Event: I am looking forward to presenting a new project at the annual BYU Copyright Symposium on Thursday, August 19, 2021. The event is online and free, but you must register first. My co-author and co-presenter is Dr. Homayoon Rafatijo who has been a Chemistry professor and also finishing his JD this semester. Our paper criticizes the Supreme Court’s sovereign immunity decision in Allen v. Cooper (2020), looking primarily at constitutional history issues. [Symposium Home] [Schedule]. I believe that folks who register have access to the paper. We’ll distribute more publicly after incorporating some feedback from the event.
Publication Opportunity: I have been newly appointed as the advisor for Mizzou Law’s business law journal: the Business, Entrepreneurship & Tax Review (BETR). I have an essay coming out in the next issue on the topic of inventorship attribution and reattribution. The staff is looking for one more outside article this Fall. They prefer shorter articles (~20 pages) written and footnoted in law review style. Submit here: mulawbetr@missouri.edu.
Publication Opportunity: Homayoon is lead articles editor for the Journal of Dispute Resolution (JDR) and they are also looking for an additional article for the fall. With a grant from the NAA, the journal is also awarding prize money ($3k; $1k) for the best professional and student articles relating to labor and employment dispute resolution. Lots of work is going on in this area involving non-compete, confidentiality, and IP transfer agreements within and between firms. Submit here: jdr@missouri.edu.
Duncan Ironmonger and Simon Burgess founded the UK companies Scuf Gaming and also Ironburg with the goal of reengineering the gaming console. Corsair purchased the companies in 2019, but by that time the litigation with Valve was well underway. Ironburg won a $4 million judgment regarding two patents (now on appeal) and the district court stayed the litigation regarding U.S. Patent Nos. 9,289,688 and 9,352,229. Those two patents are the subject of this appeal.
After being sued for infringement, valve filed inter partes review (IPR) petitions challenging the validity of Ironburg’s US Patent Nos. 9,289,688 and 9,352,229. The Board split its decision, cancelling some claims obvious and left others in place. On appeal, the Federal Circuit has sided with Valve — upholding the obviousness determination and holding that the remaining claims may also be invalid.
The focus of the appeal is whether the purported “Burns” reference should count as prior art. Valve submitted a printout of Burns and argues that it was a printed copy of an online review of a Scuf controller from 2010. The same reference had been submitted and cited in both patents, although Valve submitted a more recent print-out.
Authentication: Before relying upon a documented evidence, it must first be authenticated — a showing that the document “is what the proponent claims it is.” Fed. R. Evid. 901(a). Here, the Board found that the Burns printout submitted by Valve had not been authenticated as the same document cited during the examination. On appeal, the Federal Circuit quickly rejected that finding — holding instead that the new submission can quickly be authenticated by comparison.
Here, a simple comparison of the Exhibit with the ’525 Burns article confirms their near identity. The text of the twelve paragraphs and the 23 images (depicting the controller and a user guide) are the same in the Exhibit and the ’525 Burns article—i.e., the prior art disclosures of these documents are the same.
Slip Op. The Board had refused to compare the two documents since Valve had not presented any testimony that the two were substantially identical. On appeal here, the Federal Circuit found that the comparison here needed no testimony because the comparison was not burdensome. (10 pages, 23 images).
Isenburg also argued that the document had not been shown to be a prior printed publication. On appeal, the Federal Circuit found “overwhelming evidence” that the reference was prior art. In particular, one of the inventors (Burgess) testified that he had facilitated the publication back in 2010 for marketing purposes. The court also gave weight to an examiner statement during prosecution that the document was “published on October 20, 2010.”
Patent examiners are trained and required to determine publication dates. See, e.g., MPEP § 2128 (9th ed. Rev. 10, June 2020). The patent examiner’s determination of the publication date is a “factual finding[] from a legally authorized investigation.” Fed. R. Evid. 803(8)(A)(iii). It also “is supported by sufficient guarantees of trustworthiness.” See Fed. R. Evid. 807(a)(1).
Slip Op. The applicant did not, at that time, dispute the examiner’s statements regarding the publication. The court also looked to the IDS document where the applicant had stated that the document was published in 2010. Finally, the court also suggests that the PTAB should have relied upon the Internet Archive – Wayback Machine to further verify the authenticity.
Editor’s Note: Avery Welker is a rising 2L at Mizzou and likely a future patent attorney. He authors a series linking law school canonical cases with intellectual property counterparts. You can email ideas for future posts to avery@patentlyo.com. – Dennis Crouch
NetScout had lost a case against Packet Intelligence in the Eastern District of Texas in 2018. Id. at 1303. Packet Intelligence owns three patents at issue in the district court case: US 6,665,725, US 6,839,751, and US 6,954,789 (the “asserted patents”). Id. At their core, the patents involve packet transmission and monitoring in a computer network. Id.
