit disagreed with my second conclusion and in a 2-1 decision held the claims eligible. Patent challenger Hikma (formerly West-Ward) has petitioned the Supreme Court review and that petition is supported by two strong amicus briefs:
Hikma Pharmaceuticals USA Inc., et al. v. Vanda Pharmaceuticals Inc.
All three briefs say basically same thing — The Federal Circuit’s Vanda decision conflicts with Mayo and Flook. “The Federal Circuit’s decision effectively overturns this court’s precedents, thwarts the proper development of patent eligibility law, and will lead to countless improperly issued patents.”
The Law Professor Brief was filed by Stanford’s IP Clinic – although neither Mark Lemley nor Lisa Larrimore Ouellette signed-on. Professors Josh Sarnoff (DePaul) and Katherine Strandburg (NYU) substantially drafted the brief. Top pharma-patent litigator Douglass Hochstetler (KelleyDrye) filed the AAM brief.
I recently posted a chart showing a short time series showing the number of inventors per patent. The basic conclusion from that post was in the headline: Average Number of Inventors per Patent Continues Steady Rise. Here, I have updated and added to those charts. The first chart below reaches back to 1976 — showing that the average number of inventors per patent has been steadily increasing over all of the past 40 years. The trend has been amazingly steady and linear, and should serve as good fodder for economic analysis. My simple linear model suggests that we’ll top the 3.0 inventors-per-patent threshold by 2021 (both the mean and median).
The second and third charts (below) provides a bit more detail and looks to answer some questions posted by James Daily of WashU regarding the underlying distributions. The basic conclusion there is that the proportion of one-inventor patents has dropped steadily — and can be linked with a steady rise in patents listing three or more inventors. During this time, the proportion of two-inventor patents has remained steady at about 25%. The charts also demonstrate that the growth in 3+ inventor patents is itself skewed: For example, the proportion of patents with 3 inventors doubled during the 43 year span while the proportion of patents with 7+ inventors saw a nine-fold increase.
Although the movement was already fully underway, recognize that the America Invents Act (AIA) helps foster this as well by (1) allowing patents to be filed by the applicant rather than the inventors; and (2) weakening the penalty for errors in listing of inventorship. That change was by design and part of what Dir. Kappos notion that major inventions these days are quite often major team projects, and that the patent law should foster and encourage those teams projects at least as much as it encourages individual innovation.
The new HUAWEI indictments make include some amount of comedy. The basic claim centers on an anthropomorphic robot named “Tappy.” Tappy is owned by T-Mobile, but HUAWEI was allowed to use Tappy to test phones it was making for T-Mobile (subject to a non-disclosure agreement). HUAWEI then started developing its own robot — with the much less friendly name of xDeviceRobot. HUAWEI tried to buy Tappy, but was refused and so figured out a way to infuse xDeviceRobot with some of Tappy’s features. That infusion of ideas is what los federales consider criminal theft of a trade secret in violation of the Federal Economic Espionage Act.
I’ll note here that Tappy the Robot is also a street performer with its (his?) own FaceBook page. I might suggest a dance-off to settle the dispute.
It turns out that HUAWEI perhaps didn’t take all the steps necessary for criminal trade secret theft. But, the criminal prosecutors were able to indict the company on conspiracy to steal trade secrets and attempted trade secret theft; as well as wire fraud and obstruction of justice.
This past fall at the Administering Patent Law symposium at Iowa Law, Professor Colleen Chien presented an argument in favor of more intentional experimentation by administrative agencies such, as the USPTO to test policy concepts and proposed several possibilities. Below, Professor Chien describes one such project, based on the Merges/Crouch proposal for deferring patentable subject matter analyses in prosecution. Read the accompanying PatentlyO Law Journal article here:
Colleen V. Chien, Piloting Applicant-Initiated 101 Deferral Through A Randomized Controlled Trial, 2019 Patently-O Patent Law Journal 1. (2019.Chien.DeferringPSM)
Guest post by Colleen V. Chien, Justin D’Atri Visiting Professor of Business Law, Columbia University School of Law; Professor, Santa Clara University Law School
“The journey of a thousand miles begins with a single step.” – Lao Tzu
Responding to frustration with the Supreme Court’s patentable subject matter (PSM) decisions, the Federal Circuit has issued clarifying decisions, the USPTO has released new guidance regarding applying Section 101 (and 112), and Senators Coons and Tillis have been holding roundtables. 101 appeals and rejections, including pre-abandonment rejections, have risen following Alice and Mayo, particularly within impacted technology areas. (Figs 1A and 1B, details here and here). To support tracking the impact of its own guidance and related developments, the USPTO should release updated versions of office action data (the last release was in 2017).
In this post, I propose a complementary approach that aims to conserve agency and applicant resources even while policymakers work to clarify the law. It builds on the idea of deferring 101 subject matter until other issues are exhausted first proposed by Robert Merges and Dennis Crouch, but with some important modifications. Deferral would be at applicant’s option, not mandatory, and the USPTO should roll out this intervention through a controlled trial with randomization, as the agency has done previously, to determine the practice’s effectiveness.
