The USPTO has extended its public comment period on the subject of patenting artificial intelligence inventions. Due Date: October 11, 2019 now November 8, 2019.
The United States Patent and Trademark Office (USPTO) is seeking a technical expert to advance the shared understanding of how to best implement the opportunities presented by Artificial Intelligence. The role will provide technical expertise in developing solutions for real-world, large-scale problems using Artificial Intelligence at the USPTO.
One of the more interesting pending cases before the U.S. Supreme Court has to do with the use of functional claim language at the point of novelty. Eli Lilly and Company v. Erfindergemeinschaft UroPep GbR (Supreme Court 2019). The Supreme Court has discussed this issue in a series of important cases — albeit most recently in 1946.
In Halliburton Oil Well Cementing Co. v. Walker, 329 U.S. 1 (1946), the Supreme Court invalidated Walker’s on those grounds:
The language of the claim thus describes this most crucial element in the “new” combination in terms of what it will do rather than in terms of its own physical characteristics or its arrangement in the new combination apparatus. We have held that a claim with such a description of a product is invalid as a violation of Rev. Stat. 4888 [“he shall particularly point out and distinctly claim the part, improvement, or combination which he claims as his invention or discovery.”]
Halliburton. The Supreme Court had previously held claims invalid that use “conveniently functional language at the exact point of novelty.” Gen. Electric Co. v. Wabash Co., 304 U.S. 364 (1938). The question in Halliburton was whether this patenting-bar applied to claims directed to a combination of elements. Question as presented in Halliburton:
Is the doctrine of the case of General Electric Co. v. Wabash Appliance Corp., 304 U. S. 364, condemning the use of indefinite and functional language at the exact point of novelty in a claim of a patent, applicable to a claim on a combination of elements, or should the doctrine be limited as held by the Ninth Circuit Court of Appeals, to a claim on a “single element” or “specific product”?
Halliburton Brief. The Court answered this question affirmatively — yes the same law applies to claims in combination.
We understand that the Circuit Court of Appeals held that the same rigid standards of description required for product claims is not required for a combination patent embodying old elements only. We have a different view.
Id. Congress rejected Halliburton in the Patent Act of 1952 — allowing that “an element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof…” 35 U.S.C. 112.
The 1952 Patent Act expressly allows focused on changing the standard for combination patents, but does not seemingly apply to a claim for a single element. One interpretation of the section 112(f) is that it reinstates the 9th Circuit holding in Halliburton distinguishing the GE case:
[Petitioner] assumes that the court … failed to consider … General Electric Co. v. Wabash Appliance Corporation, 304 U.S. 364. . . . Halliburton is mistaken. In the General Electric case the claim considered was not one for a combination of elements, but a claim for a single element.
Halliburton Oil Well Cementing Co. v. Walker, 149 F.2d 896 (9th Cir. 1945), aff’d, 326 U.S. 696 (1946), opinion set aside, 329 U.S. 1 (1946). The invalidated claim in GE was written as follows:
25. A filament for electric incandescent lamps or other devices, composed substantially of tungsten and made up mainly of a number of comparatively large grains of such size and contour as to prevent substantial sagging and offsetting during a normal or commercially useful life for such a lamp or other device.
Patent 1,082,933 (claims 26 & 27 were also invalidated). In invalidating the claims, the court explained that it had no need to consider whether the claim was anticipated. “The claim is invalid on its face. It fails to make a disclosure sufficiently definite.”
The claim uses indeterminate adjectives which describe the function of the grains to the exclusion of any structural definition, and thus falls within the condemnation of the doctrine that a patentee may not broaden his product claims by describing the product in terms of function. Claim 25 vividly illustrates the vice of a description in terms of function. ‘As a description of the invention, it is insufficient, and, if allowed, would extend the monopoly beyond the invention.’
The Supreme Court agreed that the claim was not “wholly functional” and doubted such a limit would be “ever true. Still, the GE court saw the problem here the inventor’s use of “conveniently functional language at the exact point of novelty.”
A limited use of terms of effect or result, which accurately define the essential qualities of a product to one skilled in the art, may in some instances be permissible and even desirable, but a characteristic essential to novelty may not be distinguished from the old art solely by its tendency to remedy the problems in the art met by the patent.
Gen. Electric Co. v. Wabash Appliance Corp., 304 U.S. 364 (1938).
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In Lilly, the question focuses on the impact Section 112 with regards to non-combination claims.
Whether a single-step patent claim that describes its point of novelty solely in functional terms violates the rule against functional claiming set forth in Halliburton Oil Well Cementing Co. v. Walker, 329 U.S. 1 (1946).
[Lilly petition]. The claim at issue is directed to a treatment for benign prostatic hyperplasia (prostate enlargement) by administering “an effective amount of an inhibitor of phosphodiesterase (PDE) V.” The claim also includes a group of compounds that might be inhibitors but that are not covered by the claim. Lilly’s Cialis drug does serve the function of a PDE inhibitor, but Lilly argues that thousands of other drugs also fit the functional description.
The E.D. Tex. court hearing the case allowed it to go to a jury trial and confirmed the jury verdict of infringement ($20 million damages). On appeal, the Federal Circuit affirmed without opinion. (R.36 Affirmance) .
Response: Uropep has now filed its brief in opposition to certiorari. The brief primarily focuses on disputes related to the patent and procedure — arguing (1) that its claim is structural (2) the issue was not properly preserved on appeal. Uropep rewrote the question as follows:
Whether a patent claim that the district court construed as structural—a conclusion that Petitioner did not challenge in its appeal—is valid under the Patent Act.
