2020

Jury Verdicts in Design Patent Cases

Patent

Hafco Foundry and Machine Co. v. GMS Mine Repair and Maintenance, Inc. (Fed. Cir. 2020).

Hafco’s US Design Patent D681,684 covers an ornamental design for a “Rock Dust Blower.” GMS was Hafco’s distributor. After a breakup GMS started selling its own version.

The jury awarded a verdict of $123k and the district court issued a permanent injunction. However, in a post verdict ruling, the district court remitted the damages award to zero and ordered a new trial on damages.  The court also denied GMS’s motion for judgment as a matter of law (JMOL) on non-infringement and GMS appealed.

The basic question in the appeal is the extent that functional elements of the design can be protected by design patent.  Unlike copyright, design patent law does not have a statutory requirement that ornamental features of a design be separable from the functional elements.  I have never used a “rock dust blower”, but nothing in the design shown above appears purely decorative.  At the same time, I can imagine many ways to make a fully functional and relatively inexpensive “rock dust blower” that use different design features than those drawn by the patentee here.  Unfortunately, during the trial (or pre-trial) GMS never pointed to (or provided evidence on) the particular functional aspects of the design here that should have been excluded. As such, the Federal Circuit found the issue waived

Because GMS never made this non-infringement argument at the district court, nor presented relevant evidence on the functional or prior art aspects of the ‘684 patent to the jury, GMS has not preserved the argument for appeal.

Slip Op.

Jury Instructions – Functionality:  A jury is supposed to be instructed on the law.  Here, GMS asked for a jury instruction that “a design patent protects only the non-functional aspects of the design as shown in the patent drawings, if there are any such nonfunctional aspects.”  The did not use GMS’s proposal and GMS did not subsequently object to the Jury Instructions provided by the court. That lack of second-round objections to jury instructions is required under FRCP 51(d)(1) unless the instructions fall under the “plain error” exception of FRCP 51(d)(2).

(2) Plain Error. A court may consider a plain error in the instructions that has not been preserved as required by Rule 51(d)(1) if the error affects substantial rights.

On appeal, the Federal Circuit found no “plain error” and in fact no error at all.  The court particularly walked through and approved the following jury instructions:

Ordinary Observer:

An ordinary observer is a person who buys and uses the product at issue.

The appellate panel found no error with this instruction.

Differences from the Prior Art:  Under Egyptian Goddess, the infringement test compares the design patent images with with the accused product while keeping the prior art in-mind.  Here, for instance, the 55 gallon drum used in the patent is at least prior art.

The jury was not properly instructed to “familiarize yourself with each of the prior art designs that have been brought to your attention.” Rather, the court simply asked the jury to compare the design patent to the accused product:

You must only compare GMS’ accused rock dust blower to the ’684 design patent when making your decision regarding infringement.

On appeal, the Federal Circuit confirmed that this is a special case since the accused infringer – GMS – did not present any prior art for comparison. “Given that there was no prior art introduced at trial, no attempt by GMS to introduce the prior art, and no proposed jury instruction on this issue, the purported exclusion of this instruction cannot be error.”

Affirmed.  In hindsight, this case looks like a failure of lawyering by the defendant.  However, part of the issue here is that we were talking about only $100,000 and the level of lawyering required for a strong appellate case costs more than that.  In addition we have a situation where it sure looks like the defendant intentionally made a knock-off product.

Crouch’s Advice: If you are going to litigate a design patent, hire someone who has previously litigated a design patent (even though there are not that many folks).  If you already have litigation counsel that you trust, have them bring in an additional design patent litigator (likely from another firm) to add to the team. The difficulty here is that design patent law is different enough to get folks in deep trouble who assume they understand the process.

= = = =

Damages: Dissent by Judge Newman concurred with the opinion discussed above but also added her own opinion resolving the question of damages that was apparently not appealed. The jury verdict (image below) shows damages of $123k and were measured by GMS’s infringing sales under a profit disgorgement theory.  The problem though is that Hafco eventually elected to pursue damages based upon its own lost profits rather than profit disgorgement.  Clear error there by the jury and so it looks like it should require a new trial unless remittur works.

Remittur: When the jury verdict size cannot be supported by the evidence presented, the court may order a new trial (as here) under R.59.  In addition, the court can also offer the plaintiff the option to accept a lesser amount of damages – an amount that is supported by the evidence. This option is a remittur.  Here, the judge offered the Hafco a remittur of $0 in damages, which Hafco rejected in favor of a new trial.  In her dissent, Judge Newman suggested that the proper amount for Remittur would be $110,000 which (according to her) was the patentee’s undisputed lost profits.

Hafco suggests that remittitur to Hafco’s lost profits of $110,000 would be a more reasonable action than remittitur to zero, for $110,000 reasonably implements the jury’s verdict and intent. . . .

I would simply correct the district court’s judgment, and remit the damages award to the undisputed amount of $110,000. A new trial, on undisputed facts, is not needed to serve the purposes of the jury verdict.

Dissent.  On remand, the court may take Judge Newman’s arguments to heart and reconsider the new trial with a R.60(b) order.

= = = =

I also want to just note for a second that the lids here appear to have major differences in design.

