Rising Per-Patent Inventor Count

By Dennis Crouch

The chart below is a follow-up my prior post involving teams of inventors. The chart shows the average number of inventors per utility patent. For patents issued in first five-months of 2018, about 5% have 7 or more inventors.

U.S. Patent No. 9,971,713 (GlobalFoundaries) is an example of a high-inventor-count patent with 60 listed inventors. The patent is now owned by GlobalFoundaries (CAYMAN ISLANDS) but originated from work by IBM and a Department of Energy grant.

Guest Editorial: Yes, Native Americans and Patents Do Go Together

Guest post by Michael Gulliford.  Mr. Gulliford is an advisor to the Saint Regis Mohawk Tribe and the Founder of Soryn IP Group, a patent advisory and finance firm headquartered in New York City.

Native Americans and patents don’t make headlines. That changed when the Saint Regis Mohawk Tribe, located in upstate New York, conceived a lucrative transaction that saw Allergan transfer patents covering the dry eye drug Restasis® to the Tribe. In return, the Tribe agreed to use its sovereign status to protect the patents from a controversial administrative proceeding coined the patent “death squad”, and to license the patents to Allergan. Allergan paid the Tribe $13.75 million upfront, with continuing royalty payments of $3.75 million per quarter.

Although the story is far from over, so much remains unsaid. As an advisor to the Tribe on patent issues, allow me to explain.

#1 – Tribes Are Vilified For Following The Status Quo

Tribes, like States, are sovereigns and cannot be hauled into federal administrative proceedings that resemble lawsuits without consenting.  Here, the Tribe used its sovereign status to shield the patents from attack in a new administrative proceeding called Inter Partes Review (IPR), held at the Patent Trial & Appeals Board (PTAB). Generic companies remain free to challenge patent validity in district court.

From the hysteria, you’d think the Tribe is the first to invoke sovereign immunity with IPRs. It is not. State universities are, and began successfully doing so before the Allergan deal.

At least five major state universities have asserted their immunity as arms of their sovereign states with respect to IPRs. Some invoked sovereign immunity with corporate partners. Yet, only the Tribe faced Congressional hearings and proposed legislation. And in its recent decision, the PTAB, which hears IPRs, took the remarkable step of concluding that the Tribe’s immunity did not apply to an IPR because it was lesser than the immunity held by States.

In doing so, the Board overlooked the guidance of our nation’s most prominent Constitutional law scholars on the exact issue at hand. But as the leaders of numerous Indian tribes have told me, this treatment is par for the course. Once Native Americans engage in economic activities that were previously considered the status quo, the claws come out.

#2 – No One Gives Native Americans Credit

The most recited narrative of the deal is that Allergan “rented” the Saint Regis Mohawk Tribe’s sovereign immunity. This point of view is based on racism at worse and paternalism at best. Most can’t fathom that an Indian tribe, itself no stranger to devastating property loss, could be sophisticated enough to appreciate how recent changes to the U.S. patent system have failed innovators, or to have done a deal to right such wrongs.

But as I’m sure Allergan quickly appreciated when it visited the Tribe’s reservation, the Saint Regis Mohawk Tribe challenges convention. Its leadership is highly sophisticated and entrepreneurial. With limited powers of taxation, and the enormous burden of providing healthcare, addiction treatment, housing and education to its people, the Saint Regis Mohawk Tribe innovates to create revenue.

The Tribe’s broadband company “Mohawk Networks,” is solving the “last mile” problem in regions of Northern New York by building and expanding its high-speed fiber network. While local auto and aluminum factories have shut down, costing local jobs, the Tribe invested heavily in a new soy bean processing plant located close to the Tribe’s reservation. The plant will support farms that supply the State’s Greek yogurt industry, and create needed jobs.

The Tribe’s Office of Technology, Research and Patents, founded well before the Allergan deal, is pursuing a host of patent and commercialization initiatives. All are examples of the Tribe’s desire to steer away from casino gaming as its sole revenue source. And there is more to come.