Experimenting with Ordering
The case for deferring subject matter builds on the insight that 101 is rarely the single dispositive issue – among office actions prior to abandonment, less than 15% of TC36BM and medical diagnostic applications and 2% applications overall are “only 101.” Yet 101 is controversial – the rate of ex parte decisions addressing 101 has also shot up, from less than 10% to over 80% in 2018 in medical diagnostic and software technology areas, and to 26% overall. (Fig 1B)[1]
Deferring 101 would borrow from the Supreme Court doctrine of avoidance, which allows the Court to “resolve[] cases on non-constitutional grounds whenever possible,” in order to conserve court resources and legitimacy. Other federal agencies have also used deferral, for example, in the mid to late 2000s, when the application of immigration law to same-sex couples in some cases required family separation. To avoid this harsh consequence, Department of Homeland Security prosecutors administratively closed some cases, immigration judges granted continuances for unusually long periods in hopes that the law would change, and US Customs and Immigration enforcement officials granted requests for deferred action. That is to say, they avoided the law by deferring its application.
Avoiding PSM issues would allow cases to resolve, through allowance or abandonment, on less controversial, non-101 grounds.[2] (The USPTO’s new guidelines implement this logic to a degree, shifting focus towards 112 and away from 101). But making 101 deferral optional, at applicant’s discretion, would preserve the benefits of compact prosecution and the freedom applicants enjoy to select a fast or slow track for each application.
The Advantages of Experimentation
Trying out applicant-initiated 101 deferral through a rigorous pilot has several advantages. First, unlike changing the law or its application which requires all to adjust, only applicants dissatisfied with the status quo would see a change. 85% of office actions don’t even include a PSM rejection I’ve found previously.
Second, implementing 101 deferral as a pilot with randomization, like the USPTO did when it conducted the post-trademark registration proof-of-use pilot, will support effective policy-making through evaluation, iteration, and refinement.[3] Design (intent-to-treat), ethical (through consent) and methodological (power, randomization, etc.) concerns and details are discussed in the accompanying piece.Rigorously tracking the impact of PSM on patent prosecution over the course of a pilot can also provide much-needed empirical support to 101 policy-making in general.
Finally, my proposal preserves the benefits of the status quo, including the little-discussed incentive prosecutors now have to add details to their patent applications and claims, a good thing. In work with students that I presented at the Federal Trade Commission’s recent hearings building on an earlier analysis in IP Watchdog by Will Gvoth, Rocky Bernsden, and Peter Glaser from Harrity & Harrity LLP, I observed that there has been a “flight to quality” among patent complaints and applications. Carrying out a differences-in-differences analysis, we found that specification length and counts of words and unique words in the first claim have grown among software applications relative to others following the Alice decision. Deferring 101 would preserve this previously unexplored impact of the “Mayo-Alice effect” on software patent drafting. If 101 were eviscerated by Congress, so too could the incentive to be more concrete in describing and claiming inventions.
Conclusion
If successful, the treatment would result in the diminished presence of 101 subject matter issues within ex parte appeals and pre abandonment rejections and, potentially, resolution time, e.g. closer to pre-Mayo or Alice levels. Applicant and prosecutor satisfaction with the process, changes made to what gets filed, timelines, and such factors would also be worth tracking.
Read it here: Colleen V. Chien, Piloting Applicant-Initiated 101 Deferral Through A Randomized Controlled Trial, 2019 Patently-O Patent Law Journal 1. (2019.Chien.DeferringPSM)
With thanks to Santa Clara Law University students Jiu-Ying Wu, Nicholas Halkowski, Marvin Mercado, and Saumya Sinha and to William Gvoth, Peter Glaser, and Rocky Bernsden of Harrity LLP for assistance with data, and Hans Sauer and Jonathan Probell for their comments on earlier drafts.
[1] Even though 101 patentable subject matter issues appear in a quarter of 2018 appeals decisions, this share is still small compared to the share of decisions that mention, for example, “102” (, “103”, or “112” issues though note that these numbers are inflated because they do not include case specific limitations that can weed out false positives based on incidental mentions (such as “ 10/282102”)
[2] For example, if an invention is incurably anticipated, obvious or unsupported, the case will have been resolved without considering subject matter. Likewise, if the claims have been re-formulated responsive to non-101 rejections and mooted any subject matter defects in the process, PSM will not factor into the application’s outcome.
[3] In that pilot, the USPTO randomly selected 500 registrations to participate in the initial program to assess the accuracy and integrity of the trademark register. Though companies selected to participate in the pilot had to comply with additional regulatory requirements, randomization ensured that the pilot’s findings were representative and its burdens, fairly distributed. See, 77 FR 30197, 30198 (explaining that randomness in the pilot was necessary to “ensure that the resulting assessment is not skewed by consideration of registrations with particular criteria, and that implementation of the rules does not create an unfair burden on specific types of trademark owners”). The results of the test and related USPTO reports, outreach and deliberations were used to expand and make the program permanent.
