The Non-Compete Ban: Impact on Patenting and Challenging Implementation

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by Dennis Crouch

Non-compete agreements fly under the radar for most American lawyers.  One reason is that such restrictions have long been banned within legal practice. As an example, the American Bar Association (ABA) Model Rule 5.6(a) prohibits lawyers from entering into agreements that restrict their right to practice law after terminating an employment, partnership, or other professional relationship. The rule's stated aim is to protect clients' freedom to choose their legal representation, but it also ensures that lawyers can practice their profession without restriction.

The increasing prevalence of non-compete agreements in other industries has drawn increasing scrutiny from policymakers and regulators, leading to the FTC's recent rule banning most non-compete agreements across the United States.  The new rule was announced on April 23, 2024 following a 3-2 vote by the FTC Commissioners (along party lines, with Democrats in the majority). It is set to take effect 120 days later (August 21, 2024). As I discuss below, two lawsuits have already been filed seeking to derail implementation.

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Without Undue Experimentation vs Without Any Experiments

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by Dennis Crouch

I was rereading the Supreme Court's recent enablement decision of Amgen Inc. v. Sanofi, 598 U.S. 594 (2023) and was struck by the Supreme Court's statement that its 19th Century decision of Wood v. Underhill, 46 U.S. 1 (1847) "establish[ed] that a specification may call for a reasonable amount of experimentation to make and use a patented invention."  This statement from Amgen is surprising because Chief Justice Taney's decision in Wood includes a seemingly contrary statement that bars any experimentation

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SCT: False Claims Act Actions Based Upon Fraudulently Obtained Patent Rights

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by Dennis Crouch

This post walks through a new petition for writ of certiorari involving claims that Valeant Pharma defrauded the U.S. government by using fraudulently obtained patent rights prop up its drug prices. [Read the Petition]

The False Claims Act (FCA), originally enacted in 1863 to combat contractor fraud during the Civil War, imposes civil liability on anyone who "knowingly presents" a "fraudulent claim for payment" to the federal government. 31 U.S.C. § 3729(a)(1)(A). The Act allows private citizens, known as "relators," to bring qui tam actions on the government's behalf against those who have defrauded the government. If successful, relators can recover up to 30 percent of the damages. 31 U.S.C. §§ 3730(b)(4), (d)(2).

To prevent opportunistic lawsuits, however, Congress has sought to strike a "balance between encouraging private persons to root out fraud and stifling parasitic lawsuits"

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UMKC School of Law Wins National Patent Application Drafting Competition

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By Chris Holman

Last week the U. S. Patent and Trademark Office announced the winner of this year’s National Patent Application Drafting Competition (NPADC), the University of Missouri-Kansas City School of Law. I teach patent law at UMKC, and was privileged to travel to Alexandria with the team of UMKC students (pictured below, from left to right, Will Knutson, Mark Trompeter, Joe Hooper, and Lukas Fields) to watch them compete and ultimately triumph in the final round of the competition. I am sure a great deal of the credit for their success can be attributed to our adjunct faculty members teaching patent prosecution at UMKC, James Devaney (Shook Hardy & Bacon) and Jon Hines (Senior Patent Counsel at 3Shape).

I would encourage any law student interested in pursuing a career in patent prosecution to consider participating in the competition next year. In a nutshell,

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What is Next for Enablement and Written Description of Antibody Claims?

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by Dennis Crouch

I had been following the case of Teva v. Lilly for a few years.  Teva has traditionally been a generic manufacturer, but in this case sued Eli Lilly for infringing its patents covering methods of treating headache disorders like migraine using humanized antibodies that bind to and antagonize calcitonin gene-related peptide (CGRP), a protein associated with migraine pain. U.S. Patent Nos. 8,586,045, 9,884,907 and 9,884,908.  The patents cover Teva's drug Ajovy, and allegedly cover Lilly's Emgality. Both drugs were approved by the FDA in September 2018.  A Massachusetts jury sided with Teva and awarded $177 million in damages, including a controversial future-lost-profit award.

Although the jury sided with Teva, District Judge Allison Burroughs rejected the verdict and instead concluded that Teva's patent claims were invalid as a matter of law for lacking

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Supreme Court Declines to Hear Vanda’s Patent Obviousness Appeal

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by Dennis Crouch

The Supreme Court has denied Vanda Pharmaceuticals' petition for certiorari, leaving in place a Federal Circuit decision that invalidated Vanda's patents on methods of using the sleep disorder drug Hetlioz (tasimelteon) as obvious.

Vanda had argued in its cert petition that

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Importance of Due Diligence for Patent Practitioners and the US/China Economic War

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by Dennis Crouch

37 C.F.R. § 11.18(b) imposes crucial responsibilities on patent applicants, attorneys, and agents. Documents submitted to the USPTO implicitly certify that:

  1. Statements made are true or are are believed to be true (based upon information and belief) and do not include any attempt to conceal a material fact; and
  2. That a reasonable inquiry was conducted to confirm that: (i) statements have no improper purposes, (ii) legal contentions are supported by existing law or valid arguments for change, (iii) allegations and factual contentions have or are likely to have evidentiary support, and (iv) denials of factual contentions are based on evidence or a reasonable lack of information or belief.

Recent USPTO disciplinary cases underscore the seriousness of these obligations. Examples include filing a micro entity status request without proper investigation and submitting an information disclosure statement (IDS) by a non-practitioner without practitioner review. Rubber stamping is not permitted.

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Functional Claims: Morse, Halliburton & Amgen

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by Dennis Crouch

In the patent context, functional limitations describe inventions in terms of their function or intended use, rather than their specific structure or components. Such claims have been subject to much debate and litigation throughout the history of the US patent system. Notable Supreme Court cases like O'Reilly v. Morse, 56 U.S. (15 How.) 62 (1854) and Halliburton Oil Well Cementing Co. v. Walker, 329 U.S. 1 (1946) significantly impacted patent practice and the balance between functional and structural claim drafting.

The pending Supreme Court case of Amgen Inc. v. Sanofi, No. 21-757 (2023) is another example, with the potential to further shift the landscape regarding functional claim limitations. The title of my essay on the case following oral arguments, "Bye Bye Functional Claims," hints at my outlook. Although the patentee focused on other issues in its briefing, the Justices repeatedly questioned the permissibility of broad functional claim limitations.

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Guest Post: Old Designs, New Design Patents

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By Sarah Burstein, Professor of Law at the University of Oklahoma College of Law

In December 2020, the USPTO put out a request for comments on “The Article of Manufacture Requirement.” (For prior PatentlyO coverage, see here.) Last week, at Design Day 2022, the USPTO announced that it had completed its summary of those comments. That summary is available here.

In the request for comments, the USPTO floated the idea of issuing design patents for what they are now calling “designs for projections, holograms, and virtual and augmented reality (PHVAR).” Presumably, this acronym is meant to suggest that these are new types of designs, uncontemplated by Congress when it passed statutes that—according to some—are in need of “modernization.”

But projected designs aren’t new.

As we explained in our law professor comments, designs for “magic lantern” projections go back at least as far as the 17th century. So the concept of projected designs was well-established by the time Congress passed the first design patent act in 1842—not to mention when it codified the Patent Act in 1952. Projected designs are simply not some new, unforeseen concept.

There may be new types of projection machines today, but this type of design is not new.

The USPTO suggests that the scope of design patentable subject matter “should be reevaluated in order to incentivize and protect innovation in new and emerging technologies.”

But it is not—and should not—be the role of the design patent system to incentivize or protect new machines. We have utility patents for that.

Furthermore, projected designs are not as the USPTO seems to suggest, unprotected today. Projected images qualify as pictorial, graphic, or audiovisual works that are already protected—costlessly and immediately upon fixation—by copyright. It can’t be seriously suggested that Congress was unaware of projected designs when it passed the broad definitions of protectable subject matter in the Copyright Act of 1976. It’s clear from the definitions that one form of projected creativity, cinema, was very much on Congress’ mind. See, e.g., 17 U.S.C. § 102(a)(6) (providing protection for “motion pictures and other audiovisual works.”).

Again, the type of projector may be new, but the type of work is not.

So why push for design patents when copyright is already available? There may be some who just want to accrue as many belts and suspenders as their IP budgets will allow. But that alone is not a good enough reason to expand design patentable subject matter.

It may be that, for at least some potential applicants, the goal is to avoid the requirements of copyright law. In Feist v. Rural, the Supreme Court held that a work must have “minimal creativity” to be protected. Thus, to gain copyright protection, a work must “possess some creative spark, ‘no matter how crude, humble or obvious’ it might be.” This is, according to the Supreme Court, a requirement of the Progress Clause.

Minimal creativity is a low bar. Yet the USPTO has granted numerous design patents for designs that fall below it—especially in the context of computer-generated designs. In theory, novelty and nonobviousness could be a higher bar but, in practice, that is not the case.

So let’s all be clear:

  1. These are not new types of designs.
  2. They’re not unprotected—unless they fail to meet the low constitutional threshold set in Feist.

For more on why § 171 shouldn’t be “reinterpreted” to cover projected designs, see: https://www.regulations.gov/comment/PTO-C-2020-0068-0009