[Opposition Brief]. Still, the brief does get into the law and particularly argues that “there is no blanket rule against functional claiming” since Congress enacted Section 112. Note that Uropep had originally waived its right to file a brief, but the Supreme Court requested briefing on the case.
One way to think about this case is to look back onto the invalidated claim 25 in GE v. Walker and ask whether that claim would be patentable now. Or, is it unpatentable because the claim sets the “size and contour” of tungsten grains according to their functional limit — “as to prevent substantial sagging and offsetting during a normal or commercially useful life for such a lamp or other device.”
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An interesting aspect of this case is how it relates to patent eligibility. The patentees here appear to have been the first to discover the general concept that PDE V inhibitors can serve as a treatment for benign prostatic hyperplasia. That general discovery itself is an unpatentable aspect of how the human body works — what the Supreme Court calls a Law of Nature. As such, the patentee looked to find the broadest application of the general law — administering a PDE V inhibitor in an amount effective to treat. In its briefing, the patentee Uropep suggests that there might have been an eligibility argument in this case, but it was waived by Lilly.
UCP International Company Ltd. v. Balsam Brands Inc., Appeal No. 18-2231 (Fed. Cir. 2019)
In a separate post, I’ll write about the underlying decision here. This post is about the opening paragraph that begins with a reference to companion case (18-1256) involving the same case:
The instant appeal is the companion to concurrently issuing Appeal No. 18-1256 (“the Merits Appeal”), where we determined that the U.S. District Court for the Northern District of California misconstrued the “pivot joint” claim term of U.S. Patent Nos. 8,062,718 (“the ’718 patent) and 8,993,077 (“the ’077 patent”) (collectively, “the Patents-inSuit”). See UCP Int’l Co. v. Balsam Brands, Inc., No. 2018-1256, slip op. at 27 (Fed. Cir. Sept. 19, 2019). We presume familiarity with our opinion in the Merits Appeal which recites the same technology and patents as the instant appeal. We, therefore, only recite the facts necessary to understand the issues on appeal here.
Unfortunately, the referenced merits decision was issued under seal and so cannot be referenced as suggested by the appellate panel.
In the lawsuit, Balsam sued Frontgate for infringing its patents covering an artificial Christmas tree. Frontgate brought-in the manufacturer UCP for indemnification. Balsam then settled with Frontgate (without notifying UCP) and in a manner that left UCP liable for infringement. The confidential information is apparently related to the settlement between Balsam and Frontgate whose contents were designated as “Highly Confidential – Outside Attorneys’ Eyes Only” in the district court litigation. In its briefing, Balsam identified the settlement terms as “highly confidential, sensitive information.”
The Federal Circuit has asked the parties to “show cause” as to why the under seal opinion should remain under seal with briefing due by October 3. The Federal Circuit has a particular rule limiting confidential marking to 15-words. Fed. Cir. R. 28(d)(1). “A party seeking to mark confidential more than fifteen words in any brief must file a motion with this court establishing that the additional confidentiality markings are appropriate and necessary pursuant to a statute, administrative regulation, or court rule.” Id.
I have included the redacted sections from UCP’s brief (BELOW) and I really can’t see how it can only be 15 words that are redacted. Note that the rule does allow for “repeating the marked words” without recounting. But, there are more than 15 lines of text marked confidential with usual average of 10+ words per line.
Earlier this week, the jury returned with an interesting verdict in PPS DATA, LLC v. Jack Henry & Associates, Inc. (E.D. Tex. Sept 2019). In the case, PPS sued Jack Henry for infringing its patented method of centrally processing remotely deposited checks. The defendant argued that the claims improperly encompassed an abstract idea. However, following Berkheimer, refused invalidate the claims on summary judgment — finding genuine disputes of material fact:
Having considered the § 101 Motion, the Court finds it should be and hereby is DENIED. The Court finds that there are genuine disputes of material fact with respect to whether “the claim limitations involve more than performance of ‘well-understood, routine, and conventional activities previously known to the industry.’” Berkheimer v. HP Inc., 881 F.3d 1360, 1367 (Fed. Cir. 2018) (quoting Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 224 (2014)).
Those disputed facts were then put on trial and given to the jury to decide. The verdict particularly asked whether the asserted claims “ONLY involve activities that were well-understood, routine, and conventional” as of the application’s priority date. The verdict – reproduced below – sided with the defendant in finding that the claims were only directed to such non-inventive elements.
The jury also sided with the defendant on infringement — finding none.
With that verdict in hand, Judge Gilstrap has already issued a final judgment in the case — finding (1) no infringement; and (2) that the asserted claims are “invalid for being directed to patent-ineligible subject matter.”
Trading Technologies International, Inc. v. IBG LLC, SCT Docket No. 19-353 (Supreme Court 2019)
Before writing this post, I note that while in practice (2003-2007) I represented Trading Technologies and filed a number of infringement lawsuits asserting infringement of patents related to those at issue here. Although I no longer represent Trading Technologies, I continue to be bound by duties owed to a former client. – Dennis Crouch
The patented inventions at issue are used by professional stock-market traders buying and selling in a dynamic electronic marketplace. The patents generally relate to user interfaces (UIs) designed to improve accuracy and speed of offers and bids while also dynamically displaying market-depth (pending offers/bids at higher/lower prices). U.S. Patents 7,904,374, 7,212,999, and 7,533,056. These inventions do not make the computer itself run faster or improve the computer’s internal processing or signalling. Rather, the improvement is seated in user interaction. In its decision, the Federal Circuit characterized the improvement as “focused on improving the trader, not the functioning of the computer.” And, according to the court, such improvements were effectively non-technological abstract ideas. “We conclude that the claims are directed to the abstract idea of graphing bids and offers to assist a trader to make an order.”
In its petition for writ of certiorari, Trading Technologies challenges the Federal Circuit’s conclusion that an inventive concept cannot lie in the improved user-functionality and also directly challenges the Supreme Court’s Alice Corp. decision and its progeny. (Note that on the first-point, the Federal Circuit has an inconsistent set of opinions).
Question presented:
In Alice Corp. Pty. Ltd. v. CLS Bank International, 573 U.S. 208 (2014), the Court declined once again to define the scope of the “abstract idea” exception to patent eligibility created by this Court. It did, however, assume that claims that “purport to improve the functioning of the computer itself” would be patent eligible. Here, a panel of the Federal Circuit held, in conflict with other panel decisions, that computer-implemented inventions providing useful functionality to users, but without improving the basic functions of the computer itself in a manner akin to improved hardware, are directed to abstract ideas and therefore patent ineligible.
Accordingly, the questions presented are:
1. Whether computer-implemented inventions that provide useful user functionality but do not improve the basic functions of the computer itself are categorically ineligible for patent protection.
2. Whether the Court should overrule its precedents recognizing the “abstract idea” exception to patent eligibility under the Patent Act of 1952.
Trading Technologies Petition. On question two – it is important to note that the Supreme Court has identified eligibility as a question of statutory interpretation — but has not directly confronted whether the Patent Act of 1952 rejected or modified the abstract idea test.
Facebook, Inc. v. Windy City Innovations, LLC (Fed. Cir. 2019)
In a sua sponte order, the Federal Circuit asked the parties to and the U.S. Gov’t to answer the following question:
[W]hat, if any, deference should be afforded to decisions of a Patent Trial and Appeal Board Precedential Opinion Panel (‘POP’), and specifically to the POP opinion in Proppant Express Investments, LLC v. Oren Technologies, LLC, No. IPR2018-00914, Paper 38 (P.T.A.B. Mar. 13, 2019).
The Federal Circuit requested briefing from the U.S. Gov’t (filed on Sept 17, 2019) followed by party briefs within 14 days (October 1, 2019). David Boundy has also already submitted an amicus brief on the topic.
In its brief, the Gov’t argues that the PTAB-POP decisions should be given deference–Chevron Deference–when interpreting AIA Trial provisions of the Patent Act. “The POP’s interpretations of the Leahy-Smith America Invents Act (AIA) qualify for deference under Chevron U.S.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).”
The POP’s precedential opinions readily qualify for Chevron deference. . . . Congress has expressly delegated authority to adjudicate IPRs, see 35 U.S.C. §§ 311-319, as well as authority to enact regulations “establishing and governing inter partes review under this chapter,” id. § 316(a)(4). Thus, both of the quintessential forms of lawmaking authority discussed in Mead, “adjudication [and] notice-and-comment rulemaking,” are present here. Moreover, the AIA is a complex, specialized statutory regime implicating a “vast number of claims” with a “consequent need for agency expertise and administrative experience.” Barnhart.
In his brief, Boundy focuses on the grant of rulemaking authority found in the AIA — that the PTO Director “shall prescribe regulations.” 35 U.S.C. 316(a) & 326(a). Those provisions indicate ordinary notice-and-comment rulemaking procedures. He explains:
Many agencies have a propensity to avoid rulemaking, because of the workload and oversight that comes with it. . . . The POP process takes that avoidance to a new level. Over the last seven months, instead of “prescribing regulations,” the POP has issued eighteen precedential decisions, mostly on issues that are recurring and predictable. This avoidance of rulemaking process denies all parties the benefits and predictability of careful, informed “regulation,” evades oversight by OIRA and the Small Business Administration, and as this case demonstrates, poses entirely novel legal questions. The PTAB’s shortcutting creates uncertainty for the public, and will burden this Court as procedural breaches get litigated.
Boundy Brief.
This particular case involves a quirky question of joinder under 35 U.S.C. 315(c) that allows the director to join someone “as a party.” In Proppant, the PTAB POP concluded that “§ 315(c) provides discretion to allow a petitioner to be joined to a proceeding in which it is already a party.” Absent deference, I’m betting that the Federal Circuit will reject that rule.
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The consolidated case on appeal involves seven inter partes review proceedings filed by Facebook against four different patents owned by Windy City. Facebook filed successive petitions against several of the patents and then requested joinder under § 315(c). The PTAB granted those requests. The final written decision cancelled some claims three of the patents, but upheld claims in all four.
Inspired Development Group and Mitchell Prine v. Inspired Products Group (dba KidsEmbrace) (Fed. Cir. 2019)
Mr. Prine is the listed inventor of U.S. Design Patent No. D524,559 and several other super-hero related car seats. Prine formed Inspired Development and assigned patent ownership to that company. Prine then formed another company, KidsEmbrace, to sell the car seats with an exclusive license from Inspired Development. KidsEmbrace was then bought-out by Boliari who later terminated the license agreement. Prine sued for the money — suing for breach and unjust enrichment under Florida law.
