April 2021

US vs China – Moving toward Global Injunctions

Patent

by Dennis Crouch

Ericsson v. Samsung, Docket No. 21-1565 (Fed. Cir. 2021)

I wanted to briefly highlight this important pending Federal Circuit appeal involving parallel litigation in both the US and China. The Swedish company wants to litigate in the US, while the Korean company wants to litigate in China.

  • US Case: Ericsson Inc. v. Samsung Elecs. Co., No. 2:20-CV-00380-JRG (E.D. Tex. Jan. 11, 2021)
  • Chinese Case: Samsung Electronics Co., Ltd. et al. v. Telefonaktiebolaget LM
    Ericsson, (2020) E 01 Zhi Min Chu No. 743.

The Chinese court issued an anti-suit injunction order that would force Ericsson to stop litigating the case in the US (and globally anywhere but in Wuhan).  The US court then issued an anti-interference order that bars Samsung from attempting to enforce the Chinese order against the US actions.  Litigation between the parties is apparently also ongoing in the USITC, Netherlands, Germany, and Belgium.

Ericsson believes it has the stronger IP rights.  There is a general indication that those rights will be more strongly protected and with a higher royalty rate if determined by a US court rather than a Chinese court.  The following timeline from Samsung’s brief offers some historic perspective:

The basic setup here is as follows:

  • Both parties have committed to license their standard essential patents (SEPs) for 2G, 3G, 4G, and 5G cellular communication according to  “Fair, Reasonable and Non-discriminatory” (“FRAND”) principles
  • 2014 global cross-license of the SEPs between the two companies.  This agreement expired at the end of 2020.
  • December 7, 2020: Samsung sued Ericsson in Wuhan People’s Court seeking a declaration of global licensing terms in accordance the FRAND principles.
  • December 11, 2020: Ericsson sued Samsung in USA (E.D.Tex.) alleging Samsung failed to comply with its FRAND patent licensing commitments (and for declaratory judgment that Ericsson is not in breach).  In January 2021, Ericsson amended its complaint to include assertions of patent infringement — this ensures Federal Circuit jurisdiction over the appeal.
  • December 25, 2020: On request from Samsung, the Wuhan court issued an global “anti-suit injunction” — enjoining Ericsson from seeking relief from any other court, either in China or Globally.  And also ordering withdrawal of any claims already filed (such as the Texas action).  The order expressly indicates that violations of the order by Ericsson will be punished by with substantial fines.
  • December 28, 2020: Ericsson successfully petitioned the Texas Court to  issue a temporary restraining order (TRO) against Samsung.
  • January 11, 2021: Texas court issued a fairly narrow “anti interference injunction” — sometimes known as an “anti-anti-suit injunction.”  The court ordered that Samsung take no actions in the Chinese case that would interfere with the US lawsuit.  In addition, Samsung must indemnify Ericsson against any penalties levied by the Wuhan Court associated with Ericsson’s efforts to litigate the US case.

Samsung has now appealed the case to the Federal Circuit — arguing that the anti-antisuit injunction should be vacated or significantly narrowed.  Here are briefs filed:

I am generally sympathetic to Ericsson in this case with the big caveat that Ericsson committed its patents to FRAND licensing on a global level.  It does not seem reasonable (the R in FRAND) to expect that the result will be a separate lawsuit regarding the global license in each individual country.

Law School Canons: Summer-y Judgment

Patent

Editor’s Note: Avery Welker is a 1L at Mizzou and likely a future patent attorney. He is starting a new 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

Grilling weather is coming up soon! You may be in the market for a new grill to set up in your backyard. Well, now you have to make a choice: will you go with the “Backyard Grill” or the “Backyard BBQ?” That’s not a choice that Variety Stores, Inc. (Variety | Plaintiff) wants you to need to make. Variety Stores, Inc. v. Wal-Mart Stores, Inc., 888 F.3d 651 (4th Cir. 2018).

