Reverse Engineering Skittles

I really enjoy this video on reverse-engineering one of my childhood favorites – skittles. My view is that in most situations reverse engineering and other experimentation should be a permissible fair use despite the existence of patents.

Chart shows the percentage of issued utility patents that claim priority back to a prior U.S. patent application – either a prior non-provisional (via continuation, continuation-in-part, or divisional application) or to a provisional application. Data goes through May 31, 2018.

Corporate Duty to Disclose?

Query: Now that patent applications are being filed by “applicants” rather than the inventors themselves, will those applicants (i.e., corporate owners) now be bound by the duty of disclosure?

37 C.F.R. 1.56:

(a) . . . Each individual associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the Office, which includes a duty to disclose to the Office all information known to that individual to be material to patentability as defined in this section. . . .

(c) Individuals associated with the filing or prosecution of a patent application within the meaning of this section are:
(1) Each inventor named in the application;
(2) Each attorney or agent who prepares or prosecutes the application; and
(3) Every other person who is substantively involved in the preparation or prosecution of the application and who is associated with the inventor, the applicant, an assignee, or anyone to whom there is an obligation to assign the application.

If we are strictly following the rule, the basic question is whether a corporate owner counts as a “person” under (c)(3).

 

Guest Post: Fixing Patent Eligibility by Limiting Scope to Disclosed Embodiments

Guest Post by Benjamin C. Stasa, Shareholder, Brooks Kushman PC, Southfield, Michigan and David C. Berry, Director, Patent Procurement Clinic, Wayne State University Law School, Detroit, Michigan

The U.S. Supreme Court decisions in Alice[1] and Mayo[2], and subsequent attempts to apply those decisions, continue to create some uncertainty in the availability of patent protection for certain technical fields. Although recent guidance has somewhat clarified the issue, eligibility questions continue to vex practitioners, and reflect an all-or-nothing approach to patentability. As a result, commentators and national intellectual property law associations have proposed amending 35 U.S.C. §101. These proposals range from eliminating § 101[3] to amending the Patent Act to codify a broader definition of eligible subject matter.[4]

We offer an alternative approach for amending § 101 to allow some range of patentability for inventions directed to judicially-recognized eligibility exceptions. Rather than attempting to redefine the line between eligible and ineligible subject matter (a revision that preserves the current all-or-nothing approach), we propose amending §101 to implement disclosure-based limits on the scope of claims directed to judicially-recognized exceptions (abstract ideas, laws of nature, and natural phenomena).

Section 112(f) as a Model

Preemption is a common concern raised in eligibility cases. For example, claims directed to a law of nature should not be so broad as to preempt subsequent attempts by other researchers to develop other applications exploiting the law of nature. But preemption concerns may be addressed adequately by disclosure-based limits on claim scope, rather than by precluding patentability in toto. Furthermore, the Patent Act already contains a workable model for disclosure-based limits on claim scope: 35 U.S.C. §112(f).

Currently, if an applicant opts to rely on functional claim language, the claims are limited by the content of the applicant’s disclosure under § 112(f). Borrowing the same approach to limit claims directed to abstract ideas, laws of nature, or natural phenomena, § 101 could be adapted to prevent an applicant from claiming a judicially-recognized exception per se, while permitting claims essentially limited to specific embodiments disclosed in the specification.

Proposed Amendment to Section 101

101. Inventions patentable

(a) Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to subsection (b) and the conditions and requirements of this title.

(b) A claim directed to a judicially-recognized exception to subsection (a) hereof shall be construed to cover the structures, materials, or acts described in the specification and equivalents thereof.

Application

Under § 101 as amended, an examiner that considers a claim to be directed to a judicially-recognized exception would identify it as being subject to § 101(b) and point out the corresponding specific structures or processes disclosed in the specification to be covered by the claims, if any. The applicant could then attempt to refute the § 101(b) characterization through amendment or argument, or both, as is common practice under the current § 101 scheme. Alternatively, the applicant could acquiesce to the examiner’s characterization and possibly identify additional specific structures or processes disclosed in the specification to be covered by the claims. So limited, the claim would be eligible under § 101(b), and the disclosure would delimit claim scope for patentability and infringement.

Advantages

This proposed amendment would not affect an application for a process, machine, manufacture, or composition of matter that is not directed to a judicially-recognized exception to eligibility. On the other hand, claims directed to a law of nature or other judicially-recognized exception per se (claims without a corresponding disclosure of a specific working embodiment) would be indefinite under § 112(b) and thus not be patentable. The proposal improves predictability during patent prosecution, since most eligibility concerns will result in narrower claim scope, rather than the prospect of across-the-board ineligibility. Additionally, this proposed amendment preserves the central role of § 101 in governing eligibility, applies consistently across all fields of invention, and can be efficiently managed by the examining corps since they are already familiar with the operation of § 112(f).

Conclusion

The evolving nature of technology makes eligible/ineligible line-drawing difficult. Rather than just focusing on that boundary, attention can be directed to the consequences of stepping over that line. The proposed amendment of § 101 would clarify the scope of claims directed to a judicially-recognized exception, rather than simply rejecting those claims as wholly unpatentable.

– – – – –

[1] Alice Corp. v. CLS Bank International, 573 U.S. __, 134 S. Ct. 2347 (2014).

[2] Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. ___, 132 S. Ct. 1289 (2012).

[3] See https://www.law360.com/articles/783604/kappos-calls-for-abolition-of-section-101-of-patent-act.

[4] See http://admin.aipla.org/resources2/reports/2017AIPLADirect/Documents/AIPLA%20Report%20on%20101%20Reform-5-12-17.pdf (AIPLA proposal); https://www.americanbar.org/content/dam/aba/administrative/intellectual_property_law/advocacy/advocacy-20170328-comments.authcheckdam.pdf (ABA IPL Section proposal).

Citing to Published Applications

by Dennis Crouch

The chart below provides one view of prior art citations in utility patents over the past decade or so (Jan 2005 – May 2018). I divided up cited references into three broad categories: Top) Non-Patent Literature; Mid) US Patent Application Publications; and Low) All other US & Foreign Patent Documents. The chart shows per-patent averages for each of these categories grouped by patent issue year.

There are two easy descriptive conclusions to draw from the cart: (1) Overall, the average number of cited references has continued to rise during this time period; and (2) while each category has grown, most of the growth is in the citation of US patent applications.

The USPTO only began publishing applications in 2001 and so growth was expected. Published patent applications are especially useful because their timing of publication (18 months after filing) corresponds well with the prosecution timeline (First action at approximately 15 months).  For patent applications that never issue as patents, the publication does more than simply shift-back timing — those patent documents would have never entered the public domain.  I have not yet gone back to research what percentage of cited published applications fall into this second category of published-but-never-patented.

For 2018 (through May 31), the prize-winner is APPLE’s U.S. Patent No. 9,986,419 with 6,701 citations (six thousand seven hundred and one)! The patent claims “social reminders:”

Claim 31. A method comprising:

at an electronic device:

receiving input representing user instruction to provide a reminder in the future, the user instruction identifying an entity; and

after receiving the input:

detecting, by a microphone of the electronic device, an audio input;

identifying, in the detected audio input, a voice corresponding to the entity; and

in response to identifying the voice, providing the reminder.

The image above shows the way it would work. User asks iPhone to “remind me to ask Joe when I see him;” When iPhone hears Joe’s voice nearby, it provides the reminder to User.  I’ll note here that the patent was issued without rejection.

Coming in a close 2nd and 3rd in terms of most-prior-art-citations is Apple’s U.S. Patent No. 9,966060 (User-Adapted Speech Synthesis and Recognition); and Apple’s U.S. Patent No. 9,865,248 (Text to Speech) — both of which have 6,000+ cited references. (In fact of the patents issued thus far in 2018, the 8 with the most cited references are all Apple patents.