New PatentlyO Law Journal Essay by Professor Bernard Chao of the University of Denver Sturm College of Law.
On August 15, 2019, Time Warner filed a petition with the United States Supreme Court seeking to vacate a $139.8 million damages verdict. That amount represents approximately 5% of Time Warner’s monthly subscriber revenue ($1.37 per subscriber per month). Time Warner argues that this award is too much given the contribution the patented feature made to its infringing service. At its core, the damages portion of the petition is asking the Supreme Court to provide guidance that will ensure that damages verdicts rely on apportionment principles and provide clarity in how they achieve this.
For years, the Federal Circuit has required apportionment in calculating royalties for complex products because modern technology products (e.g. smart phones and semiconductors) have countless features, most of them unrelated to any given patent at issue. The patentee is entitled to capture value added by the infringing feature, but cannot recover value attributable to everything else.
As with many issues in patent law, this is easier said than done. How do courts ensure that a patentee’s expert opinion on the ultimate damages figure is based on apportionment principles? How do we know if the jury verdict reflects those same principles?
These issues are at the heart of Time Warner’s petition.
Jeremy C. Doerre, Is There Any Need to Resort to a § 101 Exception for Prior Art Ideas?, 2019 PatentlyO L.J. 10. (2019.Doerre.AnyNeed)
Colleen V. Chien, Piloting Applicant-Initiated 101 Deferral Through A Randomized Controlled Trial, 2019 Patently-O Patent Law Journal 1. (2019.Chien.DeferringPSM)
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)
Oral arguments are set for December 9, 2019 in this case that again questions the meaning of “nonappealable” in the AIA trial context.
The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.
35 U.S.C. 314(d).
The inter partes review (IPR) petition challenging Click-to-Call’s U.S. Patent 5,818,836 was filed by Ingenio who later became Dex Media and who is now known as Thryv. The PTAB instituted the petition and later found the claims unpatentable. On appeal, Federal Circuit sided with the patentee — holding (on rehearing) that the IPR should not have been instituted in the first place and thus vacating the final written decision. In particular, the court held that prior litigation on the patent triggered the 1-year time-bar of Section 315(b). The en banc majority also held that the “nonappealable” statutory language was not strong enough to bar appeals of situations like this – where Director’s decision to institute went outside of her statutory authority. In Cuozzo v. Lee (2015), the Supreme Court arguably authorized such review (UPDATE BELOW):
While the decision to institute inter partes review is “final and nonappealable” in the sense that a court cannot stop the proceeding from going forward, the question whether it was lawful to institute review will not escape judicial scrutiny. This approach is consistent with the normal rule that a party may challenge earlier agency rulings that are themselves “not directly reviewable” when seeking review of a final, appealable decision. 5 U. S. C. §704. And it strikes a sensible balance: The Patent Office may proceed unimpeded with the inter partes review process … but it will be held to account for its compliance with the law at the end of the day.
Cuozzo. UPDATE – NOTE that the quote above comes from Alito’s concurrence/dissent, not the majority opinion.
The Supreme Court granted certiorari in Thryv on the following single question:
1. Whether 35 U.8.C. § 314(d) permits appeal of the PTAB’s decision to institute an inter partes review upon finding that§ 315(b)’s time bar did not apply.
[Thryv Petition]. In its briefing, the Gov’t has provided a more neutral question:
Whether, in an appeal from the final written decision of the [PTAB] in an [IPR], the Federal Circuit is authorized to vacate the Board’s decision as to patentability on the ground that the review was improperly instituted because the petition was time-barred by 35 U.S.C. 315(b).
Merits Briefing is now ongoing with petitioner’s opening brief filed along with a Gov’t brief and amici supporting either (1) reversal or (2) neither party.
Although expected, the Gov’t brief is important. The Gov’t originally opposed certiorari and has now switched sides to support petitioner. That change was foreshadowed at the petition stage in the Gov’t brief:
Although the government agrees that the court of appeals lacked jurisdiction to consider Click-to-Call’s challenge to the institution determination in this case, the court’s contrary jurisdictional holding does not warrant further review.
[Gov’t Brief Opposing Certiorari]. The Gov’t explains its conclusion of no-appellate-authority as consistent with Cuozzo. In particular, Cuozzo explains that the no-appeal provision applies to questions “closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review.” The Gov’t key authority on this front is the dissent filed by Justice Alito in Cuozzo itself. Alito particularly argued that limitations in the Cuozzo majority opinion would leave the courts “powerless” to curb abuses by the PTO, including improper policing of the 315(b) time bar. [Gov’t Brief on the Merits].
Petitioner Merits Brief substantially parallels the brief of the Gov’t, although going a bit further by arguing that the no-appeal provision was designed to ensure that a patentee could not save its patent on a technicality not related to patentability.
This is critical, because overturning an IPR decision based on tangential, non-merits grounds decided at the institution stage would permit the patent owner to continue to enforce an invalid patent, thereby substantially harming the public interest.
Petitioner Brief.
So far, eight amici briefs have been filed:
Supporting neither party: Federal Circuit Bar Association. (arguing that initiating a petition in violation of the time-bar is an “ultra vires” agency action appealable even when appeals are barred by statute).
Supporting neither party: PTAB Bar Association. (this brief essentially requests that the Supreme Court write a careful opinion that considers its impact beyond the facts of this particular case).
Supporting petitioner: AARP. (quick and efficient IPR proceedings are saving lives by making drugs and biosimilars available at a lower cost).