Sequenom Back Again: This time Patent Eligible

Patent

by Dennis Crouch

Illumina, Inc. and Sequenom, Inc. v. Ariosa Diagnostics, Inc. (Fed. Cir. 2020)

These parties were before the Court back in 2015 in a case that ended with a big holding that Illumina & Sequenom’s patents were invalid as directed to an unpatentable natural phenomenon.  The discovery here is super interesting — a pregnant mother has the baby’s DNA floating around in her plasma.  Turns out that there is lots of DNA floating around in a human body: mother DNA; baby DNA; bacterial DNA; viruses; mitochondrial; etc.  The researchers here used a smart way to find the baby-DNA in the mess that relies on the fact (i.e., natural phenom) that baby-DNA is part mother and part father.  The researchers got a sample of paternal DNA (from the father) and then looked for DNA in the mother’s plasma that included segments that matched the father’s DNA.  Prior to this breakthrough some parents agonized over whether to collect some baby DNA by sticking a big needle into the amniotic sac.  That approach had the problem of causing death in a small number of cases.   In any event, the 2015 Federal Circuit held the patent claims ineligible and the Supreme Court denied certiorari.

The present case involves two additional patents that use the same natural phenomena to solve the same problems.  An important added element here is that the inventors also found that baby-DNA fragments in the plasma tend to be shorter than the mother-DNA in the plasma.  Both patents here take advantage of this phenomenon to claim methods of preparing DNA for testing. The patent document explains this finding as follows:

[S]urprisingly, the majority of the circulatory extracellular fetal DNA has a relatively small size of approximately 500 base pairs or less, whereas the majority of circulatory extracellular maternal DNA in maternal plasma has a size greater than approximately 500 base pairs. . . . This surprising finding forms the basis of the present invention according to which separation of circulatory extracellular DNA fragments which are smaller than approximately 500 base pairs provides a possibility to enrich for fetal DNA sequences from the vast bulk of circulatory extracellular maternal DNA.

‘751 Specification.

The district court ruled the asserted claims ineligible.  On appeal here, however, the Federal Circuit has reversed — holding that these claims are directed at a technical solution that crosses the threshold into a patent eligible invention.

We conclude that the claims are not directed to that natural phenomenon but rather to a patent-eligible method that utilizes it.

This is a split decision with Judge Lourie explaining why the claims are patent eligible and Judge Reyna dissenting. Judge Moore signed-on with the Louri opinion making the result 2-1.

= = = =

The patents here both relate to preparing sample to be tested. U.S. Patent 9,580,751 claims a method of “preparing a DNA fraction from a pregnant human female.” Claim 1 includes three steps:

(a) extracting DNA from pregnant mother’s blood plasma [this should include both fetal and maternal DNA fragments];

(b) using “size discrimination” to remove DNA fragments greater than ~500 bp; [This results in what the claims call a “fraction of the DNA”.]

(c) analyzing a genetic locus in the fraction of DNA produced in (b). [Although not stated, this analysis could discern whether the DNA is fetal and the presence of genotypic abnormalities.]

U.S. Patent 9,580,751 Claim 1. The ‘931 patent is almost identical — it removes DNA fragments < 300 bp instead of 500 bp.

Note here that prior to the invention researchers already knew how to do all of these steps individually. However, there was no reason to separate-out the <500 bp fragments prior to the discovery of the phenomenon that most of those would be fetal DNA. This is what lead Judge Reyna to reject the claims as ineligible:

The patents’ only claimed advance is the discovery of that natural phenomenon. The claims, the written description, and the legal precedent applicable to this case all support the conclusion that the patents are ineligible. . . .

The inventors discovered a natural phenomenon: that cff-DNA tends to be shorter than cell-free maternal DNA in a mother’s blood. . . . Other than the surprising discovery, nothing else in the specification or the record before us indicates there was anything new or useful about the claimed invention.

Bottom line, researchers discovered that most of the fetal DNA in the plasma is <500 bp and the resulting invention directly applies that and broadly claims fractioning-out DNA from the plasma that is <500 bp.

The majority agreed that “the inventors were not entitled to patent the natural phenomenon that cell-free fetal DNA tends to be shorter than cell-free maternal DNA.”  Here, however, the majority concludes that the claimed method merely takes advantage of that phenomenon “by employing
physical process steps to selectively remove larger fragments of cell-free DNA and thus enrich a mixture in cellfree fetal DNA.”

In prior cases the Federal Circuit has distinguished between unpatentable diagnostic methods and patent eligible methods of treatments. In this case, the court places the inventions at issue in a third category: method of preparation.

This is not a diagnostic case. And it is not a method of treatment case. It is a method of preparation case.

This line allows the court to distinguish the case from the prior Ariosa decisions and find the claims patent eligible.

Relief Available to Patent and Trademark Applicants, Patentees and Trademark Owners Affected by the Coronavirus Outbreak

Patent

The United States Patent and Trademark Office (USPTO) considers the effects of the Coronavirus outbreak that began in approximately January 2020 to be an “extraordinary situation” within the meaning of 37 CPR 1.183 and 37 CPR 2.146 for affected patent and trademark applicants, patentees, reexamination parties, and trademark owners.