I called Apple the “prize winner” since they submitted more prior art references than any other entity or inventor. The problem – of course – is that it is impossible for the examiner to consider all of these references, And I am willing to bet that neither the patent attorney nor the inventors read all of these.  In an article I highlighted last year, Prof. Jeffrey Kuhn termed any patent with 250+ citations as “impossible” — because the examiner simply would not have time to review those citations before making a decision on patentability. Kuhn wrote that a “small proportion of patents [are] flooding the patent office with an overwhelming number of references.”

Rendering Patent Unenforceable Due to Litigation Misconduct

Regeneron Pharmaceuticals, Inc., Petitioner v. Merus N.V., SCT Docket No. No. 17-1616 (On petition for writ of certiorari 2018).

Question presented:

Whether a patent right can be fully extinguished based on misconduct committed by the patentee’s counsel during federal district court litigation to enforce the patent right.

Petition. The patentee here argues that inequitable conduct should be limited to situations involving “misconduct before the Patent Office in obtaining a patent.”

In this case, however, a divided panel of the Federal Circuit dramatically expanded the inequitable conduct doctrine. Without ever finding that petitioner intended to deceive the Patent Office, the panel held petitioner’s patent unenforceable under the inequitable conduct doctrine based on purported misconduct by trial attorneys in district court litigation, years after the patent was granted.

When I originally wrote about the decision, I stated that “[t]he case may be a wake-up-call for some litigators who will read through the list of misconduct and see it as only business-as-usual.”

Regeneron v. Merus: En Banc Chances Rise

Inequitable Conduct and Regeneron Pharmaceuticals, Inc. v. Merus N.V.: Trouble Waiting to Happen

 

Judge Lourie and Newman: Call for Congress to Act

by Dennis Crouch

As part of the court’s en banc denial in Berkheimer v. Hp Inc., 2018 U.S. App. LEXIS 14388 (Fed. Cir. 2018), Judges Lourie and Newman joined together in an interesting concurring opinion that argues for some higher power to revisit the doctrine of patent eligibility to provide clarification and policy guidance.  The opinion is republished below:

Lourie, Circuit Judge, with whom Newman, Circuit Judge, joins, concurring in the denial of the petition for rehearing en banc.

I concur in the court’s declining to rehear this case en banc. There is plausibility to the panel holding that there are fact issues potentially involved in this case concerning the abstract idea exception to patent eligibility. And the panel, and the court, are bound to follow the script that the Supreme Court has written for us in § 101 cases.

However, I believe the law needs clarification by higher authority, perhaps by Congress, to work its way out of what so many in the innovation field consider are § 101 problems. Individual cases, whether heard by this court or the Supreme Court, are imperfect vehicles for enunciating broad principles because they are limited to the facts presented. Section 101 issues certainly require attention beyond the power of this court.

We started from the statute that provides for patents on “any new and useful process, machine, manufacture, or composition of matter.” 35 U.S.C. § 101. The Supreme Court put a gloss on this provision by excluding laws of nature, natural phenomena, and abstract ideas. Le Roy v. Tatham, 55 U.S. (14 How.) 156, 174-75 (1852) (“[A] principle is not patentable. A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right.”); Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980) (“The laws of nature, physical phenomena, and abstract ideas have been held not patentable.”). So far, so good. Laws of nature (Ohm’s Law, Boyle’s Law, the equivalence of matter and energy), properly construed, should not be eligible for patent. Nor should natural phenomena (lightning, earthquakes, rain, gravity, sunlight) or natural products, per se (blood, brain, skin). Of course, the latter are also unpatentable as lacking novelty under § 102.

But it’s in the details that problems and uncertainties have arisen. The Court held in Mayo Collaborative Services v. Prometheus Laboratories, Inc., that the claim at issue “set forth laws of nature” and was ineligible under § 101 as “a drafting effort designed to monopolize the law of nature itself.” 566 U.S. 66, 77 (2012). That claim recited “[a] method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising” administering a drug and then measuring the level of a metabolite of the drug. Id. at 74-75 (quoting U.S. Patent 6,355,623).

The Supreme Court whittled away at the § 101 statute in Mayo by analyzing abstract ideas and natural phenomena with a two-step test, including looking for an “inventive concept” at step two, thereby bringing aspects of §§ 102 and 103 into the eligibility analysis. Id. at 72-73, 90. The decision we now decide not to rehear en banc holds that step two of the two-step analysis may involve the type of fact-finding that underlies §§ 102 and 103, further complicating what used to be a fairly simple analysis of patent eligibility under § 101. We now are interpreting what began, when it rarely arose, as a simple § 101 analysis, as a complicated multiple-step consideration of inventiveness (“something more”), with the result that an increasing amount of inventive research is no longer subject to patent. For example, because the Mayo analysis forecloses identifying any “inventive concept” in the discovery of natural phenomena, we have held as ineligible subject matter even meritorious inventions that “combined and utilized man-made tools of biotechnology in a way that revolutionized prenatal care.” Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015) (internal quotation marks omitted).

The case before us involves the abstract idea exception to the statute. Abstract ideas indeed should not be subject to patent. They are products of the mind, mental steps, not capable of being controlled by others, regardless what a statute or patent claim might say. Gottschalk v. Benson, 409 U.S. 63, 67 (1972) (“[M]ental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work.”). No one should be inhibited from thinking by a patent. See Letter from Thomas Jefferson to Isaac McPherson (Aug. 13, 1813) (“[I]f nature has made any one thing less susceptible, than all others, of exclusive property, it is the action of the thinking power called an Idea.”). Thus, many brilliant and unconventional ideas must be beyond patenting simply because they are “only” ideas, which cannot be monopolized. Moreover such a patent would be unenforceable. Who knows what people are thinking?

But why should there be a step two in an abstract idea analysis at all? If a method is entirely abstract, is it no less abstract because it contains an inventive step? And, if a claim recites “something more,” an “inventive” physical or technological step, it is not an abstract idea, and can be examined under established patentability provisions such as §§ 102 and 103. Step two’s prohibition on identifying the something more from “computer functions [that] are ‘well-understood, routine, conventional activit[ies]’ previously known to the industry,” Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2359 (2014) (alteration in original) (quoting Mayo, 566 U.S. at 73), is essentially a §§ 102 and 103 inquiry. Section 101 does not need a two-step analysis to determine whether an idea is abstract.

I therefore believe that § 101 requires further authoritative treatment. Thinking further concerning § 101, but beyond these cases, steps that utilize natural processes, as all mechanical, chemical, and biological steps do, should be patent-eligible, provided they meet the other tests of the statute, including novelty, nonobviousness, and written description. A claim to a natural process itself should not be patentable, not least because it lacks novelty, but also because natural processes should be available to all. But claims to using such processes should not be barred at the threshold of a patentability analysis by being considered natural laws, as a method that utilizes a natural law is not itself a natural law.

The Supreme Court also held in Association for Molecular Pathology v. Myriad Genetics, Inc., that claims to isolated natural products were ineligible for claiming “naturally occurring phenomena.” 569 U.S. 576, 590 (2013). The Court concluded that those claims “are not patent eligible simply because they have been isolated from the surrounding genetic material.” Id. at 596.

However, finding, isolating, and purifying such products are genuine acts of inventiveness, which should be incentivized and rewarded by patents. We are all aware of the need for new antibiotics because bacteria have become resistant to our existing products. Nature, including soil and plants, is a fertile possible source of new antibiotics, but there will be much scientific work to be done to find or discover, isolate, and purify any such products before they can be useful to us. Industry should not be deprived of the incentive to develop such products that a patent creates. But, while they are part of the same patent-eligibility problems we face, these specific issues are not in the cases before us.

Accordingly, I concur in the decision of the court not to rehear this § 101 case en banc. Even if it was decided wrongly, which I doubt, it would not work us out of the current § 101 dilemma. In fact, it digs the hole deeper by further complicating the § 101 analysis. Resolution of patent-eligibility issues requires higher intervention, hopefully with ideas reflective of the best thinking that can be brought to bear on the subject.

Berkheimer v. Hp Inc., 2018 U.S. App. LEXIS 14388 (Fed. Cir. 2018) (concurring opinion).

The call for higher authority to change the law is interesting here.

I believe the law needs clarification by higher authority, perhaps by Congress, to work its way out of what so many in the innovation field consider are § 101 problems. Individual cases, whether heard by this court or the Supreme Court, are imperfect vehicles for enunciating broad principles because they are limited to the facts presented. Section 101 issues certainly require attention beyond the power of this court.

For a federal appellate court, there are typically two such “higher authority” mechanisms for altering the law: (1) Supreme Court reinterpretations and (2) changes in the law itself.  In the opinion, Judge Lourie rules out a reinterpretation by the Supreme Court as insufficient — thus leaving us with changing of the law.

Typically, the Patent Act is modified through typical Congressional legislative process. I wonder why Judge Lourie did not then simply call for Congressional action but rather called on action by “higher authority, perhaps by Congress.” An intriguing question here is what other higher authority might Lourie be calling upon?  One potential is not for Congress to reexamine the law, but rather to provide the USPTO with rulemaking authority to reconsider the law of eligibility.

Factual Underpinnings of Eligibility: Federal Circuit Denies Rehearing in Berkheimer / Aatrix

By Dennis Crouch

In Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018), Judge Moore explained that, although “patent eligibility is ultimately a question of law,” it may require an analysis of “underlying factual questions.” In particular, the court in that case ruled that “[w]hether something is well-understood, routine, and conventional to a skilled artisan at the time of the patent is a factual determination.”  In its petition for en banc rehearing, HP asked two questions: (1) whether eligibility has factual underpinnings; and (2) the role of the “well-understood” conclusion in the eligibility analysis:

  1. Is the threshold inquiry of patent eligibility under 35 U.S.C. § 101 a
    question of law without underlying factual issues that might prevent summary
    judgment?
  2. Is the appropriate inquiry under Alice’s step 2 whether the claims
    transform an abstract idea into a patent-eligible application, or merely
    “whether the invention describes well-understood, routine, and conventional
    activities”?

Similarly, in the parallel en banc request following Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121 (Fed. Cir. 2018), the patent challenger asked the following question:

  1. Is the threshold inquiry of patent-eligibility under 35 U.S.C. § 101 a question
    of law without underlying factual issues based on complaint allegations pled to
    avoid dismissal under Fed. R. Civ. P. 12(b)(6)?

Now, the Federal Circuit has denied both petitions with opinions by Judges Moore, Lourie, and Reyna.  The exact vote was not released, but at least 7 judges voted to deny.

Judge Moore:

Berkheimer and Aatrix stand for the unremarkable proposition that whether a claim element or combination of elements would have been well-understood, routine, and conventional to a skilled artisan in the relevant field at a particular point in time is a question of fact.

Judge Lourie:

I believe the law needs clarification by higher authority, perhaps by Congress, to work its way out of what so many in the innovation field consider are § 101 problems.

Judge Reyna:

The court’s vote to deny en banc review of Aatrix and Berkheimer is a declaration that nothing has changed in our precedent on patent subject matter eligibility under 35 U.S.C § 101. We are encouraged to move along; there’s nothing to see here. I disagree. I believe that, at minimum, the two cases present questions of exceptional importance that this court should address and not avoid. [Citing Patently-O’s description of the impact of these decisions]

Clearly Judge Reyna is correct in this aspect of his analysis even if I disagree with his ultimate conclusion that eligibility is purely a question of law.

I would look for Supreme Court petitions in both cases framed along the lines of: pro-patentee Federal Circuit judges seeking to undermine consistent Supreme Court precedent most recently restated in Alice and Mayo.

 

Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Copyrighting Software: Case Likely Heading to Supreme Court

by Dennis Crouch

Google v. Oracle (Fed. Cir. 2018)

Google has now filed an en banc rehearing petition in its dispute with Oracle over copyrightability of the naming system for an application programming interface — namely Oracle’s Java API that Google copied.  [Oracle Am. v. Google LLC Rehearing Petition]

The basic issue here stems from Google’s program interface for Android App development.  Rather than creating its own set of functions and methods, Google decided to mimic the method-calls of Java.  At the time, Google’s third-party app marketplace was lagging far behind Apple’s, and the Java-API mimic was seen as a strategy to facilitate more rapid development of apps since the programming language was already so popular.  I previously explained:

As an example, Google used the Java method header “java.lang.Math.max(a,b).”  When called, the “max” function returns the greater of the two inputs.  In Android’s API, Google copied a set of 37 different Java “packages” (such as Math) that each contain many classes and method calls (such as “max()”).  Overall, Google copied the header structure for more than six-thousand methods.

Although Java was available for licensing, Google refused. Although Java’s originator Sun Microsystems was known for its lack of IP enforcement, that all changed when Oracle acquired the company.

In the most recent iteration of the case, the jury found that Google’s use was a “fair use” and thus not an infringement.  On appeal, however, the Federal Circuit reversed — finding the API the proper subject of copyright protection and not subject to a fair use defense in this case.  As Jason Rantanan wrote: “the court’s analysis all but says (expressly so!) that fair use can never apply.”

In its petition, Google raises both the underlying copyright challenge and the fair use question. Questions:

  1. Whether application programming interface (“API”) declarations—which are designed to invoke pre-written functions and methods of software—are systems or methods of operation and thus not entitled to copyright protection.
  2. Whether use of API declarations, but not implementing code, in a new and different context is protected by the fair-use doctrine.

The petition walks through a handful of copyright cases – explaining its position that the Federal Circuit’s position is “contrary to.”

  • Campbell v. Acuff-Rose Music, 510 U.S. 569 (1994) (on fair use, the transformation question is whether the work as a whole has been transformed — not just a focus on the copied portions);
  • Harper & Row Publishers v. Nation Enters., 471 U.S. 539 (1985) (fair use is a mixed question of fact and law – not simply a question of law);
  • Sony Computer Entm’t v. Connectix Corp., 203 F.3d 596 (9th Cir. 2000) (functional requirements for comparability are not protected by copyright; protection is also limited by fair use);
  • Lotus Dev. Corp. v. Borland Int’l, 49 F.3d 807 (1st Cir. 1995), aff’d by an equally divided court, 516 U.S. 233 (1996) (menu hierarchy not entitled to copyright protection);
  • Sega Enters. v. Accolade, 977 F.2d 1510 (9th Cir. 1992) (See Sony).

The issues here are fundamental and I expect are likely to rise up to the Supreme Court.

Petition: Is the government a person and can it infringe?

by Dennis Crouch

The America Invents Act (AIA) allows for a “person” to file a covered business method review (CBM) to challenge an issued patent.  See AIA Section 18 (because they it is a temporary program, the CBM provisions have not been codified in the United States Code).  In Return Mail v. USPS, Docket No. No. 17-1594 (Supreme Court 2018), the CBM petitioner was the U.S. Postal Service – i.e., the U.S. government, and the question on petition is whether the government counts as a “person” under the statute:

1. Whether the government is a “person” who may petition to institute review proceedings under the AIA.

(Petition for Writ of Certiorari).

A major portion of the argument here is that the statute generally treats the U.S. government differently — giving it sovereign immunity but for a limited remedy for government use under 28 U.S.C. 1498(a).  The argument here is that – if the Government isn’t subject to be treated as a person under the infringement statute section 271(a) (“whoever without authority . . .”), then it also shouldn’t receive the benefit of being treated as a person under the AIA Trial regime.

The second question presented in the petition focuses on the infringement charges limitation for CBM petitions.  Unlike IPR and PGR petitions, CBM petitions my only be filed if petitioners — the “person” (or its privy) — “has been sued for infringement of the [challenged] patent or has been charged with infringement under that patent.”  On this point, the petition explains that the government is immune from suit for patent infringement — and the section 1498 action is an eminent domain takings claim. As such, the 1498 action does not count as an “infringement” charge sufficient to permit CBM review. Thus, the second question:

2. Whether a section 1498(a) action for the eminent domain taking of a patent license by the government is a suit for “infringement” under the AIA.

The setup here is fairly limited because it is only focused on governmental use, but it is the type of questions likely to receive interest from the Supreme Court.  In its decision in the case, the Federal Circuit ruled (over a dissent) that a Section 1498 action counts as an infringement lawsuit for the purposes of the AIA and that the U.S. Government counts as a “person” under the statute — writing that “The AIA does not appear to use the term ‘person’ to exclude the government in other provisions.”

 

 

Is Ineligibility a Statutory Defense to Patent Infringement

Will Justice Gorsuch bite on the new petition in Integrated Tech. Sys. v. First Internet Bank of Ind., Supreme Court Docket No. 17-1590 (2018)?   Petitioner relies heavily on Patently-O writings from Prof. Hricik and myself for its argument that the lack of patent eligibility is not a statutory defense under 35 U.S.C. § 282.

The petition asks the following questions:

  1. Does 35 U.S.C. § 282 allow for challenges to a patent’s validity based on patent eligibility under 35 U.S.C. § 101?
  2. In addition, and in close alignment with the first question, is it proper to find patents invalid under 35 U.S.C. § 101 after full examination before the U.S. Patent and Trademark Office in response to 12(b)(6) challenges when they are presumed valid under 35 U.S.C. § 282?
  3. Is it proper to grant a Rule 12(b)(6) motion to dismiss when the record contains unrebutted factual evidence that the invention is patent-eligible under § 101?

[Case Docket]

The patents here cover systems and methods for person-to-person fund transfers — something like paypal but without any need for a funded account.  United States Patent Nos. 7,912,786 (“the ‘786 patent”), 8,131,643 (“the ‘643 patent”), 8,321,347 (“the ‘643 patent”), and 8,620,809 (“the ‘809 patent”).

Claim 11 of the ‘809 patent reads as follows:

11. A method for automatically transferring funds, comprising:

providing a computer configured to provide a person to person funds transfer system; providing for the computer system to be accessible to a communication medium device that is controlled by a sender, said computer system being accessed by the communication medium device to receive information data related to a debit account of the sender and information data related to a receiving debit accessible escrow account;

receiving account information data and transfer authorization data by the computer system; processing the data in automated modes by the computer system;

transferring funds from the debit account of the sender to the receiving debit-accessible escrow account without requiring a pre-established relationship between the debit account of the sender and the receiving debit-accessible escrow account; and

repeating the above steps by the computer system, thus effecting additional transfers between different sending debit accounts and different receiving debit-accessible escrow accounts to cause fund transfers from the different sending debit accounts to the different receiving debit-accessible escrow accounts.

Sorting Cases: Applying Collateral Estoppel Mid-Stream

by Dennis Crouch

XY, LLC v. Trans Ova Genetics, L.C. (Fed. Cir. 2018).

The split decision here reveals an important dispute between Federal Circuit judges over the impact of AIA trials on pending litigation.  In this case, XY’s six patents in suit relate to the sorting of semen by gender (used for farm animal breeding).  My discussion below focuses on only one of the patents that was first enforced by the district court but later cancelled by a PTAB action.

Background: After their patent license deal went bust, XY sued Trans Ova for infringement and a jury found that the patents were not invalid and also willfully infringed. (The district court also decided contract and antitrust issues).  Following final judgment from the district court siding with the patentee, the Patent Trial and Appeal Board (PTAB) issued its final judgment finding two of the aforementioned infringed claims to be unpatentable. Claims 1 and 3 of U.S. Patent No. 7,195,920.  That PTAB decision was affirmed today without opinion by the same 3-judge panel of Judges Chen, Dyk, and Newman.

On appeal, one question for the court was the impact of the PTAB and Federal Circuit decision invalidating the patent.  The court found it moot — holding that the parallel Federal Circuit invalidation must be given immediate issue preclusive effect. The court writes:

Collateral Estoppel: As a threshold matter, we need not address Trans Ova’s invalidity arguments as to the Freezing Patent claims in view of our affirmance today in a separate appeal invalidating these same claims, which collaterally estops XY from asserting the patent in any further proceedings. . . .

That affirmance renders final a judgment on the invalidity of the Freezing Patent, and has an immediate issue preclusive effect on any pending or co-pending actions involving the patent. . . .

We do not find, as the Dissent states, that “in the event of conflict the administrative agency’s decision ‘moots’ the district court’s decision.” Dissent at 6. Rather, we find that an affirmance of an invalidity finding, whether from a district court or the Board, has a collateral estoppel effect on all pending or co-pending actions. This court has long applied the Supreme Court’s holding in Blonder-Tongue to apply collateral estoppel in mooting pending district court findings of no invalidity based on intervening final decisions of patent invalidity.

Final Decision vs Affirmance of Final Decision: Note here that the final paragraph is somewhat confusing because it appears to state two separate principles – (1) that affirmance of an invalidity finding [by the Federal Circuit] creates collateral estoppel on the issue of validity and also (2) that a final decision of patent invalidity moots pending district court findings of no invalidity.  This begs the question of what would be the proper result if this case had been decided after the IPR decision cancelling the claims but before deciding the outcome of this appeal.  When the court recognizes the potential issue – I expect that in most situations it would coordinate the appeals.

Preserving the Issue for Appeal: In this case, the defendant appealed its invalidity loss — one question is whether the that appeal was necessary to overturn the infringement verdict.  In dicta, the court suggests here that the justification for the decision is that “a defendant should not have to continue defending a suit for infringement of an adjudged invalid patent.”  (Internal quotes of excluded).  For this point, however, the court relied only upon statements from prior non-precedential Federal Circuit decisions. See U.S. Ethernet Innovations, LLC v. Tex. Instruments Inc., 645 F. App’x 1026, 1028–30 (Fed. Cir. 2016) and Translogic Tech., Inc. v. Hitachi, Ltd., 250 F. App’x 988 (Fed. Cir. 2007).

The majority opinion was written by Judge Chen and joined by Judge Dyk.

Writing in partial dissent, Judge Newman argues that collateral estoppel should not apply in this situation.  The dissent explains that collateral estoppel is not automatic, is confused by the various legal standards at play here, should be handled with caution when asserted by a non-mutual party (the defendant here was not part of the IPR), should be applied with caution when operating between an administrative agency and the courts, and certainly should not be decided sua sponte – without request from either party, briefing, or arguments on the subject. “Collateral estoppel is not subject to automatic imposition without affording any opportunity for party discussion.”

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Hyatt v. USPTO: Mandamus Action Requesting an Impartial Administrative Review

Gilbert P. Hyatt v. USPTO and Iancu (E.D. Va. 2018) (Hyatt – Mandamus Action Complaint)

Hyatt has filed a new mandamus action against the USPTO as the next step in the 40+ year battle over his microcomputer patent applications. Hyatt has over 300 patents applications pending before the USPTO.

According to the complaint, “Most of Mr. Hyatt’s applications have been pending for over 20 years, with about a dozen pending for over 35 years and three applications pending for over 40 years.”  The complaint details:

[In the 1990’s then Commissioner Bruce] Lehman and other PTO officials falsely branded Mr. Hyatt a ‘submariner’ and unlawfully decided that the PTO would never issue him another patent. . . . Having made that decision, the PTO proceeded to carry it out. It acted almost immediately to withdraw from issuance four patents either issued or in the final stages of being issued to Mr. Hyatt—actions in which the PTO has acknowledged the unusual participation of Commissioner Lehman and other senior PTO officials. It applied unlawful secret procedures (since acknowledged  by the PTO) to block the issuance of applications that examiners found patentable. Internal PTO documents reveal that these unlawful procedures prevented issuance of at least several patents to Mr. Hyatt. It put more than 80 of Mr. Hyatt’s pending administrative appeals on ice for up to a decade before terminating them by reopening prosecution and restarting the examination process from scratch. It secretly used what PTO officials called “Shadow Art Units,” “Phantom Art Units,” and “parking lots” to stow Mr. Hyatt’s applications and take them off the books. And it delayed actions across the board, with a degree of creativity that bespeaks the PTO’s enmity for Mr. Hyatt: issuing suspensions amounting to over a millennium of aggregate delay; secretly assigning his applications to management personnel who do not examine applications; dismissing his petitions imploring the agency to act on the false basis that his applications were already being expedited; leaving approximately 100 of Mr. Hyatt’s applications for a single examiner to process in his personal time, without pay; and manipulating its reporting systems to hide its failure to act on Mr. Hyatt’s applications. All the while, PTO officials spread the word high and low throughout the agency that Mr. Hyatt was a “submariner” and that he would never get another patent, poisoning the well against him.

More recently, the PTO created the “Hyatt Unit . . . “for the purpose of miring all of Mr. Hyatt’s applications in administrative purgatory until Mr. Hyatt gives up or dies.”

The Hyatt Unit began its work by restarting prosecution from scratch, throwing out years of work and enormous effort by Mr. Hyatt in the process. It blanketed Mr. Hyatt in what its leader described as a “boatload” of hundreds of burdensome Office Actions in just a few months, forcing him to scramble to make any response. And now it is in the process of systematically abandoning and rejecting his applications, piling on numerous, overlapping rejections on every patent claim and entering frivolous “objections” that take years to correct due to the PTO’s refusal to decide his administrative petitions for relief on a timely basis or at all. . . The Hyatt Unit has never allowed a single one of Mr. Hyatt’s claims in its more than-5 years of existence.

Finally, in an attempt to eliminate all of Hyatt’s claims, the PTO asserted prosecution laches against all of Hyatt’s applications.  That approach has seemingly now failed with a 2017 district court decision rejecting the PTO’s prosecution laches case.

In this action, Hyatt is looking for several forms of relief — perhaps most pointedly is a mandamus action from the court ordering the PTO “expeditiously to conduct a fair, impartial, and timely examination of his applications in accordance with law, to allow patentable subject matter, to issue patents claiming such patentable such subject matter upon payment of the issue fee, to provide timely action on Mr. Hyatt’s petitions, and to permit Mr. Hyatt to obtain timely final agency action on rejections from the Appeal Board.”

In addition, Hyatt is requesting compensation for post-GATT patent applications whose potential term have expired due to PTO delay and issuance of those patents.

= = = = =

The complaint is an interesting read, but was filed partially under seal (based upon a protective order from a prior case), including the following paragraph:

===

A separate proceeding is ongoing in DC Federal Court  Hyatt v. Iancu, Nos. 05-2310, 09-1864, 09-1869, 09-1872 (D.D.C.).  In a recent briefing, the PTO explained its contention regarding the bulk of Hyatt’s patents:

Mr. Hyatt filed a patent application in 1984 that describes, in over 650 pages of text and figures, a system for manipulating images on a screen by rotating, sliding, and zooming. His explanation includes something that he called a “window” that is in the computer’s memory and is not visible to the user. Mr. Hyatt amended his claims a number of times and, fifteen years later, in 1999, filed the claims that are now at  issue. By 1999, the term “window” had taken on a much different and more valuable meaning in computing and to the general public. Mr. Hyatt’s claims now recite a type of window that is visible on the user’s screen, can be overlapped to run multiple applications at once, includes interactive features such as menus and icons, and allows the user to interact directly with the display monitor by, for example, clicking on a pull-down menu or choosing a menu option. Those claimed inventions are not described in Mr. Hyatt’s original specification, and that lack of written description means the claims have correctly been rejected by the USPTO and should also be rejected by this Court.

USPTO Proposed Findings of Fact and Conclusions of Law [04e9202c-6214-442a-998d-3b74156ca79b]

= = = =

Example claim (1984 priority date):

Claim 131. A process comprising the acts of:

generating background image information;

generating a first window of three dimensional perspective image information;

overlaying the first window of three dimensional perspective image information onto the background image information;

generating a second window of three dimensional perspective image information;

overlaying the second window of three dimensional perspective image information onto the background image information overlapping with the first window of three dimensional perspective image information; and

displaying a background image overlaid by a first window of three dimensional perspective images and overlaid by an overlapping second
window of three dimensional perspective images in response to the background image information overlaid with the first window of three dimensional perspective image information and in response to the background image information overlaid with the overlapping second window of three dimensional perspective image information.

Layers of Doctrine with a Faulty Claim Construction at the Core

by Dennis Crouch

D Three Enterprises v. SunModo Corp. (Fed. Cir. 2018)

Reading this decision feels akin to slowly peeling off the layers of an onion – hoping to reach some prize at the core but only reaching a rotten core.

D-Three’s patents in suit are directed to roof-mount sealing assemblies for solar panel installation.  U.S. Patent Nos. 8,689,517; 9,068,339; and 8,707,655.   The district court found the asserted claims invalid as obvious or anticipated.  The basic central dispute, however, was whether the claims could rely upon a 2009 provisional application filing date.  Although the formalities of the priority chain was met — the district court found a substantive problem. In particular, the court ruled that the 2009 provisional did not sufficiently disclose the inventions as claimed — i.e., failure of written description.  Going one layer deeper, it seems that the real dispute is about claim construction — do the claimed assemblies require a “washerless” approach?  The courts found that the claims recite a washerless assembly but that the limitation was not disclosed by the provisional application — so no priority.

Unrecited Recitation: In the appeal, the Federal Circuit’s analysis began with its conclusion on the claims: “All Asserted Claims except [except two] recite washerless assemblies.” The problem with the statement is that the claims don’t expressly recite a washerless assembly.  In its brief, D Three characterized the claims as “not includ[ing] a limitation that would require the presence of a washer. No claim in the Patents-in-Suit states that there cannot be a washer, i.e., no claim requires an assembly be washerless.”  (See claim 1 below).

Unfortunately, the Federal Circuit goes no further in explaining its conclusion that the claims recite washerless assemblies but rather jumped into consideration of whether the priority claim provides a sufficient disclosure.

35 U.S.C. § 120 provides for the right-of-priority from prior U.S. applications.  Under the statute, the priority claim only works if the earlier-filed application sufficiently disclosed the invention being claimed in the later-filed application.  In particular, the statute requires disclosure “in the manner provided by section 112(a).”  In other words, the earlier-filed application’s disclosure must satisfy the enablement and written description requirements to support the claims of the later-filed application. Here, the focus was on written description — the requirement that the disclosure clearly allows a PHOSITA “to recognize that the inventor invented what is claimed” and that the “inventor had possession of the claimed subject matter as of the filing date.” Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336 (Fed. Cir. 2010) (en banc).

Here, the provisional application does actually disclose a washerless assembly, but only one.  However, the appellate court affirmed that that one specific example (using W-shaped prongs) was not sufficient to provide written description support for the claims that were not limited to W-shaped prongs.  According to the court, the result is that we can only “speculate as to the modifications that the inventor might have envisioned, but failed to disclose.” Quoting Lockwood v. Am. Airlines, Inc., 107 F.3d
1565 (Fed. Cir. 1997). At base, this case looks a lot like Gentry GalleryLizardTech and ICU Medical, although none of these cases were cited.

In the end, we have a failure of written description; failed priority claim; and invalid patents.

= = = = =

Notes:

Claim 1 of the ‘517 patent:

1. A roof standoff device for use in mounting an object to a roof, said standoff device comprising:

a base bracket having at least one mounting hole for receiving an attachment element for attaching the base bracket to a roof surface, said base bracket further including a first threaded attachment element;

a flashing having:

a raised section with an upper surface and an aperture extending through said raised section, wherein said aperture is configured for alignment with said first threaded attachment element of said base bracket;

a flange extending beyond a base of said raised section, wherein, when disposed over said base bracket on the roof surface, an inside surface of said raised section receives and surrounds said base bracket and said flange rests on the roof surface;

a core body having a first end and a second end, said second end having a contact surface;

a second threaded attachment element associated with said second end of said core body, said second threaded attachment element configured to threadably engage said first threaded attachment element, wherein, upon said first and second threaded attachment elements being threadably engaged, said flashing is compressed between said base bracket and said second end of said core body; and

said core body having a third attachment element disposed proximate to said first end for attaching an object to said core body.

Respecting Foreign Judgments and $79 million for clicking “I agree”

by Dennis Crouch

An interesting new petition before the Supreme Court focuses on international licensing and copyright issues.  What happens when foreign courts give less weight to contracts and copyrights than would a US court? World Programming Ltd. v. SAS Institute, Supreme Court Docket No. 17-1459 (2018). [petition][docket]

Agreeing not to Reverse Engineer, then Reverse Engineering: WPL, a UK software company purchased a copy of SAS’s popular software and began to study its functionality (all in the UK).  As part of the process, WPL clicked “I agree” on the SAS clickwrap licenses. Those licenses included a prohibition on reverse engineering and also limited the software use to “non-production purposes.”  According to the petition, however, “under U.K. and E.U. law, such observation and study is lawful, and contractual terms restricting such acts are null and void. . . .While  WPL was required to agree to that license before installing the SAS System, it also knew that E.U. and U.K. law permitted use of software for observation, study, and testing regardless of contrary contractual restrictions.” Consider Council Directive 2001/29/EEC, ¶ 50, 2001 O.J. (L 167/10) (EC); Council Directive 91/250/EEC, art. 5(3), 1991 O.J. (L 122/42) (EC); Copyright, Designs and Patents Act 1988, c. 48, §§ 50BA(1), 296A(1)(c) (U.K.).

When SAS later sued, the High Court of Justice sided with WPL — rejecting SAS Institute’s copyright infringement claim (functionality of software not protected) and breach of contract claim (contract cannot bar lawful right of study). Thu U.K. Court of Appeal affirmed — finding the contract provision “invalid to the extent that it prohibits the observation, study or testing of the functioning of the program in order to determine the ideas and principles underlying it” and that the software functionality “does not count as a form of [copyrightable] expression.”

After losing in the UK, SAS brought its lawsuit to the USA and won on the same contract claim that was a loser in the UK (but lost on the copyright claim).  The US lawsuit also included a fraudulent inducement and unfair trade practices under N.C. UDTPA.  A jury found WPL liable — although WPL was barred from presenting any evidence regarding its reliance upon the UK and EU safe harbors.  Damages $80 million.

In this process, the district court refused to give any preclusive effect to the UK judgment.

On appeal, the Fourth Circuit held that the UK judgment was properly denied preclusive effect since it was contrary to North Carolina policy.  “North Carolina courts [are] more protective of the sanctity of contracts” than are UK or EU courts.

On the copyright claim, the 4th Circuit declined to resolve the copyright question — finding it moot.  Here, SAS received all of its sought-for damages from its other claims and the 4th Circuit ruled that it could not prove grounds for injunctive relief.  “Thus, the legal resolution of the copyright question would have no effect on the relief afforded the parties” and therefore the issue is moot. “Absent a practical effect on the outcome of this case, the copyright claim is moot.” SAS Inst., Inc. v. World Programming Ltd., 874 F.3d 370 (4th Cir. 2017).

Now, in its petition, WPL asks two questions:

  1. Whether federal or state law governs the respect that must be accorded to the judgment of a foreign court in diversity cases.
  2. Whether a district court’s decision on the merits of a claim becomes moot, and must be vacated, if the court of appeals determines that the plaintiff has not proven entitlement to the only remaining relief sought in connection with that claim.

In its argument, WPL reaches back to Hilton v. Guyot, 159 U.S. 113 (1895) where the Supreme Court spelled-out its jurisprudence for respecting foreign judgments.  Basically – foreign judgments must be respected by U.S. courts “unless they contravene basic principles of decency and morality.”  The difficulty here, though is how a Federal Court should operate when sitting in diversity and weighing the differences between a foreign judgment and the law of a US state’s law.  Basically – state law is regularly “less respectful of foreign judgments.”

Printed Matter, Mental Steps, and Functional Relationships: Oh My!

Guest post by Professor Kevin Emerson Collins, Washington University School of Law.

Praxair Distribution, Inc. v. Mallinckrodt Hospital Products IP LTD., 2018 U.S. App. LEXIS 12707 (Fed. Cir. 2018)

In a divided opinion, the Federal Circuit held that all of the claims challenged in an IPR were obvious, upholding the PTAB’s obviousness determination with respect to most of the claims but reversing its nonobviousness determination with respect to a few. Praxair Distribution raises of a number of distinct, yet interrelated, issues concerning the cryptic, yet essential, printed matter doctrine: the opinion addresses the doctrine’s extension to mental steps, its implications for the relationship between sections 101 and 102/103, and the breadth of its functional-relation exception.

U.S. Patent 8,846,112 covers methods of distributing nitric oxide gas cylinders for pharmaceutical applications. Inhaling nitric oxide dilates blood vessels in the lungs and improves blood oxygenation, and it is approved for treating neonates with hypoxic respiratory failure. The prior art taught that inhaled nitric oxide may lead to pulmonary edema, a serious adverse event, in neonates with left ventricular dysfunction. The claims of the ‘112 patent address methods that build on this prior art. Roughly, the claims can be sorted into three groups: the informing claims, the informing-and-evaluating claims, and the informing-and-discontinuing-treatment claims. This commentary addresses each of these three groups of claims in turn.

The Informing Claims: Easy Cases?

In gross, the informing claims recite supplying nitric oxide to a medical provider and providing the medical provider with information relevant to the clinical use of the nitric oxide on neonatal patients. Claim 1, for instance, includes the steps of:

  • “supplying the cylinder containing compressed nitric oxide gas to a medical provider responsible for treating neonates” and
  • “providing to the medical provider (i) information” about the recommended dose for neonates with hypoxic respiratory failure “and (ii) information” about the risk of that dose for neonates with left ventricular dysfunction, wherein “the information of (ii) [is] sufficient to cause a medical provider … to elect to avoid treating one or more” neonates with left ventricular dysfunction in order “to avoid putting [them] at risk of pulmonary edema.”

The PTAB held, and the Federal Circuit affirmed in a majority opinion authored by Judge Lourie and joined by Chief Judge Prost, that the informing claims were unpatentable as obvious under the printed matter doctrine. Under recent Federal Circuit precedent, the informing claims present an easy case of unpatentability. The printed matter doctrine states that “[c]laim limitations directed to printed matter are not entitled to patentable weight unless the printed matter is functionally related to the substrate on which the printed matter is applied.” Opinion at *9. If a limitation is not given patentable weight, it cannot be relied upon to distinguish the claimed invention from the prior art in the novelty or nonobviousness analyses. In claim 1, the limitations apart from the providing-information limitation are obvious in light of the prior art as an ordered combination, and the providing-information limitation cannot be given patentable weight. Federal Circuit precedent clearly establishes that printing information about how to use a product onto that product as a substrate does not create a functional relationship between the printed matter and the substrate. See, e.g., In re Ngai, 367 F.3d 1336 (Fed. Cir. 2004). But see In re Miller, 418 F.2d 1392 (CCPA 1969) (finding a functional relationship between volumetric indicia and the measuring spoons on which they were printed). Importantly, the printed matter doctrine still applies even though the providing-information limitation does not require the information to be in the form of printed matter per se. In King Pharmaceuticals v. Eon Labs and In re Kao, the Federal Circuit had already extended the printed matter doctrine to encompass the conveyance of information in non-printed forms, such as verbal speech or sign language. See, Kevin Emerson Collins, An Initial Comment on King Pharmaceuticals: The Printed Matter Doctrine as a Structural Doctrine and Its Implications for Prometheus Laboratories, 2010 Patently-O Patent L.J. 111.

Not only is the lack of patentable weight for “informing”-type limitations settled law, but it is good policy, as well. As I have repeatedly argued elsewhere, the core of the printed matter doctrine, as well as its expansion to information conveyed through speech and other non-print media, is necessary to ensure that the knowledge disclosed in patent specifications remains free for all to use qua knowledge during the term of the patent. Kevin Emerson Collins, The Structural Implications of Inventors’ Disclosure Obligations, 69 Vand. L. Rev. 1785 (2016); Kevin Emerson Collins, The Knowledge/Embodiment Dichotomy, 47 U.C. Davis L. Rev. 1279 (2014). Claim limitations that read on communicative acts can restrain the diffusion of the teachings contained in patent disclosures, so a broad interpretation of the printed matter doctrine is necessary to ensure that patentee’s exclusive rights to claimed inventions cannot interfere with the free dissemination of the informational content of patent specifications.

The Informing-and-Evaluating Claims: Mental Steps and Patent Eligibility

The informing-and-evaluating claims depend from the informing claims, adding a number of steps to be performed, presumptively, by medical providers who use nitric oxide. (Bracket the divided infringement issue afoot here.) For example, claim 3 adds inter alia the following limitations to claim 1:

  • identifying a neonate with hypoxic respiratory failure,
  • determining whether the neonate has left ventricular dysfunction, and
  • “evaluating the potential benefit of treating” that neonate with nitric oxide “vs. the potential risk” of doing so.

The PTAB and the Federal Circuit both identify the evaluating limitation as a mental step performed in a medical provider’s mind. They then both extend the printed matter doctrine to preclude giving patentable weight to mental steps and, as a result, hold the informing-and-evaluating claims obvious. The Federal Circuit breaks new ground by extending the printed matter doctrine to mental activity in this manner, and Judge Newman’s concurrence argues that the extension is not proper. Simply put, “[m]ental steps are mental, not printed.” Concurrence at *1. (The concurrence may also be read more broadly to suggest that even the extension of the printed matter doctrine to spoken information in King Pharmaceuticals, discussed in the previous section addressing the informing claims, is legal error.)

Given the policy concerns discussed above for extending the printed matter doctrine to speech, however, I believe that its extension to at least some mental steps is a logical and justifiable move. As Judge Louie correctly notes, the evaluating limitation:

requires a medical provider to think about the information claimed in the providing information limitation of claim 1. But adding an ineligible mental process to ineligible information still leaves the claim limitation directed to printed matter. To hold otherwise would make the printed matter doctrine a dead letter, requiring no more than a “think about it” step to give patentable weight to a claim limitation directed to information content. There is no meaningful distinction between claim limitations directed to written information … verbal information … and mentally-processed information.

Opinion at *13. In brief, the extension of the printed matter doctrine to encompass “mentally-processed information” prevents form from trumping substance.

Although Praxair Distribution does not expressly make this point, it seems to revive some variant of the historical mental steps doctrine. In the mid-twentieth century, the mental steps doctrine did for mental steps what the printed matter does today for printed matter: it invalidated claims that relied on the content of mental processes to establish a distinction from the prior art. See, e.g., In re Abrams, 188 F.2d 165, 165 (C.C.P.A. 1951). The PTAB cited to some of these mid-century mental steps cases to support its extension of the printed matter doctrine to mental steps. 2016 WL 3648375 at *10 (2016). The Federal Circuit, however, did not, most likely because the CCPA abandoned the mental steps doctrine decades ago in the course of grappling with the patent eligibility of software, In re Musgrave, 431 F.2d 882, 889 (C.C.P.A. 1970), and the Federal Circuit has refused to reinstate it, Prometheus Labs. v. Mayo Collaborative Servs., 628 F.3d 1347, 1358–59 (Fed. Cir. 2010). Nonetheless, in practice, if not in name, Praxair Distribution plainly reinvigorates some variant of the mental steps doctrine. Technically, the opinion could be read narrowly so that the printed matter doctrine only extends to mental steps when claims recite both a printed matter limitation with certain informational content and a think-about-it limitation to the same informational content. However, the argument that the informational content of an evaluating, think-about-it limitation should be given patentable weight if the informing limitation is removed from the claim is difficult to fathom.

Another interesting aspect of Praxair Distribution is that it opens a new front in the ongoing debate concerning the intermixing of sections 102 and 103, on the one hand, and section 101, on the other hand. The Supreme Court’s opinions on patent eligibility in Mayo and Alice are highly controversial, in part, because their “inventive concept” analysis—i.e., what is now known as Mayo/Alice “step 2″—requires consideration of the advance over the prior art, a factual issue that is usually addressed in the novelty and nonobviousness analyses. Mixing the patentability requirements in the other direction—that is, using 101 concerns to inform 102/103 doctrine—has to date not received much attention. However, the printed matter doctrine has long mixed in this other direction, and Praxair Distribution brings this other-direction mixing into the spotlight:

Claim limitations directed to the content of information and lacking a requisite functional relationship are not entitled to patentable weight because such information is not patent eligible subject matter under 35 U.S.C. § 101. Cf. Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 90 (2012). While the doctrine’s underlying rationale is in subject matter eligibility, its application has been in analyzing other patentability requirements, including novelty … and nonobviousness.

Opinion at *10. (Interestingly, the European Union, too, mixes patent-eligibility concerns into the inventive step analysis with its requirement that that the inventive step reside in a technical effect. European Patent Office, Guidelines for Examination, Part G, Chapter VII.5.2.) The printed matter doctrine reveals that, at least under limited circumstances, what are often conceived of as the rigid statutory silos of patent law must break down. As Judge Newman notes in her concurrence, the printed matter doctrine started out as a prohibition on patenting business forms that was administered as part of the doctrine of patent eligibility. Concurrence at 2–3. However, over time, as patent applicants attempted to claim printed matter in combination with otherwise patent-eligible subject matter, the doctrine developed the two statutory branches that it has today: it is administered via section 101 in cases that involve claims to printed matter per se and via sections 102 and 103 in cases that involve claims to printed matter in combination with statutory processes, machines, manufactures, or compositions of matter. The extension of the printed matter doctrine to mental steps merely further highlights the mixing that is already occurring because mental processes are today, understood, well-understood to be the basis of patent-eligibility rejections. The mental steps doctrine, that the printed matter doctrine now resembles, was administered entirely as a section 101 doctrine, employing the equivalent of a patentable-weight analysis as part of patent eligibility. It never partially migrated from section 101 into sections 102 and 103 like the printed matter doctrine did.

