Fourth Estate Public Benefit Corp. v.

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

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

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

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

ScotusBlog has the Briefs

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Saint Regis Mohawk Tribe, Allergan v. Mylan: No Tribal Immunity for IPR

By Jason Rantanen

Saint Regis Mohawk Tribe, Allergan, Inc. v. Mylan Pharmaceuticals Inc., Teva Pharmaceuticals USA, Inc., AKORN, Inc. (Fed. Cir. 2018) Download Opinion

Panel: Dyk (concurring), Moore (author), Reyna

Last fall, Allergan transferred a set of patents relating to its Restasis product (the “Restasis Patents”) to the Saint Regis Mohawk Tribe (“the Tribe”). The Tribe promptly asserted tribal sovereign immunity in the pending inter partes review proceedings involving the Restasis patents.  In February, the PTAB denied the Tribe’s motion to terminate the IPRs, a decision the Tribe appealed.  Following an expedited briefing schedule, the Federal Circuit has now affirmed the PTAB’s denial of sovereign immunity.

The panel opinion, joined by all three judges, addressed only one of the arguments against sovereign immunity: that under the Supreme Court’s analysis in Fed. Maritime Comm’n v. S.C. State Ports Auth., 535 U.S. 743 (2002), tribal sovereign immunity does not apply.  It’s important to note at the outset that “Generally, immunity does not apply where the federal government acting through an agency engages in an investigative action or pursues an adjudicatory agency action.”   Slip Op. at 5.

The Court in FMC looked to whether the adjudications at issue were “the type of proceedings from which the Framers would have thought the States possessed immunity when they agreed to enter the Union.”  Id. at 5-6. In particular, the Federal Circuit observed that “[i]n doing so, the Court recognized a distinction between adjudicative proceedings brought against a state by a private party and agency-initiated enforcement proceedings.”  Id. at 6.

This question is similar to that of whether an administrative agency can hear a dispute at all, and unsurprisingly the court looked to the Supreme Court’s recent decisions for guidance.  “IPR is neither clearly a judicial proceeding instituted
by a private party nor clearly an enforcement action brought by the federal government,” the court observed, before comparing the views offered by the Court in Oil States v. Greene’s Energy and SAS v. Iancu.  Ultimately, the court concluded, “IPR is more like an agency enforcement action than a civil suit brought by a private party….”  Thus, “we conclude that tribal immunity is not implicated.”  Id. at 8.

How is IPR more like an agency enforcement action?  For one thing, the Director chooses whether to institute an IPR.  And while that discretion is limited to an all-or-none decision under SAS, “if the Director decides not to institute, for whatever reason, there is no review.”  Id. at 8.  In addition, “the Board may choose to continue review even if the petitioner chooses not to participate,” reinforcing “the view that IPR is an act by the agency in reconsidering its own grant of a public franchise.”   Id. at 9.  There are also differences between the IPR rules of procedure and the Federal Rules of Civil Procedure; because of these distinctions “the agency procedures in FM much more closely approximated a civil litigation than those in IPR.”  Id. at 10.  Nor does the existence of more “inquisitorial” proceedings in which sovereign immunity would not apply, such as ex parte and inter parte reexamination, mean that sovereign immunity must apply to IPRs.

Judge Dyk joined the panel opinion in full, but wrote separately to describe the history of inter partes review and why those reviews are not adjudications between private parties.  His opinion is a great reference if one wants a thorough description of the history of the proceeding, complete with numerous source citations.

This dispute is clearly not at an end, and I suspect that the Tribe and Allergan will seek en banc review, if not head straight for a cert petition.  Given the expedited briefing schedule, I expect this issue to continue to move quickly.  At the same time, however, keep in mind that in the parallel infringement proceeding in the Eastern District of Texas,  Judge Bryson (sitting by designation) found the Restasis Patents obvious following a bench trial.  Allergan (now joined by the Tribe) appealed that determination.  Oral argument is currently scheduled for September.

Supreme Court Update – July 2018

by Dennis Crouch

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

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

Petitions Granted:

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

Petitions for Writ of Certiorari Pending:

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


[UPDATED] The Patent-Antitrust Debate Annotated

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

= = =

Guest Post by Professor Mark R. Patterson (Fordham)

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

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

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

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

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

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


Sci-Fi & Information Law: Essay Competition

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

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

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

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


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


Ariosa Diagnostics v. Illumina: Prior Art Date of a Provisional Patent Application

by Dennis Crouch

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

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

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

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

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

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

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

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

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

There are several important prior cases on-point:

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

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

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

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

Upping the Trade War with China

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

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

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

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

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

Trade Secret Litigation in Federal Court

LexMachina has released a new report on Trade Secret litigation in Federal Court.

The basics: Federal Trade Secret litigation is up about 30% following enactment of the Defend Trade Secrets Act (DTSA) in 2016.  (1134 cases filed in 2017). The DTSA created a federal cause of action for trade secret litigation and resulting original jurisdiction in federal court for the federal claims. Prior to the DTSA, state-law trade secret claims found their way into federal court either via supplemental jurisdiction (typically linked to an a federal IP claim) or via diversity jurisdiction (parties from different states).

The vast majority of trade secret actions include additional causes of action — most often breach of contract or other commercial law claim.

[Report here – Registration Required]

Actual Use vs Inherent Disclosure: Endo v. Custopharm

Endo Pharms. Sols., Inc. v. Custopharm Inc., — F.3d —, 2018 U.S. App. LEXIS 19265 (Fed. Cir. 2018).

by Dennis Crouch

Endo’s injectable testosterone Aveed is listed in the Orange Book as being covered by Bayer’s U.S. Patent Nos. 7,718,640 and 8,338,395.  Endo and Bayer sued Custopharm after it submitted an Abbreviated New Drug Application (ANDA) to produce a generic version. (Under 35 U.S.C. 271(e), submission of the ANDA is an act of infringement).

On appeal, the Federal Circuit has sided with the patentee — affirming the district court judgment of validity.

The claimed invention here requires the use of testosterone undecanoate (TU) at a concentration of 250 mg/ml in a vehicle containing a mixture of about 40% castor oil and 60% benzyl benzoate. (Claim 1 of the ‘640 patent). Three key prior art references are all research articles that report using the same concentration of TU and also the castor oil.  The prior-art articles do not, however, actually report that benzyl benzoate was used — it turns out though that the researchers (including one overlapping listed inventor here) used the same 40/60 split of castor oil and benzyl benzoate.  The asserted claim 2 adds a limitation that 750 mg TU is injected — the articles describe the use of 1000 mg.

A primary question on appeal was whether the prior art articles inherently taught the benzyl benzoate concentration. “Custopharm contends that the Articles inherently describe the vehicle formulation (40% castor oil and 60% benzyl benzoate).”

The inherency doctrine has been quite limited by the Federal Circuit — Under the law, a prior art reference inherently discloses a claim limitation only when “the
limitation at issue necessarily must be present, or [is] the natural result of the combination of elements explicitly disclosed by the prior art.” Par Pharmaceutical, Inc. v. TWI Pharmaceutical, Inc., 773 F.3d 1186 (Fed. Cir. 2014).

In this case, we know that 60% benzyl benzoate concentration was actually present in the prior art experiments, but that knowledge was not expressly part of the prior art. Thus, the court focused on whether the existence of benzyl benzoate was necessary based upon the prior art itself. From that frame of reference, the elements were not inherently disclosed by the prior art.

The district court reasonably found that this was not enough “to establish [with clear and convincing evidence] that the Articles barred the possibility of an alternative vehicle being used in the prior art compositions” to meet the rigorous standard of inherency.

Prior Publications Compared with Prior Uses or Sales: I believe that this case could have come out differently if the challengers had been able to rely upon the uses in the experiments as prior sales or public uses. In those circumstances, the question would focus on what was actually in the injection rather than what was publicly known or disclosed about the injection. My conjecture here appears to be based upon alternative facts since the articles in-question stem from research studies and so were likely sufficiently protected by secrecy and experimental use limitations.

The other question here is what to do about the fact that Bayer (or its predecessor) was involved with the prior art articles.  Here, Doris Hübler is the first named inventor on the patents at issue and also one of the authors of the prior art article and that Bayer provided the TU ampules used for the testing.  I believe that the answer here is that Bayer only runs into trouble here if (1)the experiments count as commercialization under cases such as Metallizing Engineering or (2) Bayer somehow abandoned the invention. Neither of these appear appear to fit here.

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USPTO: Claim Construction in AIA Trials

Claim construction continues to hold focus as the centerpiece of contested patent cases — both in court and in administrative AIA trials (primarily, Inter Partes Review proceedings) before the Patent Trial and Appeal Board (PTAB).  One element of current practice is that the USPTO applies a different standard for construing claims than do courts or the USITC in infringement litigation. (Compare Broadest Reasonable Interpretation with Phillips / Ordinary Meaning standards).

One of PTO Director Iancu’s early initiatives has been to unify the standards.  That process began with a notice of proposed rulemaking with finalized rules coming later this fall.

The USPTO has posted comments submitted on the proposed change — with over 350 submissions.  Although the bulk of submissions favor the change, a substantial number also argue that the BRI standard is an important aspect of IPR effectiveness — with the beneficial result of lowering consumer costs and improving access to medicines. It will take some time to review these comments.

I was involved in two of the submissions:

  • Professors of Law: Supporting change as promoting uniformity and clarity. Although I provided some input on this document, the primary drafter was Prof. Vishnubhakat (Tex.A&M).
  • Prof. Crouch:  I also submitted my own memo highlighting the issue of estoppel and deference to claim construction by other tribunals.  The proposed rule do not address directly these issues, and I suggest that the USPTO should establish its rules and practices associated with PTAB Trial Proceeding claim construction in a way that best ensures that later tribunals will honor those constructions.

Other Law Prof Submissions:

  • Profs. Sarnoff and Ghosh: “We generally support the idea of a unitary post-grant interpretive standard in the PTO and the courts. However, we . . . encourage you to seek legislation to require the courts to adopt BRI for infringement litigation.” (Same from Prof. Dreyfuss).

Jazz Pharms: Federal Register; Public Notice; and Printed Publications

Jazz Pharms., Inc. v. Amneal Pharms., Inc., — F.3d —, 2018 U.S. App. LEXIS 19268 (Fed. Cir. 2018)

The patented invention at issue in Jazz Pharms is not a drug or drug treatment, but rather to a “drug distribution system for tracking prescriptions” for drugs with a risk of abuse[1]  The PTAB found claims from all six patents to be invalid as obvious.

The core issue on appeal was whether a pre-filing disclosure by Jazz counted as a prior art “printed publication.”

Printed Publication: As the language suggests, a “printed publication” must be both “printed” and also a “publication.”  These requirements though have been broadly construed.  “Printed” publications go well beyond physical hard-copies to allow for various media – including video and online forms.  To be a “publication,” the reference needs to be made sufficiently available to the public – publication.  In the leading case of In re Hall,[2] the Federal Circuit explained that accessibility to the relevant public is key – we ask “whether interested members of the relevant public could obtain the information if they wanted to.”  Although the court has developed a number of guide posts, the question of sufficient availability is seen as a factual inquiry handled on a case-by-case basis.

The prior art here was developed as part of an FDA drug safety review for one of Jazz’s drug products that was known as a potential date-rape drug.  In May 2001, the FDA announced in the Federal Register an upcoming public meeting – noting that the focus of the meeting would be on risk management for the drug.  The notice included a hyperlink to the pin-cite that eventually included meeting information, including background material, minutes, transcripts, and slides.

With these facts, Jazz Pharms appears an easy case – the materials were freely available online and relevant members of the public were directed to the material via the official public source.

A few caveats here:

  • The materials were not proven to be searchable or indexed at the time. In response, the court explained that these are not required elements of publication if sufficiently disseminated via other mechanisms.
  • Jazz argued that folks of skill would not have seen the notice in the Federal Register and therefore not have been pointed to the underlying documents. In response, the Federal Circuit explained that a Federal Register notice might not always be sufficient to place the relevant public on notice of a publication, but that it was sufficient in this case since it was indexed and directed toward members of the public interested in systems to protect the public from potentially dangerous drugs.  The court also endorsed the PTAB’s “sensible observation that the purpose of the Federal Register is to provide notice of government action such as the advisory committee meeting here.”

Note here that with publication, the touch stone is “accessibility” rather than “actual access.”  The court has repeatedly explained that “[i]f accessibility is proved, there is no requirement to show that particular members of the public actually received the information.”  Constant v. Advanced Micro-Devices, Inc., 848 F.2d 1560 (Fed. Cir. 1988).

= = = =

[1] U.S. Patents 7,668,730, 7,765,106, 7,765,107, 7,895,059, 8,589,182, 8,457,988.

[2] In re Hall, 781 F.2d 897 (Fed. Cir. 1986).

Practice before the PTAB: Recent Informative Decisions

The USPTO has recently designated five PTAB decisions as “informative.” (I have also included the recent Western Digital decision as well).


Covered Business Methods: Apple v. ContentGuard

On July 11, I wrote about the recent Federal Circuit decision in Apple v. ContentGuard. My post erroneously stated that the court found that the patent does not qualify as a “covered business method” patent.  The court did not take that bold of a step of a reversal. Rather, the court vacated the PTAB’s finding that was based upon an improper legal standard and remanded for a reconsideration.

 On remand, the Board must determine whether the ’280 patent qualifies as a CBM patent in the first instance without relying on the “incidental to” or “complementary to” standard.

Thanks to Patently-O reader and USPTO Examiner Scott Anderson for pointing me to this missed detail. – DC



Trade Battle Updates: Mechanisms to Avoid the Tariffs

by Dennis Crouch

The trade-battles are heating up – with President Trump imposing tens of billions of dollars of new tariffs on Chinese imports and China responding in-kind to US good imported into China. Additional tariffs have been announced on a more global basis on goods worth hundreds-of-billions of dollars.

The operational process here is that the office of the United States Trade Representative (USTR)* has gone through a political and deliberative process of determining which imports to tie to a 25% tariff (import tax).  The justification for the tariff is largely based upon Chinese non-tariff barriers to US goods. In particular, the USTR found in its “Section 301 report” that “the acts, policies, and practices of the Government of China related to technology transfer, intellectual property, and innovation covered in the investigation are unreasonable or discriminatory and burden or restrict U.S. commerce.”  The chosen tariffs primarily focus on products related to China’s “Made in China 2025” initiative to move up the industrial food-chain in terms of high technology and pharmaceutical product manufacture.  The allegations are that the initiative is being implemented by placing barriers to US imports and by using unlicensed US intellectual property rights.

In a new notice, the USTR has provided a particular pull-back process to allow US stakeholders to request particular products be excluded from the import tariff based upon “severe economic harm to a U.S. interest” that could result from the tariffs. [New Notice].  The requirements for the submission are fairly onerous for anyone who does not already have an intimate understanding of US Trade laws and practices.  Thus, I expect that the primary filers will be industry-focused trade organizations.  The notice also provides a limited opportunity to oppose any requested exclusions.


  • In the US, disputes over tariffs are heard by the US Court of International Trade with appeals going to the Federal Circuit.
  • The Office of the US Trade Representative is an administrative agency headed by the USTR (Robert Lighthizer), a cabinet level political appointee.

Covered Business Method: Licensing of Content is not (necessarily) a Financial Service

by Dennis Crouch [Updated on July 12 to correct an error]

Apple and Google v. ContentGuard v. Iancu (Fed. Cir. 2018)

Apple and Google both challenged ContentGuard’s U.S. Patent 7,774,280 under the Covered Business Method Post Grant Review proceedings.  The challenges raised eligibility, novelty, and obviousness challenges to several of the claims, but the Director (acting via the PTAB) only partially instituted: instituting only on novelty and obviousness, and only to three of the claims.  In the end, the PTAB found those claims obvious, but also allowed the patentee to add Claim 37 as a substitute for Claim 1 and found the new claim valid (not proven invalid).

On appeal, the Federal Circuit ruled the entire event a nullity — finding that the PTAB used the wrong standard for determining whether the patent qualifies as a covered business method. See Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1323 (Fed. Cir. 2015) and Unwired Planet, LLC v. Google Inc., 841 F.3d 1376, 1379 (Fed. Cir. 2016).  A key case on point is also Secure Axcess, LLC v. PNC Bank National Ass’n, 848 F.3d 1370, 1381 (Fed. Cir. 2017). However, that case was vacated as moot by the Supreme Court in PNC Bank Nat. Ass’n v. Secure Axcess, LLC, 138 S. Ct. 1982 (2018).

The “Transitional Program for Covered Business Method Patents” is not codified within the United States Code (35 U.S.C. ___) because it is only a temporary program that sunsets in September 2020.  Thus, the CBM program is generally cited as Section 18 of the Leahy-Smith America Invents Act.

Although the program allows for broad challenges of “covered business method” beyond the 102/103 published art restrictions of inter partes review, it also provides a particular narrow definition of what counts as a a covered business method patent:

[A] patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.

In Unwired Planet, the Federal Circuit held that the “financial product or service” cannot be merely “incidental to or “complementary to” a financial activity. Rather, the claims must have a “particular use” focused on financial activity.

Here, exemplary claim 1 is a method of “transferring rights” using “meta-rights”:

1. A computer-implemented method for transferring rights adapted to be associated with items from a rights supplier to a rights consumer, the method comprising:

obtaining a set of rights associated with an item, the set of rights including a meta-right specifying a right that can be created when the meta-right is exercised, wherein the meta-right
is provided in digital form and is enforceable by a repository;

determining, by a repository, whether the rights consumer is entitled to the right specified by the meta-right; and

exercising the meta-right to create the right specified by the meta-right if the rights consumer is entitled to the right specified by the meta-right, wherein the created right includes at least one state variable based on the set of rights and used for determining a state of the created right.

Google and Apple allegedly use this process to transfer access to third-party apps via their Play Stores.

In the appeal, the Federal Circuit explained that the system could be used in either financial services or non-financial services – and it “is not enough for the specification to describe how the invention could, in some instances, be used to facilitate financial transactions.”

CBM Decision Vacated: On remand, the PTAB will revisit the CBM question and will also need to follow the new rules against partial-grants.

= = = =

I’ll note here that the added claim 37 — that the PTAB found good-to-go adds a few limitations:

  1. The “item” – the subject of the rights being transferred is an “item of content;”
  2. The rights being transferred are “usage rights” or perhaps “another meta-right” (metameta); and
  3. The “meta-right is not itself a usage right because exercising the meta-right
    does not result in action to the content.”

It will be interesting to see whether the patentee goes about amending its claims through rexamination or reissue to add the new language.

= = = =

At the petition stage, Google argued that the claims were directed to the abstract idea of “providing consumers with rights to an item, such as a movie or book.” The Director (via the PTAB panel) disagreed – although providing what appears to be extremely weak analysis:

Google’s arguments that the challenged claims … are directed to a patent-ineligible abstract idea are predicated on the notion that they recite a fundamental economic or longstanding commercial practice.

Contrary to Google’s arguments, the challenged claims are not directed merely to “providing consumers with rights to an item, such as a movie or book,” nor can the features recited in the challenged claims be stripped away so that these claims simply are directed to a traditional approach or method of licensing or sub-licensing content. Indeed, the challenged claims require much more.

For instance, independent claims 1 and 12 require obtaining “rights associated with an item”—namely, a digital work—wherein the set of rights includes a “meta-right” specifying a “right” that may be created.  These claims further require providing the “meta-right in digital form” and indicate that the “meta-right” is enforceable by a “repository,” which, based on our claim construction above, constitutes “a trusted system” that enforces the “meta-rights” using very specific computer security and rights enforcement “integrities.”  In addition, these claims further require “at least one state variable” used to determine the state of the “right” created by the “meta-right.”


Patently-O Bits and Bytes by Juvan Bonni

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Source: USPTO

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Subsequent Public Availability of Misappropriated Information Cuts-Off Trade Secret Damages

by Dennis Crouch

Texas Advanced Optoelectronic v. Renesas Elecs. Am., 16-2121 (Fed. Cir. 2018)(Modified Panel Opinion Released July 9, 2018)

TAOS v. Renesas, focuses on the interplay between trade secret misappropriation (under Texas law), and patent law.  TAOS patented an ambient light sensor using a photodiode array.  See U.S. Patent No. 6,596,981. This type of sensor is widely used in smartphones to adjust the display brightness.  Following failed merger negotiations, Intersil developed a competing product — which the district court found relied upon confidential information received during the negotiations.  A jury found Intersil liable for patent infringement, trade secret misappropriation, breach of contract, and tortious interference with prospective business.