USPTO Alexandria Campus Building

Patent applicants will be able to file a petition to revive and the PTO will waive the fee for those “who were unable to timely reply to an Office communication due to the effects of the coronavirus outbreak, which resulted in the application being held abandoned or the reexamination prosecution terminated or limited.”

The petition to revive “must include a statement that the delay in filing the reply required to the outstanding Office communication was because the practitioner, applicant, or at least one inventor, was personally affected by the Coronavirus outbreak such that they were unable to file a timely reply.”

[coronavirus_relief_ognotice_03162020]

Supreme Court Postpones Oral Arguments

Patent

The Supreme Court has postponed oral arguments for its upcoming March session.  This includes two IP cases:

  • PTO v. Booking.com (Can .COM transform an otherwise generic term into a protectable trademark?)
  • Google v. Oracle (Is a software interface [an the JAVA API] protectable by copyright?)

The Federal Circuit’s next oral arguments are in April and so the court can delay any particular decision on the issue.  If you have a case before a district court judge or PTAB, check with your judges and clerks to understand timelines going forward.

Image

USPTO facilities closed to the public

Patent

All USPTO offices will be closed to the public beginning Monday, March 16, 2020 until further notice.  Employees, contractors, and those with access badges will continue to use the USPTO facilities and USPTO operations will continue without interruption.

Deadlines: Patent and trademark application deadlines and other deadlines are not extended.

AIA Patents Update

Patent

The chart above should be no surprise. Most pending applications before the PTO are now post-AIA patent applications. These are applications that were filed on or after March 16, 2013 and don’t claim priority to any prior patent filing. Note here that the PTO does not appear to enter the final AIA-status for some new applications filed with missing parts and so the numbers for the recently published cases may shift somewhat. The bulk of U.S. patents issue within four years of their priority filing date. However, there is a fairly long-tail. The patent with the longest pedigree for 2020 (thus far) is US10539396 for a dual-mode seeking missile (using both IR and RF sensors to direct a missile. The patent application was kept confidential on Gov’t order from 1976 – 2018.

USPTO cancels in-person meetings

Patent

From The PTO: Until further notice, examiner and examining attorney interviews, Patent Trial and Appeal Board (PTAB) and Trademark Trial and Appeal Board (TTAB) oral hearings, and other similar in-person meetings with parties and stakeholders scheduled to take place at USPTO offices on or after Friday, March 13, 2020 will be conducted remotely by video or telephone. Parties will receive further instructions on how to participate by video or telephone in advance of the interview, hearing, or meeting.

If you have any questions, please contact the following:

  • For patent examiner interviews, please contact the examiner or the examiner’s supervisor (SPE) directly. Additionally, if you have any questions about telephonic or video interviews in general or are unable to reach the examiner or SPE with respect to a particular interview, please email: ExaminerInterviewPractice@uspto.gov
  • For trademark examining attorney interviews, please contact the managing attorney.
  • For PTAB oral hearings, please contact PTABHearings@uspto.gov or call 571-272-9797.
  • For TTAB oral hearings, please contact TTABHearings@uspto.gov or call 571-272-8500.
  • For other in-person meetings, please contact your USPTO point of contact for that meeting.

Exclusionary Conduct

Patent

Sen. Klobuchar has proposed a new law titled the “Anticompetitive Exclusionary Conduct Prevention Act of 2020.” [PDF of Bill]

The key provision is as follows:

It shall be unlawful for a person, acting alone or in concert with other persons, to engage in exclusionary conduct that presents an appreciable risk of harming competition.

Here, exclusionary conduct is defined as conduct that disadvantages “actual or potential competitors” or “tends to foreclose or limit the opportunity of 1 or more actual or potential competitors to compete.”  For companies our groups with large market share, we assume that if they undertake exclusionary conduct then it will harm competition unless the procompetitive benefits are proven.

The bill is interesting in that it has a small caveat for securing and enforcing intellectual property rights:

Applying for or enforcing a patent, trademark, or copyright, unless such applications or enforcement actions are baseless or made in bad faith, shall not alone constitute exclusionary conduct, but such actions may be considered as part of a course of conduct that constitutes exclusionary conduct.

Thus, under the provision, “good faith” enforcement actions would not – alone – be actionable, but could be combined with other activity to show that the patent holder injured competitors.

I don’t understand why the competitors can’t just eat together politely. 

 

Zis is vat happens venue disrespect my sovereignty

Patent

by Dennis Crouch

Board of Regents of the University of Texas System, et al. v. Boston Scientific Corporation, No. 19-1110 (Supreme Court 2020).

While we await a handful of interesting state copyright law issues from the US Supreme Court, a new petition from the State of Texas asks for some respect as well. In the case, UT sued Boston Scientific for patent infringement in W.D.Tex. Federal Court.  However, venue turned out to be improper and the case was transferred to D.Del.  Texas has argued that a state has the right to enforce its actions – seek redress for harms against the state — within the borders of its own state.

Supreme Court Petition question:

Whether a state’s sovereign right to try its causes within its borders when there is personal jurisdiction over the defendant renders unconstitutional a federal patent venue statute applied to force the state sovereign to sue the in-state infringer in a federal court located in another state.

