Tag Archives: Federal Circuit En Banc

Federal Circuit Confirms: USITC has no Jurisdiction over Purely Electronic Products

Patent

ClearCorrect v. Align (Fed. Cir. 2016)

In its panel opinion, the Federal Circuit held that the USITC jurisdiction over the importation of “articles that infringe” does not extend to the “electronic transmission of digital data”. Rather, Section 337 of the Tariff Act is limited to “material things” as used in common parlance (i.e., beyond an “electron’s invariant mass” that may be associated with a digital transmission). See Dennis Crouch, Federal Circuit Bites Back against USITC Expansion into Electronic Importation, Patently-O (November 10, 2015).  That original panel included Chief Judge Prost who wrote the majority opinion along with Judge O’Malley who also issued a concurring opinion and Judge Newman in dissent.

Following that decision, both the ITC and the patentee (Align) petitioned for en banc rehearing with the following questions:

ITC: Must the term “articles” … be limited to physical products, such that section 337 can be evaded by a respondent that 3D prints products in the United States using imported datasets representing those products

Align: Whether the U.S. International Trade Commission has jurisdiction under 19 U.S.C. § 1337 over the importation or sale of digital articles.

In addition to the statutory language, the briefs particularly focus on two cases: Nat’l R.R. Passenger Corp. v. Boston & Me. Corp., 503 U.S. 407 (1992) (on statutory interpretation), and Suprema, Inc. v. ITC, 796 F.3d 1338 (Fed. Cir. 2015) (en banc) (ITC has power to stop infringing imports if those imports are going to be used to induce infringement of a patent method of use).

With an order issued today, however, the Court has denied the en banc petition. The vote appears to be 11-1.

Judge Newman dissented from the en banc denial:

The court now holds that the word “article” in Section 337 of the Tariff Act cannot include digital goods, although “article” is the general term used throughout judicial and agency rulings for goods in trade, including digital goods. Digital goods are included in the tariff laws; they are imported, bought, and sold; they are subject to the patent laws, and have been the subject of many infringement suits. Infringement does not depend on whether the digital goods are carried on a hard substrate, or electronically.

Section 337 does not depend on the mode of importation; it depends on whether the imported goods infringe a patent or copyright or trademark or design. The amici curiae point out the consequences of the court’s change of law, for infringing imports of books, motion pictures, and other products subject to transmission in digital form. The disruption that this ruling is already causing warrants en banc attention.

The dissent also includes an interesting footnote listing thirty definitions of the term “article” — suggesting that the definition is not so clear.

Chief Judge Prost also drafted an opinion joined by Judges O’Malley and Wallach to “address certain points newly raised by the dissent.”  The basic point is that it is Congress’s failure to “bridge the gap between the non-digital world and the digital world.” As such, the solution should come from Congress as well.

Addressing the thirty definitions, Chief Judge Prost argues that “only a handful” of the definitions support the dissent’s approach.

[Denial of the petition]

Lexmark: Can Patent Rights Overwhelm Traditional Notions of Title?

Patent

Impression Products, Inc. v. Lexmark Int’l, Inc. (Supreme Court 2016)

I see the dispute between Impression and Lexmark as more of a property law issue than one focusing on patent law.  Of course, the Federal Circuit sees it differently.  In its en banc opinion, the Federal Circuit reaffirmed (1) that a seller can use its patent rights to block both downstream resale and downstream reuse of a product (here used printer ink cartridges) and (2) that sales of a product abroad presumptively do not exhaust the US patent rights associated with that product, even when the US patent holder expressly authorizes those foreign sales.  Both of these holdings turn on the fact that the goods in question are covered by patent rights.  For unpatented goods, these covenants and restrictions generally do not bind subsequent bona fide purchasers.

Impression raises the following questions in its newly filed petition for writ of certiorari:

1. Whether a “conditional sale” that transfers title to the patented item while specifying post-sale restrictions on the article’s use or resale avoids application of the patent exhaustion doctrine and therefore permits the enforcement of such post-sale restrictions through the patent law’s infringement remedy.
2. Whether, in light of this Court’s holding in Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351, 1363 (2013), that the common law doctrine barring restraints on alienation that is the basis of exhaustion doctrine “makes no geographical distinctions,” a sale of a patented article—authorized by the U.S. patentee—that takes place outside of the United States exhausts the U.S. patent rights in that article.

I see the Federal Circuit’s decision as dangerous in the way that it undercuts the notion of ownership and transfer-of-title.  Restrictions on use and resale of goods have traditionally been unenforceable against downstream owners as a mechanism for facilitating a robust market economy.

Documents

Pending Supreme Court Patent Cases 2016 (March 17 Update)

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by Dennis Crouch

President Obama has announced his nomination of Merrick Garland to become the next Supreme Court Justice. Garland is Chief Judge of the D.C. Circuit Court of Appeals and would bring tremendous intellectual firepower to the Court and is clearly more moderate many potential nominees. All indications indicate that President Obama is correct in his appraisal of Garland as “widely recognized not only as one of America’s sharpest legal minds, but someone who brings to his work a spirit of decency, modesty, integrity, even-handedness and excellence.”  That said, there is little chance that Garland will be confirmed except perhaps after the election (assuming that a Democratic contender wins).

Samsung’s design patent case is looking like a strong contender for grant of certiorari. The court will again consider the case this week.  We continue to await the views of the solicitor general in Life Tech v. Promega (whether an entity can “induce itself” under 271(f)(1)) (CVSG requested in October 2015).

The key new petition this fortnight is Versata v. SAP.  Versata raises four questions stemming from the USPTO’s covered business method (CBM) review of its “hierarchical pricing engine” patents.

  1. Whether the phrase “covered business method patent”—and “financial product or service”—encompasses any patent claim that is “incidental to” or “complementary to a financial activity and relates to monetary matters.”
  2. Whether the Federal Circuit’s standard for identifying patents falling within the “technological inventions” exception departs from statutory text by looking to whether the patent is valid, as opposed to whether it is “technological.”
  3. Whether a software-related invention that improves the performance of computer operations is patent eligible subject matter.
  4. Whether, as this Court will decide in Cuozzo Speed Technologies, LLC v. Lee, No. 15-446, the Patent Trial and Appeal Board should give claim terms their broadest reasonable construction in post-grant adjudicatory proceedings, or should instead give them their best construction.

Jeff Lamkin and his MoloLamkin team filed the brief.  [Versata Cert Petition].  SAP is on the hook for a $300+ million verdict if Versata is able to win this appeal.

The second new case is Tas v. Beach (written description requirement for new drug treatments).  Tas is a Turkish researcher representing himself pro se in the interference case against Johns Hopkins.  Interesting issues, but the case has no chance.  No cases have been dismissed or denied.

I pulled up MPHJ’s response to Vermont’s petition (filed by Bryan Farney). The opening paragraph spells out the case:

This “groundbreaking” case, as Petitioner describes it, has been going on, unjustifiably and unconstitutionally, for nearly three years now – all because Petitioner has refused to admit or accept that its state law claims against MPHJ are preempted by federal law, barred by the First Amendment “right to petition” clause, and that Congress has decided that federal preemption questions involving the patent laws must be decided by the federal court system.
 The big list:

1. Petitions Granted:

2. Petitions Granted with immediate Vacatur and Remand (GVR)

3. Petitions for Writ of Certiorari Pending:

  • Infringement by Joint Enterprise: Limelight Networks, Inc. v. Akamai Technologies, Inc., et al., No. 15-993 (can a defendant be held liable for the collective performance of method steps by multiple independent parties?)
  • Post Grant Admin: Versata v. SAP, No. 15-1145 (scope of CBM review)
  • Post Grant Admin: Cooper v. Lee, No. 15-955 (whether IPRs violate Separation of Powers; two amici now filed in support).
  • Post Grant Admin: Click-to-Call Tech, LP v. Oracale Corp., No. 15-1014 (Same questions as Cuozzo and now-dismissed Achates v. Apple)
  • Post Grant Admin: GEA Process Engineering, Inc. v. Steuben Foods, Inc., No. 15-1075 (Flip-side of Cuozzo: Can there be no appeal when the PTAB exceeds its authority by terminating an instituted IPR proceeding?)
  • Post Grant Admin: Interval Licensing LLC v. Michelle K. Lee, No. 15-716 (Can the Patent and Trademark Office appropriately apply the “broadest reasonable interpretation” standard in construing patent claims in post-grant validity challenges?)
  • Laches: Medinol Ltd. v. Cordis Corporation, et al., No. 15-998
  • Laches: SCA Hygiene Products Aktiebolag, et al. v. First Quality Baby Products, LLC, et al., No. 15-927 (three amici filed in support)
  • Biologics Notice of Commercial Marketing: Sandoz Inc. v. Amgen Inc., et al., No. 15-1039 (Does the notice requirement of the BPCIA create an effective six-month exclusivity post-FDA approval?)
  • Design Patents: Samsung Electronics Co. v. Apple Inc., No 15-777 (design patent scope and damages calculation)
  • Design Patents: Systems, Inc. v. Nordock, Inc., No. 15-978 (design patent damage calculations – similar issues as Samsung v. Apple). []
  • Inducement: Life Technologies Corporation, et al. v. Promega Corporation, No. 14-1538 (whether an entity can “induce itself” under 271(f)(1))(CVSG, awaiting government brief)
  • Preclusion or Jurisdiction: BriarTek IP, Inc. v. DeLorme Publishing Company, Inc., et al., No. 15-1025 (Preclusive impact of ITC consent judgment).
  • Preclusion or Jurisdiction: Vermont v. MPHJ Technology Investments, LLC, No. 15-838 (Federal court jurisdiction in anti-troll consumer protection case)
  • Preclusion or Jurisdiction: Biogen MA, Inc. v. Japanese Foundation for Cancer Research, et al., No. 15-607 (Whether AIA eliminated federal district courts’ jurisdiction over patent interference actions under 35 U.S.C. § 146.)
  • Eligibility Challenges: Retirement Capital Access Management Company, LLC v. U.S. Bancorp, et al., No. 15-591 (Whether subject matter eligibility under 35 U.S.C. § 101 is a ground specified as a condition for patentability under 35 U.S.C. § 282(b)(2))
  • Eligibility Challenges: Hemopet v. Hill’s Pet Nutrition, Inc., No. 15-1062 (natural phenom case of tailoring a diet to a pet’s genomic characteristics)
  • Eligibility Challenges: Joao Bock Transaction Systems, LLC v. Jack Henry & Associates, Inc., No. 15-974 (defining an abstract idea)
  • Patent Term Adjustment Dispute: Daiichi Sankyo Company, Ltd. v. Michelle K. Lee, No. 15-652 (Patent Term Adjustment – whether the 180 day deadline applies; could bleed into admin law issues)
  • Damages: Innovention Toys, LLC v. MGA Entertainment, Inc., et al., No. 15-635 (Stryker/Halo follow-on – potential wait-and-see)
  • Damages: WesternGeco LLC v. ION Geophysical Corporation, No. 15-1085 (consequential lost-profit damages for infringement under Section 271(f))
  • Jury Role: Parkervision, Inc. v. Qualcomm Incorporated, No. 15-1092 (“Whether and under what circumstances an inconsistency in expert testimony permits a court to set aside a jury verdict and grant the losing party judgment as a matter of law.”)
  • Written Description: Tas v. Beach, No. 15-1089 (written description requirement for new drug treatments).
  • Low Quality Brief: Morales v. Square, No. 15-896 (eligibility under Alice)

4. Petitions for Writ of Certiorari Denied or Dismissed:

  • ePlus, Inc. v. Lawson Software, Inc., No. 15-639 (what happens with a finally-determined permanent injunction after PTO cancels the patent claim?)
  • Media Rights Technologies, Inc. v. Capital One Financial Corporation, et al., No. 15-725 (Claim Construction: whether there a strong presumption against construing terms as subject to 35 U.S.C. § 112p6 that do not recite the term “means.”)
  • Alexsam, Inc. v. The Gap, Inc., No. 15-736 (appellate jurisdiction over patents that were dropped from case pre-trial)
  • Universal Lighting Technologies, Inc., v. Lighting Ballast Control LLC, No. 15-893 (intrinsic vs extrinsic evidence for claim construction).
  • STC, Inc. v. Global Traffic Technologies, No. 15-592 (Whether marking the packaging of a patented article with patent notification satisfies the marking provision of 35 U.S.C. § 287(a) where the patented article itself is undisputedly capable of being marked.)
  • Achates Reference Publishing, Inc. v. Apple Inc., et al., No. 15-842 (IPR institution decisions unreviewable, even when addressed in a final written decision by PTAB) [Note – This case was dismissed after being settled by the parties]
  • Alps South, LLC v. The Ohio Willow Wood Company, No. 15-567
  • Allvoice Developments US, LLC v. Microsoft Corp., No. 15-538
  • OIP Technologies, Inc. v. Amazon.com, Inc., No. 15-642
  • Fivetech Technology Inc. v. Southco, Inc., No. 15-381
  • Tyco Healthcare Group LP, et al. v. Ethicon Endo-Surgery, Inc., No. 15-115
  • Nautilus, Inc. v. Biosig Instruments, Inc., No. 15-561
  • Chunghwa Picture Tubes, Ltd., et al. v. Eidos Display, LLC, et al., No. 15-288
  • Kenneth Butler, Sr. v. Balkamp Inc., et al., No. 15-273
  • Arthrex, Inc. v. KFx Medical Corporation, No. 15-291
  • Arthrex, Inc. v. Smith & Nephew, Inc., et al., No. 15-559 (Commil re-hash – if actions were “not objectively unreasonable” can they constitute inducement?)
  • Daiichi Sankyo, Inc., et al. v. Apotex Inc., No. 15-281
  • Mylan Pharmaceuticals Inc. v. Apotex Inc., No. 15-307
  • Luv N’ Care, Ltd. v. Munchkin, Inc., No. 15-242
  • Automated Merchandising Systems, Inc. v. Michelle K. Lee, Director, United States Patent and Trademark Office, No. 15-326
  • I/P Engine, Inc. v. AOL Inc., et al., No. 14-1358
  • Interval Licensing LLC v. AOL Inc., et al., No. 14-1362
  • Content Extraction and Transmission LLC v. Wells Fargo Bank, National Association, et al., No. 14-1473
  • L. Gore & Associates, Inc. v. Bard Peripheral Vascular, Inc., et al., No. 15-41
  • NetAirus Technologies, LLC v. Apple Inc., No. 14-1353
  • Muffin Faye Anderson v. Kimberly-Clark Corporation, No. 14-10337
  • MobileMedia Ideas LLC v. Apple Inc., No. 15-206
  • SpeedTrack, Inc. v. Office Depot, Inc. et al., No. 15-461 (Kessler doctrine)
  • Rodney K. Morgan, et al. v. Global Traffic Technologies LLC, No. 15-602
  • Lakshmi Arunachalam v. JPMorgan Chase & Co., No. 15-691

5. Prior versions of this report:

En Banc: Does a Confidential Manufacturing Supply Contract Trigger the On Sale Bar?

Patent,

by Dennis Crouch

More to come on this case, but I wanted to provide readers with the filed briefs below.

The Medicines Co. v. Hospira (Fed. Cir. 2016) (en banc)

Briefing is now complete in the en banc challenge to the ‘no-supplier-exception’ to the on-sale bar.  The en banc question here focuses on when a manufacturing supply contract crosses-the-threshold into impermissible “on sale” activity and raises the on-sale bar of 35 U.S.C. § 102(b) (pre-AIA). Although the patents at issue in this case involve pre-AIA law, the same “on sale” language is found in the revised statute. If the post-AIA statute is interpreted so that sales still include ‘secret sales’ then the decision here will continue to be of substantial importance. (Note that the U.S. Government argues that pre-AIA precedent is wrong and that secret sales should not trigger the on sale bar even pre-AIA).

The following questions are presented for the en banc panel:

1. Do the circumstances presented here constitute a commercial sale under the on-sale bar of 35 U.S.C. § 102(b)?

(a) Was there a sale for the purposes of § 102(b) despite the absence of a transfer of title?

(b) Was the sale commercial in nature for the purposes of § 102(b) or an experimental use?

2. Should this court overrule or revise the principle in Special Devices, Inc. v. OEA, Inc., 270 F.3d 1353 (Fed. Cir. 2001), that there is no “supplier exception” to the on-sale bar of 35 U.S.C. § 102(b)?

The parties here include MedCo (the Patentee) who (prior to filing the patent application) hired Ben Venue Mfg. to actually produce ‘validation batches’ of its bivalirudin drug. Hospira is challenging the patent and is seeking approval to market a generic version.

The original panel found that the sale constituted an invalidating on-sale bar. Of interest here, the “sale” was Ben Venue’s “sale of services” to manufacture the patented product-by-process rather than sales of the product themselves.  The original panel found no principled distinction between these concepts – thus applying the on sale bar.  Because the ‘sales’ at issue were associated with MedCo’s ‘validation batches,’ the patentee has also now argued experimental use.

Party Briefs:

Friend of the Court Briefs: 

  • US Amicus Brief (secret sales and secret offers should not be seen to trigger the on sale bar).
  • AIPLA Amicus Brief (transfer of title is not required for an on sale bar trigger)
  • BIO Amicus Brief (the original panel’s interpretation is bad policy)
  • Gilead Amicus Brief (only “arm’s length sales between two entities” qualify for the on sale bar; here that does not apply when an inventor controls (through contract) the activities of the manufacturer).
  • HIPLA Amicus Brief (experimental use continues to be an exception to the patent negating effect of on sale activity)
  • IPO Amicus Brief (Contract manufacturing is not a ‘sale’)
  • Miller Patti Pershern Amicus Brief (for AIA patents, this ‘flaw’ in the system has been corrected because only prefiling public sales activity triggers the patent prohibition)
  • Prof Morris Amicus Brief (focus should be on whether the inventor made a sale, here the inventor was the buyer and there is no “on buy” bar; on sale activity should not be termed ‘prior art.’)
  • PRMA Amicus Brief (Parties should be permitted to outsource manufacturing prior to filing for patent protection).

Delayed Justice: Can the USPTO Stall Implementation of Federal Circuit Decisions?

Patent,

In re Simon Shiao Tam (on petition for a writ of mandamus) (Fed. Cir. 2016) [TAM_Petition_for_Mandamus_14_Mar_16]

In December 2015, the Federal Circuit ruled in Tam’s favor – holding that the Lanham Act’s prohibition against registering disparaging marks violated Tam’s free speech rights under the First Amendment.  The seeming result was that Tam would be permitted to register THE SLANTS as the mark representing his musical act.

According to Tam’s pi-day filed mandamus action, however, the USPTO Director has indicated that she will not comply with the Court’s until all potential appeals have been exhausted or expired. As such, the USPTO continues to refuse to publish the mark in the Official Gazette.  According to the petition, the following statement came from the USPTO Solicitor’s Office:

Consistent with USPTO practice following a Federal Circuit decision in an appeal of a Board decision, there will be no “further proceedings” at the Board regarding [the Tam Application] until the last of the following occurs: 1) the period to petition for a writ of certiorari (including any extensions) in In re Tam expires without a petition being filed; (2) a petition for certiorari is denied; or (3) certiorari is granted and the U.S. Supreme Court issues a decision

Of course, the USPTO is bound by law – and that law has been set by the Federal Circuit.  In this case there has been a change of the law and an express order of a “remand [of] this case to the Board for further proceedings.”  The ordinary rule is that the parties must follow the law of the case as decided even if appealing unless a stay is ordered.  The Lanham Act is not particularly helpful in this regard other than expressly indicating that, the Federal Circuit Mandate and Opinion “shall govern the further proceedings in the case.”

In all likelihood the Federal Circuit would grant a stay to the USPTO if so requested. However, I suspect that the Department of Justice would not allow that particular request — instead demanding that the USPTO has the power to delay application of Federal Circuit decisions until appeals are exhausted.  This would be an effective 90-day stay in all cases.  If the Federal Circuit orders briefing in the case, it will be interesting to hear the USPTO argue its inherent right to stay Federal Circuit orders.

Under the rules, the USPTO has already missed its 45 day timeline to request rehearing  has 45-days from the  February 12, 2016 Mandate to request rehearing en banc. The 90-days timeline for filing a petition for writ of certiorari with the Supreme Court is still pending.  Ron Coleman and his team at Archer Greiner are representing Tam in the case.

= = = = = =

Mandamus action also requires a substantial harm caused by the delay.  Here, I would balance the harm associated with wrongfully awarding the trademark rights as well.

Battle over Secret Sales and Secret Commercialization under the AIA

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by Dennis Crouch

Helsinn v. Dr. Reddy’s and Teva (D.N.J. 2016)

The America Invents Act of 2011 (AIA) amended the definitions of prior art under 35 U.S.C. § 102 – up for grabs in this case is whether the changes included a narrowing of the ‘on-sale bar.’  Prior to the AIA, the ‘on sale’ bar blocked patenting of inventions that had been “on sale in this country.”  Although not specific in the statute, courts interpreted the on-sale bar to include secret sales or offers-to-sell.  These typically include closed-door business-to-business and custom sales rather than retail sales.[1]  The AIA amended the statute in a number of ways – most pertinent here is addition of the ‘otherwise available to the public’ clause to Section 102(a)(1).[2]  The provision now reads:

Novelty; Prior Art.—A person shall be entitled to a patent unless—(1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention; or

The question in this case is how to interpret the statutory phrase “on sale, or otherwise available to the public.”  The otherwise available to the public language suggests that the ‘on sale’ activity is also available to the public.  That reading, however, conflicts with the history of the on sale bar.  Which construction is correct?

The district court in Helsinn sided with the USPTO’s interpretation of the statute – that the AIA modified the definition of on-sale so that it now only includes publicly available sales activity.  This allowed the patentee in the case to avoid an invalidity finding based upon its own prior sales of the patented drug. On appeal, Teva offers its set of arguments to retain the old-meaning:

  1. In ordinary usage, an item is “on sale” whether sold privately or publicly.
  2. Courts have treated “on sale” as a term of art for almost two centuries for sound policy reasons grounded in the Constitution.
  3. Congress did not change the settled meaning of “on sale” by adding the phrase “otherwise available to the public.”
  4. The district court’s reading of “on sale” would render meaningless the crucial word “public” in [102(b)(1)(B)].
  5. A Committee Report and floor statements of two senators cannot accomplish what they failed to accomplish in the statute itself.
  6. The PTO’s interpretation is not entitled to deference.

[TevaSecretSaleBrief]

Professors Mark Lemley (Stanford) and Robert Merges (Berkeley) along with 39 other law professors have filed a brief in support of Teva’s arguments here – arguing that the new interpretation “would radically rewrite the law of prior art.”

The key legal question in the case is simple: did Congress mean to sweep away scores of established cases under the 1952 Act even though it reenacted language unchanged since 1870, merely because it added the phrase “or otherwise available to the public” to the list of prior art categories in the new AIA section 102? We think not. We have three primary reasons. First, the district court’s reading is inconsistent with the language and structure of the AIA. Second, it is inconsistent with Congressional intent in readopting the “on sale” and “public use” language in section 102. Finally, it would sweep away scores of cases decided over two centuries and radically rewrite a host of patent doctrines.

[TevaProfAmicusBrief] Moving forward, Helsinn’s responsive brief will be due April 21.

Of course, the issues here have been substantially debated already with commentators coming out on both sides of the debate:

= = = = =

AIA expanded the scope of prior art in a number of ways. This is one area, however, where it potentially shrunk the body of potential prior art.  Innovative entities with a robust business involving private-transactions and those who rely upon third-party manufacturers are the most likely to benefit by a changed-law.

An important policy question (that could also influence is the construction) is whether eliminating secret sales as prior art would actually allow an innovator secretly commercialize its patent for years and then subsequently obtaining patent rights.

= = = = = =

 

[1] The Federal Circuit has also include a manufacture-supply agreement. (E.g., a supplier seeking for to manufacture and supply your custom inventory).  This issue is currently being reconsidered by the Federal Circuit in the en banc case of Medicines Co. v. Hospira.

[2] The statute also eliminating the ‘in this country’ limitation for on-sale prior art and limited the one-year grace period associated with the on sale bar.

Court: Metallizing Engineering Overruled by Statute

Patent,

by Dennis Crouch

Helsinn v. Dr. Reddy’s and Teva, Civ. No. 11-cv-03962 (D.N.J. March 3, 2016) [Helsinn Opinion]

The district court decision in this case is focused on the medical marijuana substitute Aloxi (Palonosetron) by Helsinn and its U.S. Patent Nos. 7,947,725, 7,960,424, 8,598,219.  Of these, the district court found that the ‘219 patent is an AIA patent.  As is common in the drug industry, Helsinn carried out a number of clinical trials (working with third parties) prior to filing that included selling the du. And, a primary question for the court was whether the invention was “on sale” prior to the invention and/or filing date.

Under pre-AIA rule, the “on sale” bar included prior secret sales and offers-for-sale. See Metallizing Eng’g Co. v. Kenyon Bearing & Auto Parts Co., 153 F.2d 516 (2d Cir. 1946).  Although the AIA includes the identical “on sale” language, the rewritten Section 102 also includes the additional catchall “otherwise available to the public.”

As the fist decision interpreting the new statute, the court (Judge Cooper) here held that the “otherwise” language modifies and limits the “on sale” provision — indicating that sales and offers for sale only count as prior art if they are also “available to the public.”

§102(a)(1) requires a public sale or offer for sale of the claimed invention. The new requirement that the on-sale bar apply to public sales comports with the plain language meaning of the amended section, the USPTO’s interpretation of the amendment, the AIA Committee Report, and Congress’s overarching goal to modernize and streamline the United States patent system.

The court’s interpretation here is parallel to that of the USPTO in its examination guidelines. Although not the law, the Patent Office’s statements appear to have influenced the court here. It also falls in-line with what Paul Morgan suggested in his 2011 article. Paul Morgan, The Ambiguity in Section 102(a)(1) of the Leahy-Smith America Invents Act, 2011 Patently-O Patent Law Journal 29.  Download Morgan.2011.AIAAmbiguities. 

Here, because the patentee’s sales were kept secret (“subject to and performed under confidentiality restrictions”), they could not be considered sales under the new statute.

Teva filed its Federal Circuit appeal in the case on March 7, but the brief is not yet public. I expect that the Federal Circuit opinion will be interesting — especially if the court reaches this issue.  (The court might not reach the issue depending upon whether the actions are excluded under the upcoming Medicines Co. v. Hospira en banc decision.  In addition, the court did not explain why the patent in question–a continuation from a pre-AIA case–counts as an AIA patent.)

My basic take on the statutory construction issue is that it could legitimately go either way.  My hope is that the issue is resolved to remove the uncertainty and the likelihood that a significant number of patents are wrongly issued.

Pending Supreme Court Patent Cases 2016 (March 4 Update)

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by Dennis Crouch

Earlier this week, the University of Missouri Law Review held its annual symposium – this year focusing on the Future of the Administrative State.  That future is a primary front of challenge in the patent system.  Arguments in Cuozzo v. Lee are now scheduled for April 25.  Jeffrey Wall of Sullivan & Cromwell (who also argued Stryker/Halo two weeks ago) is representing Cuozzo along with his colleague Garrard Beeney. On that same day, the Supreme Court will also hear the copyright attorney fee case Kirtsaeng.

Following Justice Scalia’s death, the Supreme Court simplified its docket by denying certiorari to a set of patent cases, including: Arthrex v. Smith & Nephew; STC v. Global Traffic Technologies; ePlus v. Lawson Software, Inc.; Media Rights Technologies v. Capitol One; Alexsam v. The Gap; and ULT v. Lighting Ballast Control.  Achates v. Apple was dismissed after being settled by the parties.

New petitions include Sandoz v. Amgen (BCPIA’s inherent six-month delay following commercial marketing notice); Hemopet v. Hill’s Pet (eligibility of claim directed to tailoring of a pet’s diet based upon genomic characteristics and expression); GEA Process v. Steuben Foods (after instituting, is the PTAB’s termination reviewable?); ParkerVision v. Qualcomm (when should a court reject a jury’s determination that an expert is credible); and WesternGeco v. ION Geophysical (foreign lost profit damages).

  • Petitions Granted:
  1. Petitions Granted with immediate Vacatur and Remand (GVR)
  1. Petitions for Writ of Certiorari Pending:
  • Infringement by Joint Enterprise: Limelight Networks, Inc. v. Akamai Technologies, Inc., et al., No. 15-993 (can a defendant be held liable for the collective performance of method steps by multiple independent parties?)
  • Post Grant Admin: Cooper v. Lee, No. 15-955 (whether IPRs violate Separation of Powers; two amici now filed in support).
  • Post Grant Admin: Click-to-Call Tech, LP v. Oracale Corp., No. 15-1014 (Same questions as Cuozzo and now-dismissed Achates v. Apple)
  • Post Grant Admin: GEA Process Engineering, Inc. v. Steuben Foods, Inc., No. 15-1075 (Flip-side of Cuozzo: Can there be no appeal when the PTAB exceeds its authority by terminating an instituted IPR proceeding?)
  • Post Grant Admin: Interval Licensing LLC v. Michelle K. Lee, No. 15-716 (Can the Patent and Trademark Office appropriately apply the “broadest reasonable interpretation” standard in construing patent claims in post-grant validity challenges?)
  • Laches: Medinol Ltd. v. Cordis Corporation, et al., No. 15-998
  • Laches: SCA Hygiene Products Aktiebolag, et al. v. First Quality Baby Products, LLC, et al., No. 15-927 (three amici filed in support)
  • Biologics Notice of Commercial Marketing: Sandoz Inc. v. Amgen Inc., et al., No. 15-1039 (Does the notice requirement of the BPCIA create an effective six-month exclusivity post-FDA approval?)
  • Design Patents: Samsung Electronics Co. v. Apple Inc., No 15-777 (design patent scope and damages calculation)
  • Design Patents: Systems, Inc. v. Nordock, Inc., No. 15-978 (design patent damage calculations – similar issues as Samsung v. Apple). []
  • Inducement: Life Technologies Corporation, et al. v. Promega Corporation, No. 14-1538 (whether an entity can “induce itself” under 271(f)(1))(CVSG, awaiting government brief)
  • Preclusion or Jurisdiction: BriarTek IP, Inc. v. DeLorme Publishing Company, Inc., et al., No. 15-1025 (Preclusive impact of ITC consent judgment).
  • Preclusion or Jurisdiction: Vermont v. MPHJ Technology Investments, LLC, No. 15-838 (Federal court jurisdiction in anti-troll consumer protection case)
  • Preclusion or Jurisdiction: Biogen MA, Inc. v. Japanese Foundation for Cancer Research, et al., No. 15-607 (Whether AIA eliminated federal district courts’ jurisdiction over patent interference actions under 35 U.S.C. § 146.)
  • Eligibility Challenges: Retirement Capital Access Management Company, LLC v. U.S. Bancorp, et al., No. 15-591 (Whether subject matter eligibility under 35 U.S.C. § 101 is a ground specified as a condition for patentability under 35 U.S.C. § 282(b)(2))
  • Eligibility Challenges: Hemopet v. Hill’s Pet Nutrition, Inc., No. 15-1062 (natural phenom case of tailoring a diet to a pet’s genomic characteristics).
  • Eligibility Challenges: Joao Bock Transaction Systems, LLC v. Jack Henry & Associates, Inc., No. 15-974 (defining an abstract idea)
  • Patent Term Adjustment Dispute: Daiichi Sankyo Company, Ltd. v. Michelle K. Lee, No. 15-652 (Patent Term Adjustment – whether the 180 day deadline applies; could bleed into admin law issues)
  • Damages: Innovention Toys, LLC v. MGA Entertainment, Inc., et al., No. 15-635 (Stryker/Halo follow-on – potential wait-and-see)
  • Damages: WesternGeco LLC v. ION Geophysical Corporation, No. 15-1085 (consequential lost-profit damages for infringement under Section 271(f))
  • Jury Role: Parkervision, Inc. v. Qualcomm Incorporated, No. 15-1092 (“Whether and under what circumstances an inconsistency in expert testimony permits a court to set aside a jury verdict and grant the losing party judgment as a matter of law.”)
  • Low Quality Brief: Morales v. Square, No. 15-896 (eligibility under Alice)
  1. Petitions for Writ of Certiorari Denied or Dismissed:
  • ePlus, Inc. v. Lawson Software, Inc., No. 15-639 (what happens with a finally-determined permanent injunction after PTO cancels the patent claim?)
  • Media Rights Technologies, Inc. v. Capital One Financial Corporation, et al., No. 15-725 (Claim Construction: whether there a strong presumption against construing terms as subject to 35 U.S.C. § 112p6 that do not recite the term “means.”)
  • Alexsam, Inc. v. The Gap, Inc., No. 15-736 (appellate jurisdiction over patents that were dropped from case pre-trial)
  • Universal Lighting Technologies, Inc., v. Lighting Ballast Control LLC, No. 15-893 (intrinsic vs extrinsic evidence for claim construction).
  • STC, Inc. v. Global Traffic Technologies, No. 15-592 (Whether marking the packaging of a patented article with patent notification satisfies the marking provision of 35 U.S.C. § 287(a) where the patented article itself is undisputedly capable of being marked.)
  • Achates Reference Publishing, Inc. v. Apple Inc., et al., No. 15-842 (IPR institution decisions unreviewable, even when addressed in a final written decision by PTAB) [Note – This case was dismissed after being settled by the parties]
  • Alps South, LLC v. The Ohio Willow Wood Company, No. 15-567
  • Allvoice Developments US, LLC v. Microsoft Corp., No. 15-538
  • OIP Technologies, Inc. v. Amazon.com, Inc., No. 15-642
  • Fivetech Technology Inc. v. Southco, Inc., No. 15-381
  • Tyco Healthcare Group LP, et al. v. Ethicon Endo-Surgery, Inc., No. 15-115
  • Nautilus, Inc. v. Biosig Instruments, Inc., No. 15-561
  • Chunghwa Picture Tubes, Ltd., et al. v. Eidos Display, LLC, et al., No. 15-288
  • Kenneth Butler, Sr. v. Balkamp Inc., et al., No. 15-273
  • Arthrex, Inc. v. KFx Medical Corporation, No. 15-291
  • Arthrex, Inc. v. Smith & Nephew, Inc., et al., No. 15-559 (Commil re-hash – if actions were “not objectively unreasonable” can they constitute inducement?)
  • Daiichi Sankyo, Inc., et al. v. Apotex Inc., No. 15-281
  • Mylan Pharmaceuticals Inc. v. Apotex Inc., No. 15-307
  • Luv N’ Care, Ltd. v. Munchkin, Inc., No. 15-242
  • Automated Merchandising Systems, Inc. v. Michelle K. Lee, Director, United States Patent and Trademark Office, No. 15-326
  • I/P Engine, Inc. v. AOL Inc., et al., No. 14-1358
  • Interval Licensing LLC v. AOL Inc., et al., No. 14-1362
  • Content Extraction and Transmission LLC v. Wells Fargo Bank, National Association, et al., No. 14-1473
  • L. Gore & Associates, Inc. v. Bard Peripheral Vascular, Inc., et al., No. 15-41
  • NetAirus Technologies, LLC v. Apple Inc., No. 14-1353
  • Muffin Faye Anderson v. Kimberly-Clark Corporation, No. 14-10337
  • MobileMedia Ideas LLC v. Apple Inc., No. 15-206
  • SpeedTrack, Inc. v. Office Depot, Inc. et al., No. 15-461 (Kessler doctrine)
  • Rodney K. Morgan, et al. v. Global Traffic Technologies LLC, No. 15-602
  • Lakshmi Arunachalam v. JPMorgan Chase & Co., No. 15-691
  1. Prior versions of this report:

 

 

Inter Partes Review: Comingling Adjudicative and Executive Roles within an Agency

Patent, , ,

By Dennis Crouch

In its challenge of the USPTO’s implementation of the Inter Partes Review system, Ethicon has now requested an en banc rehearing with the following simple question presented:

Does the Patent Act permit the Patent Trial and Appeal Board to make inter partes review institution decisions?

Outside reading:

The basic issue here involves the two step inter partes review proceeding that begins with a decision on whether to institute the review and then, once instituted, ends with a final determination by the Patent Trial and Appeal Board (the Board).  Under the statute, the USPTO Director (the Director) is tasked with making the initial determination before passing the baton to the Board to make the final determination of patentability.  However, the USPTO’s implementation rules changed the game by also giving the Board authority to make the institution decision.  The USPTO argues that the rules were a proper delegation of the Director’s authority, but Ethicon argues that the USPTO’s procedure is an improper comingling of executive and adjudicative functions.

In creating the IPR process, Congress intended to replace the prior administrative inter partes reexamination procedure with a new adjudicative procedure that would “take place in a court-like proceeding.” H.R. REP. NO. 112-98, pt. 1 (2011). Congress did not need to, and did not, change the institution procedure used in inter partes reexamination, where the Director—through her executive delegate (typically an examiner)—would decide whether to institute. Accordingly, the AIA expressly assigns the institution duty for IPRs to the Director, sets forth a necessary (but not sufficient) substantive threshold for the Director to institute, and identifies a variety of other discretionary criteria that the Director may use to deny institution—whether or not the substantive threshold has been met. As with inter partes reexamination institution decisions, the AIA specifies that the Director’s discretionary institution decisions are not appealable. 35 U.S.C. § 314(d).

The panel nevertheless upheld a PTO regulation commingling the institution and adjudication stages of IPRs by delegating the Director’s institution power to the PTAB. 37 C.F.R. § 42.4(a). That delegation lacks statutory authorization and upends longstanding principles, articulated in both Supreme Court precedent and the Administrative Procedure Act (APA), prohibiting the combination of executive and adjudicative functions below the level of the agency head. . . . [B]y delegating the institution function to the PTAB for the sake of efficiency, the Director has repudiated her statutory duty to exercise executive discretion—including the additional procedural and policy factors specified in the AIA. . . . Congress did not intend for PTAB panels to exercise this gatekeeping function, and as purely adjudicative bodies they are neither inclined nor equipped to apply executive discretion or systemic considerations in deciding whether to institute review. En banc review is warranted to ensure the fairness of the IPR system and its compliance with Congress’s bifurcated decision-making procedure.

In the original panel opinion, Judges Dyk and Taranto joined together to reject Ethicon’s argument – finding that the statute permitted delegation of the institution decision. Judge Newman wrote in dissent.  The difficulty for Ethicon is counting heads – I struggle to find seven votes out of the twelve Federal Circuit judges that would be needed for Ethicon to win.

Amicus support is due by March 14.  Supreme Court and appellate practitioner Pratik Shah filed the brief on behalf Ethicon.  Shah’s involvement strongly suggests to me that a Supreme Court petition will follow if this en banc attempt fails.

 

Federal Circuit Again Revives Zoltek Case: Who Invented Stealth Technology

Patent, , , ,

By Dennis Crouch

Zoltek Corp. v. US (Fed. Cir. 2016)

The interesting and long-running Zoltek case has received another decision from the Federal Circuit – this time reversing the Court of Federal Claims ruling that Zoltek’s stealthy patent claims are invalid.

Zoltek is the owner of US Reissue Patent No. Re 34,162[1] issued January 19, 1993.  In 1996, Zoltek sued the U.S. government for infringing the patent – in particular, the patentee argued that the B-2 Bomber and F-22 Fighter both used carbon fiber sheets that infringed the patent rights.

As a starting point for most claims against a government is with sovereign immunity. The U.S. Government claims sovereign immunity against suits except where waived.  In the patent context, the U.S. government has waived its immunity, but limits the procedure and form of recovery. In particular, 28 U.S.C. § 1498(a) provides that “the owner’s remedy shall be by action against the United States in the United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture.”  The statute also provides cover for contractors or other non-government-entities who infringe the patent “with the authorization or consent of the Government” so that those actions must also be pursued against the U.S. Government.  The Court of Federal Claims is located in the same Madison Place building as the Court of Appeals for the Federal Circuit.

In its prior en banc decision from the case, the Federal Circuit ruled that Section 1498(a)’s infringement statute should be broadly read to encompass Section 271(g) infringement.

Following that decision, the Court of Federal Claims held a trial on validity and found that the asserted claims were invalid as obvious and/or lacking written description.  The court has reversed that holding and remanded.

Omitted Elements:  During reissue prosecution of the manufacturing process claims, the applicant deleted the initial step of “oxidizing and stabilizing the carbonizable fiber starting material at an elevated temperature.”  That deletion clearly broadened the patent claim – however, a broadening reissue was proper because it had been filed within two years of the grant of the original patent.  The CFC found, however, that the new breadth went beyond the original written description and thus rendered the claim invalid – holding that “the preparation of the known starting material must be included in the claim” even if known in the prior art.  On appeal, the US Government argued for affimance since “the specification does not state that these steps need not be performed by the same entity.”

On appeal, the Federal Circuit completely rejected this analysis: “The question of who performs steps of a fully described invention, including preparation of a known starting material, is not a matter of the written description requirement.”

The original specification plainly, and without dispute, describes that the starting material is an oxidized and stabilized fiber, cites references showing this known material, and describes its preparation. That a previously oxidized and stabilized starting material was known to a person of ordinary skill in the field was recognized [as well] . . . . The question of who performs steps of a fully described invention, including preparation of a known starting material, is not a matter of the written description requirement.

The purpose of the written description requirement is to assure that the public receives sufficient knowledge of the patented technology, and to demonstrate that the patentee is in possession of the invention claimed. . . . The written description need not include information that is already known and available to the experienced public. . . .

The CFC stated its concern that the reissue patent claims could be infringed by an entity that did not itself make the starting material, but purchased the known starting material from a commercial source. . . . A validly obtained reissue does not violate the written description requirement if the patentee can reach an enlarged scope of possible infringement. It is not an improper broadening amendment when a reissue applicant, with the considered agreement of the reissue Examiner, substitutes a preparatory step known to those skilled in the art at the time of the invention with a requirement to start with the product of that known preparatory step. The CFC’s emphasis on who might infringe the broadened reissue claims is an issue of infringement, not written description. We conclude that the CFC erred in holding reissue claims 1–22 and 33–38 invalid for failure to meet the written description requirement of section 112. That ruling is reversed.

The issue here is definitely interesting – in particular, I see the question of whether the starting-material is available as prior art to be a total red-herring since its manufacture was sufficiently described in the specification.  The question is whether the patentee described an invention that began by “obtaining” rather than “making” the starting material.  The Federal Circuit didn’t really answer that question. I will note that none of the parties cited Gentry Gallery, Inc. v. Berkline Corp., 134 F.3d 1473 (Fed. Cir. 1998) ([not announcing] an omitted essential elements test).

On Obviousness, the Federal Circuit took the government to task as well – finding substantial errors in the Government’s expert testimony and noting the admitted novelty of the fiber sheets created by the inventors. “Instead, the government’s argument appears to be that since [its expert] Dr. Sullivan is a renowned scientist in this field, and since Dr. Sullivan was able to reproduce the Figure 4 graph, it was obvious to do so. This was error.”[2]

Section 101 – The government had also argued that the patented “method of manufacturing . . . carbon fiber sheets” lacked subject matter eligibility under Section 101 as effectively claiming a law of nature.  From the CFC Decision rejecting the eligibility argument:

The Government argues that the claims are invalid because they embody nothing more than a law of nature. For example, the Government points to Figure 4 of the patent to support its contention. It argues that Figure 4, which charts a relationship between heat treatment temperature and surface resistance, demonstrates the ineligibility of the ‘162 Patent claims by showing that the claims embody nothing more than a natural law that links temperature to resistance. Relying upon the testimony of its expert, Dr. Brian Sullivan, the Government argues that the independent claims at issue (claims 1 and 33) consist of three parts: (1) the manufacture of carbon fibers using conventional carbonization equipment and techniques; (2) the manufacture of a sheet product using conventional techniques and processes; and (3) “the concept that if you control the fibers’ volume electrical resistivity it gives you the ability to control the sheet or surface resistivity of the final carbon mat productThe Government argues that these three parts render the ‘162 Patent’s claims similar to those found ineligible in Flook and Mayo. . . . The Court agrees with Zoltek [and disagrees with the Government]. The Government’s comparisons to the ineligible claims in Flook and Mayo are much less apt than comparison to Diehr.

The CFC did reject that argument and the Government did not appeal that issue.

= = = =

[1] The ‘162 Reissue Patent originally issued in 1988 as U.S. Patent No. 4,728,395 and then reissued in 1993. Zoltek obtained the patent rights when it bought Stackpole Fibers in 1988.

[2] See Uniroyal, Inc. v. Rudkin-Wiley Corp., 837 F.2d 1044, 1051 (Fed. Cir. 1988) (“[t]hat which may be made clear and thus ‘obvious’ to a court, with the invention fully diagrammed and aided . . . by experts in the field, may have been a break-through of substantial dimension when first unveiled.”); see also KSR (“A factfinder should be aware, of course, of the distortion caused by hindsight bias and must be cautious of arguments reliant upon ex post reasoning”); W.L. Gore, 721 F.2d at 1553 (“It is difficult but necessary that the decisionmaker forget what he or she has been taught at trial about the claimed invention and cast the mind back to the time the invention was made (often as here many years), to occupy the mind of one skilled in the art who is presented only with the references, and who is normally guided by the then-accepted wisdom in the art.”).

Pending Supreme Court Patent Cases 2016 (February 17 Update)

Patent, , , , , , , , , , , , ,

by Dennis Crouch

Justice Scalia died this week. May he rest in peace. Although he (as well as Justice Kagan) had left the University of Chicago before I arrived, their influence continues to be felt in that institution.  (Posner, Obama, Sunstein, Meltzer & Epstein, etc. were all still around). On her blog, Professor Ouellette (Stanford) has a nice post about the mixed bag of Justice Scalia’s IP scholarship legacy.  Most recently, Justice Scalia may be best remembered for calling-out Federal Circuit jurisprudence on obviousness as “gobbledygook.”  In many cases, I would expect that his ‘vote’ was less important than the ideas he brought to the table and the way he changed the debates.

I don’t see Scalia’s death having any impact on Halo/Stryker — where I predict the Federal Circuit will be reversed.  Cuozzo is perhaps a different story where I expect a divided court to affirm in a situation where Justice Scalia may have voted to reverse.  Oral arguments are still set for February 23, 2016 in Halo and Stryker. Tony Mauro has an interesting article on the case titled “Coin toss decides which advocate will argue key patent case.”  Professor Mann provides an argument preview on SCOTUSblog.

New petitions this week include the reappearance of Limelight v. Akamai.  The Supreme Court previously shot-down the Federal Circuit’s expanded definition of inducing infringement, but on remand the Federal Circuit expanded its definition of direct infringement (to include joint enterprise liability).  The case is interesting and I hope that the court grants certiorari, but I would side with the patentee here.

In Medinol v. Cordis, the patentee questions whether the laches doctrine still applies in patent cases. This case parallels SCA Hygiene and comes on the heels of the Supreme Court’s Petrella decision which eliminated the laches defense for back-damages in copyright cases.

Briartek IP v. DeLorme, delves into interesting separation of powers and jurisdiction issues, asking: Whether a binding consent order, entered between the federal government, the ITC, and an ITC respondent, deprives federal district courts of jurisdiction over a declaratory judgment action, seeking to invalidate the patent at issue, filed by the ITC respondent … against the patent holder: a non-party to the consent order.  The Federal Circuit had affirmed without substantive opinion.

Finally, last but not least, is Click-to-Call Tech v. Oracle Corp. who has copied the questions from Cuozzo and the recently denied Achates v. Apple.  These questions challenge the seeming the absolute bar on judicial review of Patent Trial & Appeal Board’s power to institute IPR proceedings.  Although this particular petition is unlikely to be granted. It lends additional credence to the other two.  The petition is also a mechanism for the patentee here to keep the issue alive.

1. Petitions Granted:

2. Petitions Granted with immediate Vacatur and Remand (GVR)

3. Petitions for Writ of Certiorari Pending:

  • Infringement by Joint Enterprise: Limelight Networks, Inc. v. Akamai Technologies, Inc., et al., No. 15-993 (can a defendant be held liable for the collective performance of method steps by multiple independent parties?)
  • Post Grant Admin: Cooper v. Lee, No. 15-955 (whether IPRs violate Separation of Powers).
  • Post Grant Admin: Click-to-Call Tech, LP v. Oracale Corp., No. 15-1014 (Same questions as Achates v. Apple and Cuozo)
  • Laches: Medinol Ltd. v. Cordis Corporation, et al., No. 15-998
  • Laches: SCA Hygiene Products Aktiebolag, et al. v. First Quality Baby Products, LLC, et al., No. 15-927
  • Post Grant Admin: Interval Licensing LLC v. Michelle K. Lee, No. 15-716 (Can the Patent and Trademark Office appropriately apply the “broadest reasonable interpretation” standard in construing patent claims in post-grant validity challenges?)
  • Design Patents: Samsung Electronics Co. v. Apple Inc., No 15-777 (design patent scope and damages calculation)
  • Design Patents: Systems, Inc. v. Nordock, Inc., No. 15-978 (design patent damage calculations – similar issues as Samsung v. Apple). []
  • Inducement: Life Technologies Corporation, et al. v. Promega Corporation, No. 14-1538 (whether an entity can “induce itself” under 271(f)(1))(CVSG, awaiting government brief)
  • Inducement: Arthrex, Inc. v. Smith & Nephew, Inc., et al., No. 15-559 (Commil re-hash – if actions were “not objectively unreasonable” can they constitute inducement?)
  • Claim Construction: Universal Lighting Technologies, Inc., v. Lighting Ballast Control LLC, No. 15-893 (intrinsic vs extrinsic evidence for claim construction).
  • Preclusion or Jurisdiction:  BriarTek IP, Inc. v. DeLorme Publishing Company, Inc., et al., No. 15-1025 (Preclusive impact of ITC consent judgment).
  • Preclusion or Jurisdiction: Vermont v. MPHJ Technology Investments, LLC, No. 15-838 (Federal court jurisdiction in anti-troll consumer protection case)
  • Preclusion or Jurisdiction: Alexsam, Inc. v. The Gap, Inc., No. 15-736 (appellate jurisdiction over patents that were dropped from case pre-trial)
  • Preclusion or Jurisdiction: ePlus, Inc. v. Lawson Software, Inc., No. 15-639 (what happens with a finally-determined permanent injunction after PTO cancels the patent claim?)
  • Preclusion or Jurisdiction: Biogen MA, Inc. v. Japanese Foundation for Cancer Research, et al., No. 15-607 (Whether AIA eliminated federal district courts’ jurisdiction over patent interference actions under 35 U.S.C. § 146.)
  • Eligibility Challenges: Retirement Capital Access Management Company, LLC v. U.S. Bancorp, et al., No. 15-591 (Whether subject matter eligibility under 35 U.S.C. § 101 is a ground specified as a condition for patentability under 35 U.S.C. § 282(b)(2))
  • Eligibility Challenges: Joao Bock Transaction Systems, LLC v. Jack Henry & Associates, Inc., No. 15-974 (defining an abstract idea)
  • Claim Construction: Media Rights Technologies, Inc. v. Capital One Financial Corporation, et al., No. 15-725 (Claim Construction: whether there a strong presumption against construing terms as subject to 35 U.S.C. § 112p6 that do not recite the term “means.”)
  • Patent Term Adjustment Dispute: Daiichi Sankyo Company, Ltd. v. Michelle K. Lee, No. 15-652 (Patent Term Adjustment – whether the 180 day deadline applies; could bleed into admin law issues)
  • Damages: STC, Inc. v. Global Traffic Technologies, No. 15-592 (Whether marking the packaging of a patented article with patent notification satisfies the marking provision of 35 U.S.C. § 287(a) where the patented article itself is undisputedly capable of being marked.)
  • Damages: Innovention Toys, LLC v. MGA Entertainment, Inc., et al., No. 15-635 (Stryker/Halo follow-on – potential wait-and-see)
  • Low Quality Brief: Morales v. Square, No. 15-896 (eligibility under Alice)

3. Petitions for Writ of Certiorari Denied:

  • Achates Reference Publishing, Inc. v. Apple Inc., et al., No. 15-842 (IPR institution decisions unreviewable, even when addressed in a final written decision by PTAB)
  • Alps South, LLC v. The Ohio Willow Wood Company, No. 15-567
  • Allvoice Developments US, LLC v. Microsoft Corp., No. 15-538
  • OIP Technologies, Inc. v. Amazon.com, Inc., No. 15-642
  • Fivetech Technology Inc. v. Southco, Inc., No. 15-381
  • Tyco Healthcare Group LP, et al. v. Ethicon Endo-Surgery, Inc., No. 15-115
  • Nautilus, Inc. v. Biosig Instruments, Inc., No. 15-561
  • Chunghwa Picture Tubes, Ltd., et al. v. Eidos Display, LLC, et al., No. 15-288
  • Kenneth Butler, Sr. v. Balkamp Inc., et al., No. 15-273
  • Arthrex, Inc. v. KFx Medical Corporation, No. 15-291
  • Daiichi Sankyo, Inc., et al. v. Apotex Inc., No. 15-281
  • Mylan Pharmaceuticals Inc. v. Apotex Inc., No. 15-307
  • Luv N’ Care, Ltd. v. Munchkin, Inc., No. 15-242
  • Automated Merchandising Systems, Inc. v. Michelle K. Lee, Director, United States Patent and Trademark Office, No. 15-326
  • I/P Engine, Inc. v. AOL Inc., et al., No. 14-1358
  • Interval Licensing LLC v. AOL Inc., et al., No. 14-1362
  • Content Extraction and Transmission LLC v. Wells Fargo Bank, National Association, et al., No. 14-1473
  • W.L. Gore & Associates, Inc. v. Bard Peripheral Vascular, Inc., et al., No. 15-41
  • NetAirus Technologies, LLC v. Apple Inc., No. 14-1353
  • Muffin Faye Anderson v. Kimberly-Clark Corporation, No. 14-10337
  • MobileMedia Ideas LLC v. Apple Inc., No. 15-206
  • SpeedTrack, Inc. v. Office Depot, Inc. et al., No. 15-461 (Kessler doctrine)
  • Rodney K. Morgan, et al. v. Global Traffic Technologies LLC, No. 15-602
  • Lakshmi Arunachalam v. JPMorgan Chase & Co., No. 15-691

4. Prior versions of this report:

 

 

Lexmark and Disposability: Gumming Up the Market for Refills and Repairs.

Patent

by Dennis Crouch

I was surprised at the en banc Federal Circuit’s decision in Lexmark to re-affirm Mallinckrodt — giving a seller power to block future resale and reuse of a patented product.  My surprise is grounded in the longstanding tradition in American property law of promoting the free-flow of commerce by refusing to enforce servitudes that limit the alienation or use of goods. To be clear, courts have often enforced contracts between willing parties to this end, but those same courts have refused to allow restrictive covenants to cling to the good and bind any subsequent purchaser.  Here, the court held that this type of restriction is enforceable for Lexmark, but only because Lexmark’s product is covered by patent rights.

Apart from the law, the policy issues are incredibly important and relate to the continued increase in both (1) disposable/non-reparable products on the market and (2) manufacturer control over the repair market for products that are reparable by patenting the replacement part itself.  In the auto industry, insurance companies and consumers have been fighting this issue for years – pushing lawmakers to negate design patents covering spare-parts when used to limit the supply of less-expensive parts.

In my ideal system, we encourage the creation of high quality and long lasting goods that are reparable (or refillable) at a local level.  The best and most direct way to offer this encouragement is outside the patent system. However, the Lexmark decision gums-up the works by creating a cloud over the third-party repair/refill marketplace — a market that is already such a shadow of its former self.

 

Lexmark: Presumptions in the Right to Import, Reuse, and Resale

Patent,

by Dennis Crouch

The en banc holding of Lexmark v. Impression[1] is simple – the principles of Mallinckrodt[2] and Jazz Photo[3] are re-affirmed. In particular, the court reaffirmed (1) that a seller can use its patent rights to block both resale and reuse of a product and (2) that authorized sales of a product abroad does not exhaust the US patent rights associated with that product. As Prof. Rantanen explained, although the holding is simple, the ten-member majority panel took 90+ pages to describe how its conclusions conform with 19th – 21st century Supreme Court precedent and why the patent laws should operate differently than the copyright regime in these cases.

The presumptions are of some importance for those operating on the ground.  Here, the US court will presume that foreign sales of a product do not exhaust the US patent right.  Thus, an importer must obtain a release/license of those rights to avoid liability (assuming a valid and otherwise infringed patent).  Of course, that license right may be implied based upon providing notice of the importation intent. In addition, depending upon the location of sale, UCC  2-312 (or its foreign equivalent) may create a presumption of license depending upon the situation.

With regard to limits on domestic resale/reuse, the presumption continues to be that a bare sale without express restriction is delivered free from any resale or reuse restrictions.  However, once the restriction is in place, it appears to be bound to the product and thus binding upon subsequent owners who have no contractual agreement or relationship with the patentee.  Under the UCC, a bona fide purchaser of a good takes “good title” presumably free of any encumbrance (such as a reuse restriction).  UCC 2-403(1).  However, as state-law, the UCC is trumped by Federal Patent Law which is the source of encumbrance here.  The common law has a long history of prohibiting these types of encumbrances on personal property, but for the Federal Circuit, the patent right overwhelms that tradition.

A Supreme Court petition is likely in this case.  The problem though is that Impression is a rather small generic-cartridge company and lacks the funds to hire a top Supreme Court counsel – perhaps especially important here because of the 200 years of Supreme Court precedent relating to the issues at hand.   That said, Ed. O’Connor (Impression’s litigation counsel) previously represented Independent Ink in the 2006 Illinois Tool Works case before the Supreme Court.

= = = = =

[1] Lexmark Intern., Inc. v. Impression Products, Inc., App. No. 2014-1617, ___ F.3d ____ (Fed. Cir. February 12, 2016) (en banc). En banc order available at 785 F.3d 565 (Fed. Cir. 2015).

[2] Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700 (Fed. Cir. 1992).

[3] Jazz Photo Corp. v. International Trade Comm’n, 264 F.3d 1094 (Fed. Cir. 2001)

En banc Federal Circuit affirms Mallinkrodt, notwithstanding Quanta

Patent,

By Jason Rantanen

Lexmark International, Inc. v. Impression Products (Fed. Cir. 2016) (en banc) Download Opinion
Majority opinion authored by Judge Taranto, with Judge Dyk dissenting (joined by Judge Hughes)

 This morning the Federal Circuit issued its en banc opinion in the closely watched Lexmark case.  In a behemoth 92 page opinion by Judge Taranto, the court held that the limitations on the exhaustion doctrine set out in its 1992 Mallinkrodt and 2001 Jazz Photo opinions remain good law, notwithstanding the Supreme Court’s intervening decisions in Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008) and Kirtsaeng v. John Wiley & Sons, Inc., 133 S.Ct. 1351 (2013).

From the majority opinion:

First, we adhere to the holding of Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700 (Fed. Cir. 1992), that a patentee, when selling a patented article subject to a
single-use/no-resale restriction that is lawful and clearly communicated to the purchaser, does not by that sale give the buyer, or downstream buyers, the resale/reuse authority that has been expressly denied. Such resale or reuse, when contrary to the known, lawful limits on the authority conferred at the time of the original sale, remains unauthorized and therefore remains infringing conduct under the terms of § 271. Under Supreme Court precedent, a patentee may preserve its § 271 rights through such restrictions when licensing others to make and sell patented articles; Mallinckrodt held that there is no sound legal basis for denying the same ability to the patentee that makes and sells the articles itself. We find Mallinckrodt’s principle to remain sound after the Supreme Court’s decision in Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008), in which the Court did not have before it or address a patentee sale at all, let alone one made subject to a restriction, but a sale made by a separate manufacturer under a patentee-granted license conferring unrestricted authority to sell.

Second, we adhere to the holding of Jazz Photo Corp. v. International Trade Comm’n, 264 F.3d 1094 (Fed. Cir. 2001), that a U.S. patentee, merely by selling or authorizing the sale of a U.S.-patented article abroad, does not authorize the buyer to import the article and sell and use it in the United States, which are infringing acts in the absence of patentee-conferred authority. Jazz Photo’s no-exhaustion ruling recognizes that foreign markets under foreign sovereign control are not equivalent to the U.S. markets under U.S. control in which a U.S. patentee’s sale presumptively exhausts its rights in the article sold. A buyer may still rely on a foreign sale as a defense to infringement, but only by establishing an express or implied license—a defense separate from exhaustion, as Quanta holds—based on patentee communications or other circumstances of the sale. We conclude that Jazz Photo’s no-exhaustion principle remains sound after the Supreme Court’s decision in Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351 (2013), in which the Court did not address patent law or whether a foreign sale should be viewed as conferring authority to engage in otherwise-infringing domestic acts. Kirtsaeng is a copyright case holding that 17 U.S.C. § 109(a) entitles owners of copyrighted articles to take certain acts “without the authority” of the copyright holder. There is no counterpart to that provision in the Patent Act, under which a foreign sale is properly treated as neither conclusively nor even presumptively exhausting the U.S. patentee’s rights in the United States.

Judge Dyk, joined by Judge Hughes, disagreed:

I agree with the government that Mallinckrodt was wrong when decided, and in any event cannot be reconciled with the Supreme Court’s recent decision in Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008). We exceed our role as a subordinate court by declining to follow the explicit domestic exhaustion rule announced by the Supreme Court.

They also would take a presumption-based approach to international exhaustion that would treat exhaustion as a default rule:

Second, I would retain Jazz Photo insofar as it holds that a foreign sale does not in all circumstances lead to exhaustion of United States patent rights. But, in my view, a foreign sale does result in exhaustion if an authorized seller has not explicitly reserved the United States patent rights.

My sense is that Supreme Court review is likely given the tensions between Quanta and the Mallinkrodt rule that Judge Dyk and others have identified.  In my view, Judges Dyk and Hughes have the better reading of the pre-Mallinkrodt Supreme Court decisions and the effect of Quanta.  And given the Supreme Court’s tendency to look to patent law statutes when deciding non-statutory issues in copyright law (such as in MGM v. Grokster), I’m not convinced that, should it grant cert, the Supreme Court is going to feel as strongly that patent law’s exhaustion doctrine is different because it is non-statutory while copyright law’s is statutory.

Strictly Construing Amended Claims Against the Patentee

Patent,

by Dennis Crouch

In Cioffi v. Google, the Federal Circuit sided with the patentee, Cioffi — holding that the district court erred in its construction of the asserted patent claims and thus vacated the holdings non-infringement and invalidity via indefiniteness. (Non-precedential opinion).  Now, Google has petitioned the court for an en banc rehearing asking the court to “strictly construe” claim amendments against the patentee.

1. When construing a patent claim, should courts generally consult the prosecution history as context for resolving ambiguities, or is prosecution history relevant only if it clearly and unmistakably disavows claim scope?
2. When a patent applicant has amended a claim to overcome the Patent and Trademark Office’s earlier disallowance of the claim, should a court strictly construe the amended claim language against the applicant, as the Supreme Court has held, or consider the amendment history to be relevant only to the extent that it clearly and unambiguously disavows claim scope, as this Court has held

The issues raised here are parallel to those raised in the failed Google v. Vederi petition for writ of certiori. In that case, the Google asked (but the Supreme Court refused to answer):

Whether, when an applicant for a patent amends a claim to overcome the PTOs earlier disallowance of the claim, a court should (i) presume that the amendment narrowed the claim and strictly construe the amended claim language against the applicant, as this Court has held; or (ii) presume that the claim scope remained the same and require that any narrowing be clear and unmistakable, as the Federal Circuit has held.

In my 2015 discussion of Vederi, I wrote that the following:

[T]he Federal Circuit has strayed significantly from Pre-1952 disclaimer law exemplified by cases such as Supply Co. v. Ace Patents Corp., 315 U.S. 126, 137 (1942); Keystone Driller Co. v. Nw. Eng’g Corp., 294 U.S. 42, 48 (1935); Smith v. Magic City Kennel Club, Inc., 282 U.S. 784, 789–90 (1931); I.T.S. Rubber Co. v. Essex Rubber Co., 272 U.S. 429, 443–44 (1926); and Hubbell v. United States, 179 U.S. 77, 84 (1900).

Google relies upon many of these as well as additional cases for its argument. It writes:

The Supreme Court has long held that amendments made to overcome disallowance must be strictly construed against the applicant and in favor of the public. E.g., Exhibit Supply Co. v. Ace Patents Corp., 315 U.S. 126, 136-37 (1942); Smith v. Magic City Kennel Club, Inc., 282 U.S. 784, 789-90 (1931); Hubbell v. United States, 179 U.S. 77, 84 (1900).

In its decision in the case, the Federal Circuit considered prosecution history statements and actions, but was ultimately swayed by a claim differentiation argument. “We do not find, moreover, that anything in the prosecution history overcomes the presumption created by these claim differentiation principles.”  For me, an important question (that I cannot answer at this point) is whether Google’s legal argument is actually relevant to the facts-on-the-ground.  That is, would this shift in the law also shift the outcome of the case? That question is critical.

= = = = =

I’ll note here that the Federal Circuit’s recent decision in Columbia University v. Symantec appears roughly follow the suggestions outlined by Google here. That case, was decided by Chief Judge Prost along with Judges Dyk and Huges.  It is not surprising to me that those three judges reached a different result than the Cioffi panel of Judges O’Malley, Plager, and Bryson.

For this petition, Google added known Supreme Court and appellate litigator Daryl Joseffer to the brief. Joseffer also filed the Google v. Vederi petition. The hiring of Joseffer suggests that Google will push this case to the Supreme Court if it fails at the Federal Circuit.

Asserted patents in the case are U.S. Patent Nos. RE43,103; RE43,500; RE43,528; and RE43,529.

Claim Construction Leads to Nonsensical Result and thus Indefiniteness Holding

Patent, , ,

Columbia University v. Symantec Corp (Fed. Cir. 2015)

Back in 2013, the NPE known as Columbia University sued Symantec for infringing at least six of its data-analytics patents covering the process of detecting and blocking computer malware.[1]  Following a 2014 claim construction it was clear that all of the asserted claims were either (1) not infringed or (2) invalid as indefinite.  As a result, Columbia stipulated to such and filed its appeal of the claim construction order.[2]  On appeal, the Federal Circuit has affirmed the indefiniteness holding and substantially affirmed the claim construction, but did find enough problems with the lower-court decision to re-ignite the case.

Here, I’m just going to focus on the claim term “Byte Sequence Feature.”

Defining Byte Sequence Feature: The claim construction issues in this case are parallel to those debated in many cases – when a term is understood by one skilled in the art, does the specification limit that definition by using the term in particular ways (but not expressly re-defining the term), or does the term retain its ordinary and customary meaning?   Here, the court reiterated its en banc statements from Phillips that “the specification may define claim terms by implication.”

Columbia argued that the term “byte sequence feature” includes more than merely machine code instructions, and also extends to other non-compiled elements of an executable attachment.   On appeal, the Federal Circuit rejected that argument — finding that the specification indicates that the byte sequence feature “represents the machine code in an executable.”  The court also found that the machine-code limitation “most naturally aligns” with the inventor’s description of his invention.[3]

Since none of the accused products analyze machine code instructions, they don’t infringe (under this construction).

Loose Statements in the Provisional: Of interest to patent prosecutors, the associated provisional application included a statement essentially saying that the byte sequence feature does not include non-machine code “resource information.” That statement was removed from the non-provisional application, but the Federal Circuit indicated that the original definition still stands.[4]  This fits within the normal approach to patent prosecution that the mere withdrawal of a mis-statement is insufficient.  Rather, following a mis-statement or change-in-definition, the patent applicant should affirmatively identify the change for the examiner’s consideration.

Resource Code is Indefinite: I noted above that both courts agreed – the proper definition of “byte sequence feature” covers machine code and not ancillary resource information that may be part of the executable file.  Now, the confusing part is that many of these same claims include a express limitation that the “byte sequence feature” includes this resource information — exactly opposite of the court’s definition of the term.

It is a problematic ambiguity to have a claim element include embodiments excluded from the element’s definition.  As such, the court determined that those claims must be found invalid as failing the definiteness requirement of 35 U.S.C. 112. The court writes:

Claims 1 and 16 conflate a “byte sequence feature,” which is a feature extracted from machine code instructions, with the extraction of “resource information,” which is not a machine code instruction. Specifically, the claims describe the step of extracting machine code instructions from something that does not have machine code instructions. . . . The claims are nonsensical in the way a claim to extracting orange juice from apples would be, and are thus indefinite.

The court’s decision on indefiniteness appears correct but avoids the patentee’s actual argument that the claim terms should be construed so as to avoid this nonsense approach.

As noted in the intro, the Federal Circuit did reverse the claim construction as to the claims of two of the patents and vacated the non-infringement judgment. Thus, the patent case will continue on remand.  In the case, Columbia also sued Symantec for fraudulent concealment, unjust enrichment, and conversion. Those state law claims are apparently still pending before the district court.

= = = = =

[1] The asserted patents include Patent No. 7,487,544 (“the ’544 patent”), U.S. Patent No. 7,979,907 (“the ’907 patent”), U.S. Patent No. 7,448,084 (“the ’084 patent”), U.S. Patent No. 7,913,306 (“the ’306 patent”), U.S. Patent No. 8,074,115 (“the ’115 patent”), and U.S. Patent No. 8,601,322 (“the ’322 patent”).

[2] You might question whether the claims are valid under 35 U.S.C. § 101 for being directed to an unpatentable abstract idea.  Claim 1 of the ‘544 patent is directed to a “method for classifying” an executable file attached to an email by (1) extracting a byte sequence from the attachment “representative of resources referenced by the … attachment”; and (2) using a set of classification rules (not defined by the claim) to predict whether the byte sequence is malicious.  I suspect that the full-throated Section 101 argument was not raised because the defendant Symantec also supports broad subject matter eligibility.  In that situation, it may be the Court’s jurisdictional role to take up the mantle.

[3] See Renishaw PLC v. Marposs Societa’ per Azioni, 158 F.3d 1243, 1250 (Fed. Cir. 2003).

[4] See Advanced Display Sys., Inc. v. Kent State Univ., 212 F.3d 1272, 1282 (Fed. Cir. 2000) (provisional applications incorporated by reference are “effectively part of the” specification as though it was “explicitly contained therein.”).  This suggests that the oft-used approach of ‘fixing it in the non-provisional’ may need to be reconsidered.

[5] In the ‘115 and ‘322 patents.

Pending Supreme Court Patent Cases 2016 (February 3 Update)

Patent, , , , , , , , , , ,

by Dennis Crouch

With Washington DC snowed-in, action within the Supreme Court has also been somewhat slow.  Briefing is now complete in ePlus v. Lawson. In that case, a district court originally held an adjudged infringer in contempt-of-court for refusing to comply with its injunction order. Following the contempt order, the USPTO independently cancelled the patent claims and, at that point, the Federal Circuit vacated both the injunction and the contempt order. ePlus presents the following questions:

1. Whether civil contempt of a permanent injunction order that has been affirmed on appeal and is binding on the litigants under the law of judgments, may be set aside based on a legal development that came after both the permanent injunction and the contumacious conduct, and that did not call into question the correctness of the injunction when it was entered.
2. Whether, under Plaut v. Spendthrift Farm, 514 U.S. 211 (1995), the PTO, an administrative agency, may issue an order that retroactively overrides a federal court’s judgment on a question of law that is not subject to further judicial review, so long as some other part of the litigation is pending.

BIO/PhRMA filed a brief in support of the petition.  The ePlus case is one of several challenging the structure of administrative review proceedings running in parallel with court litigation.  William Jay (Goodwin Proctor) is representing ePlus with Mark Perry (Gibson Dunn)  on the other side.

Oral arguments for the parallel willfulness cases of Halo and Stryker are set for February 23, 2016.  The cases are consolidated to a single one-hour hearing. The attorneys for Halo/Stryker will chose a representative who gets 20-minutes; the US Department of Justice (who generally supports the Halo/Stryker position) will have 10-minutes of oral arguments; and Pulse/Zimmer will choose an attorney for a 30-minute opposition.  For those attending, the other case being heard that day is the criminal case of Taylor v. US involving the Hobbs Act that creates federal criminal liability for “interference with commerce by threats of violence.” 18 U.S.C. 1951.  The question is whether the required element of interstate commerce must be proven beyond a reasonable doubt in order to obtain a criminal conviction.

A new petition for certiorari has been filed in Cooper v. Lee, No. 15-955 (whether IPRs violate Separation of Powers).  The petition by Robert Greenspoon links itself with the Cuozzo challenge — noting that Cuozzo raises the “smaller issue” while Cooper raises “larger issues.”

Other new petitions include a filing from Joao Bock Transaction Systems, LLC v. Jack Henry & Associates, Inc., No. 15-974 (defining an abstract idea) and Systems, Inc. v. Nordock, Inc., No. 15-978 (design patent damage calculations).  The Federal Circuit decided Joao Bock with a R.36 affirmance (without opinion affirming that claim 30, et. al, of U.S. Patent No. 7,096,003 are invalid as effectively claiming abstract ideas).  Regarding Nordock, although it is not as high profile, its simplicity may make it a better vehicle than Samsung v. Apple for challenging design patent damage calculations. In any event Nordock’s timing is good and I would expect that the court will at least withhold judgment until it decides whether to grant certiorari in Samsung v. Apple.

1. Petitions Granted:

2. Petitions Granted with immediate Vacatur and Remand (GVR)

3. Petitions for Writ of Certiorari Pending:

  • Post Grant Admin: Cooper v. Lee, No. 15-955 (whether IPRs violate Separation of Powers).
  • Post Grant Admin: Achates Reference Publishing, Inc. v. Apple, Inc., et al., No. 15-842 (IPR institution decisions unreviewable, even when addressed in a final written decision by PTAB)
  • Post Grant Admin: Interval Licensing LLC v. Michelle K. Lee, No. 15-716 (Can the Patent and Trademark Office appropriately apply the “broadest reasonable interpretation” standard in construing patent claims in post-grant validity challenges?)
  • Design Patents: Samsung Electronics Co. v. Apple Inc., No 15-777 (design patent scope and damages calculation)
  • Design Patents: Systems, Inc. v. Nordock, Inc., No. 15-978 (design patent damage calculations – similar issues as Samsung v. Apple).
  • Inducement: Life Technologies Corporation, et al. v. Promega Corporation, No. 14-1538 (whether an entity can “induce itself” under 271(f)(1))(CVSG, awaiting government brief)
  • Inducement: Arthrex, Inc. v. Smith & Nephew, Inc., et al., No. 15-559 (Commil re-hash – if actions were “not objectively unreasonable” can they constitute inducement?)
  • Claim Construction: Universal Lighting Technologies, Inc., v. Lighting Ballast Control LLC, No. 15-893 (intrinsic vs extrinsic evidence for claim construction).
  • Preclusion or Jurisdiction: Vermont v. MPHJ Technology Investments, LLC, No. 15-838 (Federal court jurisdiction in anti-troll consumer protection case)
  • Preclusion or Jurisdiction: Alexsam, Inc. v. The Gap, Inc., No. 15-736 (appellate jurisdiction over patents that were dropped from case pre-trial)
  • Preclusion or Jurisdiction:
    ePlus, Inc. v. Lawson Software, Inc., No. 15-639 (what happens with a finally-determined permanent injunction after PTO cancels the patent claim?)
  • Preclusion or Jurisdiction: Biogen MA, Inc. v. Japanese Foundation for Cancer Research, et al., No. 15-607 (Whether AIA eliminated federal district courts’ jurisdiction over patent interference actions under 35 U.S.C. § 146.)
  • Eligibility Challenges: Retirement Capital Access Management Company, LLC v. U.S. Bancorp, et al., No. 15-591 (Whether subject matter eligibility under 35 U.S.C. § 101 is a ground specified as a condition for patentability under 35 U.S.C. § 282(b)(2))
  • Eligibility Challenges: Joao Bock Transaction Systems, LLC v. Jack Henry & Associates, Inc., No. 15-974 (defining an abstract idea)
  • Claim Construction: Media Rights Technologies, Inc. v. Capital One Financial Corporation, et al., No. 15-725 (Claim Construction: whether there a strong presumption against construing terms as subject to 35 U.S.C. § 112p6 that do not recite the term “means.”)
  • Patent Term Adjustment Dispute: Daiichi Sankyo Company, Ltd. v. Michelle K. Lee, No. 15-652 (Patent Term Adjustment – whether the 180 day deadline applies; could bleed into admin law issues)
  • Damages: STC, Inc. v. Global Traffic Technologies, No. 15-592 (Whether marking the packaging of a patented article with patent notification satisfies the marking provision of 35 U.S.C. § 287(a) where the patented article itself is undisputedly capable of being marked.)
  • Damages: Innovention Toys, LLC v. MGA Entertainment, Inc., et al., No. 15-635 (Stryker/Halo follow-on – potential wait-and-see)
  • Low Quality Brief: Morales v. Square, No. 15-896 (eligibility under Alice)

3. Petitions for Writ of Certiorari Denied:

  • Alps South, LLC v. The Ohio Willow Wood Company, No. 15-567
  • Allvoice Developments US, LLC v. Microsoft Corp., No. 15-538
  • OIP Technologies, Inc. v. Amazon.com, Inc., No. 15-642
  • Fivetech Technology Inc. v. Southco, Inc., No. 15-381
  • Tyco Healthcare Group LP, et al. v. Ethicon Endo-Surgery, Inc., No. 15-115
  • Nautilus, Inc. v. Biosig Instruments, Inc., No. 15-561
  • Chunghwa Picture Tubes, Ltd., et al. v. Eidos Display, LLC, et al., No. 15-288
  • Kenneth Butler, Sr. v. Balkamp Inc., et al., No. 15-273
  • Arthrex, Inc. v. KFx Medical Corporation, No. 15-291
  • Daiichi Sankyo, Inc., et al. v. Apotex Inc., No. 15-281
  • Mylan Pharmaceuticals Inc. v. Apotex Inc., No. 15-307
  • Luv N’ Care, Ltd. v. Munchkin, Inc., No. 15-242
  • Automated Merchandising Systems, Inc. v. Michelle K. Lee, Director, United States Patent and Trademark Office, No. 15-326
  • I/P Engine, Inc. v. AOL Inc., et al., No. 14-1358
  • Interval Licensing LLC v. AOL Inc., et al., No. 14-1362
  • Content Extraction and Transmission LLC v. Wells Fargo Bank, National Association, et al., No. 14-1473
  • W.L. Gore & Associates, Inc. v. Bard Peripheral Vascular, Inc., et al., No. 15-41
  • NetAirus Technologies, LLC v. Apple Inc., No. 14-1353
  • Muffin Faye Anderson v. Kimberly-Clark Corporation, No. 14-10337
  • MobileMedia Ideas LLC v. Apple Inc., No. 15-206
  • SpeedTrack, Inc. v. Office Depot, Inc. et al., No. 15-461 (Kessler doctrine)
  • Rodney K. Morgan, et al. v. Global Traffic Technologies LLC, No. 15-602
  • Lakshmi Arunachalam v. JPMorgan Chase & Co., No. 15-691

4. Prior versions of this report:

Pending Supreme Court Patent Cases 2016 (January 20 Update)

Patent, , , , , , , , ,

by Dennis Crouch

This week, the Supreme Court granted certiorari in the administrative patent review case of Cuozzo v. Lee. Cuozzo raises the following two questions: (1) Whether the court of appeals erred in holding that, in inter partes review (IPR) proceedings, the Patent Trial and Appeal Board may construe claims in an issued patent according to their broadest reasonable interpretation rather than their plain and ordinary meaning; and (2) whether the court of appeals erred in holding that, even if the Board exceeds its statutory authority in instituting an IPR proceeding, the Board’s decision whether to institute an IPR proceeding is judicially unreviewable. The petitioner (Cuozzo) now has forty-five days to file its opening merits brief with amici briefs due one week later.

The other major patent issue before the court this term involves the enhanced damages questions raised in the parallel cases of Halo and Stryker. Oral arguments are set for those cases for February 23, 2016. Although not a party, the Solicitor General has requested permission to participate in oral argument as amicus curiae and for divided argument filed. The US Government generally supported the petitioners’ position that the Federal Circuit has unduly limited the availability of enhanced damages for willful infringement and other egregious acts by an adjudged infringer.

This week, the Supreme Court also issued a GVR in Medtronic v. NuVasive – ordering the Federal Circuit to reconsider whether the mens rea evidence presented was sufficient to prove active inducement under Commil.

1. Petitions Granted:

2. Petitions Granted with immediate Vacatur and Remand (GVR)

3. Petitions for Writ of Certiorari Pending:

  • Design Patents: Samsung Electronics Co. v. Apple Inc., No 15-777 (design patent scope and damages calculation)
  • Inducement: Life Technologies Corporation, et al. v. Promega Corporation, No. 14-1538 (whether an entity can “induce itself” under 271(f)(1))(CVSG, awaiting government brief)
  • Inducement: Arthrex, Inc. v. Smith & Nephew, Inc., et al., No. 15-559 (Commil re-hash – if actions were “not objectively unreasonable” can they constitute inducement?)
  • Post Grant Admin: Achates Reference Publishing, Inc. v. Apple, Inc., et al., No. 15-842 (IPR institution decisions unreviewable, even when addressed in a final written decision by PTAB)
  • Post Grant Admin: Interval Licensing LLC v. Michelle K. Lee, No. 15-716 (Can the Patent and Trademark Office appropriately apply the “broadest reasonable interpretation” standard in construing patent claims in post-grant validity challenges?)
  • Claim Construction: Universal Lighting Technologies, Inc., v. Lighting Ballast Control LLC, No. 15-893 (intrinsic vs extrinsic evidence for claim construction).
  • Preclusion or Jurisdiction: Vermont v. MPHJ Technology Investments, LLC, No. 15-838 (Federal court jurisdiction in anti-troll consumer protection case)
  • Preclusion or Jurisdiction: Alexsam, Inc. v. The Gap, Inc., No. 15-736 (appellate jurisdiction over patents that were dropped from case pre-trial) (New Petition)
  • Preclusion or Jurisdiction:
    ePlus, Inc. v. Lawson Software, Inc., No. 15-639 (what happens with a finally-determined permanent injunction after PTO cancels the patent claim?)
  • Preclusion or Jurisdiction: Biogen MA, Inc. v. Japanese Foundation for Cancer Research, et al., No. 15-607 (Whether AIA eliminated federal district courts’ jurisdiction over patent interference actions under 35 U.S.C. § 146.)
  • Eligibility Challenges: Retirement Capital Access Management Company, LLC v. U.S. Bancorp, et al., No. 15-591 (Whether subject matter eligibility under 35 U.S.C. § 101 is a ground specified as a condition for patentability under 35 U.S.C. § 282(b)(2))
  • Claim Construction: Media Rights Technologies, Inc. v. Capital One Financial Corporation, et al., No. 15-725 (Claim Construction: whether there a strong presumption against construing terms as subject to 35 U.S.C. § 112p6 that do not recite the term “means.”)
  • Patent Term Adjustment Dispute: Daiichi Sankyo Company, Ltd. v. Michelle K. Lee, No. 15-652 (Patent Term Adjustment – whether the 180 day deadline applies; could bleed into admin law issues)
  • Damages: STC, Inc. v. Global Traffic Technologies, No. 15-592 (Whether marking the packaging of a patented article with patent notification satisfies the marking provision of 35 U.S.C. § 287(a) where the patented article itself is undisputedly capable of being marked.)
  • Damages: Innovention Toys, LLC v. MGA Entertainment, Inc., et al., No. 15-635 (Stryker/Halo follow-on – potential wait-and-see)

3. Petitions for Writ of Certiorari Denied:

  • Alps South, LLC v. The Ohio Willow Wood Company, No. 15-567
  • Allvoice Developments US, LLC v. Microsoft Corp., No. 15-538
  • OIP Technologies, Inc. v. Amazon.com, Inc., No. 15-642
  • Fivetech Technology Inc. v. Southco, Inc., No. 15-381
  • Tyco Healthcare Group LP, et al. v. Ethicon Endo-Surgery, Inc., No. 15-115
  • Nautilus, Inc. v. Biosig Instruments, Inc., No. 15-561
  • Chunghwa Picture Tubes, Ltd., et al. v. Eidos Display, LLC, et al., No. 15-288
  • Kenneth Butler, Sr. v. Balkamp Inc., et al., No. 15-273    
  • Arthrex, Inc. v. KFx Medical Corporation, No. 15-291
  • Daiichi Sankyo, Inc., et al. v. Apotex Inc., No. 15-281
  • Mylan Pharmaceuticals Inc. v. Apotex Inc., No. 15-307
  • Luv N’ Care, Ltd. v. Munchkin, Inc., No. 15-242
  • Automated Merchandising Systems, Inc. v. Michelle K. Lee, Director, United States Patent and Trademark Office, No. 15-326
  • I/P Engine, Inc. v. AOL Inc., et al., No. 14-1358
  • Interval Licensing LLC v. AOL Inc., et al., No. 14-1362
  • Content Extraction and Transmission LLC v. Wells Fargo Bank, National Association, et al., No. 14-1473
  • W.L. Gore & Associates, Inc. v. Bard Peripheral Vascular, Inc., et al., No. 15-41
  • NetAirus Technologies, LLC v. Apple Inc., No. 14-1353
  • Muffin Faye Anderson v. Kimberly-Clark Corporation, No. 14-10337
  • MobileMedia Ideas LLC v. Apple Inc., No. 15-206
  • SpeedTrack, Inc. v. Office Depot, Inc. et al., No. 15-461 (Kessler doctrine)
  • Rodney K. Morgan, et al. v. Global Traffic Technologies LLC, No. 15-602
  • Lakshmi Arunachalam v. JPMorgan Chase & Co., No. 15-691

4. Prior versions of this report:

 
 

Supreme Court grants Certiorari in Challenge of Inter Partes Review Proceedings

Patent, , , , ,

by Dennis Crouch

The Supreme Court has granted writ of certiorari in the pending Inter Partes Review challenge of Cuozzo Speed Tech v. Lee, Docket No. 15-446. 

Questions Presented:

  1. Whether the court of appeals erred in holding that, in IPR proceedings, the Board may construe claims in an issued patent according to their broadest reasonable interpretation rather than their plain and ordinary meaning.
  2. Whether the court of appeals erred in holding that, even if the Board exceeds its statutory authority in instituting an IPR proceeding, the Board’s decision whether to institute an IPR proceeding is judicially unreviewable.

Nine briefs amici were filed at the petitions stage. I expect that number will double for the merits stage.

More from Patently-O on the case: https://patentlyo.com/?s=cuozzo

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The court also granted certiorari for a second time Kirtsaeng v. John Wiley. This time, the focus is on the award of attorney fees to the prevailing party in copyright cases.

Question Presented:

What constitutes the appropriate standard for awarding attorneys’ fees to a prevailing party under section 505 of the Copyright Act.

Section 505 (17 U.S.C. 505) states that: “the court may also award a reasonable attorney’s fee to the prevailing party as part of the costs.”  However, there is a circuit split as to when it should be awarded. According to the petition:

The Ninth and Eleventh Circuits award attorneys’ fees when the prevailing party’s successful claim or defense advanced the purposes of the Copyright Act. The Fifth and Seventh Circuits employ a presumption in favor of attorneys’ fees for a prevailing party that the losing party must overcome. Other courts of appeals primarily employ the several “nonexclusive factors” this Court identified in dicta in Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19 (1994). And the Second Circuit, as it did in this case, places “substantial weight” on whether the losing party’s claim or defense was “objectively unreasonable.” Matthew Bender & Co. v. W. Publ’g Co., 240 F.3d 116, 122 (2d Cir. 2001).

 As a reminder, in Kirtsaeng I, the Supreme Court ruled that copyright exhaustion (first sale doctrine) applies to international sales of the copyrighted work that were lawfully made abroad.  This rule is opposite to that in patent cases (Jazz Photo), but the issue is core to the pending en banc Lexmark case. A decision is expected any day in Lexmark.

Lighting Ballast at the Supreme Court: The Role of Extrinsic Evidence in Claim Construction

Patent, ,

by Dennis Crouch

In Lighting Ballast, construction of the claimed “voltage source means” has been the subject of five different court opinions. Three interpreted the claim term as a means-plus-function limitation and the other two found it not to be in MPF form.  The distinction is important for the case because it serves as a validity trigger.  The patent specification did not describe an embodiment of the voltage source means and so the term would necessarily be deemed indefinite if interpreted as an MPF under 35 U.S.C. 112¶6 (now renumbered as section 112(f)).

The five prior decisions included a district court reversing itself and then being re-reversed by the Federal Circuit panel whose decision was reaffirmed by an en banc Federal Circuit. Finally, after an opinionless post-Teva vacatur (GVR) from the Supreme Court, the Federal Circuit reversed course again and gave deference to the district court’s fact-finding.  The result of this last judgment was to reinstate the final district court determination that a person of skill in the art would interpret the term as connoting a structural element and thus not a pure “means” claim. This was a win for the patentee.

Now, the adjudged infringer Universal Lighting has petitioned the Supreme Court for a writ of certiorari with the following question presented:

When and how can expert testimony or other extrinsic evidence be used to avoid the construction of a patent claim otherwise dictated by the patent’s intrinsic record, including in particular to avoid the restrictions imposed by 35 U.S.C. §112 ¶ 6 on functional claiming?

The original lighting ballast issue focused on appellate deference – an issue largely decided by the Supreme Court in its 2015 Teva v. Sandoz decision.  Markman was also a case focused on process (judge vs jury).  As presented here, the case has the potential of shifting to substance of claim construction.  If it takes the case, the court will almost certainly need to delve into the goals and purposes of claim construction and the inherent conflicts between a claim’s most literal meaning, its drafter’s intended meaning, and the notice of scope provided to the world.

The brief was drafted by Steven Routh and his team at Orrick who also represented ULT at the Federal Circuit. Read the petition here: https://patentlyo.com/media/2016/01/LightingBallastPetition.pdf.

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I used this case as the subject of last fall’s Patent Law Moot Court Competition (sponsored by McKool Smith) and most of the arguments centered around this same issue of whether the expert testimony that a engineers understand Voltage Source Means as a structural term of art (a Battery or Rectifier) was sufficient to overcome the strong presumption that accompanies the use of the term “means.”  The students also debated whether, following Williamson v. Citrix, any such presumption should still exist.