Variety sued Wal-Mart Stores, Inc. (Wal-Mart | Defendant) over Wal-Mart’s use of “Backyard Grill” (logo shown above1) to promote their line of grills and grilling supplies. Id. at 656. Variety brought a plethora of federal claims, including trademark infringement and unfair competition. Id. at 658. Both parties filed motions for summary judgment and each adduced evidence in support of their own motion. Id. Variety showed evidence of more than $56 million of sales with their mark, which they have been using since 1993. Id. Wal-Mart, while submitting plenty of evidence in their own support, also brought forth evidence that their marks were not confused with Variety’s, whereas Variety did not bring any evidence of confusion at all. Id. The district court then granted partial summary judgment for Variety holding that Variety’s mark was protectable, Wal-Mart’s mark could create confusion, and that Wal-Mart’s choice to not follow their counsel’s advice showed intent to confuse consumers. Id. In part, Wal-Mart appealed the award of partial summary judgement for Variety. Id. at 659.

The “extraordinary” remedy of summary judgment has some deceptively ordinary rules: (1) there must be no genuine issue of material fact and (2) the movant must be entitled to judgment as a matter of law. Fed. R. Civ. P. 56 (2021). Courts, as the gatekeepers of summary judgment, must ensure fairness in the motion by crediting all evidentiary inferences in favor of the nonmovant when investigating any issues of material fact. Tolan v. Cotton, 572 U.S. 650, 656-57 (2014).

Tolan arose from a claim of excessive force, in violation of the Fourth Amendment. Id. at 651. Officer Edwards believed that Tolan (Plaintiff) and his cousin had stolen a car, which the two exited at Tolan’s home. Id. at 651-52. Tolan’s parents came out of the house when they noticed the brewing situation. Id. Officer Cotton (Defendant) arrived, responding to a request for backup from Edwards. Id. at 652. From here, the parties had differing stories. Id. at 653. The two parties disputed how Cotton handled Tolan’s mother during the incident, and as to how Tolan responded to Cotton’s interactions with Tolan’s mother. Id. The stories converge around an unfortunate ending, however: Cotton fired three shots towards Tolan, striking him in the lung. Id.

Cotton moved for summary judgment with the district court, who granted it for Cotton, later affirmed by the Fifth Circuit. Id. at 654. In upholding summary judgment, the Fifth Circuit relied on Cotton’s version of Tolan’s response to Cotton’s interactions with Tolan’s mother (that Tolan rose to his feet) and to the lighting conditions of the porch where the shooting occurred (that it was dimly lit). Id. at 655. The Supreme Court noted that this was in error: the lower courts had failed to credit Tolan’s versions of the facts, vacating the Fifth Circuit’s judgment. Id. at 660. The Supreme Court expressed this message by pointing out the importance of juries:

The witnesses on both sides come to this case with their own perceptions, recollections, and even potential biases. It is in part for that reason that genuine disputes are generally resolved by juries in our adversarial system. By weighing the evidence and reaching factual inferences contrary to Tolan’s competent evidence, the court below neglected to adhere to the fundamental principle that at the summary judgment stage, reasonable inferences should be drawn in favor of the nonmoving party.

Id.

The Fourth Circuit applied this fundamental principle from Tolan to Variety Stores, Inc.  Variety Stores, Inc., 888 F.3d at 662. The court noted that Wal-Mart’s evidence purporting to show weaknesses in Variety’s trademark was improperly uncredited. Id. Both parties had produced evidence, that in the Fourth Circuit’s view, genuinely disputed the strength of Variety’s “Backyard” trademark, an issue that should have been resolved by a jury. Id. at 663-64. The court vacated the judgment for partial summary judgment for Variety. Id. at 667.

Tolan expresses a fundamental principle that makes summary judgment such an “extraordinary” remedy. Crediting the non-movant with permissive inferences is crucial to allowing both sides an opportunity to be heard in a dispute.

= = = =

1The Backyard Grill branding is all but disappeared from Wal-Mart stores. This is a photo of a friend’s Backyard Grill from Wal-Mart. A search of “Backyard BBQ brand” ironically came up with a Wal-Mart listing for grills. Wal-Mart’s new branding appears to be “Expert Grill.”