[Petition].  In Ohio v. Wyandotte Chemicals Corp., 401 U.S. 493 (1971) the Supreme Court wrote that the Founders believed that “no State should be compelled to resort to the tribunals of other States for redress.”  However, the “Constitutional” limitation is one implicit in the structure of our multi-sovereign federal system rather than with express language in the document.

Sovereign Indignity: Texas must Litigate its Infringement Case in Delaware

 

Keeping Your Settlement Secret from the Court?

Patent

by Dennis Crouch

I’m going to link-in with Prof. Hricik on this case — it feels wrong to me to “settle” a lawsuit using a secret side-bet about how the court will decide a particular motion and then only reveal the settlement after the motion is decided. However, the court didn’t appear to blink its eye. 

In Diem LLC v. BigCommerce, Inc., the defendant BigCommerce asks the Federal Circuit to reconsider its legal definition of “prevailing party” in order to allow attorney fee shifting:

According to the Supreme Court, the phrase “prevailing party” bears a uniform meaning across fee-shifting statutes. CRST Van Expedited, Inc. v. EEOC, 136 S.Ct. 1642 (2016) (“Congress has included the term ‘prevailing party’ in various fee-shifting statutes, and it has been the Court’s approach to interpret the term in a consistent manner.”).

The Federal Circuit has not respected that mandate. Its “prevailing party” jurisprudence has diverged from most sister circuits in contradiction of Supreme Court law.

[En Banc Petition]. The particular legal issue here is if a patent infringement settlement agreement can create a “prevailing party” that could then result in an attorney fee award.

While this legal question is important, a big issue in the case for me is the cooperation between the parties to get the court to decide an issue after the case had been settled.

In 2018 Diem sued BigCommerce for patent infringement, BigCommerce responded with a motion for summary judgment of non-infringement based upon a joint infringement argument.  The parties “settled” the case prior to the court’s determination of the MSJ.  “Settled” is in quotation-marks because the agreement was not a complete settlement but rather a conditional agreement creating what I call a side-bet.  Under the agreement – If the MSJ is denied and the court finds that a the infringement contentions included a joint infringement claim then BigCommerce gets $30k; otherwise case dismissed with no payment. I put together the following flow-chart for how the settlement agreement works.  Note that the agreement also includes a contractual requirement to for BigCommerce to resubmit its summary judgment motion if the joint infringement contention issue isn’t addressed in court’s first determination.

[Note – my flow chart is slightly simplified from the contract language].

]The following language comes from the settlement agreement:

MSJ Denied: If the MSJ is denied and the Court rules that Joint Infringement [was disclosed in the infringement contentions], then BigCommerce will pay Diem the sum of $30,000.00 (the “Payment”). . . .

Any Other Outcome: If any other outcome occurs, then Diem agrees to the following (collectively, a “BC-Favorable Resolution”): (i) Diem will walkaway and will not appeal or object to any order(s), (ii) the parties will allow the Court to determine the prevailing party and enter a final judgment, and (iii) if the case is not otherwise disposed, the parties will move to dismiss the action with prejudice (with clear language that BigCommerce did not pay Diem to settle this action).

Note here that the settlement agreement was not filed with the district court at that time — rather the parties waited for the court to rule on the summary judgment motion before telling the court that they had settled the case.

When it finally ruled on the motion, the district court granted summary judgment but did not address whether Diem had disclosed joint infringement in its original contentions — explaining that the theory was mooted by amended contentions and the court’s claim construction ruling.  After then being confronted with the settlement agreement, the Court (now a different judge) went ahead and decided the joint infringement disclosure question — holding that joint infringement was not disclosed in the original contention. The result then under the settlement: case-dismissed with no money being paid.

Prevailing Party: The defendant BigCommerce thought that it won — case was dismissed with prejudice in favor of the defendant — and consequently asked for prevailing-party attorney fees under Section 285.  The court quickly shot-down that request — holding that the case had no prevailing party because it was settled.

While the Court granted Defendants’ motion, resulting in BigCommerce not having to pay anything, this precise scenario was contemplated by the parties and accounted for in the Settlement Agreement. Thus, there is no “prevailing party.”

This decision fits to Federal Circuit precedent in Exigent Tech. v. Atrana Solutions, Inc., 442 F.3d 1301, 1312, (Fed. Cir. 2006) (“An award of [attorney fees] was not proper unless Atrana was a prevailing party. Atrana cannot be a prevailing party if the case was resolved by settlement (not incorporated by judicial decree) prior to any relief on the merits.”).  On appeal, the Federal Circuit affirmed the award in a R.36 judgment without opinion.  The major twist here as suggested by the en banc request is that the Supreme Court has – in other contexts – repeatedly held that a prevaling party can be determined based upon a settlement where the question is left for the court to decide. See Maher v. Gagne, 448 U.S. 122 (1980); Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542 (2010)

UK Patent Law Primer: Reading through Judge Stone’s New Opinion

Patent

by Dennis Crouch

Geofabrics Ltd. v. Fiberweb Geosynthetic Ltd. [2020] EWHC 444 (Pat) [[2020] EWHC 444]

In the UK, Geofabrics just won a judgment of infringement against Fiberweb for its European Patent No. 2 430 238.  The parallel U.S. Patent 8,978,995 has not yet been enforced.  I thought I would walk through the decision looking at how UK Judge Mr. David Stone handled issues and their parallel US comparison.

