Tag Archives: anticipation

A Major Drop in Patent Infringement Litigation?

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New patent litigation (original complaint filing) is down 40% from this time last year. The chart below comes from LexMachina whose founder, Mark Lemley, offers the speculation that the drop is largely due to the Supreme Court’s recent patent law activity — especially the fall-out from Alice Corp.  Along with Alice, we have a set of additional legal issues that favor accused infringers, including indefiniteness (Nautilus) and fee shifting (Octane Fitness).  Further, we are also well into the reign of post-issuance reviews (IPR, CBM, and now PGR) and the vast majority of repeatedly-asserted patents are involved in a parallel administrative review.  All these factors come together to provide plenty of reason for patent holders to slow-down on complaint filings. Of course, the change and the purported cause cannot be said to be ‘significant’ in the statistical sense.

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We previously discussed the jump in April 2014 as a likely artifact caused by a threatened retroactive fee-shifting legislation.

In thinking about this issue, I was surprised to see HP’s most recent lawsuit as a plaintiff where it asserted three seemingly weak patents. U.S. Patent Nos. 6,089,687, 6,264,301, and 6,454,381.  These patents serve as HP’s attempt to control the market for replacement ink cartridges for its printers and have titles such as “providing ink container extraction characteristics to a printing system”; “identifying parameters in a replaceable printing component”; and “specifying ink volume in an ink container.”  The defendant in this case is Chinese ink-knockoff manufacture Ninestar.

The claims of these patents are clearly susceptible to Alice Corp in that the seeming points of novelty are basically very simply data structures.

The following is claim 1 of the ‘687 patent:

1. An ink-jet printing system comprising:

a printer portion for depositing ink on media in response to control signals, the printer portion configured for receiving a supply of ink;

a replaceable ink container for providing a supply of ink to the printer portion, the replaceable ink container including an electrical storage device for providing parameters to the printer portion, the electrical storage device containing:

an ink container scale parameter for selecting an ink container volume range from a plurality of ink container volume ranges,

a fill proportion parameter for specifying a fill proportion for the selected ink volume range;

wherein the printer portion determines an ink volume associated with the ink container based on the fill proportion parameter and the selected ink volume range.

Here, my understanding is that the hardware components were all known prior to the application here and the invention is simply to store two parameters on the cartridge (ink container scale parameter (specifying container volume) and fill proportion parameter (specifying how full it is)). The use of these parameters was also well known prior to the invention, but (apparently) they had never been put on an ink cartridge before.  Until recently, we would think this claim has an obviousness problem.  Now, it looks like it has patent eligibility problems as well. See HP v. Ninestar, 14 cv 4473 (N.D. Cal., complaint filed October 6, 2014).

The New Role for Post Grant Review Proceedings (PGR)

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by Dennis Crouch

It has now been just over 18-months since we started filing patent applications under the new first-to-file patent system mandated by the America Invents Act (AIA) of 2011.  And, slowly but surely, FTF patents are now beginning to issue.  Those new patents also bring us into a new era of Post-Grant-Review-Proceedings (PGR).

My expectation is that PGR will quickly prove itself as an incredibly powerful tool for challenging patents. Importantly, PGR proceedings allow a third party to challenge the validity of a patent on any of the validity grounds that could be raised in court as a defense under 35 U.S.C. 282 – these include novelty, obviousness, written description, enablement, indefiniteness, utility, and subject matter eligibility. This list represents a major expansion of challenge-justifications over inter partes review (IPR) proceedings or reexaminations. These same doctrines have already been available for covered-business-method review (CBM) proceedings and have been used successfully if only on a narrow class of patents (those covering financial business methods).

Two recent PGR proceedings have been filed.  In one case, LaRose Indus. has challenged Patent No. 8,684,420 that covers the popular children’s “Rainbow Loom.”  Although the patent claims a 2010 priority date, the particular application was filed as a continuation in July 2013 and, at least according to the petitioner, added new mater to the claims at that point.  The second case PGR case involves Patent No. 8,598,291 that covers a liquid formulation of a particular nausea control drug used by chemotherapy patients. The petition argues that the claims fail the requirements of written description, enablement, and definiteness.

The most important limitation on the PGR process is the relatively short 9-month window for filing a PGR petition. Namely, the petition must be filed within 9-months of the patent issuance.  This puts some pressure on parties to monitor competitor patents and patent families.  It also provides patent owners at least some incentive to hold-off asserting their patent until after that window has closed (unless the patentee would welcome the review).  I suspect that the set-up in the LaRose Rainbow Loom market will be fairly common. The patentee (Choon) had previously sued LaRose on a previous patent and so LaRose has been closely monitoring the continuation applications.

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In thinking about how soon the AIA cases will come on-board, I created the chart below. The chart provides some information on the timing of patent issuance — showing the percentage of patents issued with 18-months of filing and 36-months of filing respectively.  A big caveat for this particular chart is that it looks at the actual application filing date and does not consider the priority date that will typically control whether a patent will be examined under the AIA. Thus, even at the three-year date (March 2015), I would expect that significantly less than half of the recently issued patents would be FTF patents.

You’ll note the trend beginning in FY2011 of issuing more patents more quickly.  I largely attribute the change to two initiatives pushed by David Kappos during his term as PTO Director that resulted in (1) more funding to hire more examiners; and (2) a greater allowance rate.  Those factors have continued through the succeeding interim leadership terms of Terry Rea, Peggy Focarino, and now  Michelle Lee.

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Double Patenting when you have a Common Assignee but No Common Inventors

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This is a bit of an in-the-weeds question, even for Patently-O.

Because firms tend to operate within a certain market area and use a particular technological approach, it makes sense that a patentee may well create prior art that blocks future innovations. One solution offered by the law is the “common owner ship excption.”  In particular, the statutory definitions of prior art include the ‘common owner exception’ that excludes a right-owner’s prior-filed patent applications from the scope of prior art for later-filed applications so long as those prior applications were not published by the filing date of the later applications.

AIA Expansion of Exception: This is one area where the AIA reduced the scope of prior art. Namely, before the AIA the common owner exception excluded the prior applications only with regard to obviousness consideration (assuming different inventors). The AIA expands the exception to also exclude these prior-applications from anticipation consideration.  With this expansion, we might expect some increase in double patenting problems.

Double Patenting Common Assignee but No Common Inventors: My question relates to the statements in MPEP 804 that examiners should issue double-patenting rejections when two commonly-owned inventions claim the same subject matter even when there is no overlapping inventorship:

Claims in commonly owned applications of different inventive entities may be rejected on the ground of double patenting. This is in accordance with existing case law and prevents an organization from obtaining two or more patents with different expiration dates covering nearly identical subject matter. See In re Zickendraht, 319 F.2d 225, 138 USPQ 22 (CCPA 1963) (the doctrine is well established that claims in different applications need be more than merely different in form or content and that patentable distinction must exist to entitle applicants to a second patent) and In re Christensen, 330 F.2d 652 (CCPA 1964). . . .

[A rejection is proper even when] the reference … and the pending application are … by a different inventive entity and are commonly assigned even though there is no common inventor.

 

The problem with the MPEP here is that the cases cited are not on-point – i.e., they do not say anything about whether a double patenting rejection may persist when there are no inventors in common.  We know that statutory-double patenting is said to stem from 35 U.S.C. 101 and, likewise, we learned in AbbVie v. Kennedy Institute that obviousness-type-double-patenting also finds its roots in Section 101.  The problem with that approach is that Section 101 remains old-school and still focuses on “inventors” rather than applicants or owners.

My Question: What is the legal source of the MPEP’s declaration that a double patenting rejection is proper based upon common-ownership even when the two documents have no common inventor?  I suspect that there is a case on this, but I don’t know. 

Patent Invalid for Unduly Preempting the Field of “Automatic Lip Synchronization For Computer-Generated 3D Animation Using a Rules-Based Morph Target Approach”

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by Dennis Crouch

McRO (Planet Blue) v. Activision Blizzard, et al. (C.D. Cal. 2014) Decision PDF

In his second major Section 101 decision in as many weeks, Judge Wu (C.D. Cal) has relied upon Alice Corp. (2014) to invalidate all of McRO’s asserted patent claims.  The case is quite important because it is one of the first major applications of Alice Corp. to invalidate non-business-method claims.  Here, the invention is directed toward a specific technological problem that had troubled the field of animation – automatically animating lip synchronization and facial expression of animated characters. See U.S. Patent Nos. 6,307,576 (“‘576 Patent”) and 6,611,278 (“‘278 Patent”).  The appeal will be interesting and may serve as one of the Federal Circuit’s first opportunities to draw a new line in the sand. (more…)

Does Obviousness Type Double Patenting Survive the AIA?

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by Dennis Crouch

In Abbvie Inc. v. Kennedy Institute, the Federal Circuit confirmed that the judicially created doctrine of obviousness-type double patenting (OTDP) continues to be a viable defense following the Uruguay Round Agreements Act (URAA) even though the change to a priority-date-based patent term greatly reduced the potential for abuse. Looking forward, the decision begs the question as to whether the OTDB doctrine has been eliminated as to patents examined under new the America Invents Act of 2011 (AIA). For the first time the rewritten patent statute particularly defines what evidence counts as prior art — now leaving little room for the judiciary to create further categories.  

Obviousness-type double patenting (OTDB) has long been an element of patent law that operates to prevent a patent applicant from chaining-together a time-series of multiple patents in order to extend the exclusive rights beyond the expected 20-year term.  Historically, the potential term expansion was made possible by filing a second or subsequent patent application (often a continuation application) that issues several years after the original patent.  Because the patent term was 17-years from the issue date, later-issued patents would have additional patent term beyond the expiry date of the first-issued patent. The OTDP doctrine operates to block this outcome of extended patent term whenever the invention claimed in the extended-term-patent would be obvious (not patentably distinct) in light of the invention claimed in the first-expiring patent.  In that situation, the extended-term patent is held invalid or unenforceable unless the patentee had submitted a “terminal disclaimer” that disclaims the potential extra term and also links the two patents together as if they were one big patent. Writing on this topic in a 1963 CCPA decision, Judge Rich noted:

The public should also be able to act on the assumption that upon expiration of the patent [the public] will be free to use not only the invention claimed in the patent but also any modifications or variants thereof which would have been obvious to those of ordinary skill in the art at the time the invention was made, taking into account the skill of the art and prior art other than the invention claimed in the issued patent.

See MPEP 804.

Declining Policy Concerns: Much of the need for the OTDB doctrine evaporated with the 1995 patent term transformation enacted with the URAA. Under the new law, US patent term is now calculated from the application priority date rather than the issue date with the result being that the a divided application no longer necessarily extends the patent term.

Of course, there are some caveats to the notion that OTDB is now an unnecessary relic: First, the term of a patent may be adjusted or extended due to a variety of factors with the result that family member applications may have differing expiry dates. The second source of potential term-separation comes from the statutory definitions of prior art that excludes certain prior applicant disclosures from the scope of prior art. These prior-art exclusions include certain pre-filing disclosures by the applicant as well as prior applications on file with the PTO that are not yet published as of the application latter filing date. The first situation (PTA) was a focus of Gilead Sciences v. Natco Pharma (Fed. Cir. 2014) and the second situation was the focus of AbbVie.

In AbbVie, the patentee held two separate patents both covering aspects of a rheumatoid arthritis treatment. Although both patents were part of the same patent family, only one claimed priority to a certain earlier application. It turns out that the early priority date was not needed because no intervening prior art had been identified. Under the 20-year term rules, the two patents were scheduled to have two different expiry dates.  In the appeal, however, the Federal Circuit affirmed that the second patent was invalid for obviousness type double patenting because it was not patentably distinct from the claims of the first patent.

An interesting aspect of the decision involves the court’s attempt to ground the doctrine in statute rather than the judicial creation heritage that Judge Rich had accepted and recognized.  Judge Dyk writes:

While often described as a court-created doctrine, obviousness-type double patenting is grounded in the text of the Patent Act. . . .  § 101 forbids an individual from obtaining more than one patent on the same invention, i.e., double patenting. As this court has explained, “a rejection based upon double patenting of the
obviousness type” is “grounded in public policy (a policy reflected in the patent statute).”

Although the policy notion may be grounded in Section 101, the court explains that the practical application of the doctrine “looks to the law of obviousness generally” and is “analogous to an obviousness analysis under 35 U.S.C. § 103.”  (quoting Amgen).

While unimportant for the AbbVie decision, the particular grounding of the doctrine may be important going forward because the law of obviousness has been rewritten as part of the America Invents Act of 2011.

The AIA redefines prior art in a number of particular ways. Notably for this discussion, the law spells out the scope of prior art along with certain “exceptions.” These exceptions include disclosures originating from the inventors (Section 102(b)); as well as prior patent applications from the same patent-owned and that were still unpublished by the latter filing date (Section 102(b)(2)(c)). Section 102 has also been rewritten to expressly state that it is defining “prior art” — presumably the entire scope of potential prior art.  When the obviousness provision in Section 103 refers to “prior art” it is now clear that we are talking about prior art as defined in Section 102 with the exceptions as noted.

