Shepardizing Patents, a guest post by Professor Jorge L. Contreras

 A Patent Information Experiment

On Saturday, June 12, I did a little experiment to see what information I could find about patents that I knew to have been challenged.  I first searched for U.S. Patent No. 7,446,338, issued in 2008 to Casio for a “Display Panel.”  As expected, the official USPTO Patent Full-Text and Image Database provided me with the text of the patent document and a link to its PDF image.  The USPTO’s new PatentsView interface gave me a bit more information, mostly about forward citations of the patent, including a spiffy world map locating the citations geographically.  Google Patents indicates when a patent has expired or is scheduled to expire and displays a timeline of litigation involving the patent. The ’338 patent was subject to litigation in the Western and Eastern Districts of Texas and at the Patent Trial and Appeal Board (PTAB).  Clicking on these entries took me to a database run by Unified Patents, which lists docket entries in these matters and is accessible via a free sign-up. But to see the Complaint in one of the West Texas matters, Unified Patents redirected me to a database operated by MaxVal-IP, which, on the day I searched, gave me the dreaded error “404- File or directory not found.”  I then moved on to PTAB action IPR2020-00320, filed on Dec. 18, 2019.  The Unified docket showed the IPR as terminated following a Mar. 12, 2021 settlement between Apple and the patent owner (now a company called Solas OLED) and allowed me to access the Termination Order.  But when I searched Lex Machina, the paid IP litigation analysis engine now owned by LexisNexis, I found that Samsung, one of the IPR plaintiffs, continued the IPR action after Apple settled, and that on June 6, the PTAB issued a Final Written Decision finding all challenged claims (1-3 and 5-13) to be unpatentable (the patent has a total of 22 claims).

When I searched for U.S. Pat. No. 5,710,001, one of Myriad Genetics’ BRCA1 gene patents issued in 1998, several claims of which were invalidated in Assn. for Molecular Pathology v. Myriad Genetics, 569 U.S. 576 (2013), Google Patents displayed the initiation of the earlier district court litigation on its timeline, but the link took me to the paid Darts-IP database run by Clarivate, to which I don’t have access. Lex Machina only includes data about district court cases, but did correctly report that the District Court found all challenged claims of the Myriad patent to be invalid. The LexisNexis TotalPatent One service, which also allows patent searches, added information about patent families, fee status, assignees and, not surprisingly, links to judicial decisions and dockets.

And when I searched for U.S. Pat. No. 10,533,994, one of the fluidic system patents originally assigned to Theranos and asserted in 2020 against the maker of a COVID-19 diagnostic test, I found no indication that the founders of Theranos were under federal indictment for fraud, that they never developed the patented device, or that the current owner of the patent, Fortress Investments, had publicly pledged to license it royalty-free to anyone offering COVID-19 tests.

Contextual Patent Information

All of the information about a patent beyond its four corners – the validity status of its claims, whether it has been pledged to the public, licensed, made available for licensing, abandoned, declared essential to a technical standard, declared unenforceable for inequitable conduct and much more – is what Professor Colleen Chien has termed “contextual” patent information (Contextualizing Patent Disclosure, 69 Vand. L. Rev. 1849 (2016)).  This type of information can be extremely useful to innovators, researchers, litigants, businesses and other members of the public.  As Professor Chien writes, “contextual information can … signal which inventions are important from an economic point of view, are unimportant from a risk management perspective (insofar as they are expired or pledged to defensive uses), and may be the subject of broader technology and know-how transfers” (p. 1854).

Some contextual information, to the extent that it has been properly reported by the patent holder, is already relatively easy to find – this includes patent assignment records (through USPTO Patent Assignment Search and TotalPatent One), government interest statements (through the USPTO’s Patent View system), and maintenance/expiration data (through Google Patents and TotalPatent One).  This is a good start.

But as my informal Saturday morning experiment illustrates, contextual information is not always readily accessible or consistent, and even in the best case it is spread across a variety of public and private data sources (even the USPTO could do a better job of consolidating available information about a patent into a single record).  Thus, there is significant room for improvement.

The Genius of Shepard’s

I am pretty sure that every law student in the United States still learns to use the venerable Shepard’s citation system.  Those of us who were educated during the Bronze Age and earlier know Shepard’s as a set of ponderous, maroon-bound volumes that were last seen as set pieces for Harry Potter.  Today’s law students recognize Shepard’s as a component of the ubiquitous LexisNexis legal search engine.  But its basic function has remained the same.  Look up a judicial decision and Shepard’s will tell you, using simple color-coded icons (red stop sign, yellow triangle, green diamond, etc.) whether the case has been overruled, upheld, questioned and/or cited.  (For a fascinating history of Shepard’s and legal citation indices in general, see Patti Ogden, Mastering the Lawless Science of Our Law: A Story of Legal Citation Indexes, 85 L. Libr. J. 1 (1993)).

