by Dennis Crouch
The Federal Circuit’s 2023 decision in Axonics, Inc. v. Medtronic, Inc. marked an important change in inter partes review procedure, ensuring petitioners have an opportunity to respond patentee’s newly proposed arguments, with the hope of discouraging patent owners from holding-back (“sandbagging”) at the institution stage. Case-in-point is the Federal Circuit’s recent Apple v. Omni MedSci decision authored by Judge Alan D. Albright sitting by designation.
By Chris Holman
Sanofi-Aventis Deutschland GMBH v. Mylan Pharms Inc., 2023 WL 3311549, — F.4th — (Fed. Cir. May 9, 2023).
The “analogous arts” test is used in patent law to determine whether a particular reference is relevant for the purposes of an obviousness analysis. Under this two prong test, a reference is relevant if it is from the same field of endeavor as the invention at issue, or if it is reasonably pertinent to the problem the invention is trying to solve. In re Bigio, 381 F.3d 1320, 1325 (Fed. Cir. 2004)
In its 2007 KSR v. Teleflex decision, the Supreme Court ruled that the obviousness analysis should be more flexible and not confined to rigid rules or tests. Rather, KSR emphasized an “expansive and flexible approach” to obviousness. While KSR did not directly address the analogous arts test, it could be interpreted as calling for a more flexible approach allowing courts and the PTO more leeway to consider prior art from a broader range of sources as being “analogous” or “reasonably pertinent,” which in principle should make it easier for challengers to invalidate patents.
In inter partes review (IPR) proceedings, the Patent Trial and Appeal Board (PTAB) has invalidated patents claims for obviousness based on cited prior art that the PTAB found to be analogous, and until now the Federal Circuit has consistently affirmed those decisions on appeal. Unwired Planet, LLC v. Google Inc., 841 F.3d 995 (Fed. Cir. 2016); Smartdoor Holdings, Inc. v. Edmit Indus., Inc., 707 F. App’x 705 (Fed. Cir. 2017); Toyota Motor Corp. v. Reactive Surfaces Ltd., LLP, 816 F. App’x 480 (Fed. Cir. 2020); CyWee Grp. Ltd. v. Google LLC, 847 F. App’x 910 (Fed. Cir. 2021); and Kamstrup A/S v. Axioma Metering UAB, 43 F.4th 1374 (Fed. Cir. 2022)).
On occasion, the PTAB has found cited prior art to be non-analogous, and thus irrelevant for purposes of the obviousness inquiry. The Federal has twice affirmed those decisions on appeal. Polygroup Ltd. MCO v. Willis Elec. Co., Ltd, 759 F. App’x 934 (Fed. Cir. 2019) and Broadcom Corp. v. Int’l Trade Comm’n, 28 F.4th 240 (Fed. Cir. 2022)). In one reported decision, Donner Tech., LLC v. Pro Stage Gear, LLC, 979 F.3d 1353 (Fed. Cir. 2020), the Federal Circuit vacated and remanded after concluding that the Board had applied the wrong standard when it determined that a cited prior art reference was not analogous art.
On May 9, in Sanofi-Aventis Deutschland GmbH v. Mylan Pharms. Inc., the Federal Circuit held for the first time (to the best of my knowledge) that the PTAB erred in finding cited prior art to be analogous in an IPR. Significantly, the Federal Circuit’s decision did not address the merits of the analogous art question, but instead was based entirely on the fact that the patent challenger (Mylan) had failed to allege that the cited prior art was analogous to the challenged patent (U.S. Patent No. RE47,614, which relates to pen injectors used for the delivery of drugs such as insulin).
The court observed that:
A petitioner is not required to anticipate and raise analogous art arguments in its petition; instead a petitioner can use its reply to “respond to arguments raised in the corresponding opposition, patent owner preliminary response, patent owner response, or decision on institution.” See 37 C.F.R. § 42.23. However, Mylan did not use its reply to explain how de Gennes is analogous to the ‘614 patent.
The court reversed the PTAB’s finding of nonobviousness because it had relied upon a finding that the de Gennes reference was analogous prior art, but Mylan had never made the required analogous art argument. Mylan argued on appeal that it had, in its IPR petition, effectively argued that the de Gennes reference was analogous to another other cited prior art reference, i.e., Burren, and that Burren and the challenged Sanofi patent address the “same problem.” However, the court found Mylan’s arguments as to Burren insufficient to carry its burden because they did not directly address the challenged patent.
The court explained that:
In evaluating whether a reference is analogous, we have consistently held that a patent challenger must compare the reference to the challenged patent. This conclusion is reinforced by the purpose of the analogous art test, which is to examine whether a reference can be considered as prior art to the challenged patent in the first place. [The] purpose of the “prior art” must be evaluated with reference to the inventor’s purported invention disclosed within the challenged patent.
Guest Post by Jordan Duenckel. Jordan is a second-year law student at the University of Missouri, head of our IP student association, and a registered patent agent. He has an extensive background in chemistry and food science.
HIP, Inc., v. Hormel Foods Corp., 2022-1696, — F.4th — (Fed. Cir. May 2, 2023)
Joint inventorship requires a substantial contribution to the invention. In the decision HIP, Inc. vs. Hormel, Judge Lourie writes for a unanimous panel to reverse a district court’s determination of joint inventorship involving a new process for precooking bacon. US Patent 9,980,498 has four inventors that are employees of and assigned their interest to Hormel. HIP sued Hormel, alleging that David Howard was either the sole inventor or a joint inventor of the ’498 patent. The district court determined that Howard was a joint inventor based solely on his alleged contribution to the infrared preheating concept in independent claim 5.
Bacon is an interesting food with unique preservation and cooking properties. Being a cured product, for food safety reasons, no additional cooking of the bacon is needed when bought off the shelf in a refrigerated section. Of course, most people are not consuming the bacon without additional cooking and some companies will precook the product for consumer convenience. When precooking, Hormel is trying to avoid the loss of salt, and therefore flavor, through condensation and prevent the creation charred off flavors (as opposed to the desirable char on a steak).
In the process of viability testing the new method, prior to filing the application, the inventors consulted with David Howard of Unitherm, HIP’s predecessor, to discuss methods related to Unitherm’s cooking equipment to create a two-step process of preheating then a higher temperature step. After some difficulties, Hormel leased the equipment and returned to their own R&D lab. The method created, the subject matter of the ‘498 patent, involves a first step that allows the fat of the bacon to seal the surface of the bacon and prevent condensation. The charring was remedied by adjusting the heating method of the oven in the second step of high-temperature cooking. In Hormel’s product development, Hormel tried an infrared oven and a conventional spiral oven.
HIP argued that Howard contributed to the ‘498 patent in the preheating by hot air in claim 5 and/or preheating with an infrared oven in claim 5. Claim Five reads in the relevant part:
On appeal, Hormel argues that Howard’s contribution is well-known in the art and insignificant when measured against the full invention. With inventorship being a question of law, and the issuance of a patent creating a presumption of inventorship, an alleged joint inventor must provide clear and convincing evidence to substantiate their claim. In evaluating whether a significant contribution was made by Howards, the parties apply the test from Pannu v. Iolab Corp., 155 F.3d 1344, 1351 (Fed. Cir. 1998). The test requires that the alleged joint inventor:
(1) contributed in some significant manner to the conception of the invention; (2) made a contribution to the claimed invention that is not insignificant in quality, when that contribution is measured against the dimension of the full invention; and (3) did more than merely explain to the real inventors well-known concepts and/or the current state of the art.
Analyzing the second Pannu factor, the Court found that the alleged contribution of preheating meat pieces using an infrared oven to be insignificant in quality because it was mentioned only once in the patent specification as an alternative heating method to a microwave oven and was recited only once in one Markush grouping in a single claim. In contrast, preheating with microwave ovens and microwave ovens themselves were prominently featured throughout the specification, claims, and figures. The examples and corresponding figures also employed procedures using preheating with a microwave oven, but not preheating with an infrared oven.
Infrared heating seems to have been an afterthought in the creation of the two-step precooking method. Whatever discussions Howard might have had about the importance of the infrared, Hormel seems to have focused on microwave heating to solve the condensation problem. From one step further back, it seems absurd to permit joint ownership by a cooking equipment manufacturer when the significant discoveries and refinements of the methods were made in Hormel’s R&D facility without Howard present. The prevention of condensation and avoiding the char flavor were both made independent of Howard’s contributions. Considering the second Pannu factor, the reversal of inventorship seems appropriate.
by Dennis Crouch
NST Global, LLC, dba SB Tactical v. Sig Sauer Inc. (Supreme Court 2023)
This case has a low chance of being granted certiorari, but it still has some interesting elements regarding claim construction and procedure. This is a perfect case for the Supreme Court to issue a GVR (Grant-Vacate-Remand) with an order to the Federal Circuit to explain its reasoning.
The setup is common. Tactical sued Sig Sauer for patent infringement; Sig Sauer responded with an IPR petition that was eventually successful. Tactical appealed based upon the PTAB’s sua sponte claim construction that found the preamble to be limiting, but the Federal Circuit Affirmed without opinion.
The Supreme Court petition asks three questions:
The Tactical patents cover a forearm stabilizing brace that can be attached to a pistol. U.S. Patent Numbers 8,869,444 and 9,354,021. Sig Sauer initially was a distributor of Tactical’s product, but later began making its own competing product. At that point Tactical sued.
In the IPR petition, Sig Sauer did not request any claim construction. Likewise, the petition decision granting the IPR stated that no claim terms needed any express construction. “We agree—we need not expressly construe any claim term
to resolve the parties’ dispute.” During briefing, neither party requested construction of any aspect of the claim preambles. Eventually though, in its final written decision, the PTAB interpreted the preambles as limiting and then used that construction to conclude that the claims were invalid as obvious.
Yes, I said that the narrow construction led to the claims being found invalid. That is unusual — usually the addition of limitations helps to avoid the prior art. In this case though the focus was on objective indicia of non-obviousness. NST’s sales; copying by Sig; praise; etc. But, by giving weight to the preamble terms, the PTAB was able to destroy the presumed nexus between the claims and NST’s product. The result, those secondary indicia were found wanting because NST had not provided additional evidence “commensurate with the claims” as newly construed.
For context, the claims are directed to the attachment, but the preamble recites “a handgun” and “a support structure extending rearwardly from the rear of the handgun:”
1. A forearm-gripping stabilizing attachment for a handgun, the handgun having a support structure extending rearwardly from the rear end of the handgun, the forearm-gripping stabilizing attachment, comprising: . . .
The PTAB ruled that the claims require the handgun and also the support structure as recited in the preamble along with the forearm attachment described in the body. The problem for the patentee is that its objective indicia evidence focused on the forearm attachment, not the whole package. Thus, no nexus and no weight given to those secondary factors. In its decision, the PTAB when through the whole life and meaning analysis: “we conclude that the preambles of claims 1, 3, and 5 are ‘necessary to give life, meaning, and vitality to the claim[s],’ and, as such, are limiting.”
The case was already close because there is a long history of this sort of stabilizer going back to the 19th Century, and so the absence of secondary considerations led to the obviousness conclusion.
During the IPR trial, Sig Sauer had argued that the high sales were due to an odd regulatory scheme against semi-automatic rifles, and the pistol attachment was actually popular primarily because it allowed the pistol to be shouldered. On appeal, that was raised as an alternative justification for the judgment. But, in my view, the PTAB did not actually rule on that issue in the first place.
The patentee appealed, but the Federal Circuit panel of Judges Reyna, Schall, and Chen affirmed without opinion.
by Dennis Crouch
In Salazar v. AT&T Mobility LLC, the Federal Circuit affirmed the district court’s judgment of noninfringement. Once again, the Federal Circuit was called upon to interpret the claim term “a,” this time to determine if Salazar’s claim requiring “a microprocessor” was limited to a single microprocessor. While “a ___” is usually interpreted to include “one or more ___,” the court upheld Judge Gilstrap’s narrower singular construction in this case, finding it limited by later references to “said microprocessor.”
Salazar’s US Patent No. 5,802,467 claims a communication system for interacting with multiple external devices. The system comprises “a microprocessor” that generates reprogrammable communication protocols, a memory device for efficient storage of command code sets retrieved by “said microprocessor,” a user interface for user selections and menu displays rendered by “said microprocessor,” and an infrared frequency transceiver coupled to “said microprocessor” enabling bidirectional communication with external devices.
AT&T systems may have the capability to achieve all these steps, but the defendant argued that each step utilized different processors or multiple processors. Thus, as the District Court explained, the dispute centered on “whether the claims require one microprocessor that is capable of performing the recited ‘generating,’ ‘creating,’ ‘retrieving,’ and ‘generating’ functions.” According to the district court construction, the patentee needed to identify a single processor that performed “all the functional (and relational) limitations recited for ‘said microprocessor.'” As a result, the court found no infringement. The Federal Circuit affirmed this decision on appeal.
While the indefinite article “a” is generally interpreted broadly as not limited to one item, this presumption can shift when necessitated by the patent documents. In this case, the patentee repeatedly used “said microprocessor” to refer back to the already claimed term in a way that “reinvokes [the] non-singular meaning” of the word “a.” Slip Op. (quoting Baldwin Graphic Sys., Inc. v. Siebert, Inc., 512 F.3d 1338 (Fed. Cir. 2008). According to the court, an alternative interpretation would ignore the meaning of “said.”
The key takeaway is that each time the claim uses “said microprocessor,” it refers back to the originally identified microprocessor. This interpretation prevented the argument that the claim covers the use of multiple microprocessors working together to achieve the described functionality. Non-infringement affirmed.
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The jury sided with the patentee on anticipation. AT&T also appealed this issue. However, the Federal Circuit declined to hear the question, holding that AT&T failed to move for a Rule 50(a) JMOL before the case was submitted to the jury, thus waiving its right to appeal the sufficiency of the evidence on that issue.
by Dennis Crouch
AlterWAN sued Amazon for patent infringement back in 2019, asserting two patents claiming claiming wide-area-network improvements. US8595478 and US9015471. As the case moved forward, the district court issued a claim construction that favored Amazon. And, at that point, the parties entered a “stipulated judgment” of non-infringement; and the Judge signed the order. AlterWAN essentially admitted that it would lose under the district court’s construction of the terms “cooperating service provider” and “nonblocking bandwidth;” but reserved the right to appeal the issues.
On appeal, the Federal Circuit has refused to hear the substantive patent claim– and rather found the stipulated judgment defective, being “ambiguous in material aspects.” The appellate panel particularly asked for the following to be included within the stipulated judgment:
In the case, the court heard oral arguments, but the parties disagreed as to each of these issues.
The Federal Circuit is a court of appeals that reviews judgments by a lower tribunal. The problem here though is that the stipulation is such that the appellate panel cannot “ascertain the basis for the judgment challenged on appeal.” Quoting Jang v. Bos. Sci. Corp., 532 F.3d 1330 (Fed. Cir. 2008).
Before remanding, the appellate panel noted a major problem with the district court claim construction – that it rendered the invention inoperable. It “effectively requires a system to provide bandwidth even when the Internet is inoperable.” Despite cases like Chef America, the Federal Circuit here suggested that “common sense” is an important canon of claim construction. And that the claims should not be interpreted in an inoperable manner absent unambiguous claim language.
Chef America does not require us to depart from common sense in claim construction. Here, the claim language itself does not unambiguously require bandwidth to be available even when the Internet is inoperable.
Slip Op., citing Chef Am., Inc. v. Lamb-Weston, Inc., 358 F.3d 1371 (Fed. Cir. 2004) (heating “to” a temperature vs. heating “at” a temperature).
Bringing all this together, the Federal Circuit vacated the stipulated judgment of non-infringement and also suggested a new claim construction. The case is now back before the Judge Noreika (D.Del.) who will likely ask for new claim construction briefing as well as summary judgment motions.
by Dennis Crouch
The Federal Circuit regularly affirms PTAB judgments without issuing any explanatory opinion to justify the result. Although not found in the Rules of Appellate procedure, the court has created its own local rule allowing itself to “enter a judgment of affirmance without opinion.” In a 2017 paper, I argued that these no-opinion affirmances violated both the spirit and letter of 35 U.S.C. 144, which requires the court to issue a “mandate and opinion” in cases appealed from the USPTO. Since that time, the Federal Circuit has continued its practice, issuing hundreds of no-opinion judgments. Throughout this time, dozens of losing parties have petitioned for en banc rehearing with the Federal Circuit or certiorari to the Supreme Court. Up to now, both courts have remained silent and have refused to address the issue.
A new pending petition raises the issue once again. Virentem Ventures v. Google (Supreme Court 2023). Virentem sued Google for patent infringement, and Google responded with a set of Inter Partes Review (IPR) petitions. The PTAB eventually sided with Google and invalidated the claims of all seven challenged patents. Virentem appealed; but the Federal Circuit affirmed the PTAB’s judgement without opinion under its local Rule 36.
The new petition to the Supreme Court asks four related questions:
The Virentem patents relate to time-scale modification — the speeding-up or slowing-down of media. You may remember Alvin, Simon, and Theodore — the Chipmunks. That unintelligible high pitch arguably is not really time-scale modification because it is such a failure. Rather, TSM modern impliedly requires maintaining pitch and intelligibility. In this case though, the PTAB broadly interpreted the term to include any system that speeds-up or slows-down media. With that broad interpretation, the tribunal then was able to find prior art rendering the claims obvious. Virentem argued that its patents would be seen as valid under the narrower construction. The PTAB’s response: If you wanted that limitation in the claim, you should have added it to the claim.
by Dennis Crouch
Rule 1 of the Federal Rules of Civil Procedure sets out a bold goal for civil litigation: “the just, speedy, and inexpensive determination of every action.” Patent litigation is rarely speedy; quite expensive; and, many would argue, often unjust. In the case below, one party attempted some quick relief via preliminary injunction, but the Federal Circuit has vacated on free-speech grounds.
Light-Netics owns U.S. Patent Nos. 7,549,779 and 8,128,264 that cover easy-to-hang Christmas lights. These lights include a magnetic backing that can attach easily to metal surfaces (such as a metal roof). Light-Netics sued after discovering competing products on sale from Holiday Bright Lights (HBL). And, in addition, Light-Netics sent a notice to various light stores warning them that HBL lights were infringing. Lite-Netics LLC v. Nu Tsai Capital LLC (DBA Holiday Bright Lights), — F.4th — (Fed. Cir. 2023).
Light-Netics sued for infringement, HBL responded with unfair competition counterclaims. The district court quickly issued a TRO followed-up with a preliminary injunction against the patentee. Judge Buescher (D.Neb.) ordered the patentee to (1) stop publicly stating that HBL copied the invention and (2) stop telling HBL customers that they could also be liable for infringement. Part of the district court’s justification here was a preliminary consideration of the merits of the lawsuit: narrowed claim construction eliminated literal infringement; and a finding that the patentee was estopped from asserting DOE. At base, the issue has to do with the meaning of the article “a”: can “a” be plural? Here, the claim requires a light socked with “a neodymium magnet [having] a pull strength of at least five pounds” while the accused device uses several magnets.
On appeal, the Federal Circuit has vacated and remanded — holding that the district court went too far in restricting the patentee’s protected speech.
Objectively Baseless: The Federal Circuit has given patentees a fairly-wide berth with regard to public accusations of infringement and customer cease-and-desist letters. In particular, the court has held that state court tort claims associated with out-of-court patent enforcement activities are preempted by federal law unless the patent holder “acted in bad faith.” Breaking this down, the court requires that the infringement allegation be “objectively baseless” and that the patentee conducted its affairs with subjective bad faith. Although the court does not conduct a full First-Amendment analysis, the high burden is justified by our individual liberty interest (that includes corporate commercial speech).
In its decision, the Federal Circuit concluded that it is not-unreasonable for a patentee to assert that a claimed “magnet” could be infringed by two or more magnets.
Decisions of this court lend strong support to the proposition that, “in patent parlance,” at least in an open-ended “comprising” claim, use of “a” or “an” before a noun naming an object is understood to mean to “one or more” unless the context sufficiently indicates otherwise. . . .
The patent uses “the” or “said” when referring back to an antecedent “a” phrase, but that usage does not itself suffice to demand the singular meaning because if the “a” phrase means “one or more,” so would the subsequent reference-back phrases.
Slip Op. The court notes that the patentee’s embodiments all just show a single magnet, but the court found nothing in the specification that limits the claim to that embodiment.
There is no “present invention” or other specification language that restricts the invention to a single (or single-piece) magnet, and there are no structural limitations in the claims that implicitly demand such a configuration. Importantly, and more generally, nothing in the ’779 patent indicates that the evident purpose of the magnet on the socket base (to attach the light string to a metal surface) can be achieved only, or with specified effectiveness, through a single (or single-piece) magnet, rather than a plurality of magnets collectively having the specified pull force.
Id. Likewise, the Federal Circuit also concluded that the doctrine of equivalents could be pursued. The patentee had argued that “two semicircular magnets in the Magnetic Cord light-fixture bases are equivalent to the one [claimed] magnet.” The Federal Circuit found “nothing unreasonable” about that allegation. Further, Lite-Netics did not make any amendments or statements during prosecution concerning the number of magnets in a way that would create estoppel.
On remand, the patentee may seek a narrower preliminary injunction — focusing on the patent not discussed by the Federal Circuit. Still, the Federal Circuit’s discussion gives a big boost to the patentee’s case.
The following is an excerpt from PTO Director Michelle Lee’s keynote address today, at George Washington University Law School. Read the full remarks here.- DC
How do we continue to incentivize … incredible innovations? First, we must ensure that the USPTO issues the highest quality patents as quickly and efficiently as possible. This means, at a minimum, continuing to bring down our backlog and pendency so that good ideas can be patented quickly. Which is why I am proud to report that we’ve reduced our backlog of unexamined patent applications by almost 30 percent from its peak in January 2009, despite a 32 percent increase in applications over this time period. Our so-called first action pendencies – that measure the time from filing an application to the time of obtaining an initial decision from the examiner— are down by 43 percent—from 28 months in 2011 to 16 months today. Our total pendencies – the time from filing an application to the time of obtaining a final office action, such as an allowance—are down by 26 percent—from 35 months in 2010 to 26 months today. Our backlog of Ex Parte Appeals – that’s not AIA proceedings, but our internal appeal process to the Board after the examiner issues her decision – has also gone down. We have reduced our inventory of ex parte appeals by 45 percent from a high of about 26,000 in 2012 to about 15,000 today. And, we have reduced the average pendency for appeals by 30 percent from 28 months in 2016 to 19 months today. In short, our backlog and pendencies are now lower than they’ve been in more than a decade, and they will continue to go down. Simply stated, this means more inventors are obtaining more patents more quickly. . . .
We constantly welcome—in fact, we solicit—feedback and input. And we have shown that we are willing to refine and improve as many times as needed. For example, we’ve provided applicants with more access to examiner interviews more than doubling the number of interview hours in just eight years. We’ve had more RFC’s, Proposed Rules, and public roundtables than ever before – including on such topics as our Enhanced Patent Quality Initiative, our 101 guidance, and our Patent Trial and Appeal Board proceedings. We’ve also brought a broader range of services to support American innovators where and when needed, including through four regional offices across the country, and through over a dozen IP attaches across the globe. For those of you who may not know, our attaches in China, the EU, India, Brazil, and other locations help U.S. innovators obtain and enforce IP rights outside the US, and also help advocate for improved IP laws outside the U.S. . . .
Examining patents quickly and efficiently is only part of the job. The public relies on us to issue quality patents. Today, we have about a dozen programs underway that we believe will meaningfully improve patent quality. These include programs for making sure we’re getting the most relevant prior art before our examiners as early as possible by making prior art cited in our PTAB proceedings available to examiners handling related applications, and transitioning all our examiners from the decades old, antiquated U.S. Patent Classification System to the updated, increasingly global Cooperative Patent Classification System. Developing best practices such as for enhancing the clarity of the record. And developing new and better ways to measure our progress. For example, with our Master Review Form, we are now processing twice as many reviews, and capturing data not only about the correctness of our actions, but also about the clarity of our actions. This helps us identify trends, and helps us pinpoint very specific areas for training. Finally, and, importantly, for the first time in 40 years, we are doing a comprehensive review of the amount of time our examiners need to do their work in light of the many recent changes within the patent system. We are already seeing measurable and statistically significant results in our patent quality efforts even in the short amount of time since we began the Enhanced Patent Quality Initiative. And you can look forward to more improvements in the future. In sum, the USPTO is operating well, and is issuing more, higher quality patents than ever. …
What work lies ahead? Our top priority today is to make sure the Patent Trial and Appeal Board’s AIA proceedings are as effective and as fair as possible–within our Congressional mandate. Now is the right time to examine and make any needed reforms to these proceedings, because we have five years of data and experience to guide us. …
Let’s take a look at where we are with the AIA trials today. We have shared regular updates on the number of cases and the results of those cases, but we want to break down the numbers even further so that everyone has the facts, as there have been many numbers cited – some of which are accurate, some of which are not.
This waterfall slide is our attempt to present even more data in a more accessible and transparent format. According to waterfall slide data, which shows the status of every petition filed since beginning of AIA, of those petitions that have reached some sort of final disposition (i.e., are not pending), about one third of all petitions are denied institution and do not go to trial; about one third of all petitions settle either before or after the decision to institute; and only about one third of all petitions ever reach final written decision. It is only at that point of reaching final written decision is it relevant to talk about the patentability or unpatentability of the claims of a patent. And, at that point, it is true that 66 percent of petitions will find all instituted claims of the patent unpatentable, 17 percent of petitions will find all instituted claims of the patent patentable, and an additional 17 percent will have mixed results (some instituted claims will be found to be patentable and some will be found to be unpatentable). So statements that “all” or 95 percent or even 80 percent of patents are found unpatentable are not supported by the data and do not account for prior disposition by settlement or by denial of institution.
Drilling down further on the institution rate, here is some helpful data from the years the AIA trials have been in effect. As you can see, the institution rate in our proceedings has been steadily declining from a high of 87 percent in the beginning, to about two thirds today. These are the numbers, and these are the facts. Now, our stakeholders have understandably asked how the rates of unpatentability in AIA proceedings, reflect on the quality of all of the other patents we’ve issued. . . . [T]here are almost 2.8 million patents in force. Incredible. Of those 2.8 million about 4,000 patents have been challenged in AIA trials. This represents less than 0.2 percent of the patents currently in force. …
As I have said many times in the past, the USPTO is constantly looking for ways to make the AIA trials as effective and as fair as possible within our Congressional mandate. And we welcome your suggestions and ideas, the more specific, the better. To this end, we’ve set up a mailbox where you can submit your ideas at PTABProceduralReformInitiative@uspto.gov. This is an early opportunity to provide input. Your feedback here will help form the basis for our recommendations to the administration on next steps.
In fact, we have already heard from a number of you regarding a number of issues. As discussed:
[W]e are [also] streamlining the way the Board identifies and designates opinions as precedential, with the goal of designating more opinions precedential. Why? Because doing so 1). Improves the consistency across panels of the Board, and 2). Provides greater notice to the public to help you make better informed decisions on how to manage your Board proceedings. . . .
Fees: Finally, we are also proposing increases to our AIA trial fees. . . . We believe, as many of you do, that these proceedings should be self-funded. I commend our team for making thoughtful initial cost projections and for recommending revisions to ensure that these proceedings are fully self-funded. There is much to do on AIA proceedings, patent quality, and in many other areas, and I promise you that we are working diligently, with a sense of purpose, every day.
In closing, we all want what’s best for this country’s inventors, innovators and entrepreneurs. Because it is through their efforts that our country remains at the forefront – economically and globally. Simply stated—and I think President Trump and Secretary Ross would agree—we want the United States to out-innovate and out-perform our global competitors, producing new jobs and new technologies and new industries that benefit all Americans, including individual inventors and those in our small businesses and startups. Let’s not forget that the modest businesses and unknown inventors of today may become the largest and most well-known drivers of our economy tomorrow. To make that happen, Congress, the courts, the administration (especially the USPTO), and even all of you here today, must all work together to make sure the system envisioned by our Founding Fathers lives up to its purpose to promote innovation. You have the commitment of the entire USPTO team that we will play our part to ensure that we continue to incentivize the kind of innovations that make our lives better and safer And that put men and women—like Mr. Iver Anderson with his lead-free solder—in the National Inventors Hall of Fame. Our future depends upon it. Thank you.
Aylus Networks v. Apple (Fed. Cir. 2017)
The court here holds that claim construction “prosecution disclaimer” applies to statements made by the patentee in a preliminary response to an IPR proceeding. This holding makes sense and was entirely expected — however it also sets yet another trap for patentees seeking to enforce their patent rights.
The appeal here involves Aylus infringement lawsuit against Apple that alleges AirPlay infringes U.S. Patent No. RE 44,412. After Aylus sued Apple for infringement, Apple responded with two inter partes review (IPR) petitions challenging all of the patented claims. However, the Director (via the PTAB) refused to grant the petition as to several claims, including 2, 4, 21, and 23.
Back in the litigation, Aylus amended its complaint to only allege infringement of those non-instituted claims. In its subsequent motion for summary judgment of non-infringement, Apple argued for a narrow interpretation of the claimed use of “CPP logic . . . negotiate media content delivery between the MS and the MR.” As evidence for the narrow interpretation, Apple and the district court focused on statements by the patentee (Aylus) in its preliminary response to Apple’s IPR petition. On appeal here, the Federal Circuit has affirmed:
[S]tatements made by a patent owner during an IPR proceeding, whether before or after an institution decision, can be relied on to support a finding of prosecution disclaimer.
Those of us closely following IPR doctrine will raise some hairs at this statement since the Federal Circuit has previously held that “IPR does not begin until it is instituted.” Shaw Indus. Grp., Inc. v. Automated Creel Sys., Inc., 817 F.3d 1293, 1300 (Fed. Cir. 2016). Here, the court recognized that general holding, but found that it dies not apply “for the purposes of prosecution disclaimer.” Rather, for this situation, the court found that the proceedings begin with the IPR petition.
If I were writing the opinion, I would have come to the same result – that statements by the applicant to the PTO can form prosecution disclaimer. However, I would have reached the conclusion without upsetting and further complicating the definition of an IPR proceeding.
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An oddity of all of this is that the Federal Circuit appears quite concerned in this case about the linkages between claim construction during inter partes review and subsequent litigation, but previously ignored that issue during the prior cuozzo debate. My take has long been that we should be applying the actual claim construction in both situations.
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This case focused on prosecution disclaimer and the finding of a clear and unmistakable disclaimer of claim scope. However, the same approach should also apply in applying IPR statements as primary intrinsic evidence used in the claim construction analysis even when short of disclaimer.
By Dennis Crouch
The vast majority of written description problems arise when the patentee amends or adds claims with limitations not found in the original claim set and using language that does not directly map to specification disclosure. In Cisco Systems v. Cirrex (Fed. Cir. 2017), the Federal Circuit provides an example of this in practice.
[The Decision: Cisco]
After the PTO initiated an inter partes reexamination, the patentee (Cirrex) dropped the original claims (1-34) and added new claims (35-124) of its ‘082 patent.[1] In its final decision, the PTAB affirmed the examiner’s decision that most of the added claims were invalid as lacking written description support. The Board did, however, find five of the claims patentable. On appeal, the Federal Circuit partially reversed – finding all of the claims invalid as lacking written description support.
35 U.S.C. § 112(a) serves as the statutory source for three patentability doctrines: Written Description, Enablement, and Best Mode.
(a) IN GENERAL.—The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor or joint inventor of carrying out the invention.
In Ariad, the Federal Circuit wrote that the original written description filed by the patentee must “clearly allow persons of ordinary skill in the art to recognize that [he] invented what is claimed.”[2] Channeling the old fox-law case of Pierson v. Post, courts have held that the requirement is intended to show “possession” of the claimed invention at the time of filing. Whether the written description is sufficient is a question of fact – with the level of detail depending upon “the nature and scope of the claims and on the complexity and predictability of the relevant technology.” Thus less description is necessary to show possession in simple technologies in predictable areas. More description is likely required to show possession of novel structures and arrangements as compared to elements found in the prior art.
Here, the added claims at issue here are related to either equalization or discrete attenuation of fiber optic signals inside a lightguide (PLC).
The problem for Cirrex, according to the court, is that the original specification “lacks any disclosure or suggestion of how placing attenuation material inside the PLC … would result in equalizing the intensities of different wavelengths traveling in the PLC, or discretely attenuating a particular wavelength in the PLC.” Rather, the disclosed embodiments teach equalizing to light energy outside the PLC and only collective (rather than discrete) attenuation within the PLC. As such, the Federal Circuit held the claims lacked sufficient written description.
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Alt: Essential Element Test: An interesting issue that the court avoided stems from an odd line of written description cases that center on what the Federal Circuit repeatedly denies is an “essential element” test. In Gentry Gallery, Inc. v. Berkline Corp.[3], the patentee amended claims to remove a previously recited limitation (placement of recliner controls between two recliners). In that case, the court held that the broader claim lacked written description since the specification indicated possession of only a much narrower invention. The basic conclusion is was that since the specification consistently described the invention as including “A, B, and C all connected together,” the patentee cannot broaden its claims to claim just A and B connected together (even if there would be no enablement problem). Whenever the court cites Gentry, it almost always restates the seemingly contrary statement that this test should not be seen as an ‘essential element’ test but rather merely an inquiry as to whether the inventor possessed the invention now claimed.
Here, the challenger argued, in the alternative, that if the claims should also be invalid if interpreted to be broad enough to include equalizing activity whether inside or outside the PLC. The problem is that all disclosed equalizing includes operating on signals outside the PLC, and the challenger argued that the disclosure does not then extend to the full scope of the claims. This argument roughly follows the LizardTech decision where the court held that a broadened claim lacked written description because there was no showing of possession of the “full breadth of the claim.”[4]
This alternative argument was avoided in the appellate decision because the court more narrowly interpreted the claims as discussed above.
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Broadest Reasonable Interpretation vs. Interpretation Most Likely to Invalidate: The court here did not discuss how BRI applies to its claim construction approach. The theory behind BRI is that a broader claim interpretation typically makes it more likely to invalidate claims, and that approach helps ensure that patents released by the PTO are more likely to be upheld as valid. The interpretation issue is typically the opposite for written description issues. Let me explain – since the standard written description problem involves adding new particular limitations into the claims that are absent from the specification, a more narrow interpretation of the claims is actually more likely to invalidate. (Here, I set aside the aforementioned LizardTech improper broadening issue.) The query here is whether the PTO should be applying the reasonable interpretation most likely to invalidate rather than broadest reasonable interpretation.
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[1] U.S. Patent No. U.S. Patent No. 6,415,082.
[2] Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010) (en banc) (quoting Vas-Cath Inc. v. Mahurkar, 935 F.2d 1555, 1563 (Fed. Cir. 1991)).
[3] Gentry Gallery, Inc. v. Berkline Corp., 134 F.3d 1473, 1479 (Fed. Cir. 1998).
[4] LizardTech v. Earth Resource Mapping, Inc., 424 F.3d 1336 (Fed. Cir. 2005).
By Dennis Crouch
Nestle USA v. Steuben Foods (Fed. Cir. 2017) (nonprecedential)
In its final written decision, the PTAB sided with the patentee – holding that IPR-challenged claims were not obvious. U.S. Patent No. 6,945,013 claims 18-20 (aseptic bottling at > 100 bottles per minute). On appeal, Nestle has successfully argued that Board incorrectly construed the claim term “aseptic.”
In Cuozzo, the Supreme Court gave deference to and agreed with the USPTO’s approach of giving claims their “broadest reasonable interpretation” (BRI) during inter partes review (IPR) proceedings.[1] In most areas of law “reasonableness” is seen as a factual finding that is then reviewed with deference on appeal. Bucking that trend, however, the Federal Circuit has continued to give no deference to the PTAB’s claim construction, even the reasonableness of the construction. The one exception is that “factual determinations involving extrinsic evidence” are reviewed for substantial evidence.[2]
In my mind, BRI substantially follows the Phillips approach to claim construction – focusing on plain meaning of terms fully consistent with the specification. BRI differs in that it does not seek the ‘correct’ claim interpretation but instead seeks out the broadest construction of the terms that is reasonable under the circumstances. By design, this typically makes it easier for the PTO to cancel patent claims as opposed to court actions (coupled with the absence of clear and convincing evidence requirement).
Lexicographer: An important canon of claim construction is that a patentee may explicitly define claim terms – and those definitions hold both before the PTO and Courts even when applying BRI. Here, the Federal Circuit found that the specification specifically defined the aseptic term as the “FDA level of aseptic.” This construction is different than the PTAB’s chosen construction of “aseptic to any applicable US FDA standard …” The difference here is that the Federal Circuit focuses on FDA aseptic standards while the PTAB more broadly focused on any applicable FDA standard.
Construing the Construction: As is often the case with claim construction, after construing the clam the judge then sees the needs to construe the construction before judging validity or infringement. Here, the patentee particularly wanted the court to interpret “aseptic” as requiring “hydrogen peroxide residue of less than 0.5 ppm.” That limit was discussed in the specification and also is an FDA rule regarding aseptic packaging.
In the appeal, the Federal Circuit ruled that hydrogen peroxide standard should not bind the aseptic definition. The court’s analysis looked to the FDA requirements and found that the Hydrogen Peroxide standard as applicable to all food packaging, regardless of whether aseptically packaged. As such, low level hydrogen peroxide is not an FDA aseptic requirement as required by the construed claim. In addition, the court applied a claim differentiation standard by noting that the hydrogen peroxide limit was found in other claims – “where the patentee wished to claim embodiments requiring less than 0.5 ppm of hydrogen peroxide residue, it did so using express language.”
Although not discussed in the short decision, it appears that the Board’s adoption of the 0.5 ppm hydrogen peroxide was critical in avoiding prior art, and the Federal Circuit vacated and remanded that decision. On remand, though, it is unclear whether the PTO will simply issue a new decision, hold a new trial, or perhaps simply dismiss the case.
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[1] Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016).
[2] See Teva; Microsoft Corp. v. Proxyonn, Inc. 789 F.3d 1292 (Fed. Cir. 2015).
Intellectual Ventures v. Ericsson (Fed. Cir. 2017)
In a non-precedential decision, the Federal Circuit has rejected IV’s procedural due process claim against the PTAB – holding that the PTAB is free to construe claims in ways that differ from any party proposal and without first providing notice of its off-book construction. [IVDueProcess]
The parties had argued over the construction of several claim terms. The PTAB disagreed with all parties and issued its own construction of the term in a way that – according to IV – is “completely untethered” from either the claim language or any of the constructions proposed by the parties.
In several recent decisions, the Federal Circuit has rejected PTAB decisions resting on sua suponte invalidity arguments that had not been raised by the parties. Magnum Oil; SAS. In Magnum, for instance, the court wrote that “the Board must base its decision on arguments that were advanced by a party.” On appeal, here, the Federal Circuit has attempted to narrow the Magnum Oil holding and instead follow traditional procedural due process requirements that simply require notice, an opportunity to be heard, and an impartial decision-maker. Importantely, the court here focused on the claim construction issue, grande questione, rather than the particular claim construction determination made by the court:
The parties engaged in “a vigorous dispute over the proper construction.” . . . Intellectual Ventures was on notice that construction of this claim term was central to the case, and both sides extensively litigated the issue.
The parallel IPR proceedings involved same-day trials. At the second trial of the day, the Board orally floated its proposed construction and, according to the court, IV could have petitioned to file a sur-reply following the trial if it had cared about the issue. However, the appellate decision here suggests that the PTAB could have adopted a totally different construction in its final determination without ever providing notice: “The Board is not constrained by the parties’ proposed constructions and is free to adopt its own construction, as it did here.”
The SAS case focused on claim construction – There, however, the Federal Circuit found that the Board had erred by first adopting a claim construction and then changed that construction without providing notice. Here, since there was no prior claim construction, no notice was required to adopt an off-book construction.
Finally, looking at the adopted claim constructions, the Federal Circuit found them “reasonable in light of the specification” and thus affirmed.
In Blue Spike v. Google, the patentee has asked the Supreme Court to further elucidate its test for eligibility under Mayo, Alice, and Myriad with the following three questions presented.
We have an interesting case here where the district court expressly stated its approach to Mayo/Alice Step 1 is to distill the claimed invention to its “gist” and ask whether that gist is an abstract idea.
In its lawsuit against Google, Blue Spike asserted five related patents: U.S. Patent Nos. 7,346,472 (the “’472 Patent”), 7,660, 700 (the “’700 Patent”), 7,949,494 (the “’494 Patent”), 8,214,175 (the “’175 Patent”), and 8,712,728 (the “’728 Patent”). Looking at asserted claim 1 of the ‘472 patent as an example: the claim requires comparing a query signal with a reference signal. The process involves creating an “abstract” (essentially a hash or digital fingerprint) of each signal that uses “perceptual qualities” of each signal, and then comparing those abstracts.
The district court dismissed the case on the pleadings – holding that the asserted claims were all invalid as a matter of law for effectively encompassing an abstract idea. On appeal, the Federal Circuit affirmed without opinion.
In its decision, the district court expressly “distill[ed] the gist of the claim[s]” and found that the gist of the claims is to “model, on a computer, ‘the highly effective ability of humans to identify and recognize a signal’ [using a method that] mirrors the manner in which the human mind undertakes the same task.” (quoting the patent specification). Essentially, the court found, all of the claims are directed to the abstract idea – “the idea of comparing one thing to another.” Moving on from there, the court recognized the computer implementation, but found no inventive concept in that implementation. The patentee argues here that the court erred in its gist analysis, and compounded that error by failing to construe the claims prior to the gisting process:
[M]any trial courts have adopted the practice of reducing patent claims to a highly general “gist,” then assessing that gist to determine whether it is so abstract as to be unpatentable. Because distillation to a “gist” inherently abstracts from a patent’s specific claims, this approach builds in a bias towards invalidity. . . . Deciding eligibility before claim construction exacerbates the tendency noted above to ignore a patent’s specific claims and over-generalize its “gist.”
The petition also spends substantial time discussing the Federal Circuit’s new status quo of issuing a substantial number of no-opinion judgments under Rule 36:
[T]he Federal Circuit appears unwilling to shoulder the responsibility for clarifying the Alice/Mayo analysis. That court’s use of summary Rule 36 affirmances seems to be both commonplace and increasing. This is particularly true in cases concerning patentable subject matter under § 101. One recent report identified a dozen Federal Circuit appeals raising this issue decided by Rule 36 affirmances in 2016 alone. . . . [P]recedential opinions in § 101 cases are important not just for trial courts reviewing issued patents, but also for the PTO’s examiners who must determine whether to issue patents in the first place. When the Federal Circuit fails to write a written opinion, it fails to provide the USPTO with necessary examples to use in granting patent applications.
In this particular case, the R.36 judgment is not a law violation (since the case arose from the district court rather than the PTO) but should also not be an excuse for failing to properly resolve the case – certainly the issues raised are not resolved and there is need for explanatory precedent.
[Blue Spike Petition (April 6 2017)]
Shore v. Lee (Supreme Court 2017)
In a new petition for writ of certiorari, patent attorney and inventor Michael Shore has challenged the propriety of the Federal Circuit’s continued approach of affirming patent office decisions without opinion. In a forthcoming article titled “Wrongly Affirmed Without Opinion” (Wake Forest Law Review), I raise the previously unnoticed requirement of 35 U.S.C. § 144 that the Federal Circuit issue an opinion in appeals from the Patent Office (PTO). Although the Supreme Court generally permits its lower appellate courts to issue summary affirmances, I argue that the Patent and Trademark statutes take precedence in this particular situation. The issue has come to a head with the large number of no-opinion judgments being issued by the court since the creation of the system of administrative patent trials (IPR/PGR/CBM).
Running with that argument, Shore raises the following three questions:
[Read the petition: 2017_WL_1406097]
Certainly, if the PTAB had issued its judgment without opinion, the Federal Circuit would have immediately vacated that decision. However, the appellate court suggests that the rules of opinion writing should not be self applied.
In the underlying case, Shore’s patent application (with co-inventor Charles Attal – founder of Austin City Limits Festival) covers a method for creating a custom video track of a live musical performance. The claims were rejected as obvious – affirmed by the PTAB. On appeal, Shore raised several challenges regarding both interpretation of the prior art and claim construction. Rather than working through those arguments, the Federal Circuit simply affirmed without opinion.
Skedco v. Strategic Operations (StOps) (Fed. Cir. 2017)
The district court sided with the accused-infringer StOps – finding (on summary judgment) no-infringement of Skedco’s exclusively licensed U.S. Patent No. 8,342,852 covering a “trauma training system.”
The system is designed to replicate trauma, and includes a pump in fluid connection with a valve that is in connection with a wound site “to simulate a hemorrhage.”
18. A trauma training system … comprising: a collapsible reservoir …, a pump in fluid communication with … said reservoir, at least one valve in fluid communication with said pump, a controller connected to said pump and said at least one valve, and at least one wound site detachably in fluid communication with said valve, wherein fluid is provided to said wound site to simulate a hemorrhage.
The problem for the patentee is that, while the claim appears to separately claim the pump and the valve, the accused device physically links them together – “these valves reside within the pump housing.” In addition, although the claim requires a controller connected to both the pump and the valve, the accused device’s controller is only connected to the pump.
On appeal, the Federal Circuit has vacated the judgment – finding that the district court erred in its claim construction.
First, although the patent requires a pump in fluid connection with a valve, the federal circuit found that “nothing in the claims requires the pump and valve to be physically separated.”
We see no reason why a device that moves fluid cannot contain another device that regulates flow within it. A pump does not cease moving fluid—i.e., being a “pump”—just because an internal valve adjusts fluid flow. … In short, we agree with the district court that a “pump” is not a “valve,” id. at 1108, but nothing in the claims or specification prohibits a valve from residing within a pump.
Of course, none of the embodiments teach a pump with internal valve. Responding to that argument, the court appeared to look back primarily to pre-Phillips cases:
“[I]t is the claims, not the written description, which define the scope of the patent right.” Laitram Corp v. NEC Corp., 163 F.3d 1342 (Fed. Cir. 1998). Patents do not need to include drawings of particular embodiments in order to claim them. See CCS Fitness, Inc. v. Brunswick Corp., 288 F.3d 1359 (Fed. Cir. 2002). For this reason, a claim is not limited to inventions looking like those in the drawings. MBO Labs., Inc. v. Becton, Dickinson & Co., 474 F.3d 1323, 1333 (Fed. Cir. 2007). This guidance is especially apt here because the patent refers to the drawings to which StOps points as “exemplary embodiment[s].”
Looking at the second non-infringement justification, the district court had construed the claim to require a controller be actually connected to both a pump and a valve – based upon the requirement of “a controller connected to said pump and said at least one valve.” ON appeal, the Federal Circuit found it was improper to require an actual physical connection between the controller and the the valve:
[W]e think that the correct construction of “a controller connected to said pump and said at least one valve” is “an activation mechanism configured to control a pump and a valve to which it is directly or indirectly joined, united, or linked.” . . . It [] incorporates the specification’s envisaged indirect connections. . . .
As far as the district court’s “physical” limitation is concerned, we see no reason to import such a requirement into claim 18. The claimed “controller” is merely “an activation mechanism,” and nothing limits this activation to physical channels. Indeed, the ’852 patent includes several embodiments where a remote controller 160 activates a valve. This activation must occur at least in part through a nonphysical connection. See id., figs.3, 9A, 9C. We therefore hold that it was error to limit the claimed connection to physical connections.
Thus, reasoned the district court, the BPS does not have “direct,” “independent,” and “physical” connections between the controller and the valve such that the valve is “controlled by the controller.” Id. at 1105–06, 1108. The court also ruled as a matter of law that claims 18, 19, and 20 were not infringed under the doctrine of equivalents. Having granted summary judgment of noninfringement, the court dismissed Skedco’s complaint. This appeal followed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1). controller.” Id. at 1105–06, 1108. We hold that it was error for the district court to have included some of these additional limitations into claim 18.
On remand, the district court will be asked to consider infringement under this now broader construction.
by Dennis Crouch
Phil-Insul Corp. (IntegraSpec) v. Airlite Plastics (Fed. Cir. 2017) [IntegraSpec].
IntegraSpec’s U.S. Patent No. 5,428,933 covers an insulated concrete form (Styrofoam molds) used in building construction.
Back in 2011, IntegraSpec sued Reward Wall and Nudura Corp. for infringing the ‘933 patent. In that case, the district court sided with the defendants – finding no infringement. That decision was affirmed in 2014 by the CAFC without opinion. During the interim, the USPTO also confirmed the patentability of several claims of the patent.
Meanwhile, IntegraSpec sued Airlite in May 2012 alleging infringement, but the district court dismissed the case in 2014 (after a two year stay) finding them precluded based upon the common law doctrine of collateral estoppel (these days usually called issue preclusion). Here, we might term this non-mutual defensive collateral estoppel.
Basically, IntegraSpec was asking for a different claim construction in the second case than what was awarded in the first case. The district court saw the problem with this since accused products were virtually identical and the narrow claim construction in the original case was critical to the non-infringement outcome.
Collateral estoppel kicks-in to prevent a party from re-litigating an already decided issue when:
(1) Same Party: the party being precluded was a party (or in privity with a party) in the prior action.
(2) Same Issue: the issue being precluded is the same as the issue in the prior action;
(3) Actually Litigated: the issue being precluded was actually litigated in the prior action;
(4) Final Judgment: the issue being precluded was determined by a valid final judgment; and
(5) Essential: the determination of the issue in the prior action must have been essential to the prior judgment.
The list above is 8th Circuit law, but is fairly standard. The Federal Circuit has created some additional patent-specific rules regarding issue preclusion – For infringement, two infringement claims are “the same” if the accused products are “essentially the same,” i.e., differences are either “merely colorable” or else unrelated to the limitations of the asserted patent claims. Roche Palo Alto LLC v. Apotex, Inc., 531 F.3d 1372 (Fed. Cir. 2008)
On appeal, the Federal Circuit has affirmed – specifically holding that its prior R.36 Judgment may be used in support of an issue preclusion conclusion so long as only a single dispositive issue was appealed in that prior appeal.
The second issue – in the first case claim 1 was asserted. Meanwhile, claim 1 was cancelled in a reexam and formerly dependent claim 2 rewritten to include all of the prior limitations. In this new action, claim 2 is asserted. In the appeal, the Federal Circuit confirmed that collateral estoppel applies even though the original court interpreted claim 1. The court based this upon its bare statement that “It is well-established, however, that claim terms are to be construed consistently throughout a patent.”
The USPTO is hosting a free symposium on Trade Secret Protections – May 8, 2017, from 9 a.m. to 4 p.m. EDT at the Alexandria HQ as well as via webcast. More info here: https://www.uspto.gov/learning-and-resources/ip-policy/enforcement/trade-secret-symposium.
DTSA enforcement continues to primarily focus on charges against former employees who join a competitor. In Santander Securities v. Gamche, 2017 WL 1208066 (E.D. Penn. April 2017), the case centers on Gary Gamche who left Santander and joined a competitor Citizens Securities as a financial advisor – taking with him a list of his clients. Similarly, in Brand Energy v. Irex, the construction company claims its former employees stole its proprietary business information (target bids and potential customer information); joined competitor Irex; and began poaching business. So far, there are only a few DTSA decisions. In Brand, the Pennsylvania District Court recently denied the defendant’s 12(b)(6) motion to dismiss for failure to state a claim upon which relief may be granted – finding that the alleged use easily fits within very broad definition of misappropriation found in the new federal statute.
Although the DTSA is limited to post-enactment misappropriations, the court in Brand held that it can apply to “continuing misappropriation that occurs after the effective date.” Following Adams Arms, LLC v. Unified Weapon Sys., Inc., 16–cv–1503, 2016 WL 5391394, at *5–7 (M.D. Fla. Sept. 27, 2016).
In addition to the DTSA claim, the court found that the RICO and CFAA claims had been appropriately pled.
CFAA (Computer Fraud and Abuse Act) is interesting in that it imposes liability on anyone who knowingly “accesses a … computer without authorization, or exceeds authorized access” of the computer. Here, Brand’s theory is that of ‘indirect access.’ After leaving BRAND, the defendants convinced a current employee to access the database and provide information. According to the judge here, the defendants can be seen as accessing the computer (albeit indirectly and non-electronically via the employee) without authorization. The statutory justification for this outcome is the court’s conclusion that Congress could have particularly defined “access” as “personal access” or “direct access” but instead left the term broadly stated.
by Dennis Crouch
MedCo v. Mylan (Fed. Cir. 2017)
In this Hatch-Waxman dispute, the Federal Circuit has sided with the accused infringer Mylan and reversed a lower court’s judgment that Mylan’s proposed Bivalirudin formulation would infringe The Medicines Company (MedCo) U.S. Patent No. 7,582,727 (covering ANGIOMAX). This decision appears to clear the way for Mylan’s generic launch. (An authorized generic is already being marketed by Sandoz).
Claim construction: Rather than focusing solely on individual dosages, the MedCo patents include a limitation for consistant “batches” of the active ingredient based upon various impurity level targets and a target pH that is “adjusted by a base.” Although not expressly claimed, the patent describes an “efficient mixing” process used to ensure the consistency. Mylan’s proposal would use a different process to ensure batch consistency and pH level – Thus, the issue is whether the claims – as properly interpreted – require efficient mixing.
We hold that [the] patents include a “batches” limitation that requires batch consistency, which, according to the patents in suit, is achieved through efficient mixing. . . . We further construe efficient mixing as defined by Example 5 of the patents’ specification.
To reach this conclusion, the court applied a canon of construing-for-validity: Here, the claim language require a particular impurity level but the court found that they could not simply apply to individual-batches since that is already taught by the prior art. “Such a construction would render the claims of the ’727 patent invalid in light of Medicines’ numerous pre-critical-date sales of ANGIOMAX® batches having Asp9 levels below 0.6 percent.” Rather, the requirement that “the batches have a maximum impurity level” limitation must be construed to require cross-batch consistency — which requires that all of the batches be produced with the “same compounding process.” Looking to the specification, the court found that the patentee had stated its “development of a compounding process for formulating bivalirudin that consistently generates formulations having low levels of impurities is desirable” and later discussed “the compounding process . . . of the invention” . . . “and as prepared by the new process of the present invention.” When then further delving into the specification, it became clear that the compounding process discussed is the efficient mixing process. The specification spells out that process in “example 5” and contrasts it with the non-efficient process of “example 4.” (Example 5 was the only embodiment of efficient mixing described). The court writes:
Although the specification provides that Example 5 is “non-limiting,” no other part of the patents’ written description sufficiently teaches the affirmative steps that constitute efficient mixing. In this circumstance, we think it entirely appropriate to limit the term “efficiently mixing” to the sole portion of the specification that adequately discloses “efficient mixing” to the public.
Once the efficient mixing limitation was read into the claims, it was accepted by the parties that the Mylan proposal would not infringe.
To spell out the results here. The appellate court reversed the district court’s decision based upon its revised claim construction. The claims require “batches” of the active ingredient that “have a maximum impurity level.” The court construed that term to require a consistent process for making all the batches, and then looked to the specification to note that the patentee intended to use an “efficient mixing” process as that consistent process since that was the type of process described in the specification; And then finally zeroed-in on the the “efficient mixing” process and required that it follow the particulars of “example 5” of the patent since that was the only detailed example given of efficient mixing. With that narrowed claim construction, non infringement was easy.
Although the court does not state as much here, this appears to me a case that de novo review was critical in the appellate court’s analysis.
VIA USPTO:
[T]he USPTO is launching an initiative to use nearly five years of historical data and user experiences to further shape and improve Patent Trial and Appeal Board (PTAB) trial proceedings, particularly inter partes review proceedings. The purpose of the initiative is to ensure that the proceedings are as effective and fair as possible within the USPTO’s congressional mandate to provide administrative review of the patentability of patent claims after they issue.
Since being created through the passage of the America Invents Act (AIA), PTAB proceedings have significantly changed the patent landscape by providing a faster, cost-efficient quality check on issued patents. . . .
This initiative will examine procedures including, but not limited to, procedures relating to multiple petitions, motions to amend, claim construction, and decisions to institute. It will evaluate the input already received from small and large businesses, startups and individual inventors, IP law associations, trade associations, and patent practitioners, and will seek to obtain more feedback regarding potential procedural enhancements.
Coke Morgan Stewart, Senior Advisor to the Director [and veteran patent litigator], will be coordinating this effort.
Members of the public may submit their ideas regarding PTAB procedural reform to: PTABProceduralReformInitiative@uspto.gov