Packet Intelligence asserted these patents in a jury trial against NetScout’s “G10” and “GeoBlade” products. Id. at 1304. NetScout unsuccessfully brought invalidity defenses, and the jury found all asserted patents’ claims infringed, awarding pre- and post-suit damages, along with enhanced damages. Id. at 1304-05. Upon appeal, the Federal Circuit affirmed all aspects of the district court’s judgment save for vacating the pre-suit damages award. Id. at 1303.
For NetScout, a little bit of Civil Procedure went a long way (to the tune of $3,500,000; Id. at 1313) in arguing against the pre-suit damages. Getting to appeal is half the battle. Most casebooks for my 1L year exclusively taught the law to me through the lens of appellate review, just like many other 1Ls across the United States. So, it makes sense that one of the first things that I learned in my 1L was how a case got to an appellate review at all! Preservation is the key, and sometimes the method matters, as it did here.
NetScout chose one of the many other paths to appeal, using a Rule 50 motion for judgment as a matter of law on the issue of pre-suit damages. Fed. R. Civ. P. 50 (2020); Packet Intel. LLC, 965 F.3d at 1313. In doing so, NetScout brought a sufficiency of the evidence argument: Packet Intelligence failed to bring sufficient evidence that an unmarked product did not practice one of the asserted patents. Packet Intel. LLC, 965 F.3d at 1313. The district court denied this motion. Id.
To rebut the motion on appeal, Packet Intelligence argued that Federal Circuit case law supported the notion that the evidentiary burden belonged to NetScout to prove that the product at issue practiced the asserted patent claims because NetScout did not object to the jury instructions on the issue. Id. However, the Federal Circuit quickly dismissed this argument:
As a preliminary matter, we disagree that the failure to object decides this matter. We are bound by the law, not by the jury charge, even if the charge was not objected to. And NetScout’s failure to object to the district court’s jury instruction does not render the instruction law of the case for evaluating the sufficiency of the evidence.
Id. (Internal citations removed).
The court noted further that NetScout had the original burden for this issue of identifying an unmarked product that allegedly practiced an asserted patent, that NetScout, in fact, met this burden, and that Packet Intelligence’s presented evidence was insufficient to rebut NetScout’s evidence of an unmarked product. Id. at 1313-14.
Packet Intelligence’s attempt to shift the burden reflects an interesting appellate strategy for fighting a sufficiency of the evidence argument. However, failing to object to a jury instruction does not preclude an argument regarding the sufficiency of the evidence. Id. at 1313 and citations therein. NetScout’s choice of their road to Rome – a sufficiency of the evidence argument – served its purpose well and is a compelling example that highlights the importance of internalizing the rules of civil procedure. It might just save a few million dollars one day!
[1] “NetScout” is the collective label for NetScout Systems, Inc. and NetScout Systems Texas, LLC, Defendants-Appellants.
[2] See here for a previous Patently-O post regarding this case and its outcome authored by Dennis Crouch.
I recently wrote about Apple’s pending petition to the Supreme Court on the NHK-Fintiv Rule. Now Mylan Labs has followed up with an additional petition focusing on the same issues:
Does the no-appeal provision of 35 U.S.C. § 314(d) “categorically preclude appeal of all decisions not to institute inter partes review?”
Is the NHK-Fintiv Rule substantively and procedurally unlawful?
AIPLA QJ has been publishing intellectual property related articles since the 1980s. Unlike ordinary law reviews, the Journal’s editorial Board consists of intellectual property experts who are able to provide a peer review of submitted articles. The Board is typically a mix of IP professionals and academics. The journal is also staffed by a team of JD students from GWU Law School who also participate in selection and have a major role in the editing, vetting, and publication process.
The Journal is now seeking new members of the Board. Apply by August 31, 2021: Apply Here.
The 1836 Patent Act added the caveat that no patent should issue on an invention previously “described in any printed publication.” That language has carried through the various major patent law overhauls and continues as a prominent aspect of 35 U.S.C. 102(a)(1).
A person shall be entitled to a patent unless (1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention …
The Supreme Court has interpreted the scope of the phrase in dozens of patent cases over the past 180 years, but questions remain. A new petition asks the court to examine the phrase again and help define when a document crosses the publication threshold. In particular, the petition asks whether documents made available only to customers, and not generally to the public, count as being published. Centripetal Networks, Inc. v. Cisco Systems, Inc., No. 21-193 (Supreme Court 2021).
Question presented:
Can a document qualify as a printed publication if it is stored on a password-protected website, not accessible to the public, and available only to customers who pay over $25,000 dollars to purchase related software?
[Read the Petition here]. In its decision, the Federal Circuit found the documents at issue to be a printed publication. The court relied upon additional facts not found in the question presented–noting that the document in question was distributed to hundreds of customers over a span of years and without any confidentiality restrictions; and that product advertisements were designed to attract persons of skill in the art. On balance, the Federal Circuit found the document “sufficiently disseminated” to count as a publication.
Here, the Board found, based on testimony from a Sourcefire company employee, that each of the 586 customers who purchased a range of Sourcefire products over a relevant two-year period received a CD-ROM containing the user guide, which explicitly stated that users were permitted to “use, print out, save on a retrieval system, and otherwise copy and distribute” the reference for noncommercial use. Further, Centripetal presented no evidence to the Board showing that—despite the CD-ROM distribution— an interested person using reasonable diligence would not have been able to access Sourcefire either by purchasing the product or by receiving a copy of the user guide from another customer. Substantial evidence, including advertisements, reviews, and testimony from a Sourcefire company employee, supports the Board’s finding that those interested and of skill in the art actually purchased Sourcefire. In sum, the large number of Sourcefire product customers, the number of years the product was available, the advertisements targeting those interested and of skill in the art, and the lack of confidentiality restrictions on copying or distributing Sourcefire support a finding of public accessibility.
Centripetal Networks, Inc. v. Cisco Sys., Inc., 847 Fed. Appx. 869, 877 (Fed. Cir. 2021)(nonprecedential opinion).
The case offers a theoretical question — what price is too high before a document no longer counts as a printed publication. It is not really publicly available if the sales price is $1 billion. On the other hand, in this case the price was $25,000 (an amount that some folks paid).
In BobCar Media v. Aardvark, the patentee (BobCar) sued Aardvark for infringing its utility and design patents as well as its trade dress related to mobile showroom services. The patentee lost on a motion to dismiss with the district court holding that BobCar had not proven its ownership rights. No ownership => no standing to sue.
On the one hand, BobCar is listed as the assignee on the patents and the inventors stated under oath that they did assign rights to BobCar. “I am 100 percent sure that we assigned the patents to BobCar Media, LLC.” In addition, BobCar more recently filed a retroactive nunc pro tunc assignment. On the other hand, BobCar could not find the original assignment documents and apparently never actually filed it with the USPTO. In the end, the district court dismissed the case — finding insufficient evidence of ownership.
On appeal, the Federal Circuit affirmed, but did so without any opinion — simply a R.36 judgment without opinion.
BobCar has now filed a petition for writ of certiorari — focusing particularly on the issue no-opinion judgments as a matter of due process and appellate procedure.
1. Whether the Court should resolve the circuit split under Federal Rule of Appellate Procedure 36 (wherein a minority of circuit courts issue judgments without any explanation of their decisions), and elucidate whether or not the use of one-word affirmances has constitutional and statutory boundaries.
2. Whether the Federal Circuit’s extensive use of its Rule 36, to enter judgments which extinguish constitutional rights and private property rights without any explanation, violates constitutional and statutory protections, principles of right and justice, and this Court’s supervisory authority.
3. Whether Federal Circuit Rule 36(a)(3) violates constitutional principles, such as the Seventh Amendment, Due Process, and Equal Protection, by authorizing panels to affirm summary judgment decisions denying jury trials, without any explanation whatsoever, and irrespective of the rules and rights in the circuit from which the case was appealed.
The case relates to a paper I wrote several years ago, although my argument against R.36 judgments was based upon a statute that applies only to appeals from the PTO.
= = =
I spent many days in Princeton’s Fine Hall that housed the mathematics department. The petition includes an interesting story about obviousness:
In Princeton’s Fine Hall, Boas recalls, someone once posted a “Scale of Obviousness”:
If Wedderburn says it’s obvious, everybody in the room has seen it ten minutes ago.
If Bohnenblust says it’s obvious, it’s obvious.
If Bochner says it’s obvious, you can figure it out in half an hour.
If von Neumann says it’s obvious, you can prove it in three months if you’re a genius.
The Magseis invention here is fully enclosed single case seismometer. The patent explains that “hundreds to thousands of receivers” might be deployed in order to conduct a seismic survey. U.S. Pat. No. RE45,268. A key feature of a seismometer is the “geophone” that actually detects the vibrations. Prior to this invention, seismometers were already known as were the geophones used. The improvement here is the arrangement of all the components within the single case. Of importance to this case is that every claim requires the geophone to be “internally fixed” to either the housing or an internal compartment.
Magseis sued Seabed for infringement; Seabed turned around and petitioned for inter partes review (IPR). Although the IPR was initiated, the PTAB eventually sided with the patentee and concluded that the claims had not been proven invalid.
The basic issue on appeal was a question of whether the prior art showing a “gimbaled” attachment counts as being “fixed.” A gimbal is a mount mechanism that allows multiple degrees of freedom and are often an element of a camera tripod setup. Gimbaling of the geophone was admittedly common in the art at the time of the invention.
The specification does discus the use of a gimbal, but only with reference to the internal clock. Apparently clock performance can be slightly shifted by gravity and so the gimbaled clock can allow all of the seismometers to be on the same time.
The specification does not mention whether the geophone might or might not be gimbaled. Likewise, the specification does not mention that the geophone is “fixed” except in claim language that was added after filing. Rather, the specification describes the geophone as “internally mounted … and thus requires no external wiring or connection.”
Despite all of this, the PTAB still construed the “internally fixed” requirement to exclude a gimbaled connection. For its conclusion, the Board relied upon extrinsic evidence that a person skilled in the art would give “fixed” a special meaning that included “not gimbaled.”
On appeal, the Federal Circuit has rejected that claim construction and vacated for reconsideration. According to the opinion, the PTAB erred in delving into the extrinsic evidence since the intrinsic evidence was clear, even though entirely silent as to the gimbal issue.
Silence is golden; silence is violence; silence is complicity. Silence has long been subject to an inferential debate over its meaning. Here, the specification is silent as to whether the term “fixed” included a gimbaled connection. The PTAB saw the silence as a lack of clarity and so reached-out to extrinsic evidence to see whether the term had meaning to someone skilled in the art. But like a Zen master, the Federal Circuit found clarity in the silence.
The specification never mentions gimbaled or non-gimbaled geophones, nor does it provide a reason to exclude gimbals. That silence does not support reading the claims to exclude gimbaled geophones. . . Silence about gimbals does not evidence the absence of gimbals.
Slip Op. In its decision court notes that gimbaled geophones were known in the art at the time and so could have been easily excluded by the inventor — if that was part of the invention. Rather, the focus was on placing the geophone inside of the case along with the rest of the electronics. The claims were construed here using the broadest reasonable interpretation (BRI) standard for claim construction, which could explain the result. But the Federal Circuit does not rely upon BRI in its decision. But the implication from this decision is that silence can typically lead to a broad interpretation.
Vacated. On remand, the PTAB will need to determine whether the broader claim scope now renders the claims invalid as obvious.
We recently highlighted a WaPo editorial by Prof. Robin Feldman. Feldman has also just published a short article in Nature Biotechnology titled Negative Innovation: When Patents are Bad for Patients. (Co-authored with Profs. Nicholson Price (Michigan Law), David Hyman (Georgetown Law), and Mark Ratain (Chicago Med)). The article’s thesis:
[Sometimes] patents create incentives to bring a product to market in a way that is relatively harmful to consumers, and the existence of a patent (and the associated rents) discourages the patentee from taking steps to improve the product so as to prevent the adverse health outcomes.
The article uses the cancer drug ibrutinib as a negative innovation case study. Basically, the patentee (Pharmacyclics – AbbVie) discovered that ibrutinib was a useful cancer treatment at a wide range of doses. However, the patentee erred by publicly disclosing the low dosage idea prior to patenting and thus was only able to obtain patent claims covering the high dosage. They then pursued FDA approval of only the high dosage approach — even though this cancer drug is known to be somewhat toxic at higher doses. The FDA suggested that AbbVie pursue further research and an application on the lower dosage. But that suggestion has fallen on deaf ears — presumably because the lack of patent coverage eliminates the incentive to pay the $$$$ required to obtain FDA approval. Since the low dosage approach is in the public domain, no private company has sufficient incentive to seek and obtain FDA approval.
If you go back to the thesis statement, note that the argument is that ibrutinib is “relatively harmful to consumers.” If it were “absolutely harmful” then the drug presumably should not have been approved and no doctor should prescribe the treatment. (These are perhaps big presumptions given the current state of our system.) Relative harm is different — and focuses on whether the patent’s existence inhibits the development of a potentially better alternative. This is essentially a story of lock-in and private rent seeking. It is akin to the apocryphal story that major car manufacturers long shelved and impeded automotive battery power technology because they were so invested in the combustion engine. Perhaps they rightly recognized that battery driven cars would be so radically different as to allow upstart entry into an otherwise closed market. See Tesla.
Although the ibrutinib case study was based upon a misstep (pre-filing disclosure at a conference), there are plenty of examples of non-patentable treatments that are not made available because our current system relies upon exclusive patent rights to provide the monetary incentive to seek FDA approval and work out the kinks of manufacturing and supply. Generally the patent system has treated this is a FDA regulatory problem. But Feldman notes that there are also solutions within the patent system that begins with revitalization of the utility doctrine — evaluating whether the innovation is actually an improvement:
One avenue for reform might be to enforce a more rigorous utility requirement for pharmaceutical patents, demanding that they actually improve social welfare relative to the prior art.
If sufficient evidence is not available because of early filing incentives, an element of this may be a post-patenting requirement showing utility, similar to the working requirement of some countries or the proof of use requirement in trademark law.
I mentioned that part of the problem is that the FDA is relying upon the patent incentive, and that doesn’t work in certain instances. Feldman suggests that the Patent Office could do more to coordinate with the FDA in developing an understanding of patent coverage and how that is impacting FDA submissions.
Finally, the article suggests further development in linking and coordinating patent coverage in the pharmaceutical area. “The current jumbled system of compound patents, method of treatment patents, formulation patents, new chemical entity exclusivity, pediatric exclusivity, orphan drug exclusivity and other incentives creates limitless opportunities for gaming the system.” Of course we have a system of coordinating these involving patent families and the various obviousness doctrines (including obviousness type double patenting). What we have not tried is any sort of product-level coordination.
This fall I’m teaching Internet Law again after a hiatus. One aspect of law school that is changing is that professors are publishing freely available textbooks and (some) professors are assigning those books for the students.
This is an unusual new lawsuit filed by Martin Hoyle against several former USPTO officials, including former USPTO Director Michell Lee; former PTAB Chief James D. Smith; and former vice-chief Jay Moore. The complaint argues that the defendants violated Hoyle’s Due Process rights in the way they handled his patents during their IPR proceedings. U.S. Patent No. 6,628,314 and U.S. Patent No. 6,771,290.
The complaint suggests that Lee was compromised as a former Google official and future Amazon official (the targets of his patent lawsuits) and that the PTAB judicial assignments were intentionally stacked with judges likely to rule that his patents were invalid. The result was that the PTAB judges “Medley, Pettigrew, and Deshpande … either conspired with, or were at the very least complicit, in the unconstitutional scheme to deprive Plaintiffs of their valuable property rights in these patents.”
The lawsuit is styled as a Bivins action, which allows a private damages action against federal officials for civil rights violations. Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971).
Basically, you become a visiting professor for two years — teaching one course per year, helping with the GW IP program and working on your scholarship. They are hoping to find a candidate to start Fall 2021. Contact: iplaw@law.gwu.edu.
I have not seen the salary. I expect that it is much less than a starting associate at an IP firm, but well above the median US household income. How golden are your handcuffs? (For those thinking of going into academia, I’ll note that my salary as a law professor is still below my starting salary at MBHB LLP 18 years ago.
Rain Computing has filed an interesting petition to the Supreme Court focusing on indefiniteness and means-plus-function claims. Rain Computing, Inc. v. Samsung Electronics America, Inc., No. 21-170 (Supreme Court 2021). Rain’s asserted claims require a “user identification module configured to control access of … software application packages.” The Federal Circuit interpreted “module” as a non-structural nonce word. As such, the court interpreted the module element a means-plus-function limitation under 35 U.S.C. § 112(f). The problem though was that the specification did not disclose any corresponding structure “clearly linked” with the claimed function. As such, the Federal Circuit found the claims invalid as indefinite.
The first question in the petition focuses on the courts trigger-happy approach to invalidating means claims and the interpretive difference between a claim limitation and the claim as a whole. Although courts often construe individual claim limitations, indefiniteness is generally determined by considering the claim as a whole in light of the specification and the prosecution history and asking whether the claim informs “with reasonable certainty those skilled in the art about the scope of the claim.” Nautilus. The idea here is that the Federal Circuit should have asked the broader question — would someone of skill in the art have reasonable certainty as to the claim scope? Instead, the court did a shortcut and effectively held that the element-by-element corresponding-structure is a requirement of patentability if means language is used. The petitions also notes the construction provision of 112(f) requiring that “such claim shall be construed to cover the corresponding structure …” On its face, the provision focuses on construction of the whole claim, not just the means-element.
The second question is directed toward the Federal Circuit’s conclusion that the specification disclosed only a ‘general purpose computer’ when the district court held otherwise. The petition suggests that change-of-course would require clear-and-convincing evidence before the claim can be invalidated. The underlying assumption of this argument is that some aspect of interpreting the specification is a question of fact (rather than a question of law).
Whether a patent claim may be invalidated for indefiniteness only if, under 35 U.S.C. § 112, para. 2 (now subsection 112(b)) as construed by Nautilus, Inc. v. Biosig Instruments, Inc., 572 U.S. 898, 901 (2014), the whole claim, “read in light of the specification delineating the patent, and the prosecution history, fail[s] to inform, with reasonable certainty those skilled in the art about the scope of the claim” and 35 U.S.C. § 112(f) (previously 112 para. 6) affects only coverage of a combination claim of which an element is expressed as allowed by the subsection?
Whether the United States Court of Appeals for the Federal Circuit panel in this case erred by invalidating a patent as indefinite without mentioning 35 U.S.C. § 112, para. 2 (now subsection 112(b)) and applying the Nautilus test and by substituting, without clear and convincing evidence, its conclusion of a “general purpose computer” for the district court’s finding of no “general computer”?
I’ll note here that Rain Computing is represented by the Hsuanyeh Law Group, founded by Hsuanyeh Chang. Dr. Chang is also the listed inventor of the patent here and is CEO of the petitioner Rain Computing.
Piano Factory v. Schiedmayer Celesta GmbH (Fed. Cir. 2021)
The Schiedmayer family has been making and selling pianos since the 1700s, although the current version of the company makes only Celestas and Glockenspiels, not the 88 key Piano Forte that is popular in the US. The last Schiedmayer family pianos were apparently built and sold back in 1980. For a few years the Japanese company Kawai also sold some Schiedmayer branded pianos (apparently without license).
Piano Factory’s director noted around 2001 that nobody was making Schiedmayer brand pianos any longer and assumed the mark must have been abandoned. So, Piano Factory began branding labelling unbranded pianos with the Schiedmayer brand and selling them to the public. The following is Piano Factory’s explanation of its own operation:
When a SCHIEDMAYER branded piano was needed on the showroom floor, a quality piano from those in the warehouse, such as an unbranded piano manufactured by companies like American Sejung Corp, had a SCHIEDMAYER brand nameplate placed on it.
Piano Factory Brief.
More than a decade later, the Schiedmayer Celesta company petitioned to cancel the mark, and the TTAB complied, finding that Piano Factory’s use of the mark created a false association. The TTAB also rejecting Piano Factory’s a laches defense. This case is now on appeal.
I first note the appeal because oral arguments included a fabulous bit of singing — apparently a first for the Federal Circuit. Listen and watch in the video.
The case argues the Arthrex issue for the TTAB, although its unclear what remedy Piano Factory is now seeking. I believe there is a good chance that the court will issue a statement in this case that the PTO Dir. has power to review certain TTAB decisions.
The merits argument basically boils down to two arguments: First argument is premised on evidence that one or more third parties were using the Schiedmayer name without permission for a decade before Piano Factory started on, and then Piano Factory used the name for 15 more years. Does this create (a) laches; (b) an inference of abandonment; or (c) an inference that maybe Schiedmayer doesn’t have exclusive rights. Second argument is that Schiedmayer’s current business (celestas and glockenspiels) isn’t close enough to Piano Factory’s business (pianos) to create likely confusion.
In an important pharma decision, the Federal Circuit has doubled-down on its prior ruling that Teva’s sales of the drug carvedilol induced infringement of a GSK method-of-treatment patent, even though Teva’s product is approved and labeled only for non-infringing uses (as required by statute). In the new decision, however, the court makes clear that the inducement liability is due to Teva’s additional marketing activity that encouraged others to infringe.
GlaxoSmithKline v. Teva Pharm (Fed. Cir. 2021) (GSK v. Teva 2021)
The GSK Patent covers the use of carvedilol to “decrease a risk of mortality caused by congestive heart failure.” RE40,000 (original US Pat 5,760,069). The FDA approved Teva’s sales of the same drug, but only under a “skinny label” that carves-out the patented use. Teva only labeled its version for treatment of hypertension and left ventricular dysfunction following a heart attack (“post-MI LVD”). Despite the label differences, the drugs are otherwise therapeutic equivalents indicated by the FDA’s “AB rating.” Thus, many people (insurance companies, pharmacies, doctors, patients, etc) began using the cheaper generic for the patented purposes and Teva profited.
GSK sued for inducing infringement and the jury sided with GSK and awarded $200 million in damages. The district court rejected the jury verdict and instead found insufficient evidence to show causation — that insufficient evidence Teva’s actions caused the underlying infringement. Then on appeal the Federal Circuit flipped again and reinstated the jury verdict in its October 2020 decision.
The problem with the Oct 2020 decision is that it included an indication that a Generic could be held liable for inducement by simply selling a generic version of a drug and noting the therapeutic equivalence with the branded drug — without ever mentioning the patented use. The Federal Circuit has now released a new decision clarifying that such a straight use of the Skinny-Label could not justify inducement liability. In this case, however, the court found sufficient evidence that Teva went further — labelling its drug in a way that encouraged the patented use.
An important element of this decision: the FDA’s Skinny-Label Carveout approval process does not create a genuine safe-harbor for the generic launch.
The new opinion is listed as per curiam, signed by Chief Judge Moore and Judge Newman. Judge Prost wrote in dissent.
If a brand drug company (here, GSK) has a patent on one of a drug’s uses, it tells the FDA which use is patented. In fact, it tells the FDA exactly what language from its label is covered by its patents. The FDA will then permit a generic version of that drug to come to market if the manufacturer “carves out” such use from its drug label by omitting the language that the brand drug company identified. That’s what happened here. GSK’s sworn FDA filings identified just one use as patented. So Teva carved out that use and came to market with its “skinny” label. It played by the rules, exactly as Congress intended. It sold its generic for years without controversy.
Dissent.
= = = =
The opinion raises the doctrine of equitable estoppel. The argument is premised on the idea that GSK’s statements to the FDA led Teva to believe that its skinny-label would not induce infringement. Since Teva relied upon those statements to its detriment, GSK should now be estopped from suing Teva for inducement. This issue was not yet decided by the district court and so will be raised on remand.
= = = =
Note on the damages: $200 million was GSK’s lost profits; Teva only profited $13 million from the infringement because of its generic pricing.
= = = =
I expect that we’ll see a congressional fix following this decision.
Guest Post by Meshandren Naidoo and Dr. Christian E. Mammen
A world first – South Africa recently made headlines by granting a patent for ‘a food container based on fractal geometry’ to a non-human inventor, namely an artificial intelligence (AI) machine called DABUS.
Over the past three years, the AI algorithm DABUS (short for Device for the Autonomous Bootstrapping of Unified Sentience) and its team of supporting humans, including Dr. Stephen Thaler and Prof. Ryan Abbott, have made headlines around the world as they sought patent protection for a fractal-inspired beverage container (shown below) that they contend was invented by DABUS.
Notably, their application has been denied by the United States Patent and Trademark Office (USPTO), the United Kingdom Intellectual Property Office (UKIPO), and the European Patent Office (EPO). The grounds for rejection have included a mix of procedural formalities, formal legal requirements, and theoretical objections. The procedural formalities and formal legal requirements, which have been equally important to the theoretical questions in these decisions, are sometimes overlooked in the popular media. They include such issues as whether (and how) Dr. Thaler obtained authorization from DABUS to file the patent application, and whether the patent statutes include a requirement that inventors be human. Each of these three jurisdictions found sufficient reasons in these formalities to reject DABUS’ patent applications. In addition, the EPO focused on the broader question of legal personhood: namely, that a number of other rights and obligations are attendant upon being an inventor, and unlike humans, an AI lacks the legal personhood to discharge those obligations and exercise those rights. The UK courts reasoned similarly, noting that an AI lacks the capacity to hold property, and therefore could not have authorized Dr. Thaler to act on its behalf. The USPTO emphasized that under US law invention requires “conception” followed by reduction to practice, and reasoned that “conception” requires a theory of mind that is simply not established to be present in an AI.
Critics of those decisions have emphasized the role of patenting as a part of national industrial policy, and in particular the role of patent grants in encouraging innovation. With increasingly capable AI algorithms, the argument provides, the ability to innovate is shifting from an exclusively human domain to one that includes the algorithms, and modern industrial policy needs to encourage and reward that shift.
These same factors appear to have come into play in the South African decision, though to a clearly different outcome.
The pitfalls of formal examination in South Africa
In July 2021, South Africa’s patent office, the Companies and Intellectual Property Commission (CIPC), granted the South African DABUS patent application, which was published in the South African Patent Journal. Unlike the USPTO, UKIPO and EPO, the CIPC does not conduct a more thorough interrogation of patent applications, known as substantive search and examination (SSE). Instead, all that is required in a formal examination (also known as a registration-based system) is for the application forms and fees to be in order with the specification documents attached. If these affairs are in order, the patent will summarily be granted by the CIPC. This, along with the lack of information provided by the CIPC post-grant has led to criticism directed towards its non-examining nature. This limited review for compliance with the procedural formalities appears to have reached a different outcome than the USPTO, UKIPO and EPO, finding that Dr. Thaler is empowered to apply on behalf of DABUS. No further information has thus far been given by the CIPC relating to the grant. It should be noted however that the ongoing patent reform in South Africa provides for training and infrastructure upgrades to accommodate a shift towards implementing SSE.
Does substantive South African patent law preclude AI inventorship?
The South African Patent Act 57 of 1978 (Patent Act) does not define an ‘inventor’ hence it is arguable that the Patent Act could, or should, be interpreted to include AI. However, the Patent Act presents some challenges in doing so such as, inter alia, the requirement for the provision of names and addresses of inventors—the EPO cited a similar requirement in denying DABUS’ application. If the reasoning of the USPTO is followed, a further challenge to the DABUS patent in South Africa would be the ‘first and true inventor test’. Like the ‘conception’ test in American patent law – the object of the test is to determine the identity of the ‘devisor’ of the invention. With that said, it is open for the South African legal system to determine if the test, which was originally crystallised in South African law in 1902[1] (with not much development taking place between then and now) is a bar to AI inventorship. Whilst case law[2] which explains the test also refer to pronouns such as ‘he’ or ‘she’, South Africa could diverge from the USPTO and employ a more purposive approach to its interpretation (which is the Constitutionally recognised manner of interpretation) as opposed to a more textual one.[3] This statutory interpretation method would include broader considerations in the process such as (1) advantages posed by AI inventorship; (2) policy directives; (3) the fact that AI inventorship was unlikely to have been considered during the period when the test was originally developed and; (4) the object of the test is to determine the identity of the deviser of the invention in the event of disputes and the like – not to preclude other non-human entities from innovating.
Was granting the patent a mistake?
At first glance, it may appear that the DABUS patent was erroneously granted by the CIPC. Although there has been a shift towards digitization, the CIPC has struggled extensively in the past with infrastructure and administrative issues. But it may be premature to conclude that the granting was erroneous. The post-apartheid government foresaw the challenges associated with the exclusion of a large portion of citizens from economic participation, and central to the solution was science, technology, and innovation. This culminated in the White Paper on Science and Technology in 1996. Soon after, came many other strategic policies aimed at placing South Africa and its citizens in a stronger position. In 2019, the Presidential Commission on the Fourth Industrial Revolution and an updated White Paper on Science and technology was published – both of which highlighted the need for a technology-orientated approach to solving socio-economic issues.
Unfortunately, innovation (noted in the 2019 White Paper on Science, Technology, and Innovation) as measured in products produced and patent output from South African applicants in the country and in other jurisdictions via the Patent Cooperation Treaty (PCT) has remained ‘relatively flat’. Adding to this was policymakers’ concerns of ‘the brain drain’ – the emigration of skilled persons in search of better opportunities and environments.
In April 2021, a call for public comments on the proposed National Data and Cloud Policy in terms of the Electronic Communications Act 36 of 2005 highlighted three main points: (1) the South African Government aims to create an AI institute to assist with reformation; (2) the intention of this is to encourage investment in, and exploration of, AI as a means to achieve sustainable development goals and economic growth; and (3) AI is viewed as a solution to some of the capacity issues facing South Africa.
Thus, as a matter of national industrial policy, it is entirely possible that the grant of DABUS’ patent is fully consistent with the emphases on broad access, digital innovation, and support of science and technology generally.
An opportunity for South Africa?
Given that South Africa is currently undergoing major patent reform, South Africa’s policymakers may find that it would be prudent to capitalise on any presented advantages. Support for, and recognition of, AI inventorship could make South Africa an attractive option for investment and innovation and may also cause these systems to be viewed as a sustainable form of innovation. The path forward for South Africa is uncertain, but there are opportunities in recognising AI as an inventor that could aid in achieving the national policy goals. In doing so, South Africa may champion the Fourth Industrial Revolution and signal leadership to other countries. Indeed, in just the few days since the South African DABUS patent was granted, the Australian Federal Court appears to have followed suit, overturning a rejection of DABUS’ application by that country’s patent office and finding that recognizing AI inventorship would be “consistent with promoting innovation.”[4]
[1]Hay v African Gold Recovery Co 1902 TS 232 p 233.
[2]University of Southampton’s Applications [2006] RPC 567 (CA) paras 22–25.
[3]Bertie Van Zyl (Pty) Ltd v Minister for Safety and Security 2010 (2) SA 181 (CC) para 21.
Mr Meshandren Naidoo is a Ph.D Fellow at the University of KwaZulu-Natal (South Africa) and member of the African Health and Research Flagship. His areas of interest are AI technology, intellectual property, business strategy, and bioethics. His Ph.D involves looking at the challenges posed by AI technology to South African patent law and what the potential solutions may be.
Dr. Christian E. Mammen is an IP litigation partner with Womble Bond Dickinson in Palo Alto, CA. He has practiced in San Francisco and Silicon Valley for over 20 years, and has held visiting faculty positions at a number of universities, including Oxford University, UC Berkeley Law School, and UC Hastings College of the Law. He has written and spoken extensively on AI and patent law, including “AI and IP: Are Creativity and Inventorship Inherently Human Activities,” 14 FIU L. Rev. 275 (2020).
The authors confirmed they did not receive compensation for this article and that they do not represent any clients that might be impacted by the article or the underlying decisions. The views expressed by them in this article are solely their own.
One of the topics to be discussed at tomorrow’s PPAC meeting is USPTO operations following the Supreme Court’s 2021 Arthrex decision. In Arthrex, the Supreme Court created an additional layer of review by the PTO Director in Inter Partes Review (IPR) proceedings following a PTAB final written decision. PTO Acting Director Drew Hirshfeld has considered the first two request for Director Review, and denied both requests. (IPR2020-00081 and IPR2020-00320). It appears that the Director personally considered both cases rather than delegating the decision back to the PTAB or another Official. Neither decision reach the merits but rather perfunctorily state:
It is ORDERED that the request for Director review is denied; and FURTHER ORDERED that the Patent Trial and Appeal Board’s Final Written Decision in this case is the final decision of the agency.
I expect that this approach will be the standard for almost all cases going forward.
In re Apple, 21-147 (Fed. Cir. August 4, 2021); In re Google, 21-144 (Fed. Cir. Aug 4, 2021)
Two mandamus cases regarding whether venue is proper in Judge Albright’s court in W.D. Texas.
Even though Apple has a $1 billion Austin Texas Campus and 8,000+ employees within the district, the company argued that litigating a patent case within the district would be truly inconvenient. In a prior decision, the Federal Circuit held that Apple’s extensive presence within the district should not be given much weight. In re Apple Inc., 979 F.3d 1332 (Fed. Cir. 2020). I would argue that decision was clearly wrong for convenient venue purposes. The real answer here is that the plaintiff (Koss Corp) shopped for Judge Albright and the defendant is shopping for a different Judge (any other judge). In a short opinion, the Federal Circuit has denied mandamus — finding that Apple did not show entitlement to the “extraordinary relief” of mandamus.
In Google, the court reiterated that “Google’s mere presence in the Western District of Texas insofar as it is not tethered to the events underlying the litigation is not entitled to weight in analyzing the local interest factor in this case.” However, again the appellate court concluded that Google did not show that N.D.Cal. was clearly more convenient.