Grant Rate by Size and Representation

Patent

by Dennis Crouch

The chart below shows a measure of patent grant rate for a group of 30,000 recently completed patent prosecution cases. I reported earlier on the grant-rate differential based upon entity size classification: Large>Small>Micro. For this chart, I also added-in a second variable of whether the patent application filings were submitted by a registered US patent attorney or agent. As you might expect, those non-represented cases showed a much lower grant rate.

The most surprising result: Overall in this sample, I found that over 99% of patent applicants were represented by a US patent practitioner. An important note here is that the focus of this study was non-provisional utility application filings. I expect that the rate of true pro-se applications would be much greater if we looked at provisional patent applications.

I collected data of “disposals” for a four-week period during early 2021. I coded my database to consider each published patent application and whether (1) a patent issued in the case; or (2) the application was abandoned during the four-week period. I also coded each case according to its entity size and also whether a US patent attorney/agent had participated in the case. To calculate the grant rate, I simply divided the number of issued patents by the total disposals (issued patents + abandoned applications). Note here that this calculation is a bit different from the disposals that the USPTO uses for its examiner counts.

Entity type (Micro, Small, Large) is available from USPTO documents for each published patent application. It was more difficult to determine whether a particular applicant was represented. About 90% of the cases include a listing of one or more registered practitioners representing the parties. That linkage is typically created when the applicant files a power of attorney. For about 8% of the cases, I was able to look through the correspondence addresses for law-firms, individual attorneys, and applicants known to employ patent attorneys in order to conclude that they were represented. The final 2% required a case-by-case inspection. For each of those, obtained a copy of the application data sheet (if any) to see whether an attorney/agent had signed. In cases without an application data sheet, I looked for some responsive filing to determine whether it had been so signed.

I limited the scope of cases to only those that had been published because the files unpublished abandoned applications are not available for inspection. This likely skews the data somewhat because Small & Micro entities are somewhat more likely to file non-publication requests. However, about 90% of applications are published and so the impact of unpublished cases should not be too great.

In this sample, 74% of cases were tied to large entities; 23% to small entities; and 3% to micro entities. There are some important caveats regarding these entity sizes. Generally, a small entity can still be quite large. The basic cutoff is 500 employees. In addition, patent application at issue cannot have been licensed (obligated) to a large entity.

§ 121.802 What size standards are applicable to reduced patent fees programs?

A concern eligible for reduced patent fees is one:

(a) Whose number of employees, including affiliates, does not exceed 500 persons; and

(b) Which has not assigned, granted, conveyed, or licensed (and is under no obligation to do so) any rights in the invention to any person who made it and could not be classified as an independent inventor, or to any concern which would not qualify as a non-profit organization or a small business concern under this section.

13 CFR § 121.802. In addition, non-for profits (including universities) count as small entities without any limit on size.

Micro entities are a creation of the America Invents Act of 2011 and allow for reduced fees for individuals without much patenting experience (<5 prior applications filed for themselves) and who are not unduly wealthy (<3x median US household income). Again though, universities can count as micro entities. In my sample, a number of the small and micro entities are universities with a higher grant rate than the average for their category.

Generally, the USPTO requires non-human legal entities to be represented by a patent practitioners.  Of the 22,000+ large entity filings in my sample, I found only 4 that were not represented by a US patent attorney/agent. Those cases appeared to me to be ones where the filer should have claimed small or micro entity status.

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:

Power of Attorney

Patent

If you are in-house patent attorney/agent prosecuting cases for your employer-client, do you still need to file a power of attorney? I’m finding that a good percentage of cases have a registered patent professional listed as the correspondence address within the Application Data Sheet, and that individual is being allowed by the USPTO to prosecute the case no behalf of its client.  However, no power-of-attorney is on file with the USPTO.

My question above is focused on in-house counsel.  I’ll note that I’m also finding that this practice is quite common even in cases where outside counsel represents the patent applicant (~10% of applications).

Examples:

  • Application No. 16/381,289 — Barnes & Thornburg prosecuted this patent application to issuance on behalf of the applicant (Hill-Rom). The file does not show any power of attorney or assignment document filing.
  • Application No. 14/986,530 — Infinera’s in-house counsel prosecuted this application. No power of attorney on record.
  • Application No. 16/381,279 — Iandiorio Teska & Coleman prosecuted this patent application on behalf of the applicant (National Lumber).  No power of attorney on record.
  • Application No. 16/340,010 — Budzyn IP firm has been prosecuting this application on behalf of the owner (Armstrong Flooring).  No power of attorney is on record in the case.

(Note – these were just the first few cases that I randomly pulled-up).

Kessler Doctrine: Does it Survive?

Patent

In May 2020, the Supreme Court decided the trademark case of Lucky Brand  Dungarees, Inc. v. Marcel Fashions Grp., Inc., 140 S. Ct. 1589 (2020) and expressly refused to extend preclusion doctrines in the trademark realm beyond their traditional bounds set by the doctrines of issue and claim preclusion.

One month later, the Federal Circuit decided In re PersonalWeb Techs. LLC,  2020 WL 3261168 (Fed. Cir. June 17, 2020) and happily extended a quirky patent law preclusion doctrine beyond those traditional bounds.  See Kessler v. Eldred, 206 U.S. 285 (1907) (Kessler doctrine). In its decision, the Federal Circuit explained its expansion of Kessler “fills the gap left by claim and issue preclusion.” see Brain Life, LLC v. Elekta Inc., 746 F.3d 1045 (Fed. Cir. 2014).

Now, PersonalWeb has petitioned the Supreme Court for writ of ceritorari — pointing largely to Lucky Brands for its foundation. Questions Presented:

This Court has repeatedly held that, absent guidance from Congress, courts should not create special procedural rules for patent cases or devise novel preclusion doctrines that stray beyond the traditional bounds of claim and issue preclusion. Nonetheless, over the past seven years, the Federal Circuit has created and then repeatedly expanded a special, patent-specific preclusion doctrine that it attributes to this Court’s 114-year-old decision in Kessler v. Eldred, 206 U.S. 285 (1907)—a case this Court has not cited for almost 70 years. The Federal Circuit now routinely applies its so-called “Kessler doctrine” to reject suits like this one that would survive under ordinary preclusion principles.

The questions presented are:

1. Whether the Federal Circuit correctly interpreted Kessler to create a freestanding preclusion doctrine that may apply even when claim and issue preclusion do not.

2. Whether the Federal Circuit properly extended its Kessler doctrine to cases where the prior judgment was a voluntary dismissal.

The petition does two things here: (1) calls into question whether Kessler still applies and (2) even if Kessler itself is still good law, explains how the Federal Circuit has improperly extended the doctrine in cases such as PersonalWeb and Brain Life.

Read the petition: PersonalWeb petition

Read my prior post below:

Preclusion: Expanding Upon the Kessler Doctrine

 

Another look at USPTO Allowance Rate

Patent

by Dennis Crouch

Here is a different look at the USPTO grant rate that looks at two numbers for each quarterly period: how many patents issued, and how many applications were abandoned.  These can be added together as a total number of applications disposed-of during the period.  The percentage reported in the chart below is the percent of patents out of that total disposal.

These numbers roughly conform to the work that examiners do on a quarterly basis, but I did not count allowances/rejections, but instead looked only at whether a patent actually issued or actually abandoned (typically by failing to respond to an office action).   You’ll note an upward trend since 2010 with allowance rate roughly matching the highs seen 20 years ago.

One caveat on this data. I only used published applications because those records are open.  Unpublished applications tend to have a somewhat lower allowance rate.

 

MedImmune Licensee Standing Does not Apply to Portfolio License

Patent

by Dennis Crouch

The Federal Circuit’s new decision in Apple Inc. v. Qualcomm Inc. (Fed. Cir. 2021) offers an interesting standing puzzle.

After some heated litigation, Apple licensed 20,000+ Qualcomm patents as part of a six-year covenant-not-to-sue which resulted in the litigation being dismissed with prejudice.  Meanwhile, the parallel inter partes reexaminations (IPRs) moved forward with regard to two particular Qualcom patents within the package of 20,000+.

Although the PTAB granted Apple’s IPR petitions, the Board eventually sided with Qualcomm — holding that Apple had not proven that the claims were invalid.  Apple then appealed to the Federal Circuit.  The PTAB does not worry about Article III standing — because the PTAB is not an Article III court.  However, standing comes into play once the case moves from the administrative agency into the appellate court.