#3 – PR Is Obfuscating A Conversation That Needs To Happen

Created in 2011 in response to “patent troll” problems, IPRs were supposed to give companies a cheaper way to challenge the validity of patents they are accused of infringing. But by implementing rules that strongly promote patent invalidity findings, IPRs inflicted significant pain for companies heavily reliant on patents.

It isn’t even controversial that IPRs have clouded the validity of most U.S. patents. The U.S. Chamber of Commerce recently demoted the U.S. patent system to #12 in the world because of IPRs.  Numerous Supreme Court and appellate judges have railed against IPRs. The Wall Street Journal Editorial Board highlighted the harm that IPRs cause to American innovation.

Given these truths, one could make a compelling argument that the Board of any company reliant on patents should do whatever is necessary to avoid IPRs. Why shouldn’t companies fight back and do deals to avoid having their crown jewels invalidated?

The answer is PR and political pressure to not do such deals. Big tech likes IPRs because killing patents increases the bottom line. It is cheaper to invalidate patents than to compensate innovators for the use of their technology. Generic drug companies like IPRs because the lax IPR standards that were set up to make “patent troll” patents easier to kill can be used to more easily wipe out pharma patents. Although Congress carefully sculpted legislation to govern pharmaceutical patent challenges — called the Hatch-Waxman Act — IPRs have undone the delicate balance that Hatch-Waxman strikes.

But conversations about these issues are not happening because huge sums of money have been spent vilifying Allergan and the Tribe.

So let’s start asking new questions. Why are tribal sovereigns being treated so much differently than States? And why is way more attention being paid to the Tribe’s transaction than to fixing the flawed IPR process that forces innovators to need the Tribe’s assistance?

In the end, my bet is that history will thank the Saint Regis Mohawks for enabling changes that bring the United States patent system back to #1 in the world.

Michael Gulliford is the Founder and a Managing Principal of Soryn IP Group, a patent advisory and finance firm headquartered in New York City that closed almost $140 million in patent deals in 2017. In addition, Soryn Capital, manages one of the largest funds in the U.S. dedicated to patent litigation finance. Prior to founding Soryn, Michael was a partner in the Intellectual Property group at Kirkland & Ellis LLP.

Pro Se Loses

by Dennis Crouch

Huang v. Huawei (Fed. Cir. 2018)

This is a fairly ridiculous case. Acting pro se Mr. Huang sued Huawei for infringing three of his patents: U.S. Patent Nos. 6,744,653, 6,999,331, and RE45259 (high speed memory chips).

At the start of discovery, Huang agreed to a protective order, including a designation for “attorney’s eyes only.” Huawei then used that “attorneys eyes only” designation when it disclosed the technical information for its accused chips.  Since he had no attorney, Huang was unable to look at the disclosures.  When Huawei later motioned for summary judgment of non-infringement, Huang responded with a number of previously undisclosed reverse-engineering figures and declarations from undisclosed witnesses. The court granted a motion to strike that purported evidence as well as the summary judgment motion and awarded attorney fees to Huawei (but only $600,000) after finding his litigation behavior “constituted bad faith and an abuse of the judicial process.”

On appeal, the Federal Circuit has affirmed — holding that the district court did not abuse its discretion.

Lessons learned here:

Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Source: GM Inside News

Commentary and Journal Articles:

Source: Haseltine Lake, LLP

New Job Postings on Patently-O:

Commissioner Hirshfeld on Increasing Certainty in US Patent Law

Guest Post by Stephen C. Glazier, Partner at Akerman LLP

On April 26, 2018 the U.S. Patent Commissioner, Andrew Hirshfeld, spoke at our webinar regarding current developments at the U.S. Patent Office. [Link Below]

A major theme of Commissioner Hirshfeld’s remarks was the PTO’s revived focus on increasing reliability, certainty, and enforceability of issued patents and the application process.  The underlying goal here is to further increase the value of patents and their beneficial impact on innovative products and businesses.

The Commissioner stated that a first step toward this policy goal will be pursued by new PTO guidance to Examiners and the applicants regarding the application of the Alice-Mayo test for patent subject matter eligibility under Section 101.  Other possible PTO guidance is also being considered on various current issues.

The Commissioner pointed out that a first result in this effort was the very recently published PTO guidance, the “Berkheimer Memorandum“, which can be viewed at this link: https://www.uspto.gov/sites/default/files/documents/memo-berkheimer-20180419.PDF. This memo addresses the question of whether an additional element, or combination of elements, represents “well-understood, routine and conventional” activity in a claim directed to an abstract idea, for example, and hence constitute “something more” under the Alice-Mayo test (i.e., patent eligible subject matter).  The memo requires examiners to expressly support their positions with a citation to show an element is well-understood, routine or conventional.  This should mitigate the volume of Alice rejections.  The Commissioner indicated that this memo can currently be used as guidance, despite the fact that it is in the period for public comment until Aug. 20, 2018.

Many commentators feel that this will benefit software and medical diagnostic patents, since Alice rejections are concentrated in these technologies.

The Commissioner commented on volume and other metrics at the PTO.  The number of new patent applications has increased every year since 2009, with about 450,000 new cases filed last year (or about 600,000 if RCE’s are counted).  However, the percentage of RCE’s is declining.  The average time to first action is now about 15 months, and the final time to conclusion of prosecution is about 24 months.   Average pendency of Track One applications until issuance is only about 12 month from filing; although, the allowance rate for Track One is about the same as for regular applications.  The annual number of new Track One applications is down slightly, but remains near the historical maximum of about 10,000 annually.  There are currently about 8,200 patent examiners, of which about 4,700 are primaries.  There are approximately 500 art units.

Related issues and other questions were addressed by the Commissioner in the webinar.  Some of these issues include:  (1) recent Supreme Court patent decisions, (2)  material differences in the allowance rates of various examiners, art units and technology centers, and (3) the process for assigning applications to examiners, art units and technology centers.

A video recording of the Commissioner’s opening remarks, and the subsequent Q&A session with the Commissioner, may be reviewed in their entirety at this link: https://www.youtube.com/watch?v=svxQH7a3SwM&feature=youtu.be



Helsinn: Dueling Questions

I don’t know what the Supreme Court thinks of alternative statements of the question presented — but it has become a regular practice of parties opposing certiorari to restate the question in an attempt to shift attention of the court.

The pending petition in Helsinn is on point.  Compare the question presented in the petition with its complete restatement by the opposition:

Petition: Whether, under the Leahy-Smith America Invents Act, an inventor’s sale of an invention to a third party that is obligated to keep the invention confidential qualifies as prior art for purposes of determining the  patentability of the invention.

Opposition: Whether this Court should review the Federal Circuit’s factual conclusion that Helsinn’s sale agreement with a third party publicly disclosed its claimed invention “in detail” (Pet. 33a) more than a year before it filed  its patent application, thus triggering the “on sale” bar on patentability set forth in 35 U.S.C. §102(a).

[Docket with Briefs] The difference between the two is typical — with the petition asking the court to focus on an important question of law and the opposition focusing on already-decided factual minutia.

Later this month, the Supreme Court is holding conference in the case and I would expect a call for the views of the Solicitor General.

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

Corporate Duty to Disclose?

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

37 C.F.R. 1.56:

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

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

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


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

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

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

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

Section 112(f) as a Model

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

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

Proposed Amendment to Section 101

101. Inventions patentable

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

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


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


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


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

– – – – –

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

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

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

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

Citing to Published Applications

by Dennis Crouch

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

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

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

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

Claim 31. A method comprising:

at an electronic device:

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

after receiving the input:

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

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

in response to identifying the voice, providing the reminder.

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

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

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

Rendering Patent Unenforceable Due to Litigation Misconduct

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

Question presented:

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

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

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

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

Regeneron v. Merus: En Banc Chances Rise

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


Judge Lourie and Newman: Call for Congress to Act

by Dennis Crouch

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

By Dennis Crouch

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

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

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

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

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

Judge Moore:

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

Judge Lourie:

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

Judge Reyna:

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

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

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


Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Copyrighting Software: Case Likely Heading to Supreme Court

by Dennis Crouch

Google v. Oracle (Fed. Cir. 2018)

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

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

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

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

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

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

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

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

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

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

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

by Dennis Crouch

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

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

(Petition for Writ of Certiorari).

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

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

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

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