The USPTO is seeking information on artificial intelligence (AI) inventions. This topic generally includes both (a) inventions developed by AI (wholly or partially) and (b) inventions of AI. Although the focus here is AI invention, the relevant underlying thread is corporate invention.
What are elements of an AI invention? For example: If a person conceives of a training program for an AI, has that person invented the trained AI? If a person instructs an AI to solve a particular problem; has that person invented the solution (once it is solved by the AI)?
What are the different ways that a natural person can contribute to conception of an AI invention and be eligible to be a named inventor? For example: Designing the algorithm and/or weighting adaptations; structuring the data on which the algorithm runs; running the AI algorithm on the data and obtaining the results.
Do current patent laws and regulations regarding inventorship need to be revised to take into account inventions where an entity or entities other than a natural person contributed to the conception of an invention?
Should an entity or entities other than a natural person, or company to which a natural person assigns an invention, be able to own a patent on the AI invention?
Are there any patent eligibility considerations unique to AI inventions?
Are there any disclosure-related considerations unique to AI inventions? For example, under current practice, written description support for computer-implemented inventions generally require sufficient disclosure of an algorithm to perform a claimed function, such that a person of ordinary skill in the art can reasonably conclude that the inventor had possession of the claimed invention. Does there need to be a change in the level of detail an applicant must provide in order to comply with the written description requirement, particularly for deep-learning systems that may have a large number of hidden layers with weights that evolve during the learning/training process without human intervention or knowledge?
How can patent applications for AI inventions best comply with the enablement requirement, particularly given the degree of unpredictability of certain AI systems?
Does AI impact the level of a person of ordinary skill in the art? If so, how? For example: Should assessment of the level of ordinary skill in the art reflect the capability possessed by AI?
Are there any prior art considerations unique to AI inventions?
Are there any new forms of intellectual property protections that are needed for AI inventions, such as data protection?
Are there any other issues pertinent to patenting AI inventions that we should examine?
Are there any relevant policies or practices from other major patent agencies that may help inform USPTO’s policies and practices regarding patenting of AI inventions?
Send your comments to the USPTO (AIPartnership@uspto.gov) by October 11, 2019.
The legal claims in this case are interesting and could form a Mountain Dew commercial — unlawful use of flavor. To be clear, the case is not about actual flavors, but instead enhancing the “perceived taste” of orange juice and other beverages by adding an aroma in scratch-n-sniff form to a bottle-lid closure. A “fresh aroma that replicates or evokes memory of the expected flavor” is released by the abrasive force of twisting off the bottle-cap.
ScentSational and PepsiCo had a 10-year business relationship. As that partnership was winding down, ScentSational ramped-up talks with Coca-Cola. However, those talks also broke down — and ScentSational blames PepsiCo. In particular, the allegation is that PepsiCo misappropriated and attempted to patent ScentSational technology; and Coca-Cola dropped the project when it found PepsiCo’s pending patent applications. ScentSational then sued for trade secret theft, breach of contract, and inventorship correction — arguing that damages should be based upon the lost Coca-Cola contract. However, the district court dismissed the case in PepsiCo’s favor.
The primary issue on appeal had to do with damages and expert testimony. The district court had barred most of ScentSational’s expert testimony for failing Daubert. On appeal, the Federal Circuit affirmed — holding that the district court “did not abuse the broad discretion it is accorded in determining whether, and to what extent, to admit particular expert testimony at trial.” The Federal Circuit also affirmed the lower court’s summary judgment finding that ScentSational had failed to produce inventorship evidence.
A controversial aspect of the decision was the notion that ScentSational’s failure to prove particular damages should result in dismissal of the entire case (since damages are not an element of the trade secret or breach claims). The appellate panel held that ScentSational’s claim to nominal damages had been waived and “In any event, we have held that we will ordinarily not remand a case merely to determine whether nominal damages would have been appropriate.”
Following the May 2019 decision, ScentSational petitioned for rehearing arguing that the court misunderstood a number of facts in dispute and also “that while a plaintiff must prove the existence of damages with certainty in order to recover, plaintiff need not prove the amount of loss with certainty.” In a recent order, however, the Federal Circuit has denied rehearing — effectively ending ScentSational’s case.
Heat Technologies, Inc. v. Papierfabrik August Koehler SE (Fed. Cir. 2019)
This case involves an unusual bit of appellate procedure regarding certifying questions for appeal under 28 U.S.C. 1292(b).
Back in 2018, Heat Tech sued Koehler Paper in N.D. Georgia federal court requesting correction of inventorship under 35 U.S.C. § 256 as well as damages for unjust enrichment and conversion under Georgia state law. U.S. Patent No. 9,851,146. The basic background of the lawsuit was that Heat Tech’s president (Plavnik) invented the paper-drying mechanism that was then disclosed to Koehler as part of a collaboration evaluation. In addition, Heat Tech argued that almost all of the information disclosed in Koehler’s patent was included in a prior Heat Tech patent application.
At the district court, Koehler filed a motion to dismiss the case — arguing that Heat Tech’s actual claim is for invalidity and that an inventorship-correction lawsuit is not appropriate when the same alleged facts would invalidate the patent for lack of novelty or obviousness. The district court denied the motion to dismiss, but agreed to certify the question for appeal to the Federal Circuit — noting some disagreement among the courts on the state of the law.
Question certified by the district court:
Can a claimant obtain relief under 35 U.S.C. § 256 when its inventorship allegations, if taken or proven as true, would necessarily invalidate the subject patent under other provisions of the Patent Act?
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The usual rule is that appellate jurisdiction follows final judgment by a district court. In a motion-to-dismiss situation, the case can be appealed if dismissal is granted — but not if dismissal is denied (because the case will still be pending at the district court). There are several exceptions, including mandamus actions and appeals of preliminary injunction decisions another exception involves certification of an appeal under Section 1292:
(b) When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order.
The Court of Appeals which would have jurisdiction of an appeal of such action may thereupon, in its discretion, permit an appeal to be taken from such order, if application is made to it within ten days after the entry of the order.
In reviewing the statute, the Federal Circuit identifies three key requirements for hearing an interlocutory appeal under 1292(b):
The appeal must involve “a controlling question of law.”
There must be “substantial ground for difference of opinion.”
An immediate appeal “may materially advance the ultimate termination of the litigation.”
Further, even when all three elements are met, the appellate court still has discretion to decide whether to permit the appeal.
On appeal now, the Federal Circuit HeatTechDecisionhas denied the 1292(b) petition and effectively indicated that the district court’s decision was correct. In particular, the appellate panel found no “substantial ground for disagreement” because Section 256 jurisdiction “does not depend on whether the patent may be shown to be invalid.” Slip op. The appellate panel noted its lack of prior precedent directly and expressly on-point, but concluded that prior cases compel the answer. For example, in Frank’s Casing Crew & Rental Tools, Inc. v. PMR Techs., Ltd., 292 F.3d 1363, 1377 (Fed. Cir. 2002), the court wrote that an inventorship action could be maintained for an unenforceable patent.
E.I. DuPont de Nemours & Co. v. Unifrax I LLC (Fed. Cir. 2019)
In 2014, DuPont sued Unifrax for infringing its patented flame-barrier that is both lightweight and thin. U.S. Patent 8,607,926 (“Composite Flame Barrier Laminate for a Thermal and Acoustic Insulation Blanket”). The jury sided with DuPont — finding the asserted claims infringed and not proven invalid. Over a dissent from Judge O’Malley, the Federal Circuit has affirmed — finding that substantial evidence supports the verdict. (Majority authored by Judge Reyna and joined by Judge Hughes).
When 90% counts as 100%: A key issue on appeal was the meaning of the claim term “100%.” DuPont’s claims required an “inorganic refractory layer” made of “platelets in an amount of 100% by weight.” That particular limitation was added during prosecution to get around a prior art reference that taught a platelet concentration of less than 100%.