Supporting petitioner: Atlanta Gas Light Company. (“Providing greater opportunities for appellate review may increase accuracy, but at a cost to efficiency.”)
Supporting petitioner: Superior Communications, Inc. (the only way this situation comes-up is where the patent has been found unpatentable on the merits but is seeking to escape judgment on a technicality).
Respondent’s brief and briefs in support will be filed over the next few weeks.
Ed. Note: I summarized the Federal Circuit’s design patent decision in Curver Luxembourg v. Home Expressions in a recent post titled Federal Circuit Rejects Patenting Designs “in the Abstract.” Prof. Burstein has previously written about the case and the topic and I invited her to provide some remarks on the case. – D.Crouch
This decision is consistent with previously-decided case law on infringement.* (For a full run-down, see my law review article: The Patented Design.)
This decision not consistent with the USPTO’s current novelty rule. According to the MPEP, “[a]nticipation does not require that the claimed design and the prior art be from analogous arts,” relying on an out-of-context quote (which, as the Federal Circuit pointed out, was also dicta) from In re Glavas. See MPEP § 1504.02. The court’s ruling on this point is a welcome correction and should spur the USPTO to revise its examination procedures.
This case also raises a deeper and more important question—namely, what does it mean for something to be a “design for an article of manufacture”?
Design patents are available for “any new, original and ornamental design for an article of manufacture,” subject to the other requirements of Title 35. See 35 U.S.C. § 171(a). Prior to this case, some suggested that a “design for an article” refers to merely a design that is capable of being applied to one or more articles, not a design that is in any sense “for” any particular article. Under this view, the longstanding USPTO requirement that an applicant identify an article could be viewed as a type of reduction-to-practice requirement or mere formality that should not (or even must not) limit the scope of the claim.
The Federal Circuit’s decision in Curver seems to reject that conception of the patentable “design.” Although it doesn’t fully answer the question of what it means to be a “design for an article of manufacture,” this decision is a step in the right direction.
So what happens now? The USPTO requires a design patent applicant to identify an article in the verbal portion of the claim and (the same article) in the title. See 37 CFR § 1.153. But it also instructs examiners to “afford the applicant substantial latitude in the language of the title/claim” because, under 35 U.S.C. § 112, “the claim defines ‘the subject matter which the inventor or joint inventor regards as the invention.’” MPEP § 1503.01(I).
The Federal Circuit’s decision in Curver creates incentives for applicants to seek broader titles in order to obtain broader scope. In theory, that incentive would be counter-balanced by the fact that a broader title would create a broader universe of § 102 prior art. But given how difficult it is for patent examiners and accused infringers to find relevant prior art (an issue I discuss here), that seems unlikely to be a significant deterrent to over-claiming.
The risk of prosecution history estoppel might be a more significant practical deterrent. Curver initially claimed a “design for a furniture part.” When the examiner deemed that “too vague,” Curver amended the claim to refer to a “chair.” The Federal Circuit ruled that this amendment did limit the claim. Future applicants will have every incentive to push back on these types of rejections, putting pressure on the USPTO to enunciate clearer rules about how specific article identifications need to be.
In that respect, the USPTO (and anyone who’s interested in this topic) may want to revisit the CCPA’s 1931 decision in In re Schnell. In that case, the applicant attempted to frame its claim very broadly and the CCPA rejected that attempt. In doing so, the CCPA engaged in a thoughtful and nuanced discussion about how different types of designs might lend themselves to different types of claiming and how those claims might affect a design patent’s scope. The approach taken in Schnell is not the only possible (or necessarily the best) approach, but it’s worth considering.
I’ve also been asked how Curver might affect arguments about what constitutes the “relevant article” for the purposes of § 289. (For more on that issue, see this previous post.) At this point, it’s hard to answer that question with any certainty because the Federal Circuit has still not picked a test for Samsung step one. If it adopts the test proposed by the U.S. Government in its Samsung v. Apple amicus brief, the article identification in the patent would be relevant to the damages inquiry. This approach gives applicants incentives to direct the verbal portions of their claims to he largest salable unit. See, e.g., U.S. Patent No. D852,236 (stating that the design is “for a refrigerator” but only actually claiming a small part of the shape of the interior of a refrigerator). In some circumstances, these incentives might conflict with the ones provided by Curver; it will be interesting to see how applicants balance them in future applications.
And while Curver is only directly relevant to the scope of § 102 prior art, I suspect applicants will also argue that it should also narrow the universe of § 103 prior art. But when it comes to designs, it actually makes sense for the universe of § 103 prior art to be broader than the universe of § 102 prior art. (For more on these points, see here and here).
One final note: In Curver, the panel described the asserted patent as “atypical” because “all of the drawings fail to depict an article of manufacture for the ornamental design.” But it’s actually quite common for surface-ornamentation designs to be illustrated in this way. Whether or not that is a good policy (and whether it is consistent with § 112) is another question. The answer probably depends on what it means for a surface design to be “for an article of manufacture”? Even for repeating patterns like the one claimed in Curver, it could be argued that placement and proportion are still essential elements of a design for a particular article. If that’s true, then the disembodied-fragment drawing convention also needs to be reconsidered.
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* Other commentators have asserted that, in the past, courts treated surface-ornamentation as designs per se. But they cited no cases in support of that assertion and I have not been able to find any. For more details, see FN 480 here.
