In re TikTok: Fifth Circuit Implicitly Backs Federal Circuit’s Use of Mandamus to Transfer Cases Out of W.D.Tex.

by Dennis Crouch

The 5th Circuit Court of Appeals recently decided an important convenient venue case.  Granting TikTok’s mandamus petition to have its trade secret case transferred from W.D.Tex to N.D.Cal.  The decision does not really break ground in the venue/mandamus debate, but does solidify the Federal Circuit’s parallel approach in patent cases out of the same district.  In re TikTok Incorporated, — F.4th —-, 2023 WL 7147263 (5th Cir. 2023).  Decision.

A Chinese company – Beijing Meishe Network Tech.Co. (“Meishe”) – sued TikTok for infringing its copyrights and misappropriating traded secrets associated with AV editing software.  Although both companies are Chinese in origin, the plaintiffs sued in Judge Albright’s Waco Texas courtroom.  Judge Albright is seen as tech-plaintiff friendly and so likely was the key driver for the filing location. Still, TikTok has numerous employees within the district, including 300 in the Waco area.  Further, most of the actions associated with the underlying claims took place in China — and so the plaintiffs argued that there was no particular US court that would be clearly better.   The reality though is that TikTok has most of its US employees in California.

Judge Albright denied TikTok’s motion to transfer venue and TikTok then petitioned the 5th Circuit for a writ of mandamus who has now granted the motion and ordered the case transferred to N.D. Cal.

28 U.S.C. § 1404(a) is the federal statutory provision that governs requests to transfer venue in civil cases.  It applies particularly in situations where venue in the original court is “proper,” but still inconvenient or may otherwise frustrate justice. It provides that a district court may transfer a civil action to another federal district court if the court determines the transfer is warranted based on the “convenience of the parties and witnesses” and “the interests of justice.”

Under § 1404(a), district court generally has broad discretion to grant or deny a transfer motion.  But, the party requesting transfer must at least show that convenience and justice factors weigh in favor of litigation proceeding in the proposed transferee district rather than the district where the action was initially filed.  Although a district court has discretion, the Fifth Circuit has held that § 1404(a) motions should be granted if the movant demonstrates that the transferee venue is “clearly more convenient.” In re Volkswagen of Am., Inc., 545 F.3d 304 (5th Cir. 2008). This process requires weighing factors like the ease of access to sources of proof, availability of witnesses, and the connection between the venue and the events underlying the dispute.  Prior Fifth Circuit decisions have emphasized that the analysis focuses on convenience, not on “any particular circumstance in isolation.” In re Radmax, Ltd., 720 F.3d 285 (5th Cir. 2013).  Mandamus is designed as a rare mechanism similar to interlocutory appeal, and only permitted based upon “clear and indisputable” abuse of discretion. In TikTok, the appellate panel explained:

Mandamus is an extraordinary remedy that should be granted only in the clearest and most compelling cases. To obtain mandamus relief, TikTok must show (1) there are no other adequate means to attain the desired relief; (2) the right to issuance of the writ is clear and indisputable; and (3) the issuance of the writ is appropriate under the circumstances.

In re TikTok Inc., 2023 WL 7147263, at *3 (5th Cir. 2023) (internal citations omitted).  In most situations, a district court error can only be appealed after final judgment. But, inconvenient venue (absent a greater due process violation) is generally not appealable post-trial and not a justification for a new trial.  What that means is that mandamus is typically the only mechanism available to obtain reversal of an erroneous inconvenient venue decision.

The Fifth Circuit granted TikTok’s petition. It held that the district court clearly abused its discretion in analyzing multiple § 1404(a) factors. Two examples: (1) The district court erred in finding that access to sources of proof was neutral when the relevant source code and TikTok employees with access were located in California, not Texas. (2) The district court abused its discretion in weighing the cost of attendance for willing witnesses and court congestion against transfer.

The In re TikTok Decision Does Not Reflect a Change in Precedent

In my view, this new decision applies the Fifth Circuit’s established § 1404(a) jurisprudence, and also solidifies the Federal Circuit’s parallel patent cases that purport to apply Fifth Circuit law.   There has been a paucity of 5th Circuit precedent on point, and so this helps back-fill that foundation.

On the one hand, the Fifth Circuit explained that mandamus should be rare. But, on the other hand, the panel still granted the mandamus and transfer.  The insight then is that rare things happen — perhaps more often than we think.  Here, the appellate court identified this case as an “unprecedented situation” with no connection between the plaintiff’s claims and the Western District of Texas.  This, the case turns on the case’s unique lack of any connection between the forum and the dispute. As the court stated, “[o]ur holding today is restricted to the outlandish facts of this case.”  The appellate panel did not mention that the plaintiffs had alleged that copyright infringement occurred in the W.D.Tex.

The Fifth Circuit’s decision in In re TikTok provides support for the Federal Circuit’s approach to venue transfer in patent cases. Like the Fifth Circuit, the Federal Circuit has shown a willingness to grant mandamus to transfer patent cases out of the Western District of Texas in situations where the convenience factors strongly favor another venue.  Although the Federal Circuit applies Fifth Circuit precedent to the issue, there has been limited Fifth Circuit authority directly on point regarding venue transfer and mandamus in civil suits.  The In re TikTok decision thus lends support to the Federal Circuit’s body of law.

Rounding the Bend: Claim Construction and the Role of Extrinsic Evidence

by Dennis Crouch

Actelion Pharmaceuticals Ltd v. Mylan Pharmaceuticals Inc., No. 2022-1889 (Fed. Cir. Nov. 6, 2023) [decision]

The Federal Circuit’s bread-and-butter over the years has been claim constructions that often surprise or confuse district court judges. Part of the issue here is that most Federal Circuit judges have construed thousands of patents and are deeply immersed in the law of claim construction — while most district court judges see claim construction as a small part of a patent case, which itself is a small part of their overall docket. The other part of the issue, of course, is that no deference is given to the district court’s claim construction on appeal. The ensuing appeal then regularly turns out like that law school class where students seemed to provide really good answers in the Socratic game, but the professor could never resist tweaking — “almost right.”

The Actelion case involves a common situation where the patent claims include a measurement but do not state the level of precision, and the court is forced to decide whether values slightly outside the claimed range might be covered.

Actelion’s U.S. Patent Nos. 8,318,802 and 8,598,227 are directed to a new formulation of epoprostenol, a substance that naturally occurs in the human body and that is useful for treating cardiovascular diseases.  The claims appear directed to a product-by-process — a freeze dried powder (lyophilisate) formed from a solution that contains epoprostenol and that “has a pH of 13 or higher.” Mylan’s ANDA proposes a generic version that would have a pH made from a solution with pH slightly under 13.

The question for claim construction is whether the requirement of “13 or higher” pH encompasses something akin to a pH 12.6.  For abstract mathematicians, it is quite clear that 12.6 is less than 13 — the opposite of what is claimed. But, experimental scientists understand that a measurement of 12.6 might often be properly rounded to 13. The district court adopted Actelion’s proposed construction that “a pH of 13” includes values that round to 13, such as 12.5 and concluded that Mylan’s approach was infringing.  Mylan argued on appeal that the term requires an pH of “exactly” 13 — not values that are about or approximately 13.

The Federal Circuit opinion walked through various factors to help it understand the proper construction. As the court has held, the analysis begins with the claim language, as it is of primary importance. Additionally, “the specification is always highly relevant to the claim construction analysis” and is  often “the single best guide to the meaning of a disputed term.” Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005).

Claim Language: The court examined whether the language setting a lower limit of “13” precludes rounding or not. The claim is written as a whole number, rather than in decimal form. The district court noted that this involved “two significant figures’ without implying any higher level of precision.”  At oral arguments, the patentee’s counsel explained:

[The inventor] did not say 13.0, which is a figure that would have 10 times the greater precision, and certainly didn’t say ‘exactly 13’, which is not scientifically possible in the context of pH, because you’re talking about measurement of billions of ions in a liter of water of hydrogen ions and determining their concentration.

Oral args at 18:00. On the other side, in places the specification appeared to equate 13.0 to the whole number 13.

Lack of Approximation Terms: The court noted that the claim lacks words like “about” that would imply approximation and that are often included within patent claims. As the court explained, “Unlike other claim terms, the disputed claim term lacks approximation language like ‘about.'”

Nature of pH Measurements: The court considered whether pH values can be measured precisely or inherently require some margin of error. The court noted Actelion’s argument that “it is not practically possible to measure exact pH values” because it would require counting every hydrogen ion in solution.

Specification: The specification alternately uses approximation terms like “about” or lacks decimal points when describing pH values. For example, the specification states the pH is “preferably adjusted to about 12.5-13.5, most preferably 13.” This shows the inventor knew how to use “about” to imply approximation, but did not for the “13” value.  The statement also suggests that 12.5 is different from 13.  As the court summarized, “the specification is inconsistent, also describing pH values like ‘13.0’, ‘11.58’, and ’13’ without clear precision.”

Prosecution History: During patent prosecution, the patentee had distinguished its invention from a formulation with pH 12 — arguing that pH 13 exhibited substantially more stability. But the prosecution history did not compare pH 13 with values in between 12 and 13. As the court explained, the examiner “drew a distinction between the stability of a composition with a pH of 13 and that of 12” but this did not address whether pH 13 includes values rounding to 13.

With claim construction, the Federal Circuit has ruled that courts can quite often construe claims based solely upon intrinsic evidence. But, at times courts are permitted to go further and access extrinsic evidence like scientific texts.  Here, the Federal Circuit concluded that this is a case where extrinsic evidence  is necessary to understand how a skilled artisan would view the claim language in terms of pH precision and significant figures.  As the court explained, “this case is one where the proper claim construction cannot be reached without the aid of extrinsic evidence.” The appellate panel thus vacated the claim construction and infringement judgment and remanded for the district court to consider the extrinsic evidence like scientific textbooks and perhaps expert testimony in the process of reconsidering the claim construction.

The panel consisted of Circuit Judges Reyna, Stoll, and Stark. Circuit Judge Stoll authored the opinion.

= = =

This case highlights an issue that has led to claim construction disputes in numerous cases involving measurements and precision with billions of dollars turning on so-called rounding errors. The lack of clarity stems from applicants not specifying the precision or margin of error for claim terms either in the original application or during prosecution. This ambiguity could be avoided if the USPTO were to put the onus on patent applicants to identify the precision and error margin for any measurements recited in the claims. For example, the USPTO examiner could reject the claims as ambiguous based upon the broadest reasonable interpretation and require the applicant to clarify whether “a pH of 13” allows for values that round to 13 and if so, the acceptable variance (e.g. ± 0.1, ± 0.01 pH units).

Requiring patent applicants to explicitly identify the precision and error margin for measurements during prosecution would prevent the need for courts to resort to extrinsic evidence to resolve ambiguity that should have been addressed before issuance. This would increase certainty around claim scope and reduce unnecessary litigation.

What do you think, should the USPTO consider more ways to have applicants clarify claim term precision when filing and prosecuting applications involving numerical measurements?

The Price of Principled Dissent: Fee-Shifting as a Deterrent to Legitimate Critique of Patent Doctrine

by Dennis Crouch

In re PersonalWeb Techs, — F.4th — (Fed. Cir. Nov 3, 2023)

A few years ago, I published an article along with Homayoon Rafatijo explaining our perspective of how the Federal Circuit has improperly extended the Kessler doctrine in cases like PersonalWeb Tech.  Law school classes teach two types of preclusion: res judicata and collateral estoppel. The Kessler doctrine is an additional patent-specific preclusion doctrine that the Federal Circuit applies against patentees in certain patent situation.  The basics of the doctrine is that it applies like non-mutual collateral estoppel to bar future litigation of infringement claims. But in PersonalWeb, the Federal Circuit removed some of the key safeguards of collateral estoppel — such as requiring that the issue have been actually litigated and decided  in a first case prior to precluding further litigation of the issue in a different context and against different parties. We spent a lot of time researching the history of the doctrine and its creation in the early 1900s and then walked through how the historical expansion the “claim” via notice pleading as well as expansion of non-mutual issue preclusion overtook any original justification for the doctrine.  Our article had some legs and was also awarded the ShookHardy & Bacon LLP Excellence in Research Award.  The Gov’t brief  in the subsequent Supreme Court petition did agreed that the Federal Circuit had improperly extended the doctrine.  Unfortunately, the Supreme Court denied certiorari in the case.

I was surprised to see today that in a 2-1 decision, the Federal Circuit thought so little of our argument (and the SG brief) that it determined PersonalWeb’s lawsuit was objectively baseless — thus serving as a basis for an exceptional case finding and attorney fee award of $5 million to the accused infringers.

I’ll begin with Judge Dyk’s dissent that sets out the problem:

The majority’s opinion rests on the remarkable proposition that PersonalWeb’s arguments were objectively baseless (and supported a fee award) despite the Solicitor General’s agreeing that those very same arguments were correct. The majority’s opinion effectively awards fees for a lack of success, which is not an appropriate use of section 285, and will likely chill legitimate advocacy.

Dyk, J. in Dissent.  The majority opinion authored by Judge Reyna and joined by Judge Lourie defended the Federal Circuit’s caselaw and appears to reject any notion that the Federal Circuit has expanded the doctrine beyond its original bounds.  Notably, the Federal Circuit did not contend with any of the arguments suggested either in our article or the SG brief.  The majority also did not explain its effective conclusion that the SG brief was itself objectively baseless.

The Federal Circuit’s newest decision PersonalWeb is concerning. By penalizing reasonable legal arguments and showing little regard for scholarly critique or even the Solicitor General’s briefing, the majority opinion signals an overt hostility towards rethinking existing patent doctrine and legitimate litigation that endeavors to challenge existing law.

Nose of Wax: The Ongoing Ambiguity in Claim Construction Standards

by Dennis Crouch

One of the ambiguities with contemporary claim construction is how courts deal with loosely implied limitations from the specification. These do not rise to the level of ‘disclaimer’ but we’re never entirely sure whether the specification-forward approach of Phillips v. AWH will have traction.  The courts tend to strongly oppose importing limitations into the claims absent a disclaimer, but claim-language hook can often lead to interpretative narrowing.  This becomes even more interesting in situations where the patentee is using a coined term but without an express definition of scope.  In those instances it seems appropriate to read more into the the specification — but how much more?

The Federal Circuit’s decision in Malvern Panalytical Inc. v. TA Instruments-Waters LLC, No. 2022-1439 (Fed. Cir. Nov. 1, 2023) offers some guidance — and also rejects the use of prosecution history from a non-family-member application in interpreting patent claim scope.

At issue was the meaning of the term “pipette guiding mechanism” as used in a pair of patents owned by Malvern.  U.S. Patent Nos. 8,827,549 and and 8,449,175. The district court limited the term to only “manual” embodiments based on statements made during prosecution of an unrelated patent.  With that narrow construction, the accused automated devices clearly did not infringe — and the patentee stipulated as such. On appeal, the Federal Circuit vacated the district court’s claim construction, holding that the term was not limited to manual embodiments and that unrelated prosecution history should not have been used to construe the claims.

The patents relate to microcalorimeters, which are instruments used to measure the heat absorbed or released during a chemical reaction. Specifically, the patents describe an isothermal titration calorimeter (ITC) that contains several components including an automatic pipette assembly, a stirring paddle and motor, and a “pipette guiding mechanism.” The pipette guiding mechanism moves the pipette assembly between different positions, such as inserting the pipette into a sample cell for measurements or into a washing apparatus for cleaning. The key dispute was whether this pipette guiding mechanism included both manual and automatically operated embodiments. The Federal Circuit ultimately held that the plain meaning of the term encompassed both manual and automated guiding mechanisms.

District Judge Andrews (D.Del.) sided with the accused infringers in finding that the claimed “pipette guiding mechanism” should be limited only to manual operation forms.  On appeal, the TA defended the judgment and raised the following arguments: (1) The specification discloses two embodiments of the guiding mechanism, both of which are operated manually and refers to a “user skills” as an aspect of operating the machine.  (2) The specification goes on to describe other automated portions of the assembly, but did not do so with the guiding mechanism. (3) The term “pipette guiding mechanism” is a coined term without a plain meaning, so it can’t be broader than the embodiments in the specification. (4) that the patentee’s provided evidence that a product guide being distributed “included” the “relevant features” of their claimed invention.  That product guide only described manual operation.  (5) Finally, during prosecution of a separate non-family-member patent (US9103782), the patentee had argued that it was describing a ‘purely manual guiding system’ as an attempt to avoid prior art from an automated reference.   Although perhaps not a complete disclaimer, TA argued that these factors come together to narrowly construe the claim to cover only manual guiding mechanisms.  The Federal Circuit dismantled these arguments individually.

Claim Construction Analysis

The Federal Circuit began its analysis by looking to the plain and ordinary meaning of “pipette guiding mechanism” as would be understood by a person of ordinary skill in the art. The court found that the plain meaning encompassed both manual and automatic guiding mechanisms. This was based on examining the individual words in the claim term, as well as the overall context provided by the claims and specification. The court found no clear disavowal or redefinition in the specification or the arguments made during prosecution and so gave the claims their full ordinary meaning.

As to the coined-term argument, the court found that even coined terms can have a discernible plain and ordinary meaning based on the intrinsic evidence of the patent. There is some tension among the cases on this issue.  Compare Indacon, Inc. v. Facebook, Inc., 824 F.3d 1352, 1357–58 (Fed. Cir. 2016) (coined terms without a plain and ordinary meaning in the art can be limited more readily by prosecution statements) with Littelfuse, Inc. v. Mersen USA EP Corp., 29 F.4th 1376, 1381 (Fed. Cir. 2022) (“[T]he district court was correct in seeking to give meaning to the term ‘fastening stem’ by looking to the meaning of the words ‘fastening’ and ‘stem’ as used in the patent.”).  The appellate panel first noted that the doctrine is “sparingly applied” and, as here, the patent uses the individual words “pipette” “guiding” and “mechanism” in a manner that can be readily understood and does not suggest a manual limitation.  Rather, “the plain and ordinary meaning of ‘pipette guiding mechanism’ is a mechanism that guides a pipette, which can be either manual or automatic.”

In this case, the claims lack a textual hook for a manual requirement and the court found no “clear and unmistakable” disavowal.  As such, the proper construction is the full scope.

Use of Unrelated Prosecution History

A significant aspect of the Federal Circuit’s decision was rejecting the district court’s reliance on prosecution history from a non-family member patent to construe the claims. Although not an official  ‘family member,’ the parallel application had a shared assignee, was being prosecuted by the same law firm, and and also covered a pipetting system. In that non-family-member case, the patentee had distinguished its invention from the prior art by arguing that its guiding mechanism operated manually rather than automatically.  The district court treated the statements as admissions limiting “pipette guiding mechanism” to manual embodiments.  That office action rejection was then submitted to the PTO in these cases as part of an IDS.

On appeal, the Federal Circuit rejected the district court analysis, holding that  statements in an “unrelated” application do not guide meaning or serve as a disclaimer and further that submission of the OA in an IDS is insufficient to incorporate those statements for purposes of construing the claims at issue.

Although this answer here is probably correct, it makes me uncomfortable because it allows patentees to tell different stories in different cases.  Here, the cases were being handled by different examiners in different art units — it might be a different story though if the same examiner was looking through all the  similar but “unrelated” cases.

Although the logic of this case all seems clear from hindsight, I continue to be concerned that this situation offers lots of wiggle room for each side to push  for advantage — akin to a nose of wax.

Safe, Secure, and Trustworthy Artificial Intelligence

by Dennis Crouch

The White House this week issued a new executive order focusing on a variety of aspects of regulating artificial intelligence, some of which focuses on IP issues.  The executive order lays out eight guiding principles for manages risks while allowing growth and benefits:

  1. Ensuring AI is safe, secure and trustworthy, including through developing guidelines, standards and best practices, verifying reliability, and managing risks related to national security, critical infrastructure and cybersecurity.
  2. Promoting innovation and competition in AI, such as through public-private partnerships, addressing intellectual property issues in ways that “Protect inventors and creators”, and ensuring market competition and opportunities for small businesses.
  3. Supporting workers affected by AI adoption, including through training, principles for workplace deployment, and analyzing labor market impacts.
  4. Advancing equity and civil rights when using AI in criminal justice, government benefits, hiring, and other areas.
  5. Protecting consumers, patients, passengers and students from risks of AI systems.  “[C]onsumer protections are more important than ever in moments of technological change.”
  6. Safeguarding privacy including through evaluating commercial data use and advancing privacy-enhancing technologies. “[T]he Federal Government will ensure that the collection, use, and retention of data is lawful, is secure, and mitigates privacy and confidentiality risks.”
  7. Improving government use of AI.
  8. Strengthening American leadership abroad to advance international cooperation on AI.

Beyond the stated goals, the order has a number of requirements — most of them directed to the various Federal executive agencies.  The tightest new regulations appear intended to focus on future AI models that are a few times larger than what OpenAI and other are currently deploying as well as “dual-use” models that could have potential national security impact.

  • It requires companies developing or intending to develop “potential dual-use foundation models” to provide information to the government about model training, ownership of model weights, results of AI “red team” testing, and measures taken to meet safety objectives.
  • It authorizes the Secretary of Commerce to define the technical conditions that would trigger these reporting requirements. Until defined, reporting is required for models trained on over 10^26 operations or primarily on biological sequence data over 10^23 operations.
  • NIST is charged with developing standards and tests to ensure that AI systems are safe, secure, and trustworthy and the Department of Commerce to develop guidance for content authentication and watermarking of AI-generated content.

The intellectual property-related aspects of the executive order ask the appropriate agencies to work on the problem.

  • It directs the USPTO Director to issue guidance to patent examiners and applicants on AI and inventorship, including issues related to using generative AI in the inventive process. It calls for the USPTO Director to issue updated guidance on patent eligibility for AI and emerging technologies.
  • It instructs the USPTO Director to consult with the Copyright Office and make recommendations on potential executive actions related to copyright and AI, including the scope of protection for AI-generated works and the use of copyrighted works for AI training.
  • It directs Homeland Security to develop a program to address AI-related intellectual property theft, including investigating incidents and enforcing actions. It also calls for updating the IP enforcement strategic plan to address AI.
  • It encourages the FTC to use its authorities to promote competition in the AI marketplace and protect consumers and workers from related harms.
  • It promotes public-private partnerships on advancing innovation, commercialization and risk-mitigation methods for AI. This includes addressing novel IP questions.

None of these requirements have immediate effect, but indicate that there will be further action over the next few months.

Prosecution Strategies for the AIA Era

by Dennis Crouch

The Federal Circuit’s new claim construction decision in Monterey Research, v. STMicroelectronics highlights the ongoing difficulty of patentees to obtain narrow claim construction at the PTAB during IPR. Typically, patentees are seeking narrow claim construction in order to better differentiate the patent claims from the asserted prior art.  And, although a patentee could expressly amend the claims, such an action could create problems in litigation such as eliminating back damages and potentially creating an estoppel problem. Broad claim interpretation at the PTAB was rampant in the early days as the administrative court applied the PTO standard “broadest reasonable interpretation.” More recently, the PTAB has moved to the narrower ordinary meaning standard, but the change has not been enough for many patentees to survive the IPR process.

Monterey’s U.S. Patent No. 6,534,805 covers an improved SRAM cell design for computer memory.  The claim requires “a single local interconnect layer comprising local interconnects corresponding to bitlines and a global wordline.”  Although not expressly included in the claim, the patentee argued that the interconnect layer should be construed to require lateral routing of signals along the interconnect layer.  Monterey pointed to several elements from the prosecution history that support its contention.

  • Figure 3 of the patent (above) shows the type of lateral routing of signals  being discussed. During prosecution, Monterey distinguished its claim from the prior art by referencing Figure 3 and stting that “all the runs [i.e. interconnects] for the bitlines, Vcc, Vss and the wordline are provided in the single layer of Fig. 3” in contrast to Osada’s multi-layer arrangement.
  • In fact, the “single local interconnect layer” limitation was specifically added to the claims in order to distinguish the invention from Osada.

The majority opinion authored by Judge Chen and joined by Judge Taranto rejected the patentee’s arguments — providing two key conclusions:

  1. The prosecution history statements did not clearly limit the claim scope but rather were too ambiguous and vague to constitute a disavowal of claim scope.
  2. Figure 3 does not clearly require lateral routing.  Rather, Figure 3 only showed a single contact point on each relevant interconnect, rather than contacts on both ends that would necessitate lateral routing along the length.

Judge Dyk’s dissent, on the other hand, pointed to the prosecution history statements referencing Figure 3 as limiting the claim scope to lateral routing to overcome the prior art.  Unlike the majority, Judge Dyk looked more to the purpose and context of the prosecution history rather than just the plain language.

Unpatentability Affirmed.

= = =

The standard conventional wisdom for patent prosecution is that a more limited record is better than one full of prosecution history statements and declarations.  That approach has the benefit and tendency to lead to broader claim construction. But, this case represents another example of how that broad approach can come back to bite the patentee — especially in today’s world of AIA trials.

The conventional patent prosecution wisdom has long been that fewer prosecution history statements are generally better — because they allow for broader claim construction down the road. This approach stems from the desire to avoid unintentional disavowals or limitations on claim scope. However, as this case illustrates, that strategy can come back to haunt patentees in AIA trials.

In the current post-AIA environment, patent claims are frequently challenged in inter partes reviews (IPRs) before PTAB judges who are ready and willing to delve into the prior art to in a detailed obviousness analysis. Thus, patentees today find themselves arguing for narrower interpretations to avoid prior art — but are lacking clear prosecution history support. Vague or ambiguous statements meant to preserve claim scope have been be inadequate for this task as are intentionally broad and ambiguous claim limitations. This approach left Monterey’s claims vulnerable to invalidity in light of the broader interpretation.

Post-Hoc Party: You Should Have Said That Before

by Dennis Crouch

Netflix, Inc. v. DivX, LLC, — F.4th — (Fed. Cir. 2023)

In recent years, a number of PTAB decisions have been vacated on appeal because the administrative court failed to address arguments raised by the various parties.  Seeing this potential avenue for appeal, many IPR-losers comb through their IPR filings in an attempt to identify potential untapped veins.

Netflix did just that in this case — arguing that the PTAB had failed to address several of its arguments. But the appellate panel refused to comply and instead held that the arguments Netflix had purportedly raised before the PTAB had, in actuality, not been sufficiently raised below.   Judge Chen authored the majority opinion joined by Judge Linn, Judge Dyk wrote in dissent.

DivX has developed a number of inventions related to video streaming.  The patents at issue here are designed to facilitate adaptive bitrate video streaming through the use of “top level index files” designed to be used by a playback device in choosing the appropriate stream to play that will both take advantage of the device capabilities and take into account network conditions. U.S. Patent Nos. 9,270,720 and 9,998,515.

In 2019, DivX sued Netflix for infringing the patents, and Netflix responded with a pair of IPR petitions arguing that the claims should be cancelled.  Although the PTAB granted the petition, it did ultimately sided with the patentee in holding that the claims had not been proven unpatentable.

On appeal, Netflix did not challenge any of the PTAB’s fact finding or legal conclusions, but instead argued that the PTAB had failed to address or misinterpreted two of its obviousness arguments.  Netflix cited cases like Donner Tech., LLC v. Pro Stage Gear, LLC, 979 F.3d 1353 (Fed. Cir. 2020) for the prospect that the Board must meaningfully consider all of petitioner’s arguments.

Reviewing the PTAB’s interpretation of petition arguments for abuse of discretion, the majority held Netflix forfeited three arguments raised on appeal by failing to clearly raise them before the PTAB. See In re Google Tech. Holdings, 980 F.3d 858, 863 (Fed. Cir. 2020) (“Any argument not raised to the Board is forfeited.”).

The dissent, concluded that the arguments had been properly raised, but the majority saw the appeal as “post-hoc attempts on appeal to include additional, new arguments not contained in the petition.”  On this point, the majority complied a long list of cases where IPR-losers had attempted to appeal arguments that had not been clearly proffered below.

  • Microsoft Corp. v. Biscotti, Inc., 878 F.3d 1052, 1074 (Fed. Cir. 2017) (“Microsoft did not present to the Board the full argument that it presents here on appeal . . . Microsoft’s brief on appeal is far more detailed and contains substantial new arguments regarding why it believes Kenoyer anticipates this limitation of claim 69.”)
  • Wasica Fin. GmbH v. Cont’l Auto. Sys., Inc., 853 F.3d 1272, 1286 (Fed. Cir. 2017) (“We also are unpersuaded by Continental’s attempts to cure the petition’s deficiencies in its subsequent briefing to the Board and to us.”)
  • Yita LLC v. MacNeil IP LLC, 69 F.4th 1356, 1366–67 (Fed. Cir. 2023) (disagreeing with Yita that an argument was raised in petition and thus finding no abuse of discretion by the Board in “declining to consider Yita’s argument about modifying the teaching of Rabbe . . . because it was presented too late—in a footnote in Yita’s reply brief”);
  • Henny Penny Corp. v. Frymaster LLC, 938 F.3d 1324, 1331 (Fed. Cir. 2019) (“[T]he Board did not abuse its discretion by holding HPC to the obviousness theory in its petition”);
  • Ariosa Diagnostics v. Verinata Health, Inc., 805 F.3d 1359, 1367 (Fed. Cir. 2015) (“We see no error in the Board’s rejection of Ariosa’s reliance, in its Reply submissions, on previously unidentified portions of a prior-art reference to make a meaningfully distinct contention.”).

Without delving deeply into the technology, Netflix had argued that a “filtering” limitation had been shown based upon the prior art Pyle’s selection of an existing manifest as well as Pyle’s creation of a new manifest.  But, the Board focused only on the selection portion.  Second, for a “retrieving” limitation, Netflix argued that Lewis alone disclosed these limitations, rather than needing to be modified.  But, the Board focused on whether it would have been obvious to modify Lewis to include that limitation.   What you can see here is that both of these arguments are quite narrow slivers from the overall obviousness arguments.

In looking at the petition and the Board’s initiation decision, both the petitioner and the patentee have reasonable positions as to whether the issue was properly raised.  In the end then, I expect that the deferential abuse of discretion standard of review for this issue carried the day.  Affirmed.

= = =

This is an aside, but one part of the briefing that was interesting to me is that more than 1/3 of the cases cited by the appellant in its opening brief were non-precedential federal circuit cases.  Prior to 2007 the Federal Circuit had a rule forbidding the citation of its unpublished opinions. Now, Fed. R. App Proc. 32.1 expressly permits those citations.

Techno-Optimism and Its Ties to the U.S. Patent System

by Dennis Crouch

The idea of “techno-optimism” has been gaining traction lately, thanks to wealthy venture capitalist Marc Andreessen. In his recent essay “The Techno-Optimism Manifesto,” Andreessen lays out his vision of how constant technological development leads to to abundance, progress, and human flourishing.

At its core, techno-optimism is the belief that technological innovation is an inherent good that we should actively encourage as a society.  Many go further and view technological advance as the only way for humanity to survive and thrive.

We believe that there is no material problem – whether created by nature or by technology – that cannot be solved with more technology. . . . Give us a real world problem, and we can invent technology that will solve it.

Andreessen’s sees a potential future of unlimited clean energy, material abundance, and exponential progress driven by AI.

Andreessen’s techno-optimism is enmeshed with his libertarian notions of laissez faire no-regulation, no worries for sustainability beyond the market, and no social responsibility or civic duty.  Truthfully, Andreessen’s manifesto appears fairly unhinged once you delve into the particular theocracy, but may be reflective of the mindset of the investment elite.  Still, if I can pick and choose, then I can find substantial merit with the general idea of optimism that technology can help the human condition.

Andreessen’s manifesto does not mention patents or intellectual property directly. I see a good amount of alignment, as well as some tension with his particular views.

The general ethos of embracing technology for the betterment of humankind aligns closely with the rationale behind the U.S. patent system. Since its origins, the patent system has been premised on the idea that providing inventors with exclusive rights over their creations for a limited time will incentivize technological innovation — and thus “promote the progress.”  By granting patents, society encourages inventors to push boundaries and also disclose their breakthroughs in ways that foster further innovation.

Like techno-optimist theory, the U.S. patent system is built on the belief that technological progress is good for society. While patents do create the potential of temporary monopolies, the intended outcome is faster innovation and diffusion of knowledge over the long-term.  Andreessen’s pro-capital pro-property stance suggests general support for the system despite the temporary limits on competition. But, the major complaint about the patent system is that  it can begin to appear like a form of regulation that is picking winners without actually promoting innovation.

Another coupling here is that techno-optimists believe that a small innovators can change the world and should be rewarded for their successful endeavors.  In this vein, patent rights are a key tool to facilitate competition against against large established players. Patents help level the playing field.

One Patent’s ‘Processor’ is Another’s ‘Means for Processing’: Dueling Claim Constructions at the Federal Circuit

by Dennis Crouch

WSOU Investments LLC v. Google LLC, Nos. 2022-1063, 2022-1065 (Fed. Cir. Oct. 19, 2023)

WDTX District Court Judge Alan Albright sided with the accused infringer in this case — holding that the asserted claims were invalid as indefinite.  The setup here is a common scene: means plus function (MPF) claim limitations without adequate support in the specification.

Most commonly patentees draft claims that cover the physical structure of an invention or the particular steps taken in a process. However, the Patent Act also permits a patentee to claim the elements of an invention as “means for” accomplishing a specified function without actually claiming the structural components. Although a “means for holding hot coffee” appears potentially broader than claiming a “ceramic mug,” the statute itself places key limits on the scope of these so-called “means plus function” claims. In particular, a means for limitation is interpreted to only cover the “corresponding structure” disclosed in the specification and their equivalents. 35 U.S.C. § 112(f). And, a series of Federal Circuit cases have created a bright line rule that a means-plus-function limitation will render the entire claim invalid as indefinite in situations where no corresponding structure is provided in the specification. This is the case even in situations where various ways to perform the claimed means are well known to those of skill in the art. See, e.g., Williamson v. Citrix Online, LLC, 792 F.3d 1339, 1351-52 (Fed. Cir. 2015); Aristocrat Techs. Australia Pty Ltd. v. Int’l Game Tech., 521 F.3d 1328, 1337-38 (Fed. Cir. 2008).  In this situation, my “means for holding hot coffee” might not even cover a ceramic mug if the specification itself only discloses paper cups. And, the claim would be invalid if it failed to disclose any particular embodiments of a hot-coffee-holding device.

A patentee intending to invoke 112(f) style claiming will typically use the magic words “means for …” However, the Federal Circuit concluded that claim meaning is a matter of objective analysis, rather than subjective intent.  In MPF analysys, the court looks beyond the magic words and more generally ask whether the limitation recites a non-structural “nonce” word.  A “nonce” word is a verbal construct that does not convey a particular structure, such as “element,” “device,” or other generic, non-structural terms.  When a nonce word is interpreted in means plus function form, the corresponding structure in the specification must be something more than a repeat of the same nonce word — lest the claim be found invalid as indefinite.

In this case, the two patents at issue are related to image tracking technology (the ‘045 patent) and gesture control technology (the ‘825 patent).  The following claim terms were the ones disputed:

  1. “a processor configured to …” (‘045 patent)
  2. “at least one memory and the computer program code are configured, with the at least one processor, to cause the apparatus to …” (”825 patent)

U.S. Patent Nos. 8,965,045 and 9,335,825.

Judge Albright found each of these underlined terms to be in “nonce” form and therefore applied MPF analysis.  A processor is a means for processing; a memory is a means for storing data; etc.  According to Judge Albright, the patent document did not provide any further structural disclosure beyond the functional words — thus rendering the claims indefinite.

On appeal, WSOU argued on appeal that the limitations were not means-plus-function limitations, and thus § 112, ¶ 6 did not apply. Alternatively, it argued the specifications disclosed adequate structure.

As to the ’045 patent, the Federal Circuit affirmed the district court’s determination that the “processor” limitation invoked § 112, ¶ 6 because in the context of the claims and specification it was described only functionally and generically. The court concluded that the patentee had focused its arguments on the processor being not-MPF and had waived any arguments regarding corresponding structure. “WSOU argues for the first time on appeal that the specification discloses corresponding structure.”

As to the ’825 patent, the Federal Circuit reversed. It held that the “memory,” “code,” and “processor” limitations in this patent, read in context of the claims and specification, would connote sufficient structure to avoid § 112, ¶ 6. The court distinguished the ’825 patent’s more specific description of these elements.

So, we have the word “processor” interpreted as a nonce word invoking MPF analysis in one patent; but a structural limitation in the second patent.   The difference here is that in the ‘045 patent, the patentee “treats the word ‘processor’ so broadly as to generically be any structure that manipulates data” but without providing specific examples.  On the other hand, the ‘825 patent included a much more concrete explanation of the term. The court explained:

In contrast to the ‘045 patent, the specification [in the ‘825 patent] describes the ‘processor’ as hardware that runs the computer program code. Specifically, the specification teaches that the term ‘processor’ is synonymous with terms like controller and computer and ‘should be understood to encompass not only computers having different architectures such as single/multi-processor architectures and sequential (Von Neumann)/parallel architectures but also specialized circuits such as field-programmable gate arrays (FPGA), application specific circuits (ASIC), signal processing devices and other devices.’

Thus, the intrinsic evidence from the specification justified the distinction.  One odd note here is that I did read through the ‘045 patent and it does seem to include a bit more than what was suggested by the court. In particular, the ‘045 patent has the same quoted statement that a processor:

should be understood to encompass not only computers having different architectures such as single/multi-processor architectures and sequential (Von Neumann)/parallel architectures but also specialized circuits such as field-programmable gate arrays (FPGA), application specific circuits (ASIC), signal processing devices and other processing circuitry. …

‘045 patent. In addition, the ‘045 patent indicates that a processor could be configured as “processing circuitry” that includes a combination of implementations including microprocessor(s).

The Federal Circuit did not consider these factual similarities because, apparently the patentee raised them as to the ‘045 for the first time on appeal.   If I were the patentee, I might review this decision carefully and consider whether a request for panel rehearing is appropriate — is it true that the patentee only preserved the structure argument as to one of the patents?

In any event, the case is interesting for the outcome — the Federal Circuit finding that Judge Albright is being too tough on patentees.

Copyright-Free Sandbox: Implications of AI-Generated Content

by Dennis Crouch

Conventional wisdom in copyright law has been to presumptively treat all online content as protected by copyright. This approach has made sense because of the low originality standard for copyright protection.  The result then has been that users would focus on whether they have a license; whether the intended use is a “fair use;” and (perhaps) whether the copyright holder is likely to discover the infringement and attempt to enforce their rights.

However, our digital landscape is experiencing a major upheaval with to the proliferation of synthetic works that likely do not meet the criteria for copyright protection. These works primarily fall into two main categories: (1) those lacking the necessary originality for copyright eligibility, such as raw data or certain surveillance camera footage; and (2) those created without direct human authorship, as with content generated by AI systems, often called GenAI.

The existing legal framework requires human creativity and ingenuity as the foundation for originality. Yet, AI systems are generating content at an unprecedented scale, and the volume of synthetic creations has likely already exceeded that of human-originated works. In the upcoming years, we can expect the number of synthetic creations to continue exponential growth. While some of this content may lack originality, a significant portion could easily meet the originality standard established in Feist and similar cases, if not for the absence of a human author.

This emerging copyright-free realm poses both opportunities and challenges. The prospect of freely accessing and building upon an expanding pool of non-copyrighted material without legal ramifications offers a unique freedom. This liberty to transform AI-generated works into new creations could potentially drive innovation and further creation at an accelerated pace. However, a challenge arises in determining to what extent these uncopyrighted synthetic works are discernible from copyrighted counterparts. If my forecast holds — that the majority of works in numerous fields will soon be synthetically generated — it might become prudent to reconsider shifting the burden back onto copyright claimants to explicitly mark their works.

This potential future holds many uncertainties. One question is whether the individuals behind  AI-generated works could leverage other legal mechanisms, like contracts, to safeguard their interests. Or, will the courts follow old rules prohibiting the use of contract to limit distribution of otherwise publicly available uncopyrighted content.

One or More: One Simple Trick to Invalidate this Patent

by Dennis Crouch

ABS Global, Inc. v. Cytonome/ST, LLC, No. 22-1761 (Fed. Cir. Oct. 19, 2023).

We have another precedential Federal Circuit decision that turns on the meaning of the simplest word in the English language: “A.”

Cytonome’s US Patent No. 10,583,439 covers a microfluidic device for processing particles of interest in a sample fluid. The claim requires

an inlet configured to receive a sample stream; [and]
a fluid focusing region configured to focus the sample stream;. . .

‘439 Patent, claim 1 (emphasis added).  At the PTAB, patent holders typically seek a narrow claim construction in order to separate their claims from the closest prior art.

Here, the PTAB agreed with the patentee’s narrow construction that “the sample stream” was limited to a single, contiguous sample stream.  The PTAB relied primarily on two main reasons for its singular-only construction:

  1. The PTAB believed that allowing multiple streams would be inconsistent with dependent claim 2, which refers to “a centerline of the sample stream” in the singular. The PTAB reasoned a single centerline implies only one sample stream.
  2. The PTAB wanted to avoid redundancy with other claims that recite “a centerline of the flow channel” (claim 5) and “a centerline of the microfluidic channel” (claim 20). It distinguished those terms as referring to the physical device itself.

In addition, the patent document contains only embodiments showing a single stream. This narrow claim construction allowed the patentee to avoid the closest prior art (Simonnet) that disclosed a split stream.

On appeal, the Federal Circuit reversed — finding that the proper claim construction of “the sample stream” permitted multiple streams (including a split stream) on the same microfluidic device.

The Federal Circuit began its analysis by noting that “at least in an open-ended ‘comprising’ claim, use of ‘a’ or ‘an’ before a noun naming an object requires that the phrase be construed to mean ‘one or more’ unless the context sufficiently indicates otherwise.” Slip op. at 8-9 (Fed. Cir. Oct. 19, 2023) (citing Baldwin Graphic Sys., Inc. v. Siebert, Inc., 512 F.3d 1338, 1342–43 (Fed. Cir. 2008)). The court called this the “general rule,” and observed that the specification reinforced this rule with its boilerplate definition in the specification defining “‘a’ or ‘an’ entity [as] refer[ring] to one or more of that entity.” Id.

Although the general rule can be overcome based upon the circumstances of a particular case, the Federal Circuit held there was no sufficient basis for deviating from the general rule in this case. It rejected the PTAB’s view that dependent claim 2’s reference to “a centerline of the sample stream” implied a single stream, finding claim 2’s language “on its face is broad enough to cover” alternatives like separate centerlines or branches. The court also disagreed that the specification’s lack of a multiple-stream embodiment compelled a narrow construction, absent “‘clear and manifest disavowal’ of [the plural] meaning.” Id. (quoting Martek Biosciences Corp. v. Nutrinova, Inc., 579 F.3d 1363 (Fed. Cir. 2009)).

Given the presumption of plural meaning and finding no persuasive reason to deviate, the Federal Circuit held “the sample stream” should not be limited to a singular-only interpretation.  Reversed with a holding that claims 1 and 8 are now anticipated. The Federal Circuit remanded the case for further proceedings on dependent claims 2, 6, and 9 to consider whether those claims are now obvious.

= = = =

One question I have is whether the patent is now also likely invalid for lack of enablement and written description because it claims one or more streams while disclosing only one stream in original specification.

Fraudulent Incontestability Declarations: Textual Fidelity vs. Fraud Deterrence

by Dennis Crouch

In the trademark case of Great Concepts, LLC v. Chutter, Inc., No. 2022-1212 (Fed. Cir. Oct. 18, 2023), the Federal Circuit addressed whether fraud in a declaration of incontestability justifies cancelling the underlying trademark registration. Writing for the majority, Judge Stark held the TTAB lacked this authority under the Lanham Act. Stark reversed the TTAB’s cancellation order, finding the statute only permits cancellation for fraudulent acts taken while obtaining the registration, not for establishing incontestability. Dissenting, Judge Reyna argued this improperly restricts the TTAB’s ability to combat fraud before the agency. Their disagreement centers on the scope of “maintaining” a registration and policy concerns over deterring false statements.  Over the past several years, the global trademark systems have faced increasing fraudulent activity and this decision serve as a call for Congressional reforms.

The case also raises important issues associated with our ever-more-powerful administrative state. Although US courts are empowered by equity to counteract fraud on the system, administrative agencies are typically much more limited in their actions.  Of course, this balance of powers question goes far beyond the patent and trademark systems.

Great Concepts applied to register the mark “DANTANNA’S” for restaurant services in 2003.  The company runs restaurants of the same name in the Atlanta area that are described as “upscale” sports bars. I’m sure they are lovely.

The DANTANA’S mark registered in 2005 as Registration No. 2929764. In 2006, Chutter, Inc.’s predecessor Dan Tana petitioned to cancel the registration, alleging a likelihood of confusion with his common law “DAN TANA” restaurant mark.  For the Italian place in Santa Monica. The cancellation proceeding was eventually dismissed in 2010 for failure to prosecute.

Meanwhile in 2010, Great Concepts’ former attorney Frederick Taylor filed a combined declaration with the USPTO seeking to maintain the registration under Section 8 and also to obtain incontestable status under Section 15. The Section 15 declaration falsely stated no proceedings involving the DANTANNA’S mark were pending, when in fact the cancellation proceeding and related litigation were still ongoing.

In 2015, Chutter filed a new petition to cancel the DANTANNA’S registration, alleging Taylor’s Section 15 declaration constituted fraud warranting cancellation under Section 14 of the Lanham Act. The TTAB agreed, finding Taylor knowingly made false statements with intent to deceive the USPTO. It held the fraudulent declaration enabled Great Concepts to obtain new incontestable rights. Great Concepts appealed the cancellation order to the Federal Circuit.

The dispute here involves two adjacent provisions of the Federal Trademark statute known as the Lanham Act of 1946 (as  amended). Lets look at the statute.

Section 15 of the Lanham Act spells out the process of moving a mark to “incontestability” status.  15 U.S.C. § 1065.   Important for the purposes of this case, the process requires the mark owner to file “an affidavit … with the Director” making a variety of required statements. To be effective, the affidavit must include a statement that “there is no proceeding involving said rights pending.”  Id. As mentioned above, Great Concepts made such a statement at a time when a case was still pending.

Section 14 empowers the USPTO to act on a petition to cancel a registered trademark. 15 U.S.C. § 1064(3).  The law provides several reasons why a registration might be cancelled:

  • Mark becomes generic for the goods;
  • Mark is functional;
  • Mark was abandoned;
  • “Registration” was “obtained fraudulently”;
  • etc.

Id.  In considering Section 14, The majority concluded that it does not cover fraudulent Section 15 incontestability declarations.  The closest hook that the majority found was cancelling a mark if the registration was obtained fraudulently, but the majority found that not close enough.  Judge Stark explained “a Section 15 declaration only relates to a mark’s incontestability, not its registration.”  On this point, the court distinguished the case of Torres v. Cantine Torresella S.r.l., 808 F.2d 46 (Fed. Cir. 1986). In Torres, the the focus was on renewal under Section 8 that requires, and the court held that “[f]raud in obtaining renewal of a registration amounts to fraud in obtaining a registration within the meaning of section 14(c) of the Lanham Act.”  Id. But, the majority distinguished Torres as tied to registration because the mark would be lost absent a Section 8 renewal filing; whereas the mark is not lost based upon failure to file Section 15 incontestability docs. Truthfully, I expect that the majority here would have decided Torres differently, but they are bound by the precedent set.  As an aside: Great Lakes had simultaneously filed a Section 8 renewal with its incorrect Section 15 document, but the majority also concluded that the two should be treated as separate acts, and no fraud was found in the Section 8 filings.

The parties also pointed to conflicting statements from treatises and law reviews on the subject:

  • Jerome Gilson & Anne Gilson Lalonde, Trademarks § 9.03 (2022)) (“A fraudulent Section 15 affidavit is grounds for cancellation of the registration under Section 14(3).”).
  • J. Thomas McCarthy, Trademarks and Unfair Competition, § 31.81 (“[F]raud in a Section 15 incontestability affidavit or declaration should serve only to eliminate the incontestable status of the registration and not result in cancellation of the registration itself.”).
  • Theodore H. Davis Jr. & Lauren Brenner, Allegations of Fraudulent Procurement and Maintenance of Federal Registrations Since In re Bose Corp., 104 Trademark Rep. 933, 998-99 (2015) (even if not permitted under the statute, the courts should permit  this extra-statutory basis for cancellation)

Writing in dissent, Judge Reyna argued the majority improperly restricted the TTAB’s ability to combat fraud before the agency. He contended Section 15 declarations allow registrants to maintain their rights, placing such filings under Section 14’s umbrella for fraud in maintaining a registration. Reyna accused the majority of “constructing a milepost” in the trademark process “at which point (Section 15) fraudulent wrongdoing is green-lighted.”

In Reyna’s view, the TTAB has discretion to fashion appropriate remedies for fraud at any stage of the trademark continuum. He saw no principled rationale for the majority’s rule prohibiting cancellation for Section 15 fraud. Reyna also disagreed with imposing an artificially narrow definition of “maintaining” a registration that excludes incontestability declarations. He noted the USPTO itself advises the public that Section 15 is a maintenance filing. Beyond textual disputes, Reyna argued fraud should never be condoned at any point in agency proceedings.

The majority responded to these policy arguments with a statement that “We certainly do not intend by our holding today to encourage fraud – of any type.”  The majority goes on to agree that “some significant sanction” should be available to deter fraud.  The Federal Circuit noted that one such penalty approved in the old CCPA case of Duffy-Mott is to “remove the mark’s incontestability status.”  At least at that point the mark owner “will have a harder time preserving the validity of its registered mark” either in court or via TTAB challenge.   The majority also noted that the TTAB is empowered to “sanction any attorney who commits fraud before it.”  The court noted that such a filing may subject the attorney to a variety of penalties, including criminal prosecution.

Still, the majority concluded that it was bound by the statute — that Congress provided a closed list of reasons for cancelling a mark, and the markholder’s action here does not fit within that list:

Even if it were true that our decision would result in an unwelcome increase in fraud perpetrated against the Board – which, again, we do not believe it will – we would nonetheless adhere to the unambiguous language of the statute. . . . Whether we would prefer a different result be reflected in the statute is irrelevant to our responsibility to decide the case before us based on the law as it exists.

Slip Op. They are just calling balls and strikes.

The philosophical divide between textual fidelity and policy concerns is a recurring tension in administrative law.  The Great Concepts majority’s strict statutory interpretation contrasts Stark-ly with the dissent’s emphasis on the broader implications of fraud within the trademark system. While the court maintains its allegiance to the text of the law, it highlights another area where fraud can pervade.  The case suggests a rethink on whether the existing legal and procedural frameworks are equipped to uphold integrity in the face of evolving challenges, particularly the surge in fraudulent activities within global trademark systems.

The Complex Fact/Law Divide in Obviousness Analysis

by Dennis Crouch

The intersection between factual inquiries and legal conclusions in patent law is a complex and ever-evolving area, this is especially true in obviousness doctrine. A recent Federal Circuit decision highlights the tricky analysis required in assessing obviousness and damages in patent cases. In Cyntec Co. v. Chilisin Electronics Corp., the appellate court examined whether the lower court’s directed verdict (JMOL) of nonobviousness improperly removed factual questions from the jury.  This case provides an important reminder of the care required in delineating the fact finding and legal determinations in patent trials.  As is common, I think both the District Court and the Federal Circuit got it wrong.

Note, the court’s decision includes an interesting analysis of damages, finding that the plaintiff’s damages expert should have been excluded. It also includes a useful claim construction decision on when to give a term its plain and ordinary meaning.

A molded choke is a device used in electronic devices to filter undesirable signals.  The device contains a coiled conducting wire encapsulated in a molded mixture of magnetic powder. The powder is heated to a sufficiently high temperature to allow it all to bond together.  The patentee, Cyntec, had experienced some difficulties in creating the devices — with the high heat causing various problems such as melting the conducting wire or its insulative layer.  The solution that they hit upon was using a mixture of magnetic powders with different hardness and particle sizes.  This permitted a lowering of the required molding temperature and thus avoided wire damage during molding.  See U.S. Patent Nos. 8,922,312 and 9,481,037.

Competitor Chilisin began selling its own molded chokes and Cyntec sued for infringement.  At trial, Chilisin presented invalidity arguments that the claims were obvious based on two prior art references – Shafer and Nakamura. However, the district court granted JMOL of nonobviousness in favor of Cyntec before the case went to the jury (i.e., directed verdict). The jury subsequently found infringement and awarded full lost profits damages based on Cyntec’s expert calculations.

Although obviousness is ultimately a question of law, it depends upon upon substantial factual finding.  The particular threshold of where factual findings end and legal conclusions begin is quite tricky in this area.  In KSR, the Supreme Court appeared quick to determine as a matter of law that it PHOSITA would have been motivated to combine the references in a way rendering the claims obvious.  In subsequent cases, however, the Federal Circuit took pains to tease out motivation to combine from the ultimate conclusion of obviousness.

“Before KSR, we had also consistently treated the question of motivation to combine prior art references as a question of fact… KSR did not change this rule ….” Wyers v. Master Lock Co., 616 F.3d 1231, 1238–39 (Fed. Cir. 2010) (as quoted in Apple Inc. v. Samsung Elecs. Co., Ltd., 839 F.3d 1034, 1051 (Fed. Cir. 2016) (en banc)).

But, the fact/law divide is a bit more complicated in Cyntec because it involves a Judgment as a Matter of Law (JMOL).  We typically have two distinct types of legal questions at the JMOL stage:

  1. Regular questions of law, such as the meaning of a statute or the ultimate conclusion of a patent claim’s obviousness; and
  2. Lopsided questions of fact, where the evidence so favors one-side that no reasonable jury could find otherwise.

At JMOL, the district court is empowered to make these two types of legal conclusions, but cannot otherwise invade the jury’s factfinding role.

Adding to the difficulty is the reality that determination of the Graham factors rarely lead directly to the obviousness/nonobvious determination.  In Graham, the Supreme Court indicated that courts should work through the following for step fact-finding process and then rely upon the results to make the ultimate legal conclusion of obviousness.

These factual questions include: “(1) the scope and content of the prior art, (2) differences between the prior art and the claims at issue, (3) the level of ordinary skill in the pertinent art, and (4) [if presented,] the presence of objective indicia of nonobviousness such as commercial success, long felt but unsolved needs, failure of others, and unexpected results.”

Cyntec Co. v. Chilisin Electronics Corp., No. 22-1873 (Fed. Cir. Oct. 16, 2023) (quoting Elbit Sys. of Am., LLC v. Thales Visionix, Inc., 881 F.3d 1354, 1357 (Fed. Cir. 2018)).   The point here is that even after the fact-finder has made all the factual findings, there is still quite a bit of work for a the law-decider to do.  That said, quite a bit of the work is occupied by the motivation-to-combine factual finding.

Here, the patentee presented prior art and testimony regarding a motivation to combine. The district court found the evidence insufficient and awarded JMOL for the patentee.  On appeal, the Federal Circuit vacated that decision and instead concluded that “Chilisin presented the jury with evidence that would have allowed it to reasonably find the asserted claims obvious in view of Shafer and Nakamura. . . . Taken together and drawing all reasonable inferences in Chilisin’s favor, this evidence is enough for a reasonable jury to have found that the asserted claims would have been obvious.”

I have an important nitpick with the appellate court’s decision that goes back to the complexity of the law-fact divide in obviousness analysis.  The court skipped an important step by simply concluding that a reasonable jury could have found the claims obvious. Recall that obviousness is a question of law, and at JMOL we are only concerned taking disputed facts away from the jury.  The appellate court should have instead explained something like the following: “that the defendant presented evidence sufficient to put the factual question of motivation-to-combine into dispute in a way that, if taken as true, would lead to a legal conclusion of obviousness.”

The distinction here is important, the Federal Circuit’s rule here makes it harder to award summary judgment of non-infringement because it places an additional layer of reasonableness on the ultimate legal conclusion of obviousness. But that is a question of law, and with questions of law we don’t account for reasonable fact finders but instead ask only whether the question was decided rightly or wrongly. This distinction is why legal determinations are reviewed de novo on appeal and factual findings are given deference. This analysis also reveals the dirty secret that, although the law does not permit reasonable deference into legal questions, reasonable minds regularly do disagree upon the conclusion of obviousness even after making all the underlying factual findings.

On remand, the district court must ensure that the jury is tasked only with resolving the factual disputes, while reserving the ultimate legal question for itself. Carefully delineating the fact finding and legal conclusions will be critical to applying the proper review on any subsequent appeal.

= = =

Regarding damages, the Federal Circuit found the district court abused its discretion in admitting Cyntec’s expert testimony on alleged lost profits. Cyntec’s expert used total revenue from customer SEC filings to estimate what percentage of products containing the accused chokes were imported into the U.S. However, the appellate court found his methodology “speculative” because the filings included revenue from products that did not contain accused chokes, without distinguishing between them. Citing precedent like Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 711 F.3d 1348 (Fed. Cir. 2013), the Federal Circuit held the expert “assumed that (1) the sales revenue reported in the customers’ Form 10-K reflected sales of products with molded chokes; and (2) each third-party product shipped into the United States contained an infringing choke.” This “speculative” testimony should have been excluded under Daubert. The appellate panel thus vacated the lost profits award.  On remand, the damages calculation will need to be reevaluated without the flawed expert testimony, likely with a new trial focusing on obviousness and damages.


Amending Claims to Capture Post-Filing Market Activity

On LinkedIn I’m asking folks about continuation practice: Should it be OK to amend claims in a continuation to cover a competitor’s new product?

I don’t think I’ve seen such a lopsided poll outcome in quite a while with 93% so far indicating “Yes” it should be OK, assuming that the new claims create no enablement or written description problem.  There is still time to add your vote. (I think you have to login to vote).

Patent Continuation Strategies Face Major Threat

by Dennis Crouch

Impact of Sonos on Patent Prosecution: The recent Sonos v. Google decision threatens to grind to a halt, or at least significantly restrict, a once-common patent prosecution strategy – keeping continuation applications pending for years to obtain new claims that cover marketplace developments. Sonos Inc. v. Google LLC, 20-06754 WHA, 2023 WL 6542320 (N.D. Cal. Oct. 6, 2023).  In Sonos, Judge Alsup found Sonos’s patents unenforceable due to prosecution laches, despite Sonos diligently prosecuting related applications for 13 years; serially filing a continuation with each allowance. The decision casts doubt on the viability of pending continuation applications over a long period, even absent any evident applicant delay — especially in situations where new claims are drafted in response to emerging technologies or market demands. Although claim fluidity remains an integral principle in patent law, Sonos adds considerable viscosity to the practice. The viability of continuation strategies, especially in rapidly evolving technologies, may face a reckoning in the wake of Sonos.  The patentee will certainly appeal, but it is not clear that the Federal Circuit will change the path in any way.

Understanding Claim Fluidity: One feature of the US patent system is claim fluidity.  Most claims are amended during prosecution. Most patents claim priority back to an earlier filing with different claims.  Claims can later be amended during a post-grant proceeding. And, to make things clear the reissue state permits a patentee to alter the claims to cover in situations where the original patent claims “more or less than he had a right to claim in the patent.” 35 U.S.C. 251.

Although reissue applications are always available during the life of a patent, they have major downsides, including the two year post-grant timeline for enlarging patent scope. Id. The alternative approach followed by most is to “keep a family member alive” in areas involving technology important to the patentee.  As one family-member patent is about to issue (or be abandoned), the patentee makes sure to file a continuation application with a new set of patent claims and claiming priority back to the original filing documents.

In developing that new set of claims, the patentee will typically consider the marketplace. What market developments have occurred since the original filing date? Some of these developments may be internal — looking at their own current and future product line.  Some of the developments will also be external — looking to see how others have begun using aspects of the disclosed invention.  We then craft claims that cover these new developments; being wary to ensure that the patentee has “a right to claim” this new coverage.  This right to claim is ordinarily measured by the doctrines of enablement and written description and during prosecution we also look to the prohibition on new-matter under 35 U.S.C. § 132.

Sonos v. Google: Judge Alsup’s new decision in Sonos v. Google suggests that this common approach should come to an end. In particular, the court concluded that Sonos’ asserted claims were unenforceable because they had been added to a continuation application filed 13-years after the original priority document in a way that was prejudicial to the behemoth Google.

The essence of this order is that the patents issued after an unreasonable, inexcusable, and prejudicial delay of over thirteen years by the patent holder, Sonos. Sonos filed the provisional application from which the patents in suit claim priority in 2006.

Sonos Inc. v. Google LLC, 20-06754 WHA, 2023 WL 6542320 (N.D. Cal. Oct. 6, 2023).  Judge Alsup goes on:

Trial brought to light what happened here. This was not a case of an inventor leading the industry to something new. This was a case of the industry leading with something new and, only then, an inventor coming out of the woodwork to say that he had come up with the idea first — wringing fresh claims to read on a competitor’s products from an ancient application. . . . It is wrong that our patent system was used in this way. With its constitutional underpinnings, this system is intended to promote and protect innovation. Here, by contrast, it was used to punish an innovator and to enrich a pretender by delay and sleight of hand. It has taken a full trial to learn this sad fact, but, at long last, a measure of justice is done.


The basic setup here is not simply a delay.  Judge Alsup concluded that Sonos learned of a particular feature from Google (allowing a speaker to be in two different zones). And, that Sonos later filed a continuation application that included claims to the new feature. Meanwhile Google invested in the technology and launched its own products.

New Matter and Priority Claims: An odd aspect of the decision is that Judge Alsup concluded that the new feature constituted “new matter” that “[u]nder black letter patent law … necessarily sunk any claim of priority.”   Of course, “new matter” does not actually tank priority claims.  Rather, the priority question depends upon a proper claim and sufficient support as guided by the doctrines of enablement and written description. But Judge Alsup appears to have felt misled regarding the priority issue earlier in the case. At that prior stage, Google had failed to present certain evidence showing lack of priority. Judge Alsup seems to feel he was duped into accepting Sonos’ priority claim. As he put it:

Put another way, ‘I got a half a deck of cards’ and ‘I was not told the complete truth.’ . . . To repeat, the judge was not made aware in the briefing (or at the hearing, or otherwise until trial,) that this sentence had been inserted by amendment in August 2019. That, alone, would have been a red flag.

Id.  The opinion shows Judge Alsup’s displeasure at feeling he was not given the full story by Sonos earlier in the case. He seems to take particular issue with Sonos relying on specification language that was added years later by amendment.  He similarly did not fault Google for failing to discover the issue since the prosecution history is quite complex.

Potential Repercussions for Patent Prosecutors and Portfolio Managers: The case is obviously a major one that patent prosecutors and portfolio managers should consider.  The decision suggests strongly that the common patent prosecution strategy of keeping continuation applications pending to obtain new claims may be disfavored – at least when done over a decade or more as well its use to obtain new claims covering market developments.

Diligence in Prosecution Not a Justification for Delay: Unlike prior cases such as Hyatt, the patentee was diligently prosecuting the patents during the entire period. However, the court found that diligence “does not render the delay any less unreasonable and inexcusable. Indeed, it renders the delay all the more unreasonable and inexcusable.” The court explained that Sonos “could have filed parallel applications with new claims covering the invention” and did not have to “run out its string of inert applications before turning to claim the invention that mattered.”

Patent Term and Prosecution Laches: The Hyatt and Lemelson cases adopted by the Federal Circuit focused on pre-1995 patent applications. The old system provided an incentive for delay during prosecution because the patent term of 17 years began running as of the patent issuance date.  The result was the potential of greatly increasing the effective patent term.  That incentive for delay no longer exists because post-1995 patents (like those of Sonos) have a patent term that runs from the non-provisional filing date.  Thus, each  day of delay ate into the Sonos patent term.  There is some support for the idea that prosecution laches no longer applies in this new system because of the congressionally created limited term of 20 years that begins with the start of prosecution in a manner that is closely parallel to a statute of limitations.  In recent cases, the Supreme Court has held that laches is not a proper defense to damages claims when a statute of limitations is in place.  Still, Judge Alsup concluded that the change in patent term has no impact on the doctrine of prosecution laches.

The Future of Claim Fluidity and Patent Strategy: In the case, a jury had sided with the patent holder Sonos and awarded $32 million in back damages.  Judge Alsup’s decision flips that verdict and also kills any plans Sonos had to exert its exclusive rights over the marketplace. While claim fluidity remains an integral feature of patent law, Sonos has added considerable viscosity to the system.

Claim Construction and the Indefinite Article Shuffle

by Dennis Crouch

The Federal Circuit’s new Finjan decision once again focuses attention on what I call patent law’s “indefinite article shuffle.” Finjan v. SonicWall — F.4th — (Fed. Cir. 2023).

Although patent courts do interpret the indefinite article “a” as allowing for a plural meaning, they generally do not permit a change in the associated noun. Let me explain. Here, the patentee Finjan claimed “a computer” performing a certain operation and later referred to “the computer” performing another operation. The accused infringer SonicWall was using two different computers for these operations and the patentee sought a construction that relied upon the presumed plurality to encompass the accused activity. The district court refused and awarded summary judgment of non-infringement. On appeal, the Federal Circuit affirmed, finding that the transition from “a computer” to “the computer” requires the same computer perform both operations. As the court explained, “the use of ‘the’ also indicates the claimed term refers to an antecedent term.” Slip op. at 17 (citing Convolve, Inc. v. Compaq Comput. Corp., 812 F.3d 1313 (Fed. Cir. 2016)). Thus, the reference to “the computer” tied back to the same “a computer” initially recited, requiring a single computer be able to perform both steps.

The Federal Circuit issued a similar opinion earlier in 2023 in Salazar v. AT&T Mobility LLC, 64 F.4th 1311 (Fed. Cir. 2023). In Salazar, the court explained that “while the claim term ‘a microprocessor’ does not require there be only one microprocessor, the subsequent limitations referring back to ‘said microprocessor’ require that at least one microprocessor be capable of performing each of the claimed functions.” Id. See also Summit 6, LLC v. Samsung Elecs. Co., 802 F.3d 1283 (Fed. Cir. 2015).

Although I agree with the Federal Circuit’s decision here as to both the claim construction and non-infringement, it also appears to be a clear situation where the doctrine of equivalents could save the patentee.  However prosecution history estoppel may be a problem for the patentee on the DOE front because one of the “computer” references was added during prosecution in order to move the case toward allowance.

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The district court also found another set of claims not infringed — this time based upon an agreed claim construction of the term “downloadable.” The patents relate to cybersecurity technology for protecting network-connected devices from malware, and these patents particularly related to identifying and stopping malware downloads: U.S. Patent Nos. 8,677,494; 6,154,844; 6,804,780; and 7,613,926.

These all require receiving a “downloadable” and the parties had agreed to define a downloadable is an “executable application” that is downloaded and “run” on the destination computer. The problem for the patentee is that SonicWall’s software receives data packets but never reassembles them into an executable application.  Rather, the accused SonicWall product operates by inspecting the payload on a packet-by-packet basis and then sends each packet to its destination without reassembling the file.

Based upon this uncontroverted evidence of how SonicWall operates and the agreed upon claim construction, the district court awarded summary judgment of non-infringement to the accused infringer.  On appeal, the Federal Circuit affirmed — finding that the district court did not “impermissibly deviate[] from the parties’ agreed-upon construction” but rather only “elaborat[ed]” upon inherent aspects of the construction.

On appeal, the patentee raised a number of claim construction arguments that may have carried weight in an ordinary claim construction context. Here those arguments were rejected as the court repeatedly returned to the text of the stipulated claim construction that the patentee had agreed to.

We do not permit parties on appeal to raise claim construction arguments challenging a stipulated construction.  See, e.g., Function Media, L.L.C. v. Google, Inc., 708 F.3d 1310, 1322 (Fed. Cir. 2013); see also Traxcell Techs., LLC v. Sprint Commc’ns Co. LP, 15 F.4th 1121, 1129 (Fed. Cir. 2021) (“Now Traxcell insists in retrospect that this construction was wrong. But having stipulated to it, Traxcell cannot pull an about-face.”).

Slip Op. at 12.  Judge Bryson wrote in dissent noted that the district court’s construction leads to absurd results based upon how the internet works. No device ever ‘receives’ an already assembled executable program; rather folks receive the packets and that is seen as the equivalent of receiving the program.  Bryson then went further and argued that the district court overstepped the bounds of the agreed-upon construction.

SonicWall argues that Finjan agreed to the construction of the term Downloadable and is stuck with the consequences, even if the consequences are that the patent reads on no embodiments. In fact, however, the record reflects that although the parties to the construction of the term Downloadable, they did not share thesame understanding of the term “executable,” as used in that construction, a point that became clear during the summary judgment argument. By agreeing to the construction of the term Downloadable, Finjan did not acquiesce in the interpretation of the court’s construction of “executable,” which was that an “executable” file must be executable without any further processing, rather than being capable of execution after, for example, being reconstructed following its transmission in packetized form.

Dissent at 3-4. In Judge Bryson’s view, the district court interpreted “executable” too narrowly in a way that effectively altered the agreed-upon construction. Although Finjan agreed to the overall construction of “Downloadable,” it did not agree to the district court’s implicit interpretation of “executable” as requiring executability upon receipt.

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The final issue in the case was the district court’s decision that a number of the asserted claims were invalid. In fact, the district court did not make this ruling on the merits, but rather used the procedural tool of issue preclusion (collateral estoppel) since the claims had been held invalid in a prior dispute.

Issue preclusion prevents a party from relitigating an issue that has already been actually litigated and necessarily determined by a final judgment in a prior case. Google LLC v. Hammond Dev. Int’l, Inc., 54 F.4th 1377, 1381 (Fed. Cir. 2022). Issue preclusion always involves two different cases, and the question is whether some determination in the first case will preclude the parties from relitigating the issue in a subsequent case.  The doctrine applies when: (1) the issue is identical to one decided in the first action; (2) the issue was actually litigated in the first action; (3) resolution of the issue was essential to a final judgment in the first action; and (4) the party against whom issue preclusion is asserted had a full and fair opportunity to litigate the issue in the first action. Id. Issue preclusion can bar relitigation of both questions of law and questions of fact.

Issue preclusion can attach as soon as a final judgment is reached in one case, even before any appeals are exhausted. Levi Strauss & Co. v. Abercrombie & Fitch Trading Co., 719 F.3d 1367 (Fed. Cir. 2013). This allows parties to rely on a decision without waiting for appeals to conclude. However, if the decision providing the basis for issue preclusion is later overturned on appeal, this eliminates the ability to continue to rely on issue preclusion. Mills v. City of Covina, 921 F.3d 1161, 1170 n.2 (9th Cir. 2019). Since the overturned judgment can no longer have preclusive effect, any issue preclusion decisions relying on it must also fall away. This is what happened in Finjan v. SonicWall with the court vacating the invalidity holding.  Based upon my reading, this outcome does not save the patentee’s case against SonicWall (Because of the non-infringement findings), it does allow Finjan to continue to assert its patents against others.

Secondary Considerations Get Short Shrift in Airbed Patent Fight

by Dennis Crouch

Team Worldwide Corp v. Intex Recreation Corp. (Fed. Cir 2023)

I was disappointed to see the Federal Circuit’s no-opinion affirmance in this case — affirming the PTAB finding that Team Worldwide’s inflatable airbed invention was unpatentable as obvious.  US9211018. The case peaked my interest because I have been working on a short article focusing on what the courts term “secondary considerations” of obviousness, and the patentee raised substantial evidence of commercial success.   Ultimately the PTAB sided with the patent challenger and and that determination was affirmed on appeal in a R.36 no-opinion judgment.

TWC’s patent claims an “inflatable product,” such as an air mattress, that has a built-in electric pump.  In particular, the electric pump is built into and recessed within the exterior wall of the mattress with just one side of the pump body exposed through the exterior wall. The rest of the pump body is hidden inside the inflatable body and permanently held in place within the exterior wall of the inflatable body. The recessed design keeps the pump partially hidden and out of the way when not in use.

The key prior art references in the case are

  • U.S. Patent No. 6,018,960 (1996) (“Parienti”), which discloses an air mattress having an externally-attached solar powered pump.
  • U.S. Patent No. 2,493,067 (1945) (“Goldsmith”), which discloses ordinary inner-spring mattress having an attached fan used for temperature control (not inflation).  One embodiment includes “housing arranged within … said mattress and carrying a blower and temperature changing means therein.

This product has been a huge seller via brands such as Intex, Bestway, Boyd, Airtek, Air Cloud, Air Comfort, AirBedz, Altimair, Pittman, and TexSport.  The patentee has sued a number of folks for infringement, and they fought back with this Inter partes review proceeding.

The PTAB initially sided with the patentee, concluding that the claims had not been proven obvious. However, on appeal, the Federal Circuit vacated and remanded.

The Board misapplied the obviousness standard, and misapprehended Intex’s argument, when it fixated on whether the prior art literally disclosed Intex’s theory of modifying Parienti only slightly by taking the pump attached to the outside of the mattress and recessing it partially within the mattress. Intex’s argument regarding its proposed modification showed that Parienti was already close to the challenged claims, and only a slight change was needed to satisfy the broadest reasonable interpretation of “wholly or partially” recessing a pump. This showing, together with Intex’s showing that numerous references since the late 1800s illustrated prior artisans’ intuitive desire to recess pumps to save space, satisfied Intex’s burden [under KSR]. The Board erred in concluding to the contrary.

Intex (Fed. Cir. 2021).  Thus, in its 2021 decision the Federal Circuit concluded that Intex had satisfied its burden of proving the invention obvious. The only problem though was that the PTAB/CAFed had not yet considered secondary indicia of non-obviousness offered by the patentee.  Thus, remand was needed for the PTAB to address issues it previously declined to reach. Specifically, the PTAB had not addressed Team Worldwide’s evidence on objective indicia of non-obviousness.

On remand, the PTAB flipped its decision, finding the claims obvious despite substantial sales and other secondary considerations.  In its most recent appeal, Team Worldwide argued that the PTAB erred in its assessment of the objective evidence of nonobviousness. Specifically, Team Worldwide argued that the PTAB did not properly weigh the evidence presented regarding commercial success, failure of others, and industry praise.

Regarding commercial success, the PTAB found that Team Worldwide was entitled to only “some, but not considerable, weight in favor of non-obviousness” for the evidence of sales of infringing products, citing the impact of non-patented features on customer demand.  However, Team Worldwide argued that the PTAB ignored evidence that the majority of sales were of products admitted or shown to infringe, which constitutes overwhelming commercial success under Federal Circuit precedent. See Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 655 F.3d 1364, 1376 (Fed. Cir. 2011).

For failure of others, the PTAB concluded that Team Worldwide’s evidence was entitled to only “some weight.” But Team Worldwide argued that the PTAB improperly minimized competitors’ failed attempts to design around the claims, contrary to Federal Circuit precedent finding failure of others entitled to considerable weight. See WBIP, LLC v. Kohler Co., 829 F.3d 1317 (Fed. Cir. 2016).

Regarding industry praise, the PTAB found Team Worldwide’s evidence was entitled to some, but not considerable weight. However, Team Worldwide contended that the PTAB ignored relevant testimony praising the invention, which should be afforded considerable weight under Federal Circuit law. See Apple Inc. v. Samsung Elecs. Co., 839 F.3d 1034 (Fed. Cir. 2016) (en banc).

In sum, Team Worldwide argued that the PTAB did not properly weigh the objective evidence of nonobviousness as required under controlling Federal Circuit precedent and that this evidence outweighed the PTAB’s finding of obviousness.

Unfortunately, on appeal the Federal Circuit did not take the time to work through these issues but rather simply issued its R.36 Affirmance without opinion.

In addition to the general role of objective indicia, the appeal asked an important question about burdens of proof: “Did the Board err by inappropriately applying a standard of proof that required TWW to prove the validity of its claims in light of secondary considerations when the burden of proof statutorily remains with Petitioner to prove invalidity including in light of secondary considerations?”

The History and Importance of the Jury Trial System – An Excerpt from a Patent Infringement Trial

I was reading through a recent trial transcript and enjoyed the following historical introduction to the jury system offered by Judge Gilstrap.  He was talking to the potential jurors as voir dire was just about to begin.  — Dennis

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We are engaged or about to be engaged this morning in the selection of a jury in the civil case involving allegations of patent infringement. If you’d indulge me, though, for just a minute, I’d like to briefly review with you at this juncture how we came to have our American civil jury trial system.

If you go back in ancient history, if you start with the first five books in the Old Testament, the Pentateuch, you will find that the ancient Hebrew nation impaneled juries to decide issues of property ownership and property value.

The Greeks, the ancient Greeks, began using a jury system about 1500 B C. The Romans, as with many other things, copied the jury system from the Greeks and implemented a jury system as a part of ancient Rome. And, in fact, it was the Romans that brought the jury system to Europe across the English Channel into what we now know as Great Britain when they conquered Great Britain in the fourth century A.D.

Now, by the 12th century A.D., the jury system had been in place in England, what we now know as England, for 800 years. But in the 12th century A.D., a rather tyrannical king came to the throne of England and his name was King John. And he became embroiled in various disputes with his nobles that nearly led to the verge of a civil war.

One of those disputes was the king’s efforts to do away with the right to trial by jury. Thankfully, the civil war did not take place at that time, and the king and his nobles resolved their many disputes, including this one, by entering into a written agreement that they signed at a place in England called Runnymede. And this agreement that settled all these disputes and laid out a structure for that country going forward, including guarantees of the right to trial by jury, is a document many of you may have heard of called the Magna Carta.

And so you can see, ladies and gentlemen, that our British forefathers who came to this continent as colonists brought the jury trial system with them. And the jury trial system flourished in colonial America for over a hundred years, until another tyrannical king came to the throne of Great Britain. This time his name was King George III. I’m sure you’ve have studied him in American history that led up to our American revolutionary war. And the king, prior to that, became embroiled in many disputes with his American colonists.

One of those disputes was King George III efforts was to do away with or to substantially curtail the right to trial by jury. In fact, ladies and gentlemen, when Thomas Jefferson sat down to write the Declaration of Independence which spells out — it really was a letter to the king telling the king all of the reasons why his subjects in America felt they had no other option but to revolt, declare their independence, and form their own independent nation, one of those reasons set forth by Thomas Jefferson in the Declaration of Independence for that separation between America and Britain was King George III’s efforts to do away with or curtail substantially the right to trial by jury.

And as you’re all aware, we did revolt against Great Britain, we did form our own independent nation, and shortly thereafter we adopted the governing document for our country, the supreme law of the land, the Constitution of the United States.

And immediately after the Constitution was ratified, there were ten additions or amendments added to the Constitution. Many of the states made it clear they would not vote to ratify the Constitution without a commitment to immediately add these ten amendments. And these ten amendments you’ve all studied about in school. They’re called the Bill of Rights. And in those first ten amendments to the Constitution, you will find the Seventh Amendment to the Constitution, which guarantees, ladies and gentlemen, the right to every American citizen to have their civil disputes resolved through a trial by jury. Those ten amendments, the Bill of Rights, were all ratified in 1791. So since 1791, well over 200 years ago, every American has had a constitutionally guaranteed right to have their civil disputes settled through a trial by jury.

So by being here this morning, with that brief background and overview of how we got to have the jury trial system that we’re implementing today, I want you to realize in the Court’s view every one of you here are doing a very important part to preserve, protect, and defend the right to trial by a jury as part of our constitutionally guaranteed rights. I always tell citizens who appear for jury duty as you have this morning that, in my personal view, the jury duty or jury service rendered by any citizen is the second highest form of public service any American can render for their country. In my personal view, the highest form of public service are those men and women that serve in our armed forces.

Now, later in the process this morning, the lawyers for both sides are going to address you. They’re going to ask you questions. I want you to understand none of them are seeking to inquire unduly into your personal affairs. Said another way, none of them are trying to be nosy and to ask you about things that are not relevant to this case. They will be asking you questions as a part of working with the Court to secure a fair and an impartial jury from among you to hear the evidence in this case. I want you to also understand when the lawyers ask you questions later as a part of this process, there are no wrong answers, as long as the answers you give are full, complete, and truthful. As long as they’re full, complete, and truthful, there are no wrong answers. . .

Finesse Wireless LLC v. AT&T Mobility LLC, Docket No. 2_21-cv-00316 (E.D. Tex. Aug 23, 2021) (trial transcript day 1).

Sisvel v. Sierra Wireless – Useful Guidance for Prosecutors on Motivation to Combine and Means-Plus-Function Claims

by Dennis Crouch

Today’s post introduces the new decision in Sisvel International S. A. v. Sierra Wireless, Inc., No. 22-1493 (Fed. Cir. Oct. 6, 2023).  Here, I focus on two distinct issues. The first part has to do with motivation-to-combine, with the decision offering some good language for patent prosecutors attempting to overcome weakly worded office actions.  The second part focuses on means-plus-function language and concludes with my rant about the court’s unduly complicated layers of tests.  The case also upholds a single-reference obviousness holding, but I didn’t write about that portion of the decision.

Justifying a Motivation to Combine

In the IPR, the PTAB cancelled some claims of Sisvel’s U.S. Patent No. 6,529,561 based upon a single-reference obviousness determination (Chen; WO 99/26371), but sided with the patentee as to other claims. The Board particularly found no motivation to combine One of the key reasons was because of a lack of motivation to combine Chen with other GSM references.

On appeal, the Federal Circuit affirmed these findings.  US patent law has a long history of debate with regard to combination claims, with the Supreme Court’s most recent pronouncement in KSR reaffirming its old pronouncement that a combination of known elements is likely obvious absent some justification for deciding otherwise.  KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007).

[I]f a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill. . . . The combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results.

Id.  Referencing Sakraida v. Ag Pro, Inc., 425 U.S. 273 (1976); Anderson’s-Black Rock, Inc. v. Pavement Salvage Co., 396 U.S. 57 (1969); and Great Atlantic & Pacific Tea Co. v. Supermarket Equipment Corp., 340 U.S. 147 (1950).

Despite this lower bar, IPR petitioners still have the burden of at least explaining why a skilled artisan would have been be motivated to combine various references to form the claimed invention.  This is so, even if that explanation is simply a showing of how its case fits the model set out in KSR.

Here, however, the Board concluded that the IPR petitioner had failed that low burden.  In particular, in this case the petitioner offered “reasons to combine [that] were merely assertions that the references were analogous art, which, without more, is an insufficient articulation for motivation to combine.”  Rather, as KSR suggests, the known elements need to be combined “according to known methods” and yield only “predictable results.”  Although the petitioner might have recited these legal conclusions in its petition, the Board found them too conclusory and lacking in clarity.  Rather, the Board indicated that a proper motivation to combine analysis would explain how the primary reference is modified by the GSM reference.  As I mentioned above, this is a fairly low standard under KSR, but the Board explained that the petition failed to explain: “what reference is the primary versus secondary reference, what elements are missing from the primary reference, what elements should be added from the secondary reference to reach the claimed invention, or why those particular elements would be obvious to add.”

On appeal, the Federal Circuit affirmed the lack of motivation to combine – holding that “we cannot fault the Board for being at a loss in trying to decipher Cross-Appellants kitchen-sink of unclear and confusing motivation-to-combine arguments.”

Sisvel’s ’561 patent, owned by Sisvel, relates to improving channel coding techniques in transmitting data for radio systems. Channel coding adds redundant data bits to a data block before transmission to allow a receiver to better detect and correct errors caused by noise or other interference. The invention particularly employs “link adaptation” and “incremental redundancy” to optimize channel coding. Link adaptation allows the transmitter to adjust the code rate between data block transmissions by changing the number of redundant bits. Incremental redundancy allows the receiver to combine original and retransmitted data blocks to improve decoding.

The Federal Circuit’s affirmance on motivation to combine could be useful for patent prosecutors facing obviousness rejections. While the explanatory burden on an IPR petitioner is higher on the IPR petitioner than on a patent examiner, prosecutors may find Sisvel helpful in arguing an examiner provided inadequate rationale for combining references. Patent applicants could cite Sisvel in contending an office action improperly combines references without particularly explaining: (1) the primary and secondary references; (2) missing elements supplied by the secondary reference; (3) why a skilled artisan would have looked to the secondary reference to fill gaps in the primary reference; (4) why adding the secondary reference’s teaching would yield predictable results; etc. Although Sisvel arose in the context of invalidity allegations by an IPR petitioner, the motivation to combine principles apply equally during prosecution. By requiring examiner explanations meet KSR’s standards, applicants may succeed in overcoming some obviousness rejections.

= = =

The Noah Test as One Layer of Means Plus Function Analysis

The case also includes an interesting discussion about a means-plus-function limitation found in some of the claims, and the question of whether the claim is indefinite.  As you know, a claimed means plus function limitation is interpreted as covering the corresponding structures disclosed within the specification along with their equivalents.  35 U.S.C. 112(f).  But we have a special null case — if no such structures are disclosed then the Federal Circuit has ruled that the associated claim is automatically invalid as indefinite.  This gets a bit trickier for inter partes review proceedings since the petitioner is not permitted to challenge claims based upon indefiniteness. In Intel Corp. v. Qualcomm Inc., 21 F.4th 801 (Fed. Cir. 2021), the Federal Circuit instructed the PTAB to take the following approach to potentially indefinite MPF claims:

  1. Impossibility: Determine that the claim is indefinite and then decide whether the indefiniteness prevents a prior art analysis (the “impossibility” conclusion); or
  2. Possibility: Explain why it is able to construe the claim and resolve the prior art issues despite potential indefiniteness.

In either case, the PTAB needs to make some moves toward determining whether the limitation includes sufficient structural support in the specification.

Here, Claim 5 of the ’561 patent requires a “means for detecting a need for retransmission.”  The specification does not specify a particular algorithm to accomplish this goal, but does disclose protocols like “ARQ” and “hybrid ARQ.”  In situations like this, the Federal Circuit has created an unduly complicated framework  to determine whether expert testimony can be used to fill gaps in the structural explanation of algorithmic MPF claims. Noah Systems, Inc. v. Intuit Inc., 675 F.3d 1302 (Fed. Cir. 2012). At step one, the Noah framework specifically asks whether any algorithm is disclosed.  If no algorithm then no expert. In Noah step two, where an algorithm is disclosed but arguably inadequate, its sufficiency is judged based on a skilled artisan’s perspective and expert testimony is permitted to support the conclusions. Id.

Here, the PTAB found that references to “ARQ” and “Hybrid ARQ” were not algorithms.  On appeal the Federal Circuit found error in that conclusion. In particular, the court held the PTAB erred by not evaluating the protocol names under the step two framework. The court explained that even “brief disclosures” may warrant assessing expert views on their import to a skilled artisan. Because the specification explicitly referenced protocols, it was not wholly devoid of structure. The court vacated and remanded for the PTAB to conduct a step two analysis, including evaluating expert testimony.

This holding provides useful guidance for assessing computer-implemented means-plus-function claims. The Federal Circuit appropriately avoided rigid formalism, recognizing algorithm disclosures need not detail every step and by recognizing that  reference to commercially available tools can satisfy the structural requirement of 112(f).  Still, I would have simplified this approach and simply held that the claim covered the disclosed protocols. After Sisvel, courts evaluating software means-plus-function limitations must carefully walk the line between Noah’s step one and two.

Conclusions: The means-plus-function doctrine was originally designed to allow patent applicants to claim an element by the functions it performs rather than reciting structure, with the goal of providing a simple and flexible claiming technique. However, as evidenced by the complicated Noah framework sitting atop Williamson and Donaldson, Sisvel’s nuanced analysis of whether disclosed protocols qualify as algorithms, means-plus-function claims have become one of the more complex and controversial doctrines in patent law. The current morass of rules, exceptions, and expert testimony required to assess even basic computer-implemented means-plus-function claims suggests the doctrine has veered far from its original purpose. In my view, courts should seek to simplify the rules and refocus on whether the specification provides sufficient information to allow a skilled artisan to understand the boundaries of the functional claim element.

= = =

  • Sisvel International S.A.: Represented by Robert Gajarsa, Timothy Devlin, and Neil Benchell of Devlin Law Firm.
  • Sierra Wireless, Inc.: Represented by Kourtney Merrill of Perkins Coie LLP and Amanda Tessar.
  • Telit Cinterion: Represented by Guy Yonay of Pearl Cohen and Kyle Auteri.
  • Opinion: Authored by Judge Chen and joined by Chief Judge Moore and Judge Clevenger.

Upcoming Events

I have several public events coming up over the next few months that I’m looking forward to. I always enjoy the opportunity to connect with old friends and meet new people who are ready to dig into the details of intellectual property law.  Let me know if you want to meet up. — Dennis

AIPLA Annual Meeting – October 19-21, 2023 – Washington DC

I’ll be joining a year-in-review plenary session on the final day of the AIPLA Annual Meeting moderated by Melissa Pytel of Entrada Therapeutics. This year we’re limiting the focus to patent law & trademark law. My fellow panelist is trademark expert Richard Mandel of Cowan Liebowitz and we’ll be providing a year-in-review plenary session for the conference. The event is always interesting to me with 50+ speakers and hundreds of global IP specialists in attendances.  I’ll be looking out for PTO Director Kathi Vidal and Patent Commissioner Vaishali Udupa.

61st Annual Conference On Intellectual Property Law – November 9-10, 2023 – Plano, Texas

I’m honored to be delivering the keynote address at this conference hosted by The Center for American and International Law. For my talk, I’m planning to offer an outlook on the future of IP in the US.  This is a great event that I’ve attended in the past and I’m looking forward to hearing from PTAB Vice Chief Judge Michael Tierney  of the PTAB as well as the afternoon IP Trivia Session led by Matt Cornelia (McGuire Woods) and Bethany Salpietra (Baker Botts).

IP Timely Topics CLE – November 14, 2023 – Washington State Bar Association

I’m delighted to be presenting again this year at the Washington State Bar Association’s IP section meeting. My presentation will focus on the implications of the Amgen vs. Sanofi decision for both biotech and “regular” tech.  This year’s meeting is virtual again — so you’ll just see flat personality.

IP&SKI CLE Conference – January 7-10, 2024 – Snowmass, Colorado

To wrap up a busy few months, I’ll be speaking again at the IP&SKI CLE conference organized by Scott Alter and David Bernstein. Along with skiing and networking, we have an amazing lineup of speakers including Federal Circuit Judges Leonard Stark and Kara Stoll. I always look forward to reconnecting with colleagues at this unique IP event that takes place right on the slopes.