2019

Did You Know: Reducing USPTO Fees

Patent

The America Invents Act requires the USPTO Director to consider reducing Patent Office fees each fiscal year.  In particular, the Act requires that the Director:

(1) shall consult with the Patent Public Advisory Committee and the Trademark Public Advisory Committee on the advisability of reducing any fees [subject to USPTO Fee Setting Authority] and (2) after the consultation required under paragraph (1), may reduce such fees.

This requirement is not codified in the U.S. Code because it is part of the temporary fee-setting-authority granted by the AIA for 7-years and then extended this year by the USPTO FEES Act for an additional 8-years (ending in October 2016).

 

Obviousness without a Motivation to Combine

Patent,

by Dennis Crouch

Realtime Data, LLC v. Iancu (Fed. Cir. 2019)

Interesting obviousness case here regarding motivation-to-combine.

The PTAB’s obviousness finding is based upon two prior art references. However, the references are not being combined so-to-speak. Rather, the Board found that the first reference (O’Brien) teaches all limitations of the lossless encoding scheme in Realtime’s claim 1.  The second reference (Nelson) was used essentially to show that the “string encoding” described in O’Brien was the same as the “dictionary-based encoding” in Realtime’s claims.

 

On appeal, Realtime argued a lack of “motivation to combine” the references — based upon longstanding precedent that a “factfinder must further consider the factual questions of whether a person of ordinary skill in the art would be motivated to combine those references.” Dome Patent L.P. v. Lee, 799 F.3d 1372 (Fed. Cir. 2015).

Here, however, the Federal Circuit ruled that motivation-to-combine was not necessary since the obviousness finding did not combine two different disclosures. Rather, the Board used the second reference to help explain the first reference.

We conclude that, in this case, the Board was not required to make any finding regarding a motivation to combine given its reliance on O’Brien alone. . . . HP relied on Nelson merely to explain that O’Brien’s encoder is a type of dictionary encoder. . . . Under these circumstances, the Board was free to come to the very conclusion it reached: that O’Brien alone disclosed every element of claims 1–4, 8, and 28. And because the Board did not rely on Nelson for the disclosure of a particular element or teaching, the Board had no obligation to find a motivation to combine O’Brien and Nelson.

The CAFC noted that an anticipation determination rather than obviousness may have been more appropriate since O’Brien taught all of the elements of Realtime’s claim.  However, the court concluded that obviousness still worked — since  “a disclosure that anticipates under § 102 also renders the claim invalid under § 103, for ‘anticipation is the epitome of obviousness.’” Connell v. Sears, Roebuck & Co., 722 F.2d 1542 (Fed. Cir. 1983) (quoting In re Fracalossi, 681 F.2d 792, (CCPA 1982)).

= = = = =

Patent at issue: U.S. Patent No. 6,597,812, covering lossless data compression and decompression. Realtime sued HP and others back in 2015 and that led to the responsive IPR filing that is the subject of this appeal.

 

 

 

 

PTAB Must Consider All Claims AND All Grounds

Patent

by Dennis Crouch

AC Techs v. Amazon.com, Inc. (Fed. Cir. 2019)

This case focuses on AIA-Trial Procedure following SAS Institute, Inc. v. Iancu, 138 S.Ct. 1348 (2018).   In SAS, the Supreme Court held that the USPTO’s institution decision is binary — “either institute review or don’t.”  If the USPTO institutes an IPR then the PTAB must issue a final written decision regarding each claim challenged in the petition.  Prior to SAS, the USPTO commonly issued partial-institution orders — instituting the IPR on only a subset of challenged claims.

Here, Amazon’s petition was granted as to Grounds 1 and 2, but not Ground 3.  At institution stage, the Board found Ground 3 redundant — in part because the claims challenged by Ground 3 were already challenged by Ground 1.  Thus, we don’t have the same situation as SAS, but it is somewhat similar.  An important bit of information for the case is that Ground 3 did not present new prior art, but only an argument based upon an alternative claim construction.

In its final written decision, the Board invalidated a number of claims, but sided with the patentee for claims 2, 4, and 6 — the same claims challenged by not-instituted Ground 3.  On motion, the Board then issued a revised opinion considering Ground 3 and rejecting the remaining claims on that ground.

On appeal, the Federal Circuit confirmed that the Board had followed proper procedure — noting that “if the Board institutes an IPR, it must similarly address all grounds of unpatentability raised by the petitioner.” See BioDelivery Scis. Int’l, Inc. v. Aquestive Therapeutics, Inc., 898 F.3d 1205 (Fed. Cir. 2018) (“Post-SAS cases have held that it is appropriate to remand to the PTAB to consider non-instituted claims as well as non-instituted grounds.”).

The Federal Circuit also found no due process violation in the rehearing since the USPTO provided notice and allowed additional discovery and argument prior to considering Ground 3.

Court denies motion to clarify obligations when making permitted ex parte contacts

Ethics, Patent

By David Hricik

The ABA Model Rules and most state rules divide the world into “persons represented by counsel,” who may not be contacted about a matter, and “unrepresented persons,” who may.  Speaking generally, a lawyer may not communicate about a matter with a person who is “represented by counsel” in that particular matter.  See, e.g., A.B.A. Model Rule 4.2.  This is true even if the represented person wants to talk to the lawyer: only the person’s lawyer may consent.

If a person is not “represented by counsel,” in a matter, a lawyer may communicate with that person, subject to requirements of Rule 4.3, which usually include explaining why the lawyer is communicating and not giving legal advice. A comment to that rule states: “In order to avoid a misunderstanding, a lawyer will typically need to identify the lawyer’s client and, where necessary, explain that the client has interests opposed to those of the unrepresented person.”

Two common problems arise with these rules.  One is that whether a person is “represented by counsel” is not always clear when an entity is the opposing lawyer’s client: if you’re suing my client, and my client is a huge multi-national corporation, is everyone at my client “represented” by me, or what?  The comment to ABA Model Rule 4.2 provides some clarity, but not a lot at the margins, by stating:

In the case of a represented organization, this Rule prohibits communications with a constituent of the organization who supervises, directs or regularly consults with the organization’s lawyer concerning the matter or has authority to obligate the organization with respect to the matter or whose act or omission in connection with the matter may be imputed to the organization for purposes of civil or criminal liability. Consent of the organization’s lawyer is not required for communication with a former constituent.

That’s likely why a comment states: “A lawyer who is uncertain whether a communication with a represented person is permissible may seek a court order.”

The second problem is that often what, exactly, a lawyer must say to a person who is not “represented by counsel,” can be unclear.  Obviously, a lawyer who wants the person not to reveal information will want the person to be given all sorts of information by opposing counsel — “you don’t have to talk to me and you shouldn’t reveal privileged information” and so on — while the lawyer wanting to make the contact wants to make the contact friendly and informal.

It’s not perfectly clear from the court’s order, but it appears that in Hoist Fitness Systems, Inc. v. TuffStuff Fitness International, Inc. (C.D. Cal. Jan. 7, 2019), a lawyer sought an order modifying the protective order to specify that certain persons were not “represented” and to clarify what the lawyers had to do to comply with Rule 4.3.  The court denied the request:

Defendant seeks to amend the Protective Order to require the parties to comply with the law – specifically, California Rule of Professional Conduct 4.37. Defendant “seeks clarification from the Court regarding the proper interpretation of Rule 4.3, and if it agrees with [Defendant’s] interpretation, grant [Defendant’s] request to amend the protective order to ensure compliance with Rule 4.3 by all counsel in this litigation.” Dkt. 147 at 1.