This case involves a patent term adjustment (PTA) challenge by Mayo, the owner of of U.S. Patent 8,981,063. On appeal, the Federal Circuit has affirmed the PTO’s statutory interpretation — holding that the RCE period (pausing PTA Calculation) is not ended by an interference proceeding.
Utility patents have a term of 20-years from the effective filing date of the patent application (not counting national-stage priority or provisional applications). Since patent rights are not complete until the patent issues, a long period of prosecution can eat-into the effective length of the patent term. However, Congress has provided for a generous Patent Term Adjustment (PTA) designed to add extra days to the patent term in order to compensate for lengthy prosecution periods.
This appeal is focused on the PTA guarantee of “no more than 3-year application pendency.” 35 U.S.C. § 154(b)(1)(B). If the application is pending for more than three years, then the patentee will receive day-for-day additional patent term. One major exception to the 3-year timeline is that it does not include RCE time: “not including — (i) any time consumed by continued examination of the application requested by the applicant under § 132(b).”
In Novartis AG v. Lee, 740 F.3d 593 (Fed. Cir. 2014), the Federal Circuit held that this RCE-time exception stops at the mailing of the notice-of-allowance.
Mayo’s here prosecution was complicated by an interference proceedings that was declared after Mayo initially filed its RCE. Timeline below comes from Mayo’s brief.
From the chart above: Mayo filed an RCE and then a few months later the PTO declared an interference (at Mayo’s suggestion). Once the interference ended, the PTO sua sponte re-reopened prosecution before finally issuing a notice of allowance.
Mayo’s argued that the time “consumed by continued examination” was only Period-1 that ended with the interference declaration. Its reasoning has to do with interference declarations that require examination to be “completed” and the invention otherwise “patentable” before declaring the interference.
On appeal here, the Federal Circuit sided with the PTO — holding that a declaration of an interference not is the equivalent of a Notice of Allowance. Rather, here “examination clearly did not end until the date the Notice of Allowance was mailed.” Bottom line was that the court counted the post-interference examination time as caused by the RCE filing — and thus not eligible for PTA.
Although interference proceedings are now rare (and on their way out), the reasoning here would apply equally to cases where an examiner reopens prosecution following a successful appeal by the patent applicant.
The majority opinion was penned by Judge Lourie and joined by Judge Dyk. Writing in dissent, Judge Newman sided with Mayo since all of the claims pending in the interference had been indicated to be allowable by the examiner.
Regents of the University of Minnesota v. LSI Corporation (Supreme Court 2019) (petition stage)
Question presented in this new petition:
Whether the inter partes review proceedings brought by private respondents against the University of Minnesota in this case are barred by sovereign immunity.
UMN sued LSI and Ericsson for infringing several of its semiconductor related patents. U.S. Patents 5,859,601, 7,251,768, RE45,230, 8,588,317, 8,718,185, and 8,774,309. Those two companies then petitioned the USPTO for inter partes review (IPR) of the asserted claims. The PTAB then dismissed the proceedings – holding that 11th Amendment sovereign immunity applied to IPR proceedings. On appeal, however, the Federal Circuit reversed – holding that sovereign immunity does not protect state-owned patents from being cancelled by the PTAB.
A key Supreme Court precedent on-point is Fed. Mar. Comm’n v. S.C. State Ports Auth., 535 U.S. 743 (2002) (FMC) (presumptive state immunity even in administrative adjudications). Here a major difference is that we have property-rights at stake that create special in rem jurisdiction potential and that UMN has already attacked the IPR petitioners by suing them for infringement, creating potential waiver.
This case is parallel to the Indian Tribe immunity case of Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc., 896 F.3d 1332 (Fed. Cir. 2018). The Supreme Court denied certiorari in that case earlier this year. A major difference here is that Indian Tribe immunity stems from common law and statutory law (and sometimes treaty) while State immunity is grounded in the U.S. Constitution.
Curver Luxembourg, SARL v. Home Expressions Inc. (Fed. Cir. 2019)
The district court dismissed Curver’s design patent infringement lawsuit for failure-to-state-a-claim. Asserted U.S. Design Patent D677,946 is titled “Pattern for a Chair”
and claims an “ornamental design for a pattern for a chair, as shown and described.”
Note from the figure above that the drawings (and thus the claims) are not dirercted to a whole chair, but only a pattern that apparently could be used on a chair.
The accused product is not a chair but instead a basket that (arguably) uses the same pattern. The district court looked to the “for a chair” limitation in the claim and made the easy conclusion that a basket is not a chair. Before moving forward, I’ll note the famous Van Gogh chalk drawing titled “woman sitting on a basket with head in hands.” I wonder if she just tried to reconcile a set of Federal Circuit precedents.
On appeal, the Federal Circuit has affirmed — holding that claim language specifying a particular article of manufacture (a chair) limits the scope of the design patent in cases where “the claim language supplies the only instance of an article of manufacture that appears nowhere in the figures.”
In this case, the patentee essentially asked for the Federal Circuit to construe the patent as covering a disembodied design that could be applied to any article of manufacture. In rejecting that argument, the court first noted that it “has never sanctioned granting a design patent for a surface ornamentation in the abstract such that the patent’s scope encompasses every possible article of manufacture to which the surface ornamentation is applied.”
Given that long-standing precedent, unchallenged regulation, and agency practice all consistently support the view that design patents are granted only for a design applied to an article of manufacture, and not a design per se, we hold that claim language can limit the scope of a design patent where the claim language supplies the only instance of an article of manufacture that appears nowhere in the figures.
Slip opinion. As the court notes, PTO design patent practice bars patentees from obtaining coverage for an abstract design.
The title of the design must designate the particular article. No description, other than a reference to the drawing, is ordinarily required. The claim shall be in formal terms to the ornamental design for the article (specifying name) as shown, or as shown and described.
37 C.F.R. § 1.153. This provision has not been challenged at the Federal Circuit (and this litigation appeal does not allow for a direct challenge of the PTO regulation). However, the court suggests that the limit is also good policy — citing Prof. Sarah Burstein’s work on-point:
If we adopted a design per se rule, “the title and claim language would provide no useful information at all.” Sarah Burstein, The Patented Design, 83 TENN. L. REV. 161 (2015). In contrast, tying the design pattern to a particular article provides more accurate and predictable notice about what is and is not protected by the design patent.
Id.
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The Samuelson Clinic at Berkeley Law filed an amicus brief on behalf of the Open Source Hardware Association. The brief argues that allowing patenting of designs in the abstract would deter innovation.
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Although the design patent here was ‘examined,’ the examiner did not issue a single office action rejection. Both the examiner’s search and references cited by the applicant focus on material for the backing or seat of a chair.
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Note here that the inventor has patented a number of baskets, and Curver sells baskets using this patented design. But, Curver did not patent its basket with the design.
In its new petition for writ of certiorari, Tech. Properties focuses on claim construction and the Federal Circuit’s application of prosecution history disclaimer.
Whether the United States Court of Appeals for the Federal Circuit’s development and application of the doctrine of “prosecution history disclaimer” is consistent with fundamental principles of separation of powers, the Patent Act, and long-established Supreme Court precedent.
The patent at issue here (5,809,336) stems from a 1989 application and a divisional filed just before the 1995 change-over to the 20-year-from-filing patent term. The microprocessor system claims require an “oscillator.” In interpreting that limitation, the court added some additional negative limitations that (1) the oscillator “does not require a command input to change the clock frequency” and (2) the oscillator’s frequency “is not fixed by any external crystal.” The addition was based upon arguments that the patentee made during prosecution. That narrowing, the patentee argues “runs afoul of the separation of powers among Congress, the USPTO, and the federal courts embodied in the Patent Act.”
The most interesting aspect of the petition here is reliance on so many 19th century decisions by the Supreme Court:
Keystone Bridge Co. v. Phoenix Iron Co., 95 U.S. 274 (1877) (The Patent Act of 1836 “relieving the courts from the duty of ascertaining the exact invention of the patentee by inference and conjecture. . . . This duty is now cast upon the Patent Office. There his claim is, or is supposed to be, examined, scrutinized,
limited, and made to conform to what he is entitled to.”)
Merrill v. Yeomans, 94 U.S. 568 (1876) (claims are of primary importance).
Goodyear Dental Vulcanite Co. v. Davis, 102 U.S. 222 (1880) (prosecution history cannot “enlarge, diminish, or vary” the claim limitations).
White v. Dunbar, 119 U.S. 47 (1886) (“unjust to the public, as well as an evasion of the law, to construe it in a manner different from the plain import of its terms”).
McCarty v. Lehigh Val. R. Co., 160 U.S. 110 (1895) (“[I]f we once begin to include elements not mentioned in the claim, in order to limit such claim, . . . we should never know where to stop.”).
Of course, the petition also includes the mystery statement: “While the prosecution history can play some role in claim construction, it should not be used to diminish or enlarge the scope of the claims.” What is this mystery role?
Patent reform legislation continues its slow pathway through Congress. The leading bill is the STRONGER Patents Act of 2019 (“‘Support Technology and Research for Our Nation’s Growth and Economic Resilience”) with identical bills pending in both the House and Senate. H.R.3666; S. 2082.
Upcoming Hearing: September 11, 2019 held by the Intellectual Property Subcommittee of the Senate Judiciary Committee with testimony from: Bradley Ditty (InterDigital); Prof. Mossoff (Scalia Law); Prof. Cotter (Minnesota); Dan Lang (Cisco); Josh Landau (CCIA); and Eb Bright (ExploaMed). [Written testimony will be available on the Hearing website sometime on the 11th.]
The Bill is designed to strengthen the power of an individual patent — making it harder to invalidate and easier to enforce as follows:
AIA Trials: PTAB must require clear and convincing evidence before invalidating an issued patent;
AIA Trials: Petitioner must have standing (business or financial reason to challenge a patent’s validity);
AIA Trials: Bar multiple trials on the same claims; Bar multiple petitions on the same patent by a single petitioner.
AIA Trials: Allowing petitioner to appeal most insitution question; barring appeal of institution denials;
AIA Trials: Splitting institution judges from trial judges;
Enforcement: Presume that infringement causes irreparable harm and that the remedy at law is inadequate.
A group of law professors have submitted a letter to Congress arguing against the STRONGER Patent Act. The core argument of the letter is that the inter partes review (IPR) system “has proven to be a robust and efficient check on patent validity, and has had a positive impact across industries, including high-tech, Main Street, and pharmaceuticals, where invalid patents can keep drug prices high.” [Read it here] Prof. Cotter signed the letter; Prof. Mossoff did not.
Valspar Sourcing, Inc. (Sherwin Williams) v. PPG Indus. (Fed. Cir. 2019) (nonprecedential) (Valspar II)
This short decision reads like a study of my parenting style — “You should have understood my meaning based upon my facial expression!” From a patent-law perspective, the Federal Circuit here has vacated an entire IPR proceeding because the challenger lacks standing to appeal. Note here that the “R” is reexamination rather than review and the decision is nonprecedential.