In MedImmune, Inc. v. Genentech, Inc., 529 U.S. 118 (2007), the Supreme Court  held that a patent licensee has standing to challenge a patent’s validity even without stopping the royalty payments.  Here, Apple argued that it likewise has standing. The problem, according to the court, is that cancelling of the two Qualcomm patents would not actually impact Apple’s obligations under the license.  This contrasts with MedImmune where an invalidity finding would dramatically impact the royalty owed.

In Apple’s view, a licensee’s obligations to pay royalties for a license to 100,000 patents would provide standing to challenge the validity of any single licensed patent, even if the validity of any one patent would not affect the licensee’s payment obligations. We do not read MedImmune so broadly.

Slip Op.  The basic outcome here is that a broad portfolio license does not, on its own, create MedImmune-style standing for the licensee to sue to challenge the patent rights.

The court also rejected Apple’s argument that it has an interest in invalidating the patents because it might be sued again once the patent expires.  On appeal, the Federal Circuit found that argument too speculative and unsupported by any evidence.

Apple offers the sparsest of declarations in  support of standing, which are devoid of any of the specificity necessary to establish an injury in fact. Without more, we are left to speculate about what activity Apple may engage in after the expiration of the license agreement that would give rise to a potential suit from Qualcomm. This is insufficient to show injury in fact. . . . What products and product features Apple may be selling at the expiration of the license agreement years from now are not the kind of undisputed facts we may take judicial notice of because they may be reasonably questioned. . . . We are not fortune-tellers. Accordingly, we must decline Apple’s invitation to take judicial notice.

Slip Op.

In the end, I expect that Apple could have established standing, but chose instead to withhold details from the license and it upcoming product line that could have changed the outcome.

 

Google v. Oracle and the Mixed Question of Law and Fact

Patent

by Dennis Crouch

In Google LLC v. Oracle Am., Inc., 593 U. S. ____  (2021), the Supreme Court spends a few pages walking through procedural aspects of the fair use defense.

Like many patent law doctrines, fair use is a mixed question of law and fact. The defendant’s use of the asserted copyrighted work and its impact on the plaintiff are typically factual issues that must be proven by evidence as weighed by the factfinder (often a jury). These are questions such as “how much of the copyrighted work was copied” and “whether there was harm to the actual or potential markets for the copyrighted work.” Google at 19.  However, the questions of law emerge when we are categorizing the importance of the factual findings as well as asking the ultimate question of whether the use was a fair use.

The fact-law divide comes up in various ways: Is there a Constitutional right to a jury trial on the issue; lacking that may a jury still decide the issue; does proof require evidence (as defined by the Federal Rules of Evidence) proven to a particular standard; or instead do we simply look for the ‘right’ answer; on appeal, what is the standard of review — deference or not?  Fact/Law also comes up in patent prosecution, but examiners are not charged with making the distinction and the rules of evidence don’t apply.

At the trial court this leads to the very practical question of how easily a judge can dispose of the issue pre-trial.  Questions of law are often easy to determine pre-trial; some mixed questions are also relatively easy to determine pre-trial if there is no right to a jury determination; mixed questions involving substantial factual disputes and a right to a jury trial are hard.  In patent cases, courts are regularly making pre-trial determinations on claim construction and eligibility, both of which are ultimately questions of law but that can involve underlying factual determinations.  Obviousness is another mixed question.  Although  the ultimate determination of obviousness is a question of law, it is treated differently from claim construction and eligibility.  Rather than being decided by a judge, obviousness is typically decided by a jury as fact-finder.  The difference is that obviousness typically requires detailed factual determinations that are hard to separate from the ultimate conclusion of obviousness and that are subject to a Constitutional right to a jury trial.

In deciding an issue, a district court will typically separate its analysis between findings-of-fact and conclusions-of-law. This separation is expressly required in FRCP 52(a)(1) when a judge determines the facts without a jury.  District courts also decide other substantive questions pre- and post-trial.  However, those determinations are typically purely questions-of-law.  (Failure to state a claim; Summary Judgment; Judgment as a Matter of Law).

Back to Google: Oracle sued Google for copyright infringement, and Google raised a defense of Fair Use.  The district court gave the question of fair use to the jury who sided with Google.  On appeal, though the Federal Circuit reversed and found no fair use.  Although the jury had decided the issue, the Federal Circuit gave no deference to the jury’s legal conclusions.  In its subsequent analysis, the Supreme Court agreed with the Federal Circuit’s  procedural approach of de novo review of the legal conclusions but ultimately disagreed on the substance. Rather, the Supreme Court concluded that Google’s use was a fair use as a matter of law.

One typical difficulty in the law-fact divide is that the questions are often not easily separable. In Markman, the Supreme Court called claim construction a “mongrel practice” because it is a mixed question that is hard to separate-out.  Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996).   In Google, the court determined that the big questions of fair use should be treated as questions-of-law because they “primarily involves legal work.”

The Google court went on to cite Markman in concluding that there is no 7th Amendment Right to a Jury Trial on the doctrine of fair use. “As far as contemporary fair use is concerned, we have described the doctrine as an ‘equitable,’ not a ‘legal,’ doctrine.” Google at 20.  See U.S. Const. 7th Amd. (“In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved.”).

The Court’s general approach to mixed questions of law is explained in some detail within its 2018 bankruptcy decision of U. S. Bank N. A. v. Village at Lakeridge, LLC, 583 U. S. ___, 138 S. Ct. 960 (2018). In that case, the mixed-question was whether a creditor qualified as a “non-statutory insider.”  In U.S. Bank, the court explained that “mixed questions are not all alike.”  Some mixed questions are more like questions of law requiring an “amplifying or elaborating on a broad legal standard.”  Those should be treated as questions of law.  Other mixed questions require analysis of narrow facts “that utterly resist generalization.”  Those should be treated as questions of fact.  “In short, the standard of review for a mixed question all depends—on whether answering it entails primarily legal or factual work.”

For the fair use analysis in Google, the court followed the U.S. Bank standard and determined that the fair use questions at issue in the case were primarily legal and thus should be reviewed de novo on appeal.

Bringing all this back to patent law, I don’t see anything in this analysis to disturb our current approaches to obviousness, claim construction and eligibility.  But, both Google and U.S. Bank are clear that they are focusing on the particular issues in the case at hand.  It may well be that the mixed question analysis will come out differently on a different set of facts.

The Next Chief Judge: Judge Moore

Patent

Chief Judge Prost took over as Chief at the end of May 2014 just after Judge Rader stepped-down from the position.  The position lasts for seven years and that date is approaching in May 2021. In addition, the statute prohibits a judge from being Chief Judge once they turn 70 years old.  Judge Prost is also turning 70 toward the end of May 2021.  28 U.S.C. 45. Thus, we’ll have a new Chief Judge within the next 7 weeks or so.

The next chief is defined by statute:

(1) The chief judge of the circuit shall be the circuit judge in regular active service who is senior in commission of those judges who—

(A) are sixty-four years of age or under;

(B) have served for one year or more as a circuit judge; and

(C) have not served previously as chief judge.

Judge Moore is the most senior active judge that satisfies the three statutory requirements and thus is the chief-apparent.  Judges Newman, Lourie, and Dyk are the three most-senior active judges.  However, they are all over the age of 64 and thus do not qualify to become the next Chief Judge.  Judge O’Malley is next in line following Judge Moore, but turns 65 in November 2021. Assuming that Judge Moore takes to the role and remains Chief Judge for her full 7 year term, the next Judge on deck will be Judge Chen in 2028. Since all of the current Judges are >50 years old, none would be eligible for the subsequent go-round in 14 years.

* I also apologize for openly discussing ages of these humans in such an uncouth way, but it is required by the statute.

Studying Nonobviousness

Patent

By Jason Rantanen

There are lots of quantitative studies of patent litigation appellate court decisions, going all the way back to P.J. Federico’s 1956 article Adjudicated Patents in the Journal of the Patent and Trademark Office Society.  One of the big limitations of these studies, though, is that there hasn’t really been any work done to examine how replicable their observations are – even for variables as seemingly simple as whether the court affirmed or reversed on a particular issue, or reached a particular outcome, such as whether a patent’s claims was obvious.  New studies compare their aggregate results to previous studies, but not the actual data themselves–even when studying the same set of cases.

In an article forthcoming in the Hastings Law Journal, Abigail Matthews, Lindsay Kriz and I set out to do exactly that: to examine the amount of agreement between two studies on nonobviousness around the time of KSR v. Teleflex, one that I did that was published in 2013 and one that was recently published by Judge Ryan Holte and Prof. Ted Sichelman.

Our reliability assessment reveals a complex picture.  Somewhat reassuringly, the results from the two studies are largely consistent for decisions from the same time period.  Surprisingly, however, fewer than 2/3rds of the decisions analyzed in both studies were the same—even when limited to the identical time period and using the same criteria.  Within that set of cases, however, the core data coding was largely identical, with a few notable exceptions.  Specifically, we find differences in the coding for procedural postures and in some coding related to judicial reasoning.

In addition, since the period covered by those two studies ended several years ago, we also updated the dataset through the end of 2019.  Here are some highlights from our findings:

  • The number of Federal Circuit decisions in appeals arising from the district courts that involved a § 103 issue peaked between 2010 and 2015, and in recent years has declined to half of that peak.
  • The percentage of Federal Circuit decisions with an outcome of “obvious” in appeals arising from the district courts remained high between 2006 and 2014, but since 2015 the number of “obvious” outcomes has fallen dramatically.
  • The Federal Circuit continues to affirm district courts on the issue of obviousness at a high rate (around 80% of the time since 2013), and—in contrast with the immediate post-KSR period studied Holte & Sichelman (2019) and Rantanen (2013)—since 2013, affirmances have been equally high for district court outcomes of “nonobvious.”
  • The number of grants of summary judgment involving § 103 that were reviewed by the Federal Circuit in its decisions has fallen substantially in recent years. Nearly all § 103 decisions arising from the district court that were reviewed by the Federal Circuit between 2016 and 2019 involved a bench or jury trial.

In the paper we talk about some possible explanations for this decline, including two obvious causes: the rise of inter partes review and patent eligible subject matter issues.  You can read the full preprint on SSRN here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3818466.  I’m hoping to have the data posted within the next few weeks.

Google v. Oracle: Use of Oracle’s API is a Fair Use

Patent

Google LLC v. Oracle America, Inc. (Supreme Court 2021)

In a 6-2 decision authored by Justice Breyer, the Supreme Court has held that Google’s copying of the JAVA API naming convention was a fair use as a matter of law.  The court did not decide the question of whether the API was copyrightable in the first place.

In his dissent, Justice Thomas (joined by Justice Alito) argues that the majority opinion “disregards half the relevant statutory text and distorts its fair-use analysis. . . . Oracle’s code at issue here is copyrightable, and Google’s use of that copyrighted code was anything but fair.”

The key lines from the case for patent attorneys:

Majority: [U]nlike patents, which protect novel and useful ideas, copyrights protect “expression” but not the “ideas” that lie behind it.

Dissent: Computer code occupies a unique space in intellectual property. Copyright law generally protects works of authorship. Patent law generally protects inventions or discoveries. A library of code straddles these two categories. It is highly functional like an invention; yet as a writing, it is also a work of authorship. Faced with something that could fit in either space, Congress chose copyright, and it included declaring code in that protection.

= = =

The case involves the software interface or Application Program Interface (API) for Oracle’s Java programming language.   What we’re really talking about here are the names of the various functions that a programmer might memorize such as “Math.max(a,b)” which returns the greater of two inputs.  Java is divided up into “packages” of function calls such as max.

Java is a popular language with many millions of skilled programmers.  As Google developed its Android platform, it wanted to simplify the adoption process for app developers. As such, it chose a language that the programmers know – Java.  The one problem is that Oracle wanted a substantial royalty and so Google instead recreated the entire language, including the functionality of thousands of function-calls.

What did Google copy?: It copied the naming convention of the functions (Math.max(a,b)) and their organization.  This is thousands of function names organized into 37 Packages.  Oracle claimed copyright to these names and their organization.  The Federal Circuit agreed with Oracle that (1) the API is protectable under copyright and (2) that Google’s use was not a fair use.

In its fair use analysis, the court placed substantial weight on the fact that the value of Java’s API is based upon the fact that “those who do not hold copyrights, namely, computer programmers, invest of their own time and effort to learn the API’s system” rather than in the inherent creativity of the expression.  Thus, the “‘nature of the copyrighted work’ points in the direction of fair use.”  Although the Supreme Court found Google “precisely” copied the JAVA API, it still found the use transformative — because it was being used on a handheld rather than a laptop.  For substantiality, Google only copied 11,000 lines of code.  The court found that insubstantial since it was less than 1% of Java as a whole.  Finally, regarding market impact, the court found that Sun was unlikely to be able to compete in the Android marketplace and that the copying by Google created a lots more market opportunity for others.

Obviously, there is lots more to this opinion.  Read it via the link above.

USPTO Grant Rate 2021

Patent

by Dennis Crouch

The following chart provides one look at USPTO historic patent grant rate for patent applications filed over the past 20 years.  The chart groups together patent applications as of their filing-month and then simply reports the percentage patented, abandoned, and still-pending.  The red-line in the chat excludes the still pending applications and thus reports the grant rate of disposed-of applications.

A few notes.

  • There are many ways to calculate a patent grant rate.  This one is perhaps the simplest in that I simply looked at the current status of each published utility application – serial number by serial number.  I treated all utility applications equal, regardless of whether it was part of a larger patent family or whether it was subject to an RCE.
  • Beware of recent grant rate data:  In my model here, there are only two ways that a patent can escape from being still-pending: Either (1) the patent issues or (2) the applicant abandons the application.  And, the former (disposals-by-patenting) typically take less time than the latter (disposals-by-abandoning).  As the PTO begins examining a cohort of patent applications, it typically issues a number of first-action allowances, while most applicants hold on for at least a final rejection before abandoning. What all this means is that more-recent grant rate data can be skewed.

Patently-O Bits and Bytes by Juvan Bonni

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The AIA Patents have Arrived

Patent

by Dennis Crouch

The America Invents Act of 2011 included a major reshuffling of what counts as “prior art” against a given patent. 35 U.S.C. § 102 was substantially rewritten with a new focus on an application’s effective filing date, and zero focus on whether a patent applicant was the “first to invent.”  The new law applies only to post-AIA patents.  The Act defines these as any patent that “contains or contained at any time” a patent claim “that has an effective filing date” on or after March 16, 2013. We are now in the midst of a major change-over.  Most in-force patents are still pre-AIA, but most newly issued patents are post-AIA.

The pretty chart below provide a sense of where we stand for newly issued patents.  For 2021, 90%+ of newly issued patents are post-AIA, meaning that their effective filing date was on or after the March 16, 2013 threshold.  Patents coming out of TC-1600 (Biotech + Organic Chemistry) are the most likely to still be pre-AIA (18% pre-AIA in 2021) while TC-2800 (Semiconductors, Electrical and Optical Systems and Components) is at the other end of the table (4% pre-AIA in 2021).

The data here comes from the USPTO data files, but is generated primarily from applicant input on the application data sheet.  So, there are likely some mistakes. Further we do not have clear case law interpreting the threshold timing in any detail.

Patent Term: We know that in the USPTO, the patent term lasts 20 years from the effective filing date (not counting US provisional PCT and foreign national stage filing).  However, the US also has a generous patent term adjustment (PTA) program that provides patentees with additional patent term in cases where patent prosecution took too long.  Thus, although the clock is seemingly running on these still-pending pre-AIA applications, I expect that many of them will find their terms substantially adjusted. [Thanks to a reader for catching my typo above. Priority claims to a PCT application do count into the 20 year patent term.]

Transitions: Andrei Iancu

Patent

by Dennis Crouch

Former USPTO Director Andrei Iancu has returned to private practice — back at his Southern California firm Irell & Manella. Iancu had been managing partner of the firm before being nominated by President Trump to lead the Patent Office.

Congratulations to Dir. Iancu on navigating the tricky political waters of Washington DC these past several years.  I hope that Iancu’s measured success during rather extreme times will encourage others to step-up as well.