The accused product layer approximates 100% platelets, but has some small amount of residual dispersant that didn’t fully evaporate. Prior to trial, the district court sided with DuPont on claim construction and ruled that “100%” be interpreted as allowing for “some residual dispersant.” This substantially foreclosed Unifrax’s non-infringement argument that it had hoped to take to the jury.
On appeal, the Federal Circuit affirmed — finding a more-relaxed construction of 100% was correct because of how the mathematical construct was used in the patent document itself. The key phrase from the specification is as follows:
The refractory layer comprises platelets. Preferably at least 85% of the layer comprises platelets, more preferably at least 90% and most preferably at least 95%. In some embodiments, platelets comprise 100% of the layer. The refractory layer may comprise some residual dispersant arising from incomplete drying of the platelet dispersion during manufacture.
According to the court, the final sentence of this paragraph — allowing for residual dispersant in the layer — applies to all of the embodiments, including the 100% layer. Thus, when the patent says “100%” platelets, it really meant almost-all platelets with potentially a bit of dispersant. According to the majority the defendant is wrong that “‘100%’ means one hundred percent.”
Writing in dissent, Judge O’Malley argued that the majority’s construction “ignores the plain meaning of ‘100%’ and introduces more ambiguity than it resolves.”
There is no ambiguity in this language. The “platelets” must be present in the refractory layer “in an amount of 100% by weight.” The “100% by weight” language, coupled with the requirement that the platelets exist in an “inorganic refractory layer,” clearly contemplates that the platelets—i.e., inorganic material—constitute the entirety of the refractory layer. That leaves no room for other organic additives. There is perhaps no clearer or simpler way the patentee could have conveyed such a requirement.
Dissent.
The claim language is actually quite mess in the same clause it indicates that the refractory layer comprises “platelets in an amount of 100% by weight” but may also have a moisture content of up to 10% by weight. 110% by weight concentration is not ordinarily allowed in physics. However, we do sometimes talk about “110% effort” and Cecil Quillin has reported a USPTO’s patent grant rate as greater than 100% (by comparing original filings to all patents issued in the resulting family).
I pulled up the prosecution history and found that the 100% and 10% elements were added at the same time in the same amendment with the statement that the claim now “requires a refractory layer containing 100% platelets (and also requires . . . a defined residual moisture content).” In my mind, this works strongly in the patentee’s favor — that the 100% allows for residual moisture. Still, it is unfortunate that the ultimate holding is a rejection of the defendant’s argument that “‘100%’ means one hundred percent.”
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Product on sale before the patent filing. A unique aspect of this lawsuit is that the accused products were already on sale before DuPont filed its patent application.
Unifrax’s product was on-sale by May 2011; DuPont filed its application in December 2011. To be clear, DuPont’s patent does claim priority to prior applications, but only as a continuation-in-part. The prior applications apparently do not sufficiently disclose the invention at-issue here.
For DuPont, the fact that its patent was filed prior to the AIA saved its bacon. On appeal, the Federal Circuit agreed that DuPont had presented substantial evidence to antedate Unifrax’s prior use/sale.
The critical point of law focused on proof of the prior invention. The courts have long been suspicious of inventor’s self-serving testimony regarding prior inventorship. Here, the duPont provided inventor testimony along with substantial documentation of the prior invention timing. However, the company did not provide o corroborating evidence as to one particular limitation in the claims — a requirement that the refractive layer have a “dry areal weight of 15 to 50 gsm.”
On appeal, the Federal Circuit sided with duPont — reflecting on the requirement for corroboration.
[O]ur case law does not require that evidence have a source independent of the inventors on every aspect of conception and reduction to practice. . . Here, the law requires only that the corroborative evidence, including circumstantial evidence, support the credibility of the inventors’ story.
The reason for corroboration is a concern that inventors will commit perjury. Thus, the role of corroboration is help ensure inventor credibility.
Coda Development v. Goodyear Tire & Rubber (Fed. Cir. 2019)
Coda and Goodyear cooperated in a project to commercialize self-inflating tire technology invented by the CEO of Czech-based Coda (Hrabal). Coda shared its information as well as functional prototypes with Goodyear representatives, including Robert Benedict. At the meeting Benedict photographed the prototype without permission (after asking to be left alone for a moment). All of this sharing was done under a non-disclosure agreement between the companies. Benedict then ghosted and did not return attempted contacts from Coda.
Self-Inflating-Tire: Pause here to note that this is pretty neat technology. As a tire rolls along, its sidewalls are repeatedly squashed and then expanded in a rotating procession. That squash-expand cycle is used here to power a simple air pump that keeps pressure in the tires.
Back to the Story: One month after their meeting with Coda, Goodyear applied for a patent titled “Self-Inflating Tire Assembly” Naming Benedict and Mr. Losey as inventors. The patent issued as U.S. Patent No. 8,042,586 “with claims covering the allegedly novel, proprietary, and confidential information Coda disclosed to Goodyear.”
Coda was clued-in to what happened at a later date from an email from a former Goodyear employee stating:
I am retired now from Goodyear and see in the news today that they have copied your SIT. Unfortunate. I thought China companies were bad.
Coda sued, requesting to add Hrabal as inventor on the ‘586 patent and delete Benedict and Losey. See 35 U.S.C. 256. Coda also identified eleven other Goodyear patents included confidential technology invented by Hrabal, and requested that he be added as inventor on those as well. The complaint also alleges trade secret misappropriation.
Although the story might sound sounds compelling, the district court still dismissed the complaint for failure to state a claim. The crux of the dismissal centers on an additional piece of evidence – 2008 article published by Hrabal that, according to the district court found, disclosed the information that Coda “now claims was secret when disclosed to Goodyear in 2009.” The district court denied Hrabal’s request to amend its complaint to provide details regarding the differences between the published article and the information taken by Goodyear.
On appeal, the Federal Circuit has vacated the dismissal — finding that Hrabal’s complaint sets out a plausible claim for correction of inventorship. In particular, the court held that the facts outlined above “allow the reasonable inference that Mr. Hrabal conceived the invention of the ’586 patent and that Messrs. Benedict and Losey did not” and that Hrabal should be considered a joint inventor. The appellate panel identified the lower court’s error as procedural. Namely, in its motion-to-dismiss, the court considered evidence outside of the pleadings (the 2008 publication), but did not permit Hrabal to present explanatory evidence. Under motion-to-dismiss rules, [i]f a court does consider material outside the pleadings, the motion to dismiss must be treated as a motion for summary judgment under Rule 56 and all parties must be given a reasonable opportunity to present all material pertinent to the motion.” See Fed. R. Civ. P. 12(d).
In this case, the parties “hotly” dispute whether the 2008 publication actually discloses the alleged novel trade secrets – and so a judicial conclusion is inappropriate at the pleadings stage.
The district court erred in considering the Hrabal article for this purpose without converting Defendants’ motion to dismiss into one for summary judgment and giving Plaintiffs a reasonable opportunity to present all pertinent material.
On remand, the district court will need to reconsider these issues and must also permit the plaintiff to amend its complaint in order to clarify the trade secrets and inventive elements at issue. “We …. aware of no reason why they should not be permitted to file their proposed amended complaint on remand.”
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The district court had also dismissed the trade-secret claims as time-barred based upon the Ohio statute of limitations that requires a claim filed “within four years after the misappropriation is discovered or by the exercise of reasonable diligence should
have been discovered.” Ohio Rev. Code § 1333.66. On appeal, the court also found substantial factual dispute – making this an issue not appropriate for dismissal on the pleadings.
Defendants ask us to infer, from the complaint itself, that Plaintiffs should have begun investigating in 2009 and that, had they done so, they would have discovered the application leading to the ’586 patent as of its publication
date eighteen months later. Defendants argue that the only reasonable inference to be drawn is against Plaintiffs. We disagree. Plaintiffs might have assumed Goodyear lost interest in the technology, given its previous failed investment. Or they might have thought that Goodyear would honor the nondisclosure agreement.