This case involves two inter partes reexaminations filed by PPG back in 2012. U.S. Patents 7,592,047 and 8,092,876. On reexamination, the examiner rejected all the claims; then the Board (PTAB) reversed all of those rejections (favoring the patentee).
On appeal, the Federal Circuit refused to hear the case on standing grounds — holding that Valspar had granted a covenant-not-to-sue that mooted the appeal. PPG Industries, Inc. v. Valspar Sourcing, Inc., 679 Fed. Appx. 1002 (Fed. Cir. Feb. 9, 2017)(nonprecedential) (Valspar I). Still, although it did not hear the merits of the case, the court still vacated the PTAB Final decisions in the interests of “justice.” In particular, the court appeared to be looking to punish Valspar for filing its covenant-not-to-sue late in the appeal — “tardily and unilaterally.”
“If a judgment has become moot, this Court may not consider its merits, but may make such disposition of the whole case as justice may require.” Walling v. James V. Reuter, Inc., 321 U.S. 671 (1944). . . .
“A party who seeks review of the merits of an adverse ruling, but is frustrated by the vagaries of circumstance, ought not in fairness be forced to acquiesce in the judgment. The same is true when mootness results from unilateral action of the party who prevailed below.” U.S. Bancorp Mortg. Co. v. Bonner Mall P’ship, 513 U.S. 18 (1994). . . .
VACATED, and . . . DISMISSED
Valspar I. Here, the vacatur is seen as an equitable remedy and, it turns out that the Federal Circuit was not interested in punishing the patentee for its late action, but only to ensure that the mootness holds.
Following Valspar I on “remand” and with its decision upholding the patent vacated, the Board went the other way and ordered the examiner to issue reexamination certificates cancelling all of the challenged claims. In particular, the Board found that the vacatur of its prior decision terminated the appeal and thus the examiner was required by law to issue the reexamination certificate upholding the claims.
The Federal Circuit, now in Valspar II, found the Board’s approach inequitable — the very opposite of equitable.
The ordered vacatur was designed to protect the challenger from being forced to acquiesce to an unreviewable adverse ruling by the Board. But by effectively canceling all the challenged claims, the Board’s approach unfairly converted the vacatur shield into a sword for the challenger. That is an inequitable result—especially here, where the Board previously determined that the challenged claims are not invalid.
Had we intended such an incongruous result, we would have made that intent explicit in our opinion. The Board should have interpreted the scope of the vacatur based on the context provided by this court’s opinion. . . . With this context, it was clear that this court’s intent was to nullify the entire inter partes reexamination without any collateral effect on other litigation.
Valspar II. On remand here, the Board is instructed to either (1) do nothing or (2) “To the extent the Patent Office interprets our mandate to require further action, such action should be limited to concluding the reexaminations by vacating the proceedings without any further adjudication, and without the issuance of any reexamination certificate.”
Issues Here: To my knowledge, the Federal Circuit has not begun vacating Inter Partes Review proceedings based upon lack of appellate jurisdiction, but this decision shows how it is within the court’s equitable power.
Query: Is anyone else a little bit creeped out by the Sherwin Williams logo?
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Andy Baluch (Smith Baluch) represented the patentee Valspar on appeal; Tony Figg (Rothwell Figg) represented PPG.
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Note that Valspar has an ongoing lawsuit against PPG that asserts continuations of the disclaimed patents here.
In re Greenstein (Fed. Cir. 2019) (nonprecedential decision)
Mark Greenstein is trying to patent an automated investment system to “automatically adjust the amount [a] person saves” in order to achieve a projected income amount. A key element of the claims, according to Greenstein, is to “utilize a projected amount of income at a future date for at least one person.” The Examiner and PTAB found the claims unpatentable as both lacking eligibility and as either anticipated or obvious.
On appeal, the Federal Circuit has affirmed the eligibility rejection — finding:
Alice Step 1: Representative claim 1 recites receiving investment data, adjusting an individual’s savings, and investing the adjusted savings to achieve a projected retirement income. This describes no more than the automation of the longstanding fundamental economic concept of personal financial planning. We have routinely held that such claims are directed to abstract ideas.
Alice Step 2: The claims merely recite an abstract idea with instructions to implement it “using one or more computers with associated software.” And as the Board correctly stated, these are “generic, purely conventional elements.”
On appeal, Greenstein argued that the claimed utilization of projected income was an inventive concept and noted that it “was the basis for the successful commercial launch of a new product, demonstrating its material advantages to persons in the relevant market.” On appeal, the Federal Circuit found that argument failed to connect the dots.
Even if Mr. Greenstein is correct that the claimed utilization of a projected future income was the basis for a commercially successful product, this is insufficient to transform the claims into a patent-eligible application. It is well-settled that a claimed invention’s “use of the ineligible concept to which it is directed cannot supply the inventive concept that renders the invention ‘significantly more’ than that ineligible concept.”
Greenstein filed this application back in 2014 (provisional in 2013). He was represented by Bacon Thomas before the PTO, but took it on pro-se before the Federal Circuit.
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Facebook, Inc. v. Windy City Innovations, LLC (Fed. Cir. 2019)
Regents of the University of Minnesota v. LSI Corporation (Supreme Court 2019) (petition stage)