Pursuant to Local Rule 37-2.4, “[t]he Court will not consider any discovery motion in the absence of a joint stipulation or a declaration from counsel for the moving party establishing that opposing counsel (a) failed to confer in a timely manner in accordance with L.R. 37-1; (b) failed to provide the opposing party’s portion of the joint stipulation in a timely manner in accordance with L.R. 37-2.2; or (c) refused to sign and return the joint stipulation after the opposing party’s portion was added.” L.R. 37-2.4. Here, Defendant filed the instant Motion to Amend the Protective Order without a Joint Stipulation or the required declaration from counsel. Hence, the Court need not consider Defendant’s Motion to Amend the Protective Order.

In addition, the Court declines Defendant’s request to give an advisory opinion on whether Plaintiff’s counsel has violated California Code of Professional Conduct 4.3. Golden v. Zwickler, 394 U.S. 103, 108, 89 S. Ct. 956, 959, 22 L. Ed. 2d 113 (1969) (“‘(T)he federal courts established pursuant to Article III of the Constitution do not render advisory opinions.”). Moreover, there is no good cause to amend a stipulated protective order to include a requirement that counsel comply with the law. Fed. R. Civ. P. 26(c)(1) (“The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.”).

It’s hard to tell, but if the party seeking the modification had identified particular individuals and sought rulings as to them, then perhaps the cost of formal discovery could have been reduced, and the potential for future motion practice on this point, eliminated.

Patently-O Bits and Bytes by Juvan Bonni

Bits and Bytes, Patent

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

What the Fu** — Supreme Court agrees to hear Brunetti Trademark Dispute

Patent

by Dennis Crouch

Erik Brunetti’s “FUCT” line of apparel doesn’t have much appeal to my sense of style, but the clothing certainly seem to make a statement.  The USPTO refused to grant Brunetti’s application to register the mark — finding that the mark “comprises immoral * * * or scandalous matter” and thus cannot be registered under Section 2(a) of the Lanham Act.

On appeal, the Federal Circuit sided with Brunetti — holding the statute unconstitutional as contrary to the Free Speech provision of the First Amendment.  In its decision, the court followed the Supreme Court’s lead in Matal v. Tam, 137 S. Ct. 1744 (2017). In Tam, the Supreme Court addressed disparaging marks — also prohibited under Section 2(a) — finding that the prohibition on registration to be contrary to free speech rights.  The Government then petitioned the Supreme Court to review the case, and the court has now granted certiorari with the direct question:

Whether Section 1052(a)’s prohibition on the federal registration of “immoral” or “scandalous” marks is facially invalid under the Free Speech Clause of the First Amendment.

In an unusual turn of events, Brunetti did not oppose the petition, but instead agreed that the Supreme Court should weigh-in — and additionally address the following additional question:

Whether Section 1052(a)’s prohibition on the federal registration of “immoral” or “scandalous” marks is unconstitutionally vague under the First and Fifth Amendments.

In granting certiorari, the Supreme Court did not indicate whether the court is addressing both questions, or only the one proposed by the the Government.  Since Tam, the Supreme Court has changes somewhat — Justice Kennedy is gone and Justices Gorsuch and Kavanaugh are now on the court.

Read these Eligibility Guidelines from the USPTO

Patent

by Dennis Crouch

The USPTO has released pair of examiner guidance documents for (1) examination of patent eligibility and (2) examination for definiteness of functional claim limitations (with a focus on software patents).

Although these guides do not have the force of law, they are quite important because they direct the bureaucratic process — telling examiners how to examine patent applications for these issues. Examiner performance will be adjudged based upon their ability to comply with the guidance.  In general, I would expect that examiners will be more quickly swayed by citations to the guidelines rather than to citations to particular court decisions.  Examiners will be trained in the upcoming weeks and training materials will be available at the PTO website.

Here, I will focus on the eligibility guidelines and leave definiteness for a separate post.

Prior iterations of eligibility guidelines focused on a listing of post-Alice cases as examples for examiners to follow.  Examiners are typically not attorneys and are not expected to read cases — that makes this case-focused approach problematic in the long-term.  In the new 2019 iteration, the PTO has attempted to synthesize case law in a way that is practical for examiners.  The PTO is also suggesting that this approach will be more reliable and more predictable.  The USPTO does not have the power to shift the legal definition of eligibility.  However, the Agency is given discretionary authority to design a practical administrative mechanism for implementing the law as given.  That is how I see the PTO’s approach here. Now lets look at two of the important changes from prior guidance documents: .