The invention here is a fairly expensive multi-layer geo-liner for a railway. The layered product includes two support layers sandwiching a filtration layer — this filtration is the key to the invention.  The filtration layer is “normally impermeable to water” but allows water to pass upward through the layer when under high pressure (rail car).  The inventors called it a filtration layer because it only allows water to pass through and leaves behind silt and clay-fines in order to avoid erosion.

The defense offered several reasons for denying the infringement: lack of novelty, obviousness, and insufficiency of the claims and disclosure.

Novelty: The UK novelty law is substantially parallel to that of the U.S., although with a somewhat heightened enablement requirement. In a 1972 opinion, Lord Justice Sachs provided the following metaphor to the law of (land) discovery:

To anticipate the patentee’s claim the prior publication must contain clear and unmistakable directions to do what the patentee claims to have invented … A signpost, however clear, upon the road to the patentee’s invention will not suffice. The prior inventor must be clearly shown to have planted his flag at the precise destination before the patentees.

General Tire & Rubber Co v Firestone Tyre & Rubber Co Limited [1972] RPC 457.  More recently, UK courts have noted that an anticipatory references must both disclose the claimed invention as and also “enable the ordinary skilled person to perform it.” Synthon BV v SmithKline Beecham plc [2006] RPC 10 (Lord Hoffman).

In the present case, the Judge Stone found that multi-layer fabric in the prior art lacked the precise permeability spectrum claimed in the invention.

Obviousness in the UK similarly parallels the U.S. law’s Graham analysis:

(1) (a) Identify the notional [skilled addressee]; (b) Identify the relevant common general knowledge of that person;

(2) Identify the inventive concept of the claim in question or if that cannot readily be done, construe it;

(3) Identify what, if any, differences exist between the matter cited as forming part of the “state of the art” and the inventive concept of the claim or the claim as construed;

(4) Viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps which would have been obvious to the person skilled in the art or do they require any degree of invention?”

Pozzoli SpA v BDMO SA [2007] EWCA Civ 558 (Jacob LJ).  The UK statute itself is simple asking is the invention “obvious to a person skilled in the art, having regard to any matter which forms part of the state of the art.” The Patents Act 1977 (as amended).  Note here that the UK statute limits obviousness analysis only to publicly-available prior art while secret prior art (such as prior filed applications) are available only for novelty analysis.

The case here focused also on two sub elements:

  • Obvious to try: There must be at least a reasonable expectation of success of a combination.
  • Long-felt want: Something often pleaded but rarely with success.  However, it can turn “apparent technical obviousness” into a judgment of non-obviousness.

In his opinion, Judge Stone again sided with the patentee — finding that although the prior art addressed under-track erosion using a barrier — it’s solution was quite different in practice.

[I]t is by no means clear to me that a skilled addressee equipped with the CGK [Common General Knowledge] would:

(a) replace an impermeable membrane with a permeable one; (b) introduce a filtering element when none is hinted at in Jay; and (c) choose a geomembrane that operated under the load of a train – that is, it would allow water to pass up through it (whilst being filtered) only under the pressure of the load of a train, and not under the pressure of the tracks and ballast in the absence of a train.

In my judgment, the Patent is not obvious over Jay.

Insufficiency: The court examined three defenses under the umbrella of “insufficiency”: Uncertainty (sometimes called ambiguity); Classical insufficiency/lack of enablement; and Lack of plausibility.  The statute provides that the specification must “disclose the invention clearly enough and completely enough for it to be performed by a [skilled addressee]”.  72(1)(c) of the Patents Act 1977.

Insufficiency – Uncertainty is basically the same as claim indefiniteness in the U.S. — requiring undue effort to understand the scope of the claims. Here, the court found that the claim requirement of being “normally impermeable” was not unduly uncertain.

Classical Insufficiency is parallel to enablement in US law — the specification must enable a person killed in the art to perform the invention without undue burden.  Here, the court found that some testing was necessary to create the claimed permeability profile, but that testing was “not unduly burdensome.”

Insufficiency – Plausibility: In the UK, the plausibility doctrine has some flavors of US utility doctrine.  Normally, plausibility will be assumed. However, courts have raised suspicion in situations where an inventor could easily file many patents based upon pure speculation of success.  One example of this might be a new medical use of a known drug (“second medical use claim”).  In that situation, the UK Courts require “some disclosure as to how or why the known product can be expected to work in the new application.”  In rejecting this defense, the court noted that a patent for a new product (as here) is “almost always” plausible.

Infringement: The court found infringement both literally and as equivalence.  For equivalence – the court applies a result-way test: “Substantially the same result in substantially the same way.” Actavis UK Ltd v Eli Lilly and Co [2017] UKSC 48 (Lord Kitchin JSC). Equivalence can be negated based upon evidence that patentee “intended that strict compliance with the literal meaning . . . was an essential requirement of the invention.” Id.  In this case, the question of what “normally” impermeable meant. The court found that the accused product fit that term or was at least the equivalent.  The basic argument on the other side was that the layer might be permeable under the weight of flood-water and in some parts of the UK floods regularly occur.

