by Dennis Crouch
The Supreme Court has not granted certiorari in any patent cases this term. But the 2024 docket includes a number of important petitions -- some focusing on procedural issues and others on fundamental patent law questions. Here is a quick review of those currently pending before the high court:
by Dennis Crouch
The European Patent Office (EPO) has again rejected Dr. Stephen Thaler’s patent application that attempted to name his artificial intelligence system DABUS as an inventor. The EPO examining division’s decision reinforces the foundational principle that inventors must be natural persons under European patent law. Article 81 of the European Patent Convention (EPC) requires a mandatory designation of inventor, and according a prior precedential decision that went against Thaler, the inventor “must be a natural person.” The examining division emphasized that this requirement stems from the interconnection between Article 81 EPC (designation of inventor) and Article 60(1) EPC (right to European patent).
Article 81: Designation of the inventor — The European patent application shall designate the inventor. If the applicant is not the inventor or is not the sole inventor, the designation shall contain a statement indicating the origin of the right to the European patent.
Article 60: Right to a European patent — (1) The right to a European patent shall belong to the inventor or his successor in title. . .
Of course, neither of these articles expressly state that the inventor must be human, but the implication from Article 60(1) in particular is that the inventor is someone with the capability of holding title. (more…)
by Dennis Crouch
The Federal Circuit's December 19, 2024 decision in Altria (Philip Morris) v. R.J. Reynolds offers important guidance on patent damages methodology while potentially previewing issues soon to be addressed en banc in EcoFactor v. Google. The case centered on Reynolds' VUSE Alto e-cigarette product and its infringement of three Altria patents. U.S. Patent Nos. 10,299,517, 10,485,269, and 10,492,541. While the court addressed multiple issues, I want to focus here on the damages analysis - particularly regarding comparable licenses and apportionment. Although the case is non-precedential, it includes both a majority opinion (authored by Judge Prost and joined by Judge Reyna) and a dissent (by Judge Bryson). Like Judge Reyna's decision in EcoFactor, the case involves the use of lump-sum licenses to create a running royalty calculation, as well as the proper approach to apportioning damages so that the award is for the use of the patented invention.
The damages dispute focused primarily on how Altria's expert derived a 5.25% royalty rate from comparable license agreements, particularly a license between Fontem and Nu Mark. Under this agreement, Nu Mark paid Fontem a $43 million lump sum for rights to practice Fontem's patents through 2030. Following established precedent from Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301 (Fed. Cir. 2009), Altria's expert analyzed Nu Mark's sales projections to convert this lump-sum payment into an effective royalty rate. The expert identified projections showing that a 5.25% royalty applied to sales from 2017 to 2023 would yield approximately $44 million in payments - close to the actual $43 million lump sum paid.
by Dennis Crouch
The Senate Judiciary Committee’s Subcommittee on Intellectual Property recently held a new hearing focusing on the RESTORE Patent Rights Act, a deceptively simple one-sentence bill that could dramatically reshape patent enforcement in the United States. The hearing highlighted the stark divide between those who believe stronger injunctive relief is needed to protect patent rights and those who warn that presumptive injunctions could harm innovation.
At its core, the RESTORE Act would establish a rebuttable presumption that courts should grant permanent injunctions when patent infringement is found. The key language is as follows:
If . . . the court enters a final judgment finding infringement of a right secured by patent, the patent owner shall be entitled to a rebuttable presumption that the court should grant a permanent injunction with respect to that infringing conduct.
This would partially reverse the Supreme Court’s 15-year-old decision in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006) which eliminated the near-automatic granting of injunctions in patent cases and instead required courts to apply a four-factor test considering irreparable harm, adequacy of monetary damages, balance of hardships, and the public interest. Under the proposal, the four factors would (I presume) continue to apply, but with the burden shifted to adjudged infringers to show that they do not support injunctive relief. In my mind, the bill also highlights an aspect of eBay that is not much discussed. The Supreme Court said nothing explicit about whether a presumption of irreparable harm persists — that elimination of even a presumption of irreparable harm came from the Federal Circuit most notably in Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142 (Fed. Cir. 2011). In Bosch, the Federal Circuit took the additional step of interpreting eBay to eliminate the presumption of irreparable harm. Overruling Smith Int’l, Inc. v. Hughes Tool Co., 718 F.2d 1573 (Fed. Cir. 1983) (“where validity and continuing infringement have been clearly established, immediate irreparable harm is presumed.”).
The December 18, 2024 hearing was led by Senators Coons and Tillis and included four witnesses.
by Dennis Crouch
The Supreme Court’s December 18, 2024 order in TikTok v. Garland is an extraordinary intervention by the Court (especially for its speed) and will likely address a number of novel constitutional questions about government regulation of social media and national security, especially in light of the ongoing economic “war” with China. The order consolidates two emergency applications seeking to block enforcement of the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACAA) before its January 19, 2025 effective date. That statute would effectively ban TikTok from operating within the US unless it is fully divested from Chinese government control.
PAFACAA, signed into law on April 24, 2024, specifically targets applications controlled by designated foreign adversaries, with TikTok being the only platform currently affected. The legislation prohibits entities from distributing, maintaining, or updating foreign adversary controlled applications within U.S. borders through app stores or internet hosting services. For TikTok, these prohibitions take effect on January 19, 2025, unless the platform executes a “qualified divestiture” that would sever its ties to ByteDance and, by extension, the People’s Republic of China (PRC).
by Dennis Crouch
In the pending appeal of In re Chestek, PLLC, No. 22-1843, a trademark applicant is opposing the USPTO requirement that all applicants must disclose their domicile address. This requirement, referred to as the “domicile address rule,” has been controversial since the USPTO adopted it in a 2019 rulemaking. For individuals, this rule requires an actual residential address. See Requirement of U.S. Licensed Attorney for Foreign Trademark Applicants and Registrants, Final Rule, 84 Fed. Reg. 31498 (July 2, 2019). The outcome could have significant implications for privacy and transparency in the trademark registration system. For a variety of reasons, many people do not publicly disclose their place of residence. In the US, the most common reasons stem from domestic violence and stalking. Although the USPTO is attempting to offer a mechanism to protect domestic residence from public view, it also recently had a major data loss of that information -- and effectively all domestic residence information is available in various sources online. A decision favoring the petitioner would also be seen as bolstering the Administrative Procedure Act’s notice and comment requirements.
The best place to begin any analysis is probably with the statute.