Source: http://lexisnexis.custhelp.com/app/answers/answer_view/a_id/1088155/~/shepards-signals-and-analysis

Shepard’s for Patents?

Trademark issues aside, there is no reason that Shepard’s (or a variation thereof – maybe using yellow moons, orange stars, pink hearts and green clovers?) can’t be adapted for patents.  The concept is simple.  The record for every U.S. patent could include a set of regularly-updated signals conveying key contextual information for that patent.  As with cases, the signals themselves would not convey detailed information, but would indicate that the interested reader should seek additional information (preferably through a hyperlink within the signal itself).

The implementation of such a system would admittedly require substantial up-front work, but several organizations including LexisNexis/Shepard’s/Lex Machina, Google and the USPTO, or some combination thereof, would be well-situated to undertake such a project.

If implemented, here are some of the contextual information categories that would be useful for such a patent signaling system:[1]

Invalidity – have some or all of the patent claims been disclaimed as invalid under 35 U.S.C. §§ 253(a) or 288, or challenged or invalidated by the PTAB or a court, or have claims survived challenges in litigation?  The appealability/finality of these determinations could be indicated, as could the ground for invalidity (e.g., 101, 102, 103, 112).

Enforceability – has the patent been rendered, or challenged as, unenforceable for other reasons, such as inequitable conduct, patent misuse or standards deception?

Licenses – has the patent been licensed on an exclusive or non-exclusive basis?  While many licenses are not publicly disclosed, licenses that are material to the business of publicly-traded companies are accessible through the Securities and Exchange Commission’s EDGAR database.  Other licenses can become available through litigation discovery, freedom of information requests and other means (see discussion here).

Available for licensing – is the patent holder willing to consider granting licenses to third parties, as shown in the USPTO’s recent Patents 4 Partnerships platform (discussed in a prior Patently-O post by Chien).

Pledges and Dedications to the Public – has the patent been pledged by its owner for public use (see, e.g., the Open COVID Pledge, which I discuss at length here, subjected to a binding “covenant not to sue” (as was the trademark in Already, LLC v. Nike, Inc., 568 U.S. 85 (2013)), or dedicated to the public under 35 U.S.C. § 253(b)?  There is currently no centralized repository for information regarding such commitments (see my proposal for creating a registry of pledges here), though various academic and nonprofit organizations maintain informal lists.

Standards Declarations – has the patent been declared essential to a technical standard?  If so, the patent holder may have committed to license it on royalty-free or fair, reasonable and non-discriminatory (FRAND) terms.  While some SDOs have searchable public databases of declared essential patents (e.g., ETSI and IETF), and some academic projects have consolidated some of this information, it is not generally linked to individual patent records.

***

In a world where patents play an increasingly important role in the technology development and innovation landscape, it is critical that reliable information about the status and history of patents be made available to the public.  The USPTO has made a public commitment to the “discoverability, accessibility, and usability of public patent and trademark data”, and as such it can help to collect, organize and display contextual patent data in a simple and user-friendly fashion. A uniform “Shepardization” system for patents, which clearly flags issues for potential licensees, defendants and innovators and alerts the public to the potential investment and threat value of individual patents, would help to make the markets in which patents exist more transparent and efficient.

[1] Chien, p. 1877, Table 2, offers a comprehensive taxonomy of many types of contextual patent information that exist, though not all of these lend themselves to the simple signaling system suggested here and some (such as assignment, maintenance, expiration and government interest status) are already be available in a relatively (though not perfect) format.

Companies who play corporate games creating and shifting shell companies sometimes face serious consequences when painted into a corner.   In Cirba, Inc. (DBA Densify) and Cirba IP v. VMWare (D. Del. 2020), a jury sided with the patentee Cirba Inc. and awarded $235 million in damages.  That verdict though has been vacated because Cirba Inc.’s subsidiary Cirba IP actually owns the patent rights.  According to the filings, the transfer to Cirba IP was done for “uncontroversial tax reasons.”

Although the jury awarded the money, Judge Leonard P. Stark did not enter judgment for the millions. Rather, Judge Stark found that Cirba Inc. (“INC”) did not actually have rights to enforce the patent and thus dismissed the case for lack of Article III standing.  According to Stark, INC had transferred rights to its wholly owned subsidiary Cirba IP (“IP”).  And, although IP was a co-plaintiff Judge Stark ordered a new trial — finding that the presence of INC so materially changed the trial that “it is quite probably that the outcome would … have been different.”  Basically, the theme of INC’s case was about competition against the much larger VMWare, but IP is only a patent holder.  Thus, all is not lost for Cirba, but juries are quite unpredictable.

A timeline of events is shown above, and one basic question for standing is whether that license-back included enough grit to give INC standing.

The new trial order is not a final judgment — the case is still ongoing.  That means that there is no right to appeal the case immediately.  However, Cirba has petitioned the Federal Circuit for writ of mandamus, arguing that the dismissal on standing was improper. The petition particularly focuses on the Supreme Court’s Lexmark decision and the Federal Circuit’s two subsequent decisions of Lone Star and Schwendimann.  In particular, the plaintiff argues that under those decisions, the patent ownership is not a jurisdictional/standing question. “[D]ecisions treating the prerequisites of the Patent Act as jurisdictional were wrong.” Schwendimann.  “Whether a party possesses all substantial rights in a patent does not implicate standing or subject-matter jurisdiction.” Lone Star.

[Cirba Mandamus Petition]

FocusVision Worldwide v. Information Builders Inc. (Fed. Cir. 2021)

The Federal Circuit has affirmed the TTAB’s decision refusing to register FocusVision’s eponymous mark FOCUSVISION after being opposed by IBI based upon its FOCUS marks.  The appeal focused in part on the similarity of goods, trade channels, and sales.

IBI is a software company known for its FOCUS database programming language. FocusVision does market research and was attempting to register its mark in three different classes:

• Class 42 – in particular for online software for market research, including data analysis for marketing, market research, and focus groups.
• Class 35 – in particular for market research.
• Class 38 – in particular for streaming or broadcast of market research interviews.

IBI opposed only the Class 42 request and the tribunals all found the complaint valid.  IBI’s mark registration generally covers computer software for database management and decision support systems. Although FocusVision’s Class 42 submission is limited to market research, the court still found substantial overlap.  “Even if FocusVision’s services are not identical to IBI’s goods, they are still closely enough related to support a finding of likelihood of confusion.” See In re Detroit Athletic Co., 903 F.3d 1297 (Fed. Cir. 2018) (“while the goods and services are not identical, they substantially overlap, which weighs in favor of finding a likelihood of confusion”).

IBI’s lowest cost service is $30,000 for its “WebFocus” tool.  A full “Focus” is significantly more expensive.  FocusVision argued that the high price, major commitment associated with the purchase, and sophistication of the buyers all suggested against confusion.  On appeal, the Federal Circuit noted that “even sophisticated purchasers may be confused by marks that are sufficiently similar.”  Slip Op. (finding substantial evidence supporting the conclusion that this factor is “neutral” in the DuPont analysis).

Finally, although there was no proof of any actual confusion, the court also found this “neutral” because the products had only been overlapping on the market for four years. “Here, the relevant period during which actual confusion could have occurred was relatively short—from June 2014 to January 2018.”

The Journal of the Patent & Trademark Office Society has been publishing intellectual property scholarship for 100+ years (since 1918).  Originally it was the Journal of the Patent Office Society, the journal changed its name in 1985 to expressly include trademarks.  The US Patent & Trademark Office (formerly the US Patent Office) had changed its name in 1975.

The first issue included an two articles and several notes:

• Wm. I. Wyman, Thomas Jefferson and the Patent System, 1 J. Pat. Off. Soc’y 5 (1918).
• F.W.H. Clay, The relation of the examiner to the inventor and his attorney, 1 J.
  Pat. Off. Soc’y 8 (1918).

Three of my favorite articles in the journal are all historical pieces by Edward Walterscheid.

• Edward C. Walterscheid, The Early Evolution of the United States Patent Law: Antecedents (Part 1), 76 J. Pat. & Trademark Off. Socy. 697 (1994).
• Edward C. Walterscheid, The Early Evolution of the United States Patent Law: Antecedents (Part 2), 76 J. Pat. & Trademark Off. Socy. 849 (1994).
• Edward C. Walterscheid, Patents and Manufacturing in the Early Republic, 80 J. Pat. & Trademark Off. Socy. 855 (1998).

Some of you may have known Edward, who died in 2011.

Here’s what I’m writing to announce: JPTOS was in a publishing hiatus over the past year, but is now back and ready to accept article submissions:

JPTOS is a publication written by and for the benefit of IP practitioners. We favor topical, practical articles that can be useful to our readers. There is no page length limit, however, articles greater than 40 double spaced pages may have to be split into separate articles.

We take article submissions pertaining to all areas of intellectual property, including patents, trademarks, copyrights, trade secrets, hybrids between all those forms, etc., as well as cutting-edge law & technology issues that may intersect intellectual property topics such as blockchain, cryptocurrencies, NFTs, artificial intelligence, robotics, 3D-printing, privacy/surveillance law, social media, bioengineering, pharmaceuticals, COVID vaccine patents or patent policies, the pandemic’s impact on IP laws/practice and much more. If you are a practitioner/lawyer, judge, law professor, law student, writer or anyone having an interest in the above areas, please submit by clicking the “Submit Manuscript” button above today!

Submit your articles here: https://jptos.scholasticahq.com.