In the end, the court upheld the patent and found it infringed. The next steps in the case will be to consider remedies. The patentee has requested damages as well as injunctive relief.

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:

Computer as a Tool: Abstract Idea

Patent

Customedia Tech. v. DISH Network (Fed. Cir. 2020)

The PTAB sided with the patent challenger DISH – cancelling the challenged claims of Customedia’s US Patents 8,719,090 and 9,053,494.  On appeal, the Federal Circuit has affirmed – holding that the “claims are ineligible under § 101.”

The invention here relates to facilitating advertising via multimedia system. The Federal Circuit provided the following example synopsis: “a cable set-top box with built-in storage sections that may be leased or sold to advertisers.”  The claims also include a remote server that provides the advertising data.

Alice Step 1: The patentee argued that specifically allocating data space for advertising was an improvement to computer functionality — it ensures that space is available for advertising. On appeal, the Federal Circuit disagreed:

To be a patent-eligible improvement to computer functionality, we have required the claims to be directed to an improvement in the functionality of the computer or network platform itself. . . . [I]t is not enough, however, to merely improve a fundamental practice or abstract process by invoking a computer merely as a tool. . . . We have also held that improving a user’s experience while using a computer application is not, without more, sufficient to render the claims directed to an improvement in computer functionality. . . .

The claims here . . . do not enable computers to operate more quickly or efficiently, nor do they solve any technological problem. They merely recite reserving memory to ensure storage space is available for at least some advertising data. . . . The only improvements identified in the specification are generic speed and efficiency improvements inherent in applying the use of a computer to any task. Therefore, the claimed invention is at most an improvement to the abstract concept of targeted advertising wherein a computer is merely used as a tool. This is not an improvement in the functioning of the computer itself.

Abstract idea.

Proving Unintentional Delay

Patent

The UPSTO has published a new Federal Register notice titled “Clarification of practice for revival, reinstatement, and delayed priority petitions.”

Here, the PTO is explaining that it is going to require patent applicants to submit “additional information” to explain its claim of “unintentional” delay in meeting a particular deadline.  Additional information will be required by the PTO when:

  • a petition to revive an abandoned application is filed more than two years after the date the application became abandoned;
  • a petition to accept a delayed maintenance fee payment is filed more than two years after the date the patent expired for nonpayment; and
  • a petition to accept a delayed priority or benefit claim is filed more than two years after the date the priority or benefit claim was due.

The notice also indicates that the PTO might also require additional information in other situations where there is “a question as to whether the delay was unintentional.”

Up to now in these situations, the USPTO has simply allowed the attorney or party to sign a statement that the entire delay was unintentional — relying upon the duty of candor and good faith to ensure that the claim was accurate. However, that structural trust appears to be breaking down.

Fed Reg Notice.

37 CFR 1.137 already indicates that the PTO “may require additional information where there is a question whether the delay was unintentional.”  What is happening here appears to be an expansion of this regulation.

Inherency as an Element of Obviousness

Patent

Hospira v. Fresenius (Fed. Cir. 2020)

Hospira lost at the district court on obviousness — with the court finding its asserted Claim 6 of US8648106 invalid as obvious. On appeal, the Federal Circuit affirmed and now Hospira has petitioned for en banc rehearing — focusing in on the role of inherency in combining prior art.

[Fed. Cir. Decision][Hospira Petition]

The claim is directed to the sedative dexmedetomidine in a “ready use liquid pharmaceutical composition” in a glass container and a shelf-life of 5-months with “no more than about 2% decrease” in the concentration of the active drug.

The “no more than about 2%” loss claim appears functionally described result — if you build the vial and fill it in the way described by the inventor then you’ll presumably get the shelf life.

Here, all of the limitations found in the claim are found within the prior art and the district court held that it would have been obvious for PHOSITA to combine the references as such. The one lacking element was the <2% loss limitation — that one was not expressed in the prior art.  However, the district court concluded that the functional limitation is an inherent result of the combination — and thus the whole claim is obvious.

Petition question:

Whether a party seeking to show that a property is inherent in a combination of prior art disclosures must affirmatively prove that the property is necessarily present in that combination, regardless of how that combination is prepared.

Hospira’s basic arguments here are (1) that inherency for obviousness must be proven with clear and convincing evidence and (2) that inherency for obviousness only ‘counts’ if necessarily present in the proposed combination, not merely likely or possibly present.

In their 2005 paper on Inherency, Professors Dan Burk and Mark Lemely took the position that inherency should have almost no role in the obviousness analysis because of its hindsight approach.

Hindsight reconstruction of the invention, looking back at the prior art to second-guess the inventor once the invention is available, is anathema to an obviousness assessment. But inherency is all about hindsight—a recognition today that an invention was present in the prior art, even though it was not understood to be there at the time.

Given the hindsight limitations on obviousness, we expect the role of inherency under § 103 to be extremely limited, if not altogether nonexistent.

Dan Burk, Mark Lemley, Inherency, 47 William & Mary Law Review 371 (2005).

ITC: Importing Articles that Infringe

Patent

Comcast Corp. v. ITC and Rovi Corp. (Fed. Cir. 2020)

Rovi complained to the US International Trade Commission (ITC) that Comcast’s customers directly infringe Rovi’s U.S. Patents 8,006,263 and 8,578,413 when they use the X1 system.  The ITC agreed and found Comcast in violation.