On remand, the court must allow this issue to proceed past the pleadings stage.
I recently posted a chart showing a short time series showing the number of inventors per patent. The basic conclusion from that post was in the headline: Average Number of Inventors per Patent Continues Steady Rise. Here, I have updated and added to those charts. The first chart below reaches back to 1976 — showing that the average number of inventors per patent has been steadily increasing over all of the past 40 years. The trend has been amazingly steady and linear, and should serve as good fodder for economic analysis. My simple linear model suggests that we’ll top the 3.0 inventors-per-patent threshold by 2021 (both the mean and median).
The second and third charts (below) provides a bit more detail and looks to answer some questions posted by James Daily of WashU regarding the underlying distributions. The basic conclusion there is that the proportion of one-inventor patents has dropped steadily — and can be linked with a steady rise in patents listing three or more inventors. During this time, the proportion of two-inventor patents has remained steady at about 25%. The charts also demonstrate that the growth in 3+ inventor patents is itself skewed: For example, the proportion of patents with 3 inventors doubled during the 43 year span while the proportion of patents with 7+ inventors saw a nine-fold increase.
Although the movement was already fully underway, recognize that the America Invents Act (AIA) helps foster this as well by (1) allowing patents to be filed by the applicant rather than the inventors; and (2) weakening the penalty for errors in listing of inventorship. That change was by design and part of what Dir. Kappos notion that major inventions these days are quite often major team projects, and that the patent law should foster and encourage those teams projects at least as much as it encourages individual innovation.
Guest Post By: Colleen Chien, Professor, Santa Clara University Law School
Over the last several years, the USPTO has continued to release high-quality data about the patent system. This is the first of a series of posts by Professor Chien based on insights developed from that data. (The accompanying Patently-O Law Journal Paper includes additional views and methodological notes, and links to queries for replication of the analysis by Chien and Jiun-Ying Wu, a 3L at Santa Clara Law. )
“Everything should be made as simple as possible,
but not simpler” — Albert Einstein
A few weeks ago, the USPTO Director Andrei Iancu announced progress on new guidance to clarify 101 subject matter eligibility by categorizing exceptions to the law. The new guidance will likely be welcomed by prominent groups in the IP community,[1] academia,[2] and the majority of commentators to the 2017 USPTO Patentable Subject Matter report[3] that have called for a overhaul of the Supreme Court’s “two-step test.” Behind these calls are at least two concerns, that the two-step test (1) has stripped protection from meritorious inventions, particularly in medical diagnostics, and (2) is too indeterminate to be implemented predictably. To Director Iancu’s laudable mission, to produce reliable, clear, and certain property rights through the patent system, 101 appears to pose a threat.
Last November, the USPTO released the Office Action Dataset, a treasure trove of data about 4.4 million office actions from 2008 through July 2017 related to 2.2 million unique patent applications. This release was made possible by the USPTO Digital Services & Big Data (DSBD) team in collaboration with the USPTO Office of the Chief Economist (OCE) and is one of a series of open patent data and tool releases since 2012 that have seeded well over a hundred of companies and laid the foundation for an in-depth, comprehensive understanding of the US patent system. The data on 101 is particularly rich in detail, breaking out 101 subject matter from other types of 101 rejections and coding references to Alice, Bilski, Mayo and Myriad.
With the help of Google’s BigQuery tool and public patents ecosystem[4] which made it possible to implement queries with ease, research assistant Jiun-Ying Wu and I looked over several months for evidence that the two-step test had transformed patent prosecution. We did not find it, because, as the PTO report notes, a relatively small share of office actions – 11% – actually contain 101 rejections.[5] However once we disaggregated the data into classes and subclasses[6] and created a grouping of the TC3600 art units responsible for examining software and business methods (art units 362X, 3661, 3664, 368X, 369X),[7] which we dub “36BM,”[8] borrowed a CPC-based identification strategy for Medical Diagnostic (“MedDx”) technologies,[9] and developed new metrics to track the footprint of 101 subject matter rejections, we could better see the overall impact of the two-step test on patent prosecution. (As a robustness check against the phenomenon of “TC3600 avoidance,” as described and explored in the accompanying Patenty-O Law Journal article, we regenerate this graph by CPC-delineated technology sector, which is harder to game than art unit, finding the decline in 101 more evenly spread).
Mayo v. Prometheus, decided in March 2012, and Alice v. CLS Bank, decided in June 2014, elicited the strongest reactions. The data suggest that an uptick in 101 subject matter rejections following these cases was acute and discernible among impacted art units as measured by two metrics: overall rejection rate and “the pre-abandonment rate” rate – among abandoned applications, the prevalence of 101 subject matter rejections within the last office action prior to abandonment.
Within impacted classes of TC3600 (“36BM”), represented by the top blue line, the 101 rejection rate grew from 25% to 81% in the month after the Alice decision, and has remained above 75% almost every month since then. (Fig 1) In the month of the last available data, among abandoned applications, the prevalence of 101 rejection subject matter rejections in the last office action was around 85%. (Fig 2)
Among medical diagnostic (“MedDx”) applications, represented by the top red line, the 101 rejection rate grew from 7% to 32% in the month after the Mayo decision and continued to climb to a high of 64% (Fig 1) and to 78% among final office actions just prior to abandonment (Figure 2). In the month of the last available data (from early 2017), the prevalence of subject matter 101 rejections among all office actions in applications in this field was 52% and among office actions before abandonment, was 62%. (Fig 2)
However, outside of these groupings and other impacted art units (see paper for longer list) the impact of 101 caselaw has been more muted. 101 rejections overall (depicted by the thick black line) have grown – rising from 8% in Feb 2012 to 15% in early 2017 (Fig.1) – but remain exceptional.
On balance, the data confirm that 101 is playing an increasingly important role in the examination of software and medical diagnostics patents. More than four years after the Alice decision, the role of subject matter does not appear to be receding, remaining an issue in a large share of cases not only at their outset but among applications that go abandoned through the last office action. That patentees cannot tell before they file whether or not their invention will be considered patent-eligible, and perceive that much depends not on the merits of the case but in what art unit the application is placed also presents a challenge to the goal of predictability in the patent system.
It is also the case that the vast majority of inventions examined by the office are not significantly impacted by 101. Even when an office action does address subject matter, rejections and amendments on 101 subject matter on the record are often cursory, in contrast with, for example, novelty and nonobviousness discussions.
What does the data teach us and what directions for policy might it suggest? I save this topic, as well as the impact of USPTO guidance on prosecution and some data issues left unexplored here, for the next post, as data gathering continues.
In the meantime the USPTO continues to move forward on revised examiner guidance. As it does, it may want to decide which metrics most matter – overall prevalence of 101, 101 in pre-abandonment phases, or others – and how it hopes the metrics might change as a result of its revised guidance. The USPTO should also consider keeping the office action data up-to-date — right now, high quality data stops around February 2017[10] without any plans to update it of which I’m aware (my subsequent FOIA request for updates was denied). That leaves a gap in our ability to monitor and understand the impact of various interventions as they change over time – certainly not a unique phenomena in the policy world – but one that is fixable by the USPTO with adequate resources. In the meantime, it is thanks to the USPTO’s data release that this and other analyses of the impact of the two-step test is even possible.
Thanks to Jonah Probell and Jennifer Johnson for comments on an earlier draft and Ian Wetherbee for checking the SQL queries used to generate the graphs. Comments welcome at cchien@scu.edu.
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[1] The AIPLA has proposed a “clean break from the existing judicial exceptions to eligibility by creating a new framework with clearly defined statutory exceptions.”; the IPO has suggested replacing the Supreme Court’s prohibition on the patenting of abstract ideas, physical phenomena, and laws of nature with a new statutory clause, 101(b), to be entitled “Sole Exception to Subject Matter Patentability.”
[4]Google Public Patents is a worldwide patent bibliographic database linked with other datasets described more fully in the accompanying Patently-O Law Journal article.
[5]Office Action Dataset at 2 (also mentioning that “101 rejections” include subject matter eligibility, statutory double patenting, utility, and inventorship rejections).
[6] Using Google Patents Public Data by IFI CLAIMS Patent Services and Google, used under CC BY 4.0, Patent Examination Data System by the USPTO, for public use, Patent Examination Research Dataset by the USPTO (Graham, S. Marco, A., and Miller, A. (2015) described in “The USPTO Patent Examination Research Dataset: A Window on the Process of Patent Examination”), for public use.
[8] We put the remainder of TC 3600 art units into the category “TC36 Other” however because many months contained insufficient data (of less than 50 office actions), we did not include it in the Figures.
[9] Coded using a patent classification code (CPC)-based methodology developed from Colleen Chien and Arti Rai, An Empirical Analysis of Diagnostic Patenting Post-Mayo, forthcoming (defining medical diagnostic inventions by use of any of the following CPC codes: C12Q1/6883; C12Q1/6886; G01N33/569; G01N33/571; G01N33/574; C12Q2600/106).
[10] The later months of 2017 have insufficient counts for research purposes.
In re VerHoef (Fed. Cir. 2018) is a sad tale of a failed partnership that doomed the patent rights. The tale may be useful for anyone representing co-inventors involved in a start-up. At a minimum, a corporate entity should have been created at the get-go to hold the patent rights and mitigate later breakdowns in the partnership. Notice the drawing below – even the dog looks sad.
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For patent applications filed prior to the America Invents Act implementation, the Patent Act included an express requirement that the patent applicant be the inventor.
A person shall be entitled to a patent unless - (f) he did not himself invent the subject matter sought to be patented. 35 U.S.C. 102(f) (pre-AIA)
The named in inventor in this case – Jeff VerHoef – received some help from a veterinarian Dr. Lamb. In particular, VerHoef first designed and built his prototype harness designed to provide ‘knuckling’ therapy for his dog. Later, during a therapy session with Dr. Lamb, she suggested he consider a “figure 8” strap around the dog’s toes. VorHoef implemented the idea then filed for patent protection — naming both himself and Dr. Lamb as co-inventors.
Several months later, relations between VerHoef and Lamb broke-down; their original application was abandoned; and each filed their own separate patent applications. Both applications were filed on December 16, 2011 and are identical except for the names of the listed inventors.
VerHoef’s examiner examiner uncovered the parallel Lamb Application and subsequently rejected the claims under Section 102(f) — alleging that Lamb’s application provides evidence that “applicant did not invent the claimed subject matter.” The PTAB affirmed that ruling and on appeal here the Federal Circuit has also affirmed.
For joint-inventorship, the baseline principles revolve around “conception.” Individuals who conceive of features that lead to the whole invention are generally thought of as proper joint-inventors. However, the exact penumbra of what counts as sufficient contribution is at times difficult to exactly discern. Some cases suggest “every feature” while others require “significant contribution” as compared with the invention as a whole. Here the court did not need to parse-out the exact limits. Rather, VerHoef admitted that the figure-eight design (1) was contributed by Lamb and (2) is an “essential feature” of the invention.
VerHoef argued that he is the sole-inventor since he “maintained intellectual domination and control over the work” at all times and since Lamb “freely volunteered” the idea of the figure eight loop during a therapy session. (“Lamb’s “naked idea was emancipated when she freely gave it to VerHoef.”)
The domination legal theory here from an old patent board decision, Morse v. Porter, 155 U.S.P.Q. 280 (B.P.A.I. 1965). In Porter, the Board wrote that if an inventor “maintains intellectual domination of the work of making the invention . . . he does not lose his quality as inventor by reason of having received a suggestion or material from another even if such suggestion proves to be the key that unlocks his problem.” Porter is cited by the Patent Office MPEP inventorship section as the basis for the following heading:
Ali v. Carnegie Institution of Washington and the University of Massachusetts (Supreme Court 2017)
Sovereign Immunity protectionism continues to be an important topic in the patent law community. Although the biggest news this year has been the debate over immunity claimed by Tribal Nations owning patent rights, the actual major players in the area are states and state run public universities who hold so many patents.
This case involves Mussa Ali who was a graduate student at UMass working with Dr. Craig Mello on mRNA inhibitors. Mellow was awarded the nobel prize (along with Dr. Andrew Fire of Carnegie) stemming from their research in this area and obtained a collection of patents that are co-owned between UMass and Carnegie.
Ali was not listed as an inventor of any of the patents and that alleged exclusion is the basis of the lawsuit filed under 35 U.S.C. § 256.
The problem for Ali – UMass is a wing of the State of Massachusetts, and the 11th Amendment provides US States immunity from being sued in Federal Court. That approach was affirmatively stated by the Supreme Court in Florida Prepaid Postsecondary striking down the Patent Remedy Act which was designed to hold States liable for patent infringement. An element of its decision though, was that “Congress identified no pattern of…constitutional violations.” Of course times have changed since then. In Xechem, Judge Newman wrote in concurrence to recognize “an increasing urgency, as the States enter the private competitive arena governed by the laws of intellectual property, to establish fair relationships and just recourse.”
In Ali’s case, UMass was dismissed as a party on immunity, and then the still-pending suit against Carnegie was also dismissed since UMass was an indispensable party under FRCP R.19. That decision was affirmed on appeal. Because of federal preemption, Ali is also barred from filing suit in Massachusetts state court to resolve his claim of inventorship and equitable-ownership rights.
The new petition for writ of certiorari asks the following questions:
1. At what point do patent-owning States waive their sovereign immunity when they voluntarily participate in the patent system?
2. If Eleventh Amendment sovereign immunity is extended to allow patent-owning states to escape suits under § 256, how is this not a taking from wrongfully omitted inventors and a violation of due process of law under the Fourteenth Amendment?
3. Carnegie is a private entity and does not have Eleventh Amendment sovereign immunity. If a State is allowed to essentially extend its sovereign immunity privilege to a private entity who co-owns a patent, how is this not a State granting a privileged status to select citizens and violative of the equal protection clause of the Fourteenth Amendment?
4. 35 U.S.C. § 256 … was specifically enacted to provide a judicial mechanism to correct inventorship in patents. Can Eleventh Amendment sovereign immunity subjugate Congress’ express power under Art. 1, Sec. 8?
Important issues here that have the potential of extending our discussion of the rights of inventors and the role of governmental players in the marketplace.
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Moving Forward: I would recommend that faculty and student groups consider this issue as you develop and negotiate your employment agreement with the University.
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11th Amendment, Constitution of United States of America
The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.
Suppes v. Katti and Fender (Fed. Cir. 2017) (non-precedential)
I should probably be a bit careful writing about this case because of its closeness to home. Galen Suppes is a recently fired engineering professor from University of Missouri (my employer); Chris Fender is the director of our University Technology Transfer office, known here as the Office of Technology Management & Industry Relations and Katti is a professor of radiology and physics.
When it hired Suppes, the University (a wing of the State of Missouri) bound Suppes to an agreement that, inter alia, gave the University ownership and control over the filing of patents stemming from Suppes future inventions.
The University “shall have ownership and control of any Invention or Plant Variety developed in the course of the Employee’s service to the University.” University of Missouri Collected Rules and Regulations § 100.D.1.a.
The basis of Suppes lawsuit was that the University took control, but then failed to actually file patent applications on his inventions.
In the appeal, Suppes (acting pro se) presented some interesting arguments:
That pre-patent invention ownership is a right reserved to the people under the 10th Amendment of the U.S. Constitution and that the State thus violated his constitutional rights by taking ownership and then failing to file for patent rights.
The State actions stifled the progress of science and thus violatedhis due process rights; and
The State violated Suppes 5th Amendment rights by taking his invention-rights without just compensation.
These were all rejected by the the district court, and that decision is affirmed on appeal (nonprecedential opinion).
One way to think about Suppes argument here is to consider the employment contract as a state law that applies to anyone who works for the state (at least this branch of the state). And, the state law says that the University (rather than the inventor) owns the inventions.
In discussing inventorship rights pre-patent-application, the Federal Circuit makes an interesting set of holdings. First, the court holds that the Constitution does not directly set any limit on inventorship rights. Rather, the Article I provision is simply an authorization to Congress to act:
The Constitution, standing alone, grants the power to Congress to “secur[e] for limited times to . . . inventors the exclusive right to their . . . discoveries.” Any rights Mr. Suppes has in his inventions are thus subject to Congress’s implementation of the Constitution by statute. 35 U.S.C. § 261 provides that “[a]pplications for patent, patents, or any interest therein, shall be assignable in law by an instrument in writing.”
Of course, Section 261 only directly applies to “applications,” “patents,” and “interest[s] therein.” A straightforward interpretation of the provision is that Section 261 says nothing about pre-application assignments. As such, pre-application assignment of rights falls back to state law. “The allocation of interests prior to the filing of a patent application is thus a matter of state contract law and is not preempted by the Patent Act.” Later, the court reiterates that no Federal public policy (such as preemption) would void the state contract:
The determination of whether a statute prohibiting the assignment of “inventive thoughts” would promote the Progress of Science is therefore, at least initially, allocated to Congress by the Constitution. To the extent that Mr. Suppes is arguing that the contract is void as a matter of public policy, that is once again a matter of state contract law.
In the end, Suppes easily loses this case, but it raises some interesting issues in my mind, including: (1) a tacit recognition that states could enact a set of pre-filing quasi-patent rights without those being preempted by Federal Law – perhaps as an expansion of state trade secrecy law; and (2) an implicit call for uniform law associated with ownership and transfer of pre-filing invention rights.
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Follow-up reading: Regents of University of New Mexico v. Knight, 321 F.3d 1111 (Fed. Cir. 2003).
For Friday enjoyment, I post Pirri v. Cheek. So far we only have a complaint associated with the dating site Cheekd that bombed on Shark Tank but is now gaining steam. [h/t Prof. Brian Love]
The idea behind Cheekd is “Online Dating in Reverse” – basically when you meet someone in person, you give them a business card links to your online dating profile. There is even a patent – U.S. Patent No. 8,543,465 claiming the process. [US8543465]. You can read Claim 1 for yourself, but my quick review lets me classify the patent as quite low quality; very difficult to infringe; and likely invalid under 101 (abstract idea).
Now, here comes Alfred Pirri Jr, a mild-mannered “single man living in the New York tri-state area.” Pirri had some difficulty finding a date — notably, he “keenly noted through his personal experiences that, although there were plenty of single people living in New York City, there were very few efficient ways a person could use to meet single people in order to date them.” In particular, Pirri lamented that “In a crowded bar, a person could be standing 10-feet from the person’s future spouse and never know it.” Around 2006, Pirri then had the idea – of reverse online dating as described above although he never filed for patent protection, he did consult with a patent attorney who “confirmed that no identical nor similar ideas were ever disclosed in registered patents, pending patent applications and non-patent publications.”
Although Pirri kept his idea quite secret, he did disclose the details of his idea to his personal counselor Joanne Richards (a licensed clinical social worker). According to the allegations, Richards disclosed the idea to a social acquaintance — “That social acquaintance was no other than Defendant Lori Cheek, one of the so-called inventors of the Cheek’d dating website and app.”
The tale goes on, but now we reach the lawsuit claiming:
Unenforceability of U.S. Patent No. 8,543,465 (for lying about inventorship);
Unjust Enrichment;
Breach of Fiduciary Duty;
Misappropriation of Trade Secrets;
Unfair Competition;
Conversion; and
Fraud.
So far, we only have a complaint, but it will be interesting to watch to see how this moves forward. Assuming the allegations are are true, how do you rule?
= = = =
UPDATE: Lori Cheek has contacted me to say that the entire story is a bizarre fabrication.
= = = =
1. A method for personal meeting comprising the steps of: an initiator developing a profile with a central organization; the central organization providing the initiator by computer with a number of cards on which are printed at least an icebreaker, a website designation, and a code comprising elements corresponding to the icebreaker printed on the card; the initiator giving the card to at least one recipient; the recipient going to the website designated on the card; the recipient entering the code printed on the card at the designated website; the recipient being given access to the initiator’s profile with the central organization; the recipient sending a message to the initiator; and the initiator tracking activity comprising:
the central organization storing data by computer corresponding to when the recipient enters the code from the card bearing the specific icebreaker; the central organization storing data by computer corresponding to when the recipient sends the message to the initiator after the recipient has received the card bearing the specific icebreaker; the central organization compiling data by computer corresponding to a number of times the recipient enters the code from the card bearing the specific icebreaker and a number of times the recipient sends the message to the initiator after the recipient has received the card bearing the specific icebreaker; and the central organization displaying the compiled data by computer to the initiator.
The decision here is important as one example of a single-reference obviousness decision upheld by the Federal Circuit on appeal. Here, the prior-art is a published international patent application also owned by the patentee and with overlapping (but not identical) inventorship.
Idemitsu’s U.S. Patent No. 8,334,648 covers an organic LED and claims priority back to a July 19, 2002 Japanese patent application. The asserted prior art is an international application (PCT) publication from a two-weeks prior – July 4, 2002. International Publication WO 02/052904 (claiming priority to December 2000 and named Arakane). At this point it is unclear why, but Idemitsu never challenged the status of prior-art status of Arakane.
In its obviousness analysis, the Board found that Arakane taught all of the elements of ‘648 patent’s challenged claims and that it would have been obvious to combine them in the way claimed. On appeal, the Federal Circuit has affirmed – holding that the Board had made reasonable conclusions both on the facts and the law.
The case includes a couple of procedural findings — importantly the Court permitted (at least in this situation) the PTAB to reach factual and legal conclusions not directly addressed in the petition.
= = = =
Note: The opinion here does not discuss why the single-reference decision was based upon OBVIOUSNESS rather than ANTICIPATION.
Following an IPR administrative trial, the Patent Trial & Appeal Board (PTAB) concluded that the challenged claims of NFC’s U.S. Patent 6,700,551 are unpatentably obvious. The focus of the dispute is on a pre-AIA inventorship claim — The PTAB rejected NFC’s attempt to claim priority to its date of invention.
Although the Patent Act itself has never directly defined inventorship, a substantial body of cases have worked through the problem. In general, the courts have determined that invention is a two-step process that begins with a complete mental conception of the invention and concludes with reducing the invention to practice (i.e., creating a working model). Most of the inventions claimed within patent documents are not actually reduced to practice prior to the application filing. Rather, that substantial majority relies upon the judicially created exception that the filing of a patent application should be deemed (in the eyes of the law) a reduction to practice.
Here, NFC’s near-field communication patent application claims priority back to an original French patent application filed March 25, 1999, while the primary prior art reference has an effective date of February 8, 1999. If the patent in question was a post-AIA patent, NFC would easily lose. Here, however, NFC has the opportunity to claim back to its date of invention because its patent fits under the old law.
Under the old law, the inventor could claim priority back to that initial date of conception. However, that was generally a difficult prospect because the courts also required extensive post-conception diligence on the part of the patentee to reduce that invention to practice. It is much simpler if the patentee did actually reduce the invention to practice prior to filing because diligence is no longer required post-RTP (just no suppression, abandonment, or concealment). Although this ability to claim back to a date-of-invention is a benefit to patentees, it is usually thought of as something of a trap because of the high evidentiary burden placed on the inventor for proving prior conception, diligence, and reduction to practice.
Here, NFC argued that the named inventor (Charrat) and his team had reduced the invention to practice as of November 1998 by creating a device embodying the invention. The PTAB rejected the argument — holding that a portion of the prototype had been built by a third party chip fabricator (Concept Electronique – CE) and, therefore, Charrat isn’t the one who reduced it to practice. According to the Board, when a third-party reduces the invention to practice, that RTP only inures to the inventor if the inventor can show that he had already conceived of the invention and communicated that to the third party. “For Charrat to receive the benefit of that reduction to practice, the Board read [the Federal Circuit] precedents as requiring that Charrat conceived the claimed invention and communicated the underlying subject matter to CE.”
On appeal, the Federal Circuit has reversed – finding that NFC had provided sufficient evidence of conception.
Here, Charrat provided testimony of his conception, but oral testimony alone is insufficient to prove prior invention. Charrat also provided a data-sheet order to CE. The Board found that the data sheet had “no named author” – on appeal, however, the Federal Circuit credited the document’s statement “By BC” (BC are Charrat’s initials). “Thus, contrary to the Board’s finding, the data sheet does name an author.”
The PTAB also found it odd that there was not more specific evidence (such as an email) from Charrat to CE that provides information on how to build the circuit (if Charrat had actually been the inventor). The Federal Circuit rejected that analysis:
Here … Charrat’s account of a period of a few months, nearly twenty years ago, is nonetheless supported by documentary evidence. The relevant period and presence of documentary evidence places this case closer to Loral Fairchild Corp. v. Matsushita Electric. . . . [W]e characterized the inventor’s inability to submit [production] documents as “not surprising” given the amount of time that had passed. Here, similarly, Charrat’s account is corroborated by the initial data sheet that began the project, communications with CE, and documents generated after Charrat and INSIDE received the prototype and began to test it. “[C]orroboration of every factual issue contested by the parties is not a requirement of the law.” In re Jolley, 308 F.3d 1317, 1328 (Fed. Cir. 2002). On these facts, and particularly considering the amount of time that has passed, we determine that Charrat’s account was adequately corroborated.
In a typical murder mystery plot, the accused criminal wins by successfully pointing the finger toward the true killer. Here, the appellate panel suggests that the the PTAB should have also considered that approach. In particular, the Federal Circuit asks “who, if not Charrat, designed the prototype. . . . Charrat is the only source identified by the evidence for the design of the prototype. Indeed, there is no record evidence of any other INSIDE employee communicating with CE. Under the rule of reason, the totality of the evidence establishes the credibility of Charrat’s account.”
On remand, it looks like the IPR case will continue — in its original analysis, the PTAB did not actually determine whether the prototype embodied the claimed invention since it dismissed on other grounds. Thus, NFC is simply one step closer to success.
I’ve been taking a break from blogging for the past few months to focus on teaching, research and service at the University of Iowa. That’s allowed me to experience new aspects of technological innovation and patent law, particularly in the context of a research university. It’s also allowed me to work on a couple of projects that are finally coming to fruition.
The first is described below. It’s a concept that will likely feel familiar to most patent practitioners. I’ve just articulated the inchoate idea and given it structure to allow it to be weighed and debated more easily. Virtually every person connected with patent law that I’ve shown the paper to has had examples and stories of their own, some of which I’ve added. At the onset I want to make clear that while I think that the credentialing function of patents has merit on balance, in individual situations it can have substantial negative effects.
Here’s the abstract:
The conventional explanation for why people seek patents draws on a simple economic rationale. Patents, the usual story goes, provide a financial reward: the ability to engage in supracompetitive pricing by excluding others from practicing the claimed technology. People are drawn to file for patents because that is how these economic rewards are secured. While scholars have proposed variations on the basic exclusionary mechanism, and a few have explored alternate reasons why businesses seek patents, the question of whether individuals—human beings—seek patents for reasons other than the conventional economic incentive remains unexplored. As Jessica Silbey recently observed, human creativity is motivated by more than just the potential for immediate economic returns. But an individual’s motivation to create does not explain why that person would go through the trouble and expense of obtaining a patent absent the promise of economic gain.
We offer an explanation for why individuals may seek patents beyond the promise of supracompetitive pricing: patents serve as credentials. Simply put, some human beings want to be recognized by society as inventors. But claiming to be an inventor without evidence is unlikely to persuade the masses—or perhaps even friends. Patents serve as powerful evidence that an individual meets the societal definition of “inventor.” Just as a doctoral degree in history might indicate that one is an intellectual, obtaining a patent shows that the person named on its face is a real-life, government-certified inventor. Regardless of whether a particular patent conveys an economically valuable mechanism of exclusion, the inventorship recognition alone may motivate some individuals to seek patents.
Cumberland Pharma v. Mylan (Fed. Cir. 2017) [cumberland]
Cumberland’s Patent No. 8,399,445 is listed in the Orange Book as covering Acetadote, an intravenous antidote for overdoses of acetaminophen. Following the process set out in the Hatch-Waxman Act, Generic manufacturer Mylan filed an abbreviated new drug application (ANDA) with the FDA to market its own version of the drug and Cumberland sued for infringement. While patent infringement ordinarily requires some making/using/selling of the invention, 35 U.S.C. 271(e)(2)(A) creates a form of paper-infringement – stating that “It shall be an act of infringement to submit (A) an application under section 505(j) of the Federal Food, Drug, and Cosmetic Act or described in section 505(b)(2) of such Act for a drug claimed in a patent or the use of which is claimed in a patent.”
The ‘445 patent (August 24, 2005 priority date) covers a non-chelating form of Acetadote. Back in 2002, Cumberland was seeking FDA approval of a form of the drug that included a chelating agent (EDTA). In a letter, to the listed inventor (Pavliv) of the ‘445 patent, the FDA requested justification for including EDTA in the formulation and later requested data proving that EDTA should be included. Shortly after that letter, the inventor Pavliv had the idea of a formulation without the EDTA.
Based upon these (and a few other) facts, Mylan argues that (1) the ’patent had been derived from someone at the FDA – and therefore the patentee was not the “inventor” as required by pre-AIA law, 35 U.S.C. 102(f); and (2) the invention would have been obvious in light of the FDA communications. On appeal, however, the Federal Circuit affirmed the lower court holding siding wholly with the patentee.
A request for justification of the inclusion of EDTA, supported by data, is not the same as a suggestion to remove it, let alone to remove it and not replace it with another chelating agent.
Further, the claim was not obvious because the defendant failed to prove “a reasonable expectation of success” if the non-EDTA version was tried. That seems to be right here (based upon the evidence presented). The inventor previously believed that EDTA (or similar agent) was needed to ensure formulation stability, but later was able to show that the non-EDTA version was still stable (and the claims expressly reflect that the formulation is stable but non-EDTA). On appeal, the Federal Circuit agreed with the patentee:
Considerable evidence supports the finding that relevant skilled artisans believed that chelating agents were necessary to sequester metal contaminants and prevent oxidative degradation of acetylcysteine and that such artisans had no reasonable expectation of stability without such an agent. . . . As late as 2011, Mylan’s own scientists expressed concern that the removal of EDTA would make the product more vulnerable to oxidation.
The enactment of the AIA brought several changes to processes for correcting and challenging inventorship. Perhaps most notable were the elimination of 35 U.S.C. § 102(f) and the replacement of interference proceedings with derivation proceedings. These changes have raised several questions on the implications of improper inventorship in a post-AIA patent. See, e.g., Crouch, With 102(f) Eliminated, Is Inventorship Now Codified in 35 U.S.C. 101?, Patently-O (October 4, 2012). Of the many questions yet to be addressed, one is whether an allegation of improper inventorship can be raised in a Post Grant Review (PGR) proceeding.
The PTAB recently had a chance to address that question when it ruled on the first ever PGR petition filed against a design patent. Galaxia Electronics Co. v. Revolution Display, LLC, PGR2016-00021, paper 11 (PTAB November 2, 2016). In deciding not to institute trial, the PTAB also made the first ever decision on an alleged inventorship error in a PGR proceeding. However, the PTAB chose to not address the fundamental question of whether an alleged error in inventorship is a statutorily proper ground for institution of a PGR and instead denied institution by deciding the Petitioner failed to present adequate evidence to support its allegation. While this may have been the judicially expedient way to resolve this specific petition, sooner or later the PTAB is going to have to deal with the question of whether inventorship challenges should be grounds for PGR. When it does get to that question, the PTAB should decide there is no place in a PGR proceeding for inventorship challenges.
A PGR trial cannot be instituted unless the information in a petition demonstrates that it is more likely than not that at least one challenged claim is unpatentable. See 35 U.S.C. § 324; see also 37 C.F.R. § 42.208. Even before the AIA, however, an allegation of improper inventorship typically did not result in invalidation. SeeViskase Corp. v. American National Can Co., 261 F.3d 1316, 1329 (Fed. Cir. 2001) (“Absent fraud or deceptive intent, the correction of inventorship does not affect the validity or enforceability of the patent for the period before the correction.”); see also 1-2 Donald S. Chisum, Chisum on Patents § 2.03 [4][a] (Matthew Bender) (“Misjoinder and nonjoinder [of inventors] have long been viewed as ‘technical’ defects, not to be favored as objections or defenses to patent rights.”). The reason being that, despite 35 U.S.C. § 102(f) (pre-AIA), inventorship could be corrected in most instances under either §§ 251 (“Reissue Of Defective Patents”) or 256 (“Correction Of Named Inventor”).
A limited pre-AIA exception where inventorship could not be corrected was if a movant could not demonstrate the error arose without deceptive intent. See, e.g., Pannu v. Iolab Corp., 155 F.3d 1344, 1350 n.4 (Fed. Cir. 1998) (noting the requirement of showing the error occurred without deceptive intent, but also that “good faith [was] presumed in the absence of a persuasive showing of deceptive intent”). The AIA removed that limited exception, thereby eliminating any possibility of invalidating a patent based on improper inventorship, assuming at least one of the owners is willing to make corrections deemed necessary. Specifically, besides eliminating § 102(f), the AIA also amended sections 251 and 256 by removing the “without any deceptive intention” requirement from those two sections. While commentators have questioned whether that pre-AIA requirement had any practical effect, seeChisum § 2.04[4][d], the amendments to sections 251 and 256 make it clear that any demonstrated inventorship error can be corrected; either by a certificate of correction, a reissue application, or by a suit under § 256 in Federal court. See, e.g., Vapor Point, LLC v. Alford, 832 F.3d 1343, 1348 (Fed. Cir. 2016) (ruling on an action to correct inventorship brought under § 256).
Admittedly, in situations where a party has raised an inventorship issue in a PGR, it is unlikely that all alleged inventors would be willing to cooperate with the patent owner. But this still is not a stumbling block to correction of inventorship because cooperation of all inventors is not necessarily required. As noted in MPEP § 1481.02(I), in the event an inventor is unavailable or uncooperative, a patent owner can still obtain correction via reissue. See 37 C.F.R. §§ 1.175, 1.64; see also MPEP § 1412.04(II) (“Reissue As A Vehicle For Correcting Inventorship”). Further, the patent owner may establish the right to take action pursuant to procedures described in MPEP § 325. To the extent there was a legitimate dispute as to ownership affecting entitlement toact, that dispute is separate from inventorship and a matter governed under state law—a matter that simply cannot be resolved by the PTAB or anyone at the USPTO. See, e.g., Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456, 1471 (Fed. Cir. 1998).
There is a further, practical problem to permitting inventorship challenges in a PGR. If the PTAB were to institute trial on that ground (alone or among others), nothing would appear to prevent the patent owner from admitting the error and filing a reissue application or § 256 court action to correct it. It would then seem that fundamental due process considerations should allow the patent owner to correct a correctable error. But the PTAB may not be able to wait to see if inventorship is corrected before ruling in the PGR because it is statutorily obligated to reach a final determination within 12-18 months of instituting trial. 35 U.S.C. § 326 (a)(11). Based on the current backlog of reissue applications and other matters before the Central Reexamination Unit (CRU), it is unlikely that a reissue application could reach final disposition within the 12-18 month time period. The USPTO would thus seem to be stepping into a quagmire if it does not eliminate inventorship error as a ground for PGR—a patent owner has a right to pursue correction of inventorship, yet the PTAB is obligated to reach a final decision before that correction can be effected. On the other hand, if inventorship challenges before the PTAB are limited to Derivation proceedings, which are not statutorily mandated to be completed within a specific time frame and also contemplate correction of inventorship as a possible outcome (35 U.S.C. § 135(b)), that potential quagmire is avoided.
So even if, despite the elimination of § 102(f), inventorship can still be challenged under 35 U.S.C. §§ 101 or 171, such a challenge is not a statutorily proper ground for institution of a PGR because such a petition cannot demonstrate that it is more likely than not that at least one challenged claim is unpatentable. And such a ruling would comport with the statutory-framework of the AIA—Congress created Derivation proceedings, the replacement for Interference proceedings (35 U.S.C. § 135 (pre-AIA)), as the sole proceeding before the Board for inventorship challenges to post-AIA patents. See 35 U.S.C. § 135; see also 37 C.F.R. § 42.401 et seq. Thus, inventorship challenges can still be brought before the PTAB, it is simply a matter of choosing the correct vehicle through which to do so. While the PTAB chose not to address this issue this time, when next raised, it should decide the Derivation proceeding is the sole process to bring such a claim before the Board.
But until the PTAB rules definitively that inventorship error is not a ground on which PGR may be based, it is our view that failure to raise that ground in a petition will most likely lead to an estoppel on the issue. See 35 U.S.C. § 325 (e). Thus, for now, any PGR petitioner that thinks it might have a possible basis for challenging inventorship better raise that ground in its PGR petition or risk being estopped from later challenging the patent on that basis.
Tom Kohler and Kevin McGrath are director and associate, respectively, at Downs Rachlin Martin, PLLC which represented the Patent Owner in Galaxia Electronics Co. v. Revolution Display, LLC, PGR2016-00021 (PTAB May 18, 2016); the first PGR petition directed to a design patent.
One thing I have to deal with a lot when advising lawyers — whether practitioners for prosecution matters or litigators in patent case (or other stuff) — is the difference between subject matter jurisdiction and choice of law.
First, I cannot tell you how important this issue can be. For example, under some state rules public information is confidential; it’s not under the USPTO rules. If state rules apply, I may have to ask a client for permission before I disclose a prior art patent to the Office. That sounds like a silly example, and it is, but you’d be surprised what “experts” I’ve testified against say sometimes…
So let me give a simple walk through.
Ordinarily, a state bar is going to be able to discipline a lawyer for conduct occurring in representing clients in a state even if the practice is entirely federal and even if the lawyer is not licensed in a state. So, if Bob is a patent lawyer licensed only in Minnesota and is prosecuting an application for an Iowan, the Iowa authorities (whether it’s disciplinary counsel or the court, I don’t know) are going to be able to subject him to discipline. Likewise, more obviously, the OED can discipline him.
What rules apply? The goal of modern choice of law principles in legal ethics is to make it so that one set of rules applies and we can easily figure that out. Where a matter is pending before a tribunal, the tribunal’s rules will generally apply. So, if Bob files the application and misses a deadline, the USPTO’s rule about neglect, or competence, should be applied by both the Iowa bar and the OED.
Here is the USPTO Rule on subject matter jurisdiction, which is unique to the Office, but notice how it defines its reach — to practice before the office:
All practitioners engaged in practice before the Office… are subject to the disciplinary jurisdiction of the Office….. A person not registered or recognized to practice before the Office is also subject to the disciplinary authority of the Office if the person provides or offers to provide any legal services before the Office.
“Proceeding before the Office” is itself defined: “Proceeding before the Office means an application for patent, an application for reissue, a reexamination, a protest, a public use matter, an inter partes patent matter, correction of a patent, correction of inventorship, an application to register a trademark, an inter partes trademark matter, an appeal, a petition, and any other matter that is pending before the Office.”
So, plainly Bob is involved in a proceeding before the Office and the OED could discipline him. Can the OED apply Iowa’s Rules to his conduct? Do they apply? Before we get there, let’s see if the OED could discipline Bob because Bob had violated an Iowa rule — without Iowa already having done so.
Another subsection of that same USPTO regulation in title 37 of the CFR identifies what is a basis for OED discipline:
The following, whether done individually by a practitioner or in concert with any other person or persons and whether or not done in the course of providing legal services to a client, or in a matter pending before the Office, constitute grounds for discipline or grounds for transfer to disability inactive status.
(1) Grounds for discipline include:
(i) Conviction of a serious crime;
(ii) Discipline on ethical grounds imposed in another jurisdiction or disciplinary disqualification from participating in or appearing before any Federal program or agency;
(iii) Failure to comply with any order of a Court disciplining a practitioner, or any final decision of the USPTO Director in a disciplinary matter;
(iv) Violation of any USPTO Rule of Professional Conduct; or
(v) Violation of the oath or declaration taken by the practitioner. See § 11.8.
So, unless some other agency or court has disciplined a practitioner, or one of the other specific acts has occurred, the OED has to find that a practitioner violated a USPTO Rule. So, the OED has to find that Bob violated the USPTO Rules.
Now for Iowa. (I used to speak there every year! Why haven’t they invited me back in a couple years?). Let’s do it in reverse order. What rules would Iowa apply to Bob’s conduct? Luckily, it’s the USPTO rules, as Iowa Rule 32:805(b) makes clear:
(b) Choice of Law. In any exercise of the disciplinary authority of Iowa, the rules of professional conduct to be applied shall be as follows:
(1) for conduct in connection with a matter pending before a tribunal, the rules of the jurisdiction in which the tribunal sits, unless the rules of the tribunal provide otherwise; and
(2) for any other conduct, the rules of the jurisdiction in which the lawyer’s conduct occurred or, if the predominant effect of the conduct is in a different jurisdiction, the rules of that jurisdiction shall be applied to the conduct. A lawyer shall not be subject to discipline if the lawyer’s conduct conforms to the rules of a jurisdiction in which the lawyer reasonably believes the predominant effect of the lawyer’s conduct will occur.
The USPTO is a “tribunal.” It defines itself as one! See 37 C.F.R. 11.1 (“Tribunal means the Office…”). So, the Iowa Rules won’t apply to Bob’s conduct; even if Iowa tried to discipline Bob, it would apply the USPTO Rules.
Warning: not every state has the same version of Rule 8.5, and some have weird carve outs (e.g., D.C.).
Now, if Iowa wanted to discipline Bob, does it have subject matter jurisdiction to do so? It does! Here is the rest of Iowa’s rule 8.5:
(a) Disciplinary Authority. A lawyer admitted to practice in Iowa is subject to the disciplinary authority of Iowa, regardless of where the lawyer’s conduct occurs. A lawyer not admitted in Iowa is also subject to the disciplinary authority of Iowa if the lawyer provides or offers to provide any legal services in Iowa. A lawyer may be subject to the disciplinary authority of both Iowa and another jurisdiction for the same conduct.
(Remember, Bob’s licensed only in Minnesota.) So, we end up with a nice good, predictable approach. A recent case analyzing the subject matter jurisdiction issues, but not the choice of law issue, is York v. W. Va. Office of Disciplinary Counsel, 744 S.E.2d 293 (2013). According to this opinion, (scroll down to top of page 26), in an unreported later decision, Mr. York was disciplined.
(By the way, Minnesota could also discipline Bob, and it would also apply the USPTO rules in doing so. Whew!)
Here, unless the facts are weird, Bob’s conduct would violate both Iowa and the USPTO rules, and Minnesota’s for that matter, so who cares?
Like I said at the start, there are critical differences between the USPTO rules and many state rules and often those differences tell us whether Bob keeps his license, or not. More often, choice of law becomes an issue in disqualification motions and in legal malpractice cases. Ethical rules like state bar rules and then USPTO rules are are applied in disqualification and malpractice cases. If something is ethical under the USPTO rules, but unethical under state law, choice of law may provide the answer to what’s right — whether a client has a malpractice claim, or a lawyer is subject to disqualification.
Where it gets even more interesting is if the conduct occurs before the application is filed, and so there is no matter before a tribunal (yet). Some choice of law rules state that that apply to matters that going to be before a tribunal, but many don’t. Others say that the cover only the lawyer who appears before the tribunal, so what about a lawyer who does work in the office on an application but whose name doesn’t appear on the filing? What rules apply? What if it’s an assignment that’s incompetently drafted (probably won’t matter but you see my point)? What if…
Finally, if state law somehow does apply to conduct before the office, then it may be that a preemption analysis is required, because the USPTO rules do narrowly preempt state law to the contrary.
The primary goal of the patent system is to encourage innovation – “promote the Progress of Science and useful Arts.” For me, the nature of inventorship is a fascinating pursuit: what are the factors that lead to invention and what are the results of invention?
A major shift over the past few decades in terms of inventors listed on U.S. patents is the rise of team-based inventorship. Back in 1975, the vast majority of U.S. patents were issued to a single inventor. Since that time, there has been a steady trend toward more inventors-per-patent. Around 1990 we reached a point where, for the first time, more than than half of US patents listed multiple inventors. That trend toward more inventors per patents continues today.
Drilling down, the increase is seen in patents with three or more inventors. The chart below shows the percentage of utility patents with either one listed inventor (downward sloping double line) or three+ listed inventors (upward sloping line). The drop in the first almost exactly correlates with the rise in the second. Throughout this time, the percentage of two-inventor patents has remained steady at around 25%.
The chart does not offer any causation explanation. Is the change is due to the nature of the inventions (i.e., more complex subject matter); the increase in team projects in corporate environment; or the politics of patenting (team projects more likely to get funded); or perhaps teams are better at identifying the valuable innovations; etc. We do know that multi-inventor patents tend to do better on patent scorecards and are more likely to be filed internationally, suggesting that their owners place more value on those patents. In the U.S., un-assigned patents still tend to be single inventor. That factor may be explained by the reality that most cooperative inventorship endeavors set up a partnership or corporate to at least hold the patent rights. Some areas of technology (esp: biotech & chemistry) tend to have more inventors-per-patent than the mechanical and software areas.
The chart below considers utility patents 2012-2016 and groups them according to the assignee country provided to the USPTO. For each country, I looked at (1) the average number of inventors per patent; (2) the percentage of patents with 5+ inventors; and (3) the percentage of patents with only 1 inventor. There is likely an interesting story to tell about Korea & India — why do they list so many inventors per patent?
An important change made in the America Invents Act of 2011 was to allow patent owners to file for patent protection as patent applicants rather than relying upon sometimes uncooperative inventors to do so.[1] However, the AIA did not make any changes to the ever-present rule that ownership stems from invention and thus initially vests in the inventors.[2] Because ownership is tied to invention, inventorship disputes remain a part of patent law even under this new regime.
Meng v. Chu (Fed. Cir. 2016) focuses on two superconductivity patents purportedly owned by the University of Houston based upon assignment from the listed inventor Prof. Ching-Wu Chu.[3] I discussed this case previously in my post titled: Can you Wait 20-Years to Challenge Inventorship?: In this case, Yes, