Assignor Estoppel

In Hologic, Inc. v. Minerva Surgical, Inc., 957 F.3d 1256 (Fed. Cir. 2020), the court upheld the doctrine of “assignor estoppel” but also found that it could be collaterally attacked via IPR since the PTO does not enforce the doctrine.  The panel – led by Judge Stoll — also called for reconsideration of the doctrine “as it applies both in district court and in the Patent Office.”

The patentee in this case want the the court to broadly hold that assignor estoppel cannot be circumvented via IPR proceeding; the defendants are asking that the court go the other way and narrow assignor estoppel associated with claims added or amended after the assignment.

Pending en banc questions from the patentee:

1. Whether an assignor can circumvent the doctrine of assignor estoppel by attacking the validity of a patent claim in the Patent Office?

2. Whether the America Invents Act prohibits the doctrine of assignor estoppel.

The accused infringer asks the following:

1. Whether assignor estoppel applies when the assignee broadened claims after assignment.

[Note – I amended these questions to make them more readable – DC].

A group of 26 law professors led by Prof. Mark Lemley (Stanford) filed a petition in support of the en banc rehearing — arguing that the Federal Circuit has unduly expanded the doctrine of assignor estoppel. [LemleyAmicus]

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What the court needs to do here is recognize that “assignor estoppel” is the same defense as the longstanding property law doctrine of “estoppel by deed.”  The two should be interpreted in parallel fashion.

Bostick v. Clayton County Georgia

It is a slow patent news day, but the Supreme Court offered a big employment discrimination decision in Bostick v. Clayton County Georgia (Supreme Court 2020).

The opinion joins together several cases challenging employment discrimination on the basis of gender identity (transgender) and also sexual orientation (homosexuality). Title VII of the Civil Rights Act of 1964 prohibits employment discrimination on the basis of an “individual’s race, color, religion, sex, or national origin.”   Here, the Supreme Court holds that gender identity and sexual orientation both fall with the ambit of “sex” and thus are also protected against discrimination.

Justice Gorsuch wrote the 6-3 majority opinion in textualist form:

Today, we must decide whether an employer can fire someone simply for being homosexual or transgender. The answer is clear. An employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex. Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.

Those who adopted the Civil Rights Act might not have anticipated their work would lead to this particular result. Likely, they weren’t thinking about many of the Act’s consequences that have become apparent over the years, including its prohibition against discrimination on the basis of motherhood or its ban on the sexual harassment of male employees. But the limits of the drafters’ imagination supply no reason to ignore the law’s demands. When the express terms of a statute give us one answer and extratextual considerations suggest another, it’s no contest. Only the written word is the law, and all persons are entitled to its benefit.

Slip Op. Beyond the importance of the holding, the Gorsuch opinion has a few lines that will be quoted and used in future cases:

Sometimes small gestures can have unexpected consequences. Major initiatives practically guarantee them.

Likely, [the legislators] weren’t thinking about many of the Act’s consequences that have become apparent over the years . . . But the limits of the drafters’ imagination supply no reason to ignore the law’s demands.

In dissent, Justices Alito & Kavanaugh each argued that the Gorsuch opinion represented “legislation.” None of the decisions included any substantive discussion of the importance of either (1) the right of potential employees to not be discriminated against on the basis of gender identity and sexuality or (2) the right of employers to discriminate on those bases.   The majority does indicate that it is not a problem to fire an employee for “supporting the wrong sports team” (or it is at least not a violation of Title VII). 

Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

Change in the Law not Enough for R.60(b) Relief from Judgment

Medinol Ltd. v. Cordis Corp. (Fed. Cir. 2020) (nonprecedential)

Fed. R. Civ. Pro. 60 is entitled “Relief from a Judgment or Order” and allows a party to request that a district court reconsider a prior order. R. 60(b) provides a list of specific reasons for granting relief but concludes with a catch-all “any other reason that justifies relief.” R. 60(b)(6).  At times, 60(b)(6) motions can be quite powerful — especially because the rule does not set a firm deadline other than recognizing that the request “must be made within a reasonable time.” That said, courts only allow relief in “extraordinary circumstances.”

Back in 2014, the district court dismissed Medinol’s patent infringement claims as bared by laches.  Three years later, the U.S. Supreme Court held in SCA Hygiene that laches is not a proper defense in this situation. SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, 137 S. Ct. 954 (2017).

Case History: Medinol actually filed its R. 60(b)(6) motion in 2014. A few months after its case had been dismissed, the Supreme Court decided Petrella, a copyright case also holding laches was not a proper defense. Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S.Ct. 1962 (2014).  The district court & Federal Circuit refused to grant relief at that time — distinguishing copyright from patent law.  Subsequently the Supreme Court decided SCA Hygeine and ordered the Federal Circuit to reconsider Medinol’s case in light of the new law.  Medinol Ltd. v. Cordis Corp., 137 S.Ct. 1372 (2017).   On remand, the Federal Circuit then sent the case back to the district court to consider any extraordinary circumstances.  The district court again denied the motion for relief — holding that Medinol should have appealed the issue rather than asking for relief of judgment.  Further, although equitable defense (laches) is not effective, its underlying holding–that Medinol unreasonably delayed in bringing the lawsuit–suggests that the court should not bend-over-backwards to provide relief.  R. 60(b) relief expresses a “grand reservoir of equitable power to do justice,” but that power must be limited to only extraordinary cases.