Three issues to talk about here: (1) Importing “articles that infringe”; (2) Importation by third parties; (3) Patents are now expired.

Articles that Infringe: The ITC statute provides for action based upon “importation … of articles that (i) infringe a valid and enforceable US patent.”  19 U.S.C. § 1337(a). Comcast argues that the set-top boxes do not infringe the patent at the point of importation, but rather only become infringing once in use by the customer. On appeal, the Federal Circuit held that this issue was already decided in Suprema, Inc. v. U.S. Int’l Trade Comm’n, 796 F.3d 1338 (Fed. Cir. 2015) (en banc) (ITC still can take action to block imports even though direct infringement is post-importation).  Note here that Comcast hired former US Solicitor General Donald Verrilli as its appellate counsel — in part to potentially push this issue up to the Supreme Court.

Third Party Importation: The Comcast X1 boxes are actually imported by ARRIS and Technicolor.  On appeal, the Federal Circuit confirmed that Comcast counts as the importer for Section 337 purposes because Comcast caused the articles to be imported and because the articles are particularly tailored to Comcast’s system so as to have no other use.

Expired Patents: The patents at issue here have expired. As such, the ITC exclusion order has no further prospective effect.  Since the ITC is not authorized to award damages, Comcasted that the patent expiration rendered the entire case and appeal moot.  On appeal, however, the Federal Circuit chose to decide the issues — finding that “appellate finality” is warranted based upon “collateral consequences” that may stem from its outcome.  In particular, the court noted two additional ITC actions involving Rovi patents asserted against the same Comcast X1 box in which ALJ noted that the present appeal will impact the outcome of the ongoing investigation. “We conclude that there are sufficient collateral consequences to negate mootness.”

= = = = =

The case also involves parallel district court litigation that was originally filed in E.D. Tex. but moved to S.D.N.Y. That case has been stayed pending outcome of the ITC litigation under 28 U.S.C. § 1659.  Although the ITC upheld the asserted claims, the USPTO cancelled the claims of the asserted patents as part of an IPR proceeding. Those final decisions are now being appealed by Rovi to the Federal Circuit.

One of the appeals included the following interesting colloquy at oral from Judge Lourie associated with the patent’s listing of 1,500 cited references.

Judge Lourie: You are presumably registered to practice in the Patent Office?

Attorney: I am

Judge: What do you understand the purpose of citing prior art references to be?

Attorney: During prosecution?

Judge: During prosecution, yes.

Attorney: So that the examiner may consider them in whether to allow the claims

Judge: In other words, they are relevant to patentability

Judge: This patent, I’m sure you didn’t draft it, but you are standing here. This patent has 22 columns of cited references; Probably between 1,500 and 2,000. It’s very difficult to escape the conclusion that the applicant was trying to bury — it didn’t even cite [the reference used in the IPR]. What can be the sound purpose in citing 1,500 – 2,000 references other than to bury the examiner.

Attorney: The Rovi family of companies have a lot of different patent applications all related to similar technology. And I know that there is an obligation when you have multiple patents that are related to cite all of the prior art references.

Judge: So five references; ten references; twenty references …

Attorney: They do tend to accumulate when you have large patent portfolios. Because if you don’t cite all of the prior art references you cited for another patent that has your name on it then the implication is that well you purposefully didn’t cite it.  …

Judge: Well you’ve given a pretty good defense and I commend you for that. But, it is not convincing as to the citation of 1,500 references.  Will you filter back to the originators of this patent, at least with respect to one judge ‘it doesn’t sit very well.’? It doesn’t leave a good impression of patent prosecution.

Oral arguments in 2019-1188 available here: http://www.cafc.uscourts.gov/oral-argument-recordings

The Many Mistakes in the Panel Decision in GS CleanTech Corp v. Adkins

Ethics, Patent

By David Hricik, Mercer Law School

Over on the main page, Dennis has written up GS CleanTech Corp. and Cantor Colburn LLP v. Adkins Energy LLC (Fed. Cir. 2020) [Fed Cir Decision][DCT Decision] (does Dennis ever sleep?), which affirms a holding of inequitable conduct.

That finding can ruin careers.  Dennis examined the merits: I want to examine the procedure used on appeal. (I’ve taught civil procedure for decades now, and served as a clerk on the court a few years ago… this case is in need of correction by the full court or the panel on rehearing — whether it changes the outcome, or not, a point on which I have no view.) Whatever the merits, the panel mistates key issues of appellate review of inequitable conduct and contradicts prior panel decisions and even Therasense itself — and does so in a way that radically increases the scope of this equitable defense while, at the same time, failing to analyze the equities, oddly enough.

Specifically, first, the panel states the the standard of review of a fact finding of materiality underlying inequitable conduct  is for abuse of discretion. That is just flat wrong. “[W]e review the district court’s findings of materiality… for clear error.” Am. Calcar, Inc. v. Am. Honda Motor Co., 768 F.3d 1185, 1189 (Fed. Cir. 2014). Accord, Regeneron Pharm., Inc. v. Merus N.V., 864 F.3d 1343, 1351 (Fed. Cir. 2017).

