by Dennis Crouch
US Synthetic Corp. v. ITC, Docket No. 23-01217 (Fed. Cir., pending appeal)
The United States International Trade Commission (ITC) is often seen as a pro-patentee venue — but not for US Synthetics and its attempts to enforce its patents covering drill bit diamond tips.
In its October 2022 decision, the ITC found the asserted claims of USS’s US10508502 invalid under 35 U.S.C. § 101 even though the patent claims polycrystalline diamond compacts (“PDCs”) used in drill bits and other applications. The ITC’s decision is now on appeal to the Federal Circuit, with oral arguments set for October 8, 2024. PhRMA provided amicus support for the patentee, arguing that the ITC’s decision represents an unprecedented expansion of abstract idea analysis to invalidate composition of matter claims. PhRMA contends such claims should be deemed inherently non-abstract and tangible, unlike computer programs that may rightfully be seen as mental processes or mathematical concepts.
Professor Jeffrey Lefstin (UC SF Law) provided an earlier blog post on the original ITC decision that included a detailed historical perspective on this case. Lefstin traced the evolution of functional claim language in patent law, from its initial rejection in cases like General Electric v. Wabash Appliance (1938) to its acceptance in In re Swinehart (1971). He argued that the ITC’s decision in the PDC case, following the Federal Circuit’s reasoning in American Axle, represents a dramatic shift away from decades of established patent jurisprudence. His analysis underscores the potential far-reaching implications of applying the American Axle framework to composition claims, suggesting it could invalidate many biotechnology patents and upend well-established enablement doctrines.
- USS – Appellant Brief
- USS – Intervenor Brief
- USS – ITC Responsive Brief
- USS – Reply Brief
- USS – PhRMA Amicus
The claims are directed to a a polycrystalline diamond compact (PDC) that consists of a diamond table bonded to a substrate. According to claim 1, the diamond table is made of small diamond grains (50 μm or less) bonded directly to each other, with a cobalt-based catalyst filling the spaces between grains. Key limitations include specific magnetic properties (coercivity of 115-250 Oe and specific permeability below 0.10 G·cm3/g·Oe), a substantially planar interface between the diamond table and substrate, and a diamond table size of 0.8-1.9 cm across. Other claims include limitations directed to a G-ratio (a measure of wear resistance) and thermal stability of the diamond table.
In its Alice analysis, the ITC characterized certain claim elements as “performance measures” (e.g., G-ratio, thermal stability) and “side effects” (e.g., magnetic/electrical properties). The ITC reasoned these elements were “problematic” because they incorporate “the goal or result of a particular measure of wear resistance…or thermal resilience…however achieved” and are “an indirect measure of the effectiveness of other design choices and manufacturing variables.” The ITC concluded the claims were directed to an abstract idea rather than a specific implementation.
According to the ITC, the basic ‘problem’ with the invention as claimed is that the key limitations are all functional limits that effectively encompass (or preempts) all PDCs with enhanced bonding. In addition, it appears that the accused products achieved the claimed properties using different processes and metal contents than taught in the patent, suggesting the properties do not actually indicate a specific microstructure.
At Alice step two, the ITC found the claims lacked an inventive concept, stating they “invoke[] well-understood, routine, [and] conventional components to apply the abstract idea[s].” The ITC determined the physical elements recited were conventional and the claims read on “any PDC structure that achieves the claimed improvements.”
On appeal, USS attacks the ITC decision from several angles — most pointedly though USS simply argues that these claims are directed to a concrete, physical composition of matter – a PDC with defined structural and compositional features – not an abstract concept. USS asserts the claimed properties like coercivity and specific permeability are not abstract “results” but objective measurements reflecting the PDC’s physical microstructure.
Additionally, USS argues the ITC erred by faulting the claims for not reciting manufacturing steps, when the claims are directed to a product, not a method of manufacture. USS contends § 101 expressly allows claiming a “composition of matter” and that the judge made eligibility limitations cannot contradict that statutory allowance. The ITC noted that the claims here effectively preempt all uses of enhanced bonding PDCs, but USS points in its appeal to many prior-art and current PDCs that fall outside the claim scope. Thus, the company contends the claims leave open other solutions to creating stronger PDCs and thus do not raise preemption concerns.
As mentioned above, The Pharmaceutical Research and Manufacturers of America (“PhRMA”) filed an amicus brief in support of USS, expressing concern about the ITC’s application of the abstract idea exception to a composition of matter claim. PhRMA argues this expansion is unprecedented and contradicts the text of § 101, which explicitly lists compositions of matter as patent-eligible subject matter. PhRMA contends compositions are inherently non-abstract and tangible, unlike the mental processes or mathematical concepts typically found abstract.
PhRMA cites Supreme Court precedent holding man-made compositions patent-eligible, such as Diamond v. Chakrabarty, 447 U.S. 303 (1980), which upheld claims to a genetically modified bacterium expressing two “separate hydrocarbon degradative pathway[s].” PhRMA argues the ‘502 patent claims are more akin to those in Chakrabarty than to computerized method claim found abstract in Alice.
In Chakrabarty, the claim defined a genetically engineered bacterium based upon its functional property – its ability to break down multiple components of crude oil. Similarly, the PTC patent defines the diamond compact functional (and structural) properties, including magnetic properties, grain size, coercivity, specific permeability, etc. Of course, Chakrabarty did not deal directly with the abstract idea exception.
The ITC and Intervenors (accused infringers) defend the decision, arguing the Commission’s factual findings are supported by substantial evidence and should be upheld under the deferential standard of review. They contend the Commission properly found the claimed magnetic properties and thermal stability to be “side effects” or results, not structural limitations. This argument brings to mind the much maligned decision Parker v. Flook, 437 U.S. 584 (1978), where the Supreme Court disregarded what it saw as “insignificant post-solution activity.” And, even if significant, the ITC argues that the claimed genus limited by specific properties is not a proper invention because it does not specify how to achieve the result. See, American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, 967 F.3d 1285 (Fed. Cir. 2020). I should note here that while the Flook citation is apt, it is largely thought to be taboo to positively cite Flook to the Federal Circuit, and the ITC did not explicitly cite or rely on Flook in its decision or brief.
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Daniel Cooley is representing the patentee on appeal along with his Finnegan Henderson team of Brandon Andersen, James Barney, Mareesa Frederick, Alexander Harding, . Derek McCorquindale, and Christina Ji-Hye Yang.
Cathy Chen will argue for the ITC, and was joined on the brief by ITC attorneys Dominic Bianchi, Wayne Herrington, Panyin Hughes, and Michelle Klancnik.
There are a host of intervenors with several law firms involved. Theodore Angelis of K&L Gates will argue collectively on behalf of all the intervenors, splitting time with the ITC. Angelis is joined on the briefing with his team of Jas Dhillon, Darlene Ghavimi, George Summerfield, Jr., and Timothy Walker. Timothy Bickham of Dentons along with his team of Li Guo and Stephen Yang are representing other intervenors as is Adam Hess of Squire Patton Boggs.
Richard Rainey of Covington & Burling is representing PhRMA as amicus curiae, along with his team of Natalie Derzko and Nicholas Lane Evoy from Covington & Burling LLP, and David Evan Korn from PhRMA.