Merry Christmas 2021, your Patent is Invalid

by Dennis Crouch

Bankers’ Serv. Corp. v. Landis Christmas Sav Club Co, 273 F. 722 (3d Cir. 1921) [67_F.2d_904]

This 1921 decision centered on Merrill B. Barkley US Pat. No. 1,202,646, covering stationary for making “Christmas club deposits.”  The specification explains:

There has developed recently in banking circles a wide demand for various kinds of special savings accounts, known generally as Christmas clubs, vacation accounts … and the like.

The claimed invention then is directed to a “deposit book,” with each page having a stub and detachable coupon.  The customers keep the book with all the stubs showing deposits while the coupon goes to the bank to help direct the deposit.

Landis Christmas Sav Club was already selling supplies to banks, but Barkley was able to improve the system.  In particular, with the Landis system, the a book of coupons was held by the bank, and individual sheets given out to the customer with each deposit.  The Barkley reversal allowed the customer to keep the book and give deposit slips to the bank.  Apparently Landis then copied the Barkley approach and an infringement suit followed.  In essence, Barkley’s device is a reversal of the Landis approach.   And, the appellate court recognized that the Barkley approach was and improvement that “could be more easily and conveniently handled.”

Despite the improvement, the courts found that they were of the time that would “naturally follow” from the prior art rather than rising to the level of an invention:

[I]t was the to-be-expected result which would naturally follow the study of men familiar with the banking and stationery business, when they set themselves to study and improve the Christmas Club system, as all bank employees would do. When such a new system was used by the thousands of keen minds, when better detail and further efficiency of such system would be the customary result of the experience that came from use, we would expect improvements, and the ideas such as Barkley worked out are, in our judgment, the steps that would naturally follow use. To take the cleverness of an improver and award the monopoly of an invention thereto would, to our minds, make of the patent law a hindrance, not a help, in the evolution of progress.

Invalidity affirmed.

Although the decision is issued prior to Graham v. John Deere, it offers an example of the level of ordinary skill in the art likely made a difference.  The appellate court reflected that bank clerks are generally quite clever and diligent in their pursuit of efficiency.  The court’s suggestion that the ubiquity of the prior art makes it much more likely that an improvement will naturally follow.  This last bit on ubiquity is not typically used in the obviousness analysis anymore, but it does appear in Alice, step 2.

39 thoughts on “Merry Christmas 2021, your Patent is Invalid

  1. 11

    My apologies for this comment if it seems in poor taste, but I notice that on 23 Dec Judge Newman dissented from denial of en banc review in Mondis Tech v. LG Electronics. Today she again dissented (System Studies & Simulation v. United States) without opinion. There is nothing unusual in Judge Newman dissenting, but dissenting without opinion is very unusual for her. Judge Newman is 94 years old. I hope that this recent silence does not betoken illness.

    1. 11.1

      Sorry, in case it was not clear, both of these dissents in the last week were without opinion. That is the unusual bit.

      1. 11.1.1

        Man that ol girl needs to step down. Go have a good time with the grandkids and whatnot.

        Also the federal gov needs to stop with the elder abuse, even if it be low-key and even if Newman remains sharp.

        1. 11.1.1.1

          Your ISMs are showing.

        2. 11.1.1.2

          I am happy to have Judge Newman on the court for as long as she is willing to serve. Judge Rich never took senior status, but remained an active service judge until his death at age 95. Myron Bright served on the CA8 until his death at age 97. May she serve another decade.

  2. 10

    The CAFC released four non-precedential, per curiam opinions today in four separate appeals between Sanofi-Aventis and Mylan (3 IPR appeals and 1 infringement suit). Appeal 20-2066 is another interesting data point in the gradual tightening of written description standards.

    The technology here is a medical device, not a pharmaceutical. Sanofi filed a UK priority app describing an injector whose piston rod has “a first threaded portion at a first end and a second threaded portion at a second end.” The drawings showed external threads on the rod.

    The later PCT that claimed the benefit of the UK priority filing distinguishes between internal and external threads, although this distinction was not explicitly discussed in the UK app. The US patent claims recite “a piston rod comprising either an internal or an external fourth thread… .”

    The PTAB found that the US claims lack support in the UK app, and thus the effective filing date is the PCT date. Intervening art makes the US claims invalid. So far, nothing terribly surprising.

    The part that is surprising is that Sanofi tried to propose substitute claims which remove mention of “either an internal or an external.” Needless to say, this would result in a claim with the same effective scope as the originally granted claims, but without the language that is arguably unsupported by the UK application text. The PTAB refused to enter the claims—on the grounds of lack of written description support—and the CAFC affirmed.

    1. 10.1

      Thanks, Greg. The way I see it, and as I have suggested many times in these columns, a “gradual tightening” in the WD requirement is the inevitable consequence of the switch into a First to File patent law. The courts, pursuing justice between Parties in dispute, have no other choice.

      An inexorable and remorseless tightening of the WD requirement is a consequence of the ever-increasing importance of patents and ever-increasing competition between bulk filers, each opposing the others’ claims, claims usually directed to small improvements made, independently, and at much the same time by in several different corporate R+D departments. Often, it’s because these improvements are small but profitable that they are so often opposed by the competition. Decades of fiercely fought oppositions at the USPTO (or s has already happened at the EPO) are what squeeze WD standards ever higher. That there were so few interferences, long ago, under First to Invent, is no indication of how many “oppositions” occur today under FtF.

    2. 10.2

      See ICU Medical, Inc. v. Alaris Medical Systems, Inc., 558 F.3d 1368, 1377-1378 (Fed. Cir. 2009) (“The district court correctly granted summary judgment of invalidity with respect to the spikeless claims. As an initial matter, we refer to these claims as spikeless not because they exclude the preferred embodiment of a valve with a spike but rather because these claims do not include a spike limitation — i.e., they do not require a spike. … But the specification describes only medical valves with spikes. … Based on this disclosure, a person of skill in the art would not understand the inventor of the 509 and 592 patents to have invented a spikeless medical valve.”); LizardTech, Inc. v. Earth Resource Mapping, Inc., 424 F.3d 1336, 1344 (Fed. Cir. 2005) (“because there are no limitations in claim 21 as to how the seamless DWT is accomplished, claim 21 refers to taking a seamless DWT generically. … The trouble with allowing claim 21 to cover all ways of performing DWT-based compression processes that lead to a seamless DWT is that there is no support for such a broad claim in the specification.”)

    3. 10.3

      Is it really another data point if it’s non-precedential?

      1. 10.3.1

        Non-precedential opinions are still persuasive authority, even if not binding authority.

      2. 10.3.2

        If it’s any comfort, I am not persuaded as to Greg’s presumption by any of these “data points.”

  3. 8

    Off-topic (once again), but Judge Taranto’s precedential decision yesterday in Intel v. Qualcomm was very interesting and informative about how the PTAB should treat §112(f) claim limitations in IPRs.

    1. 8.1

      Thanks. Does he include “effective to” limitations?

      1. 8.1.1

        The opinion does not have occasion to discuss the different formats of §112(f) limitations. In this instance, the relevant limitations were a “means for processing” and a “means for scatter loading.”

    2. 8.2

      Thanks for that observation Greg. My skimming of the same Intel v. Qualcomm Fed. Cir. decision looked to me like most thorough applications of KSR to 103 issues by the Fed. Cir. that I recall ever having seen. I would thus think it is likely to be cited in other IPRs and D.C. cases on 103 issues?

      1. 8.2.1

        I counted “KSR” printed 22 times in this 12/28/21 Intel v. Qualcomm Fed. Cir. decision.

        1. 8.2.1.1

          typo – 12

    3. 8.3

      Greg, a law firm note in support of that Intel v. Qualcomm aspect – that Indefinite claims do not preclude patentability analysis at the PTAB:
      The Federal Circuit reasoned that the Board failed to fully assess claims 16 and 17 for patentability since there were issues of indefiniteness. The Federal Circuit stated that the “Board did not itself conclude that the prior-art analysis task was impossible” and concluded that the Board should nevertheless address whether the underlying patentability of the claims could be analyzed despite any indefiniteness issues. Accordingly, the Federal Circuit vacated and remanded the Board’s decision.

  4. 7

    Off topic, but mandamus to the WD Tex denied today in In re Medtronic.

    1. 7.1

      Obviously, a denial of mandamus is kind of a dog-bites-man story. I like to point out these occasions of ordinary outcomes, however, lest we all get the wrong impression because we hear only about the unusual outcomes.

      1. 7.1.1

        Thanks for the heads up on that dog bite bruh. I take it that was the one about the moving the case from one court to another court.

        1. 7.1.1.1

          That’s right.

  5. 6

    This last bit on ubiquity is not typically used in the obviousness analysis anymore, but it does appear in Alice, step 2.

    Resurrected.

    Alice is certainly not a backdoor 103 test.

    1. 6.1

      Resurrected…?

      You mean “ultra vires,” eh?

  6. 5

    Must have struck a big fraudulent nerve. Can’t wait to get this party started.

    1. 5.1

      Hate itself takes on a life all its own, that literally blinds the person who now hates from getting to the bottom of the hate. But, every once in a while the veil of hate is lifted to let the person full of hate from the machinations delivered day in and day out for 69 years see. I’m thankful it happened. I also am thankful to realize that my Uncle and then my Cousin were somehow able to, because of positions in their own family and background were able to get an Army of many. I know now that two relatives lost their jobs over this. Surely it had to do with addresses changed. Their positions were taken from them because of what they did. what others did to me was ignored. Some of them even put their property with another relative for years thinking the statute to their crimes was past. But because of the constant, laches exist in each and every jurisdiction they played me during this continuing this crime spree.

      1. 5.1.1

        I HAVE TWO SS NUMBERS. ONE THEY WERE ABLE TO BUILD INTO A COUNTERFEITING SCHEME. THE OTHER THE USED TO ENRICH THEMSELVES.
        There was a law firm that wanted to help me in Jackson, TN. But they were without their realizing that an Atty. they hired was involved. They fired him then were not in the position to take it on in a court. They were in a catch 22 position. the do no harm oath ha been muddied. I being filled with hate, blamed them completely. They didn’t do enough to let me know and then help me. They should have called me into their office when I went back to get my Check, that an Uncle had already involved himself in the situation. He even went as far as sitting a s a creditor on my stolen property. Then he took off like a bat out of ……This whole story of my life not necessarily lived by me for 69 years reminds me of what went wrong in this country. And if being a lawyer and knowing the Oath is what you follow, you don’t need me to explain just when this all started. You know when it started. An you also know that it is the catalyst to my story.

  7. 4

    Merry Christmas, all. 🎄

  8. 3

    Why did you include the link to the Christmas lights case, and then say nothing about it?

  9. 2

    I wish I had taken Latin when I was a tyke, and I would have known the origins of “obvious”. Now I do, thanks to MaxDrei.

    1. 2.1

      Interestingly enough, “obviate” also has the same Latin origin, and obviating is exactly what one does to the “roadblocks” that Max describes.

      I’m really glad I took Latin in HS so I could use it for a stray patent blog comment years later.

      Joyeux Noël folks.

      1. 2.1.1

        What to do, when progress is prevented by a roadblock? Well, you might be able to take a different route from A to B, avoiding the roadblock. Then again, that might not be possible. Not sure though that one can class that as “obviating” the roadblock. After all, designing around is what the patent system is supposed to promote.

        Anything else? Well, you could try to demolish the roadblock. Perhaps you could ask the PTAB to help you in the vital task of removing the block on everybody’s progress in the useful arts?

        Best Christmas present I ever had was the tip given me by the careers adviser at my university, to look into the possibility of becoming a patent agent (as we UK patent attorneys were called back in the 1970’s). It introduced me to the ever-fascinating (and seemingly never-ending) topic of obviousness in the field of technical innovation and progress.

        1. 2.1.1.1

          Please name an instance in which a roadblock has been the only way.

        2. 2.1.1.2

          You also left out not one but two ‘obvious’ choices:

          1) pay the innovator that has first dedicated the innovation through the patent system.

          2) do without (if the purported innovation is ‘that obvious,’ then it may well be easy enough to step around the item in the road).

          But if your mindset is that the item is like dog
          c
          r
          a
          p

          and you still insist on stepping into the
          c
          r
          a
          p,
          then you have no one else to blame but yourself.

        3. 2.1.1.3

          Perhaps you could ask the PTAB to help you in the vital task of removing the block on everybody’s progress in the useful arts?

          There are only two possibilities here. Either (1) the claimed invention was obvious on its filing date, or (2) it was not.

          If #1, then the PTAB can (and should!) wipe out the wrongly granted claims even if they are not a “roadblock” to the progress of others. The mere fact that the patentee has usurped a portion of the public domain to itself justifies the PTAB’s actions, regardless of “roadblock” status.

          If #2, then there is nothing that the PTAB can do for you. Their charter is to efface invalid claims, not inconvenient claims.

          1. 2.1.1.3.1

            Entirely agree with you, Greg. Obvious Y/N, that is the eternal question.

            There are limits to the degre to which one can liken the advance of the useful arts to a road. But when I wrote about ob Via, I suppose I had in mind, in the established case law of the Boards of Appeal of the EPO, the section (see Link below) on the so-called “One Way Street” situation (which is an indication of obviousness despite Applicant’s evidencing one or other effect adduced as surprising or unexpected).
            link to epo.org

  10. 1

    I never forget that the word “obvious” derives from the Latin “ob Via” meaning “lying in the road”. Given that progress in the useful arts naturally follows (geddit?) a course of development, then what needs to be excluded from patentability is stuff that is lying in the road ahead. Roadblocks hinder rather than promote progress down the road.

    All very fine and dandy in principle. But how shall a court that is not a person skilled in the art have the first clue how to discern the road ahead (and whether or not the subject matter of the claim in view is or is not Off-road?

    Happy Christmas everybody, and may 2022 be a distinct improvement on 2021. The common cold is a corona virus. I think I can discern the road ahead for C 19, degenerating into something like the common cold virus. It’s not obvious though, is it?

    1. 1.1

      Oh, good, no more 101 stuff.

      I’ve always thought our approach to 103 art wasn’t quite right. To continue your analogy, proper obviousness should only consider stuff nearby the path, not something lying partially covered in the woods some distance away. But, how exactly to implement that concept (102 art vs 103 art), IDK.

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