On appeal again, the Federal Circuit has — holding that a change in the law is not sufficient alone to trigger R.60(b) relief and that relief cannot serve as a substitute for failure-to-appeal.

Of course, we do not expect parties to foresee the future when deciding whether to appeal an adverse judgment. We simply conclude that there were enough reasons supporting an appeal in this case for the district court to properly hold Medinol’s failure to appeal against it in the Rule 60(b)(6) analysis.

Slip op.

Gentlemen. It has been a privilege playing with you tonight.

by Dennis Crouch

Ubisoft v. Yousician (Fed. Cir. 2020) (nonprecedential)

Ubisoft (Rocksmith) and Yousician are competitors in the music-lesson software market.  Truthfully, I really enjoy using these tools — their main problem is the added screen time.

In 2018, Ubisoft sued Yousician for infringing its U.S. Patent 9,839,852 covering an “Interactive Guitar Game.”  Before the opening act even started, the district court dismissed the case on failure-to-state-a-claim. Fed. R. Civ. Pro. 12(b)(6).  In particular, the court found the claimed invention to be improperly directed to an abstract idea. On appeal, the Federal Circuit has now affirmed.

The claims at issue are directed to functional software stored on a computer drive — “a non-transitory computer readable storage medium with a computer program stored thereon.”  The claimed software is designed “present an interactive game for playing a song on a guitar” by causing the computer processor to take the following steps:

show finger notations on a display device (corresponding to the song to be played by a user);

receive audio input from the guitar that corresponds to the song played by the user;

assess the performance and determining a portion of the performance that should be improved;

change the difficulty level of the fingering notations (based upon the assessment); and

generate a “mini-game” targeted to improving the user’s skills associated with problematic portion.

Human tutors have worked in the music lesson world for a long time. Some folks are self-taught, but it is a pretty big deal to have responsive computer software that actually works for helping learn guitar.  Within the claim, you can see hints of major developments of (1) accurately assessing performance and then (2) motivating learning through gamification.  The problem with the claims is that they are written in broad functional form without actually claiming how the results are accomplished.  In particular, the claims could be transformed by expressing the algorithms for assessing performance; changing difficulty level; or generating the mini game.  Taking all this a step further, the court looked to the specification and found only a description of “these steps in functional terms and not by what process or machinery is required to achieve those functions.”

Without those specifics, the court held that this is just taking a human tutor’s method and saying “do it on a computer.”

[The steps here are] thus no different from the ordinary mental processes of a guitar instructor teaching a student how to play the guitar.

Slip Op.

[Post title comes from Titanic (1997)]

Internet Law at the Supreme Court

Although I love teaching patent law, my favorite class to teach is often Internet Law. This next year I’ll be teaching it both to law students and as a sophomore-level undergraduate class. One thing that is great about the class is that all of the students already have a set of preconceived notions about how internet society should work, but without much information about the legal background.

Here are three cases Supreme Court petitions that I’ve been following that are closely related to civil internet law issues:

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LinkedIn Corporation v. hiQ Labs, Inc., No. 19-1116. (Cert Pending)

In the case, LinkedIn told hiQ to stop scraping data from its public website and also created a technical barrier to block the bulk scraping (while keeping the LinkedIn user information on the public-facing website).  In response, hiQ deployed a set of bots to circumvent the barriers and harvest the data. The 9th circuit sided with hiQ – finding no violation of the Computer Fraud and Abuse Act (CFAA).  The petition asks:

Whether a company that deploys anonymous computer “bots” to circumvent technical barriers and harvest millions of individuals’ personal data from computer servers that host public-facing websites—even after the computer servers’ owner has expressly denied permission to access the data—“intentionally accesses a computer without authorization” in violation of the Computer Fraud and Abuse Act.

[LinkedIn Petition].

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Malwarebytes, Inc. v. Enigma Software Group USA, LLC, No. 19-1284 (Cert. Pending)

Malwarebytes is another case out of the 9th Circuit and focuses the filtering-immunity provision of the Communications Decency Act (CDA). 47 U.S.C. § 230(c)(2).  The CDA has been receiving substantial airtime recently with President Trump & Senator Hawley’s push to limit the ability of online service providers like Twitter, Google, and Facebook from politically motivated filtering. The relevant text of the statute is follows:

(2) Civil liability: No provider or user of an interactive computer service shall be held liable on account of—

(A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected, or

(B) any action taken to enable or make available to information content providers or others the technical means to restrict access to material described in paragraph (1).

The case involves the defendant Malwarebytes whose anti-malware software identified the plaintiff Enigma’s software as “potentially unwanted.”  Enigma sued –alleging that Malwarebytes improperly “configured its software to block users from accessing Enigma’s software in order to divert Enigma’s customers.”  The district court found immunity, but the 9th Circuit reversed — holding that “anticompetitive animus” bypassed the 230(c)(2) defense, leading to the question presented to the Supreme Court:

Whether federal courts can derive an implied exception to Section 230(c)(2)(B) immunity for blocking or filtering decisions when they are alleged to be “driven by anticompetitive animus.”

[Malwarebytes Petition]. In my view, the 9th Circuit decision and briefing thus far misses the mark by failing to analyze the “good faith” requirement in the analysis.

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Hunt v. Board of Regents of the University of New Mexico, No. 19-1225.

Paul Hunt, was a UNM medical school student back in 2012 and posted the following anti-abortion tirade on Facebook soon after Obama’s election:

The Republican Party sucks. But guess what. Your party and your candidates parade their depraved belief in legal child murder around with pride.

Disgusting, immoral, and horrific. Don’t celebrate Obama’s victory tonight, you sick, disgusting people. You’re abhorrent.

Shame on you for supporting the genocide against the unborn. If you think gay marriage or the economy or taxes or whatever else is more important than this, you’re fucking ridiculous.

You’re WORSE than the Germans during WW2. Many of them acted from honest patriotism. Many of them turned a blind eye to the genocide against the Jews. But you’re celebrating it. Supporting it. Proudly proclaiming it. You are a disgrace to the name of human.

So, sincerely, f[***] you, Moloch worshiping

[Stars added for your sensibilities.]

The University found the post “unprofessional.” Hunt offered to remove the expletives, but the university found that insufficient. Hunt then sued on first amendment grounds.  The district court and 10th Circuit both rejected Hunt’s case on qualified immunity, with the appellate panel finding no precedent barring “reasonable medical school administrators [from] sanctioning a student’s off-campus, online speech for the purpose of instilling professional norms.”

The question presented:

Whether Respondents violated Mr. Hunt’s clearly established rights as a private citizen under the First Amendment by punishing him for his off-campus, political speech.

[Hunt Petition]


Backdating at the Board: Provisionals & Prior Art

by Dennis Crouch

Merck Sharp & Dohme Corp. v. Microspherix LLC (Fed. Cir. 2020)

The Federal Circuit here affirms the PTAB IPR final determination that Merck failed to prove the Microspherix claims invalid. US9636401; US9636402; US8821835. Microspherix sued Merck — accusing Merck’s implantable contraceptive of infringing. Merck responded with the three IPR petitions.

The patents here cover implantable therapeutic/diagnostic devices that also have a radiopaque marker that helps find the device after insertion.  As originally filed, the claims were directed to “brachytherapy” — slow release of radioactive agents to treat cancer.  However, the claims were expanded in various continuation applications to broadly claim any “therapeutic, prophylactic, and/or diagnostic agent”

The interesting legal question on appeal has to do with the timing of the asserted prior art reference Zamora. The chart below shows the patent filings in question, and each party argued that the opposing non-provisional applications could not properly claim priority to their respective provisional applications.

Question 1: Does 102(e) (pre-AIA) apply in inter partes review?: 35 U.S.C. 311 limits IPR validity challenges “the basis of prior art consisting of patents or printed publications.”  Under 102(e), Zamora’s 2001 non-provisional application became prior art once the resulting patent issued. However, as of its 2001 filing date, the application was neither a “patent or printed publication.”  In its decision here, the court simply assumed that 102(e) prior art counts under the IPR statute (as it has done in prior cases as well) See In re Cuozzo Speed Techs., LLC, 793 F.3d 1268, 1281 (Fed. Cir. 2015), aff’d sub nom. Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016).  Post-AIA 102(a)(2) does not have the same problem because the statute makes clear that it is the patent / published application that is the prior art.

Question 2: Does Zamora’s provisional date allow for further back-dating of the 102(e) date?: Here, the court explains that Zamora would get the 2000 prior art date of its provisional “if it was entitled to the date of the Zamora provisional.” The court quoted Drinkware, LLC v. Nat’l Graphics, Inc., 800 F.3d 1375, 1381 (Fed. Cir. 2015) in explaining that the “‘reference patent is only entitled to claim the benefit of the filing date of its provisional application if the disclosure of the provisional
application provides support for the claims in the reference patent in compliance with’ the written description requirement.”  Here, the court noted that 2001 Zamora claimed three options for placement of a radiopaque medium, but one of those was not present in the provisional application.  That failure of written decription meant that Zamora’s prior art date was 2001, not Jan. 2000.

Question 3: Does Microspherix’s provisional date work as a priority date?: In considering priority claims, the courts generally operate on a claim-by-claim basis.  Thus, in a complex patent family, a single patent may include claims with a variety of priority dates. One problem with our current system is that a patent only tells us the earliest claimed priorty date — not the actual priority date.  The actual date is only realized and determined through ex post litigation.  Here, Merck argued that some of the claims went beyond the provisional disclosure. On appeal, the Federal Circuit disagreed — explaining that the the written description requirement requires the disclosure to “reasonably convey” possession of the invention.

Here, the particular written description argument focused on the length of the claimed strands that were inserted into a body.  The original provisional disclosed a variety of strand lengths, but none of them were longer than 1 cm (10 mm).  Some of the patent claims claim strands without any length limitation, and Merck argued that Microspherix was not in possession of such a broad range of strand lengths. On appeal, the Federal Circuit agreed with the PTAB that the description found int he provisional “adequately supports the claimed strand recited in Microspherix’s patent

Federal Circuit Backtracks (A bit) on Prior Art Status of Provisional Applications and Gives us a Disturbing Result

Case must be “Exceptional” for Attorney fees in Patent or TM case

Munchkin, Inc. v. Luv N’ Care, Ltd. (Fed. Cir. 2020)

This lawsuit centers on Munchkin’s U.S. Patent 8,739,993 covers a “spillproof drinking container” as well as associated trademark and unfair competition claims.  Munchkin sued and LNC responded with an inter partes review petition. The PTAB cancelled the claims; the Federal Circuited affirmed without opinion (R.36); and Munchkin then dismissed its patent claims in the district court.  By that point, Munchkin had also dropped all of its non-patent claims (dismissed with prejudice).

After Munchkin’s voluntary dismissal, the defendant then asked for attorney fees under 35 U.S.C. § 285 (Patent Act) and 15 U.S.C. § 1117(a) (Lanham Act).  Both provisions indicate that attorney fees can be awarded to the prevailing party in “exceptional cases.”  Although a district court is given discretion in determining whether a case is “exceptional,” a threshold still exists.

The judge sided with LNC — finding all of the claims “substantively weak” and noting that Munchkin should have known of the weakness. The court then awarded $1.1 million in attorney fees.

On appeal, the Federal Circuit has reversed — holding that the moving party (LNC) had failed to meet its burden of presentation since it “presented nothing to justify” an exceptional case finding.

Here, the trademark and unfair competition claims were voluntarily dismissed by the plaintiff without any substantial analysis of the issues by the court.  That situation can still lend itself to a fee award. However, the Federal Circuit here ruled that those underlying issues of merit or misbehavior must be “meaningfully considered by the district court.”

LNC failed to make the detailed, fact-based analysis of Munchkin’s litigating positions to establish they were wholly lacking in merit. The district court’s opinion granting a fee award likewise lacked adequate support.

Slip Op.

The appellate panel showed its approach with the patent claim.  Although the patent was found invalid, for exceptional case analysis we begin with an assumption that the patentee had a reasonable basis for believing its patent was valid.  The prevailing party has the burden of then showing that the position was unreasonable.

The relevant question for purposes of assessing the strength of Munchkin’s validity position is not whether its proposed construction is correct; rather the relevant question is whether it is reasonable.

In other words, a prevailing defendant does not receive attorney fees simply for winning the case or by proving the patent invalid.  Fee awards require a second step of proving the patentee’s case was also unreasonable. “That Munchkin’s patent was ultimately held unpatentable does not alone translate to finding its defense of the patent unreasonable.”

No fees.

Supreme Court Roundup June 2020

by Dennis Crouch

The Supreme Court is wrapping up its 2019-2020 term within the next couple of weeks. I’m expecting a decision in the trademark case of USPTO v. during this time. [updated].  A second IP case to be decided is Google LLC v. Oracle America, Inc. (copyrightability and fair-use for programming language function calls). However, the court postponed oral arguments until next term (October 2020).  In addition, the court’s actions suggest that it may dismiss the case on procedural right-to-jury-trial grounds.  In particular, the court asked for additional briefing on the standard-of-review for a jury determination regarding fair use.

Prior to the end of June, the court is likely to rule on a number of patent-focused certiorari petitions:

  • Retroactive application of IPR – Due Process + Takings claims. Collabo Innovations, Inc. v. Sony Corporation, No. 19-601; Celgene Corporation v. Peter, No. 19-1074; Enzo Life Sciences, Inc. v. Becton, Dickinson and Company, No. 19-1097; Arthrex, Inc. v. Smith & Nephew, Inc., No. 19-1204
  • Limits on Doctrine of Equivalents. Hospira, Inc. v. Eli Lilly and Company, No. 19-1058; Dr. Reddy’s Laboratories, Ltd. v. Eli Lilly and Company, No. 19-1061; CJ CheilJedang Corp. v. International Trade Commission, No. 19-1062.
  • Eligibility. The Chamberlain Group, Inc. v. Techtronic Industries Co., No. 19-1299.
  • Undermining Prior Final Judgments with IPR decisions. Chrimar Systems, Inc., v. Ale USA Inc., No. 19-1124.
  • Mootness of ITC case regarding expired patent. Comcast Corporation, v.  ITC, No. 19-1173.
  • Thryv follow on – likely to be dismissed. Emerson Electric Co. v. SIPCO, LLC, No. 19-966.

In addition, petition-stage briefing is ongoing in a handful of patent cases.

  • Right to Jury Trial to set ongoing Royalty Rate. TCL Communication Technology Holdings Limited, v. Telefonaktiebolaget LM Ericsson, No. 19-1269.
  • Standard for Prevailing Party in voluntary dismissal. B.E. Technology, L.L.C. v. Facebook, Inc., No. 19-1323.
  • 271(g) Elements of Infringement. Willowood, LLC, et al. v. Syngenta Crop Protection, LLC, No. 19-1147.

Another Communication Method – Not Patent Eligible

by Dennis Crouch.  NOTE – The patentee here is represented by my former law firm MBHB, including my mentors of mine Dan Boehnen & Grant Drutchas. MBHB is also a financial sponsor of Patently-O. That said, I have not had any communication with MBHB regarding this case. 

British Telecom v. IAC/InteractiveCorp and Tinder, Inc. (Fed. Cir. 2020)

In a short nonprecedential decision, the Federal Circuit has again affirmed a FRCP 12(b)(6) dismissal of an infringement lawsuit based upon a finding that the patent improperly claims an abstract idea.  The district court decision was written by Federal Circuit Judge Bryson sitting by designation.

Here, the claims walk through a step-by-step method of using a user’s geo-location to match the user with a short-list of relevant information sources and push those out to the user’s device. U.S. Pat. No. 6,397,040 (1997 priority date).

Steps in claim 1:

A telecommunications system server (i) proactively tracking each individual user, (ii) accessing location data to determine geo-relevant information sources; (iii) dynamically developing a shortlist of information sources that the server deemed relevant to a specific user based on both the user’s geographical location and other personalized factors, and (iv) then pushing that shortlist out to the user.

On appeal, the Federal Circuit found the claims generally directed to providing location-specific information to users — an abstract idea.

We have previously held that tailoring the provision of information to a user’s characteristics, such as location, is an abstract idea.

The court went on to hold that that the claims added nothing new — an inventive step — to take claim 1 across the patent eligibility threshold.  Here, the court only indicates that the claims recite “generic computer hardware.” The court focused only on the tech hardware and court did not particularly reference the patentee’s arguments of dynamic individualized user tracking and new techniques of combining data.

Non-Asserted Claims: In the case, the defendants challenged all 44 claims in the patent, but only discussed claim 1. The district court found all 44 ineligible – writing without further discussion that its analysis of claim 1 “applies equally to all claims of the ’040 Patent.”  On appeal, the Federal Circuit affirmed, explaining that:

Because British Telecom did not present any “meaningful argument for the distinctive significance of any claim limitation” not found in claim 1, the district court did not err in finding that British Telecom had forfeited its ability to argue that other claims are separately patent eligible.

Slip Op. Quoting Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018).  The odd aspect of the court’s citation of Berkheimer is that the patentee had relied upon the same portion of Berkheimer for its argument that claim 1 cannot simply be assumed to be a representative claim if the patentee argues that limitations in the other claims “bear on patent eligibility and never agreed to make claim 1 representative.”  Berkheimer.

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Note that the district court dismissed this portion of the action and issued final judgment with respect to the ‘040 patent.  The case is ongoing, however, with respect to other asserted patents.

No Rehearing on Question of whether Fed. Reserve Banks are People

Bozeman Financial LLC v. Federal Reserve Bank (Fed. Cir. 2020)

The Federal Circuit has denied Bozeman’s petition for en banc rehearing in this case – confirming the holding that the Federal Reserve Banks are permitted to petition the PTO for inter partes review proceedings despite the Supreme Court’s decision in Return Mail barring the US Postal Service (USPS) from taking such action.

The AIA indicates that any “person” other than the patentee can petition for inter partes review (IPR).  However, in Return Mail, the Supreme Court held that the U.S. Gov’t does not qualify as a “person” under the statute and thus cannot files such petitions. Since USPS is a branch of the US Gov’t, its petition was improperly filed.

The distinction in Bozeman is that the Federal Reserve banks are not actually governmental institutions but rather a set of somewhat independent banks.  Of course, the various Federal Reserve banks are substantially controlled by the Board of Governors, which is more appropriately termed a branch of the US Government.

Invention without the Inventor

The Chartered Institute of Patent Attorneys (CIPA) is the professional organization of UK Patent attorneys. The organization has released a new discussion paper on invention without the inventor.

Although the current debate is captioned around artificial intelligence (AI) systems, a real underlying focal point is a mechanism to allow for immediate and automatic corporate ownership:

Many in CIPA think patent rights should be available for inventions which represent new, non-obvious technical developments, regardless of how they were created (with or without an AI system).

Others in CIPA prefer to limit patent protection to inventions having a human contribution – in effect, retaining current inventorship requirements, but accepting that an invention created using AI is patentable as long as there is a genuine human contribution.


no-challenge clauses

by Dennis Crouch

Patent settlement agreements often include a no-challenge clauses — where the accused infringer promises to never (again) challenge the validity of the asserted patents. Courts have done a slow about face on the notion of licensees challenging the validity of a licensed patent.  In 1905, Licensee Estoppel was the general rule.  That rule was slowly eroded until finally eliminated in Lear, Inc. v. Adkins, 395 U.S. 653, 670 (1969).  Later, in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), the Supreme Court opened the door to provide a licensee in good standing easier access to the courts.  Still, question remained whether explicit no challenge clauses would be enforceable; especially when done in the context of settling litigation.  (Some licenses also included termination clauses if validity was challenged).  Effectively what happened is that pre-1982 the various circuit courts extended Lear, but the Federal Circuit altered course. See Flex-Foot, Inc. v. CRP, Inc., 238 F.3d 1362 (Fed. Cir. 2001); compare Rates Tech. Inc. v. Speakeasy, Inc., 685 F.3d 163 (2d Cir. 2012) (no-challenge term in settlement agreement was void for public policy reasons).


A new decision in this area is Transocean Offshore Deepwater Drilling Inc. v. Noble Corp. Plc, 4:17-CV-123, 2020 WL 1666119 (S.D. Tex. Apr. 2, 2020).  In a first lawsuit, Transocean sued Noble for patent infringement and the parties agreed to a license agreement with a “no-challenge promise” as follows:

Noble Licensee covenants that it will not participate as a party or financially support a third party in any administrative or court proceeding or effort in the world to invalidate, oppose, nullify, reexamine, reissue or otherwise challenge the validity, enforceability, or scope of any claim of the Licensed Patents. Breach of this section 4.3 shall be considered a material breach which may not be cured.

Id.   Later, Transocean sued Noble again for infringement – different acts of infringement, but the same patents. In that litigation Noble apparently did not challenge the patent’s validity or enforceability. However, Noble arguably did challenge the “scope” of the claims — attempting to limit the scope during claim construction proceedings.

Applying Flex Foot, the Texas District Court found the clause enforceable — jas a “clear and unambiguous waiver.”

Here, Transocean and Noble settled a patent infringement lawsuit involving the patents-in-suit by entering into the license agreement. In the license agreement’s no-challenge clause, Noble agreed that “it w[ould] not participate as a party or financially support a third party in any administrative or court proceeding or effort in the world to… challenge the…scope of any claim of the [patents-in-suit]” Under Diversey and Flex-Foot, the no-challenge clause is clear and unambiguous enough to waive future challenges to the scope of any claim of the patents-in-suit.

Id.  The court then left open the actual meaning of the contract — in particular, what does it mean to “challenge the scope of any claim?”

SCT: Copyrighting Labels and scope of 271(g)

Willowood, LLC v. Syngenta Crop Protection, LLC, Docket No. 19-1147 (Supreme Court 2020)

Syngenta sued Willowood for both patent and copyright infringement associated with its generic fungicide compound.  Willowood won at the district court, but that holding was overturned on appeal. Now Willowood is bringing it to the Supreme Court.

The copyright claim: Syngenta product “labels” have many pages of small-type that were registered with the US Copyright office.  Willowood apparently copied the labels for its competing generic product.  Because the fungicides are dangerous chemicals, these labels are required in order to sell the product.

The district court dismissed the copyright claims — holding that the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”) precludes the copyright claim because FIFRA requires a generic product to use “identical or substantially similar” labels that are typically mandated by EPA regulations.  On appeal, the Federal Circuit vacated — holding that statute does not allow thoughtless copying since “the text of FIFRA does not, on its face, require a me-too registrant to copy the label of a registered product.”  Rather, according to the court, the court must look at each copyrightable element of Syngenta’s label and consider whether that portion is “necessary” for the generic approval process.

In its petition for certiorari, Willowood asks for a blanket rule:

Whether, by requiring the EPA to grant expedited review and approval of labels for generic pesticides that are “identical or substantially similar” to the previously approved labels for the same product, Congress intended to preclude claims of copyright infringement with respect to generic pesticide labels.

Question presented in Petition for Certiorari.  This portion of the case could be a nice companion case to Google v. Oracle if certiorari is granted there.

The product label was apparently substantially copied, but without the TM, patent claims, or Syngenta name.

The Patent Claims: A portion of the infringement case turned on the court’s interpretation of 35 U.S.C. 271(g).

(g) Whoever without authority imports into the United States … a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, offer to sell, sale, or use of the product occurs during the term of such process patent.

The district court ruled found no infringement because the product was purchased from a separate entity and that the single-infringer-rule requires “every step of a claimed process to be performed or attributable to a single entity.”

On appeal, the Federal Circuit also rejected this statement of the law — holding that importation is the act of infringement under 271(g) (or sale/offer).  The statute does not require that the accused infringer be the one performed the method.

This [statutory] language makes clear that the acts that give rise to liability under § 271(g) are the importation, offer for sale, sale, or use within this country of a product that was made by a process patented in the United States. Nothing in this statutory language suggests that liability arises from practicing the patented process abroad. Rather, the focus is only on acts with respect to products resulting from the patented process. Thus, because the statutory language as a whole is clear that practicing a patented process abroad cannot create liability under § 271(g), whether that process is practiced by a single entity is immaterial to the infringement analysis under that section.

Syngenta Crop Protec., LLC v. Willowood, LLC, 944 F.3d 1344, 1359–60 (Fed. Cir. 2019). In its petitition, Willowood asks that the Supreme Court step-in here as well:

Whether liability for patent infringement under 35 U.S.C. § 271(g) requires that all steps of a patented process must be practiced by, or at least attributable to, a single entity, a requirement that the Supreme Court previously recognized is a prerequisite for infringement under 35 U.S.C. §§ 271(a) and (b) in Limelight Networks Inc. v. Akamai Technologies Inc.




Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

USPTO Rule Making: Codify SAS, Eliminate Presumption in Favor of Petitioner

By David Hricik, Mercer Law School

The USPTO is seeking comments on amending certain PTAB Rules of Practice. While it proposes many amendments, two seem key: one for instituting on all challenged claims and grounds (to conform with SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018)) and the other to eliminate the presumption at institution favoring the petition as to testimonial evidence.  Comments will be accepted through June 26, and the notice is available here.

As to the first major proposal, as amended the PTAB will institute an IPR, PGR, or CBM proceeding on all claims and all grounds if preponderant evidence in the petition shows at least one claim is unpatentable.  The Office explained in part:

In light of SAS, the Office provided guidance that, if the Board institutes a trial under 35 U.S.C. 314 or 324, the Board will institute on all claims and all grounds included in a petition of an IPR, PGR, or CBM. To implement this practice in the regulation, the first proposed change would amend the rules of practice for instituting an IPR, PGR, or CBM to require institution on all challenged claims (and all of the grounds) presented in a petition or on none. Under the amended rule, in all pending IPR, PGR, and CBM proceedings before the Office, the Board would either institute review on all of the challenged claims and grounds of unpatentability presented in the petition or deny the petition.

As to the second, the USPTO spent a lot more ink explaining it, writing in part:

In April 2016, after receiving comments from the public and carefully reviewing them, the Office promulgated a rule to allow new testimonial evidence to be submitted with a patent owner’s preliminary response. Amendments to Rules of Practice for Trials Before the Patent Trial and Appeal Board, 81 FR 18750 (April 1, 2016). The Office also amended the rules to provide a presumption in favor of the petitioner for a genuine issue of material fact created by such testimonial evidence solely for purposes of deciding whether to institute an IPR, PGR, or CBM review. Id. at 18755–57.

Stakeholder feedback received in party and amicus briefing as part of the Precedential Opinion Panel (POP) review in Hulu, LLC v. Sound View Innovations, LLC, Case IPR2018–01039, Paper 15 (PTAB Apr. 3, 2019) (granting POP review), indicated that the rule has caused some confusion at the institution stage for AIA proceedings. For example, certain stakeholders have indicated that the presumption in favor of the petitioner for genuine issues of material fact created by patent owner testimonial evidence also creates a presumption in favor of the petitioner for questions relating to whether a document is a printed publication. Additionally, the Office has concerns that the presumption in favor of the petitioner may be viewed as discouraging patent owners from filing testimonial evidence with their preliminary responses, as some patent owners believe that such testimony will not be given any weight at the time of institution.

Section 314(a) of 35 U.S.C. provides that ‘‘[t]he Director may not authorize an inter partes review to be instituted unless the Director determines that the information presented in the petition. . . and any response . . . shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.’’ 35 U.S.C. 314(a). Thus, the statute provides that a petitioner is required to present evidence and arguments sufficient to show that it is reasonably likely that it will prevail in showing the unpatentability of the challenged claims. Hulu, LLC v. Sound View Innovations LLC, Case IPR2018– 01039, Paper 29 at 12–13 (PTAB Dec. 20, 2019) (citing 35 U.S.C. 312(a)(3), 314(a)). For a post-grant review proceeding, the standard for institution is whether it is ‘‘more likely than not’’ that the petitioner would prevail at trial. See 35 U.S.C. 324(a). In determining whether the information presented in the petition meets the standard for institution, the PTAB considers the totality of the evidence currently in the record. See Hulu, Paper 29 at 3, 19.

In this notice of proposed rulemaking, the Office proposes to amend the rules of practice to eliminate the presumption in favor of the petitioner for a genuine issue of material fact created by testimonial evidence submitted with a patent owner’s preliminary response when deciding whether to institute an IPR, PGR, or CBM review. Thus, consistent with the statutory framework, any testimonial evidence submitted with a patent owner’s preliminary response will be taken into account as part of the totality of the evidence.

Interestingly, the Office specifically asked for input as to implementation, stating  “the Office may apply any rule changes, if adopted, to all pending IPR, PGR, and CBM proceedings in which a patent owner’s preliminary response is filed on or after the effective date.”

Odyssey Logistics v. Iancu: Two of the three bears in an APA challenge

By Jason Rantanen

Odyssey Logistics and Technology Corporation v. Iancu (Fed. Cir. 2020) Download opinion

Panel: Lourie, Reyna and Hughes (author)

Some of my biggest head-scratchers when I studied administrative law in law school were the timing rules for bringing challenges under the Administrative Procedures Act.  It wasn’t because of a lack of comprehension, but instead due to the way these rules can block off judicial review of agency action.  Individually the timing rules make sense, but collectively they produce a Three Bears-type situation: the timing of challenges has to be just right, or the challenge will get tossed for being either too early or too late.

This case involves two challenges to actions taken by the PTO and one challenge to a set of rules published by the PTO in 2011.  The first two challenges were dismissed as two early and the third was too late.

Count I involved a request for rehearing by the relevant Technology Center Director following the Patent Trial and Appeal Board’s (PTAB) reversal of the examiner’s objections to Odyssey’s application.  The request for rehearing was filed about five months after the PTAB decision.  Odyssey challenged the propriety of the request on procedural grounds at the PTO, which were rebuffed, and then filed a challenge in the Eastern District of Virginia before the PTAB issued its decision on the substantive merits raised by the rehearing.  The Federal Circuit affirmed the district court’s holding that there was not yet a “final agency action” under the APA.  Nor did the Federal Circuit see this as a situation involving an abusive use of agency rules to delay proceedings that justified compelled action by the court.

In Count II, Odyssey challenged what it argued were new grounds for rejection by the examiner.  However, the PTAB had not yet issued a decision at the time Odyssey brought the challenge.  The result: dismissal for non-finality.  Odyssey argued that the district court should have instead dismissed on mootness grounds, but the Federal Circuit said that wasn’t necessary: “[A] federal court has leeway to choose among threshold grounds for denying audience to a case on the merits….The district court did not err by “tak[ing] the less burden-some course.”  Slip Op. at 11.

