Federal Circuit Revives Patent Suit Against Aetna Over Health Savings Cards

Patent

by Dennis Crouch

In AlexSam v. Aetna, the Federal Circuit recently revived the patentee's infringement lawsuit against health insurance giant Aetna over its Visa and Mastercard-branded health savings account (HSA) debit cards. AlexSam, Inc. v. Aetna, Inc., No. 22-2036 (Fed. Cir. Oct. 8, 2024). The district court has dismissed the case on 12(b)(6) for failure to state a claim of infringement.  The case will likely be highly cited by future infringement plaintiffs seeking to overcome motions to dismiss, especially whether allegations in the complaint are unduly conclusory.   The appellate panel also narrowly construed a prior license agreement between AlexSam and Mastercard

AlexSam's asserted U.S. Patent No. 6,000,608 covers a "multifunction card system" that can serve as both a debit card and a medical services card.  I have reproduced the two asserted claims below. And no, this is not an eligibility case.

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Third-Party Litigation Funding in Patent Cases: Transparency, Ethics, and Policy Concerns

Patent

by Dennis Crouch

The landscape of patent litigation has been dramatically reshaped by the rise of third-party litigation funding (TPLF) over the past decade. As someone who has been involved in patent law issues for 20+ years, I can confidently say that if I were asserting a patent today, I would actively seek litigation finance to mitigate risk, even if I had sufficient resources to self-fund (which I don't). The availability of TPLF allows patent holders to create high-caliber legal teams and can also provide a strategic advantage by demonstrating to opponents that the case has been vetted by sophisticated investors willing to back it financially.

However, this trend toward litigation finance comes with complications and controversies. While TPLF has undoubtedly increased access for many patent holders, it has also given rise to significant ethical concerns and abuses. One of the most pressing issues is the potential for effectively sidelining the nominal plaintiff – the actual patent holder – in favor of the financial interests of funders and attorneys. In addition, there is some notion that TPLF is often channeled into the US via foreign sources -- something that has raised concerns that this could somehow destabilize the rule of law.

At the same time, it's important to acknowledge the positive impacts of TPLF. The availability of litigation finance has allowed larger, more established law firms to take on plaintiff-side patent cases that they might have previously declined due to risk or resource constraints. Anyone working in a law firm knows how difficult it is to convince partners to take on risk, and TPLF offers guaranteed partial payouts from funders even if the defendant wins.  That means that these firms can assemble formidable legal teams, potentially leveling the playing field against well-resourced defendants and improving the overall quality of patent litigation.

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Pink Ceramic Hip Implants: When Functionality Trumps Trade Dress

Patent

by Dennis Crouch

The pending appeal in CeramTec v. CoorsTek Bioceramics again highlights the interplay between utility patents and trade dress protection -- this one focusing on the color pink.  The case centers on CeramTec's attempt to maintain trademark registrations for the pink color of its ceramic hip implants after its utility patent expired. While color can sometimes serve as a trademark, the Board's decision to cancel CeramTec's registrations appears supported by the evidence and aligns with key Supreme Court precedent on functionality.  At the same time, CeramTec offers a  powerful argument that the TTAB decision disregarded direct evidence of non-functionality based upon recent material science testing.

There is some chance that the court will issue a quick affirmance without opinion, but it is more likely that we'll see an opinion in the next few months. (Note, the image above is marked "confidential" but was found in appellant's non-confidential brief making it, in my view, fair game for publication).

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USPTO Terminates Thousands of Chinese-Origin Patent Applications Due to Forged Attorney/Agent Signatures

Patent

by Dennis Crouch

In a stunning development, the USPTO recently terminated proceedings in approximately 3,100 patent applications due to the fraudulent use of a practitioner's signature. This mass termination, announced on October 2, 2024, stems from an investigation that uncovered misconduct involving the unauthorized use of a registered patent agent's electronic signature.

The outcome here appears potentially over the top in the way that it punishes the patent applicants -- almost all Chinese companies -- for unknowingly participating in the fraud.  As one attorney who is now representing one of the impacted applicants explained to me: "punishing the applicants for the actions of the practitioner goes a bit far, especially where the punishment is termination with no remedy."  A number of the applicants used Chinese counsel who identified and hired the offending firm (W&K) years ago and worked with them for some time without issue.  I would not be surprised if some of these applicants push for judicial review, perhaps by filing an APA action.

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Free Post: En Banc Review in Allergan: Rehearing Petition Tackles ODP Safe Harbor and WD Essential Elements

Patent

by Dennis Crouch

This post focuses on the issues raised in the patent challenger Sun Pharma’s recent en banc petition in Allergan USA, Inc. v. MSN Laboratories Private Ltd and Sun Pharmaceutical Indus. Ltd., No. 2024-1061 (Fed. Cir. 2024).  The original panel majority opinion is controversial on two separate fronts. First, it created an obviousness-type double patenting (ODP) safe harbor for certain patents whose term had been extended via patent term adjustment (PTA); Second, the court OK’d the omission of what appeared to be an essential element (a glidant) from the claims, finding sufficient written description support despite the specification only describing formulations that included a glidant. This omission was particularly notable as it occurred after the patentee learned during litigation that the accused products did not include a glidant.

I’ve divided this post into two parts: Part I – ODP Safe Harbor and Part II – Written Description Essential Element. (more…)

Supreme Court denies Cert

Patent

by Dennis Crouch

The Supreme Court has denied certiorari in all of the patent cases it considered in its  first conference of the October 2024 term:

  • Denied: 23-1349 Provisur Technologies, Inc. v. Weber, Inc..  Does an on sale product constitute a printed publication that can be asserted in an IPR.
  • Denied: 23-1298 United Therapeutics Corporation v. Liquidia Technologies, Inc. Whether the IPR statute and SAS require the Federal Circuit to review de novo, or only for an abuse of discretion, the PTO's reliance on new grounds and new printed publications—not raised in the initial petition?
  • Denied: 23-1231 Cellect, LLC v. Vidal.  Whether a patent procured in good faith can be invalidated on the ground that statutory Patent Term Adjustment created an improper term extension under the judge-made doctrine of obviousness type double patenting.
  • Denied: 23-1217 Chestek PLLC v. Vidal. Whether the PTO is exempt from notice-and-comment requirements when exercising its rulemaking power under 35 U.S.C. § 2(b)(2).
  • Denied: 23-1184 Eolas Technologies v. Amazon.com, Inc. Whether the claims recite patent-eligible subject matter under 35 U.S.C. § 101 and Alice Corp.
  • Denied: 23-1142 Surti v. Fleet Engineers, Inc. Whether the Court erred in denying proper compensation.

Only a handful of cases are still pending before the court:

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