Worse, invalidity “under the on-sale bar is a question of law with underlying questions of fact.” Robotic Vision Sys., Inc. v. View Eng’g, Inc., 249 F.3d 1307, 1310 (Fed. Cir. 2001). Accord, The Medicines Co. v. Hospira, Inc., 881 F.3d 1347, 1350 (Fed. Cir. 2018). The panel examines for abuse of discretion of, not just the underlying factual questions, but the legal question. That is wrong. Indeed, it applied abuse of discretion to whether the invention was ready for patenting, which is also wrong.

As stated,  reviewed the findings of intent to deceive for abuse of discretion: that’s wrong. “This court reviews the district court’s factual findings regarding what reasonable inferences may be drawn from the evidence for clear error.”
Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276, 1291 (Fed. Cir. 2011)

And, third, the panel never (as the district court apparently failed to do) analyzed equitable balancing — given the circumstances should the entire patent be held unenforceable?  I’ve often observed that nothing in Therasense changed the rule that, if the accused infringer meets its burden of showing both materiality and intent, “then the district court must weigh the equities to determine whether the applicant’s conduct before the PTO warrants rendering the entire patent unenforceable.” Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276, 1287 (Fed. Cir. 2011).

The panel applied the standard of review on the ultimate issue — equitable relief — to fact findings and legal conclusions. It’s a slippery slope, and one with severe consequences to the boundaries created by Therasense: it allows district courts to make clear errors on factual findings and legal conclusions, but be affirmed on appeal so long as they do not abuse their discretion. Finally and in addition, lack of careful appellate review will lead to OED investigations into practitioners, as well as ruined businesses and scientific careers.

“They Chose Advocacy over Candor”

Patent

GS CleanTech Corp. and Cantor Colburn LLP v. Adkins Energy LLC (Fed. Cir. 2020) [Fed Cir Decision][DCT Decision]

The district court ruled against the patentee CleanTech — holding the four asserted patents unenforceable due to inequitable conduct during prosecution.  On appeal, the Federal Circuit has affirmed — particularly calling out the Cantor Colburn firm for its role.

The basic issue here is that the bio-oil recovery invention (embodied by at least some of the claims) had been the subject of a pre-filing commercial offer for sale after the invention was ready for patenting.  The pre-filing activity was not disclosed to the PTO in what the district court called a “complete lack of regard for their duty to the PTO.”

As the district court explained things: The inventors made a mistake by offering to sell the invention at that early date but compounded the mistake by taking “affirmative steps to hide that fact from their lawyers, then, later the PTO when they learned that it would prevent them from profiting.”  The district court also found that Cantor Colburn had acted inappropriately — either by purposeful evasion or by failing to seek out relevant information. They “chose advocacy over candor.”

Following Therasense, it is tough to prove inequitable conduct.

The accused infringer must prove by clear and convincing evidence that the patentee: (1) “knew of the reference” or prior commercial sale; (2) “knew that it was material”; and (3) “made a deliberate decision to withhold it.”

See Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1290 (Fed. Cir. 2011) (en banc).

On appeal here though the Federal Circuit seemed to find this a straightforward case:

The District Court did not abuse its discretion in determining for numerous reasons that CleanTech deliberately withheld material information.

First, the District Court concluded that CleanTech knew the July 2003 Proposal to Agri-Energy threatened its chances of patenting its ethanol oil recovery method. This determination is supported by the
record. . . .

Second, the District Court found that the Inventors and the attorneys at Cantor Colburn withheld evidence of successful testing in 2003 and made false representations by implying that the invention was not reduced to practice until 2004. This finding is supported by the record. . . .

Third, the District Court determined that CleanTech and Cantor Colburn “threatened” Agri-Energy to coerce its support regarding the critical date for the Patents-in-Suit, after the July 2003 Proposal surfaced and during the pendency of the ’516 and ’517 patents. . . . District Court did not abuse its discretion in concluding that these attempts to threaten Agri-Energy spoke to CleanTech’s and Cantor Colburn’s intent to deceive the USPTO.

Fourth, the District Court concluded that the Inventors and Cantor Colburn made a “patently false” statement in the First Cantrell Declaration, by claiming the July 2003 Proposal was delivered to Agri-Energy after the critical date. The District Court’s determination that the declaration was false is supported by the
evidence. . . . This was done notwithstanding the Inventors’ knowledge that Mr. Barlage had practiced the claimed method in June 2003 and they had offered to sell the claimed invention to Agri-Energy in July or early August of 2003. See Rohm & Haas Co. v. Crystal Chem. Co., 722 F.2d 1556 (Fed. Cir. 1983) (“[T]here is no room to argue that submission of false affidavits is not material.”). . . . The District Court did not abuse its discretion in concluding that the “patently false” statement in the First Cantrell Declaration was material and supported its intent to deceive determination.

Fifth, the District Court explained that the Inventors’ and Cantor Colburn’s failure to correct the false declaration in the ’484 patent prosecution was “strong evidence of intentional deceit[.]”  . . . Based on this evidence, we conclude that the District Court did not abuse its discretion in concluding that, by clear and convincing evidence, the single most reasonable inference to be drawn from the record was that the Inventors and Cantor Colburn intended to deceive the
USPTO.

Affirmed.

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: