Standing Naked before the TTAB

Australian Therapeutic Supplies Pty. v. Naked TM (Fed. Cir. 2020) (en banc)

NAKED TM holds the registration for the mark NAKED that it uses to sell its luxury condoms.  However, by the time NAKED TM started its business, Australian Therapy was already selling its NAKED condoms to US customers over the internet.  In the early 2000s, the companies reached some form of a tacit agreement — although without an express contract.  Since 2003, Australian has continued to sell NAKED condoms in the US, but the TTAB found that it was never more than 48 consumers per year.

The appeal here stems from Australian Therapy’s cancellation proceeding that ended when the TTAB found the petitioner lacked standing under 15 U.S.C. § 1064 (petition to cancel may be filed by “any person who believes that he is or will be damaged … by the registration of a mark …”).  The TTAB particularly found a binding contract between the parties where Australian Therapy gave-up its rights to use the mark in the US: 

The evidence shows that the parties reached an agreement. The mutuality of intent to contract is satisfied because the parties recognized their trademark issue and they communicated and exchanged offers to resolve it. The consideration for the contract is Petitioner’s agreement not to use or register the NAKED trademark for condoms in the United States and Respondent’s agreement not to use or register the NUDE trademark for condoms.

The Board explained also that Australian must show a “proprietary rights in its unregistered mark” in order to have standing under the statute.

On appeal, the Federal Circuit reversed — holding a cancellation petition may be filed by any party who demonstrates “a real interest in the cancellation proceeding and a reasonable belief of damage regardless.” It does not require evidence of a “proprietary interest in an asserted unregistered mark.”  Here, the court found a real-interest based on the fact that Australian had filed to register its marks, and had demonstrated a belief of damage because the USPTO refused registration of both the ’237 and ’589 applications based on a likelihood of confusion with Naked’s registered mark, U.S. Registration No. 3,325,577.”

At that point, NAKED TM petitioned for en banc rehearing on two questions:

I. Whether a petitioner who has forfeited its rights in a mark pursuant to a valid settlement agreement has a real interest in the proceedings and a reasonable belief of harm for the registration of said mark so as to support a finding of statutory standing under 15 U.S.C. § 1064 to challenge the registration of the mark; and

II. Whether a petitioner in the TTAB is required to establish the pleaded basis for its standing at the commencement of an action, or whether this Court may rely on an argument that has been waived by a party in finding a basis for standing in the TTAB.

The Federal Circuit has now denied the rehearing, although the case includes an interesting dissent from Judge Wallach. Wallach argues that the decision in Australian Therapy:

  1. Conflicts with our case law requiring a “legitimate commercial interest” to have a valid cause of action under 15 U.S.C. § 1064, see Empresa Cubana Del Tabaco v. Gen. Cigar Co., 753 F.3d 1270, 1274 (Fed. Cir. 2014) (following Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014)., noting that a petitioner must have a “legitimate commercial interest sufficient to confer standing”);
  2. Undermines our case law favoring the enforcement of settlement agreements, see Wells Cargo, Inc. v. Wells Cargo, Inc., 606 F.2d 961, 965 (C.C.P.A. 1979) (“If there [is] a policy favoring challenges to trademark validity, it too has been viewed as outweighed by the policy favoring settlements.”); and
  3. Raises questions as to the impact of Supreme Court precedent on our statutory standing jurisprudence, see Lexmark, 572 U.S. at 128 n.4 (noting that statutory standing does not implicate Article III subject matter jurisdiction), 134 (providing “a direct application of the zone-of-interests test and the proximate-cause requirement [to] suppl[y] the relevant limits on who may sue”).

AusTherapy v. Naked.

USPTO Patent Center (Beta)

The USPTO has made its new Patent Center available to all users — although still in beta form.

The Patent Center is designed as a more streamlined tool electronic filing of patent applications that combines EFS-Web and PAIR. For now, the PTO is planning to keep those avenues available until the Patent Center achieves full functionality and stability.

Not-Yet Filed Invention Rights

The Patent Act indicates that patents should be treated as if “personal property” and that both patents and patent applications are “assignable in law by an instrument in writing.” 35 U.S.C. 261.  Section 102 also suggests that the claimed invention may already be “owned” prior to filing. 35 U.S.C. 102(b)(1)(C).

A disclosure [in a prior-filed patent application] shall not be prior art to a claimed invention under subsection (a)(2) if … [T]he subject matter disclosed and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person.

Id. The reference to ownership of pre-filing inventions suggests a property right, but does not expressly define that right.  In its 2011 decision, the Supreme Court offered the clue “that inventors have the right to patent their inventions.” Bd. of Trustees of Leland Stanford Junior U. v. Roche Molecular Sys., Inc., 563 U.S. 776 (2011).  In Stanford v. Roche, the court also offered some cases for discussion:

  • Gayler v. Wilder, 51 U.S.(10 How. 477), 493 (1851) (“the discoverer of a new and useful improvement is vested by law with an inchoate right to its exclusive use, which he may perfect and make absolute by proceeding in the manner which the law requires”);
  • Solomons v. United States, 137 U.S. 342 (1890) (“whatever invention [an inventor] may thus conceive and perfect is his individual property”);
  • United States v. Dubilier Condenser Corp., 289 U.S. 178 (1933) (an inventor owns “the product of [his] original thought”).

Despite these old cases, it is remains unclear to me what does it mean to “own” a “claimed invention” before the patent application is on file.  What law applies?

Briefing begins in US v. Arthrex

US vs. Arthrex, 19-1434 (Supreme Court 2020).

Earlier this year the Supreme Court granted writ of certiorari on the PTAB appointments clause issues stemming from the Federal Circuit’s determination that (1) PTAB judges were Officers of the United States who should have been appointed by the President (rather than by the Secretary of Commerce), but (2) the appointments problem was curable by eliminating any statutory job security held by the judges (this reduced them to “inferior officers” who are properly appointed by a head of department, such as the Secretary of Commerce).  The court agreed to hear the first two questions, but not the third (regarding waiver/forfeiture).

  1. Whether, for purposes of the Appointments Clause, U.S. Const. Art. II, § 2, Cl. 2, administrative patent judges of the U.S. Patent and Trademark Office are principal officers who must be appointed by the President with the Senate’s advice and consent, or “inferior Officers” whose appointment Congress has permissibly vested in a department head.
  2. Whether, if administrative patent judges are principal officers, the court of appeals properly cured any Appointments Clause defect in the current statutory scheme prospectively by severing the application of 5 U.S.C. 7513(a) to those judges.
  3. Whether the court of appeals in Arthrex erred by adjudicating an Appointments Clause challenge that had not been presented to the agency.

July 22, 2020 Memorandum for the United States.

The case involves three parties.

  • Arthrex, whose patent is being challenged in inter partes review. Arthrex brought the appointments clause challenge, but strongly disagrees with the severing “cure.”
  • Smith & Nephew, the IPR petitioner. Smith & Nephew fundamentally argues that the the PTAB judges are at most inferior officers and thus were properly appointed.
  • US Gov’t intervened in the lawsuit to defend the PTAB decision, and also argues that PTAB judges are inferior officers.

The first round of merits briefing has been filed by the US and Smith&Nephew.  As discussed below, neither party addressed the second question — they will have an opportunity to do so after Arthrex files its opening brief later this month. Additional amicus briefs are expected this week.

US Gov’t Brief:  In its brief, the US argues strongly that PTAB administrative patent judges “are inferior officers whose appointment Congress permissibly vested in the Secretary of Commerce.”  US Government did not address the second question of curing the Appointments problem.

For its analysis, the US attempted to align its argument with the Supreme Court’s approach in Edmond v. United States, 520 U.S. 651 (1997) (Inferior officers must be “directed and supervised at some level by others who were appointed by Presidential nomination with the advice and consent of the Senate.”).

The Gov’t brief walks through the ways that the Secretary of Commerce and USPTO Director (both presidential appointees) possess authority to direct and supervise PTAB judges:

  • The Secretary (in consultation with the PTO director) appoints the judges.
  • The Secretary can remove the judges for “efficiency” purposes and that includes “failing to follow their supervisors’ instructions.”
  • The PTO Director has “unfettered power to decide which adjudicators will sit on any Board panel.”
  • The PTO Director has power to “promulgate regulations governing Board proceedings; issue binding policy directives, including instructions regarding how the patent laws and USPTO policies apply to particular fact patterns; and determine which Board decisions are precedential and therefore binding on future panels.”
  • “The Director has additional prerogatives regarding the conduct of individual proceedings. He may decide unilaterally whether a particular inter partes or post-grant review will proceed at all, and he possesses substantial authority over any rehearings that the Board may grant.”

Role of Rulemaking: Note here that that one important question arises regarding the extent that the Director has “given-up” authority by rulemaking and by tradition.  Under the promulgated regulations as currently in operation, the PTO Director has delegated substantial authority to the PTAB and to the Chief Judge.  An important example of this is that the PTAB determines institution decisions. A question for the Court will be the extent that those prior rulemakings should be considered when analyzing the officer-status of PTAB judges.

Mechanical Turks: In its opinions, the Federal Circuit also analyzed the situation using Edmond. In its brief, the US asserts that the court’s approach is “deeply flawed.”  Most importantly, the US argues that Edmond should be seen as providing for a flexible and open ended analysis of the level of supervision and control; whereas the Federal Circuit followed a more “mechanistic” of distilling Edmond into three discrete criteria and then focusing solely on those.

Burdensome: An additional important criteria here has to do with the burdensome nature of having the President Nominate and the Senate Confirm a large number of administrative officials. From 1836-1975, the patent judges (then called examiners-in-chief) were appointed by the President.  However, the expansion of the patent system (and administrative state in general) began to identify those appointments as an unneeded burden on the President and thus shifted their appointment to the Secretary of Commerce.  I expect that some members of the court – such as Justice Gorsuch – will see this justification as carrying little weight.

Still no Trillion Dollar Judgment

Parker v. Apple (Fed. Cir. 2020) (non-precedential order)

The Federal Circuit has dismissed Parker’s pro se appeal as frivolous.  Parker described the facts of the case as follows:

On October 29, 2018 Raevon Parkerwent to the Apple Store in the Saint Louis Galleria for a malfunction of his cellular device. The attendant in the Apple Store fixed the device but kept it by deceiving the Plaintiff knowing that it was the first phone to have new features [created by Parker himself].

The damages that the plaintiff is seeking is a trillion dollars.

Parker first sued in Missouri state court asking for $2 trillion and $900 USD as well as return of his priceless phone.  The Missouri court dismissed on the pleadings for failure to state a claim. Later, Parker refiled in Federal Court and that case was also dismissed.

You may have heard of district court’s certifying questions for appeal under 28 U.S.C. 1292(b).  In this case, the district court issued a reverse-certification — certifying that any appeal by Mr. Parker should not be taken in good faith.  Still, Parker appealed.

On appeal to the Federal Circuit, Parker made a takings claim — arguing that his 5th Amendment rights were violated by Apple — “his property was taken for public use and he had not been compensated.”  Despite widespread concern over Apple’s monopolistic practices, Apple is not the government and is not bound by the 5th Amendment takings clause or is incorporation under the 14th Amendment.  Thus, the Federal Circuit dismissed the case and denied Parker’s fee waiver petition (Proceedings in forma pauperis).  The Federal statute guiding the court’s approach to in forma pauperis proceedings indicates that the court should dismiss any case where “the action or appeal is frivolous.”  28 U.S.C. § 1915(e)(2)(B).  Following that guidance the the court has dismissed Parker’s appeal.

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I will note that the current value of Apple’s publicly traded shares is $2 billion trillion.

Computer Fraud and Abuse Act: Van Buren v. US

by Dennis Crouch

A lot has changed since President Reagan signed the Computer Fraud and Abuse Act of 1984 (CFAA) and amended it in 1986.  Still, the CFAA remains Federal Law’s primary anti-hacking statute and provides for both civil and criminal penalties.  The most-oft used provision reads as follows:

(a)Whoever … (2) intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains … (C) information from any protected computer … shall be punished.

18 U.S.C. 1030(a). The broad and potentially uncertain scope of “exceeds authorization” is the Focus of the Supreme Court’s November 30, 2020 oral arguments in Van Buren v. United States.

As a police officer, Mr. Van Buren was authorized to search the Georgia Crime Information Center database, but only for police business. As part of a broader FBI sting, Van Buren agreed to and did-actually search the database at the request of private citizen (Albo).  In particular, Albo paid Van Buren $6,000 to search the license-plate records of a prostitute that Albo was considering hiring.

A jury convicted Van Buren for both wire-fraud and computer-fraud.  On appeal, the 11th Circuit overturned the wire-fraud verdict on faulty jury instructions (ordering a new trial); but affirmed the computer fraud conviction despite the “vague language of the CFAA.”  U.S. v. Van Buren, 940 F.3d 1192 (11th Cir. 2019), cert. granted, 140 S. Ct. 2667 (2020).   The Supreme Court granted certiorari on the following question:

Whether a person who is authorized to access information on a computer for certain purposes violates Section 1030(a)(2) of the Computer Fraud and Abuse Act if he accesses the same information for an improper purpose.

[Petition].  The statute does provide a definition:

(6) the term “exceeds authorized access” means to access a computer with authorization and to use such access to obtain or alter information in the computer that the accesser is not entitled so to obtain or alter;

18 U.S.C.A. § 1030(e)(6). Martin’s simple statutory argument: As a police officer, he was authorized to access and obtain the license-plate information, even if he did so here for an inappropriate reason.  The 11th Circuit disagreed and followed its prior precedent in U.S. v. Rodriguez (11th Cir. 2010). Rodriguez is a closely parallel case of an SSA employee who conducted personal searches on the SSA databases. In that case, the 11th Circuit affirmed the CFAA conviction.

One underlying issue here is that the 11th Circuit’s approach seemingly makes it a federal crime for an individual to obtain information after violation of a terms-of-use.  The government argues that prosecutorial discretion is sufficient to avoid these concerns and that the statute should be “specifically and  authorized” individuals, not the general public.

So.  The government argues that its statutory interpretation turns on the word “so” as used in the statute.  I’m still struggling with how that argument works.

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Read the Transcript and Listen to the Audio.  The outcome here is a bit unclear to me, but I expect the Supreme Court to at least offer a set of limiting principles for the statute — if not going as far as suggested by Van Buren.  That said, I would not be surprised with a 7-2 Sotomayor decision favoring Van Buren. That outcome would then serve as notice to Congress to update the 35-year-old law.

The government repeatedly worked to draw an analogy between the information at issue here and property rights.  The case may turn on the extent that the Supreme Court finds that analogy appropriate.  In particular, the government will likely win if we think of exceeding access as a form of “stealing information” as parallel to that of a brick-and-mortar store employee taking money from the till.  The employee has access to the money, but exceeds access by taking it out.

Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

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Obviousness: Claim Construction (Q.of.Law) vs. Interpretation of the Prior Art (Q.of.Fact)

by Dennis Crouch

In re Aspen Aerogels, Inc. (Fed. Cir. 2020) (non-precedential)

The basic question in this ex parte appeal is whether the asserted references teach the layering of aerogels as required by the insulation materials claim pending before the USPTO.  The pending APN 14/446,663 was filed in 2014, but claims a chain of priority stretching back to a 2005 provisional patent application. The basic idea here is that aerogel is a great insulator, but is fragile, so the claim requires fiber-reinforcement.  The claim particularly requires two plys of fiber-reinforced aerogel — and that the fibers in the plys are interlaced with one-another.

Claim 1: A composite comprising

[a] at least one first ply of fiber-reinforced aerogel material adjacent to [b] at least one second ply of fiber-containing material,

wherein fibers from the at least one first ply of fiber-reinforced aerogel material are interlaced with fibers from the at least one second ply of fiber-containing material.

The examiner rejected the claim as obvious and that was affirmed by the PTAB. The Federal Circuit has now affirmed.

  • U.S. Patent App. No. 2002/0094426 (Stepanian) taught having the two layers of fiver-reinforced aerogel, but did not teach the interlacing of fibers.
  • Japanese Patent No. 2000-080549 (Sano) teaches interlacing of fibers of layers using needle-felting.

Aspen’s argument on appeal is that Stepanian does not actually teach plys as claimed but rather two masses of undifferentiated aerogel.  On appeal here, Aerogel presented this as a question of law involving the definition of the term claim term “ply.”  The Federal Circuit here rejected that approach — holding instead that the real question is whether the prior art discloses the plys.  The difference between these two approaches is very important on appeal: Claim construction is reviewed de novo on appeal without deference to the PTO determination; Content of the prior art is reviewed for substantial evidence with major deference going to the PTO.

[W]e determine the issue to be a factual question of whether the prior art teaches an undifferentiated mass of aerogel or teaches layers of fiber-reinforced aerogel as the Board determined. We review this issue for substantial evidence.

Slip Op.  Stepanian (which I have previously discussed in PatentlyO) clearly shows layers, and particularly defines Fig 3 (below) as disclosing “a 3-layer laminate.”  But, the issue is that Stepanian stacks the fibers and then pours in the areogel over the layers of fibers.  The PTAB made the factual conclusion that Stepanian disclosed “plys” of fiber-aerogel, even with the pour-over approach, and the appellate panel found substantial evidence for that conclusion.

Whether layers of fibrous material are filled with aerogel and then stacked or stacked and then filled with aerogel makes no difference if the result is the same as the claimed composite here.

Slip Op.

Note here, that Aerogel is also the owner of the Stepanian patent application (and issued patent). The problem though is that the Stepanian application was published back in 2002, more than 1-year before the priority date of the application at issue here.

Rejection affirmed.

If there really is a claim-construction issue here, on remand the patentee may want to amend its claims to make the proper construction exceedingly clear and then rejoin the rodeo.

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If we go back to the heart of this matter: Aergoel appealed on claim construction, the Federal Circuit says “the real issue is not claim construction but rather the content of the prior art” (paraphrase).  The court then goes on to refuse to decide the claim construction issue and instead decide the case on the alternative grounds.

Truthfully, this seems wrong. The appellate court should have decided the issue raised by the appellant (claim construction) and ended the case there.  I read appellant’s brief who particularly stated that no factual question is being appealed: “There is no dispute here about any relevant fact.”

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Poongs Muthukumaran, chief counsel for Aspen argued for his employer; Kakoli Caprihan argued for the PTO.

For Better or Worse: A time for Family

As we reflect on family, consider the following cases:

Inspiration for Inventing on Thanksgiving Day: 

Shafer claims that he invented the subject matter of his patent and reduced it to practice November 24, 1921 (Thanksgiving Day). . . . [This was] the first time that his brother, who was a mechanic, and he, had the day off together, they devoted that morning to reducing to practice his discovery.

Brown Instrument Co v. Gen. Electric Co, 35 F. Supp. 29, 30 (E.D.N.Y. 1940), rev’d sub nom. Gen. Elec Co v. Minneapolis-Honeywell Regulator Co, 118 F.2d 278 (2d Cir. 1941) (thermostat patent).

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Protecting Children from Forced Adoption: 

He was a research man prepared to devote his life to discoveries of value to industry. Under [his employment] contract he was, however, if he worked in another laboratory or for another manufacturer, required to assign his discoveries to appellee. This would effectively close the doors of employment to him. Until the end of the [contract term of three years] he was compelled either to work for appellee or turn over the children of his inventive genius to it. Such a contract conflicts with the public policy of the land, which is one that encourages inventions and discourages the exclusion of an employee from engaging in the gainful occupation for which he is particularly fitted for all time, anywhere in the United States.

Guth v. Minnesota Min. & Mfg. Co., 72 F.2d 385, 388–89 (7th Cir. 1934).

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It just sounds bad to terminally disclaim a child: 

Although a terminal disclaimer does not conclusively show that a child patent involves the same cause of action as its parent, the terminal disclaimer is still very relevant to that inquiry.

SimpleAir, Inc. v. Google LLC, 884 F.3d 1160, 1168 (Fed. Cir. 2018).

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As a Family, we are In it Together: 

[T]he FRAND commitment applies to all members of that patent family, unless a specific exclusion has been made.

TCL Commun. Tech. Holdings, Ltd. v. Telefonaktiebolaget LM Ericsson, CV 15-2370 JVS(DFMX), 2017 WL 6611635, at *15 (C.D. Cal. Dec. 21, 2017).

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I’ll buy some consonance for $250:

[T]he sibling patent did not maintain consonance [under Section 121], and therefore the safe harbor provision cannot apply, we hold [the claims] invalid.

St. Jude Med., Inc. v. Access Closure, Inc., 729 F.3d 1369, 1380 (Fed. Cir. 2013).

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Sleeping in your Corset?: 

They were presented to her for use. He imposed no obligation of secrecy, nor any condition or restriction whatever. . . . The donee of the steels used them for years for the purpose and in the manner designed by the inventor. . . . According to the testimony of the complainant, the invention was completed and put into use in 1855. The inventor slept on his rights for eleven years.

Egbert v. Lippmann, 104 U.S. 333, 337 (1881).

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Patents & Divorce: 

In a dissolution action, patents are subject to equitable distribution.

Teller v. Teller, 53 P.3d 240, 249 (Haw. 2002).

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L·U·B·R·I·C·I·O·U·S

[T]he patent fails to teach how the invention actually achieves lubriciousness.

Ritchie v. Phallix, Inc., 8:06-CV-2128-T-26TGW, 2007 WL 9723903, at *2 (M.D. Fla. Oct. 26, 2007).

Remand with Guidance

Network-1 Techs., Inc. v. Hewlett-Packard Co. (Fed. Cir. Nov. 20, 2020) (modified opinion) (US6218930 – providing power via ethernet cable)

This case has gone back-and-forth several times.  Here are a few highlights:

  • PTAB instituted IPR on likelihood of invalidity, but then concluded the claims were not proven invalid.
  • Later, in the infringement lawsuit, jury found the claims invalid.
  • Judge Schroeder (E.D.Tex.) rejected the jury verdict – holding that HP was estopped from challenging validity under 35 U.S.C. § 315(e)(2). (Granting renewed motion for JMOL under R.50(b).)
  • Then on appeal, the Federal Circuit vacated JMOL but did not expressly reinstate the jury verdict – seemingly leaving that for Judge Schroeder to decide what to do. (Sept 2020 decision).

An additional problem with Judge Schroeder’s decision below is that he did not rule on Network-1’s conditional motion for new trial as required by R.50(c):

If the court grants a renewed motion for judgment as a matter of law, it must also conditionally rule on any motion for a new trial by determining whether a new trial should be granted if the judgment is later vacated or reversed.

Fed. R. Civ. Pro. R. 50(c).  In addition to the new trial motion, Judge Schroeder also made no ruling on other substantive JMOL motions filed by Network-1.

The remand order demanded the district court proceed in a manner “consistent” with the appellate decision.  However, Network-1 foresaw some conflict and argument regarding how that order might be interpreted.  In particular, HP wants the district court to simply reinstate the Jury Verdict of invalidity; while Network-1 wants the district court to rule on its alternative JMOL motions or alternatively order a new trial on validity.  As such, Network-1 petitioned the Federal Circuit for a clarifying order:

To avoid any possible confusion on remand, Network-1 respectfully asks the panel to clarify that its remand includes deciding Network-1’s motion for a new trial and addressing Network-1’s remaining arguments for JMOL on validity— including significant evidentiary shortcomings that no court has yet to address given the district court’s estoppel ruling.

Network-1 Petition for panel rehearing.

The court has granted the petition and now expressly stated:

We therefore remand to the district court for further proceedings consistent with this opinion, which include ruling in the first instance on Network-1’s entitlement to JMOL (notwithstanding this court’s holding on estoppel) and its new-trial motion.

Modified opinion (underlined portion is the new part).  The court also explained that the appellate panel “will not consider either Network-1’s alternative grounds for JMOL or its new-trial motion in the first instance.”

In its briefing, HP explained its position that Network-1 had forfeited its right to make its renewed-JMOL motions on sufficiency of the validity evidence because Network-1 had failed to raise that particular challenge in its R.50(a) motion.

[A] party that fails to move for judgment as a matter of law under Rule 50(a) on the basis of insufficient evidence at the conclusion of all of the evidence waives its right to file a post-verdict Rule 50(b) motion, and also waives its right to challenge the sufficiency of the evidence on appeal.

Moss v. Princip, 913 F.3d 508, 522 (5th Cir. 2019).  In its rehearing order, the Federal Circuit did not decide the forfeiture issue, which will be open for debate back before the District Court.  (Note issue of waiver vs forfeiture).

Network-1 had requested that the Federal Circuit order the district court to consider “Network-1’s previously asserted substantive grounds for JMOL” and did not mention the forfeiture issue.  Although not entirely clear, it appears that this requested order might have overcome the potential waiver.  The Federal Circuit was careful to require only examination of Network-1’s “entitlement to JMOL” without requiring that the merits of the motion be considered.

Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

Overbroad Assignment Agreement: Invalid under California Law

Whitewater West Indus. v. Richard Alleshouse and Yong Yeh (Fed. Cir. 2020)

This is an important case invalidating provisions of an employment agreement based upon California Law. Alleshouse left his former employer Wave Loch (predecessor to Whitewater) and started working on inventions for his new venture the very next day. Within two months he (along with his partner Yeh) had filed a set of provisional patent applications at issue in this case.  Whitewater then sued, arguing that the employment contract included rights over post-employment inventions.

The agreement:

a. Assignment: Employee agrees that all right, title and interest in all inventions … that Employee conceives or hereafter may make or conceive …

(a) with the use of Company’s time, materials, or facilities; or (b) resulting from or suggested by Employee’s work for Company; or (c) in any way connected to any subject matter within the existing or contemplated business of Company

shall automatically be deemed to become the property of Company as soon as made or conceived, and Employee agrees to assign to Company, its successors, assigns, or nominees, all of Employee’s rights and interests in said inventions, improvements, and developments in all countries worldwide. Employee’s obligation to assign the rights to such inventions shall survive the discontinuance or termination of this Agreement for any reason.

Prong (c) from the contract is at issue that requires Alleshouse to assign any invention connected with the business of Wave-Loch — apparently reaching indefinitely into the future.  It just so happens that Wave-Loch makes wave-riding attractions, and that is also the subject of Alleshouse inventions here. So the patents fall squarely within the express and literal terms of the contract.

On appeal, the court looked to § 16600 of the California Business and Professions Code.

Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.

The provision voids any contract that restrains anyone from engaging in a lawful profession or trade. Here, the Federal Circuit found that the assignment provision reaching indefinitely into the future would have “a broad restraining effect” because it would prevent Alleshouse from working effectively in the field for any other company.

The Federal Circuit cited to a number of prior district court decisions confirming “that invention-assignment provisions that go beyond protection of proprietary information and ensnare post-employment inventions are to be judged under the strict § 16600 standards that protect former employees.”  The court also cited older cases that discuss these same issues. See, e.g., Standard Plunger Elevator Co. v. Stokes, 212 F. 893, 896 (2d Cir. 1914); and Guth v. Minnesota Min. & Mfg. Co., 72 F.2d 385 (7th Cir. 1934) (improper to force someone to “turn over the children of his inventive genius” conceived after employment).

The weak point: The baseline here is that the court found that this assignment agreement to be void. The weak point of the Federal Circuit’s decision is that it is seemingly contrary to its own prior express statement that “section 16600 [applies] to employment restrictions on departing employees, not to patent assignments.” Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems, Inc., 583 F.3d 832, 837 (Fed. Cir. 2009), aff’d on other grounds, 563 U.S. 776 (2011).  On appeal here, the court attempted to skirt that statement by interpret interpret as only applying to assignment agreements that were not themselves driven by employment agreements, even though that caveat is not found in the decision.

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U.S. Patent Nos. 9,044,685; 9,302,189; and 9,592,433.

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Alleshouse was Represented by Manuel de la Cerra with Rick Taché on the other side.

A Lesson from Judge Chen on Waiver vs Forfeiture

by Dennis Crouch

In re Google Technology Holdings LLC (Fed. Cir. 2020)
Decision authored by Judge Chen and joined by Judges Taranto and Stoll

This is an ex parte appeal of a patent office refusal to grant a patent to Google on its U.S. Pat. App. No. 15/179,765 (distributed caching of content for video-on-demand).  The examiner rejected the claims as obvious and that was affirmed by the PTAB.  On appeal here the Federal Circuit affirms on forfeiture grounds:

Because we conclude that Google has forfeited its arguments put forth on appeal, we affirm.

Slip Op.  Most of the opinion actually focuses on the legal distinction between “waiver” and “forfeiture,” primarily citing to the 1993 Supreme Court Case of US v. Olano and its predecessor Johnson v. Zerbst (1938). 

Waiver is different from forfeiture. Whereas forfeiture is the failure to make the timely assertion of a right, waiver is the “intentional relinquishment or abandonment of a known right.”

Olano, quoting Johnson. The difference between these two terms is somewhat parallel to that of laches and equitable estoppel. Laches can apply to bar a claim in situations where a plaintiff unreasonably delayed in making the claim (much like a statute-of-limitations).  Equitable Estoppel, on the other hand, requires some action by the plaintiff – a misleading statement or conduct – that was detrimentally relied upon.

Here, on appeal Google argues that the PTAB erred in its claim construction of Google’s claim terms of “cost” of delivering data and “network penalty.”  However, Google did not present those particular arguments to the PTAB and thus forfeited them:

Meritorious or not, Google never presented these arguments to the Board. And therein lies the problem. Because Google failed to present these claim construction arguments to the Board, Google forfeited both arguments.

Slip Op.

The basic rule here is that “a position not presented in the tribunal under review will not be considered on appeal in the absence of exceptional circumstances.”  In this case, the court found no such exceptional circumstances.

Sua Sponte by the Court: Note here, the forfeiture is a bit tricky because apparently neither Google nor the Patent Examiner requested or briefed claim construction of the “Cost” term before the Board. Rather the Board construed the terms sua sponte.  On appeal, the Federal Circuit found that in this situation it had discretion regarding whether or not to hear the appeal, but declined to do so.  The court reasoned that Google should have argued the claim construction issue if it thought the issue important.

Google has not provided any reasonable explanation as to why it never argued to the examiner during the iterative examination process or later to the Board for a particular construction of the term “cost,”—an argument that is now the linchpin to its claims’ patentability. Allowing Google to press, on appeal, a specific claim construction that it did not present to the Board deprives the Board, an expert body, of its important role in reviewing the rejection of patent applications. Moreover, Google has not explained how the Board’s understanding of “cost” altered the theory underlying the examiner’s rejection or otherwise was a surprising, unexpected departure.

Slip Op.  The court admitted that in other cases it has reviewed issues raised sua sponte by the PTAB — but that such review has always been discretionary.

Service of Process and Theft of Ideas

Tracy Nixon v. General Motors (Fed. Cir. 2020).

Nixon sued GM in E.D. Texas, acting pro-se.  The complaint makes the following allegation:

The defendant infringed on the Plaintiffs Design for the Chevrolet Corvette that consisted of the rear trunk LTD Wing, Aerodynamic Full Body Combo Kit, and Hood DAM sold on the 2014-2019 Corvette C7 and Z06 Corvette before the Plaintiff could patent the invention for sale to the public.

Pro Se Complaint.

GM did not make an entry of appearance into the lawsuit and Nixon asked for default judgment. However, Judge Gilstrap refused to enter default judgment — holding that GM had not been properly served with the summons and complaint as required by FRCP 4.

The rule includes several mechanisms for service process, including  “following state law for serving a summons …”   Nixon thought service was proper — Nixon sent the Summons & Complaint to the Texas Secretary of State who forwarded the Summons and Complaint to General Motors HQ via Certified Mail. (See image below). Texas law allows for service-via-SOS in special circumstances, such as where a company is supposed to have a registered agent, but does not have one (or that one isn’t accepting service). See Texas Business Organizations Code § 5.251. (Failure to Designate Registered Agent). A non-Texas company only needs a registered agent in Texas if it “Transact Business” within the state. .

Texas does not make its list of registered agents freely available online, but I just paid for a search and found that General Motors does have a a registered agent in Texas, and that is who should have received service of process.

The District Court denied default judgment, and Nixon immediately appealed to the 5th Circuit who denied appellate jurisdiction for lack of final judgment:

Nixon also appealed directly to the Federal Circuit in parallel who has issued a notice-to-show-cause on whether this is a patent case.  If you remember, Nixon does not have a patent but has sued for theft of the idea.  The court writes:

It appears that this case is not within this court’s limited subject matter jurisdiction. Although this court does have jurisdiction “of an appeal from a final decision . . . in any civil action arising under . . . any Act of Congress related to patents,” it does not appear that Mr. Nixon’s complaint raises a non-frivolous claim arising under the patent laws. See Gayler v. Wilder, 51 U.S. 477, 493 (1850) (explaining that “no suit can be maintained by the inventor against any one for using it before the patent is issued”).

Nor does it appear that transfer to the appropriate federal court of appeals, in this case, the United States Court of Appeals for the Fifth Circuit, would be in the interest of justice. It appears that Mr. Nixon’s request for permission to appeal was initially filed at that court, which issued an order on November 4, 2020 denying his request because “[t]he district court’s order denying the motion for default judgment is not a final order . . . [and] the order has not been certified for immediate appeal under 28 U.S.C. § 1292(b) by the district court.” Nixon v. Gen. Motors Corp., No. 20-90032 (5th Cir. Nov. 4, 2020).

NixonGMOrder.

In the end, Nixon may be left with properly serving GM to get his case moving forward.

Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

AIA Trial Rule Changes? PTO Notice & Comment

The USPTO is seeking comments on its rules for instituting AIA trials — especially cases involving multiple AIA petitions against the same patents.

https://www.federalregister.gov/documents/2020/10/20/2020-22946/request-for-comments-on-discretion-to-institute-trials-before-the-patent-trial-and-appeal-board

Comments due by Nov 19, 2020

The following comes from the Request for Comments:

ISSUES FOR COMMENT

The USPTO seeks comments on considerations for instituting AIA trials as it relates to serial and parallel AIA petitions, as well as proceedings in other tribunals. The questions enumerated below are a preliminary guide to aid the USPTO in collecting relevant information to assist in modifications, if any, to its current practices, and in the development of any possible rulemaking on this subject. The questions should not be taken as an indication that the USPTO has taken a position or is predisposed to any particular views. The USPTO welcomes comments from the public on any issues believed to be relevant to these topics, and is particularly interested in answers to the following questions:

Serial Petitions

1. Should the Office promulgate a rule with a case-specific analysis, such as generally outlined in General Plastic, Valve I, Valve II and their progeny, for deciding whether to institute a petition on claims that have previously been challenged in another petition?

2. Alternatively, in deciding whether to institute a petition, should the Office (a) altogether disregard whether the claims have previously been challenged in another petition, or (b) altogether decline to institute if the claims have previously been challenged in another petition?

Parallel Petitions

3. Should the Office promulgate a rule with a case-specific analysis, such as generally outlined in the Consolidated Trial Practice Guide, for deciding whether to institute more than one petition filed at or about the same time on the same patent?

4. Alternatively, in deciding whether to institute more than one petition filed at or about the same time on the same patent, should the Office (a) altogether disregard the number of petitions filed, or (b) altogether decline to institute on more than one petition?

Proceedings in Other Tribunals

5. Should the Office promulgate a rule with a case-specific analysis, such as generally outlined in Fintiv and its progeny, for deciding whether to institute a petition on a patent that is or has been subject to other proceedings in a U.S. district court or the ITC?

6. Alternatively, in deciding whether to institute a petition on a patent that is or has been subject to other proceedings in district court or the ITC, should the Office (a) altogether disregard such other proceedings, or (b) altogether decline to institute if the patent that is or has been subject to such other proceedings, unless the district court or the ITC has indicated that it will stay the action?

Other Considerations

7. Whether or not the Office promulgates rules on these issues, are there any other modifications the Office should make in its approach to serial and parallel AIA petitions, proceedings in other tribunals, or other use of discretion in deciding whether to institute an AIA trial?

Patent Law Moot Court

This semester I’m holding a moot-court again for my patent law class. We’re suing the recent decision in SynKloud v. HP, and taking an appeal from that decision.  Oral arguments will be online because of COVID issues.

I have a couple of questions:

  1. Call for Judging: If you are an Attorney involved in the practice of patent law, would you be willing to judge? (2-3 hours in the afternoon on Tuesday 11/17 or the Final Round, Wednesday 11/18). (Email me: dcrouch@patentlyo.com).
  2. Setup: Should the setup include VIDEO or only AUDIO? I believe that the appellate courts have been using audio-only, but video feels better to me. Thoughts?

 

Patent Eligibility of Claims Directed to Printed Matter

by Dennis Crouch

C R Bard Inc. v. AngioDynamics, Inc., No. 19-1756 (Fed. Cir. 2020) (Opinion by Judge Reyna, joined by Judges Schall and Stoll).

= = = =

Important: The court in this case particularly holds that “a claim may be found patent ineligible under § 101 on the grounds that it is directed solely to non-functional printed matter and the claim contains no additional inventive concept.”

= = = =

Question: How does the printed-matter-doctrine apply to letters that can only be read using an X-ray?

Answer: It is still printed matter; the limitations are given no patentable weight; and might render the whole claim ineligible.

= = = =

The invention in this case was prompted by a 2005 FDA labelling requirement for IV ports capable of handling fluids “power injected” directly into a patient’s veins.  (Most IV ports are designed for low-pressure gravity flow).  Bard’s IV ports were apparently already designed for use in power-injection, but not fully labelled.

More than Skin Deep: The problem with labelling is that the ports are under the skin, and so are not susceptible to a written label.  Bard’s solution: “a radiographic marker in the form of the letters ‘CT’ etched in titanium foil on the device.”   The radiomarker would then be seen on a pre-treatment “scout scan.”  The products also include shapes palpable through the skin, although that feature is not required in the claims:

providing an access port including … a radiographic feature indicating that the access port is suitable for flowing fluid at a rate of at least 1 milliliter per second through the access port …

identifying the access port as being suitable for flowing fluid at a rate of at least 1 milliliter per second through the access port via the image of the radiographic feature of the access port …

Claim 8 of US8805478.  In essence, Bard wants to be the only company that sells ports with the CT radiographic marker.

In 2015, Bard sued AngioDynamics for infringement and the case went to trial before a jury. But, the jury never got to deliberate.  After Bard presented its case-in-chief the court terminated the trial and granted JMOL (directed verdict) for the defendant — finding particularly: no infringement, no willful infringement, and that the claims are invalid as directed ineligible subject matter (printed matter) and also not inventive. The district court explained:

Fundamentally, after listening to the evidence presented to the jury and considering the evidence for the previous motions for summary judgment, the Court finds this patent is about labeling, not invention and not technology.

C R Bard Inc. v. AngioDynamics Inc., 382 F. Supp. 3d 332 (D. Del. 2019).

Printed Matter Doctrine: Under Praxair and other cases, the Federal Circuit has expanded the printed matter doctrine to “encompass[] any information claimed for its communicative content.” Printed matter can be patent eligible it is functional rather than merely communicating about the invention.

Here, the court found that the marker is on the port as a label precisely for the purpose of informing others about the functionality of the product.

Indeed, as early as the 1930s, our predecessor court recognized that the mere marking of products, such as meat and wooden boards, with information concerning the product, does not create a functional relationship between the printed information and the substrate. See In re McKee, 75 F.2d 991 (CCPA 1935); In re Johns, 70 F.2d 913 (CCPA 1934); In re Bruce, 56 F.2d 673 (CCPA 1932).

Slip Op.

Printed Matter and Eligibility: So we have claimed printed matter what next?:  One answer is that portion of the claim is “not entitled to patentable weight.”  The second question though is weather the entire claim fails under Alice?

Although the underlying rationale of the printed matter doctrine lies in the requirements of subject matter eligibility under § 101, our case law has typically applied the doctrine to hold that specific limitations of a claim are not entitled to patentable weight for purposes of novelty under § 102 and non-obviousness under § 103.

Slip Op.

Although the court has traditionally not applied eligibility-doctrine to printed-matter, the court here notes that prior precedent “did we foreclose the possibility that an entire claim could be found patent ineligible when the claim as a whole is directed to printed matter.” Slip Op.

We therefore hold that a claim may be found patent ineligible under § 101 on the grounds that it is directed solely to non-functional printed matter and the claim contains no additional inventive concept.

Id. On the merits of this case, the court found that Step-Two of Alice (lack of “something more”) was not clear enough for a directed verdict summary judgment:

AngioDynamics’s evidence is not sufficient to establish as a matter of law, at Alice step two, that the use of a radiographic marker, in the “ordered combination” of elements claimed, was not an inventive concept.  Even if the prior art asserted by AngioDynamics demonstrated that it would have been obvious to combine radiographic marking with the other claim elements, that evidence does not establish that radiographic marking was routine and conventional under Alice step two.

Id.  A confusing aspect of the decision is that it identified its judgment on Section 101 as a “reversal”, but really looks more like a vacatur.

= = = =

What is the impact of a claim term being “not entitled to patentable weight.”  Here, the court narrowly defined the printed matter as “the information that the claimed access ports are suitable for [power] injection.”  The court still gave weight to the requirement of a “radiographic marker.” Thus, if you scroll up to the two claim-terms that I copied, it appears that the first term (“providing … a radiographic feature”) is given patentable weight while the second term (acting on information provided by the feature) is not.  The district court gave neither patentable weight. On appeal the court also vacated on anticipation.

On remand there will be a new trial on infringement and validity, apparently including aspects of Alice Step 2.

Federal Circuit Usurps Judge Albright’s Judicial Power

by Dennis Crouch

In re Apple (Fed. Cir. 2020)

The Federal Circuit has granted Apple’s petition for writ of mandamus and ordered the infringement lawsuit against the tech-giant be moved from W.D. Texas (Waco) to N.D. Cal. — finding that the company’s convenience is paramount.  The majority opinion was written by Chief Judge Prost and joined by Judge Hughes.  Judge Moore wrote in dissent.  Judge Albright is the W.D. Tex. Judge who had refused to transfer the case.

28 U.S.C. § 1404(a) (partially) codified the common law doctrine of forum non conveniens. The statute:

(a) For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.

28 U.S.C. § 1404(a). The statute provides the original district court with discretionary authority to transfer a case to another district upon a showing that a different venue is “clearly more convenient.”   Although that abuse-of-discretion might be reviewed on appeal after final-judgment in a case, the error would probably be seen as harmless by that point. (Court’s don’t order new trials on convenience grounds unless they actually and meaningfully impacted the trial.) Thus, in a number of cases the Federal Circuit has granted mandamus on § 1404(a) issues.  Still, the approach is controversial because (1) district courts are given substantial deference regarding their 1404(a) determinations; and (2) mandamus is such an extraordinary writ.

Writ of mandamus is “an extraordinary remedy available [only] to correct a clear abuse of discretion or usurpation of judicial power.” Slip. Op. Note here that the standard of “clear abuse of discretion” goes beyond ordinary “abuse of discretion.”  As Judge Moore wrote in dissent: “there is no more deferential standard of review than clear abuse of discretion.”  The appellate panel found that high standard met.

In my experience, § 1404(a) arguments have become highly-formal and fairly divorced from the “interest of justice” command found in the statute. The majority opinion here nitpicks its way through Judge Albright’s case-management style and opinion in a way that goes beyond even typical de novo review of claim construction on an issue that is traditionally fully within the district court’s discretion. In particular, the majority appears to take real issue with Judge Albright’s express and actual focus on moving his docket forward quickly and efficiently.

As you might expect, the dissent is more interesting. Judge Moore:

Our mandamus jurisdiction is not an invitation to exercise de novo dominion, as the majority does here, over the district court’s individual fact findings and the balancing determination that Congress has committed “to the sound discretion of the trial court.” Nor is it an invitation for us to criticize the way our district court colleagues generally manage their dockets, or as the majority puts it, “barrel” ahead on the merits in any given case. . . .

Under the proper standard of review, I believe the only patently erroneous result here is the one reached by the majority. I dissent from that result. Though the standard of review is not de novo, because the majority has approached the case as though it is, let me add—I agree with the district court and I would have denied transfer de novo.

Slip Op. (Dissent by Judge Moore).  The majority responds in kind:

To the contrary, and as we have explained throughout the order, we properly reviewed the district court’s order only for reliance on clearly erroneous fact findings, erroneous conclusions of law, or misapplications of law to fact. District courts have no discretion to make these kinds of
errors. And when such errors accumulate to produce a patently erroneous result, as they have here, we are obliged to act

Id. (Majority by Chief Judge Prost).  The majority spends pages walking through the various “misapplications of law to fact” by the District Court.  While none of the errors were dispositive, their collective weight was sufficient for the majority to find that the only answer is to order transfer.

Section 1404(a) is simply written, asking courts to consider “convenience of parties and witnesses, in the interest of justice.”  However, the 5th Circuit has turned that open approach into an eight factor analysis:

  • Private Factors
    1. Private: Relative ease to access to sources of proof;
    2. Private: Availability (and need for) compulsory process to secure witness attendance;
    3. Private: Cost of attendance for willing witnesses; and
    4. Private: Other practical considerations associated with and “easy, expeditious and inexpensive” trial.
  • Public Factors
    1. Public: Administrative difficulties associated with court congestion;
    2. Public: Local interest in having a case decided ‘at home’;
    3. Public: Familiarity of the forum with the law that will govern the case; and
    4. Public: Avoidance of potential conflict-of-law problems.

In re Volkswagen of Am., Inc., 545 F.3d 304 (5th Cir. 2008) (en banc)  Here, we’re using 5th circuit law since this is a procedural issue, not a patent-law issue. In this opinion, the Federal Circuit appears to add additional tricks-and-traps to the analysis.

Again the dissent:

[The district court] ultimately found … that Uniloc chose a venue in the district in which Apple maintains a large campus employing thousands of people, where one of the accused products is manufactured, where third-party information and potential witnesses are located, and which is convenient for potential witnesses and sources of proof and which would not impose a significant hardship on Apple.

Id. This is the baseline for me. If none of the convenience factors are determinative then there is no clear abuse of discretion or patent travesty of justice.

= = = =

Section 1404(a) as a Pretext: The obvious background to this case is that Apple believes it will have a better outcome of the case, and with more significant delays, if it is assigned to a judge in the Northern District of California rather than Judge Albright. The convenience argument is simply a pretext on that front.

= = = =

Finally, we should all note that the convenient-venue analysis is entirely different than the proper-venue analysis that does not provide discretion in any way.  Apple agrees that venue is proper in W.D. Tex. If you remember, Apple previously closed its Apple Store in Plano to avoid proper venue in E.D. Tex. but has thousands of employees in W.D. Tex. and is in the midst of building a $1 billion campus in Austin (where this trial likely would have been held).

Analogous Art: What is the “Particular Problem”?

Donner Technology, LLC v. Pro Stage Gear, LLC, App. No. 20-1104 (Fed. Cir. 2020)

The PTAB sided with the IPR patentee — finding the cited prior art had not been proven “analogous” On appeal, the Federal Circuit has vacated and remanded for lack of substantial evidence to support that conclusion.

The Analogous Art Test: Federal Circuit obviousness doctrine begins with prior art as defined by 35 U.S.C. 102, but then limits the scope of potential references with the “analogous art” test.  The test appears to have its origin in Judge Giles Sutherland Rich’s 1966 decision of In re Winslow, 365 F.2d 1017, 1020 (Cust. & Pat. App. 1966) (“Section 103 requires us to presume full knowledge by the inventor of the prior art in the field of his endeavor.”).  There are two potential ways of showing that a reference is analogous. The first option follows directly from Winslow, asking “whether the art is from the same field of endeavor, regardless of the problem addressed.”  In re Bigio, 381 F.3d 1320, 1325 (Fed. Cir. 2004).  The alternative asks “whether the reference … is reasonably pertinent to the particular problem with which the inventor is involved.” Id.  If either prong is met (a factual question), then the reference is deemed analogous and available for use in an obviousness argument.  I believe a fair reading of KSR further expands the doctrine, but the courts have not gone there.

In the same way that a pretextual police stop opens the door to more invasive searches, the analogous arts test also opens the door to more extensive obviousness analysis. In particular, once the reference is admitted as analogous art, any aspect of the reference (including non-analogous aspects) can be used.

Here, Pro Stage Gear’s US 6,459,023 is directed to a guitar effects pedalboard with space for mounting guitar pedals and running cables.  The image above comes from the patent and shows the patented mounting-board with various controls attached.

Donner petitioned for IPR citing US 3,504,311 (along with several other references).  The ‘311 patent has nothing to do with guitars or guitar pedals.  Rather, that patent is directed to electrical relays, including a support structure for holding a relay and wiring-channel space.

The PTAB found the ‘311 patent non-analogous.  On appeal, that judgment was vacated.  Although everyone recognized the patent came from a different field of endeavor, the fight was on the second-prong — whether it addressed the same-problem as the ‘023 inventors faced.

On appeal, the court first addresses the PTAB’s apparent failure to read the briefs:

The Board erroneously stated that Donner did ‘not put forth any argument’ [that the ‘311 patent addressed questions considered by] a pedalboard inventor. . . . “To the contrary, Donner submitted detailed expert testimony relevant to the inquiry. . . . Given the Board’s mistaken assertion to the contrary, it is unclear whether the Board meaningfully considered all of Donner’s arguments and evidence.”

On a more substantive push, the court found that the Board had improperly tied the patentee’s problem-to-be-solved to the field-of-endeavor without actually focusing on the true nature of the problem:

For instance, the Board at one point stated that the “purpose of the ’023 patent” is “to mount guitar effects on a pedal board.” But substantial evidence does not support that statement. As the
’023 patent readily discloses, guitar effects had already been mounted on a pedalboard. Thus, that could not possibly be a relevant purpose of the invention. Indeed, with respect to the analogous art inquiry, the relevant purposes of an invention are those relating to solving a problem.

Slip Op. In the end, the court remanded for reconsideration rather than offering a complete reversal:

Although we conclude that the Board applied the wrong standard and might have failed to analyze certain arguments and evidence, we do not further hold that “no reasonable fact finder could conclude, under the proper standard,” that Mullen is not analogous art. Accordingly, we leave this factual issue for the Board to resolve on remand.

Id.   This outcome appears correct since the question of analogous art is a question of fact.  What the court is really holding here is that substantial evidence did not support the PTAB’s factual conclusion.