Although a seeming small change in the statute, these alterations repeatedly make clear that certain prior disclosures by an inventor/owner simply don’t count as prior art either for novelty or obviousness purposes. At the margins there continues to be potential for applicants to “play games” with the filing system in order to extend their effective patent term. However, that potential is so reduced from ages past and the statute now defines prior art at such an explicit level of detail that we leave little room for a judicially created doctrine that further eliminates patents.

Creating versus Eliminating Prior Art: At this point, it would be rather odd for the court to create additional forms of prior art that extend beyond the statute.  What is unclear is whether the courts will be willing to apply the rewritten statute in a way that eliminates old forms of prior art that are no longer part of the statute.  Like OTDP ‘prior art,’ the court will be faced with a similar situation involving prior secret sales or non-public commercial uses by the patentee that previously served as prior art but that do not seem to fit within the re-written definition of Section 102.

One problem with the doctrine is that it is slowly developing. The first challenges may come from a patent applicant who refuses to file a terminal disclaimer in order to get its patent allowed.

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I should say that Congress potentially recognizes that double patenting doctrine is potentially problematic and Rep. Goodlatte has proposed an amendment that would codify double patenting.

Federal Circuit Defies Supreme Court in Laches Holding

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by Dennis Crouch

SCA Hygiene v. First Quality (Fed. Cir. 2014)

Rather than focusing on a single event, allegations of patent infringement generally involve a series of actions that each constitute an infringement.  Courts identify each act (making, using, selling, …) as a separate and actionable infringement of the patent.  This notion of repeated acts of infringement (the “separate-accrual rule”) is only occasionally important, but comes up most often in the context of the impact of delays in pursuing court action with the effect of making delays look less egregious.

The Patent Act includes a six-year limitation on collecting back-damages. 35 U.S.C. 286. The old equitable doctrine of laches has also traditionally been available to cut-off damages when the patentee unreasonably and inexcusably delayed in bringing suit.  Under the Federal Circuit’s 1992 en banc Aukerman decision, courts generally apply the same six-year timeline for laches – finding that a six-year delay in filing suit creates a presumption of unreasonable delay that, when coupled with detrimental reliance leads to a laches finding.  Although it only creates a presumption of unreasonableness, in my experience, this six-year delay makes laches much much more likely to be found. Laches then has the ordinary result of cutting-off all pre-suit damages. However, based on the aformentioned theory of individualized acts of infringement, a remedy remains available for infringement that occurs after the lawsuit is filed as well as the potential for further equitable relief to stop future infringement.

Laches is based on a tradition of equity and has no direct tie-in to the patent statute itself. Likewise, Laches is not found in the list of defenses under Section 282 nor identified as an aspect of the statutory limitation on damages. Of course, that is the tradition of equity — existing for times when the law fails.

Putting this entire area somewhat astir is the Supreme Court’s 2014 copyright laches decision in Petrella v. Metro-Goldwyn-Mayer, 134 S.Ct. 1962 (2014).  In similar manner to patent law, the copyright statute has a three-year statute of limitations on filing suit.  In the case, the (alleged) copyright holder had delayed for 18-years in filing suit.  The statute-of-limitations cut-off all but the last three years of recovery and the lower court found that laches blocked recovery for those remaining three years.  However, in Petrella the Supreme Court revived the copyright claim and held instead that laches should not apply because Congress has taken fully spoken on the issue with its statute.

Laches, we hold, cannot be invoked to preclude adjudication of a claim for damages brought within the three-year window. . . .  [L]aches is a defense developed by courts of equity; its principal application was, and remains, to claims of an equitable cast for which the Legislature has provided no fixed time limitation. See 1 D. Dobbs, Law of Remedies 104 (1993) (“laches . . . may have originated in equity because no statute of limitations applied, . . . suggest[ing] that laches should be limited to cases in which no statute of limitations applies”). Both before and after the merger of law and equity in 1938, this Court has cautioned against invoking laches to bar legal relief. See Holmberg v. Armbrecht, 327 U. S. 392 (1946) (in actions at law, “[i]f Congress explicitly puts a limit upon the time for enforcing a right which it created, there is an end of the matter,” but “[t]raditionally . . . , statutes of limitation are not controlling measures of equitable relief “); Merck & Co. v.Reynolds, 559 U. S. 633 (2010) (quoting, for its current relevance, statement in United States v. Mack, 295 U. S. 480 (1935), that “[l]aches within the term of the statute of limitations is no defense [to an action] at law”); County of Oneida v. Oneida Indian Nation of N. Y., 470 U. S. 226, n. 16 (1985) (“[A]pplication of the equitable defense of laches in an action at law would be novel indeed.”).

An important element of the holding is the ongoing separation of legal and equitable remedies — with the notion that laches may still be obtained to block equitable remedies, but not to bar a traditional legal remedy such as past-damages.

In Petrella, the Supreme Court limited its particularly holding to copyright law and noted that “[w]e have not had occasion to review the Federal Circuit’s position” on laches in patent cases. Of course, the parallels between copyright and patent are strong in this situation and so we would expect the Federal Circuit to seriously consider whether Petrella should be applied to overrule Aukerman.

SCA v. First Quality: In 2003, SCA sent a C&D letter to First Quality in 2003 regarding patented adult diapers. However, in 2004, SCA filed for ex parte reexamination that was completed in 2007 with a confirmation of patentability. Finally, in 2010, SCA filed the lawsuit against First Quality.  By that time (beginning in 2006) First Quality had greatly expanded its use of the underlying concepts of the invention (it doesn’t leak).  Rather than deciding the lawsuit, the district court dismissed the case based upon the delay finding both laches and equitable estoppel.

On appeal, the Federal Circuit has affirmed – most notably holding that the Petrella decision has no impact on the adjudication of laches in patent cases.  However, rather than addressing the clear and obvious tension, the court simply wrote:

Petrella notably left Aukerman intact. See id. at
1974 n.15 (“We have not had occasion to review the Federal Circuit’s position.”). Because Aukerman may only be overruled by the Supreme Court or an en banc panel of this court, Aukerman remains controlling precedent.

While clinging to the Aukerman approach, affirmance was easy because the six-year delay creates a strong presumption of unreasonable delay.  However, the court did reverse the summary judgment of equitable estoppel because there was no evidence of the required affirmative act such as a misleading communication leading to detrimental reliance on the notion that the defendant’s infringement would be permissible.

The decision here is notable for its glaring reticence. The panel of Judges Reyna, Wallach, and Hughes are all relatively new and perhaps expect en banc review of this issue.  Many (perhaps most) other judges on the court would have made their mark rather than simply passing.

Although I believe, on balance, that Petrella controls here, the case is not open-and-shut because there are important distinctions as you move from copyright to patent. Notably, the copyright statute of limitations is a more direct and total limit on filing suit while in patent law the statute only limits the collection of too-far-back damages. Thus, in this situation, Congress seems to have spoken more fully in the copyright realm. Additionally, the three versus six year limit appears important because, in the time-scale of lawsuits and three years is a relatively short time while six-years begins to allow for much more unreasonableness and detrimental reliance.  That time differential is further compounded by the fact that three years is quite a small bit of the copyright term (5%) while six-years is often more than 1/3 of the patent term — suggesting that a patentee’s should move more quickly.

If anything, this issue will be interesting to watch.

Design Patents §103 – Obvious to Whom and As Compared to What?

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Guest Post by Paul Morgan

This is an increasing important and not fully resolved legal issue which should logically be addressed in the pending Fed. Cir. appeal of the nearly $1 billion infringement damages award in Apple v. Samsung, re the Apple design patents held infringed.   That award seems to have inspired increased design patent assertions and design application filings.  In that case Judge Koh had even called the application of the Supreme Courts controlling KSR decision on §103 an “open question” as to design patents!  Apple, Inc. v. Samsung Electronics Co., Ltd., Case No.: II-CV-01846-LHK, Slip Op. at 19 (N.D. Cal. Dec. 2, 2011).   These issues could also arise soon in PTO IPR PTAB decision appeals to the Fed. Cir.  The PTAB has already issued a final written decision in the first IPR against a design patent. Munchkin, Inc. and Toys “R” US, Inc. v. Luv N’ Care, Ltd, IPR 2013-00072 (Paper No. 28) (April 21, 2014).

In contrast to utility patent litigation, in design patent litigation summary judgments for non-infringement are relatively rare, while summary judgments for §103 obviousness are more common.  This is so even though they have the very same §103. Yet the Supreme Court’s controlling §103 guidelines in KSR Int’l Co. v. Teleflex Inc, 550 U. S. 398 (2007) have been strangely totally ignored or not applied in many subsequent design cases.  Instead, unique old Fed. Cir. case law is still being applied in making §103 design prior art comparisons and combinations, as discussed below.  Perhaps this reportedly high rate of design patent §103 summary judgments logically correlates with the prior study and report on this blog at: https://patentlyo.com/patent/2010/01/design-patent-rejections.html showing that design patent applications are issued with only rare §103 rejections by PTO design patent application examiners?  That is, prior art is rarely being applied at the examination stage.  Again, this is opposite from PTO utility patent application examination, even though under the very same §103 standard.  A recent example of a Fed. Cir. sustained §103 summary judgment of two design patents in suit isMRC Innovations v. Hunter Mfg. (Fed. Cir. 2014).

Is another reason for relatively less non-infringement than §103 summary judgments in design patent cases due in part to the usual absence of any verbal claim distinctions, plus the Egyptian Goddess “ordinary observer” test?   The “ordinary observer” test for designpatent infringement must also be contrasted with the traditional judicial view of design patent “claims scope” as narrow – see, e.g., cases cited in the article “Functionality and Design Patent Validity and Infringement”, 91 Journal of the Patent and Trademark Office Society (JPTOS) 313, May, 2009, by Perry J. Saidman of the DesignLaw Group.  But is the scope of design patents now being treated consistently with the black-letter case law that claims in litigation must have the same scope for infringement and validity?  Is there a problem with lack of legal guidance of how prior art is to be treated in defining a design patent’s claim scope for, or before, an “ordinary observer” infringement test?  [It has been argued that this was a jury instruction defect in the above Apple decision.]

In what seems like a remarkably begrudging semi-admission [which may be due to its particular panel members], the panel in Titan Tire Corp. v. Case New Holland, Inc. 566 F.3d 1372, (Fed. Cir. 2009) said that “it is not obvious that the Supreme Court necessarily intended to exclude design patents from the reach of KSR.”  However even this Fed. Cir. panel held that: “Our precedents teach that ‘the ultimate inquiry under section 103 is whether the claimed design would have been obvious to a designer of ordinary skill who designs articles of the type involved.’ Durling v. Spectrum Furniture Co., 101 F.3d 100, 103 (Fed. Cir. 1996) (citing In re Rosen, 673 F.2d 388, 390 (CCPA 1982)).”

Yet the patent statute at §171 is perfectly clear that design patents have the very same §103 as other patents.  §103 requires “..that the claimed invention as a whole would have been obvious .. to a person having ordinary skill in the art to which the claimed invention pertains” [emphasis supplied].  For design patents  that has to be a person having ordinary skill in the art of industrial product design, not the non-skill level of any lay person, such as a jury member.    [This §103 requirement should, of course, not be confused with a §102 novelty test.]

The prior en banc Federal Circuit “Egyptian Goddess” decision on design patent infringement, Egyptian Goddess, Inc. v. Swisa, Inc. 543 F.3d 665 (Fed. Cir. 2008), notes, just after referring to “the hypothetical ordinary observer who is conversant with the prior art” test fordesign patent infringement, that: “We emphasize that although the approach we adopt will frequently involve comparisons between the claimed design and the prior art, it is not a test for determining validity, but is designed solely as a test of infringement.”  Unfortunately this en  banc Egyptian Goddess decision did not clarify that statement further.

In High Point Design LLC v. Buyers Direct, Inc., (Fed. Cir. 2013) a Fed. Cir. panel had to face up to the District Court below having been mislead by one of the Court’s own prior design patent decisions, and had to re-clarify its §103 “obvious to whom” case law.  Key text in this High Point Design decision includes:

The use of an “ordinary observer” standard to assess the potential obviousness of a design patent runs contrary to the precedent of this court and our predecessor court, under which the obviousness of a design patent must, instead, be assessed from the viewpoint of an ordinary designer. See Apple, 678 F.3d at 1329 (“In addressing a claim of obviousness in a design patent, ‘the  ultimate inquiry . is whether the claimed design would have been obvious to a designer of ordinary skill who designs articles of the type involved.’”) (quoting Durling, 101 F.3d at 103); Titan Tire Corp. v. Case New Holland, Inc., 566 F.3d 1372, 1380–81 (Fed. Cir. 2009) (same); In re Borden, 90 F.3d 1570, 1574 (Fed. Cir. 1996) (“The central inquiry in analyzing an ornamental design for obviousness is whether the design would have been obvious to ‘a designer of ordinary skill who designs articles of the type involved.’”) ..

Although High Point Design cites prior Fed. Cir. decisions which note §103, its does not base the decision directly on this controlling statute, as it could and should have!   Instead, this High Point Design footnote 2 below unsuccessfully attempts to explain-away a priorconflicting, erroneous “ordinary observer” invalidity test decision, but ends up by noting that it cannot, in any event, overrule even earlier Fed. Cir. decisions:

2 We do not believe our decision in International Seaway Trading Corp. v. Walgreens Corp., 589 F.3d 1233, 1240 (Fed. Cir. 2009), cited by the district court, compelsa contrary conclusion. The International Seaway court may in fact have had the “designer of ordinary skill” standard in mind when it used the term “ordinary observer.” In any event, the court could not rewrite precedent setting forth the designer of ordinary skill standard. See Vas Cath, Inc. v. Mahurkar, 935 F.2d 1555, 1563 (Fed. Cir. 1991); Newell Cos., Inc. v. Kenney Mfg. Co., 864 F.3d 757, 765 (Fed. Cir. 1998).

This High Point Design decision should, finally, end part of the debate over the proper “obvious to whom” test for design patent obviousness.  [Prior §103 design patent decisions include In re Nalbandian, 661 F.2d 1214, 1215-16 (CCPA 1981) and In re Carter, 673 F.2d 1378 (CCPA 1982), both cited in MPEP Section 1504.03, and the above Walter E. Durling v. Spectrum Furniture Company, Inc., 101 F.3d 100, 103 (Fed. Cir. 1996).]

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However, High Point Design still leaves another important unresolved §103 issue for design patents, one serious enough that it may end up in another Supreme Court challenge if the Fed. Cir. does not address it.  I have labeled this the “as compared to what”? question.    Because High Point Design does not even mention KSR and instead continues to apply an additional and unique “obviousness” analysis requirement for design patents from old pre-KSR case law.  An additional requirement that is not in §103 and does not seem consistent with KSR or even some other §103 combination of references case law.   Specifically, High Point Design states:

When assessing the potential obviousness of a design patent, a finder of fact employs two distinct steps: first, “one must find a single reference, a something in existence, the design characteristics of which are basically the same as the claimed design”; second, “[o]nce this primary reference is found, other references may be used to modify it to create a design that has the same overall visual appearance as the claimed design.” Durling v. Spectrum Furniture Co., 101 F.3d 100, 103 (Fed. Cir. 1996) (internal quotations omitted); see also Apple, Inc. v. Samsung Elecs. Co., 678 F.3d 1314, 1329 (Fed. Cir. 2012). Under the first step, a court must both “(1) discern the correct visual impression created by the patented design as a whole; and (2) determine whether there is a single reference that creates ‘basically the same’ visual impression.” Durling, 101 F.3d at 103.”

Another way in which this above unique old special §103 test for design patents is sometimes expressed is a requirement to “first find a Rosen reference” (In re Leon Rosen, 673 F.2d 388, 391 (CCPA 1982)).  [That may be quite difficult in some cases.]  Note particularly the above High Point requirements for first finding a single reference that has “basically the same” design characteristics and visual impression, and only modifying it with other references to create “the same overall visual appearance.” Does that seem appropriate for a normal §103 analysis?  Does this old judicially created §103 analysis for design patents not significantly reduce §103-usable or combinable prior art?  How is that consistent with the controlling Sup. Ct. KSR §103 guidance for combining references, completely ignored in High Point Design?  Has anyone suggested any reason why KSR does not apply to design patent §103 analysis?

In this respect, here are some specific §103-KSR issues to consider.  Is not the designing of costly consumer products intended to be sold by the millions [like smart phones] an “art” in which the §103 “ordinary skill” level of product designers would be expected to be especially high?   Furthermore, do not professional product designers normally work on many different products and use product appearance design ideas from many different fields and products, far more than for utililty patents?  To express that another way, should not “non-analogous art” arguments against combining art for a 103 rejection be even less effective for design patents after KSR than for utility patents?

* * * * *

I have no stake in any of these interesting legal issues.  I simply think members and professional organizations of the patent bar as well as legal academics should be doing more pro bono thinking about them.  Hopefully the Federal Circuit will provide clearer guidance in future decisions.

 

Interval Licensing v. AOL: Post-Nautilus Indefiniteness

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By Jason Rantanen

Interval Licensing LLC v. AOL, Inc. (Fed. Cir. 2014) Interval v AOL
Panel: Taranto and Chen (author)*

One of the most frequent criticisms of Nautilius v. Biosig is that it simply provides a  general standard (Section 112 ¶2 requires that “a patent’s claims, viewed in light of the specification and prosecution history, inform those skilled in the art about the scope of the invention with reasonable certainty” ) and fails to offer any substantive discussion of what this meant.  In this post-Nautilius opinion affirming the district court’s ruling of indefiniteness, Judge Chen provides some of that guidance when it comes to words of degree.

Background. Interval owns the two patents-in-suit, Nos. 6,034,652 and 6,788,314, that claim priority back to 1996.  These patents are directed to a system that “acquires data from a content provider, schedules the display of the content data, generates images from the content data, and then displays the images on a device.”  The system does not simply initiate images on the display device, however.  Rather, almost all of the asserted claims state that the images are displayed “in an unobtrusive manner that does not distract a user.”  The idea is that the images will occupy the peripheral attention of a person in the vicinity of the display device while not interfering with their primary interaction with the device.  The main issue on appeal was whether this “unobtrusive manner” language was indefinite.

Representative claim 1 of the ‘314 patent (with emphasis added):

1. A method for engaging the peripheral attention of a person in the vicinity of a display device, comprising the steps of:
providing one or more sets of content data to a content display system associated with the display device and located entirely in the same physical location as the display device;
providing to the content display system a set of instructions for enabling the content display system to selectively display, in an unobtrusive manner that does not distract a user of the display device or an apparatus associated with the display device from a primary interaction with the display device or apparatus, an image or images generated from a set of content data; and
auditing the display of sets of content data by the content display system;
wherein the one or more sets of content data are selected from a plurality of sets of content data, each set being provided by an associated content provider, wherein each associated content provider is located in a different physical location than at least one other content provider and each content provider provides its content data to the content display system independently of each other content provider and without the content data being aggregated at a common physical location remote from the content display system prior to being provided to the content display system, and wherein for each set the respective content provider may provide scheduling instructions tailored to the set of content data to control at least one of the duration, sequencing, and timing of the display of said image or images generated from the set of content data.

Interval sued AOL, Apple, Google, and Yahoo for infringement.  In its claim construction order, the district court held the “in an unobtrusive manner” language indefinite under the pre-Nautilius standard, thus rendering invalid most of the asserted claims.  (The parties stipulated to noninfringement of the remaining claims based on the court’s claim construction).  Interval appealed.

Indefiniteness.  Under Nautilus, “[a] claim fails to satisfy [the Section 112, 2] requirement and is thus invalid for indefiniteness if its language, when read in light of the specification and the prosecution history, ‘fail[s] to inform, with reasonable certainty, those skilled in the art about the scope of the invention.'”  Slip Op. at 10, quoting Nautilus.  However, there is more to the inquiry than just this general statement.  Here, the term at issue was a term of degree.  That, by itself, was not fatal:

We do not understand the Supreme Court to have implied in Nautilus, and we do not hold today, that terms of degree are inherently indefinite.  Claim language employing terms of degree has long been found definite where it provided enough certainty to one of skill in the art when read in the context of the invention….As the Supreme Court recognized in Nautilus, “absolute precision” in claim language is ‘unattainable.'”

Slip Op. at 11 (internal citations omitted).  But meaningful boundaries – which Judge Chen indicates must be objective – are necessary; that one might identify some standard for measuring claim scope does not mean the claims meet the § 112 requirement:

Although absolute or mathematical precision is not required, it is not enough, as some of the language in our prior cases may have suggested, to identify “some standard for measuring the scope of the phrase….The Supreme Court explained that a patent does not satisfy the definiteness requirement of § 112 merely because “a court can ascribe some meaning to a patent’s claims.”  Nautilus, 134 S. Ct. at 2130. The claims, when read in light of the specification and the prosecution history, must provide objective boundaries for those of skill in the art.

Id. at 12 (internal citations omitted).  Here, no such no such “objective boundaries” for those of skill in the art are provided in the patent:

The patents’ “unobtrusive manner” phrase is highly subjective and, on its face, provides little guidance to one of skill in the art….Although the patented invention is a system that displays content, the claim language offers no objective indication of the manner in which content images are to be displayed to the user. As the district court observed, “whether something distracts a user from his primary interaction depends on the preferences of the particular user and the circumstances under which any single user interacts with the display.”

The lack of objective boundaries in the claim language is particularly troubling in light of the patents’ command to read “the term ‘image’ . . . broadly to mean any sensory stimulus that is produced from the set of content data,” including sounds and video. ’652 patent, 6:60–64. The patents contemplate a variety of stimuli that could impact different users in different ways.  As we have explained, a term of degree fails to provide sufficient notice of its scope if it depends “on the unpredictable vagaries of any one person’s opinion.”

Id. at 13.  Nor did the written description provide the necessary guidance.  “Where, as here, we are faced with a “purely subjective” claim phrase, we must look to the written description for guidance.”  Id. But Interval’s principal argument, that “unobtrusive manner” is defined through its relationship to the “wallpaper” embodiment, thus informing those of skill in the art that “unobtrusive” has only a spatial meaning in the context of the patents, failed because the link was not clear: other portions of the specification suggest that the phrase may also be tied to the “screen saver” embodiment.  The specification is “at best muddled, leaving one unsure of whether the “unobtrusive manner” phrase has temporal dimensions as well as spatial dimensions.”  And it’s secondary argument, that the court must adopt a “narrow example” from the specification, failed because the “narrow example” from the specification was just that: an example, not a definition.  The patent drafter used the term “e.g.” (“exempli gratia”), which in English usage means “for example.”  If the drafter had instead used words of definition, such as “i.e.” (“id est” which in English usage means “that is”), it might have helped provide the necessary clarity.  Nor was one example sufficient here: “With this lone example, a skilled artisan is still left to wonder what other forms of display are unobtrusive and non-distracting. What if a displayed image takes up 20% of the screen space occupied by the primary application with which the user is interacting? Is the image unobtrusive? The specification offers no indication, thus leaving the skilled artisan to consult the “unpredictable vagaries of any one person’s opinion.”  Slip Op. at 18 (quoting Datamize).

Claim Construction/Noninfringement.  The Federal Circuit revised the claim construction of two terms in the four claims of the ‘652 patent that did not contain the “unobtrusive manner” language, vacated the district court’s judgment of noninfringement as to these claims, and remanded for further proceedings.

Nonobviousness: Not at issue here.  Are these patents obvious?  That’s a different question.  After the suit commenced, two of the defendants initiated an ex parte reexamination against the ‘652 patent and a third initiated an inter partes reexamination against the ‘314 patent.  While the examiners found the asserted claims of the patents to be patentable over the cited prior art,the PTAB reversed the decision on the ‘314 patent during the appeal in this case and held that all the claims of that patent were obvious, anticipated, or both.  The Federal Circuit opinion notes that Interval indicated that it will appeal that decision.

Federal Circuit: Bingo Gaming Software Improperly Encompasses the “Basic Tools of Scientific and Technological Work”

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by Dennis Crouch

Planet Bingo v. VKGS (Fed. Cir. 2014)

In a non-precedential decision earlier this week, the Federal Circuit found Planet Bingo’s patents invalid as lacking eligible subject matter under 35 U.S.C. 101.  The court’s opinion self-identifies as a “straightforward application of the Supreme Court’s recent holding in Alice Corp. v. CLS Bank International.”

The patent claims a computerized method for managing a game of Bingo – yes, the multi-billion dollar industry of Bingo. The basic idea of the invention is that some folks want to play ‘their numbers’ each week.  The computerized system lets individuals pre-select their numbers and also helps the Bingo-hall to track sales, verify winners, and avoid tampering.  VKGS and Planet Bingo compete in the marketplace for bingo equipment. (more…)

Guest Post: Publishing Design Patent Applications: Time to Act

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Gary L. Griswold

Mr. Griswold is a Consultant residing in Hudson, WI and was formerly President and Chief Intellectual Property Counsel for 3M Innovative Properties Company. The essay reflects the views of the author. He wishes to thank Bob Armitage and Mike Kirk for their excellent contributions to the essay.

Overview

Design patenting has come of age. According to a recent World Intellectual Property Organization (WIPO) study, the filing of design patent applications more than doubled between 2004 and 2011.[1] The stakes in design patent litigation today can be enormous. One commentator on the recent Apple-Samsung iPhone IP wars noted, “After operating in the intellectual property backwaters for years, design patents took center stage in the epic battle.”[2]

Enterprises of all sizes have come to recognize the value to be had from securing patents on their innovative designs. This also means that more businesses now need to consider whether design patents of others might impair their freedom to operate when placing a new product on the market.

Unlike conventional (“utility”) patent applications, design patent applications are not subject to the “publication” provisions that were placed in the U.S. patent law in 1999 with the enactment of the American Inventors Protection Act (AIPA). Utility patent applications, with a few exceptions, must all be published and made publicly available within 18 months after filing.[3]   However, all design patent applications are required to be kept in secret in the United States Patent and Trademark Office (USPTO) until the patent issues on the application.

Today this secrecy can have significant and negative consequences – for the design’s creator and for those who commit resources to manufacture a similar product before the issuance of the design patent. Unlike most utility patents today, the first inkling that a patent is being sought on a new product’s design may come with grant of a design patent, in other words come at the end of the examination process in the USPTO.

The growing importance of design patents suggests that this exclusion from publication with respect to design patent application publication should be rectified by Congress. This can best be done by requiring that all pending design patent applications be made available to the public by publishing these applications at 6 months after the date that they were originally filed.

Doing so would put the public on notice, shortly after the design patent application is filed, that a new product’s design may be protected. The growing prominence of design patenting, as well as other developments in the law since 1999, now make it timely for Congress to act.

Background

Two major pieces of patent legislation over the past 15 years have worked to make the U.S. patent law operate with vastly greater transparency, predictability and simplicity. The AIPA, with its requirement that most new non-design patent filings must be published at 18-months after their original filing dates was followed by a host of even more significant patent reforms. These were contained in the Leahy-Smith America Invents Act (AIA) of 2011.[4]

Key provisions of the AIA were designed to allow inventors to accurately assess whether they could secure – or had secured – a valid patent. For utility patents, access to earlier-filed patent applications comes though the AIPA’s publication provisions. Clearly, since some patents can take years to issue, holding earlier-filed patent applications in secrecy in the United States Patent and Trademark Office (USPTO) until a patent issued meant that an inventor might mistakenly invest based on the apparent validity of a patent that might then evaporate upon the issuance of a patent on a never-published, earlier-filed patent application.

The AIA also sought to assure that members of the public could more effectively participate in the patenting process. It allowed members of the public to be involved in the determination of whether a claimed invention in a patent application can be validly issued as a patent, both before the patent issues and after the patent issuance.

If action is taken promptly after a pending patent application is published, the AIA permits a member of the public to make a “pre-grant submission” of relevant prior art that the patent examiner handling the patent application must consider in deciding whether a patent should issue on the application.[5] These submissions, most notably include the earlier-sought patent applications of other inventors that have been published under the AIPA’s provisions.

In addition, the new “post-grant review” or “PGR” provisions of the AIA permit a member of the public to raise in a USPTO proceeding any issue of a patent’s validity that could be raised in court by someone accused of infringing the patent. However, these PGR provisions, like the pre-grant submission provisions, require that an individual act promptly. In this case, the PGR petition must be filed within nine months of the issue date of the patent that is being opposed.

Given the formidable requirements for requesting a PGR, most individuals making a PGR request will benefit from advance notice that a patent is about to issue. This notice, of course, is automatic when the patent application has been published under the AIPA’s provisions.

The manner in which the AIA built upon the AIPA’s provisions, both with pre-grant submissions and with post-grant review, work to benefit patent owners and their potential competitors alike. However, while these new pre-grant and post-grant provisions technically apply both to design and utility patents, the lack of any “publication provision” for design patents means that these provisions are now significantly less effective for designs.

The Rationale for Excluding Design Patents from the AIPA Publication Provisions No Longer Makes Sense

When the AIPA was enacted, there were two significant exceptions to the rule that pending applications for patent would be published and made publicly accessible. First, these provisions allowed inventors seeking only U.S. patents to opt-out of the publication requirement. This was done for inventors interested in patent protection only for the U.S. market on the assumption that at least some of them might not want their inventions publicly disclosed if they were ultimately not going to be able to receive a valid patent. However, for almost all such inventions, marketing the invention necessarily discloses to the public what the invention is and, in fact, discloses much more about the invention to the public than would normally be found in an inventor’s patent application if published.

Thus, this rationale, particularly today, makes little sense. The inventor can be “protected” from public disclosure by opting-out of the publication provisions of the AIPA only in the situation where the invention is never commercialized and essentially has no economic value, or in the limited situations where the invention can be effectively practiced as a trade secret. Consequently, it is a protection that seldom affords any economic value to the inventor.

Under the AIA, the publication of an invention in a pending patent application provides an inventor with a guarantee that no one else will be able to successfully secure a patent on the same or a similar invention based on an application filed after the inventor’s patent filing. Where someone subsequently files for a patent, the earlier-filed application limits the later-filing inventor to validly patenting only subject matter both novel and non-obvious over what was disclosed in the earlier-filed application.

Design patents were totally excluded from the 18-month publication provisions. The rationale for the design patent exclusion can be found in the legislative history of the AIPA: “Since design applications do not disclose technology, inventors do not have a particular interest in having them published.” That statement, whatever its validity then, was made before design patenting came of age and has little relevance today, as evidenced by the litigation between Apple and Samsung.

Another reason given for the design exception was that “The Hague Agreement Concerning the International Registration of Industrial Designs” was being revised and that any change to the design patent law should await the outcome of that exercise. That outcome is now clear; Congress has acted to remove the exception for design patents filed under The Hague Agreement.[6]

Yet another reason that design patents may have been left out of the mix when the publication provisions of the AIPA were being drafted was the short pendency of a design patent application. “Pendency” is the time taken by a patent examiner between filing and issuance of the design patent. With pre-grant submissions of prior art and post-grant review under the AIA now in place, that relatively shorter pendency before the Patent Office for design applications versus utility applications makes it much more important to have design applications not only published, but published quite promptly, i.e., at six months from the patent filing.[7]

The last reason Congress may have excepted design patents from publication is that some manufacturers may not have wanted the designs for new products to be prematurely disclosed, prior to market introduction.[8] Under the AIA, however, the filing of a design patent application assures that no similar designs can be patented based upon a later-filed design patent application. In addition, early publication puts competitors on notice that there is a “patent pending” on the design so that they dare not copy the design without the risk of infringing a subsequently issued design patent. Instead of a problem for manufacturers, pre-grant publication carries with it undeniably important benefits.

In addition to the “notice” function that arises from publishing a design patent application, inventors whose design patent applications publish secure yet another benefit under the AIPA. They can qualify for “provisional rights” – that is the right to collect reasonable royalty damages from anyone who uses the design during the period from the date the user received notice of the published design application until issuance of the patent on the design.[9] This again reflects the upsides of publication, much potential gain with a negligible prospect of incurring any pain.

Conclusions

The AIA increased the openness and transparency of the patent system by providing for pre-grant submissions and post- grant review. These provisions work to protect the public against patents that lack valid claims – and similarly protect the inventor from making investments in reliance on patents that could never be successfully enforced. Those aspects of the AIA are premised in part on the publication of pending patent applications.   Whatever reasons can be cited for excluding design patent applications from these important provisions of the AIPA, such reasons now have only historic significance. Today, all design patent inventors deserve equal treatment. The availability of the benefits of publishing pending design patent applications should not depend on where a design patent inventor seeks patent protection.

In sum, the agreement to allow publication of design patent applications filed by U.S. inventors under The Hague Agreement represents a significant step by the United States toward achieving the open, transparent 21st century patent system contemplated by the AIPA and AIA. The increase in design patent application activity – and the prominence of design patent enforcement efforts – renders this a perfect time to remove the exclusion from publication of those design patent applications filed only in the United States.

 

[1] According to WIPO, in 2012, “the 1.22 million industrial designs contained in applications grew by 17%—the highest growth on record.” http://www.wipo.int/export/sites/www/freepublications/en/statistics/943/wipo_pub_943_2013.pdf, at p. 4.

[2] See http://designpatentattorney.com/wp-content/uploads/2013/01/Carani-Lanslide-Article-Design-Patents-Take-Center-Stage-Jan-Feb-2013.pdf.

[3] Most utility patent applications must be published under the AIPA’s publication provisions. The time period set for publishing utility patents is 18 months after the initial patent filing date. 35 U.S.C. § 122(b).

[4] The United States adopted a so-called first-inventor-to-file system as the principle for determining what subject matter can represent “prior art” to a claimed invention. Also, a number of subjective and non-transparent aspects of the rules on patenting were removed.

[5] Because prior art can be submitted to the USPTO anonymously, members of the public and competitors of the applicant are normally comfortable in making such submissions. Since the processing time is shorter for design patent applications than that of utility patent applications, a narrower time window (e.g., before the earlier of a notice of allowance and the later of (1) the first rejection or (2) 2 months after publication) would be necessary for submitting third party submissions.

[6] The implementing legislation for the Geneva Act of The Hague Agreement has been enacted by the United States and rules for its implementation are being finalized by the USPTO. Once the rules are completed, the formal process for membership will be initiated and completed. The Common Regulations Under the 1999 [Geneva] Act and the 1960 Act of The Hague Agreement provide for publication of international applications six months after the date of the international Registration (which occurs upon receipt by WIPO of the international application). This publication of the international application will be considered a publication in the U.S. under 35 USC 390. The U.S. will not allow deferral of publication. Thus, any concerns related to the early publication of design patent applications as a policy matter have already been decided by Congress in favor of publication.

[7] As with utility patent applications, the public may well be aware of better prior art for design patent applications than the USPTO. If design patent applications were published, interested members of the public could submit prior art to the USPTO with the result that any issuing design patents would have been more thoroughly examined, benefiting both the applicant and public.

[8] Because of the speed of issuance, design applications filed only in the U.S. would need to be published 6 months after their U.S. filing date. Any concern with timing of publication relative to commercialization would seem to be handled by a 6 month period between filing and publication, which mirrors The Hague Agreement, and the relatively rapid grant (typically 15 months) of design patents.

[9] By providing that publication under The Hague Agreement will be deemed a publication under 35 USC 122(b), the implementing legislation (35 U.S.C. 390) makes such design patent applications eligible for provisional rights under 35 USC 154(d).

Myriad Patents Now Challenged at the PTO

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Myriad v. Gene Dx, Inc.

In 2013, the US Supreme Court invalidated Myriad’s patent claims covering isolated DNA coding for the cancer causing BRCA1/BRCA2 by ruling that those isolated genes were unpatentable products of nature. However, the Supreme Court also ruled that the ‘created’ cDNA versions of the genes were patent eligible – or at least not excluded by the product-of-nature exception to subject matter eligibility.

Following that decision, a number of companies indicated that they would enter the market and begin BRCA1/BRCA2 diagnostic genetic testing in violation of the patents. Myriad responded aggressively by filing lawsuits against several companies, including Gene Dx for patent infringement. The case against Gene DX alleges infringement of sixteen different Myriad patents and is still pending in Federal Court in Utah where the parties have jointly agreed that settlement prospects are “low.” The case has been centralized before a multidistrict panel that is handling parallel cases against Gene DX, Quest Diagnostics, Ambry, and Counsyl.

In a bold move, Gene DX has now filed a set of inter partes review (IPR) requests – challenging 11 of the Myriad (or Myriad Licensed) patents. I should note, these challenged patents are different from the ones ruled-upon by the Supreme Court. In the IPR regime, patents can only be challenged on prior art grounds. Here, each of these patents have been challenged on either 103 (obviousness) or 102 (novelty) grounds.

Judge Mayer Raises 101 When Not In Issue: Other Panelists Don’t

Invalidity, Obviousness, Patent, Patentable Subject Matter, Software, , , , ,

I am sure Dennis will do his usual full and grand treatment, but this one is sort of the counter-punch to Ultramercial. In I/P Engine, Inc. v. AOL Inc. (Fed. Cir. Aug. 15, 2014) (per curiam), the court split on whether the claims were properly found by the jury to have been not obvious, with Judge Chen dissenting on that point and the per curiam opinion reversing the finding of no invalidity. (The other panel members were Judge Wallach and Judge Mayer).

Recall that in Ultramercial the court emphasized that 101 was seemingly a defense, and so evidence was needed and the usual presumption of validity applied, and so on.  Here, Judge Mayer seemed to take precisely the opposite tact, though it’s not quite clear.  In addition to writing at length about what he perceives the “technological arts” test to mean and require, he wrote:

The Supreme Court has dictated that the subject mat- ter eligibility analysis must precede the obviousness inquiry. Flook, 437 U.S. at 593 (“The obligation to determine what type of discovery is sought to be patented” so as to determine whether it falls within the ambit of sec- tion 101 “must precede the determination of whether that discovery is, in fact, new or obvious.”); Bilski, 130 S. Ct. at 3225 (explaining that the issue of whether claims are directed to statutory subject matter is “a threshold test”); see also In re Comiskey, 554 F.3d 967, 973 (Fed. Cir. 2009) (“Only if the requirements of § 101 are satisfied is the inventor allowed to pass through to the other requirements for patentability, such as novelty under § 102 and . . . non-obviousness under § 103.” (citations and internal quotation marks omitted)). To fail to address at the very outset whether claims meet the strictures of section 101 is to put the cart before the horse. Until it is determined that claimed subject matter is even eligible for patent protection, a court has no warrant to consider subordinate validity issues such as non-obviousness under 35 U.S.C. § 103 or adequate written description under 35 U.S.C. § 112.

From a practical perspective, there are clear advantages to addressing section 101’s requirements at the outset of litigation. Patent eligibility issues can often be resolved without lengthy claim construction, and an early determination that the subject matter of asserted claims is patent ineligible can spare both litigants and courts years of needless litigation. To the extent that certain classes of claims—such as claims on methods of doing business—are deemed presumptively patent ineligible, moreover, the United States Patent and Trademark Office will have more resources to devote to expeditiously processing applications which disclose truly important advances in science and technology.

Even more fundamentally, the power to issue patents is not unbounded. To the contrary, the constitutional grant of authority “[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries,” U.S. Const. art. I, § 8, cl. 8, “is both a grant of power and a limitation,” Graham v. John Deere Co., 383 U.S. 1, 5 (1966); see Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 146 (1989). Section 101’s vital role—a role that sections 103 and 112 “are not equipped” to take on, Mayo, 132 S. Ct. at 1304— is to insure that patent protection promotes, rather than impedes, scientific progress and technological innovation. A robust application of section 101 ensures that the nation’s patent laws remain tethered to their constitutional moorings.

I am guessing we’ll see another en banc case soon…

Update on USPTO’s Implementation of ‘Alice v. CLS Bank’

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The following guest post comes from USPTO Commissioner for Patents Peggy Focarino and is a re-publication of what Commissioner Focarino published on the USPTO Director’s Blog.

Today I would like to address our ongoing implementation of the June 19, 2014, unanimous Supreme Court decision in Alice Corporation Pty. Ltd. v. CLS Bank International, et al. (Alice Corp.). In the decision, the court held claims to a computerized scheme for mitigating settlement risk patent-ineligible because they are drawn to an abstract idea. I want to share with you the steps we’re taking to implement the decision.

First, on June 25th, we issued preliminary examination instructions to assist examiners when evaluating subject matter eligibility of claims involving abstract ideas, particularly computer-implemented abstract ideas, in view of Alice Corp.

Second, the USPTO has applications that were indicated as allowable prior to Alice Corp., but that have not yet issued as patents. Given our duty to issue patents in compliance with existing case law, we have taken steps to avoid granting patents on those applications containing patent ineligible claims in view of Alice Corp. To this end, our primary examiners and supervisory patent examiners (SPEs) promptly reviewed the small group of such applications that were most likely to be affected by the Alice Corp. ruling.

We withdrew notice of allowances for some of these applications due to the presence of at least one claim having an abstract idea and no more than a generic computer to perform generic computer functions. After withdrawal, the applications were returned to the originally assigned examiner for further prosecution. Over the past several days, our examiners have proactively notified those applicants whose applications were withdrawn. (Applicants who had already paid the issue fee for applications withdrawn from allowance may request a refund, a credit to a deposit account, or reapplication of the fee if the applications return to allowed status.)

This limited action was closely-tailored and taken specifically in reaction to the Alice Corp. decision. We do not anticipate further review of any applications indicated as allowable under this process, as examiners are currently following the Alice Corp. preliminary instructions during examination (i.e., prior to allowance).

Third, as we continue to study Alice Corp. in the context of existing and developing precedent, public feedback will assist us in formulating further guidance for our examiners. On June 30th, a Federal Register Notice was published to solicit written comments from the public on the preliminary examination instructions. The period for submitting those comments ended July 31, 2014. We appreciate the comments we have received to date. All input will be carefully considered as we work to develop further examination guidance, which we anticipate issuing this coming fall.

We look forward to working with our stakeholders in refining our examination guidance, and will continue to seek feedback as we implement changes as the laws evolve.

Intellectual Property in an Independent Scotland

Patent,

Guest Post Author – Peter Arrowsmith, partner and (Scottish) patent attorney at Cleveland (p.arrowsmith@cleveland-ip.com).

Introduction

On 18 September 2014 the people of Scotland will vote in a referendum to decide their future: whether to continue as part of the United Kingdom, or whether to re-establish themselves as an independent country. For all Scottish people (and many British people from the remainder of the UK) this is an emotive debate, with strong opinions on both sides. As Scotland prepares for the referendum this article considers the possible impact of a ‘Yes’ vote on intellectual property.

Background: Intellectual Property in Scotland

The structure of the United Kingdom can sometimes be confusing, even for its own residents. The UK is a sovereign state that comprises four different countries: England, Northern Ireland, Scotland and Wales. It is a long and complex history that has led to the current situation, but for Scotland it was the Act of Union in 1707 which signalled the end of its independence, and a political union with England.

Today Scotland has its own parliament, which provides limited self-government. In addition Scotland has representatives in the UK parliament, which retains control over reserved matters such as defence and international relations. Scotland also has its own legal system, which is different from that of Northern Ireland and England and Wales.

UK and European Community intellectual property rights apply in Scotland, just as they would in the rest of the UK. Importantly, there is no geographic sub-division of IP rights in the UK. Thus, it is not possible, for example, to obtain a Scottish patent, a Welsh trade mark, an English registered design or Northern Irish copyright.

Issues relating to intellectual property can be dealt with in various different Courts in the UK. Often IP issues are handled in the Courts of England and Wales, which include the High Court in London. However, it is also possible for IP issues to be handled by the Courts of Scotland (and indeed the Courts of Northern Ireland). If there is a suitable connection with Scotland then the Court of Session in Edinburgh is competent to decide on issues of infringement, validity and ownership. In these cases decisions of the Scottish Courts can be made binding on the remainder of the UK.

Memberships of International Organisations Following Independence

There is significant uncertainty about the status that Scotland would have with respect to international organisations of which the UK is currently a member. The view of the UK government is that, following independence, the remainder of the UK would continue as a successor state, and that a newly independent Scotland would be a new state. This new state would then need to apply for membership of various international organisations such as the EU. There are various alternative views, however. In one scenario it is arguable that the independence of Scotland would actually create two new states, both of which would need to apply to join international organisations (a similar situation arose in the dissolution of Czechoslovakia in 1993). In another scenario, perhaps justified by the fact that Scotland was independent prior to 1707, independence could create two successor states, with equal rights to continue as members of international organisations to which the UK is a member.

The status of Scotland with respect to various international organisations is, of course, important in the case of intellectual property. For the EU the Scottish Government proposes that it will agree the terms of Scotland’s continued membership between the date of the referendum on 18 September 2014, and the proposed date of independence on 24 March 2016. However, the President of the European Commission, Jose Manuel Barroso, recently said that an independent Scotland would have to apply for EU membership and would need to secure the approval of all its current member states. The status that Scotland would have is equally unclear in respect of other international treaties such as the European Patent Convention, the Madrid Protocol, the Hague Agreement, and the new agreements involved in the establishment of the Unitary Patent and the Unitary Patent Court. It would appear that Scotland’s status in these matters will only become clear following a ‘Yes’ vote, during the 18 months in which Scotland would negotiate the terms of its independence.

Effects on existing IP rights

There are two broad categories of IP in the UK. Firstly, there are Community rights that apply across the European Union, which include Community Trade Marks, and registered and unregistered Community Designs. Secondly, there are national rights that apply only in the UK, which include national trade marks, national patents, copyright, registered and unregistered designs and European patents that are validated in the UK.

In the case of Community IP rights, these would appear to apply in an independent Scotland, only if it were to be a member of the EU. As discussed above, this remains an unresolved issue.

In the case of UK national rights, it is difficult to find clear basis regarding how and whether these would apply in an independent Scotland. In order to seek clarity on this issue we contacted both the Yes Scotland Campaign and the UK-IPO.

The UK-IPO had this to say:

In the event of a vote for independence, existing intellectual property rights, including rights registered by Scottish nationals, would remain valid in the continuing UK.

Whether existing and future intellectual property rights registered in the UK would be permitted to extend to an independent Scotland would be a matter for the Scottish Government. There would be no need for the UK Government to approve such an arrangement.

Yes Scotland said this:

“In ‘Scotland’s Future’, the Scottish Government explains that it will ensure ‘continuity of the legal framework for protecting intellectual property rights’ – so existing patents and trademarks will be protected”

Thus, it would appear that the Scottish Government intends that existing UK national rights would continue to be protected in an independent Scotland. The mechanism for this remains unclear, but it seems likely that some kind of re-registration process would be required in Scotland (at least for registered rights). One possible precedent for this comes from Montenegro’s independence from Serbia in 2007. In that case existing IP rights for the territory of Serbia and Montenegro continued to be automatically valid in Montenegro. These rights were then independently renewable in Montenegro when renewal fees became due. For pending applications there was an opportunity to re-file in Montenegro within six months of the establishment of the Montenegrin Patent Office. The Yes Scotland Campaign was unable to say whether Scotland would establish its own Patent Office, although it seems very likely that this would be required.

The Scottish Government’s White Paper on Independence

The Scottish Government has published a white paper on independence which is intended to set out the case for independence, and explain what an independent Scotland would look like. The white paper contains only a few brief comments about intellectual property. For example, the white paper states that the Scottish Government will ensure “continuity of the legal framework for protecting intellectual property rights” and that “as an EU member state, Scotland will meet European regulations and directives on IP rights protection, as well as international patent and trademark protections.”

Additionally, the white paper states that:

“Independence will also allow Scotland to offer a simpler and cheaper, more business-friendly model than the current UK system, which is bureaucratic and expensive, especially for small firms. The UK is one of the few EU countries which does not offer a scheme which covers the basics of protection. Scotland could follow, for example, the German model which protects technical innovations”.

To an IP practitioner, these statements are more than a little surprising. In particular, it is not clear how Scotland would offer a “simpler and cheaper, more business-friendly model” than the current UK system. Taking patents as an example, it would appear that the Scottish Government intends to allow patents to be granted using the European Patent Office, given its stated aim to ensure continuity of the legal framework. If this is the case then the cost of obtaining patent protection in Scotland would be at least the same as in the current system. In fact, the cost would probably be slightly higher since an additional step (and possibly additional official fees) would be required to obtain protection in Scotland as well as the remainder of the UK. The same logic would appear to apply in the case of national trade mark or registered design applications since two applications would likely be required to cover the same geographic area that would be covered by a single application at present.

In terms of enforcement, it is already possible to enforce UK national IP rights in the Scottish Courts. Therefore, Scotland already offers a forum for deciding issues relating to IP in the Courts. This forum can sometimes be cheaper than the Courts of England and Wales, but independence would not be required to realise this advantage. One possible disadvantage in the Scottish Court structure is the absence of a specialised court for small and medium sized enterprises. Such a Court exists in England and Wales: the Intellectual Property and Enterprise Court (IPEC). This could actually increase the cost of the IP system for small companies, by depriving them of access to a lower cost forum.

The suggestion regarding German-style utility models is also surprising. This author cannot comment on whether an IP system that includes utility models is a better system. Utility model systems do appear to be effective in some countries, although they also generate some problems, especially due to the existence of unexamined rights which are clearly lacking in novelty.

Reflections

There are a great many unanswered questions about what an independent Scotland would look like. The question of EU membership, in particular, is important, as well as other issues such as the currency that would be used. In this context it is perhaps unsurprising that there are outstanding questions about how IP rights would be disentangled following separation. It seems that we will need to wait and see how things develop, if a ‘Yes’ vote materialises.

From a personal perspective it feels strange to be participating in this debate. Personally, I do not have a conflict between my cultural and national identities (Scottish, British, and European in that order); although I recognise that many others feel differently. In fact, as I work and live in London I am ineligible to vote in this referendum (since eligibility is based on residency). I will therefore watch with interest from the side-lines as my national identity is decided by others.

At present the polls suggest that a ‘Yes’ vote is unlikely on 18 September (at present around 30% of the electorate are in favour). However, there is a significant number of ‘don’t knows’, and therefore it does not seem implausible that Scotland could soon become an independent country once more. In the event of a ‘Yes’ vote, IP rights holders will need to take an active interest in this issue in order to ensure that they have an appropriate protection strategy for Scotland, ready for the anticipated independence day of 24 March 2016.

Alice, Artifice, and Action – and Ultramercial

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Guest post by Emily Michiko Morris, Associate Professor, Indiana University Robert H. McKinney School of Law

Anyone familiar with recent Supreme Court patent jurisprudence was perhaps disappointed but certainly not surprised by the Court’s latest decision, Alice Corp. v. CLS Bank Int’l. The Court once again left many questions unanswered and failed to provide a clear rubric for identifying patentable subject matter. When viewed within the broader context, however, Alice fits nicely within what is actually a long-standing pattern in § 101 cases. IF Ultramercial v. Hulu follows this pattern after its now second GVR, the Federal Circuit may finally affirm that the internet-mediate advertising method at issue there is unpatentable subject matter.

In What Is “Technology”?, I explain that as unmethodical as patentable subject matter often seems, two surprisingly consistent concepts explain how courts identify patentable subject matter. The article dubs these concepts “artifice” and “action.”

Artifice refers to the well-recognized requirement that patentable subject matter be the product of human ingenuity, not nature. Less appreciated is the fact that artifice requires more than just changes in structural or other physical characteristics; to be patentable, a claimed invention must also function in some new, non-naturally occurring way. We can see this latter point illustrated in the purification line of cases as well as Myriad, Funk Brothers, and Chakrabarty.

Much more obscure but more relevant to Alice is the concept of action. Roughly defined, action is the requirement of active rather than passive utility through operating, behaving, performing, or otherwise actively doing something; that is to say, an invention must be “self-executing.” Inventions that display, transmit, or even store information may satisfy the action requirement, but works such as laws of nature, mathematical algorithms, and “abstract ideas” are (perceived as) merely informational or descriptive in value and therefore unpatentably inert. Moreover, as Alice explains, the abstract idea category is not “confined to ‘preexisting, fundamental truth[s].’” By definition any purely informational or descriptive content, whether naturally occurring laws of nature and mathematical algorithms or human-made financial and economic methods, fails the action requirement. As the Court in Diamond v. Diehr put it, such works simply do not “perform[ ] a function which the patent laws were designed to protect.”

To the extent different tests appear to govern natural products versus laws of nature and abstract ideas, then, artifice and action – and more importantly, the circumstances in which each are likely to be invoked – account for these differences. Artifice obviously plays its largest role in cases involving products or laws of nature, whereas action is most important in cases involving abstract ideas and laws of nature. Nonetheless, patentability under § 101 requires both artifice and action.

Both Alice and Bilski illustrate what role action plays under § 101. The methods in both Alice and Bilski involved hedging risk during business transactions by relying on intermediaries, but more importantly, both methods served solely to inform parties about when they can safely transact. The Alice and Bilski opinions describe this as the abstract concept of intermediated settlement, but really it is just information – information about risk. As such, both methods were unpatentably inactive under § 101.

And although Alice differs from Bilski in that Alice’s method was computer-implemented, the Court found both methods to be unpatentable. Like artifice, action is also a scalar characteristic. Just as artifice depends on an invention’s perceived degree of alteration from nature, action depends on an invention’s perceived degree of activity, and despite Alice’s computer-implementation, the method was still not active enough under § 101.

Indeed, both Alice and Mayo emphasize the scalar nature of patentability under § 101. Under Mayo’s two-step test, a court first determines whether a claim is directed to a law of nature, natural phenomenon, or abstract idea. As the Alice Court observed, however, all inventions are directed to one of the patent-ineligible concepts at some level. The second and pivotal step is therefore to determine whether the claim demonstrates an “inventive concept” – that is, does the claim add elements “sufficient” and “enough” to establish patentable subject matter.

And to see that a sufficient “inventive concept” requires sufficient action, one need only look at how the Court treats computer-mediated elements with regard to patentability under § 101. Computers are widely regarded as “technological,” but much computer technology is “information technology,” and computer use primarily to manipulate data or other information thus adds no patentable action. Computer implementation in Alice’s method followed exactly this pattern – as the Court noted, the computer served only to create and maintain “shadow” accounts, obtain data, adjust account balances, and issue automated instructions. Accordingly, whether Alice claimed its invention as a method, system, or medium, the invention failed to provide an adequate “inventive concept” because it did not demonstrate sufficient action.

Under an artifice-plus-action standard, then, Ultramercial’s internet-mediated advertising method fails § 101. Ultramercial claimed a method of distributing copyrighted content for free in return for viewing an advertisement. The method is purely an exchange of informational and expressive content and performs no action whatsoever, and the claim’s cursory reference to the internet does nothing to add a “sufficient inventive concept.”

This is not to say, of course, that computer-implemented methods are never patentable subject matter. The Alice Court pointed out the difference between computers used purely for information processing and computers used to effect improvements in “any other technology or technical field,” or improvements in the function of the computer itself. Diehr’s computer-assisted rubber-curing process, for example, was adequately “technological” and therefore patentable, whereas the computer-implemented methods in Benson and Flook yielded “simply a number” and were therefore unpatentable. Per the view of the patent system, information processing is simply not “technological.” Similarly, computer or storage media that are distinguishable only by their informational or expressive content alone been held unpatentable if the content has no “functional” relationship with the device. The variable role that computers and other tangible devices can thus play in an invention may be why the Supreme Court rejected the machine-or-transformation test as the sole test for methods under § 101.

And while the discussion here focuses mostly on business methods, note that the Mayo two-step test as stated in Alice covers all patent-ineligible abstract ideas, laws of nature, and even phenomena of nature – all are subject to the same requirement that a claimed invention add “enough” to constitute a patentable inventive concept. For claims directed to phenomena of nature, “enough” means artifice and meeting the age-old test of “markedly different characteristics from any found in nature.” For abstract ideas, laws of nature, mathematical algorithms, mental processes, and all other forms of information, “enough” means action and demonstrating function beyond merely informing.

As simple as artifice and action may sound, however, patentable subject matter clearly remains a difficult and ambiguous issue. The difficulty lies in the scalar quality of both artifice and action and deciding where along these spectra any given new invention falls. The requisite degree of artifice and action has also varied over time as the liberality of patentable subject matter has waxed and waned, creating yet further uncertainty. Most significantly, where the line between patentable and unpatentable lies along the spectrum is entirely unclear. There are no bright-line rules and no magical claim elements that can guarantee patentability under § 101.

The Court has often (but not always, as our host Jason Rantanen has pointed out) expressed a preference for a “functional” approach to patent law, however: that is, a preference for standards over hard and fast rules. As stated in Bilski’s rejection of the machine-or-transformation test, to do otherwise would “make patent eligibility ‘depend simply on the draftsman’s art.’” True, the artifice-plus-action standard requires courts to make many judgment calls about where along the spectrum of artifice and action any given invention must fall before it can be considered patentable technology, but standards are often vague. Besides, patent law frequently must address these kinds of line-drawing exercises. The non-obviousness, utility, enablement, and even written description requirements all force courts to make judgment calls.

Compounding the difficulty is the fact that § 101 determinations are in the end based on nothing more than intuition. As I and a number of others have noted, none of the pragmatic justifications commonly cited in support of § 101, such as preemption and disproportionality explain how patentable subject matter determinations are actually made or, more importantly, why. Thus, although artifice and action consistently appear in patentable subject matter, the combination does not necessarily reflect the most efficient or “correct” way to define patentable subject matter. Rather, the combination merely reflects an underlying intuition about what constitutes technology. (In Intuitive Patenting, a companion article to What Is “Technology”?, I argue that there simply are no more objective bases on which to make these determinations.) Unfortunately, patentable subject matter’s intuitive nature leaves courts effectively unable to specify how they reached their determinations. This often leads to language that sounds more like non-obviousness, novelty, or utility than to § 101, but in the end, artifice and action are better explanations for these otherwise perplexing references.

Federal Circuit: To Satisfy the Written Description Requirement, a patent “must at least describe some species representative” of the accused product.

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By Dennis Crouch

AbbVie v. Janssen Biotech and Centocor Biologics (Fed. Cir. 2014)

This decision is important in the way that it confirms a strong Post-Ariad Written Description requirement – especially with regard to genus-species claim situations. The decision also includes a key (but preliminary) discussion on the preclusive effect of PTAB decisions and also attempts to justify Federal Circuit decisions that extend beyond questions necessary for the judgment. Hal Wegner has already classified this opinion – written by Judge Lourie – as “unnecessary judicial activism.”

In 2013, Abbot Labs spun-off AbbVie as a separate company with a focus on biopharmaceutical research and a current Market Cap of $90 Billion US (ABBV). In the split, AbbVie obtained ownership of a number of valuable patents. In this case, AbbVie asserted various claims of U.S. Patent Nos. 6,914,128 and 7,504,485. These patents broadly cover antibodies that can bind to and neutralize activity of human interleukin 12 (IL-12). These antibodies have been found useful in the treatment of autoimmune disorders, including psoriasis and rheumatoid arthritis.

A key asserted claim is listed as follows:

29. A neutralizing isolated human antibody, or antigen-binding portion thereof that binds to human IL-12 and disassociates from human IL-12 with a Koff rate constant of 1×10−2s−1 or less, as determined by surface plasmon resonance.

A jury found the claim invalid for lacking a sufficient written description, lacking enablement, and also for obviousness. AbbVie appealed the §112(a) claims (WD & enablement) and, as for obviousness, AbbVie argued that that issue should never have been decided by the district court since it had already been fully litigated during the prior interference contest. On appeal, the court affirmed – agreeing that the patent was properly held invalid for lack of written description and that the collateral estoppel did not apply to the obviousness question because the interference proceeding was not sufficiently “final” at the time of the complaint filing.

Written Description: In Ariad, the Federal Circuit confirmed that the written description requirement is separate and distinct from that of enablement and that it serves an important role of ensuring that the patent is based upon an actual describable invention and that the patent scope does not overreach beyond the scope of the inventor’s contribution.

Written Description
– Genus-Species: By design, patent claims generally cover a set of a variety of potential embodiments. Likely, most claims cover an infinite variety of potential embodiments each involving a minor tweak in one way or another. The courts have never required that all potential embodiments be disclosed – however, the written description doctrine has been applied to invalidate patent claims that do not disclose a sufficient representative sample of embodiments. This is generally known as part of a genus-species problem – with the operative question here being how many different species (embodiments) of an invention must be described in a patent document before the applicant can properly claim rights to the genus of all related species. A key case on point is Regents of the University of California v. Eli Lilly & Co., 119 F.3d 1559 (Fed. Cir. 1997) (Lourie, J.) that was also affirmed in Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1355 (Fed. Cir. 2010) (en banc; Lourie, J.) (“[No] bright-line rules govern[] the number of species that must be disclosed to describe a genus claim, as this number necessarily changes with each invention, and it changes with progress in a field.”). Rather than simply listing various embodiments, the usual approach is to also describe common structural features of the species.

Here, AbbVie’s generic claim can be classified as a set of human antibodies defined functionally by their high affinity and neutralizing activity to the human IL-12 antigen. However, AbbVie did not disclose any structural features common to the members of the genus. Rather, AbbVie’s patent described only one type of structurally similar antibodies rather than antibies representative of the full scope of the genus.

In the decision, Judge Lourie focuses particularly on the alleged infringing antibodies and notes that:

[While] AbbVie’s patents need not describe the allegedly infringing [compound] in exact terms . . . [t]he patents must at least describe some species representative of antibodies that are structurally similar to [the accused compound].

Because the patent document lacked any such structural description, the court confirmed that the corresponding claims were invalid under 112(a).

Functional Patent Claims Are Inherently Vulnerable: In discussing the case, Judge Lourie was clear that one problem here is that the invention was described in terms of its function rather than its structure. Lourie writes:

Functionally defined genus claims can be inherently vulnerable to invalidity challenge for lack of written description support, especially in technology fields that are highly unpredictable, where it is difficult to establish a correlation between structure and function for the whole genus or to predict what would be covered by the functionally claimed genus.

With functional claims, the patentee must establish “a reasonable structure-function correlation” either within the specification or by reference to the knowledge of one skilled in the art. Of importance, the court is clear that functional claim limitations are patentable, but, in order to be patentable, they must be linkable to structure by PHOSITA. An interesting distinction though is that, unlike many written description issues, the linkage between the function and structure need not necessarily be found in the patent document itself.

Patent attorneys will also note that Judge Lourie’s reference to “highly unpredictable” arts is designed to refer primarily to bio-related sciences. We shall see whether the subsequent case law is so limited.

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Collateral Estoppel applies to preclude a court from re-deciding issues. Generally collateral estoppel only applies when the same issue was actually litigated and decided by a final and binding judgment in a way that was essential to the judgment. It is also generally true that collateral estoppel applies even when the first case is still pending on appeal – so long as the original court’s judgment was a final judgment being appealed.

Here, a prior interference proceeding between the parties had resulted in a determination that the AbbVie claims were not-obvious. Following the PTAB interference decision, Centocor filed a civil action under 35 U.S.C. § 146 that was pending at the time the present infringement litigation began. In the present appeal, the Federal Circuit held that the PTO decision should not be considered a “final judgment for the purposed of collateral estoppel” since the district court decision was still pending and during that case the parties have the opportunity to expand the factual record. The court left open the possibility that collateral estoppel would apply once the decision is final and that collateral estoppel may have applied if Centocor had appealed directly under § 141 instead of filing a civil action.

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Because AbbVie did not appeal the substance of the obviousness question, the collateral estoppel question fully decided the case. However, in its decision, the court offered an explanation for its reasons for going ahead and deciding the written description question.

AbbVie did not substantively challenge the district court’s holding of obviousness of the asserted claims. It might therefore be concluded that we could affirm that court’s obviousness holding and proceed no further. However, as an “inferior” court, we are well-advised to review more than one issue raised before us on appeal, lest higher authority find error in any basis for a more limited review. Cardinal Chem. Co. v. Morton Int’l, Inc., 508 U.S. 83, 97–98 (1993) (“[T]he Federal Circuit is not a court of last resort. . . . [Its] decision to rely on one of two possible alternative grounds (noninfringement rather than invalidity) did not strip it of power to decide the second question, particularly when its decree was subject to review by this Court.” (emphasis in original)); see also Wm. Wrigley Jr. Co. v. Cadbury Adams USA LLC, 683 F.3d 1356 (Fed. Cir. 2012) (affirming invalidity based on anticipation and obviousness); Verizon Servs. Corp. v. Cox Fibernet Va., Inc., 602 F.3d 1325 (Fed. Cir. 2010) (same); Union Pac. Res. Co. v. Chesapeake Energy Corp., 236 F.3d 684 (Fed. Cir. 2001) (affirming invalidity based on indefiniteness and lack of enablement). Because the written description issue constituted the principal basis of AbbVie’s appeal to this court, we proceed to consider the written description issue rather than affirm merely on any procedural defect or omission relating to the obviousness issue.

In her concurring opinion, Judge O’Malley did not sign-on to the “thoughtful written description analysis” of the majority – finding it not “necessary or dispositive ot the outcome of the case.”

The Supreme Court’s Alice Decision on Patent Eligibility of Computer-Implemented Inventions: Finding an Oasis In the Desert

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Guest Post by Donald S Chisum, Director of the Chisum Patent Academy and author of Chisum on Patents.

In Alice (June 19, 2014), the Supreme Court held that the two step framework for determining the Section 101 patent-eligibility of a patent claim, which the Court previously articulated in the 2012 Mayo decision on the patentability of a diagnostic method, applied to computer-implemented inventions.  Thus, one determines: (1) does the claim recite an ineligible concept (natural phenomena, natural law or abstract idea), and (2) if so, does the claim recite sufficient additional elements to make the claim one to an application of the concept, rather than to the concept itself?

On Mayo step one, Alice held that the claims at issue were to an abstract idea, an “intermediated settlement.”  On step two, it held that “merely requiring generic computer implementation” did not “transform that abstract idea into a patent-eligible invention.”  Thus, claims to a method, a computer system configured to carry out the method, and a computer-readable medium containing program code for performing the method all fell invalid under Section 101.

I considered but then reconsidered entitling this comment “Alice in Wonderland.”  For, indeed, the Supreme Court’s chain of decisions creating a judicial exception to the statute defining patent eligible subject matter (35 U.S.C. § 101) and holding unpatentable claims to algorithms and abstract ideas, stretching from Benson in 1972 to Alice in 2014, is wondrous.  But I will not here review the “big picture,” including the fundamental flaws in the chain; I and others have already done that.

Instead, my focus is on the “small picture,” the every day problem: does the Alice opinion provide some meaningful guidance to fill the near void left by the Court in its prior Mayo and Bilski decisions?  Those decisions provided no definition of an “abstract idea” (or “law of nature”) and little direction on, precisely, how much “more” was required for the transformation.

The Court’s fuzz left stranded in a desert of uncertainty an array of feet-on-the-ground decision makers, from inventors to rights owners to patent professionals drafting and amending claims to examiners to PTO officials to licensing negotiators to litigators to district court judges to federal circuit judges to treatise authors.

Positive news.  At least on first analysis of Alice, I find some additional guidance, perhaps enough to lead us toward an oasis in the desert.

In particular, the Alice opinion supports the following proposition:  a novel and unobvious solution to a technical problem is not an “abstract idea,” and a claim drawn to such a solution, even if broad, is not subject to the Mayo framework (though, of course, it is subject to scrutiny for disclosure support).

The Alice opinion does not state the proposition directly.  The Court expressly indicated that it did not need to “delimit the precise contours of the `abstract ideas’ category” because the concept at issue was so similar to that in Bilski.  But the proposition is fairly inferred from the Court’s rejection of the patent owner’s argument that the intermediated settlement concept in its claims was not an “abstract idea” within the implicit exception to Section 101 and from its novel description of the prior Diehr decision.

Based on prior Supreme Court cases and language in Mayo, the patent owner argued that the definition of “abstract ideas” for Section 101 was: “preexisting, fundamental truths that exist in principle apart from any human action.”  The Court disagreed because that definition did not fit Bilski, which held that risk hedging was an abstract idea. Hedging was a “longstanding commercial practice” and a “method of organizing human activity,” but not a “truth” about the natural world that “always existed.”  Hedging and the similar concept of intermediated settlement were abstract ideas because they were “fundamental economic practices.”

Thus, concepts that constitute abstracts ideas fall into two categories.  First are mathematical equations, mathematical formulae and algorithms (at least ones of a mathematical nature, and, I would emphasize, not all algorithms are mathematical or numerical).  Second are methods of “organizing human activity,” at least if they constitute a fundamental economic practice “long prevalent in commerce.”

What’s left out of the “abstract idea” category?  The Court in Alice declined to say explicitly, but there are hints in its discussion of the 1981 Diehr decision in connection with the second Mayo step.  The Court noted that Diehr had held a computer-implemented process for curing rubber was patent eligible, not because it involved a computer but rather because “it used that equation in a process designed to solve a technological problem in `conventional industry practice.”  It reiterated: “the claims in Diehr were patent eligible because they improved an existing technological process, not because they were implemented on a computer.”  In contrast, the claims in Alice did not “improve the functioning of the computer itself” or “effect an improvement in any other technology or technical field.”

The Court had discussed and distinguished the Diehr case before, in both Bilski and Mayo, but never on the basis that Diehr entailed a technological improvement.  Thus, the Alice discussion of Diehr in terms of a solution to a technical problem is important new ground.

Hence there are strong grounds for the proposition that a patent claim reaches a safe harbor from Section 101 abstract idea scrutiny, including the Mayo second question for an “inventive concept,” if the claimant establishes that the claim is directed to a solution of a technological problem.  This definition of abstract idea as excluding applied technology accommodates the case law treating pure mathematical statements, economics and finance, and schemes of a non-technical character (“methods of organizing human activity”) as “abstract ideas” that must be include additional elements to achieve patent eligibility (Mayo step two).

Is this shift in focus to “technological” an oasis of greater clarity?  No doubt there will be arguments about what is technological and what is not.  But there are at least three advantages to the verbal change.  First, technology is the historic core of the patent system, especially given  the Constitutional phrase “useful Arts,” which is 18th century terminology for “technology” in 21st century terminology.  Thus, an inquiry about the technological is much less of an alien intruder than prior Supreme Court language about the abstract idea exception to Section 101.  Second, evaluating the Section 101 abstract idea prohibition in terms of technological versus non-technological conforms to the language Congress used in Section 18 of the America Invents Act in setting up special PTO review of business method patents.  Finally, a technology test aligns the United States standard with the language used in Europe and elsewhere to address exceptions to patent eligible subject matter.

Judge Chen and Nonobviousness

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By Jason Rantanen

The past two weeks have seen a substantial number of nonobviousness opinions emerge from the Federal Circuit.  These decisions are particularly interesting because they contain pairs of opinions with opposite outcomes.  Judge Lourie, the second longest-tenured active judge on the court, wrote two of them while Judge Chen, the second-newest member of the court, wrote a third and a dissent in the fourth.  Each found (or would have found) the patents in question to be obvious in one opinion and nonobvious in the other.  For those interested in the jurisprudential views of Judge Chen, especially, the pairing may provide some useful insights.

Allergan, Inc. v. Apotex Inc. (Fed. Cir. 2014) Download Allergan v. Apotex
Panel: Prost (author), Reyna, and Chen (dissenting in part)

Allergan and Duke University hold a pair of patents relating to an ophthalmic solution used as a treatment for eyebrow hair loss.  Allergan sells LATISSE a 0.03% bimatoprost ophthalmic solution as a topical treatment for eyebrow hair loss.  After Apotex and other manufacturers submitted Abbreviated New Drug Applications to the FDA seeking to market generic versions of LATISSE, Allergan and Duke sued for infringement.  Following a bench trial, the district court rejected the generic manufacturers’ invalidity arguments, found infringement, and entered an injunction.  The manufacturers appealed.

On appeal, the Federal Circuit addressed claim construction, anticipation and obviousness, affirming the district court’s contested claim construction of “treating hair loss” and its determination that the patents were not anticipated, but reversing the finding of nonobviousness.  I could write a lengthy post on the majority opinion alone, but this passage particularly caught my eye since it relates specifically to the issue of what subjects the Federal Circuit considers to be issues of law versus fact in the nonobviousness inquiry:

In sum, even if the district court did not commit clear error in its findings of fact, failure to consider the appropriate scope of the ’029 patent’s claimed invention in evaluating the reasonable expectation of success and secondary considerations constitutes a legal error that we review without deference.

Slip Op. at 23 (emphasis added).  The substantial breadth of the asserted claims of the ‘029 patent was particularly troubling to the majority, both in assessing the Graham factors and the nexus for secondary considerations.

Writing in dissent, Judge Chen would have found the ‘029 patent to be nonobvious.  In reaching this conclusion, he placed much more weight on the determination of the examiner during prosecution:

To begin with, issued patents enjoy a presumption of validity, which can only be rebutted by clear and convincing evidence. Microsoft Corp. v. i4i Ltd. P’ship, 131 S. Ct. 2238, 2245–46 (2011). A party challenging a patent’s validity must do so with “evidence which produces in the mind of the trier of fact an abiding conviction that the truth of [the] factual contentions are highly probable.” Buildex Inc. v. Kason Indus., Inc., 849 F.2d 1461, 1463 (Fed. Cir. 1988) (citing Colorado v. New Mexico, 467 U.S. 310, 316 (1984)). This is not a burden that is easily satisfied.

Dissent at 2.  Particularly persuasive to Judge Chen was the fact that examiner considered the key reference during examination and allowed the claims over it following an amendment by the patentee:

In light of the particularly heavy burden to show obviousness over a reference disclosed during prosecution and discussed by the examiner, Appellants have
not shown that Johnstone now somehow teaches or suggests the very structural feature that the patentee claimed to distinguish the Johnstone compounds.

Id. at 4.  On his part, Judge Chen found the disclosure Johnstone reference to be meaninglessly broad and generic:

This is not a situation in which there are a finite number of identified, predictable solutions. See KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 421 (2007). Rather, the
single sentence in Johnstone actually proposes hundreds of thousands, or even millions, of variations on the alpha chain. [] The compound in Johnstone
could have a saturated bond at any position on the alpha chain, an unsaturated bond at any position, a triple bond at any position, or even a combination of any of these bonds. As a result, a person of ordinary skill in the art was not faced with a “small or easily traversed” number of options based on Johnstone. [] In this instance, covering everything effectively tells us nothing.

Id. at 5-6 (internal citations omitted).

Bristol-Myers Squibb Company v. Teva Pharmaceuticals USA, Inc. (Fed. Cir. 2014) Download BMS v Teva
Panel: Prost, Plager, Chen (author)

Bristol-Myers Squibb (BMS) owns Patent No. 5,206,244, which relates to certain antiviral compounds.  At issue was claim 8, which covers entecavir, a treatment for hepatitis B that BMS markets under the name BARACLUDE.  Teva submitted an ANDA seeking to market a generic version of entecavir; BMS sued for infringement.  After trial, the district court held claim 8 to be obvious based on the selection of 2’CDG as a lead compound from the prior and a finding that a skilled artisan would have been motivated to make the necessary modification with a reasonable expectation of success at creating a compound with beneficial antiviral properties.  BMS appealed.

Unlike the Allergan case, the analytic framework presented by the parties for the question of obviousness was the lead-compound approach.  BMS contended that the district court had erred in selecting 2′-CDG as a lead compound, a particular legal framework that is frequently used in chemical compound cases.  The Federal Circuit disagreed, agreeing with the district judge’s conclusion that “those of ordinary skill in the art would have selected 2′-CDG, a carbocyclic analog, as a lead compound for
further development efforts before BMS applied for the 244 patent in October 1990.”  Slip Op. at 10-11.   The appellate court also rejected BMS’s argument on motivation to modify the lead compound to make the patented compound, pointing to detailed evidence and testimony on why the modification would have been obvious.

Nor was the presence of unexpected results sufficient to establish nonobviousness on their own.

Contrary to BMS’s argument, unexpected results do not per se defeat, or prevent, the finding that a modification to a lead compound will yield expected, beneficial
properties. Rather, as secondary considerations of nonobviousness, they come into play in determining “the ultimate question of patentability.”

…

Secondary considerations of nonobviousness “must always when present be considered,” and can serve as an important check against hindsight bias. See Cyclobenzaprine, 676 F.3d at 1075-76, 1079 (quoting Stratoflex, Inc. v. Aeroquip Corp, 713 F.2d 1530, 1538-39 (Fed. Cir. 1983)). While secondary considerations must be taken into account, they do not necessarily control the obviousness
determination.

Slip Op. at 15-16.  Here, the district court did not commit error in its factual findings that the unexpected properties did not compel a finding of nonobviousness, and the two legal errors that it committed (“(1) comparing entecavir to another hepatitis B drug on the market instead of the closest prior art, 2′-CDG; and (2) inappropriately look[ing] to what the inventor knew at the time of the invention—instead of one of ordinary skill in the art—to determine what was expected.”  Slip Op. at 18) were harmless.

First Impressions: My reading of Judge Chen’s majority opinion is that it reflects a careful, thorough review of the district court’s opinion (which itself is helpfully quite detailed and Magistrate Judge Burke should be commended for his own thoughtful analysis).  Conclusions are supported by detailed discussions and even if one disagrees with the overall conclusion of obviousness here, that disagreement seems less likely due to the carefulness of his approach and more likely due to some of the core difficulties inherent in pharmaceutical innovation such as the challenge of ascertaining marketable in vivo efficacy and the high value our society places on large-scale data-driven safety and efficacy determinations, determinations that can be quite costly yet have little if any direct role in substantive patent law questions.

Another possible reading of these two opinions is that they reflect a fair amount of deference to the decision making of others more familiar withe the specific facts.  In Allergan, in addition expressly referencing the examiner’s decision to allow the patent, Judge Chen’s view would also have affirmed the district court’s ruling of nonobviousness.   And in BMS, Judge Chen drew heavily on the district court’s findings.  (That said, one reason why these opinions aren’t in as much tension as they might be is because the district court’s analysis of obviousness in Allergan was at least an order of magnitude thinner than that of the judge in BMS).  At this point, this is merely an observation, and we’ll have to wait for future opinions from Judge Chen.

Guest Post: The Rise of The End User in Patent Litigation (and Attorney Fee Shifting)

Patent,

Professor Bernstein’s current scholarship focuses on the role of end users in the patent system.  Because end users are fast becoming major stakeholders in the operation of the patent system, I asked her to write a few words about how she conceives of these players. – Jason

Guest Post by Gaia Bernstein, Professor of Law, Seton Hall University School of Law

We usually think of two players in the patent system: the patentee and its competitor.  Increasingly, however, end users – who are neither patentees nor competitors – are playing a significant role in the patent system.  The attention of the press has recently turned to patent assertion entities who are suing vast numbers of customers using patented technologies in their everyday businesses.  For example, one patent assertion entity has sued individual podcasters, including the Comedian Adam Carolla. End users were also principal players in some of the recent patent cases before the Supreme Court. In Bowman v. Monsanto, Monsanto sued a farmer for re-using its patented seed technology. End users also appear as patent challengers: in Association for Molecular Pathology v. Myriad Genetics, patients and physicians sued to invalidate breast cancer gene patents. And patients and drug stores repeatedly challenge pay-for-delay agreements between patentees and competitors, claiming they undermine patients’ interests in access to generic drugs.  This is only the beginning: end users are likely to become even more prevalent in patent litigation, as 3D printers become more popular, making it more likely that an individual or a small business will make an infringing item that will expose them to patent liability.

All of this begs the questions what is an “end user” and how well is patent law suited to deal with this new player?  In The Rise of The End User in Patent Litigation, forthcoming in the Boston College Law Review, I define end users as people and companies that use a patented technology for personal consumption or in their business.  I emphasize that they are strictly users.  Even if they incorporate the patented technology into a product or service they offer their customers, they do not make or sell the technology standing by itself.  I explain that end users differ from competitors in three respects.  First, end users usually lack technological sophistication – they are generally not technological companies and do not produce and supply the allegedly infringing technology. Second, end users usually become involved in the patent conflict relatively late in the life of the patent, after the patented technology enters the market and achieves widespread adoption.  Third, end users are typically one-time players. In most cases the technology is ancillary to their business and they do not have a long-term stake.

Patent litigation is exorbitantly expensive. It is all the more expensive for end users who lack the technological expertise to challenge validity and infringement claims and cannot rely on in-house technological expertise. Because end users are often one-time players, they prefer to avoid the expense of patent litigation and settle even strong cases, making them a particularly lucrative target for patent owners. Unfortunately, even the most recent substantive patent law legislation, the America Invents Act (“AIA”) fails to address the growing role of end users. I show that while the AIA attempts to address the needs of small entities, mainly by adding and changing procedures to challenge patents in the patent office, thus providing a cheaper and faster forum for contesting validity, those same novel procedures are largely unsuitable for end users because they permit expansive challenges mostly early in the life of the patent before end users are likely to be involved in the patent dispute. The procedures that allow challenges later in the life of the patent limit the grounds available for challenging the patent. Thus, unlike even small competitors of the patent holder, end users are unlikely to benefit from the enhanced patent office proceedings put in place in the AIA.  The effect of this is to leave them without the very same tools that were implemented to protect small entities.

Ultimately, the rise of the end user is a complex phenomenon that needs to be addressed by a series of reforms, which I am addressing in other works in progress.  Here, however, I focus on the role that fee shifting of attorney fees and litigation expenses to the prevailing party can play in end user cases because a modest change could contribute toward leveling the footing of end users in all type of end user-patentee disputes.

Fee shifting in patent litigation has been a hot topic this year. Recently, the Supreme Court decided two fee shifting cases: Highmark v. Allcare and Octane Fitness v. ICON Health & Fitness. In Octane Fitness, the Court lowered the standard for awarding fee shifting in patent litigation. Congress is also considering multiple bills advocating different versions of fee shifting. The problem is that although some of the congressional bills address PAE’s suits against customers, neither these bills nor the Supreme Court decisions address the broader role that end users are now playing in our patent system. In the article, I argue that the case for fee shifting is strong where end users are implicated particularly because of the great inequality in technological sophistication between end users and patentees and because end users frequently represent many other parties who are not before the court. For these reasons, end user status should be considered as a factor that weighs in favor of fee shifting, particularly when the end user fits the paradigmatic form of a classic end user.

There is more in the article than I can write about here. If you are interested, please take a look at the full version. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2440914.

Friday Afternoon Rant

Ethics, ,

Hey, it’s my blog.

I just spent some time reading the PTO 101 guidelines and the arguments made about them earlier this month at the PTO.

Sixty years ago, Judge Rich wrote:  “The drafters of the present statute did their best to take out of the law the undefinable concept of ‘invention.’ Whether lawyers will now take advantage of the terminology . . . and stop talking nonsense is up to them.”  Principles of Patentability, 28 Geo. Wash. L. Rev. at 407.

This from Chief Judge Rader’s opinion in CLS Bank:

Defining one of those expansive categories, Section 100(b) confirms the statute’s intended breadth. At first examination, the Act’s definition of “process” to include a new use of a known machine seems superfluous. After all, if “any” process may be patented under Section 101, Section 100(b) seems wholly unnecessary. An examina- tion of the context for adding Section 100(b) informs the analysis of Section 101. Specifically, the 1952 amend- ments added Section 100(b) to ensure that doubts about the scope of a “process” under the pre-1952 version of the patent statute would not be read into the new Act. P.J. Federico,2 Commentary on the New Patent Act, reprinted in 75 J. Pat. & Trademark Off. Soc’y 161, 177 (1993) (Federico’s Commentary) (“Remarks have appeared in a few decisions and elsewhere that new uses are not pa- tentable. . . . [I]f such remarks are interpreted to mean that a new use or application of an old machine, manufac- ture or composition cannot result in anything patentable then such statements are not and have never been an accurate statement of the law.”); Hearing Before Subcomm. No. 3 of the Comm. on the Judiciary, at 37 (1951) (1951 Hearings) (Federico testifying that the “definition of ‘process’ has been added . . . to clarify the present law as to certain types of methods as to which some doubts have been expressed . . . .”). The 1952 Act shows that the “primary significance” of adding Section 100(b) was to make clear that a method was not “vulnerable to attack, on the ground of not being within the field of patentable subject matter, merely because it may recite steps con- ventional from a procedural standpoint and the novelty resides in the recitation of a particular substance, which is old as such, used in the process.” Federico’s Commen- tary at 177; see S. Rep. No. 82-1979, at 17 (“The . . . defini- tion clarifies the status of processes or methods which involve merely the new use of a known process, machine, manufacture, composition of matter, or material; they are processes or methods under the statute and may be patented provided the conditions of patentability are satisfied.”).

In addition, in testimony requested by the Committee, P.J. Federico, a chief patent examiner at the United States Patent & Trademark Office (Patent Office), ex- plained that under the proposed amendment a machine or manufacture may include “anything that is under the sun that is made by man.” 1951 Hearings at 37; see S. Rep. No. 82-1979, at 5 (stating the same principle: so long as the conditions of patentability are met, anything made by man is patentable). The Supreme Court summarized the intent and meaning of these changes when it quoted and approved this famous statement. See Diehr, 450 U.S. at 182.

Indeed, to achieve these ends, the 1952 Act did not merely rely on the breadth of Section 101 and the expand- ed definition of “process” in Section 100(b), but also added the words “or discovered” to the definition of “invention” in Section 100(a). By definition, Congress made it irrelevant whether a new process, machine, and so on was “discovered” rather than “invented.” Both inventions and discoveries are eligible for patenting. This addition confirmed the principle articulated again in Section 103 that an invention “shall not be negated by the manner in which [it] . . . was made.” 35 U.S.C. § 103. The language of the Act shows that the authors of the 1952 Act wanted that principle incorporated into the eligibility section of the Act as well as the patentability sections.

One final point confirming the breadth of Section 101 is the 1952 Act’s deliberate decision to place the substan- tive requirement for “invention” in Section 103. Before 1952, the courts had used phrases including “creative work,” “inventive faculty,” and “flash of creative genius” which compared the existing invention to some subjective notion of sufficient “inventiveness” as the test for patent- ability—by definition a hindsight analysis. See Giles S. Rich, Principles of Patentability, 28 Geo. Wash. L. Rev. 393, 404 (1960). These standardless terms and tests created wildly disparate approaches to determine suffi- ciency for “invention.” Id. at 403–04. Judge Rich ob- served that with “invention” as the test, “judges did whatever they felt like doing according to whatever it was that gave the judge his feelings—out of the evidence coupled with his past mental conditioning—and then selected those precedents which supported his conclu- sions.” Sirilla, 32 J. Marshall L. Rev. at 501 (internal quotation marks omitted).

The 1952 Act focused its central purpose on correcting this systemic problem. “One of the great technical weak- nesses of the patent system” prior to 1952 was “the lack of a definitive yardstick as to what is invention.” Victor L. Edwards, Cong. Research Serv., Efforts to Establish a Statutory Standard for Invention, at 2 (1958) (Study on Standard for Invention). As Judge Rich testified at the beginning of this legislative effort in 1948, “the matter of defining invention” was “what we are trying to get away from.” Id. at 4. As Federico put it, “invention” was “an unmeasurable quantity having different meanings for different persons.” Federico’s Commentary at 183 (mak- ing the statements in the context of explaining why Congress added Section 103)…

After deliberate effort, the 1952 Act replaced any need for an “invention” or “inventiveness” measure with an objective test for “obviousness” in Section 103. See Dann v. Johnston, 425 U.S. 219, 225-26 (1976) (explaining that although “an exercise of the inventive faculty” had been used as a judicial test, “it was only in 1952 that Congress, in the interest of uniformity and definiteness, articulated the requirement in a statute, framing it as a requirement of ‘nonobviousness.’” (internal quotation marks and footnote omitted)). The official “Revision Notes” explain that Section 103 became an “explicit statement” of the “holding of patents invalid by the courts[] on the ground of lack of invention.” S. Rep. No. 82-1979, at 18; see Federi- co’s Commentary at 180 (explaining that one of the two major changes made by the 1952 amendments was “incorporating a requirement for invention in section 103.” (internal quotation marks omitted)); Study for Statutory Standard of Invention (extensively reviewing Congres- sional efforts to redefine “invention,” which culminated in adoption of Section 103). Thus, the central thrust of the 1952 Act removed “unmeasurable” inquiries into “inven- tiveness” and instead supplied the nonobviousness requirement of Section 103.

After enactment of the 1952 Act, both of its principal architects recognized the significance of the elimination of a subjective test for “invention.” Judge Rich, a House Committee architect of the 1952 Act and later an es- teemed jurist, applauded the fact that the Patent Act of 1952 makes no “reference to ‘invention’ as a legal re- quirement.” Principles of Patentability, 28 Geo. Wash. L. Rev. at 405 (emphasis omitted). Judge Rich emphasized that using “the past tense in referring to” what “used to be called the requirement of ‘invention’” could not be over- emphasized. Id. (emphasis in original). Federico expressed the same sentiments. See Federico’s Commentary at 182-83 (explaining that while perhaps the word “in- vented” in the prior patent act may have been the source of judicial demand for more than just novelty, Section 103 replaced any requirement for “invention”).

Contemporaneous commentators also recognized that any need for “invention” had been rejected in favor of nonobviousness. See generally, Karl B. Lutz, The New 1952 Patent Statute, 35 J. Pat. Off. Soc’y 155, 157-58 (1953) (explaining that courts had long ago decided that novelty was not enough and had disagreed on how to determine how much more was necessary, but that that issue was now addressed solely by Section 103); Dean O.S. Colclough, A New Patent Act—But the Same Basic Prob- lem, 35 J. Pat. Off. Soc’y 501, 510 (1953) (explaining that the “condition of inventiveness has been expressed in a variety of ways by the courts,” but the “new provision on inventiveness” in Section 103 was intended to replace and codify prior law). And indeed the courts, including this court, implemented the new statute carefully and reli- giously. See Graham v. John Deere Co., 383 U.S. 1, 14 (1966) (“Section 103, for the first time in our statute, provides a condition which exists in the law and has existed for more than 100 years, but only by reason of decisions of the courts.” (internal quotation marks omitted)); W.L. Gore & Assocs., Inc v. Garlock, Inc., 721 F.2d 1540, 1548 (Fed. Cir. 1983) (Markey, C.J.) (recognizing the district court improperly relied upon one step of a multi-step process to determine nonobviousness); Gardner v. TEC Sys., Inc., 725 F.2d 1338, 1349–50 (Fed. Cir. 1984) (recognizing that Section 103 sets forth the standard, and so “synergism” of a known combination is not required). Thus, any requirement for “inventiveness” beyond sec- tions 102 and 103 is inconsistent with the language and intent of the Patent Act.

With an eye to the statutory language and its back- ground, the Supreme Court recognized Section 101 as “a ‘dynamic provision designed to encompass new and un-foreseen inventions.’” Bilski, 130 S. Ct. at 3227 (quoting J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred Int’l, Inc., 534 U.S. 124, 135 (2001)). Indeed, the broad interpretation of Section 101 has constitutional underpinnings. “The subject-matter provisions of the patent law have been cast in broad terms to fulfill the constitutional and statutory goal of promoting ‘the Progress of . . . the useful Arts . . . .’” Chakrabarty, 447 U.S. at 315.

In sum, any analysis of subject matter eligibility for patenting must begin by acknowledging that any new and useful process, machine, composition of matter, or manu- facture, or an improvement thereof, is eligible for patent protection. While a claim may not later meet the rigorous conditions for patentability, Section 101 makes these broad categories of claimed subject matter eligible for that consideration.