Prior Patently-O Patent L.J. Articles:
David A. Boundy, Agency Bad Guidance Practices at the Patent and Trademark Office: a Billion Dollar Problem, 2018 Patently-O Patent Law Journal 20. (Boundy.2018.BadGuidance)
Paul M. Janicke, Patent Venue: Half Christmas Pie, And Half Crow, 2017 Patently-O Patent Law Journal 13. (Janicke.2017.ChristmasPie.pdf)
Paul M. Janicke, The Imminent Outpouring from the Eastern District of Texas, 2017 Patently-O Patent Law Journal 1 (2017) (Janicke.2017.Venue)
Mark A. Lemley, Erik Oliver, Kent Richardson, James Yoon, & Michael Costa, Patent Purchases and Litigation Outcomes, 2016 Patently-O Patent Law Journal 15 (Lemley.2016.PatentMarket)
Bernard Chao and Amy Mapes, An Early Look at Mayo’s Impact on Personalized Medicine, 2016 Patently-O Patent Law Journal 10 (Chao.2016.PersonalizedMedicine)
James E. Daily, An Empirical Analysis of Some Proponents and Opponents of Patent Reform, 2016 Patently-O Patent Law Journal 1. (Daily.2016.Professors)
Tristan Gray–Le Coz and Charles Duan, Apply It to the USPTO: Review of the Implementation of Alice v. CLS Bank in Patent Examination, 2014 Patently-O Patent Law Journal 1. (GrayLeCozDuan)
Robert L. Stoll, Maintaining Post-Grant Review Estoppel in the America Invents Act: A Call for Legislative Restraint, 2012 Patently-O Patent Law Journal 1 (Stoll.2012.estoppel.pdf)
Paul Morgan, The Ambiguity in Section 102(a)(1) of the Leahy-Smith America Invents Act, 2011 Patently-O Patent Law Journal 29. (Morgan.2011.AIAAmbiguities)
Joshua D. Sarnoff, Derivation and Prior Art Problems with the New Patent Act, 2011 Patently-O Patent Law Journal 12 (sarnoff.2011.derivation.pdf)
Bernard Chao, Not So Confidential: A Call for Restraint in Sealing Court Records, 2011 Patently-O Patent Patent Law Journal 6 (chao.sealedrecords.pdf)
Benjamin Levi and Rodney R. Sweetland, The Federal Trade Commission’s (FTC) Recommendations to the International Trade Commission (ITC): Unsound, Unmeasured, and Unauthoritative, 2011 Patently-O Patent Law Journal 1 (levi.ftcunsound.pdf)
Kevin Emerson Collins, An Initial Comment on King Pharmaceuticals: The Printed Matter Doctrine as a Structural Doctrine and Its Implications for Prometheus Laboratories, 2010 Patently-O Patent Law Journal 111 (Collins.KingPharma.pdf)
Robert A. Matthews, Jr., When Multiple Plaintiffs/Relators Sue for the Same Act of Patent False Marking, 2010 Patently-O Patent Law Journal 95 (matthews.falsemarking.pdf)
Kristen Osenga, The Patent Office’s Fast Track Will Not Take Us in the Right Direction, 2010 Patently-O Patent L.J. 89 (Osenga.pdf)
Michael Kasdan and Joseph Casino, Federal Courts Closely Scrutinizing and Slashing Patent Damage Awards, 2010 Patently-O Patent L.J. 24 (Kasdan.Casino.Damages)
Edward Reines and Nathan Greenblatt, Interlocutory Appeals of Claim Construction in the Patent Reform Act of 2009, Part II, 2010 Patently‐O Patent L.J. 7 (2010) (Reines.2010)
Gregory P. Landis & Loria B. Yeadon, Selecting the Next Nominee for the Federal Circuit: Patently Obvious to Consider Diversity, 2010 Patently-O Patent L.J. 1 (2010) (Nominee Diversity)
Paul Cole, Patentability of Computer Software As Such, 2008 Patently-O Patent L.J. 1. (Cole.pdf)
John F. Duffy, The Death of Google’s Patents, 2008 Patently O-Pat. L.J. ___ (googlepatents101.pdf)
Mark R. Patterson, Reestablishing the Doctrine of Patent Exhaustion, 2007 Patently-O Patent L.J. 38
Arti K. Rai, The GSK Case: An Administrative Perspective, 2007 Patently-O Patent L.J. 36
Joshua D. Sarnoff, BIO v. DC and the New Need to Eliminate Federal Patent Law Preemption of State and Local Price and Product Regulation, 2007 Patently-O Patent L.J. 30 (Download Sarnoff.BIO.pdf)
John F. Duffy, Are Administrative Patent Judges Unconstitutional?, 2007 Patently-O Patent L.J. 21. (Duffy.BPAI.pdf)
Joseph Casino and Michael Kasdan, In re Seagate Technology: Willfulness and Waiver, a Summary and a Proposal, 2007 Patently-O Patent L.J. 1 (Casino-Seagate)