Categories of Abstract Ideas: The inquiry of Alice/Mayo Step 1 is whether the patent claim is “directed to” an “abstract idea” or other excluded area.  The first important guidance change here is to create three of categories or “groupings” of abstract ideas:

  • Mathematical Concepts
  • Methods of Organizing Human Activity
  • Mental Processes

Under the guidance, claims that do not recite matter within one of these three groups “should not [ordinarily] be treated as reciting abstract ideas.”  The guidance does note a “rare circumstance” where an abstract idea might fall outside these categories.  While this approach does not settle the ongoing question of what counts as abstract, it does go a long way toward helping examiners decide when to reject claims.

“Directed To” an Ineligible Concept: The PTO guidance has also focused-in on the Supreme Court’s “directed to” requirement that finds claims problematic only if “directed to” the ineligible concept.  For that element, the PTO asks examiners to consider whether the ineligible concept is “integrated into a practical application.”

A claim is not “directed to” a judicial exception, and thus is patent eligible, if the claim as a whole integrates the recited judicial exception into a practical application of that exception.

The guidance for analyzing this issue focuses on whether keywords of whether the claim uses the ineligible subject matter in a way “that imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception.”

Although the document is written primarily as examiner guidance, it is also being applied to PTAB judges and is being seen as a statement of PTO policy.

Shutdown for Years?

Patent

Although the PTO is permitted to spend its already collected fees.  It isn’t actually able to spend fees collected since the shutdown.  My understanding is that the Office is in cost-cutting mode based upon President Trump’s statement that the shutdown could last for “weeks or even years.”

Once funds run out, the PTO is looking for ways to keep the doors open enough to continue to accept new application filings — while shutting down examination and PTAB activities.  It is likely that a special PTO funding bill would receive bipartisan support — keeping the patent office rolling while other government services are shut-down.

What is the Role of the Objective Indicia of Nonobviousness

Patent

by Dennis Crouch

ZUP, LLC, Petitioner v.  Nash Manufacturing, Inc. is a nice teaching case because the invention is so simple.  Zup’s patent covers a wake-board with a particular handle configuration and a method of riding the board — using the handles to change positions. U.S. Patent No. 8,292,681.

In its decision, the Federal Circuit sided with the accused infringer Nash — affirming that the asserted claims are invalid as obvious.  In particular, the Federal Circuit agreed with the lower court ruling that Zup had simply combined well-known elements (handles & foot bindings, e.g.) to solve a longstanding watersport goal.  Zup presented evidence of secondary considerations of both long-felt but unresolved need and copying.  Zup explains its position:

Here, the defendant Nash had been in the field for over 50 years, obtaining numerous patents on water recreation devices similar to the ZUP Board. Nash had tried, but failed, to create a device that would allow broader participation in watersports like waterskiing. Nash praised the ZUP Board. Nash attempted to do business with ZUP, obtaining a ZUP Board from ZUP to analyze. Instead of partnering with ZUP, however, Nash decided to copy ZUP. The ZUP Board is nonobvious if Nash tried and failed to invent it for over 50 years and then copied it
after failing to partner with ZUP.

The appellate majority rejected Zup’s arguments and instead ruled that “The weak evidence of secondary considerations presented here simply cannot overcome the strong showing of obviousness.”  The majority was penned by Chief Judge Prost and joined by Judge Lourie.  Writing in Dissent, Judge Newman argued that the majority improperly treated secondary considerations as a rebuttal factor rather than an integral aspect of the obviousness analysis.

Now, Zup has petitioned the Supreme Court for writ of certiorari — asking whether secondary considerations are properly relegated to rebuttal evidence.

Read the new petition here. SCOTUS.

The Role of Objective Indicia in Non-Obviousness Doctrine