Finally, the dispute underlying the Praxair Distribution opinion also reveals an overlap between sections 102 and 103 and section 101 in yet another way. The parallel district court proceeding invalidated all claims of the ‘112 patent that were at issue for lack of patent eligibility under Mayo, although the representative claim was a more conventional diagnostic claim from a different patent. 2017 WL 387649, *14–*20. The PTAB, of course, could consider this section 101 ground because it is limited in IPRs to 102 and 103 grounds.

The Informing-and-Discontinuing-Treatment Claims: An Expansive Functional-Relation Exception

Like the informing-and-evaluating claims, the final group of claims also depends from an informing claim. Technically, however, these claims depend from a claim that requires slightly different information to be provided to the medical provider with the nitric oxide cylinders, namely information in the form of a “recommendation that, if pulmonary edema occurs in a [neonate] who has pre-existing left ventricular dysfunction … the treatment with … nitric oxide should be discontinued.” Again like the informing-and-evaluating claims, they add further steps presumptively performed by medical providers to the steps performed by nitric oxide distributors. The representative claim here is claim 9. After reciting the limitations of identifying a neonate with hypoxic respiratory failure and determining whether the neonate has left ventricular dysfunction, it adds treatment and treatment-cessation steps:

  • “treating the neonatal patient with left ventricular dysfunction with … nitric oxide, whereupon the [neonate] experiences pulmonary edema; and
  • in accordance with [the information provided], discontinuing the … nitric oxide due to the neonatal patient’s pulmonary edema.”

The PTAB held claim 9 not unpatentable as obvious. It construed the “in accordance with” language to mean that the discontinuation of the treatment was performed “based on, or as a result of” the information/recommendation provided with the nitric oxide cylinders. It then concluded that the fact that the information was the reason or motivation for the medical provider to discontinue treatment created a functional relationship between the information and the discontinuing-treatment step. Opinion at *6. In turn, the PTAB held that the functional-relation exception to the printed matter doctrine applied, that the information provided could be given patentable weight, and that claim 9 was not obvious.

The Federal Circuit approved of the PTAB’s interpretation of the functional-relation exception to the printed matter doctrine as well as its application to claim 9. Opinion at *17. However, the Federal Circuit reversed the PTAB’s ultimate nonobviousness determination, concluding that, even when the content of the information is given patentable weight, the claim is obvious in light of the prior art. The prior art taught that nitric oxide may be given to patients with left ventricular dysfunction as long as those patients are monitored during treatment. The information provided—namely that nitric oxide should be discontinued for patients with left ventricular dysfunction upon pulmonary edema—was too small of an advance over the prior art to render the claim patentable.

The point of agreement between the PTAB and the Federal Circuit on the expansive interpretation of the functional-relation exception raises an interesting—and possibly troubling—precedent for future cases. The logical reason for a real-world, extra-mental action can now distinguish a claim reciting the action from the prior art. That is, the “invention” of a nonobvious mental motivation for a human actor to perform an already-known, real-world (i.e., non-mental) action, like discontinuing treatment, can give rise to a patentable method claim.

Consider a simple hypothetical. Assume that doctors routinely decrease the dosage of a drug when a metabolite of the drug in a patient’s bloodstream exceeds a certain threshold because of a known potential for a serious adverse event, namely liver problems. Now assume that a researcher discovers that, unexpectedly, the same metabolite in a patient’s bloodstream exceeding the same threshold also raises the risk of a different, serious adverse event, namely heart problems. The researcher claims a method of a medical provider: (a) administering a dose of a drug to a patient from a package with a printed indication that a metabolite level exceeding a threshold creates a medically unacceptable risk of heart problems, (b) determining the level of the drug’s metabolite in the patient’s bloodstream, and (c) reducing the dosage of the drug “in accordance with” the printed indication (i.e., due to the risk of heart problems) if the threshold is exceeded. Even though the medical provider infringing the claim performs conduct that, to an external observer, cannot be differentiated from the prior art (except for the printed indication on the drug package), the claim is patentable. The functional-relation exception to the printed matter doctrine allows the content of the printed matter be given patentable weight because the information conveyed motivates the medical provider’s conduct, and the unexpected nature of the connection between high metabolite levels and heart problems strongly supports nonobviousness.

To be clear, even if one finds the patentability of this hypothetical claim to be problematic—and reasonable minds may differ on whether it is problematic—there is no reason to question the Federal Circuit’s actual holding concerning claim 9 in Praxair Distribution. The Federal Circuit held the claim unpatentable for obviousness even when it gave the content of the printed (or spoken or thought) matter patentable weight. By necessity, it therefore would have reached the same holding if it had refused to give that content patentable weight. The expansiveness of the functional-relation exception in Praxair Distribution will only become outcome-determinative in future cases when a claim recites information that provides an unexpected reason or motivation for a real-world, extra-mental action that, standing alone, is known or is merely an obvious departure from the prior art.

Inversely, a narrow interpretation of the functional-relation exception—one that does not label the content of information as functionally related to an action recited as a limitation when the action is performed because of the information—would not widely undermine patentability. In particular, it would not invalidate most claims to actions that are motivated by newly discovered information. For example, consider a researcher who discovers that, unexpectedly, a particular genetic mutation means that a patient should be taking a lower dosage of a drug. The researcher may claim a method of a medical provider: (a) testing a patient for the mutation and (b) administering the lower drug dosage to the patient if the mutation is present. The printed matter doctrine is irrelevant to the nonobviousness of this claim because the claim does not recite the content of printed information (or a mental state of a doctor who thinks about the information) as a limitation. Such an information limitation is not required for validity, and would thus be unnecessary drafting surplusage, because the real-world (non-mental) conduct of testing and administering under the specified conditions is sufficient to distinguish the claim from the prior art. Although it is not recited as a claim limitation, the newly discovered information still provides an explanation for why the claimed invention is useful and why it produces unexpected results. (Further highlighting the interconnection of the printed matter doctrine and patent eligibility, compare the outcome in this hypothetical to the Federal Circuit’s recent holding in Vanda Pharmaceuticals Inc. v. West-Ward Pharms Int’l Ltd., 887 F.3d 1117 (Fed. Cir. 2018), which upheld the patent eligibility of a hybrid diagnostic/treatment claim under Mayo.)

The Federal Circuit’s expansive interpretation of the functional-relation exception to the printed matter doctrine in Praxair Distribution can be traced to a recent shift how the Federal Circuit articulates that exception. Traditionally, the functional-relation exception was applied only when there was a functional relationship between the content of the printed matter “the substrate on which the printed matter is applied.” Opinion at *9 (emphasis added). For example, in one of the few non-software cases in which the Federal Circuit actually held that the functional-relation exception allowed the content of printed matter to receive patentable weight, the content of a series of numbers printed on a loop of paper was held to be functionally related to the substrate/paper because the numbers themselves were a looping series. In re Gulack, 703 F.2d 1381 (Fed. Cir. 1983). In contrast, the PTAB and the Federal Circuit in Praxair Distribution looked for, and found, a functional relationship between the content of the printed matter and a different limitation in the claim other than the printed-matter limitation, namely the discontinuing-treatment limitation. From my quick research, Praxair Distribution appears to be the first case in which the functional-relation exception has been found to apply based on a functional relationship between printed matter and a claim limitation directed to something other than the printed matter’s substrate. Both King Pharms. and Kao use language that suggest the possibility of such a non-substrate relationship satisfying the functional-relation exception, but neither finds that it exists on the facts presented. If the functional-relation exception were limited to claims in which there is a functional relationship between the printed matter and the substrate in particular, then claims to new motivations for already-performed conduct would not be patentable under the printed matter doctrine.