The damages verdict was as follows:

  • Patent Infringement: $74,000
  • Trade Secret Misappropriation – Disgorgment of D’s Profits: $48,000,000
  • Trade Secret Misappropriation – Punitive Damages: $10,000,000
  • Reasonable Royalty for Breach of Contract: $12,000,000
  • Retention of Documents Breach of Contract: $1
  • Tortious Interference – Lost Profits: $8,000,000
  • Tortious Interference – Punitive Damages: $10,000,000

The district court ruled that the Trade Secret award was duplicative of the Contract and Tortious Interference awards — and thus kept only the larger of those awards. All this was based upon the longstanding principle that “double recovery for the same injury is inappropriate.”  Aero Prods. Int’l, Inc. v. Intex Recreation Corp., 466 F.3d 1000, 1017 (Fed. Cir. 2006).  Still, the state law trade secret damages were more than 500 times greater than the federal patent law damages.

Patent and Trade Secret?:  One of the initial thought experiments for potential patentees is whether to (1) file for patent protection or instead (2) keep the invention as a trade secret.  It turns out though that one of the jedi tricks of in-house counsel the art of layering rights rather than choosing rights.   Counsel ask question: What must be disclosed in the patent application in order to obtain full rights?; What information may be kept secret without endangering the patent rights?; Can the product or process be divided into separate components so that some may be kept secret while others made public in patent documents? Is it possible to keep the patent documents secret for longer? Because early filing is so strongly encouraged in the patent system, it is regularly true that implementation details are developed after the filing date that are appropriately kept as trade secrets. Here, the alleged trade secretes included financial information on the costs as well as some technical information (the 1:1 interleaved array structure).

The combination is a trade secret: The asserted patent discloses, individually, a 1:1 array structure and also the interleaving of shielded and unshielded wells. However, the patent does not disclose the combination, of the array and interleaving wells (despite the fact that both disclosures are in the same patent application).  It was proper here – according to the court – for the jury to find that the combination remained a trade secret. Here, it appears that the trade-secret combination need only survive a novelty test. See Sikes v. McGraw-Edison Co., 665 F.2d 731, 736 (5th Cir. 1982) (concluding that, under Texas law, a trade secret may be “the application of known techniques and the assembly of available components”; “a trade secret can exist in a combination of characteristics and components, each of which, by itself, is in the public domain, but the unified process, design and operation of which in unique combination, affords a competitive advantage and is a protectible secret”).

On appeal, the Federal Circuit affirmed that this technical information could be the enforceable trade secret.  However, the court ruled that it was improper for TAOS to recover on both patent and trade secret claim

Here, Intersil’s use of TAOS’s photodiode array structure is the basis of Intersil’s liability for both trade secret misappropriation and patent infringement. . . . The patent award represents an impermissible double recovery [since] ‘all of the damages awarded to [plaintiff] flowed from the same operative facts: sales of the [same] infringing [products].’ (Quoting Aero Prods. Int’l, Inc. v. Intex Recreation Corp., 466 F.3d 1000, 1017 (Fed. Cir. 2006)).

In Aero Prods., the Federal Circuit explained that “in determining whether there has been an impermissible double recovery of damages, the inquiry focuses on whether the damages issue arose from the same set of operative facts.”

Later-Acquired by Proper Means: An important question for damages: How long does the trade secret last.  Here, in particular, prior to the real harm (Intersil’s contract with Apple), TAOS had already released its product and Intersil had reverse-engineered that product.


  • Summer 2003: TAOS ‘981 patent issues with 1:1 array and interleaving disclosed (but not the combination);
  • Summer 2004: Intersil received technical information from TAOS regarding 1:1 interleaving as part of merger negotiations;
  • August 2004: After ending negotiations, Intersil began developing its own 1:1 interleaved product;
  • January 2005: TAOS won contract from Apple to supply the sensors;
  • February 2005: TAOS releases its product that include the 1:1 interleaving;
  • January 2006: Intersil reverse-engineered TAOS product that included the 1:1 interleaving;
  • September 2006: Intersil won contract from Apple to supply the sensors;
  • November 2008: Lawsuit began.

Here, the Intersil contract was not inked until after Intersil had reverse-engineered the TAOS product.  Under Texas trade secrecy law, information is no longer a protectable trade secret once accessible by “proper means.” The court explained:

Such accessibility existed no later than January 2006, when Intersil successfully reverse-engineered the TSL2560, and perhaps as early as February 2005, when TAOS “released” the TSL2560.

Under the law then, “secrecy protection terminated at the end of the period of time it would have taken Intersil, after Intersil’s permissible discovery of the photodiode structure, to recreate that structure in its own products.”

Financial Information: In addition to limiting the damages for the technical-information misappropriation, the court ruled that the financial information was not protectable:

  • Cost information: Not protectable because Intersil already had its own cost information by the time of the alleged misappropriation.
  • Build-vs-Buy Analysis: Not protectable because the confidentiality agreement between the parties allowed for its use.

One additional problem with the trade secret damage award: Disgorgement: The jury had awarded damages in the form of disgorging profits of the defendant.  On appeal, the Federal Circuit ruled that disgorgment is not available for trade secret misappropriation (without proving that disgorgment was the proper form of compensatory damages).  The result here offers an interesting historical analysis of trade secret damages.

The Federal Circuit originally issued the decision in May 2017, the court has now denied a petition for rehearing en banc, but has rewritten a portion of the opinion relating to the patent damages — TAOS had asked for worldwide damages, but those continue to be denied.

Intersil submitted evidence that, except for 1.2% of the accused units, all of its accused products were manufactured, packaged, and tested abroad, and those units were shipped to manufacturers and distributors abroad. . . .  But even the additional evidence . . . of domestic negotiations and Intersil’s testing of some of Intersil’s products—does not demonstrate “substantial activities regarding sales” sufficient to raise a material dispute of fact as to sales or offers to sell in the United States. . . . Intersil presented evidence of extraterritorial manufacturing, packaging, and shipping, and TAOS failed to present any evidence establishing the required domestic activity.  On this record, TAOS has not produced evidence sufficient to raise a material dispute of fact as to the 98.8% of units that were the subject of the district court’s grant of summary judgment.

International damages for patent infringement denied.

Phonetic Symbol System Not Patent Eligible

In re Wang (Fed. Cir. 2018) (nonprecedential)

In a non-precedential decision, the Federal Circuit has rejected George Wang’s pro se appeal — affirming the PTAB judgment that Wang’s claimed phonetic symbol system lacks eligibility under Section 101.

The baseline here is that the written english language is only quasi-phonetic.  Every rule of spelling or pronunciation has layers of exceptions.  Linguists have developed a phonetic pronunciation guides, but those use quirky non-english letters.  Wang’s invention here offers a one-to-one system tying each vowel and consonant sound to a single phonetic symbol, and uses only English letters for the phonetic symbols. Table 1 below comes from Wang’s patent application and offers an example embodiment of his system:

The claim (slightly edited for clarity):

A phonetic symbol system comprising:

a plurality of phonetic symbols,

wherein each of said phonetic symbols is defined by one (or more than one) letter of English alphabet, the case or the style of said letter does not affect the sounds of said phonetic symbols,

[said phonetic symbols include] vowel phonetic symbols and consonant phonetic symbols . . . ,

each vowel [sound] is distinctively represented by one of said vowel phonetic symbols, and each consonant [sound] is distinctively represented by one of said consonant phonetic symbols.

Rather than reaching the more controversial aspects of eligibility, the court here first focused on the statutory requirement that a patent must be directed to a “process, machine, manufacture, or composition of matter.” 35 U.S.C. 101.  Since the claim is not directed to any concrete physical form, it cannot be a machine, manufacture, or composition of matter.  Further, because the claim does not actually require performance of any steps, then it cannot be defined as a process.

Without analysis, the court also agreed with the PTO that “defining phonetic symbols in language, using strings of English letters, is an unpatentable abstract idea” and  that the claims offer nothing beyond the abstract idea:

[W]here, as here, claims of a patent application recite an abstract idea, the question becomes whether they contain “additional features” that embody an “inventive concept,” so as to nevertheless make them patenteligible. Alice Corp. Pty. Ltd v. CLS Bank Int’l, 134 S. Ct.
2347 (2014). The application claims on appeal, however, contain no “additional features” of any kind embodying an inventive concept. The claims merely encompass strings of English letters representing sounds. In short, there is no inventive concept that rescues them from patent ineligibility.

Rejection affirmed.

As the old saying goes, part of Mr. Wang’s problem is that he “has a fool for a client.”  Patent law and procedure is at such a high level of complexity that it very rarely makes sense for an inventor to represent himself — especially at the appellate level.

My question for the patent attorneys and agents here: Is there a way for Wang to turn this case around by amending the claims so that they recite a particular method.  [Read the application here:]  Is this the type of idea that patent law should cover?  Consider U.S. Patent No. 7,004,758.