The final count was a challenge to certain amendments that the PTO made to its rules on practice for ex parte appeals in 2011.  Odyssey argued that these amendments were facially invalid–that the regulations were unlawful generally.  However,  28 U.S.C. § 2401 bars claims that are not brought within 6 years of the date the action accrues.  Odyssey argued that the relevant triggering date was the effective date of the regulation (January 23, 2012) rather than the date it was published in the Federal Register (November 22, 2011), but the Federal Circuit disagreed: under both Fourth and Federal Circuit law, the relevant date for substantive facial challenges is the date of publication.  Substantive facial challenges are different from “as applied” challenges, which accrue as of “the time of an adverse application of the decision against the plaintiff.”  Id. at 13, quoting Hyatt v. U.S. Pat. & Trademark Off., 904 F.3d 1361, 1372 (Fed. Cir. 2018).  The result was that Odyssey’s challenge, which was filed in district court on January 23, 2018, was time-barred by § 2401.

Edit: Shortly after I posted this, counsel for appellant contacted me to inform me that the statement “Odyssey challenged the propriety of the request on procedural grounds at the PTO, but then filed a challenge in the Eastern District of Virginia before the PTAB ruled on the request for rehearing” was incorrect: in fact, the lawsuit was filed after the petition for rehearing was granted but before the PTAB had issued a decision on the merits on the substantive issues raised by the rehearing.  I’ve changed the above post to specifically refer to the “decision on the substantive merits raised by the rehearing.”   I also made a few other edits to clarify the issue raised in Count I.  




A Patent Emergency

by Dennis Crouch

The Chamberlain Group, Inc. v. Techtronic Indus. Co. (Supreme Court 2020)

Chamberlain Group’s asserted patent claims a garage-door-opener (claim 1, 5) and an associated method (claim 15). US7224275.

Garage doors and opening mechanisms have been the subject of patents for 150 years. Back in 1919 Lee Hynes filed an early patent on electric-controller for a car door operating mechanism. Despite this long history, the Federal Circuit found Chamberlain’s patent ineligible under 35 U.S.C. 101 as directed to an abstract idea.

Chamberlain’s opener consists of three key elements:

  • A device controller — This is an electronic component that receives and processes control signals and sends out the orders to open/close.
  • A movable barrier interface coupled to the controller — This is the actual drive or clutch mechanism that powers the door movement.
  • A wireless data transmitter coupled to the controller.

By the time this patent application was filed, all three of these elements were all “generally well understood in the art.” The innovative feature of the claims is that the system is designed to transmit the door’s “present operational status” — i.e., is it moving up; moving down; reversing; blocked; etc.  The signal also includes a “relatively unique” identifier for folks with multiple garage doors so that the unclaimed receiver can tell which door is up/down. Note here that there is nothing new about these various status points — the only difference is that it that the signals are being sent, and being sent wirelessly.

So, although the patent claims a garage-door-opener including various physical components, the point-of-novelty is that a particular signal is being sent wirelessly. In its decision, the Federal Circuit found the wireless transmission of status to be an abstract idea: “the broad concept of communicating information wirelessly, without more, is
an abstract idea.”  One Alice Step 2, the court held that the claims did not include any inventive concept beyond the excluded abstract idea:

In other words, beyond the idea of wirelessly communicating status information about a movable barrier operator, what elements in the claim may be regarded as the “inventive concept”?

[W]ireless transmission is the only aspect of the claims that CGI points to as allegedly inventive over the prior art. . . . Wireless communication cannot be an inventive concept here, because it is the abstract idea that the claims are directed to. Because CGI does not point to any inventive concept present in the ordered combination of elements beyond the act of wireless communication, we find that no inventive concept exists in the asserted claims sufficient to transform the abstract idea of communicating status information about a system into a patent-eligible application of that idea.

Fed. Cir. Opinion.

The new petition has two focal points (1) whether eligibility should be seen as a “narrow exception;” and (2) whether the Federal Circuit errs in its approach of separating the claim into various components and excluding the abstract idea portion from the claim when considering Alice Step 2.

Question presented:

Whether the Federal Circuit improperly expanded § 101’s narrow implicit exceptions by failing to properly assess Chamberlain’s claims “as a whole,” where the claims recite an improvement to a machine and leave ample room for other inventors to apply any underlying abstract principles in different ways.

Chamberlain Petition.  The petition also repeats the refrain of unsettling uncertainty:

The root cause of all this ire and uncertainty is the Federal Circuit’s insistence once again on crafting an elaborate test that strays from—and here, contradicts—the plain text of the Act.


The petition ends with a call for immediate action — calling out the current situation as “a patent emergency.” The breadth of eligibility challenges are shifting innovator behavior:

[T]here is no time. Innovators are adapting their behavior right now to the Federal Circuit’s new patent-hostile regime. Investors are deciding now to withhold investments they would have made before the Federal Circuit changed the law. Waiting any longer to intervene could inflict irreparable harm on U.S. industry.

Techtronic has already waived its right to respond to the petition — meaning that the Supreme Court may act on the petition before the close of its current session in June.