March 2023

The Brandeis Brief in Patent Cases

by Dennis Crouch

Louis D. Brandeis was a famous lawyer long before becoming a Supreme Court Justice. In the 1908 case of Muller v. Oregon, Brandeis represented the State of Oregon defending the state’s rule restricting the number of hours that women could work in certain industries.  In defense of the law, Brandeis filed a brief that presented social science research and empirical evidence to support the argument that long working hours had negative effects on women’s health and family life.  That evidence helped sway the court and also spawned the “Brandeis brief” — an approach that continue to be a popular mechanism for attempting to influence the Supreme Court. Brandeis briefs typically include lots of facts and claims about how the world works and ask the court to use those facts in its interpretation of the law.  One key problem with this approach is that it does not follow the usual rules of evidence required for factual findings.  And, when the Supreme Court adopts the findings, then the facts suddenly become the law and binding precedent.  Thus, Muller v. Oregon, the Supreme Court precedentially concluded that it was uniquely risky for women to work long hours and that their natural caregiver role would be improperly disrupted.  Today, we might recognize that those conclusions included inherent cultural biases rather than stemming from the nature of women.

A major problem with this sort of evidentiary submission directly to the Supreme Court is that it is unchecked and admittedly biased — these are sent to the court in briefs advocating a particular point of view and without the ordinary judicial evidentiary process.  But, proponents of Brandeis briefs argue that the rules don’t apply to these “legislative facts” because the evidence is being used to interpret the law rather than make case-specific factual conclusions.  This is much the same approach as the Court uses to determine historical facts for originalist decisions.  But, many historians would agree that history as defined in Supreme Court cases appears to be cherry-picked in order to achieve a particular results.

In patent cases, we often have Brandeis briefs on the policy impact of certain choices.  In addition, we also regularly see attempts to explain the science to the justices in ways that help lead them to a particular conclusion.  In Amgen, for instance, Nobel Prize winner Gregory Winter submitted a brief explaining that antibody design is extremely unpredictable and, because of that, broad functional claims should not be allowed.   Amgen contended that some of the evidence Winter relied upon had been excluded by the trial court, and thus should not be reintroduced to the Court. But, the practice is likely to persist.

Bye Bye Functional Claims

by Dennis Crouch

Oral arguments from Amgen v. Sanofi suggest the potential of a blockbuster Supreme Court decision further derogating functional claim limitations (all of which are also genus claims).  A key question is whether the court will include limiting language that that directs impact primarily upon the “unpredictable arts.”

At oral arguments, the Supreme Court was quite hostile to the patentee counsel Jeffrey Lamken and his attempt to defend Amgen’s functionally claimed genus of antibodies.  I believe that Lamken took the wrong turn by first repeatedly telling the court that the claim covered only about 400 antibodies, before eventually admitting that a scope covering millions of yet unidentified antibodies.  I could taste the bitterness in the further questions.  Several members of the court struggled with the expressly functional claim limitation that permitted Amgen to claim all antibodies that achieve its stated results.  Lamken suggested that the “PTO regularly issues patents which have that sort of functional piece.”  Of course, the PTO also regularly issues invalid and overbroad patents.  In questioning, the court clearly thought we had a potential eligibility problem because of the functional limit. In his response Paul Clement picked-up on that issue and explained that the functional genus claim is “a work-around of Myriad. Because basically they’re pointing to something that exists in nature [the PCSK9 pathway] and they’re saying, we claim everything that works to bind there en bloc.”

In Amgen v. Sanofi, the Supreme Court  agreed to reevaluate the doctrine of enablement as applied by the Federal Circuit.  Although juries twice sided with the patentee, the district court and the court of appeals both rejected the jury verdict and concluded that lacked an enabling disclosure as a matter of law.  The Federal Circuit particularly noted (1) that functional limitations are much more difficult to enable than are structural limitations and (2) that each embodiment covered by a genus claim must be enabled.  Here, the court noted that Amgen had failed to enable the “far corners of the claimed landscape.”

Amgen has requested the court to incorporate a meaningful limitation into the enablement test.  In that framework, a patent challenger would need to show both (1) that some embodiments requires undue experimentation in order to recreate and (2) that those failures would be meaningful to skilled artisans.  And, Amgen suggests that functional genus should not face heightened scrutiny.  Lastly, Amgen suggested that the Wands Factors should be given less weight – that today they are being used as the test, rather than for functional support.  The particular Wands problem for the patentee here is the notion that antibodies are “unpredictable” and therefore require more disclosure.

The case is a very big deal, and not just for antibodies.  Every claim covers myriad undisclosed embodiments; Everyone is using lots of functional limitations; and Every patent suffers from unenabled far corners.

The claim here:

1. An isolated monoclonal antibody, wherein, when bound to PCSK9, the monoclonal antibody binds to at least one of the following residues: S153 … or S381 of SEQ ID NO:3, and wherein the monoclonal antibody blocks binding of PCSK9 to LDLR.

The Amgen invention centers around a pathway that others discovered regarding LDL, AKA “bad cholesterol,” the liver’s role in destroying bad cholesterol, and a new protein PCSK9.  The liver has LDL receptors (LDLRs) that bind and break-down LDL.  But, the body also makes a protein known as PCSK9 that competitively binds to those receptors and blocks the liver LDL-breakdown action.  In creating its invention, Amgen set out to find monoclonal antibodies that bind to PCSK9 and block its operation — and thus allow the liver to do its LDL-breakdown work.  The process for doing this was somewhat straightforward. They first injected a humanized-mouse with PCSK9 in order to cause an immune reaction to attack the foreign body.  The mouse created a bunch of antibodies (about 3,000) that bind to PCSK9.  These were then all tested (using standard rapid testing tools) to determine which ones bind the “sweet spot” of PCSK9 — and thus would have the impact of “block[ing] binding of PCSK9 to LDLR.”  This process brought it down to about 400 antibodies.  However, Amgen did not actually take the time to figure out the amino-acid sequence for of each of these. Rather, it did so for 16 of them and called it good.  Sanofi’s product is – most likely – one of the 400 discovered by Amgen, but was not literally described in the Amgen patent. Rather, Amgen described the process, and also described the use of a codon-replacement process to check similar antibodies (that is where the millions come-into play).

A key quote from Clement was be the following: “I think functional genus
claims are terrible.”  The essence of his argument is that they have the potential of giving the patentee a broad scope covering numerous radically different solutions.  The result though is that nobody has incentives to look for the others because of the covering patent.  “They retard the science.”  In his view, a more limited monopoly is much better — “We’re better off with two competing independently developed therapies.”

Colleen Sinzdak argued on behalf of the US Gov’t as amicus and in support of Sanofi.  Sinzdak was in complete agreement with Clement, arguing that broad genus claims are “a danger to innovation and especially in the medical field.”

The Government argued that a genus claim is only proper if each and every embodiment within the genus has been enabled. “It really is that simple. … you really do need to enable each of the different embodiments that you’re claiming.”  Sinzdak argued that in an unpredictable, fast-moving field, the law should be more stringent in order to allow an early patent to unduly grab land and shut-down further research.   Sinzdak suggested that the court force narrow claims and then let folks rely upon the doctrine of equivalents if necessary.

Lamkin’s important rebuttal point: Although Amgen did not literally disclose every embodiment, and some covered embodiments are quite structurally different from those disclosed, “the key fact in this case is that Sanofi has not identified one antibody that would require undue experimentation to make.”

Venue Transfer and Witness Credibility

In re: Roku, Inc. (Fed. Cir. 2023)

IOEngine sued Roku for patent infringement back in 2021. As is common with large corporate defendants sued in Waco, Roku asked Judge Albright to transfer the case to N.D. California on convenience grounds under 28 U.S.C. 1404.  Judge Albright refused — noting that Roku’s corporate witness lacked credibility and his testimony was “either misleading or based on an inadequate investigation of the facts.”  In particular, the record showed several Roku employees with “particularly relevant knowledge” of the case located in the W.D. Tex. (Austin), but that Roku had indicated all potential employee witnesses were located in Northern California.

Still, Roku petitioned for mandamus with some confidence, having seen the Federal Circuit previously repeatedly nitpick the work of Judge Albright on transfer motions.  Although Roku did not expressly claim that Judge Albright was biased, it did argue a failure of “objective assessment” (essentially the equivalent).

Objectively assessing the facts shows that the [Roku] employees in WDTX identified by IOENGINE do not possess relevant material information. And, even if they do, their knowledge is, at best, cumulative to the knowledge of Roku employees in NDCA.

Roku Petition.  Of course, the second sentence suggests the problem with Roku’s argument.

In the end here, the appellate panel did not move forward — holding that denial of transfer was not a “clear abuse of discretion” since the district court considered the relevant factors in its conclusion that Roku failed to show that the Northern District of California was clearly more convenient.

$469 Million: There and Gone

ClearPlay v. Dish Network (D.Utah 2023)

Earlier in March 2023, a Utah jury sided with the patentee ClearPlay – find that Dish Network infringed two “clean movie” patents used to to skip the naughty bits of a video program. US7577970 (Claims 28 and 33); and US6898799 (Claim 12).  The jury went on to award a “reasonable royalty” of $469 million.

Hold that pause button.  This week, Judge Nutter rejected the jury verdict and instead granted the defendant’s motion for Judgment as a Matter of Law.  Nutter concluded that the patentee had not shown either literal infringement or infringement by equivalents.  The court ordered DISH to prepare a draft order for his signature that adopts the rational from its briefing.

The draft order will contain support, citations, and consistent rationale from its briefing; transcript references from DISHs appendix (which should be used extensively in the draft order); and references to contrary positions taken by ClearPlay to illustrate the conflicts that this ruling resolves.

Minute Entry of March 21.   The case has been pending since 2014.

Abitron v. Hetronic: Extraterritorial Application of U.S. Trademark Law

by Dennis Crouch

The Supreme Court held oral arguments on March 21, 2023 in the international trademark case of Abitron Austria GmbH v. Hetronic International, Inc. and will be holding arguments on March 22, 2023 in the whisky dog toy trademark case of Jack  Daniel’s Property v. VIP Products.

Abitron was formerly the international distributor for Hetronic radio-remote-control products used largely for heavy machinery.  Hetronic products have a distinctive yellow-black coloring pattern.  At some point, Abitron began selling a competing product using the same pattern and same product names.  (Image above).  Hetronic sued and won a $90 million judgment based upon willful  trademark infringement and goodwill injury.  Hetronic also won on a contract claim, but contract law would not support this disgorgement remedy.

The $90 million award reflected the entire gross revenue of Abitron’s knockoff sales, 97% of those sales were outside of the USA.  As Abitron wrote in it its brief: these “were sales in foreign countries, by foreign sellers, to foreign customers, for use in foreign countries, that never reached the United States or confused U.S. consumers.”  Of course, this foreign anaphora omits a key domestic conclusion: the harm was directed to the USA and felt in the USA by the TM owner.  Of course, the leading justifications for TM law are tied to customer harm, and we only assign rights to the business unit because it quickly solves a collective action problem.  In that framework, any harm caused by Abitron is also felt abroad — with confusion of its non-us customers.

On appeal, the 10th Circuit sided with Hetronic and confirmed the award.  The U.S. Supreme Court then granted certiorari on the following question:

Whether the court of appeals erred in applying the Lanham Act extraterritorially to petitioners’ foreign sales, including purely foreign sales that never reached the United States or confused U.S. consumers.

Petition.  At oral arguments, Lucas Walker (MoloLamken and former Gorsuch clerk) argued on behalf of the adjudged infringer; Matthew Hellman (Jenner & Block and former Souter clerk) argued on the other side; and Masha Hansford (SG’s office) largely sided with petitioner.

Although U.S. law is generally thought to not apply extraterritorially, trademark law has had a somewhat different path triggered by the Court’s decision in Steele v. Bulova Watch Co., 344 U.S. 280 (1952), which allowed for collection of damages for foreign infringement.  Petitioners here both distinguish Steele and suggest that it could be overruled.

In my view, this level of extraterritorial application creates a sovereignty conflict, with the USA extending its reach unduly into the realm covered by trademark and competition laws of other nations.  Sovereignty principles recognize the independence of each nation and are built upon principles of non-interference — that nations should not interfere with the internal affairs of other nations.  This is a situation that calls for the court to exercise comity and abstain from extending its reach absent a clear statement and authorization from Congress. Rather, if a trademark holder wants to sue for confusing sales made in Europe, Europe is the location where the parties should deal with the issue.

All Inventors are Human; All Humans are Inventors

by Dennis Crouch

Petitioners in Thaler v. Vidal ask the Supreme Court one simple question:

Does the Patent Act categorically restrict the statutory term ‘inventor’ to human beings alone?

Thaler Petition for Writ of CertiorariOnly a court with substantial hubris would be willing to take-on this case, but I’m confident that the Supreme Court is up for the task.

The power of AI tools has become viscerally apparent over the past few months and hopefully members of the court have been shown chatGPT or some other generative AI tools that are now widely available (if still quite flawed).  We are are now at a point where it is easy to see an AI tool creating inventive output. And, even if recognition of the invention is fundamental to the inventing process, the AI tools certainly provide sufficient contribution to be considered for joint inventorship.

In general, we take an objective approach to patentability focusing on whether the result is a substantial step beyond what was known before and looking for objective evidence within the patent document of sufficient disclosure.  Some early 20th century courts had alluded to a potential subjective test, but Congress rejected that in the 1952 Patent Act, writing that “Patentability shall not be negatived by the manner in which the invention was made.”  35 U.S.C. 103.  The basic idea here is that we have a public policy goal of encouraging innovation and invention, “promot[ing] the Progress of Science and useful Arts.”  And Congress concluded that a key way to get results is to reward results.

In Thaler’s case, the PTO and courts short-circuited the patentability analysis because the purported inventor is a machine, and machines simply are not permitted to be inventors.

The pending case involves a human named Thaler (Dr. Stephen Thaler) who created an “imagination engine” named DABUS.  According to thus-far undisputed allegations, DABUS created two inventions and also recognized their utility without any specific guidance from a human.  In Thaler’s view, DABUS was the inventor since it was the “individual . . . who invented or discovered the subject matter of the invention.” 35 USC 100(f).   But, the USPTO refused to award a patent because the listed inventor was inhuman.

On appeal, the Federal Circuit affirmed — holding that the word “individual” found in 100(f) was properly interpreted as applying only to humans.  One oddity of this conclusion is that definition was added in 2011 as part of the America Invents Act, and without any suggestion on record that the amendment was intended to exclude robots or non-humans.

Thaler’s new petition asks the U.S. Supreme Court to take up the case and so some simple statutory interpretation of the word “individual” in context of Section 100(f) and (g).  According to Thaler, the statute is designed to focus attention on the entity that actually does the inventing and does not limit its scope to “humans” or “natural persons,” the common mechanisms used by Congress.

Professor Ryan Abbot has been Counsel of Record for Thaler throughout the case.  Thaler added Mark Davies and his Orrick team for this petition.  Earlier in March, the UK Supreme Court heard oral arguments regarding the UK version of the patent, asking whether “section 13(2)(a) of the Patents Act 1977 (the “1977 Act”) require a person to be named as the inventor in all cases, including where the applicant believes the invention was created by an AI machine in the absence of a traditional human inventor?”  The UKIPO Comptroller-General refused the application and that decision was affirmed on appeal. [2021] EWCA Civ 1374.

= = =

Assuming Thaler loses here, the unsatisfying solution appears to be that the owner or user of the AI will simply be claiming rights as the constructive inventor.  Thaler has a pending application in the EPO suggesting himself as the inventor as owner of DABUS. This approach substantially stretches the law of inventorship.  In the U.S., limitations on challenging inventors mean that many inventive entities can de facto stretch the notion of inventorship without getting caught.

= = =

If you are interested in supporting Thaler’s position, brief in support will be in about 30-days. (Depending upon the docket date, that has not been released yet).

Only Some of the Claims are Invalid

by Dennis Crouch

Hantz Software v. Sage Intacct (Fed. Cir. 2023) (non-precedential) 

The district court sided with the defendant Sage, dismissing the complaint for lack of eligibility.  In a short opinion, the Federal Circuit has largely affirmed, but made an important caveat — that the district court held only that claims 1 and 31-33 are invalid.

[W]e agree that the operative complaint asserted infringement of only claims 1 and 31–33 of each asserted patent, and because Sage did not file any counterclaim of its own (instead, it simply moved to dismiss Hantz’s complaint), we conclude that the ineligibility judgment should apply to only claims 1 and 31–33 of the asserted patents. We therefore vacate the district court’s judgment insofar as it held any claim other than claims 1 and 31–33 of each asserted patent ineligible and affirm in all other respects.

Slip Op.  Despite the limit here, claim preclusion will prevent Hantz from reasserting any of the remaining claims against Sage. Non-mutual collateral estoppel should also apply here to to prevent Hantz from asserting any of the claims against a third party — unless the claims are meaningfully distinct on eligibility grounds from those already adjudged to be invalid.  Normally, collateral estoppel only applies to issues actually litigated, but in the patent context, the Federal Circuit has ruled that it may also apply to non-litigated claims when the differences do not “materially alter the question of invalidity.” Ohio Willow Wood Co. v. Alps South, LLC, 735 F.3d 1333, 1342 (Fed. Cir. 2013); MaxLinear, Inc. v. CF CRESPE LLC, 880 F.3d 1373, 1377-78 (Fed. Cir. 2018) (Asking “whether the remaining claims present materially different issues that alter the question of patentability”).



Preparing for Automated Examination

Associates around the country today are drafting motions, patent applications, and other documents using some version of ChatGPT.   Of course, If I were a judge or examiner, I might also be interested in using AI to help facilitate my decision-making.  ChatGPT is good for that as well and can provide a reasoned structure, including identifying of prior art and obviousness standards.

If you recall your last writing course, the professor repeatedly focused attention on the audience. “Who is the audience you are looking to persuade?”  Moving forward, it appears that we really do have a new audience for our writing — AI advisors.  This calls to mind the great tape recorder scene from Real Genius (1985). Members of the class began just leaving tape-recorders to record the  boring lecture; eventually, the professor also just brought in his own taped lecture to speak to the machines.

Automated Examination: On the patent prosecution side, we may shortly be in a situation where AI systems will be able to conduct patent examination at the same level of quality as a typical human examiner.  It seems obvious that we should rely upon the AI to at least facilitate examination.  The bigger question is whether to eliminate the first-level human bureaucracy all together and move to an automated examination system.  The benefit of that process is that it could be done very rapidly (immediate allowance / rejection) and potentially at a much lower cost.  Certainly, PCT systems could move toward substantially lowering costs with initial search reports and examination being done automatically.

What do you think? 

IPRs and the APA: Review of Director’s Discretion to Initiate IPRs

By Jordan Duenckel.  Jordan is a second-year law student at the University of Missouri School of Law and a registered patent agent. 

Apple brought an action against the USPTO Director Vidal in district court under the Administrative Procedure Act (APA), 5 U.S.C. §§ 701– 706, challenging the Director’s instructions to the Board regarding exercise of discretion in IPR institution decisions. In Apple v. Vidal, 2022-1249, — F.4th — (Fed. Cir. Mar. 13, 2023), Judge Taranto (joined by Judges Lourie and Stoll) largely affirmed the district court’s dismissal, confirming that the Director’s instructions are unreviewable.  The court did separately reverse a tertiary challenge to allow Apple to proceed on a claim related to the note-and-comments procedure of the APA. 

Apple and other repeat players in patent infringement litigation often use the inter partes review process under 35 U.S.C. §§ 311–319 to challenge the validity of asserted patents. The statute provides a two-step IPR process: Step 1 is the institution decision by the Director under § 314(b); Step 2 is the trial and final written decision by the PTAB.   

At least two prerequisites assist the Director in deciding to grant review: [1] a reasonable likelihood that the petitioner would prevail in 35 U.S.C. § 314(a) and [2] a petition must be filed within one year after service of the infringement complaint. § 315(b). Even if these conditions are met, the Director has unreviewable discretion over whether to initiate an IPR. The statutory text is seemingly as clear as a statute can be: “The determination by the Director whether to institute an inter partes review under [§ 314] shall be final and non-appealable.” 35 U.S.C. § 314(d); see also United States v. Arthrex, Inc., 141 S. Ct. 1970, 1977 (2021).   

From the outset of the IPR program, the Director delegated institution authority to the Board. 37 C.F.R. § 42.4(a). Practically, without this delegation, Director Vidal would spend a disproportional amount of time reviewing IPR petitions at the expense of other duties of the office, although she could have delegated responsibility to other agency departments such as the petitions division.  The right of delegation of the institution is settled law. See Ethicon Endo-Surgery, Inc. v. Covidien LP, 812 F.3d 1023, 1031–32 (Fed. Cir. 2016).  

At issue in Apple v. Vidal are the so-called Fintiv instructions issued by the Director based on Apple Inc. v. Fintiv, Inc., IPR2020-00019, 2020 WL 2126495 (P.T.A.B. Mar. 20, 2020) which provides six factors for analysis of whether to institute an IPR parallel to pending litigation.   

Proposing an analysis under the arbitrary and capricious standard, Apple and the other petitioners are directly focused now not on the denial of a specific petition for IPR review but as a general challenge to the Director’s instructions to the PTAB about how to exercise the delegated discretion.   

Slip Op. The district court ruled that 35 U.S.C. § 314(d) “precludes judicial review” of the challenged agency actions, bringing the case within the APA exclusion stated in 5 U.S.C. § 701(a)(1). According to this court, the IPR statute’s preclusion was settled by the Supreme Court in Arthrex and encompasses review of content-focused challenges to the Fintiv instructions. § 314(d) provides the clearest congressional delegation of nonreviewable discretion possible and the panel rightfully relied on plain-meaning and clear Supreme Court precedent.    

While affirming the dismissal of the content-based claims, the court separates the procedural requirements set forth in the APA. Reversing the district court in part, Judge Taranto’s panel opinion reopened Apple’s claim that the Director was required, by 35 U.S.C. § 116 together with 5 U.S.C. § 553, to promulgate institution instructions through notice-and-comment rulemaking procedures.  Slicing the procedure from the underlying substance of the rule, Taranto relies on Lincoln v. Vigil, 508 U.S. 182, 195 (1993) to clarify that the 5 U.S.C. § 553 provides the basis for rulemaking through the notice-and-comment procedure for the Director’s instructions and is a separate analysis of reviewability from the substance of the instructions. 

Standing was also preemptively addressed for the remand proceedings. Lujan provides the three-step test: injury-in-fact, causation, and redressability. In search of a particularized, concrete injury, the court takes notice that Apple is a repeat player with a history of IPR claims being denied. This past injury was used to show the eminency of future injury resulting from the denial of the benefits of IPRs linked to the concrete interest possessed by an infringement defendant. Redressability and causation were met because there is a genuine possibility that the instructions would be changed in a way favorable to Apple in notice-and-comment rulemaking.  

The Federal Circuit may have reached a bit to find standing in an effort to effectively resolve concerns about a heavily used procedure: the IPR process. On remand, the district court might rightly decide that a traditional notice-comment rulemaking procedure is required to redress harms or prophylactically provide clarifications for the patent system that can accomplish the goals of using agency resources effectively. Allowing the frequent fliers of the IPR system to at least have an appearance of input in the procedure would create a process with more certainty and produce more long-term economic efficiency.  

Stipulated Judgment must be Unambiguous; and the Canon of Common Sense Claim Construction

by Dennis Crouch

AlterWAN sued Amazon for patent infringement back in 2019, asserting two patents claiming claiming wide-area-network improvements. US8595478 and US9015471.  As the case moved forward, the district court issued a claim construction that favored Amazon.  And, at that point, the parties entered a “stipulated judgment” of non-infringement; and the Judge signed the order. AlterWAN essentially admitted that it would lose under the district court’s construction of the terms “cooperating service provider” and “nonblocking bandwidth;” but reserved the right to appeal the issues.

On appeal, the Federal Circuit has refused to hear the substantive patent claim– and rather found the stipulated judgment defective, being “ambiguous in material aspects.” The appellate panel particularly asked for the following to be included within the stipulated judgment:

  1. A statement as to whether the patentee needs to win on both claim construction issues in order to recover; and, what does a middle-ground  construction look like in terms of infringement.
  2. A listing of the claims that remain at issue on appeal.

In the case, the court heard oral arguments, but the parties disagreed as to each of these issues.

The Federal Circuit is a court of appeals that reviews judgments by a lower tribunal. The problem here though is that the stipulation is such that the appellate panel cannot “ascertain the basis for the judgment challenged on appeal.” Quoting Jang v. Bos. Sci. Corp., 532 F.3d 1330 (Fed. Cir. 2008).

Before remanding, the appellate panel noted a major problem with the district court claim construction – that it rendered the invention inoperable. It “effectively requires a system to provide bandwidth even when the Internet is inoperable.”  Despite cases like Chef America, the Federal Circuit here suggested that “common sense” is an important canon of claim construction. And that the claims should not be interpreted in an inoperable manner absent unambiguous claim language.

Chef America does not require us to depart from common sense in claim construction. Here, the claim language itself does not unambiguously require bandwidth to be available even when the Internet is inoperable.

Slip Op., citing Chef Am., Inc. v. Lamb-Weston, Inc., 358 F.3d 1371 (Fed. Cir. 2004) (heating “to” a temperature vs. heating “at” a temperature).

Bringing all this together, the Federal Circuit vacated the stipulated judgment of non-infringement and also suggested a new claim construction.  The case is now back before the Judge Noreika (D.Del.) who will likely ask for new claim construction briefing as well as summary judgment motions.

Publicly Traded International Patent Firms

by Dennis Crouch

In October 2022, Canada’s largest intellectual property firm became a publicly traded entity.  Smart & Biggar, a firm that includes 100+ Canadian patent attorneys and agents (most of whom are also registered with the USPTO) was purchased by the Australian company IPH Limited.  The holding company trades on the Australian stock exchange with a market valuation of $1.8 billion Australian dollars ($1.2 billion USD).

IPH already owns five Australian IP-focused law firms (consolidated from 10), including offices in New Zealand, Singapore, China, Malaysia, Indonesia, and Thailand.   With one firm having 32% of the Australian national phase market, you might think that conflicts would get a bit tricky. A bit more on that below.

What is the benefit of selling for Smart & Biggar? Presumably money today.  The purchase price was $350 million Canadian dollars ($250 million USD).  That includes $241m cash to the old owners (i.e., the partners) along with $45m in IPH shares and another $66m in deferred IPH shares (presumably for partners who stay for two years).  The old partners continue to have some management rolls at the firm but will be employees of IPH rather than owners.  “Canada’s Intellectual Property Firm” is now owned by the Australians.

Like the U.S., Canadian law generally requires that law firms be owned by lawyers.  To avoid this hiccup, Smart & Biggar divided its firm into two parts – an “IP Agency Practice” involving patent preparation and prosecution; and a “Law Practice” handling litigation and other legal issues.  The IP Agency Practice apparently “does not practice law” and therefore is not controlled by the lawyer-ownership rule.  As the deal was structured, IPH owns the IP Agency Practice without any problem because they are “not practicing law.”  The Law Practice is partially owned by the IP Agency Practice which is somehow sufficiently owned by lawyers, even though IPH owns the IP Agency Practice.  This clever approach apparently satisfies Canadian restrictions except for Alberta where Smart & Biggar’s law practice remains “wholly owned by individual lawyers.”  Still, at least according to the website, the Smart & Biggar Alberta branch is operating as part of IPH.

Back in Australia we have had some interesting events that began a decade ago when the country began to permit patent attorneys to incorporate in public firms. Shelston IP was the first IP firm to list itself on the Australian Stock Exchange back in 2015.  In 2019, IPH bought Shelston in a hostile takeover. Shelston has now been merged into Spruson & Ferguson as have Fisher Adams, and Cullens. Other IPH brands include Pizzeys; AJPark, & Griffith Hack.  Collectively, this is about 1/3 of the Australian national-phase market. What this means to me is that there is a good chance that competitors are are hiring co-owned firms to do their Australian work.

Throughout this time, there has been lots of turmoil for attorneys themselves, with a substantial percentage moving firms.  IPH has repeatedly sued its former employees who left to start their own firms — seemingly for “stealing” clients.

Australian patent attorney Mark Summerfield has been writing about these issues for the past several years on his excellent Patentology blog.

Could this happen in the US: The ABA model rules as well as USPTO rules prohibit law firms being owned by non-lawyers.  But, some states are moving forward with experiments.  So far, the USPTO has not suggested any changes.

Multiple dependent claims, blaze marks, and ipsis verbis support

By Chris Holman

University of Minnesota v. Gilead

This is a follow-up to Dennis’s post discussing a recent Federal Circuit decision, University of Minnesota v. Gilead, wherein the university was essentially precluded from claiming priority to a provisional patent application because the provisional failed to provide adequate written description support for a later claimed invention.

Note that a provisional patent application is not required to include any patent claims, since a provisional can never mature into an actual patent, but only serves to provide an earlier effective filing date for a later-filed non-provisional patent application, assuming certain requirements are satisfied. In this case, however, the university’s provisional application included 63 claims, 49 of which are directed toward “[a] compound of Formula I:

wherein: . . . .”

The bodies of the claims defines various possible substituents at the seven “R” positions.  Here are the claims filed in the provisional application.

Claim 1 is the only independent claim, defining a genus of astronomical proportions. As Judge Lourie puts it, “the listings of possibilities are so long, and so interwoven, that it is quite unclear how many compounds actually fall within the described genera and subgenera.”  Claim 49 is the only claim that recites a single chemical “species,” presumably the molecule that the university thought was the most promising at the time the provisional was drafted.

Claims 2-48 lie between these two extremes, defining a huge number of subgenuses of the genus of compounds defined by Claim 1 – by my count over 500,000. (Note that the terms genus, subgenus, and species are relative terms when used in this context.)  How, one might ask, can 47 patent claims define over half a million subgenuses? The answer is through the use of multiple dependent claims that depend upon other multiple dependent claims, a practice that is not permitted under U. S. law.

The Manual of Patent Examiner Procedure (MPEP) defines a multiple dependent claim as “a dependent claim which refers back in the alternative to more than one preceding independent or dependent claim.”  It also cites 37 C.F.R. 1.75 for the proposition that “[a] multiple dependent claim shall not serve as a basis for any other multiple dependent claim.”

37 C.F.R. 1.75 further provides that for fee calculation purposes, a multiple dependent claim will be considered to be that number of claims to which direct reference is made therein. For fee calculation purposes also, any claim depending from a multiple dependent claim will be considered to be that number of claims to which direct reference is made in that multiple dependent claim.

This fee calculation policy reflects the reality that a multiple dependent claim is simply a shorthand means of reciting multiple discrete patent claims.  For example, the provisional’s claim 12 recites “[t]he compound of any one of claims 1-11 wherein R2 is hydroxy.”  That is simply shorthand for and the functional equivalent of 11 discrete dependent claims, i.e., the compound of claim 1 wherein R2 is hydroxy, the compound of claim 2 wherein R2 is hydroxy, the compound of claim 3 wherein R2 is hydroxy, the compound of claim 4 wherein R2 is hydroxy, etc..

When you start going down the path of multiple dependent claims that depend upon other multiple dependent claims, which in turn depend on other multiple dependent claims, etc., the number of discrete dependent claims can become immense. In this case, the provisional’s claim 47 is a multiple dependent claim that, inter alia, refers back to another multiple dependent claim (claim 45), which in turn refers back to a third multiple dependent claim (claim 33), which refers back to a fourth multiple dependent claim (claim 21), which refers back to a fifth multiple dependent claim (claim 13), which refers back to dependent claim 2. If you follow this path, you arrive at a subgenus that the University asserts is the same subgenus claimed in the later issued patent.  Assuming this to be correct, then, as Dennis pointed out in his post, claim 47 does appear to encompass a claim that specifically defines the later claimed subgenus.

The problem is, claim 47 also encompasses 250,880 other unique claims, each of which defines its own subgenus. The huge number results from the multiplicative effect of five iterations of multiple dependent claims. One can readily understand why the PTO does not allow multiple dependent claims that depend on other multiple dependent claims. But since this was only a provisional application, the claims were never examined, and are simply serving as a vehicle for disclosing a huge number of subgenuses.  By my count, the provisional includes a total of 584,431 subgenus claims.

The Board concluded that the claims in the provisional did not provide ipsis verbis support for the later claimed subgenus, albeit without providing much in the way of explanation, and the Federal Circuit affirmed. Black’s Law dictionary defines ipsis verbis as “in the identical words, as opposed to substantially.” In my view, claim 47 does literally describe the later claimed subgenus, the problem is that it is buried in astronomical number of other subgenuses.

The courts have long used the terminology of “blaze marks” when assessing written description support for a later claimed chemical compound or genus.  The term refers to the practice of marking a trail through the forest by slashing the bark of trees. Expanding upon that metaphor, imagine a vast forest wherein there lies hidden a beautiful waterfall.  One could employ blaze marks to chart out a trail leading to the waterfall.  But if all of the trees in the forest have a blaze mark, the explorer would have no idea which marks to follow, regardless of the fact that one could go back retrospectively and point out specific blaze marks that would define a trail leading to the waterfall.  The point is, even if there are blaze marks defining a trail to the waterfall, as a practical matter it would be very difficult to find the correct trail if there are too many other blaze marks defining a huge number of trails that do not lead to the waterfall.

Returning to the case at hand, I do not think the result would have changed if somehow the university could have, perhaps with the help of AI, drafted 584,331 discrete dependent claims that would have been the functional equivalent of the multiple dependent claims that it did file in its provisional application.  At some point, the disclosure of too many alternative possibilities can, as a practical matter, negate the disclosure of one specific subgenus. I would suggest that this is the basis for the Board’s determination that there was not ipsis verbis support for the later claimed subgenus, nor were there sufficient blaze marks pointing the way.

And given the standard of review, it is not surprising to me that the Federal Circuit affirmed.  As stated in its opinion, “the primary considerations in a written description analysis are factual and must be assessed on a case-by-case basis. We thus review the Board’s decision regarding written description for substantial evidence.”

Issue its “Mandate and Opinion”

by Dennis Crouch

The Federal Circuit regularly affirms PTAB judgments without issuing any explanatory opinion to justify the result.  Although not found in the Rules of Appellate procedure, the court has created its own local rule allowing itself to “enter a judgment of affirmance without opinion.”  In a 2017 paper, I argued that these no-opinion affirmances violated both the spirit and letter of 35 U.S.C. 144, which requires the court to issue a “mandate and opinion” in cases appealed from the USPTO.  Since that time, the Federal Circuit has continued its practice, issuing hundreds of no-opinion judgments.  Throughout this time, dozens of losing parties have petitioned for en banc rehearing with the Federal Circuit or certiorari to the Supreme Court.  Up to now, both courts have remained silent and have refused to address the issue.

A new pending petition raises the issue once again. Virentem Ventures v. Google (Supreme Court 2023).  Virentem sued Google for patent infringement, and Google responded with a set of Inter Partes Review (IPR) petitions.  The PTAB eventually sided with Google and invalidated the claims of all seven challenged patents.  Virentem appealed; but the Federal Circuit affirmed the PTAB’s judgement without opinion under its local Rule 36.

The new petition to the Supreme Court asks four related questions:

  1. Does the Federal Circuit’s use of Rule 36 to affirm without opinion PTAB invalidity determinations that are challenged based on pure questions of law violate a patentee’s due process rights through arbitrary or disparately applied results?
  2. Did the Federal Circuit’s use of Rule 36 to affirm without opinion PTAB invalidity determinations of Virentem’s patents violate its due process rights?
  3. Did the PTAB’s adoption, and Federal Circuit’s summary affirmance, of broad constructions of Time Scale Modification and other claim terms over Virentem’s explicit narrowing definitions, violate the Federal Circuit’s own law and precedents on claim construction in such circumstances?
  4. Does the Federal Circuit’s use of Rule 36 to affirm without opinion decisions from the PTAB violate the requirement of 35 U.S.C. § 144 that the Federal Circuit “shall issue to the Director its mandate and opinion”?

The Virentem patents relate to time-scale modification — the speeding-up or slowing-down of media.  You may remember Alvin, Simon, and Theodore — the Chipmunks.  That unintelligible high pitch arguably is not really time-scale modification because it is such a failure.  Rather, TSM modern impliedly requires maintaining pitch and intelligibility.  In this case though, the PTAB broadly interpreted the term to include any system that speeds-up or slows-down media.  With that broad interpretation, the tribunal then was able to find prior art rendering the claims obvious.   Virentem argued that its patents would be seen as valid under the narrower construction.  The PTAB’s response: If you wanted that limitation in the claim, you should have added it to the claim.


Laundry Lists of Components are Insufficient Written Description for a Particular Combination

by Dennis Crouch

The pending Supreme Court case of Amgen v. Sanofi focuses on a broadly claimed genus and asks whether the disclosure is sufficiently detailed.  The Federal Circuit’s recent UMN v. Gilead is the flip-side.  Regents of the U. of Minnesota v. Gilead Scis., Inc., 2021-2168, — F.4th — (Fed. Cir. Mar. 6, 2023).  UNM’s original disclosure is extremely broad with “laundry lists” of components that might be included in various combinations;  while the later-added claim is directed to a more particular sub-genus combination.  The court looked in vain for some indication in the specification as to why the claimed combination is important or particularly suggested.  Here, they disclosed a large forest, but failed to disclose the tree that turned out to be valuable.

Going forward, a patentee might avoid this particular problem with some patent attorney tricks.  Rather than listing all potential components for each functional group and generally suggesting their combination, an early-stage patentee might have its AI assistant provide a hypothetical example of each possible combination, one at a time.  That situation would provide clear ipsis verbis disclosure and thus more likely survive a written description challenge.

= = =

Most U.S. patents assert priority to at least one prior patent application filing.  The early filing date helps avoid would-be intervening and invalidating prior art.  But, the right to priority is not automatic. In addition to the formal paperwork, the original application must sufficiently disclose the invention as claimed in the later patent.  Sufficiency of disclosure is generally judged under 35 U.S.C. §112(a) with the doctrines of enablement and written description.

A patent that improperly claims priority is not automatically invalid.  Rather, the priority filing date is rendered void and then we consider whether the  invention was still novel and nonobvious as-of the later filing date.  This setup also allows these disclosure issues to be considered during Inter Partes Review  (IPR) proceedings that are statutorily limited to anticipation and obviousness grounds.


In Regents of the U. of Minnesota v. Gilead Scis., Inc., 2021-2168, — F.4th — (Fed. Cir. Mar. 6, 2023), the Federal Circuit faced the issue of whether the  written description found in UMN’s priority applications supported the claims in the resulting US8815830 patent.  Here, the ‘830 patent covers the drug sofosbuvir that has FDA approval for Hep-C treatment.  Claim 1 does not simply cover sofosbuvir, but instead an entire genus of molecules that fit the general structure shown above and where functional groups R1 – R7 are further defined within the claim.  For instance, “R3 is hydroxy … R5 is an amino acid …”

UMN’s initial patent application was a provisional filed back in 2004, followed by a PCT application in 2005, followed by a non-provisional application in 2007 and finally by another non-provisional application in 2013 that led to the ‘830 patent. In 2010, a Gilead patent application published (“Sofia”) that discloses the claimed invention.  In this setup, UMN’s can disregard Sofia so long as it properly claimed priority to at least one of those earlier applications.  But, if priority fails then the ‘830 patent is anticipated.

During the IPR, the Board sided with Gilead — concluding that the priority filings lacked sufficient written description and thus that the claims were invalid as anticipated. On appeal, the Federal Circuit has affirmed in an opinion by Judge Lourie and joined by Judges Dyk and Stoll.

The patent act requires a “written description of the invention” be submitted in the form of a patent specification.  “Judicial gloss” explains this requirement has proving that the inventor “possessed the invention as claimed” at the time of filing.  Written description issues most often arise in situations like this one where the patented claims were not found in the original filing documents; but rather were added later during prosecution.

The courts have been particularly hard on patentees seeking to claim coverage for a large genus of compounds.  In that situation, it is typically a difficult endeavor for the patentee to literally enumerate all operable compounds covered by the claims.  That level of disclosure is not required, but the patentee must describe “the outer limits of the genus” as well as “either a representative number of members of the genus or structural features common to the members of the genus, in either case with enough precision that a relevant artisan can visualize or recognize the members of the genus.”  The court will also consider “blaze marks within the disclosure that guide attention to the claimed species or subgenus.” Slip Op., citing In re Ruschig, 379 F.2d 990 (CCPA 1967).

Ipsis verbis: I mentioned above that written description challenges are most often successful in situations where the claim scope has changed during prosecution.  Claims that are found word-for-word in the original application (ipsis verbis) can still fail the written description requirement, but that result is much less likely.  Here, UMN argued that the original provisional filing disclosed the eventual claim in ipsis verbis form — pointing to a combination of elements of provisional claims 1, 2, 13, 21, 22, 45, and 47 that collectively forming a substantial word-for-word recitation of claim 1 in the ‘830 patent.  On appeal though the Federal Circuit found that combination of this disparate set of claims required a bit too much cleverness.

Following this maze-like path, each step providing multiple alternative paths, is not a written description of what might have been described if each of the optional steps had been set forth as the only option. This argument calls to mind what Yogi Berra, the Yankee catcher, was reported to have said: “when one comes to a fork in the road, take it.” That comment was notable because of its indeterminacy, its lack of direction. Similarly, here, all those optional choices do not define the intended result that is claim 1 of the ’830 patent.

Moreover, Minnesota’s argument is akin to that rejected in Fujikawa, where the applicant “persist[ed] in arguing that its proposed count [wa]s disclosed ipsis verbis in Wattanasin’s application.” Fujikawa v. Wattanasin, 93 F.3d 1559 (Fed. Cir. 1996). As the court explained in Fujikawa: “just because a moiety is listed as one possible choice for one position does not mean there is ipsis verbis support for every species or sub-genus that chooses that moiety. Were this the case, a ‘laundry list’ disclosure of every possible moiety for every possible position would constitute a written description of every species in the genus. This cannot be because such a disclosure would not ‘reasonably lead’ those skilled in the art to any particular species.”

Slip Op.  I would argue that the Federal Circuit erred on this point. The UMN provisional application’s Claim 1 is directed to the same general molecule, but with much broader definitions for each of the functional group. Then, the subsequent provisional dependent claims (2, 13, 21, 22, 45, and 47) refine the scope of those functional groups in a manner that is identical to that eventually claimed in the ‘380 patent.  Here, each of these dependent claims are defined as being dependent upon any of the prior claims.  Thus, provisional dependent claim 47  seemingly includes the identical limitations found in the ‘830 patent claim 1. Yes, it is a little bit complicated, but so is chemistry.

It is not clear that my quibble would change the outcome of the case since ipsis verbis support does not necessarily result in sufficient written description.

= = =

The absence of ipsis verbis support is not fatal, so long as the original filings sufficiently show possession of the full scope of the claimed invention.  In cases involving very broad disclosure (a forest), the courts look carefully for indications that for disclosure of the particular trees actually claimed.  But, long lists of components are not sufficient. Rather, the suggestions – the “blaze marks” — must be clear.  Here, the PTAB found the patentee had failed to provide that roadmap and, on appeal, the Federal Circuit affirmed on substantial evidence.

[T]he structures [disclosed in the provisional] are so extensive and varied that [they] encompasses a significantly larger genus than that claimed in the ’830 patent, are not sufficiently common to that of claim 1 of the ’830 patent to provide written description support.

Slip Op.

UMN made other arguments that were all rejected:

  1. The PTAB should have made a credibility determination or other fact finding regarding expert testimony.  On appeal though the Federal Circuit concluded that the PTAB is not required to address each and every  side contention within its decision.
  2. The PTAB previously issued a decision that is facially inconsistent with this case, and thus is acting in an arbitrary and capricious manner.  On appeal, the court found no problem since the Board is not bound by prior panels.
  3. As a state institution, UMN is immune from IPR challenges.  UMN recognized that this argument was previously decided by the Federal Circuit.  Further, UMN has already lost a case on this argument and so is not just bound by precedent but also collateral estoppel.

Cancellation affirmed.

CHIPS and Science Act

The $280 billion CHIPS and Science Act is designed to use federal grants and investments to encourage domestic production of advanced semiconductors and will also fund research into further advanced technologies, including further improved microchips; quantum computing; and artificial intelligence (AI).  Although many advanced chips are still primarily designed in the US, almost all of them are currently manufactured abroad (primarily in Taiwan and Korea). And, China is rapidly developing its own capabilities for advanced chip manufacture.  Legislators and the Biden Administration see this situation as a potential national security concern deserving of major market intervention.  These most advanced semiconductors serve as core features of US military and other governmental systems, and the current situation has substantial security risks.  Although the Department of Commerce is in charge of distributing the funds, the Department of Defense is also directly involved with the considerations.  At this point, it appears that there are three primary companies set to vie for the bulk of the $50 billion in direct investment: Intel, Samsung, and Taiwan Semiconductor Manufacturing Company (TSMC).

On the patent side, the basic setup will follow the usual US rule that inventions created using federal fund will belong to the creators (i.e., the chip companies), but the Government will seemingly have march-in rights.  In high-security situations, some developments will also be classified and the patents kept secret, although that situation most often arises in the context of a DoD contract.

Eligibility for Dummies; Benson Redux

by Dennis Crouch

I’ve become somewhat callous toward patent eligibility jurisprudence and so was surprised when I read the Federal Circuit’s decision in ADASA Inc. v. Avery Dennison Corp., 55 F.4th 900 (Fed. Cir. Dec 16, 2022). The case concluded that constructively dividing a fixed-length binary number into different sub-portions was not an abstract idea.  Now, the accused infringer has asked the Supreme Court for review.

ADASA’s US Patent 9,798,967 is directed toward an RFID chip “encoded with a unique object number.”  This object number as various blocks pre-allocated to identify the selling-company, product reference, and serial number as shown below.  The serial number has a unique feature of being divided into a section of “most significant bits” (MSBs) and “least significant bits” (LSBs). This division between MSBs and LSBs help in the allocation of unique serial numbers in a distributed production system.  The basic approach:

  • A product-line will be exclusively allocated a particular MSB and all possible accompanying LSBs. It will then enable RFID chips using the allocated MSB and then sequentially incrementing the LSB.
  • A separate product line might also be simultaneously enabling other other chips. To ensure no overlap in serial numbers, the second-line will be allocated a different MSB.
  • The result then is that we can guarantee that each chip has a unique serial number despite parallel production lines.

The claims do not appear to include any novel features other than this constructed division between bits in a binary number.  (Claim 1, is reproduced below). In its petition, the adjudged infringer relies heavily on the old cases of Benson and Flook to argue that the setup here lacks eligibility.

Question presented:

Radio Frequency Identification Device (RFID) tags are encoded with lengthy serial numbers that uniquely identify particular items. The patent at issue in this case designates the leading bits in a binary serial number as “the most significant bits,” and directs that all serial numbers in an allocated block begin with the same “most significant bits.”

The question presented is whether that claim, by subdividing a serial number into “most significant bits” that are assigned such that they remain identical across RFID tags, constitutes patent-eligible subject matter under 35 U.S.C. § 101.

Avery Dennison Petition.

Chief Judge Moore wrote the opinion and concluded that the claims were not directed to an abstract idea but rather provides a novel data structure within a serial number.  Here, the idea is that the patentee was able to create a new data field that was “not a mere mental process, but a hardware-based data structure focused on improvements to the technological process by which that data is encoded;” and an improvement with “important technological consequences.”

An interesting feature is that the general idea presented by the patentee was already identified and discussed in the book RFID for Dummies.  If Avery Dennison loses here, then the district court will hold a trial on anticipation.  Still, the “for Dummies” label has strong rhetorical appeal — should everything in that book title be considered an abstract idea?  The petitioner writes:

“[A]bstract ideas are not patentable.” … It is hard to imagine a more blatant transgression of that rule than the claim in this case, which sought a patent monopoly over the simple concept of treating one long serial number as the combination of two shorter numbers, and then [requiring] blocks of RFID tags all start with the same shorter number. At bottom, that claim is no different from a direction to mentally subdivide all telephone numbers into two component parts and then assign the same leading part to an allocated block of numbers (e.g., all telephone numbers in the District of Columbia start with 202). That may be a good idea (indeed, the concept in ADASA’s patent appears in the pages of RFID for Dummies), but it is no more patentable than the other good but abstract ideas that this Court has held unpatentable for more than 150 years.

Id.  I’m confident that if the Supreme Court takes this case, it would even further expand eligibility doctrine.

= = = (more…)

IP Law in the 21st Century at Columbia Law in NYC

I’m looking forward to speaking at Columbia Law School on Monday night (March 6, 2023) at the 5th Annual IP Law in the 21st Century Panel.  The event is moderated by the really amazing professor Mavis Fowler-Williams. The panel includes a powerhouse set of speakers, including Dawn Davis EIC of Bon AppetitBrittany  Hazelwood from Cognizant, and Rebecca Michaud from Amazon.

The public is invited to attend in person, but you should register first.

Columbia Law School (NYC) starting at 7pm, Monday March 6.

— Dennis

Are Drill Bits Now Abstract Ideas Too?

The following is a really wonderful Guest Post from UC San Francisco Law School Professor Jeffrey Lefstin focusing on a recent ITC decision finding a claimed drill bit abstract because of its functional limitations. 

by Jeffrey Lefstin

Not too long after the Supreme Court decided Mayo v. Prometheus, I wrote an article suggesting, based on some of the history that followed Funk Brothers, that patents on ordinary industrial processes and compositions could become ineligible in Mayo’s wake. As the Federal Circuit has interpreted Mayo and Alice, some of that has come to pass. In the controversial case of American Axle v. Neapco, the Federal Circuit held claims to a process of manufacturing automobile driveshafts ineligible under § 101, because the claims were directed to ‘laws of nature’ and nothing more. And in Yu v. Apple, the Federal Circuit held claims directed to a digital camera ineligible as “abstract ideas.”

The latest development in that trend is the International Trade Commission’s decision in a section 337 investigation, In The Matter of Certain Polycrystalline Diamond Compacts and Articles Containing Same. [2022-10-26 [DI 783166].Commission Opinion] Affirming the Initial Determination, the ITC found that all of the asserted claims, directed to diamond composites that can be used in drill bits, were ineligible ‘abstract ideas’ under § 101.

The claims in the case were directed to polycrystalline diamond compacts (PDCs), which can be used as the cutting elements in tools such rotary drill bits. A PDC is composed of a diamond-containing layer (a “table”) bonded to a substrate. The diamond table is fabricated by mixing diamond grains with a metal-solvent catalyst, usually including cobalt. When the substrate and the diamond-catalyst mixture is subjected to heat and pressure, the diamond grains become bonded to each other and to the substrate.

The patents are based on the technique of fabricating the PDC at elevated pressures, at least 7.5 GPa. According to the patent specifications, PDCs fabricated under those conditions show improved diamond bonding and density, resulting in higher thermal stability and resistance to wear.

The asserted claims define the diamond table in terms of three kinds of properties: (i) structural properties, such as the size of the diamond grains; (ii) performance measures, such as the degree of thermal stability or wear resistance achieved in a compact; and (iii) other parameters, such as electrical conductivity or magnetic coercivity of the table, that are said to reflect the amount of remaining metal-solvent catalyst or the distance between the diamond grains in the table.[1]  A representative claim is from patent US10507565, with the claim limitations at issue in the case highlighted:

18. A polycrystalline diamond compact, comprising:

a polycrystalline diamond table, at least an unleached portion of the polycrystalline diamond table including:

a plurality of diamond grains directly bonded together via diamond-to-diamond bonding to define interstitial regions, the plurality of diamond grains exhibiting an average grain size of about 30 μm or less;

a catalyst occupying at least a portion of the interstitial regions;

wherein the unleached portion of the polycrystalline diamond table exhibits a coercivity of about 115 Oe to about 175 Oe;

wherein the unleached portion of the polycrystalline diamond table exhibits an average electrical conductivity of less than about 1200 S/m; and

wherein the unleached portion of the polycrystalline diamond table exhibits a thermal stability, as determined by distance cut, prior to failure in a vertical lathe test, of at least about 1300 m.

All the asserted claims were upheld against enablement challenges under § 112. However, the Initial Determination found, and the Commission affirmed, that all the asserted claims were directed to “abstract ideas” and thus not patent-eligible subject matter under § 101.

How could the ITC reach such a result? While the reasoning is not always easy to follow (the Initial Determination dismissed the electrical and magnetic properties recited by the claim as “gratuitous rather than inventive”), the crux of the Commission’s decision is its finding that the claims recite desired properties but not the way to achieve those properties:

The claims here cover a set of goals for the PDCs that the specifications posit may be derived from enhanced diamond-to-diamond bonding. The claims do not recite a way of achieving the claimed characteristics; they simply recite the desired range of values for each characteristic.

The Commission acknowledged that the specification may have taught the conditions and input materials needed to make PDCs with the recited properties – consistent with its finding that lack of enablement had not been shown. But those conditions were not recited by the claims. According to the Commission, under the Federal Circuit’s decision in American Axle v. Neapco, “unclaimed features of the manufacturing process ‘cannot function to remove [the claims] from the realm of ineligible subject matter.’” (quoting American Axle). The claims were therefore directed only to the result or goal of a diamond table with the desired properties – an abstract idea under § 101.

The Commission thus held that a composition of matter or manufacture claim, which defines subject matter in part by effect or result, is patent-eligible under § 101 only if it additionally recites the process by which the claimed material is made. Otherwise, the claim is only directed to the abstract idea of achieving that result.

That is a remarkable proposition, and would represent a drastic change in the law. For it has long been settled that composition or manufacture claims may be defined in part by function or result, so long as the claims meet the definiteness and disclosure requirements now embodied in § 112.

It is true that for a time after the Supreme Court’s condemnation of “conveniently functional language at the exact point of novelty” in General Electric v. Wabash Appliance, 304 U.S. 364 (1938), the Patent Office and the courts were hostile to the use of ‘functional’ limitations to define compositions. In In re Fullam, 161 F2d. 247 (CCPA 1947), the Court of Customs and Patent Appeals considered a claim to a method for polishing a baked resin finish, which recited the use of a novel abrasive powder – the powder being characterized in the claim only by the property of forming flocculates with the abraded material. The CCPA held that when a claim defines a material “not in terms of what it is, but of what it does,” the claim was ‘functional’ and therefore unpatentable under General Electric. This theory survived through In re Fisher, 307 F.2d 948 (CCPA 1962), where the CCPA affirmed the rejection of a claim to a hormone concentrate defined by its potency. Now framed as a question of indefiniteness under of § 112 under the 1952 Act, (now § 112(b)), the court found the claim invalid because it defined “what that concentrate will do rather than what it is.” The courts did not invalidate these claims because the boundaries of the claim were unclear, or because the claims were broader than the disclosure. Rather, any use of functional language to define a composition was sufficient to invalidate a claim.

But after casting doubt on the Fullam doctrine in In re Fuetterer, 319 F.2d 259 (CCPA 1963)[2], the CCPA settled the issue conclusively in favor of such claims in In re Swinehart, 439 F.2d 210 (CCPA 1971). Swinehart considered the following claim to an infrared-transparent crystal (useful, among other things, for the front window of heat-seeking missiles):

24. A new composition of matter, transparent to infra-red rays and resistant to thermal shock, the same being a solidified melt of two components present in proportion approximately eutectic, one of said components being BaF2 and the other being CaF2.

Notably, eutectic compositions of barium fluoride and calcium fluoride were known in the prior art. The desirable properties of infrared transparency and thermal resistance arose from the conditions for preparation described in the disclosure. The disclosure even stated: “The essential feature of the present invention is the growing of the instant bodies under controlled conditions.”[3] Thus exactly like the claims in Polycrystalline Diamond Compacts, the claim recited desired characteristics of the crystal, but did not state how those characteristics were achieved.

The Patent Office rejected the claim as “functional,” because not all eutectic mixtures of BaF2 and CaF2 would have the properties of infrared transparency and thermal resistance recited by the claim. Reversing the rejection (and explicitly overruling Fisher), the CCPA held that there was nothing intrinsically wrong in defining a composition “by what it does rather than by what it is.” The court explained that the only issues from using such a mode of definition were (1) possible lack of novelty, where the functional characteristics were inherent in the prior art; (2) possible indefiniteness under § 112, where the language was not sufficiently precise to delineate the subject matter embraced by the claim, and (3) possible insufficient disclosure under § 112, where the breadth of the claim raised questions such as scope of enablement.

Subsequent cases confirmed that claims could define compositions by results or effects, where the results depended on the unclaimed manufacturing process rather than being derived solely from the chemical or structural properties recited by the claim. For example, in In re Miller, 441 F.2d 689 (CCPA 1971), the claim at issue recited a powdered PFTE composition defined in part by desired results (such as tensile strength when sintered), and in part by ‘gratuitous’ properties (such as dielectric strength), where the recited properties arose from the process of grinding the powder. The inclusion of properties that derived from the preparation did not even raise any issue at the Patent Office, the issue in the case being whether the powder could be defined by properties manifested only when the powder was sintered in a mold[4]. Likewise, in In re Roberts, 470 F.2d 1399 (CCPA 1973) the court approved of a claim to “Corrugated polyethylene terephthalate film having a surface coefficient of friction of less than about 0.40 as determined by the Bell test,” where the claimed reduction in friction arose from production steps disclosed in the specification but absent from the claim.  According to the CCPA, “the absence in the claim of specific steps which would bring about the desired friction property is no defect. The claims define the limits of the claimed invention, and it is the function of the specification to detail how this invention is to be practiced.”

This line of authority is hardly obsolete. As recently as 2017, in BASF v. Johnson Matthey, 875 F.3d 1360 (Fed. Cir. 2017) the Federal Circuit relied on Swinehart to reverse a district court which had invalidated claims that defined a composition with functional language. Very much like the Commission in this case, the district court invalidated the claims for indefiniteness because they “recite a performance property the composition must display, rather than its actual composition.” The Federal Circuit reversed, holding that functional language was permissible so long as the claim satisfied the Nautilus standard of reasonable certainty.

But all that was before today’s regime of patent-eligibility, and before the Federal Circuit decided American Axle. When Professor Peter Menell and I filed our amicus brief urging the Supreme Court to grant certiorari in American Axle, one of the points we made was that, by making a claim’s alleged failure to describe how to carry out an invention a question of § 101, the Federal Circuit had effectively supplanted § 112. Whereas § 112 requires factual inquiries about what the disclosure teaches, American Axle teaches that under § 101 the only question is whether the “claim on its face” describes a way to reach a particular result.

At least in American Axle there might have been questions whether the claims met the requirements of § 112.[5]  So perhaps we could justify the outcome in American Axle as an I-know-it-when-I-see-it test for lack patentability under § 112, much as Alice has become an I-know-it-when-I-see-it test for lack of patentability § 103. Yet in Polycrystalline Diamond Compacts the Commission specifically found that lack of enablement had not been proven. The claims were nonetheless invalid under § 101 as directed to results rather than solutions.

While perhaps surprising, the Commission’s decision is a logical development of American Axle’s approach. To quote American Axle, “features not claimed are irrelevant to step 1 or step 2 of the Mayo/Alice analysis.” The CCPA’s articulation of the basic truth of patent law in Roberts – that the claims define the limits of the invention, and the specification details how the invention is to be practiced – is arguably no longer good law following American Axle.

Rather ironically, the Commission’s patent-eligibility analysis begins with this quote from Classen Immunotherapies:[6] “The statement of patent-eligible subject matter has been substantially unchanged since the first Patent Act in 1790.” But if the Commission is correct in its application of American Axle, the Supreme Court and the Federal Circuit have swept away decades of patent jurisprudence. No doubt the judges of the CCPA would have been surprised to learn that the claims in Fuetterer, Swinehart, Miller, Roberts, and similar cases I have not mentioned here, were all “abstract ideas,” because the claims recited functions depending on “features not claimed.”

And when courts wrestled with the enablement of biotechnology claims in cases like In re Fisher, 427 F.2d 833 (CCPA 1970), or Amgen v. Chugai, 927 F.2d 1200 (Fed. Cir. 1991), where the claims recited molecules defined by their biological activity, the judges could have avoided painstaking inquiry into the facts of enablement, because the claims failed to recite how to achieve the desired activities. And today the Supreme Court can save itself a great deal of time in in the pending enablement case of Amgen v. Sanofi, because the claims are clearly directed to the ‘abstract idea’ of antibodies that block the interaction of the PSCK9 and LDLR proteins, without identifying how those antibodies are achieved.

The Commission’s decision is currently on appeal. No doubt the Federal Circuit could resolve the case, if it is so inclined, with an ad hoc rule that claims to compositions of matter are not directed to abstract ideas – much as Vanda imposed an ad hoc rule that methods of treatment are not directed to laws of nature.[7] But without addressing the deeper doctrinal and historical errors of American Axle (and ultimately Mayo), the courts may find themselves endlessly plugging their fingers in the leaking holes of today’s patent-eligibility regime. At some point we  might come to think that the whole edifice is built upon a rotten foundation, and perhaps would be better swept away.

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[1] Less remaining catalyst and shorter grain-grain distances are both advantageous.

[2] Fuetterer cited the 1952 Act’s new provision on functional claiming that now appears as § 112(f). Some, but not all, of the CCPA’s subsequent case law on compositions relied on this provision as well. Swinehart was not based on this provision, but the court took it as evidence that its approach was consistent with Congress’s intent. The CCPA extended the use of functional claiming to the radical group of a compound (as compared to an ingredient in a composition) in In re Barr, 444 F.2d 588 (CCPA 1971).

[3] U.S. Patent 3,766,080. Those techniques were described in the disclosure as “conventional crystal-growing techniques.”

[4] It could be so defined, according to the CCPA.

[5] In American Axle the district court denied the defendants’ indefiniteness challenge, and the defendants did not raise lack of enablement or written disclosure.

[6] 659 F.3d 1057, 1063 (Fed. Cir. 2011).

[7] But ominously, the Federal Circuit’s recent decision in Chromadex applies the Mayo/Alice two-step inquiry to a composition claim as an alternative analysis.