Thought pioneer Dan Abelow fits within an interesting designation. So far in 2017, his U.S. Patent Publication No. 2012/0069131– mysteriously titled “Reality Alternate” – is the Most-Oft examiner cited U.S. prior art reference. The document – now patented as U.S. Patent No. 9,183,560 – covers a method of providing “a portal for a user … to be present simultaneously in two or more different non-fictional alternate realities that are distinct from a non-fictional physical reality of the user.” [Here, I’m looking at Examiner citations rather than those submitted by Applicants]
The Abelow document reads something like science-fiction novel — defining a new Alternate Reality world both in terms of its incredible impact and technical specifications. From the abstract:
Just as fiction authors have described alternate worlds in novels, this introduces an Alternate Reality—but provides it as technical innovation. This new Alternate Reality’s “world” is named the “Expandaverse” which is a conceptual alteration of the “Universe” name and a conceptual alteration of our current reality. Where our physical “Universe” is considered given and physically fixed, the Expandaverse provides a plurality of human created digital realities that includes a plurality of human created means that may be used simultaneously by individuals, groups, institutions and societies to expand the number and types of digital realities—and may be used to provide continuous expansions of a plurality of Alternate Realities. To create the Expandaverse current known technologies are reorganized and combined with new innovations to repurpose what they accomplish and deliver, collectively turning the Earth and near-space into the equivalent of one large, connected room (herein one or a plurality of “Shared Planetary Life Spaces” or SPLS) with a plurality of new possible human realities and living patterns that may be combined differently, directed differently and controlled differently than our current physical reality.
In addition to being written in a way that draws diverse connections (helpful for obviousness conclusions), the reference is also 750 pages long! (The patentee paid an extra $4,000+ in filing costs for the extra page length). One of the best patent attorneys in the country – David Feigenbaum – filed this case and helped push it through to issuance.
First Data Corp. and Frank Bisignano v. Eric Inselberg and Inselberg Interactive (Fed. Cir. 2017).
Interesting tale: Back in 2010 Frank Bisignano loaned Inselberg Interactive (Interactive) $500,000 – a loan personally guaranteed by the company’s owner Eric Inselberg as well as by a security interest in the patents owned by Interactive at the time.
By 2011, the federal authorities were after Inselberg and charged him with criminal sports memorabilia fraud. Those charges were later dropped after witnesses recanted Inselberg convinced prosecutors that the witnesses had lied. [UPdate By that time, however, Interactive had defaulted on the loan to Bisignano. As a consequence, “Inselberg and Bisignano entered into an agreement that purported to convey Interactive’s patent portfolio to Bisignano.” [USPTO Assignment Records]
Bisignano later became CEO at First Data and First Data (arguably) began to make use of some of the patents in Inselberg’s former portfolio. Inselberg then approached Bisignano and requested that First Data pay a license fee (and also claiming that the prior assignment was invalid). After being threatened with a lawsuit, Bisignano and First Data filed for declaratory judgment in Federal Court upholding the assignment and thus denying infringement. Inselberg responded with a New Jersey state court action asserting that – under N.J. State Law – that the assignment was invalid. In the state court case, Bisignano asserted non-infringement as a counter claim and then removed that case to federal court as well.
The two federal cases were both docketed before Judge McNulty who dismissed them both — finding no federal cause of action. McNulty wrote:
Inselberg and Interactive acknowledge that they are not now the owners of the patents. They agree that they do not currently possess standing to sue for infringement. [Rather, they seek] a declaratory judgment that the assignment was invalid under state law.
Thus, according to the district court, the only issue truly at hand now is who owns the patents (with a side issue of whether the assignment included further duties). Since transfer of patents is a matter of state law – there is no federal cause of action. [Inselberg District Court Dismissal].
On appeal, the Federal Circuit has affirmed the dismissal – following its prior Jim Arnold decision. Jim Arnold Corp. v. Hydrotech Systems, Inc., 109 F.3d 1567 (Fed. Cir. 1997).
[In Jim Arnold], the plaintiff attempted to assert an infringement claim, but that claim was contingent on the success of the plaintiff’s state law claim that its prior assignment of the patents was void. We concluded that the district court did not have jurisdiction over the infringement claim . . . until ownership is restored in the assignor.
The approach here then is for the State Court to first figure out ownership. Then, if it decides that Interactive is the owner, an infringement case can return to Federal Court.
Brian Brooks founder of Clinton Brooks represented the prevailing party Inselberg while William Adams led the Quinn Emanuel team on the other side.
Allied Mineral v. OSMI and Stellar Materials (Fed. Cir. 2017)
US-based Allied manufactures a cement specially designed for lining aluminum furnaces. Allied distributes both in the US and in Mexico (through Ferro Alloys and Pyrotek). The patentee Steller is also US-based. However, rather than suing Allied for infringing its US patent, Steller sued only the Mexican distributors in Mexico on its Mexican family member patent. U.S. Patent No. 7,503,974; Mexican Patent No. 279757.
Allied then filed a declaratory judgment action in the US — asking for a declaration that, inter alia, the US patent is invalid, not infringed, and unenforceable. In the appeal here, the Federal Circuit has affirmed a lower court ruling that the DJ action is not based upon a “case of actual controversy” as required both by the Declaratory Judgment Act as well as the US Constitution.
Courts consider a totality-of-the-circumstances on the case-or-controversy question — asking whether “there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Citing toMedImmune v. Genentech, 549 U.S. 118 (2007).
Here, the Mexican lawsuit was quite relevant since a parallel patent was asserted accusing Allied products. Those same products are also sold Allied in the US, and the main parties are all in the US. However, after reviewing those facts, the Federal Circuit ruled that they were insufficient to create a sufficient controversy. Importantly, there was no evidence that (1) the patentee had ever approached Allied; or (2) ever threatened to sue on its U.S. patent. In Arkema Inc. v. Honeywell International, Inc., 706 F.3d 1351 (Fed. Cir. 2013), the Federal Circuit relied on foreign litigation in finding the a case-or-controversy. Here, the court distinguished Arkema by pointing to parallel US litigation in that case. There, “the combination of the German litigation and the U.S. litigation over a related patent” were sufficient to find a case-or-controversy.
The Federal Circuit has released a pair of decisions (2017-2235; 2017-2130) in this patent / trade secret case. Waymo (Google) sued Uber (Ottomotto) for patent infringement and trade secret misappropriations. “Specifically, Waymo alleges that its former employee, Mr. [Anthony] Levandowski, improperly downloaded thousands of documents related to Waymo’s driverless vehicle technology and then left Waymo to found Ottomotto, which Uber subsequently acquired.”
Arbitration: In this lawsuit, Waymo sued Uber but not Levandowski himself. However, Levandowski intervened into the lawsuit to defend his personal interests. Uber then filed a motion to compel arbitration based upon the arbitration clause found in the employment agreement between Levandowski and Waymo. Although the agreement’s terms do not extend to Uber, Uber argues that the agreement should equitably apply since the complaint alleges that the misappropriation was conducted “by virtue of [Levandowski’s] job at Waymo.” In order to avoid an arbitration order, however, Waymo promised that it would not affirmatively rely upon “any employment or other agreement with Levandowski containing an arbitration clause” throughout the lawsuit (unless the documents are first raised by Uber). The District Court (Alsup) then rejected the motion to compel arbitration. Under the Federal Arbitration Act, denial of arbitration is immediately appealable.
On appeal here, the Federal Circuit affirmed — holding that as a matter of California Contract Law, the arbitration clause did not apply to Uber, and that equitable estoppel does not apply since Waymo has disclaimed any affirmative use of the employment contract in its case against Uber.
California law establishes that reliance on the contract bearing the arbitration clause is fundamental to compulsion by a non-party to arbitrate.
Here, Waymo has expressly stated that it is not relying upon the contracts containing the clause — thus successfully foreclosing the estoppel theory arbitration.
The second case involves a petition for Writ of Mandamus by Levandowski fighting-off a discovery order. The particular document at issue is a report created by the Stroz Friedberg firm in the lead-up to the Uber-Otto merger regarding prior Waymo employees. Importantly, the report was requested by Uber and Otto – not Lefandowski himself. The district court ordered discovery of the Stroz Report. In the appeal, the Federal Circuit rejected the petition — holding that Levandowski failed to show the urgent nature of the interlocutory appeal.
Mr. Levandowski contends that disclosure of the Stroz Report would be “particularly injurious or novel.” . . . His arguments are unpersuasive, for it is apparent that Mr. Levandowski cannot invoke attorney-client privilege or work-product protection.
Regarding injury, Mr. Levandowski fails to articulate any persuasive reasons why disclosure of the Stroz Report should be barred in this civil litigation, for the possibility of admissions against his interest is a valid function of civil discovery. While Mr. Levandowski claims that the District Court would be unable to “cleanse the trial of all taint from the improper disclosure,” such an unsupported assertion is insufficient. Moreover, we take note that the District Court, reviewing the Stroz Report in camera, declined to exclude it, and as explained above, the Supreme Court has indicated that appellate courts can remedy an improper disclosure of privileged information by vacating an adverse judgment and remanding for a new trial.
Slip opinion, internal citations removed. Thus, the outcome here is that the lawsuit will continue before the district court without interruption. The court is preparing for trial, with ongoing allegations of discovery abuse as well as a pending partial summary judgment motions. A recent order from the court is as follows:
By SEPTEMBER 15 AT NOON, counsel for plaintiff Waymo LLC shall file a declaration under oath responding to each and every accusation of discovery misconduct by Waymo [made by] defendants Uber Technologies, Inc., and Ottomotto LLC’s (collectively, “Uber”).
Respond fully to each and every allegation therein. Be complete and accurate. Counsel shall also state the extent, if any, to which it is true that Waymo “still has not produced a privilege log” (id. at 4).
Also by SEPTEMBER 15 AT NOON, counsel for Uber shall file a declaration under oath in support of the aforementioned accusations.
…is still claim construction in my book. This is true even when the claim construction focuses less on the specific meaning of individual words or phrases and more on construing the invention as a whole.
***
One of the most enjoyable things about teaching a course like Patent Law, which I’m doing again this fall, is that you get to re-read all the old classics and work through them from first principles with students who are not (yet) locked in the dogma of accepted narratives. In other words, to see cases such as Mayo,Myriad, and Alice through fresh eyes, or to explore the evolution of post-Markman claim construction from Markman to Cybor to Phillips to Teva. Today we worked through some of the examples that the PTO has published–for those who aren’t aware, there’s a host of them on the PTO’s website.
As I’ve read through the patent eligible subject eligibility cases again, I’m struck by the extent to which the courts engage in what I can only describe as claim construction–but a very different type of claim construction than what’s contained in the countless opinions deciding the meaning of individual claim terms over the last two decades. Those cases address the meaning of individual terms or phrases in a patent claim, often in a way that is dispositive of an infringement, novelty or nonobviousness issue.
The different type of claim construction that I’m talking about is what courts necessarily do when conducting a patent eligible subject matter analyses (and perhaps nonobviousness and enablement as well): construe the invention from the claims rather than interpret a particular word or phrase. None of the judicial opinions talk about what they’re doing as claim construction, but that seems to me to be exactly what it is.
The idea that courts describe patent claims in words other than those of the claims themselves during patent eligible subject matter inquiries is nothing new–to the contrary, it’s a frequent complaint about the Supreme Court’s patent eligible subject matter cases. Usually, it’s referred to as determining what the claims are “directed to,” or, in the second part of the Mayo/Alice inquiry, the search for an “inventive concept.”
But if claim construction is understood as the translation of the words of a patent claim into text that will have meaning for the person deciding a legal issue such as infringement or validity, then discussions of the patent claims in the context of patent eligible subject matter analyses would seem to be exactly that. Alice offers an obvious example: there, the Supreme Court explained that “[o]n their face, the claims before us are drawn to the concept of intermediated settlement,” (an abstract idea, failing Mayo step 1), and that “viewed as a whole, petitioner’s method claims simply recite the concept of intermediated settlement as performed by a generic computer” (thus failing Mayo step 2). Put another way, the Court took the words of the claim, gave them legally operative meaning, and then assessed whether that legally operative meaning against the criteria of abstract idea and inventive concept. That’s claim construction.
I can see some pushback here from folks who think of claim construction solely as the process of determining the meaning of individual words or phrases in a claim–in other words, as questions of accuracy about the meaning of words. The sharp focus on the meaning of individual claim terms has dominated thinking about patent law for the last two decades, but I think it’s a mistake to view claims only as individual limitations. That approach is useful for inquiries such as literal infringement or novelty, but it’s of less use when conducting other types of patentability or validity analyses. I’m not suggesting that claim term interpretation is irrelevant to patent eligible subject matter or enablement inquiries–sometimes the meaning of individual terms matters quite a bit. But what I see courts doing again and again in the patent eligible subject matter cases is to read the claims to arrive at a construction of the invention, rather than resolve disputes about the meaning of particular terms.
My thinking in this area is heavily influenced by Andres Sawicki’s forthcoming article The Central Claiming Renaissance. Professor Sawicki argues that the Supreme Court’s re-invigoration of patent eligible subject matter has been accompanied by a rebirth of “central claiming”: the idea that “courts use both the specification and the claims to situate the inventor’s work in the context of the technological field to understand just what it is that the inventor contributed.” Id. at 10. Sawicki observes that the Mayo/Alice analysis necessarily requires a determination of the inventor’s contribution–and particularly, whether that is the type of thing that is patent eligible subject matter. Consistent with the idea of central claiming, he suggests that in identifying the inventor’s contribution, the Supreme Court looked mostly to the the specification when making this determination in Bilski, Mayo, and Alice, even as he acknowledges the important role the claims play in what the Court was doing. Id. at 23-35.
While I mostly agree with Professor Sawicki’s analysis of the Supreme Court’s patent eligible subject matter cases, I think the article gets over-invests in the concept of “central claiming.” As Sawicki recognizes, even when conducting the Mayo/Alice analysis, courts are still construing the actual claims, not the written description, to identify the invention. They draw on the written description, but so too does conventional claim term interpretation. I’m also hesitant because what’s involved isn’t “claiming;” it’s the process of construing an existent claim. That said, I don’t have any sticky words to describe this alternate approach to claim construction. The best I’ve come up with are “whole claim construction,” “invention-focused construction,” or “inventive contribution construction” as contrasted with “claim term interpretation.”
***
Why does it matter whether we call what the court’s doing “claim construction?” After all, a rose by any other name still smells as sweet.
There are a few reasons. First, the old adage that “the name of the game is the claim” is just as true when courts are construing the claims in a general sense as it is when courts are engaged in term-based constructions. As patent practitioners know, how the court articulates the claims for Mayo steps 1 and 2 matters–and can even be dispositive, as the recent case of Visual Memory LLC v. NVIDIA Corp. shows. Recognizing that the courts are engaged in type of claim construction has the benefit of focusing the parties’ arguments on an issue that may determine the outcome of the case.
A second benefit from recognizing that courts are engaged in claim construction in the patent eligibility inquiry is that the discussion can then turn to what constitutes an abstract idea. Sure, the court’s construction matters, but so too does the question of what an abstract idea actually is. Untangling these two issues–the construction of the claim and the meaning of “abstract idea”–may bring clarity to the second one.
A third reason why we should acknowledge that there’s a type of claim construction going on in patent eligible subject matter analysis is because the Federal Circuit’s opinions don’t. Recognizing that the courts are engaged in a type of claim construction raises an important question: we have a complex methodology and approach to interpreting claim terms; what then is the methodology for this other type of claim construction that the courts are doing? As the patent eligible subject matter jurisprudence develops, methodological variants are emerging that reflect sharp differences in the way that claims are being construed when conducting the patent eligible subject inquiry. Some of these divisions present the same types of issues as the conventional claim term interpretation cases raise, such as “how much weight to give the specification?,” while others present new divisions, such as the question of “at what level of generality the claims should be read?”
As a first pass at this idea, here are a few different ways that “invention-focused construction” can be done:
At one extreme is the ipsis verbis methodology: to repeat the words of the claim and nothing but. Only those words, and perhaps interpretations of some key terms, suffice. One might picture an attorney standing before a judge who repeatedly asks “what’s the invention?” while the attorney dutifully recites the words of the claim again and again, neither understanding why the other doesn’t get it.
At the other extreme is a claim construction untethered from the claims themselves. An example might be to construe a claim to a typewriter as being to a hot dog. While this example is absurd, the point is to illustrate that there is a range from ipsis verbis to a construction of the invention that has no connection to the claims.
Another dimension of the invention-focused construction involves the degree to which the construction hones in on the inventor’s contribution. To borrow from the USPTO’s gunpowder example, the “inventive concept” of a claim to “an intimate finely-ground mixture of 75% potassium nitrate, 15% charcoal and 10% sulfur” isn’t the individual ingredients; those already exist in nature. Rather, the “invention” is the combination of the ingredients, or the specific ratios, or that they are finely ground in the mixture.
Alternately, the court may treat the claim as a whole as the “invention,” not caring about which part of it constitutes the inventor’s contribution to the art. I struggle with applying this approach: how do you conduct an analysis of whether the invention is eligible subject matter when you aren’t focusing in on what is new?
In my next post I’ll write more about how these different approaches recently manifested in the Visual Memory case that Dennis blogged about last month.
Perhaps the most debated issue in obviousness disputes is the question of whether a person of ordinary skill in the art would have been motivated to combine prior art references in order to form the invention as claimed. In KSR, the Supreme Court made the process a little bit easier for patent examiners by permitting a common sense analysis. Still, 10 years later, the issue arises on a daily basis for patent attorneys and in the vast majority of obviousness challenges to issued patents.
I have long felt that prosecution history files may serve as key evidence in justifying the motivation to combine. As an example, consider a patent prosecution file history from several years ago that that includes an office action rejection based upon the patent examiners conclusion the two prior art references should be combined. Regardless of whether the examiners assertions were correct at the time, that document seems to be pretty good evidence someone actually considered combining references together. In general, a prior art statement that expressly suggests and provides reasons for combining Reference A with Reference B is really good evidence for combining the two.
There are several difficulties with my “patent prosecution as prior art” theory. A first problem is that, although patent prosecution files are open to the public once a patent issues or the application publishes, the prosecution history files are not well indexed or searchable in any meaningful way. As far as I know, there is no publicly accessible database of prosecution history files that is either indexed or searchable. That problem is becoming a historic problem.
Beginning this week, the USPTO has transitioned its Private Pair system to include text versions of its office action rejections as well as notices of allowances (actual XML and DOCX versions). It is a straightforward step to move these documents into a searchable database available for public consumption.
I’ll note here that the XML/DOCX files are quite nice and, although not well tagged, will make it easy for patent attorneys to cut & paste from the OA in their responses or client emails. The system also includes a new mechanism for submitting documents to the PTO.
As a placeholder – I’ll note here that the pending en banc case of In re Aqua Products regarding amendments during IPR Proceedings is still pending before the Federal Circuit. The court asked two questions:
(a) When the patent owner moves to amend its claims under 35 U.S.C. § 316(d), may the PTO require the patent owner to bear the burden of persuasion, or a burden of production, regarding patentability of the amended claims as a condition of allowing them? Which burdens are permitted under 35 U.S.C. § 316(e)?
(b) When the petitioner does not challenge the patentability of a proposed amended claim, or the Board thinks the challenge is inadequate, may the Board sua sponte raise patentability challenges to such a claim? If so, where would the burden of persuasion, or a burden of production, lie?
The en banc order was released in August 2016, and oral arguments heard in December 2016. The 8-month delay in writing the opinion is unusually long.
The chart above provides an update to my prior post – looking at patents issued over the past 40 years and finding the proportion of patents that use the word “SAID” within the patent claims.
During this time, there has been a general trend in legal writing toward the use of Plain English rather than legalese, and I believe that the chart here is generally representative of that trend. Some agencies, such as the SEC, have required the use of plain English in documents submitted for public disclosure. The USPTO has not yet taken that route. However, the USPTO is required to ensure that its own publications are “clear, concise, and well organized.” Plain Writing Act of 2010.
US Law generally holds that Indian Tribes are “Sovereign Powers” that “possess immunity from suit,” although only “to the extent that Congress has not abrogated that immunity and the tribe has not clearly waived its immunity.” Breakthrough Management Group, Inc. v. Chukchansi Gold Casino and Resort 629 F.3d 1173 (10th Cir. 2010), cert denied. As the Supreme Court wrote, “without congressional authorization,” the “Indian Nations are exempt from suit.” United States v. United States Fidelity & Guaranty Co., 309 U.S., at 512 (1940).
Questions in patent law remain, primarily: (1) Does the exemption from suit extent to exemption from an administrative action to cancel a tribal owned patent?; and (2) by purchasing a patent does a Tribe implicitly waive sovereign immunity regarding validity challenges to the patent.
In 2006, an en banc Federal Circuit decided the somewhat parallel case of Intel v. CSIRO, holding that the Foreign Sovereign Immunities Act (FSIA) permitted suit against Australia’s national science agency based upon the agency’s commercial activity — attempting to licence its WIFI patents. The Statute provides that:
[a] foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case … in which the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States. . . . Here, we are persuaded that these declaratory-judgment actions are “based on” CSIRO’s commercial acts of obtaining and asserting a United States patent.
My understanding is that FSIA does not apply directly to the Tribal immunity, which is judge-made-law.
The district court dismissed Lifetime’s infringement complaint for failure to state a claim. Fed. R. Civ. Pro. 12(b)(6). On appeal, the Federal Circuit reversed – holding that the inducement and contributory infringement claims were sufficiently pled.
The most interesting aspect of the decision is actually a bit of dicta regarding the now abrogated Form 18. Prior to December 2015, the Federal Rules of Civil Procedure included a set of Form complaints – the patent complaint (Form 18) was truly bare-bones. Following Iqbal and Twombly, many of us saw a real tension between the permissible forms and the plausibility requirements of Twiqbal. Thus, when the forms were eliminated in 2015, I assumed that pleading standards had been effectively raised. Here, the Federal Circuit pushes back against that assumption:
The parties assume that there is a difference between the requirements of Form 18 and Iqbal / Twombly; however, we have never recognized such a distinction. See KTech (“That Form 18 would control in the event of a conflict between the form and Twombly and Iqbal does not suggest, however, that we should seek to create a conflict where none exists.”). In any event, we need not resolve the question whether there is a difference between the two standards here because, as we explain, the SAC met the Iqbal / Twombly standard for pleading direct infringement.
When they think you are wrong, double-down.
Lifetime’s U.S. Patent 6,966,590 claims a two-part seal used in RV slide-out rooms. In 2013, two of Lifetime’s seal-designers left the company and joined Trim-Lok. Although neither were named inventors on the asserted patent, Lifetime alleged that both had knowledge of the patent. Although the accused infringer only manufactured only one of two components of the claimed invention, the Federal Circuit ruled that the patentee pled facts sufficient to reasonably infer that an infringing combination was created once installed in a Forest River RV. (Two components: a seal installed on an RV).
Holdings:
Direct Infringement Properly Pled: Lifetime did allege that TrimLok installed the seal onto the RV; that is, Lifetime alleged that Trim-Lok made an infringing seal-RV combination.”
Inducement Properly Pled: Alleged prior knowledge of the patent by the two former employees which allows us to presume intent.
Contributory Infringement Properly Pled: Knowledge of patent sufficiently alleged.
To be clear, the patentee did not simply allege these conclusively but went well beyond a typical Form-18 complaint to specify:
where the alleged infringement occurred (the Forest River plant);
when it occurred (in or around June 2013);
who performed the allegedly infringing act (an agent or employee of Trim-Lok); and
why (to test fit the seal onto the RV and to solicit sales).
These particular factual allegations – according to the court – easily push the complaint over the plausibility threshold.
Dismissal Reversed and remanded – the district court should now pick-up the case again and give the patentee a chance.
I’m quite happy with the timeline above showing the percentage of US utility patents that include the word “said” within their set of claims. Each dot represents one week of issued patents.
It appears that Allergan’s attorneys have been working overtime. In a bold move, Allergan has transferred title to all of its Restasis patents to the Saint Regis Mohawk Tribe. I don’t know if I’m laughing or crying, but there’s not a dry eye in the house.
The move is designed to prop the patents up against challenge via a tribal sovereign immunity claim. (Several of the transferred patents are being challenged before the PTAB in AIA Trials). Parallel claims have been quite successful for public universities in fending of both IPR and declaratory judgment lawsuits – even when the patents are exclusively licensed to commercial entities. In fact, this is one reason why public universities almost never sell their patent assets, but instead merely license them. Of course, a major difference with the university situation is that the university patents are the outcome of original university research. In Allergan’s case one question will be whether the ownership structure creates a sham that can be pierced as if a fraudulent corporate veil. I’m confident, however, that Allergan’s lawyers worked through the analysis. One element of the potential sham – the Tribe reports that it is being paid $13.75 million to buy the patents and will receive up to $15 million in annual royalties.
Allergan is a frequent player of jurisdictional games. Its corporate “headquarters” is in Dublin for the tax benefits, although it is “actually” sited in New Jersey.
Patents involved: United States Patent Nos. 8,629,111; 8,633,162; 8,642,556; 8,648,048; 8,685,930 and 9,248,191.
In a new decision, the Federal Circuit has ruled that the PTAB erred in its inherency analysis, but ultimately affirmed the claim cancellation after finding the error harmless. Southwire v. Cerro Wire (Fed. Cir. 2017) [Southwire]
Back in 2012, Cerro Wire filed an inter partes reexamination request against Southwire’s U.S. Patent No. 7,557,301. The slow process apparent here is one reason why this type of reexamination was phased-out and replaced by the more aggressive AIA-Trials. With reexaminations, the issued patent is sent first to a patent examiner for consideration with any decision then being appealable to the PTAB and eventually to the Federal Circuit.
The prior art is our primary source of evidence as to whether a patent claims a new invention. The best evidence comes from express teachings in the prior art. However, the courts also allow for teachings to be derived from the prior art so long as they are “inherent” within the evidence.
Example: Prior art disclosing a automobile wheel might not expressly state that the wheel is made of molecules, but that teaching would be seen as inherent. Thus, an invention directed toward a “wheel comprising molecules” would be anticipated by the reference.
Although inherency is sometimes useful, its scope has been limited by the courts only to cases where the proposed inherent element is “necessarily … present” in the prior art. See PAR Pharm., Inc. v. TWI Pharm., Inc., 773 F.3d 1186, 1194–95 (Fed. Cir. 2014).
Here, the patented method is directed toward making electric cable. Lubricant is added to reduce friction and allow the wires to be more easily pulled into the sheath. The claims require that the lubricant result in “at least about a 30% reduction” in pulling force. (Note here that the claim is written in Jepson form.)
In its decision, the PTAB (board) used inherency in a particular way – finding first that it would have been obvious to combine the prior art to use the method described; and then finding that the 30% reduction would have inherently resulted from the combination. On appeal, the Federal Circuit rejected that analysis – holding that “the Board cited no evidence that a reduction of 30% in the pulling force would necessarily result from the claimed process, which contains no steps that ensure such reduction.” Rather, as the patentee argued, the 30% reduction serves as a guide for selecting the particular lubricants and arrangements.
We have an error, but as I mentioned, it turns out to be harmless because the Board “made the necessary underlying factual findings to support an obviousness determination.”
In particular, the prior art teaches the “substantially identical” process as that claimed with no claim element differing “in any material way” from the prior art, and the prior art might have produced the claimed “30% reduction” in pulling force. Keeping that in mind, the court looked back to the CCPA’s 1977 In re Best holding:
Where, as here, the claimed and prior art products are identical or substantially identical, or are produced by identical or substantially identical processes, the PTO can require an applicant to prove that the prior art products do not necessarily or inherently possess the characteristics of his claimed product.
In re Best, 562 F.2d 1252 (C.C.P.A. 1977). In Best, the court noted that inherency would be properly used in this situation for an anticipation decision, but that for obviousness, the PTO can simply find a prima facie obviousness case.
In a split opinion, the Federal Circuit has affirmed summary judgment of obviousness in Intercontinenntal Great Brands (Kraft) v. Kellogg (Fed. Cir. 2017). Writing in dissent, Judge Reyna argued that the majority improperly applied a shortcut “prima facie obviousness test” without allowing for a full consideration of the patentee’s objective indicia of non-obviousness that the district court found both substantial and compelling.
The majority opinion, authored by Judge Taranto and joined by Chief Judge Prost begins with a discussion of the resealable cookie package covered by Kraft’s U.S. Patent No. 6,918,532. Essentially, we have a wet-wipes package for cookies.
One difference from wet-wipes is that the cookies need a frame to avoid crushing. The defendants here relied upon a prior art reference showing a rigid re-sealable sushi container (image below). The container has a tray, and the claimed frame is essentially a tray with higher sides. When combined with known cookie packaging frames — the district court found that “the only reasonable inference on the record was that a relevant skilled artisan would have been motivated to combine those prior-art references.”
In particular, the court noted that the difficulty with opening and closing cookies was well known, and the tray in the Machine Update prior art could simply be replaced with a more complete frame (i.e., a tray with higher sides) to protect the cookies.
In reviewing the lower court decision, the majority wrote:
[T]he court considered the simple and clear teachings of the art, the importance of common sense and ordinary creativity, and the conclusory character of Kraft’s expert’s assertions of nonobviousness.
Despite my love of cookies, I have to admit that I have never purchased one of these re-sealable containers as my preference is to complete a package within a single sitting. However, the product packaging has apparently met with some amount of commercial success.
Regarding objective indicia of non-obviousness, the district court found it to be highly “substantial” and “compelling” with great commercial success tied to the packaging, industry praise, and copying by the defendant here. On balance, however, the district court found (on summary judgment) the evidence was insufficient to raise a jury question.
Quite simply, according to the district court, there are some prima facie obviousness cases so strong that they are impossible to overcome even with the best possible secondary indicia of nonobviousness. On appeal, the majority affirmed this reasoning with a quote from the Supreme Court’s KSR analysis:
Where, as here, the content of the prior art, the scope of the patent claim, and the level of ordinary skill in the art are not in material dispute, and the obviousness of the claim is apparent in light of these factors, summary judgment is appropriate.
KSR v. Teleflex (2007) (note that KSR elsewhere notes the weak objective indicia in that particular dispute).
To be fair, the majority is clear that the ultimate conclusion of obviousness still requires consideration of the objective indicia (even if they could not make a difference). However, the majority finds that conclusions regarding the evidence – such as a motivation to combine references — may be drawn without consideration of the objective indicia.
Judge Reyna’s dissent goes the other way:
I would find that the district court improperly found a prima facie case of obviousness before considering Kraft’s evidence of objective indicia of nonobviousness. . . . I am left to wonder how “substantial” and “compelling” evidence of objective indicia cannot overcome a prima facie showing. If such significant evidence does not make a difference in this case, it is hard to imagine a situation in which it would.
For many, the problem with Reyna’s dissent is quite simply that it will make summary judgment more difficult — and the conventional wisdom is that winning an obviousness case is extremely difficult before a jury.
The majority-dissent also battle over the ‘correct’ order of consideration of the questions of operation. I’ll save that issue for a separate post.
Andrei Iancu’s nomination to be the next Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office has now been delivered to the Senate. The nomination will be considered by the Judiciary Committee with likely confirmation this fall.
At age 49, Mr. Iancu is Managing Partner at Irell & Manella (LA) where he is a patent attorney but these days primarily focuses on intellectual property litigation.
Iancu has participated in a number of Inter Partes Review proceedings – both as petitioner (challenging the patent) and representing the patentee. He regularly works with Michael Flemming who is of-counsel at Irell and former PTAB Chief Judge. Iancu has also been part of dozens of patent infringement lawsuits, again representing both patentees and accused infringers.
Iancu is also a prolific author of patent law materials – the following are a few examples:
Andrei Iancu, Jeremiah Helm, Code on Disks and Hat Tricks – Is Computer Software on A Medium Really Patentable?, 90 J. Pat. & Trademark Off. Socy. 97, 98 (2008) (“In the absence of legislative changes to what constitutes patentable subject matter, there really is no debate that a claim for software code by itself is not patentable.”)
Andrei Iancu, Ben Haber, Post-Issuance Proceedings in the America Invents Act, 93 J. Pat. & Trademark Off. Socy. 476, 486 (2011) (“Congress clearly intends to make the PTO a viable alternative to district court litigation for answering questions of patent validity.”)
Andrei Iancu, Michael Fleming, C. Maclain Wells, Indefiniteness in Inter Partes Review Proceedings, 98 J. Pat. & Trademark Off. Socy. 4, 5 (2016) (proposing that the PTAB allow the parties to fully brief indefiniteness issues before the PTAB issues express indefiniteness findings at the IPR initiation stage)
Benjamin Hattenbach, Andrei Iancu, Kenneth Weatherwax, Patent Prosecution Pitfalls: Perspectives from the Trenches of Litigation, 92 J. Pat. & Trademark Off. Socy. 340, 341 (2010) (“Those writing patents must recognize the various uncertainties, embrace them, and take steps that will improve the odds of prevailing in litigation in spite of them.”)
Andrei Iancu, Jay Chung, Real Reasons the Eastern District of Texas Draws Patent Cases-Beyond Lore and Anecdote, 14 SMU Sci. & Tech. L. Rev. 299, 308 (2011) (“[T]he presence of local patent rules, judges well versed in patent litigation, and a relatively quick docket mean that a patent case can often be resolved more efficiently and effectively in the Eastern District of Texas than in many other districts. Plus, it is more likely that a case will get to the jury in East Texas.”)
Andrei Iancu, Ben Haber, Elizabeth Iglesias, Inter Partes Review Is the New Normal: What Has Been Lost? What Has Been Gained?, 40 AIPLA Q.J. 539, 592 (2012) (“Only time will tell whether this is an improvement over the old inter partes reexamination process.”)
It is the first time in a while that we’ve had a PTO director with this level of litigation experience, and it will be interesting to see how that develops in terms of policy goals.
Patent agent and author Kevin Prince is hosting a great Kickstarter Campaign – producing a set of playing carts highlighting amazing patent illustrations from the past 220 years. The cards are a follow-up to his coffee-table book The Art of the Patent.
A recent draft article by Professors Jeffrey Kuhn (UNC-Business) and Kenneth Younge (EPFL) along with former USPTO Economist (and formernow professor) Alan Marco looks more in-depth at patent citations and arrived at a conclusion parallel to mine:
Specifically, we observe a dramatic increase in the number of citations generated per year and relate that change to a small proportion of patents flooding the patent office with an overwhelming number of references.
The paper divides patents four categories according to the quantity of prior art citations. Rather than call them “quartiles” the authors opt for names that relate to the examiner’s ability to review the corpus of submissions (given their time constraints):
0-20 References – Routine
21-100 References – Difficult
101-250 References – Extreme
251+ References – Impossible
Matching my parallel work, the authors write: “By 2014, patents that cite an “extreme” or “impossible” number of citations are responsible for more than 46% of all patent citations, even though they comprise less than 5% of all patents issued in that year.” In my data – looking at patents issued Jan-Aug 2017 – I found that the skew has increased so that the “impossible” patents now cite half of all applicant-submitted patent citations. [Note Here that Kuhn looks at citation of US patent documents only, while my approach considered all citations, but limited them to those designated as applicant cited.]
Figure 1 from the article provides further information.
When focusing on those “impossible” patents, the team concluded that “the citations generated by highly citing patents appear to be particularly uninformative.” This conclusion is based upon their conclusion that many of the cited references are dissimilar to the claimed invention.
Kuhn, et al., is directed at academic researchers who use patent citation in their empirical research on business and technological trends. Thus, the conclusions drawn are not designed to either indict or improve the patent system – rather, the primary conclusion is that researchers should consider this skew when making assumptions about the importance of patent citations. “The main contribution of this article is to provide prima facie evidence that the citation generating process is now generating significant measurement error for many academic studies.”
Guest Post by By Michael Sander,[1] Tara Klamrowski, and Rachel Sander
Legal analytics can now identify law firms committed to gender diversity by analyzing the gender of attorney appearances. Docket Alarm has done so for the United States Supreme Court and specialized patent courts. The lack of gender diversity is significant, especially in patent cases. Here we highlight firms breaking the mold.
Corporate clients are aware of the gender imbalance and actively seek out firms that reflect their own commitment to gender diversity. Clients now regularly request firm diversity statistics as part of law firm pitches, putting pressure on firms to support female attorneys at the highest ranks.
Law firms typically measure diversity by tracking headcount; the number of male and female associates and partners in their ranks. These metrics can ignore the often more meaningful metric of how often female attorneys actually appear in court-room litigation.
How Legal Analytics Can Help Quantify Firm Diversity
Modern legal analytics can play an important role in increasing transparency in law firm gender diversity. Traditional legal analytics show how often parties or law firms win cases, or the likelihood of winning legal relief in front of a particular judge. However, they can also be used to rank and analyze more general litigation trends, including gender diversity.
To identify firms with the most balanced male-female attorney ratio, Docket Alarm scours the litigation record, looking at the names of attorneys and their law firm. The gender of each attorney in a case is identified based on the attorney’s first name and other factors.[2]
The result is that we can now measure firm gender diversity based on attorneys actually staffed on cases, i.e., those that most substantively participate in litigation, not just by firm head-count.
Gender Analytics in the Patent Trial and Appeal Board AIA Trials
The analysis began with the Patent Trial and Appeal Board (“PTAB”), a specialized court focused on patent validity. The analysis shows that patent litigation is dominated by male attorneys. Of the top 100 law firms, 55 have less than 10% female attorneys on cases, and 8 firms have never had a single female attorney work on their PTAB AIA-Trial cases. On average, attorney appearances are only 12% female. When representing patent owners, the percentage of female attorneys drops further to 9.8%.
The “percentage female” here is calculated by dividing the number of female attorney appearances by the number of male and female attorney appearances for each firm.
Other runners up that have at least 25% of their AIA-Trial representations staffed by female attorneys include: Kasha Law; Covington & Burling; Mayer Brown; Drinker Biddle & Reath; Ascenda Law Group; Keker & Van Nest; Ropes & Gray; WilmerHale; and Venable.
The firms listed above, either by chance or design, have far more female attorneys working on cases than the average firm.
Fig. 1: Screenshot of Docket Alarm’s Gender Diversity Statistics in the PTAB
Gender Analytics in the U.S. Supreme Court
Compared to patent law, the male-female gap in Supreme Court practice is less severe, but by no means diverse. For the Supreme Court, Docket Alarm examined petitions for certiorari, analyzing the gender of the attorneys representing certiorari petitioners and respondents. Only two private law firms have half of their attorney appearances staffed by female attorneys, and only 7 have more than 25%. They are as follows:[3]
Rank
Firm
Percentage Female
1
Dykema Gossett
75%
2
Quinn Emanuel Urquhart & Sullivan
57%
3
Arnold & Porter
35%
4
Morgan, Lewis & Bockius
32.3%
5
Littler Mendelson
32.2%
6
Latham & Watkins
30.0%
7
Hogan Lovells
29.9%
In the rarefied world of Supreme Court practice, having just one or two top female attorneys on the team can make the firm a leader in gender diversity. Jill Wheaton leads Dykema’s Supreme Court practice. At Quinn Emanuel, it is Kathleen Sullivan and Sheila Birnbaum. Similarly, Deanne Maynard and Beth Brinkmann take the majority of cases at MoFo. These firms can attribute their strong diversity numbers to just a few highly specialized attorneys.
Win Rates and Gender Diversity
In addition to identifying the most gender diverse law firms, Docket Alarm’s analytics also show how case success rates are related to gender diverse firms. Docket Alarm found no statistically significant correlation between gender diversity and a firm’s win rate in the PTAB.[4]
Fig. 2: Petitioner Win Rates Plotted Against Gender Diversity in the PTAB
The Future of Diversity Analytics
Now that gender diversity is becoming part of the law firm sales pitch to clients, there is demand to identify firms committed to gender diversity, and for law firms to track diversity recruitment efforts.
Analytics can also identify gender diversity of a particular client’s legal team across law firms. This metric can help clients identify the progress of diversity efforts.
Analytics are leading the way for a new look at diversity in law, one that relies on actual client representation, and not just firm head-count. The initial statistics are not encouraging, especially in patent law, but they highlight firms that are making progress, and provide a baseline to measure future progress for everyone else.
[2] Attorneys where the gender cannot be determined due to a gender-neutral first name are not included in the statistics so as to not skew the results one way or another.
[3] The analysis did not consider firms that made fewer than 30 appearances as either a petitioner or respondent in petitions for certiorari since 2000. In an effort to home in on private civil litigation, the analysis disregarded cases filed forma pauperis.
[4] The methodology used a bivariate linear regression model. From a sample of the most active 100 law firms, gender diversity (measured as a percentage of female attorneys at the firm) was regressed on both petition institution as well as claim cancelation. The analysis was run separately for firms representing petitioners and patent owners.
35 U.S.C. 103 CONDITIONS FOR PATENTABILITY; NON-OBVIOUS SUBJECT MATTER.
A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.
Patentability shall not be negated by the manner in which the invention was made.
Patent agent and author Kevin Prince is hosting a great Kickstarter Campaign – producing a set of playing carts highlighting amazing patent illustrations from the past 220 years. The cards are a follow-up to his coffee-table book 
