Upcoming PTO Events in at the HQ in Arlington:

1. August 2, 2018 (9 am to 3 pm ET): PPAC Meeting [Webcast]
2. August 14, 2018 (Noon to 1 pm ET): Patent Quality Chat: AIA Trial Statistics from PTAB and Using AIA Trials to Enhance Patent Examination
3. September 6, 2018 (9 am to 11 am ET): PPAC discussion of New FEES. 

USPTO is planning to exercise its fee setting authority to set or adjust patent fees. As part of the rulemaking proceeding for the issuance of regulations under Section 10, the USPTO will publish a proposed patent fee schedule and related supplementary information for public viewing no later than August 29, 2018.

• The next PPAC Meeting will be on August 2, 2018 starting at 9:00 a.m. I usually attend via webcast that works well. [Agenda and Links]
• Former Acting PTO Director Joseph Matal has moved into the role of Acting Solicitor of the agency as well as Acting Deputy General Counsel for Intellectual Property Law.  Congratulations Joe! Former Solicitor Nathan Kelley has left the office that he joined originally back in 1993 as an examiner.
• EPO is highlighting its new office in The Hague. The Video below is worth watching if only for the dramatic background music.

by Dennis Crouch

In its new en banc opinion, the Federal Circuit has confirmed that the Patent Act does not require patent applicants to pay the USPTO’s attorney fees in Section 145 actions.  The USPTO had requested $100,000+ to compensate for the time of its in-house attorneys.

NantKwest, Inc. v. Iancu, 16-1794, 2018 U.S. App. LEXIS 20932 (Fed. Cir. 2018) (en banc).

35 U.S.C. 145 provides an unsuccessful patent applicant with the option of either (a) appealing the PTAB decision to the Federal Circuit or (b) filing a “civil action” in district court.  One kicker though – the statute provides that “All the expenses of the proceedings shall be paid by the applicant.”

Back in 2010, the Federal Circuit ruled that the statute allows the USPTO to collect expenses “regardless of the outcome.” Hyatt v. Kappos, 625 F.3d 1320 (Fed. Cir. 2010) (en banc).

In NantKwest, the original panel split on the meaning of “all the expenses” — with the majority holding that “expenses” include USPTO attorney fees (including in-house salaried attorney fees)..  That panel decision has now been rejected in a 7-4 decision with Judge Stoll penning the majority decision. Chief Judge PROST wrote in dissent and was joined by Judges Dyk, Reyna, and Hughes.

The court’s reasoning here is that the “American rule” on fees (each party pays for its own attorney fees) is a strongly embedded and any statutory rejection of the rule must be “specific and explicit.” The “all the expenses” language here does not meet that requirement — especially since such an interpretation would render this the only federal statute requiring “a private litigant to pay the government’s attorneys’ fees without regard to the party’s success in the litigation.”

The bottom line here is that patent applicants who challenge a PTAB decision will still be forced to pay other expenses such as printing costs and expert fees — but will not be required to pay the PTO attorney fees as a matter of course.

By Jason Rantanen

Trustees of Boston University v. Everlight Electronics Co., Ltd. (Fed. Cir. 2018) Download Opinion
Panel: Prost (author), Moore, Reyna

This opinion provides an example of how Section 112 can function as a commensurability requirement.  The court’s final lines say as much:

“Having obtained a claim construction that included a purely amorphous
layer within the scope of the claim, BU then needed to successfully defend against an enablement challenge as to the claim’s full scope…Put differently, if BU wanted to exclude others from what it regarded as its invention, its patent needed to teach the public how to make and use that invention. That is ‘part of the quid pro quo of the patent bargain.'”

Slip Op. at 14 (citations omitted).

I like the opinion because the court’s analysis fits neatly with my conceptual explanation of how enablement analyses are actually performed: it’s a two-step process, with the first step being the articulation of the relevant target and the second asking whether the patentee managed to hit that target.  Here, the court defined the target as consisting of one of six possible permutations under the claim construction the patent owner had sought.  Unfortunately, the evidence did not support the conclusion that a person having ordinary skill in the art could make that permutation without undue experimentation.

In the Federal Circuit’s words, Patent No. 5,686,738 “relates to the preparation of monocrystalline GaN films via molecular beam epitaxy.”  Slip Op. at 4. These films are used in creating blue light LEDs.  The plaintiff, Trustees of Boston University (BU), sued defendants for infringing the ‘738 patent.  Following a jury trial, BU obtained a verdict of infringement and no invalidity.  The district judge subsequently denied defendants’ renewed motion for judgment as a matter of law, in which defendants had argued that the asserted claim was not enabled.  Defendants appealed.

Only claim 19 of the ‘738 patent was at issue.  That claim states:

A semiconductor device comprising:

Two constructions were key here.  The court construed “grown on” to mean “formed indirectly or directly above” and “a non-single crystalline buffer layer” to mean “a layer of material that is not monocrystalline, namely, [1] polycrystalline, [2] amorphous or [3] a mixture of polycrystalline and amorphous, located between the first substrate and the first growth layer.”  (emphasis added).  It also understood “growth layer” as including within its scope a monocrystalline growth layer.  BU did not challenge any of these constructions on appeal.

In the Federal Circuit’s view, collectively these constructions raised six possible permutations for the relationship between growth layer and buffer layer:

• (1) monocrystalline growth layer formed indirectly on a polycrystalline buffer layer;
• (2) monocrystalline growth layer formed indirectly on a buffer layer that is a mixture of polycrystalline and amorphous;
• (3) monocrystalline growth layer formed indirectly on an amorphous buffer
  layer;
• (4) monocrystalline growth layer formed directly on a polycrystalline buffer layer; (5) monocrystalline growth layer formed directly on a buffer layer that is a mixture of polycrystalline and amorphous; and
• (6) monocrystalline growth layer formed directly on an amorphous buffer layer.

Slip Op. at 6. Of these six permutations, defendants focused their enablement argument on #6: whether a person of ordinary skill in the art could practice the invention with a monocrystalline growth layer formed directly on an amorphous buffer layer.

With the court’s attention focused on permutation #6, the enablement analysis was relatively straightforward.  The evidence supporting enablement of #6 was weak: the only technique described in the patent, epitaxy, doesn’t work to grow a growth layer directly on an amorphous structure.  BU tried to argue that the patent didn’t actually teach epitaxy, but the court was unpersuaded: “The ’738 patent’s specification is concise—just over four columns of text—and focuses on epitaxy. Indeed, it is saturated with the word ‘epitaxy’ or variants thereof.”  Id. at 9.  BU also argued that what the patent taught could not be epitaxy “because epitaxy invovles a crystalline layer on top of another crystalline layer,” and an amorphous layer is not “crystalline.”  Id. at 10.  But regardless of whether one called it epitaxy or not, the problem was that  BU couldn’t identify anywhere in the specification that taught how to grow a monocrystalline layer directly on an amorphous layer.  Nor was the expert testimony sufficient as it consisted of conclusory statements.  Testimony that other people had successfully grown a monocrystalline layer on top of an amorphous buffer layer didn’t help either, as “[s]imply observing that it could be done–years after the patent’s effective filing date–bears little on the enablement inquiry.”  Id. at 12.

In light of how the court understood the focus of the enablement issue, BU’s final argument–that the specification enabled 5 out of the 6 permutations and that was enough–didn’t work.  The court cited the “full scope” language from precedent here, and the “gap-filling” approach didn’t work here since that concept “is merely supplemental; it cannot substitute for a basic enabling disclosure.”   Ultimately, the court concluded that the patent needed to enable all six permutations–a result consistent, the court noted, with the claim constructions that BU itself had sought.  In the end, the court saw this as being in the vein of Liebel-Flarsheim: if you get the claim scope you ask for through construction, you’re also going to need to show enablement of that scope.

For enablement-timing gurus, there’s some interesting language in the section about the post-application successes to ponder.

In addition to the one patent case (Helsinn), the Supreme Court also has one Copyright case lined-up for its October 2018 term:

Fourth Estate Public Benefit Corp. v. Wall-Street.com, No. 17-571

Section 411(a) of the Copyright Act provides that “no civil action for infringement of the copyright in any United States work shall be instituted until” either (1) “registration of the copyright claim has been made in accordance with this title,” or (2) “the deposit, application, and fee required for registration have been delivered
to the Copyright Office in proper form and registration has been refused.” 17 U.S.C. 411(a).

The question presented is as follows: Whether a copyright owner may commence an infringement suit after delivering the proper deposit, application, and fee to the Copyright Office, but before the Register of Copyrights has acted on the application for registration.

ScotusBlog has the Briefs

by Dennis Crouch

Each summer, the Supreme Court takes a recess and patent cases begin to pile-up in the high-court’s docket. Only a handful of intellectual property petitions are granted certiorari each year, but almost all of the petitions raise interesting and important issues of law and policy.

The following is a comprehensive list of Patent cases pending before the Supreme Court.  I have excluded a small handful that have (in my estimation) no shot at certiorari and also fail to raise interesting patent law issues.

Petitions Granted:

1. Prior Art – On Sale Bar: Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., et al., No. 17-1229. This case questions whether 102(a) prior art under the AIA is limited to publicly available prior art. Particularly, does a pre-filing sale of the invention count as “on sale” prior art where the sale was a private sale that did not publicly disclose the invention? Merits briefing should be complete in October with oral arguments likely held in November 2018.

Petitions for Writ of Certiorari Pending:

1. Inequitable Conduct: Regeneron Pharmaceuticals, Inc. v. Merus N.V., No. 17-1616. The question presented is “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.”
2. Validity – Indefiniteness: American Technical Ceramics Corp. v. Presidio Components, Inc., No. 17-1497 (Can a patent’s definiteness be proven based wholly upon post-filing evidence?)
3. Damages – Enhanced Damages: Bombardier Recreational Products Inc., et al. v. Arctic Cat Inc., No. 17-1645 (Can treble damages for “willful infringement” be based upon a “should have known” standard?)
4. Validity – Obviousness: Nichia Corporation, et al. v. Everlight Electronics Co., Ltd., et al., No. 17-1707 (Treating obviousness as a question of fact vs law).
5. Validity – Obviousness: B/E Aerospace, Inc. v. C&D Zodiac, Inc., No. 17-1252 (Process of obviousness analysis — is there first a prima facie obviousness analysis followed by consideration of objective indicia of non-obviousness?)
6. Procedure – Standing for AIA Trials: Return Mail, Inc. v. United States Postal Service, No. 17-1594 (Whether the government is a “person” who can petition to institute a CBM;  Does a 1498(a) action count as an infringement action?)
7. Procedure – Standing of AIA Trials: RPX Corporation v. ChanBond LLC, No. 17-1686 (What is required for a petitioner to have standing to appeal an AIA Trial final decision?)
8. Procedure – Impact of Factual Stipulation: Allergan Sales, LLC v. Sandoz, Inc., et al., No. 18-21 (may the court “ignore a factual stipulation”).
9. Procedure – Federal Court Patent Jurisdiction: Alexsam, Inc. v. Wildcard Systems, Inc., et al., No. 17-1483 (Does a breach-of-patent-license lawsuit arise under the Federal Patent laws?)
10. Procedure – Joinder of Co-Owner: Advanced Video Technologies LLC v. HTC Corporation, et al., No. 18-77 (When we have co-owners of a patent, can one co-owner use Fed. R. Civ. Pro. R. 19 to force joinder of the other co-owner in an infringement lawsuit?)
11. Procedure – Timing of New Trial Motion: Promega Corporation v. Life Technologies Corporation, et al., No. 17-1669.
12. Inventor Rights: Leitner-Wise v. LWRC International, LLC, et al., No. 18-52.  Leitner-Wise (the inventor) assigned his patent rights as part of a royalty agreement that have not been by the subsequent assignee.  May he now sue the assignee for infringement?
13. Patent Eligibility: Integrated Technological Systems, Inc. v. First Internet Bank of Indiana, No. 17-1590 (“Does 35 U.S.C. § 282 allow for challenges to a patent’s validity based on patent eligibility under 35 U.S.C. § 101?”)
14. AIA Trials and Appeals: Stambler v. Mastercard International Inc., No. 17-1140 (Can Congress revoke a patent owner’s right to have the validity of his patent determined by a jury trial before an Article III forum after his patent issues; and (2) whether Federal Circuit Rule 36 contravenes 35 U.S.C. § 144.).
15. Infringement — Ensnarement as a Defense: Jang v. Boston Scientific Corporation, et al., No. 17-1332 (“Whether the Federal Circuit’s “ensnarement” defense to infringement [under the doctrine of equivalents] violates patent holders’ Seventh Amendment jury-trial rights.”)
16. Prior Art – Effective Date of Prior Art: Ariosa Diagnostics Inc. v. Illumina Inc, No. 18-****.  (“If a patent discloses but does not claim an invention, does that disclosure qualify as prior art as of the date of the application in which it was first made, such that no one else may patent the same invention based on a later-filed application?”)

Professor Patterson’s antitrust essay has been updated.  I had inadvertently posted a draft version. ☹ – DDC

= = =

Guest Post by Professor Mark R. Patterson (Fordham)

The past few months have seen a remarkable back-and-forth between Makan Delrahim, the Assistant Attorney General for the Antitrust Division of the Department of Justice, and attorneys both objecting to and supporting his views on standard-essential patents (SEPs) and standard-setting organizations (SSOs). For parties who are interested in this controversy but who do not have time to review and compare all the documents, I have annotated them, with Acrobat sticky notes keyed to highlighting of text.

• Speech by Delrahim Nov 10 annotated
• Letter from Industry Jan 24 annotated
• Letter Commending Delrahim Feb 13 annotated
• Speech by Delrahim Mar 16 annotated
• Speech by Delrahim Apr 10 annotated
• Letter to Delrahim May 17 annotated
• Response by Delrahim May 18 annotated
• Article by Willard Tom June 18 annotated

To put my cards on the table, I am largely in agreement with AAG Delrahim’s critics, though I did not sign either of their letters. I agree with Delrahim that it is reasonable to devote scrutiny to the patent “hold-out” problem that is his focus, but doing so does not require dismissing a well-established consensus on the validity and harm of patent “hold-up.” The most compelling evidence for hold-up, it seems to me, is the 100-to-1 ratio of royalty demands to royalty awards that have been seen in some cases. Perhaps that differential is the product of confused courts, but despite the calls of AAG Delrahim and his supporters for evidence or more evidence for hold-up, they themselves provide nothing to show that the courts are confused. Nor do they provide empirical evidence to demonstrate the claimed greater importance of hold-out.

In the (currently) final document from AAG Delrahim in this saga, he states that the DoJ is “not able to comment on any pending investigation or evidence that [they] have reviewed.” As I note on that document, the possible problems he suggests might turn out to be present in the SEP context, perhaps in the process of the 2015 amendment of the IEEE’s patent policy, to which the speeches might obliquely refer. If so, his speeches will merely have been valid warnings to SSOs. Again, though, the speeches seem to go much further than necessary in dismissing other problems.

I make no claim to complete objectivity or thoroughness in my annotations, which are only my immediate responses to various points made in the documents. But I have pointed out what I think are weak points and strong points not only in the comments of Delrahim and his supporters but also in the responses of his critics. Also, some of my points in some of the documents are raised also in others, but I have tried to avoid duplication.

Finally, the annotation approach that I take here might seem more argumentative than necessary. Obviously neither my own writings nor anyone else’s would emerge unscathed from such an approach, but some of the rhetoric in these documents is best addressed in this way. I also think this approach is warranted by the importance of the issues, the dramatic differences in the views expressed, and the unfamiliarity of some with these issues. This controversy deserves even more attention than it has already received.

Mark R. Patterson is a Professor of Law at Fordham University School of Law. 

The University of Amsterdam’s Institute for Information Law recently announced its essay competition: “Science Fiction and Information Law.”

Authors in both ‘genres’ dedicate a considerable share of their time speculating about how [new] technologies may evolve. Most importantly, science fiction authors, as well as information law scholars, ponder what the implications will be for society, markets and the values that we cherish and seek to protect. . . .

We welcome essays that reflect on our possible data-driven future, where data has been firmly established as an economic asset and new, data-driven smart technologies can change the way we live, work, love, think and vote. How will AI change politics, democracy or the future of the media? What will life be like with robot judges and digital professors? What is the future of transportation in the wake of drones, the autonomous car and perfect matching of transportation needs? Is there a life beyond the ubiquity of social media: Is there bound to be an anti-thesis and if so, what will the synthesis look like? What will happen when social media corporations start fully-fledged co-operation with the police? Or unleash the power of public engagement to solve or prevent crime by themselves? How would crime respond to all this? What could be the true implications of the ‘data economy’ and if we really can pay our bills with our data? How will future information law look like in the age of AI?

The essays will be read and judged — the top five will receive awards, published in the Internet Policy Review, and the authors invited to Amsterdam for a public symposium.

Rules:

• 8000-15000 words in English.
• Authors might already be sci-fi authors, but might come from any realm.
• Essay emailed to Prof. Helberger n.helberger@uva.nl by December 15, 2018.

by Dennis Crouch

The new petition for writ of certiorari in Ariosa raises the questions of what “counts” as prior art — what is disclosed or what is claimed?  The petition asks:

If a patent discloses but does not claim an invention, does that disclosure qualify as prior art as of the date of the application in which it was first made, such that no one else may patent the same invention based on a later-filed application?

[Ariosa Diagnostics Inc. v. Illumina Inc. – cert. petition].  Here, the prior art statute at issue is pre-AIA 102(e), whose equivalent is in the post-AIA 102(a)(2).  The statute seems to squarely answer the question above — a disclosure in an issued US patent will count as prior art as of its filing date regardless of whether the all features of the disclosure were actually claimed in the patent.

102 A person shall be entitled to a patent unless (e) the invention was described in . . . (2) a patent granted on an application for patent by another filed in the United States before before the invention by the applicant for patent.

In the simple case outlined above, the courts all agree that the disclosures found in an issued patent or published application  count as prior art as of the patent’s filing date.  The difficulty comes when we bring priority-claims into play (such as priority to a provisional application).

In this case, the Federal Circuit ruled that a published application can count as prior art as of its provisional filing date — but only as to features actually claimed in the application.  According to the court, features disclosed in the provisional but not claimed in the published application will only be prior art as of their date of public disclosure.

The patent challenger argues that this interpretation is wrong — and particularly that the effect of the priority claim should be governed by 35 U.S.C. §§ 119(e)(1) and 120, which provide for applications properly claiming priority back to an earlier filing “shall have the same effect, as to such invention, as though filed on” the earlier date.  On the other side – the statutory hook for the Federal Circuit’s limitation here is the fact that the statute gives priority for “the invention” — i.e., the claimed invention — but not for the disclosure as a whole. In addition Sections 119 and 120 develop the rules for patents claiming priority — not for prior art.

In the petition, the patent challenger offers the following question:

Question presented: Do unclaimed disclosures in a published patent application and an earlier application it relies on for priority enter the public domain and thus become prior art as of the earlier application’s filing date, or, as the Federal Circuit held, does the prior art date of the disclosures depend on whether the published application also claims subject matter from the earlier application?

There are several important prior cases on-point:

• Alexander Milburn Co. v. Davis-Bournonville Co., 270 U.S. 390 (1926) (judicially establishing the precursor to 102(e)).
• Hazeltine Research, Inc. v. Brenner, 382 U.S. 252 (1965)
• In re Wertheim, 646 F.2d 527 (C.C.P.A. 1981)
• Dynamic Drinkware, LLC v. National Graphics, Inc., 800 F.3d 1375 (Fed. Cir. 2015)

The petition cites my Patently-O commentary on the situation in which I argue that a disclosure’s prior art status should not depend upon what is claimed.

A leading commentator has observed that “[a]nyone who works with prior art knows that this setup is an oddball way to address the situation. A patent’s disclosure for prior art purposes should not depend upon what was claimed or not but instead should focus on what was disclosed.” Dennis Crouch, Federal Circuit Backtracks (A bit) on Prior Art Status of Provisional Applications and Gives us a Disturbing Result; see also id. (“The result here is silly—and somewhat disturbing—that under the first-to-invent rule the second inventor gets a patent.”).

Although it is unclear, I don’t believe that the AIA will be seen to have changed the statute in a way that changes the rule here.  Thus, the outcome of this case will likely bind post-AIA cases as well.

Earlier in 2018, the Office of the US Trade Representative (USTR) imposed a 25% added-value tariff on a set of particular Chinese-made products expected to valued at about $34 billion per year.  A prior notice indicated a plan to increase the 25% tariff to $50 billion worth of goods (an additional $16 billion on Chinese goods ).  Doing the math here – the US is planning here to collect $12.5 billion in tax revenue from the Chinese goods entering into the US. Although a tariff already applied to most Chinese imports, the rate is usually less than 5%.

As expected, in response to the US tariffs, China imposed increased duties on US goods.

The USTR has now proposed upping the bet — this time “in the form of an additional 10 percent ad valorem duty on products of China with an annual trade value of approximately $200 billion.” [FR Notice].   Easy math: the new 10% tax should raise an additional $20 billion in general revenue for the U.S. Government.

China cannot match this added tariff in direct parallel fashion – Since the U.S. only exports about $130 billion to China per year.  However, China could instead collect the $20 billion with a higher duty; impose quotas; or apply some other non-tariff countermeasure (such as by adjusting IP rights owned by US entities).

In addition to each country’s unilateral measures, both countries (as well as our other global trading partners) have taken their cases to the World Trade Organization (WTO) asking for enforcement of the rules of The General Agreement on Tariffs and Trade (GATT) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).