Bibiji Inderjit Kaur Puri v. Yogi Bhajan Administrative Trust (Fed. Cir. 2021)

I practice a form kundalini yoga that is somewhat in the tradition of Yogi Bhajan.  Bhajan died in 2004 leaving his widow (Puri) as well as an Administrative Trust (YBAT). In recent years, Bhajan’s history of sexual abuse has come to light as well.

Puri and YBAT have a fairly long history of litigation over ownership and control of Bhajan’s estate.  The most valuable aspect today is probably YOGI TEA that is sold by a third party, the East West Tea Company, but with Puri and YBAT each having a 50% undivided ownership of intellectual property rights.

The dispute at issue here started when Puri, acting alone, filed a trademark registration application for the mark YOGI for bath and beauty products. YBAT opposed, and the PTAB sided with YBAT — holding that:

[Puri] did not have a bona fide intent to use the mark in commerce solely in her individual capacity at the time she filed her involved because, at such time, [Puri] was aware that both [YBAT] and [Puri] each had an undivided and equal interest in the applied-for mark for the identified goods. Accordingly, we find that the involved application is void ab initio.

[TTAB Decision – OPP_47].  On appeal, the Federal Circuit has affirmed, finding the Board’s legal conclusions “without error” and its factual findings supported by substantial evidence.

The basic legal rule here is that all owners of a trademark must at least consent to the filing of a use-based trademark application.  Without consent, “the application
is void ab initio.”  For this point, the TTAB cites to Kristin Marie Conolty d/b/a Fairway Fox Golf v. Conolty O’Connor NYC LLC, 111 USPQ2d 1302, 1310 (TTAB 2014) (“the involved application is void ab initio because applicant is not the sole owner of the mark”).

This basic rule is derived from the statute 15 U.S.C. § 1051(a), which requires the trademark owner be the one who files for registration. The statute goes on to require a statement from the owner that “no other person has the right to use such mark..” 15 U.S.C. § 1051(a)(3)(D).   Here, although Puri as an owner of the mark, YBAT is also an owner with its own rights.  

Affirmed.

by Dennis Crouch

The professional conduct of US patent attorneys and agents are governed by the rules regarding “Representation of Others before the United States Patent and Trademark Office” found in the Code of Federal Regulations, Title 37, Part 11. 37 CFR 11.1 – 11.901.  Patent attorneys are also regulated by the rules of professional conduct of their home states.  Although there are some patent specific differences, the USPTO has been shifting its rules to be more in line with the ABA’s Model Rules of Professional Conduct that have been adopted, at least in part, by all fifty states.

In 2020, the USPTO proposed a number of changes to its rules to better align them with the ABA Model Rules.  Recently, the agency finalized those proposals (with minor changes) to be effective June 25, 2021.

Federal Register Notice [PDF]

Key changes:

• Section 11.106(b)(7): New provision permits the disclosure of client information “to the extent the practitioner reasonably believes necessary . . . (7) To detect and resolve conflicts of interest arising from the practitioner’s change of employment or from changes in the composition or ownership of a firm, but only if the revealed information would not compromise the practitioner-client privilege or otherwise prejudice the client.”
• Section 11.106(d): New provision that practitioners “shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.”
• Section 11.118: The amendment here focuses on prospective clients, and changes the rule from someone who “discusses” becoming a client to someone who “consults” with the practitioner about the possibility of forming a client-practitioner relationship. This is generally thought to narrow the definition.

• Section 11.702:  This provision focuses on attorney advertising. The changes conform more closely with the new ABA rules.  I’ve compared the old and new below.  The main changes here:
  • Advertising can include “contact information” rather than “office address.”  The notes indicate that this might be a website or email address, although I don’t see a website as necessarily being “contact information.”
  • Nominal gifts will now be expressly permitted to someone who refers clients to you, so long as they are “neither intended nor reasonably expected to be a form of compensation.”
  • Certified as a Specialist: The rules limit a practitioner’s ability to state or imply that he or she is “certified as a specialist in a particular field of law.” It is not clear to me that “patent law” would count here, but I’m going to speak with OED to make sure.

• Section 11.703 makes some changes to the meaning of “solicitation” and when it is appropriate. Importantly, prohibited solicitation is now expanded beyond “prospective clients.”

Other changes are included as well.

by Dennis Crouch

A swarm of gnats (midges) can be annoying.  Although each bug is almost too small to be seen or felt, 20,000+ of the critters buzzing around can cause some to panic or at least release a curse.  I’d advise you to just act gnaturally. But imagine for a second that you are able to capture two of the creatures that were part of the swarm.  Are you then able to pass judgment on those two captured individuals for the harm of the swarm?  Will killing those two gnats provide any relief from the swarm? (I know you are thinking revenge, but that is gnot the kind of concrete and particularized relief I’m talking about.)

In Apple Inc. v. Qualcomm Inc., 992 F.3d 1378 (Fed. Cir. 2021), the Federal Circuit refused to pass judgment on the two without some evidence that they were the particular cause of any harm.  OK, we’re really talking about patents, and Apple is seeking to cancel two patents out of the 20,000+ that it has licensed from Qualcomm.  Id.

MedImmune Licensee Standing Does not Apply to Portfolio License

The Case: After some litigation, Apple eventually licensed 20,000+ Qualcomm patents in a six-year-deal.* Meanwhile, Apple also pursued inter partes review (IPR) of two of the licensed patents. US7844037 and US8683362.  The PTAB granted the IPR petitions but eventually sided with Qualcomm–holding that the challenged claims had not been proven obvious.  Apple then appealed, but the Federal Circuit dismissed the appeal for lack of standing.  The court held that Apple had not shown any “injury-in-fact” associated with the continued existence of the two challenged patents.

The en banc petition focuses on the Supreme Court’s patent-licensee standing decision in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007). In MedImmune, the Supreme Court rejected Federal Circuit precedent that a “licensee in good standing cannot establish an Article III case or controversy.”  Although the facts of MedImmune are some what different, Apple argues that the case should be read broadly based upon the Supreme Court’s repeated promotion of patent challenges.

• Lear, Inc. v. Adkins, 395 U.S. 653 (1969) (abolishing doctrine of licensee estoppel)
• Blonder-Tongue Laboratories, Inc. v. U. of Illinois Found., 402 U.S. 313 (1971) (expanding issue preclusion against a patent previously determined invalid).
• Cardinal Chem. Co. v. Morton Intern., Inc., 508 U.S. 83 (1993) (holding that courts may retain jurisdiction over invalidity counterclaims even after a determination of noninfringement).

Apple correctly argues that the IPR situation has unique circumstances that push toward standing: (1) estoppel tied to unsuccessful IPR; and (2) statutory right to appeal.  In the case, Unified Patents has filed a brief in support of en banc rehearing. And, the Federal Circuit has shown some interest by inviting a response from Qualcomm. That response is due June 9.

En Banc on Standing for IPR Challenge Appeals

= = = =

The panel noted in its opinion (and especially in oral arguments) that case involved a lack of evidence regarding the injury-in-fact.  That situation exists, in part, because the issue of standing was not addressed by the USPTO.  Rather, Article III standing only applies once a case moves into Federal Court, and so here addressed for the first time by the appellate court.  Usually the court has a nice tight record to work from, but no record exists for this issue.  Perhaps the court should have held an evidentiary hearing in order to elucidate this injury-in-fact. 

= = = = =

* Note – most of the deal has been kept confidential.

Editor’s Note: Avery Welker is a rising 2L at Mizzou and likely a future patent attorney. He authors a series linking law school canonical cases with intellectual property counterparts. You can email ideas for future posts to avery@patentlyo.com.  – Dennis Crouch

By Avery Welker

If PerDiemCo LLC (PerDiemCo | Defendant) could have it their way, sending demand letters to a company in another state would not constitute minimum contacts for purposes of personal jurisdiction. Trimble, Inc. v. PerDiemCo LLC, No. 19-2164, 2021 WL 1898127, at *1, *7 (Fed. Cir. May 12, 2021). PerDiemCo is the assignee of eleven patents[1] at issue, all related to geofencing and electronic logging technology (commonly used in the trucking industry). Trimble, Inc., and ISE (Trimble’s wholly-owned subsidiary) (Trimble | Plaintiff) offer geofencing and logging technologies along with manufacturing and selling positioning devices. Id. at *1. Below is a figure depicting this technology, which shows the geofenced areas (boxed in), the entry and exit points (see figure reference 2204), and location information logs while a contact is within a geofenced area (see figure reference 2202). U.S. Patent No. 10,171,950 fig.22 (filed May 22, 2018) (issued Jan. 1, 2019).

The entire web of incorporations, headquarters, locations, and personal jurisdiction issue reads like a Civil Procedure personal jurisdiction final exam hypo. Trimble, Inc. is incorporated in Delaware and headquartered in Sunnyvale, California (in the Northern District of California). Trimble Inc., WL at *1. ISE is an Iowa LLC with its principal place of business in Coralville, Iowa (in the Northern District of Iowa). Id. PerDiemCo is a Texas LLC with office space in Marshall, Texas (Eastern District of Texas). Id. The sole owner, employee, and officer lives and works in Washington D.C. and has never visited the office space in Texas. Id.

PerDiemCo sent a letter to ISE in 2018 alleging ISE’s devices used technology in PerDiemCo’s patents (see footnote 1). Id. PerDiemCo attached an unfiled complaint against ISE for the Northern District of Iowa, asserting nine patents against ISE, included a claim chart, offered a non-exclusive license to PerDiemCo’s patents, and a draft nondisclosure agreement for negotiations. Id. ISE subsequently forwarded the letter to Trimble’s IP counsel in Westminster, Colorado. Id. at *2. The counsel responded to PerDiemCo to inform that the issues would be communicated through Trimble. Id. PerDiemCo responded to Trimble and alleged that Trimble’s products also infringed in PerDiemCo’s patents, attaching a claim chart. Id. The parties agreed to negotiate for a few months. Id. PerDiemCo leveled new allegations of patent infringement against Trimble’s geofencing products and allegations based on two previously unasserted patents. Id. PerDiemCo repeatedly threatened to sue Trimble in the Eastern District of Texas on the infringement accounts. Id.

In response, Trimble and ISE sought a declaratory judgment action of non-infringement in the Northern District of California for all patents asserted by PerDiemCo in January 2019. Id. Trimble and ISE asserted that PerDiemCo was subject to specific personal jurisdiction in the Northern District of California. Id. While the district court (and later the Federal Circuit) held that the minimum contacts standard was satisfied, the district court dismissed the action, and Trimble and ISE appealed. Id. at *3, *7.

PerDiemCo argued that specific personal jurisdiction would be unreasonable, citing the five “fairness” factors outlined in Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985).[2] In Burger King, the Court had to decide whether exercising personal jurisdiction over two out-of-state Burger King franchisees would be fair. Id. at 466, 476. The Court ultimately concluded, after weighing the fairness factors (see footnote 2), that the exercise of personal jurisdiction, in that case, did not offend due process, as the franchisees had fair notice of the danger of suit in Florida. Id. at 487. The franchisees did not show the Court that it would be fundamentally unfair to exercise jurisdiction. Id.

Factor 1 – the burden on the defendant: PerDiemCo argued that litigating anywhere other than the Eastern District of Texas would impose an undue burden. Trimble Inc., WL at *7. However, the district court found that PerDiemCo’s office in Texas was essentially for show since PerDiemCo’s sole employee lived and worked in Washington D.C. Id. Since PerDiemCo filed lawsuits very far away from Washington D.C. and litigating patents away from D.C. is the main operation of PerDiemCo’s business, the Federal Circuit found no burden. Id.

Factor 2 – the forum State’s interest in adjudicating the dispute: The Federal Circuit found that California had an interest in litigating the suit as Tremble resided in California, and the State desires to protect its residents from any frivolous claims of patent infringement. Id. at *8.

Factor 3 – the plaintiff’s interest in obtaining convenient and effective relief: Here, the Federal Circuit found that Trimble had an obvious interest in getting relief from a court in its home forum, where principal employees and documents are. Id.

Factor 4 – the interstate judicial system’s interest in obtaining the most effective resolution of controversies: The Federal Circuit found that even if, as PerDiemCo asserted, a settlement would be the most efficient conflict resolution, both parties could reach a settlement pending litigation in the Northern District of California. Id.

Factor 5 – the shared interest of the several states in furthering fundamental substantive social policies: Given that the same patent laws govern all states, there is no conflict in litigating in the Northern District of California. Id.

Upon the Federal Circuit’s factor weighing, they ultimately decided that PerDiemCo did not show that jurisdiction was unreasonable and reversed the district court’s dismissal, remanding for further proceedings. Id.

Here, PerDiemCo couldn’t “have it their way.” Nothing short of jurisdictional rules so unfair that make litigation so tricky that the party would be severely disadvantaged will defeat asserting personal jurisdiction. Burger King, 471 U.S. at 477. Burger King makes it abundantly clear – if it’s fair, personal jurisdiction is lawful!

[1] U.S. Patent Nos. 8,149,113, 9,319,471, 9,485,314, 9,621,661, 9,680,941, 9,871,874, 9,954,961, 10,021,198, 10,104,189, 10,148,774, 10,171,950.

[2] The factors are: (1) “the burden on the defendant,” (2) “the forum State’s interest in adjudicating the dispute,” (3) “the plaintiff’s interest in obtaining convenient and effective relief,” (4) “the interstate judicial system’s interest in obtaining the most efficient resolution of controversies,” and (5) the “shared interest of the several States in furthering fundamental substantive social policies.” Burger King, 471 U.S. at 477 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980).

by Dennis Crouch

SpeedTrack v. Amazon (Fed. Cir. 2021)

This claim construction decision focuses on prosecution disclaimer.  During prosecution, the patentee amended its claims and made statements distinguishing their claimed invention from the prior art.  Those actions created a disclaimer — meaning that the claim limitation cannot be interpreted to cover what was found in that distinguished reference. 

SpeedTrack’s U.S. Patent No. 5,544,360 covers a three-step method of searching-by-category.

1. Creating a table of category descriptions without any “predefined hierarchical relationship”;
2. Creating a directory of files that includes a set of category descriptions for each file.
3. Creating a search filter, that allows a user to pick a set of categories, but only allows selection when there is at least one file that matches the selection.

The patent document explains the benefits of this system: It avoids the problem of typos in searches; and avoids the time-waste of searching for data that cannot be matched.  OK – it is surprising to me that there is not clear prior art, even though the application has a 1985 priority filing date.

The infringement lawsuit was filed back in 2009 in N.D.Cal. In 2010, Judge White stayed the lawsuit pending outcome a parallel lawsuit against Wal-Mart and an ex parte reexamination of the patent at issue.  The reexamination concluded in 2011 — confirming the patentability of the above claim (as well as others); the Wal-Mart action ended with non-infringement finding. And, another parallel action against Home Depot also ended with a finding that the “Kessler doctrine precludes SpeedTrack’s infringement claims.”  At that point, Judge White picked up this case again and started working through the remaining issues.

Claim Construction: The focal point of claim construction was the negative claim limitation prohibiting a preexisting hierarchical relationship between the various categories: “the category descriptions having no predefined hierarchical relationship.”  Claim 1.  The accused systems all include some genus-species or field-value relationships within their categories.  Here, a field-and-value is something like “Language-and-French.”  The district court held that these genus-species relationships were prohibited under the no-preexisting hierarchy limitation because of prosecution disclaimer.

Interpretive Construction versus Disclaimer: The entire prosecution history is relevant to determining the meaning of the various claim limitations. As the Supreme Court wrote in Graham v. John Deere Co., 383 U.S. 1 (1966), “an invention is construed not only in light of the  laims, but also with reference to the file wrapper or prosecution history in the Patent Office.” See also Crawford v. Heysinger, 123 U.S. 589, 602 (1887) (“file-wrapper and contents in the matter of the reissue are part of the evidence in the case, and throw light upon what should be the proper construction of claims 1 and 2.”).  In extreme cases, the prosecution history serves as a disclaimer effectively showing abandonment of claim scope.  Disclaimer only applies when the patentee acts to disavow claim scope in a way that is “both clear and unmistakable to one of ordinary skill in the art.” Elbex Video, Ltd. v. Sensormatic Elecs. Corp., 508 F.3d 1366 (Fed. Cir. 2007); Vita-Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317 (Fed. Cir. 2009).

Often Implicit: Sometimes patent applicants expressly state that they are disclaiming scope. But most of the time the disclaimer is impliedly understood by the patentee’s statements and actions.  We typically look toward statements in the prosecution history and amendments made to the claims, either of which can create disclaimer.

In SpeedTrack, the hierarchical limitation had been added during prosecution to distinguish the invention from a prior art patent that included a field-and-value hierarchy. (Snippet below).

On appeal, SpeedTrack argued that the prior art’s use of field-and-value was not a hierarchy and so not captured by the claim limitation.  The problem though is that (1) the patentee had, during patent prosecution, added the limitation specifically to avoid the prior art reference and (2) had particularly distinguished the prior art reference as requiring a “2-part hierarchical relationship between fields or attributes, and associated values for such fields or attributes.”

In the end we have classic disclaimer: amendment to avoid prior art + statements explaining aspect of the prior art being avoided by the amendment. SpeedTrack admitted that there would be no infringement on this construction.  As such, the prior judgment of non-infringement was affirmed.

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As discussed above, the doctrine of prosecution disclaimer is a rule of claim construction that then applies to limit the literal claim scope.   The courts have separately ruled on the prosecution history estoppel that similarly limits patentees ability to expand the literal scope to cover equivalents.  I would argue that the doctrine of equivalents could not be used to recover scope disavowed by disclaimer (even absent a narrowing amendment).

In addition, although I termed the doctrine “classic disclaimer” it was only in 2003 that the Federal Circuit first used the phrase “doctrine of prosecution disclaimer” — writing that the doctrine “is well established in Supreme Court precedent, precluding patentees from recapturing through claim interpretation specific meanings disclaimed during prosecution.” Omega Engr., Inc, v. Raytek Corp., 334 F.3d 1314 (Fed. Cir. 2003).  It was in Omega that the court also made clear that any disavowal be “clear and unmistakable.”  Truthfully, at this point the Supreme Court precedent  was not (and is not) entirely clear and unmistakable.

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Some older cases on point:

• Goodyear Dental Vulcanite Co. v. Davis, 102 U.S. 222 (1880) (express disclaimer added to the specification during prosecution confirmed a narrow construction);
• Sutter v. Robinson, 119 U.S. 530 (1886) (The patentee “is not at liberty now to insist upon a construction of his patent which will include what he was expressly required to abandon and disavow as a condition of the grant.”)
• Schriber–Schroth Co. v. Cleveland Trust Co., 311 U.S. 211 (1940) (“It is a rule of patent construction consistently observed that a claim in a patent as allowed must be read and interpreted with reference to claims that have been cancelled or rejected, and the claims allowed cannot by construction be read to cover what was thus eliminated from the patent.”);
• Graham v. John Deere Co., 383 U.S. 1, 33, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966) (“claims that have been narrowed in order to obtain the issuance of a patent by distinguishing the prior art cannot be sustained to cover that which was previously by limitation eliminated from the patent”).

by Dennis Crouch

The Federal Circuit recently wrote about the GATT-Bubble in Hyatt v. Hirschfeld decision. “[I]n the nine days leading to June 8, 1995, the PTO reported that it received and processed over 50,000 applications—one-quarter of the entire year’s projected filings.”  Pre-GATT applicants had a comparative incentive to keep their patent applications pending longer because patent term was calculated based upon the issue date.* This was especially true in the early days prior to creation and expansion of Patent Term Adjustment.  1995 was 26 years ago — most folks who are patent attorneys today were not yet even in law school at the time. That summer, I was working at a bacon factory in Frontenac Kansas (The $5.15 per hour was substantially above minimum wage of $4.25).

The bulk of pre-GATT applications were processed and issued/abandoned roughly as expected.  However, there has been quite a long tail of pending applications.  By 2010 the number was down to about 600 pre-GATT pending applications.  We know now that about 380 of these were associated with Gil Hyatt; the remaining 220 were associated with other applicants.**   By 2016, the number was down to 20 non-Hyatt pre-GATT pending applications, and now in 2021 there are only 2 non-Hyatt applications remaining.  There will be a few more years of litigation, but if the PTO’s win on prosecution estoppel holds, this chapter will finally be closed.

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In recent years, all of the pre-GATT patents have issued to Personalized Media Communications (PMC).

• U.S. Pat. No. 10,715,835 – 2020 Signal processing apparatus and methods
• U.S. Pat. No. 10,616,638 – 2020 Signal processing apparatus and methods
• U.S. Pat. No. 10,609,425 – 2020 Signal processing apparatus and methods
• U.S. Pat. No. 10,523,350 – 2019 Signal processing apparatus and methods
• U.S. Pat. No. 10,334,292 – 2019 Signal processing apparatus and methods
• U.S. Pat. No. 9,674,560 – 2017 Signal processing apparatus and methods

In addition, a number of unclassified pre-GATT cases have also moved through.  An interesting one is a patent issued to Lockheed Martin in 2020 on a “method for opening a combination padlock.” U.S. Pat. No. 10,669,742.  Basically, this is a method and apparatus for figuring out the combination on the padlock.  The application was filed back in 1990 and kept secret by order of the Department of Defense until 2018.

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* Applicants who beat the 1995 deadline were granted given either a patent term of 17 years from issuance or else 20 years from filing, whichever was longer as calculated at issuance. In that scenario, there were very good reasons to file before the deadline if the invention was ready for patenting.

** Note – for this essay, I’m ignoring old applications that were kept secret and denied issuance by the US Government.

SC Johnson & Son v. USA (Fed. Cir. 2021)

This is a tariff (importation tax) case, so you might stop reading here.   But, it also involves Ziploc brand food-grade sandwich bags. SC Johnson manufactures the bags in Thailand for US import.

There is a big (electronic) book known as the Harmonized Tariff Schedule of the United States (“HTSUS”) that is used to classify commercial imports.  Each classification will have its own tariff rate, that will often also depend upon other factors such as the country of origin.

In this case, the Customs (part of Homeland Security) classified the bags under HSTSUS Subheading 3923.21.00, but SCJohnson argues that the proper classification is 3924.90.56, which would reduce the tariff from 3% ad valorem to 0% (duty free).

3923.21.00–Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics: Sacks and bags (including cones): Of polymers of ethylene.  [3% tariff ad valorem]

3924.90.56–Tableware, kitchenware, other household articles and hygienic or toilet articles, of plastics: Other: Other. [Nominally 3.4% tariff, but duty free under the Generalized System of Preferences]

The United States Court of International Trade found that the bags could be classified under either heading and consequently chose what it deemed to be the more specific–bags made of ethylene.  On appeal, the Federal Circuit has affirmed.

The Federal Circuit follows a similar law/fact divide that it does for patent infringement. “(1) determining the proper meaning of the tariff provisions, which is a question of law; and (2) determining which heading the particular merchandise
falls within, which is a question of fact.”  Slip Op. (Quoting Deckers (Fed. Cir. 2008)).

One of the key questions in the appeal is whether the 3924 heading should be classified as a “use provision” or an “eo nomine” provision.

An eo nomine provision ‘describes an article by a specific name,’ whereas a use provision describes articles according to their principal or actual use.

Slip Op. Quoting Schlumberger (Fed. Cir. 2017) and Aromont (Fed. Cir. 2012).  Use provisions are more narrowly construed – and that would make it more likely that the court would choose SCJohnson’s preferred classification.   On appeal though, the Federal Circuit interpreted it as eo nomine and affirmed.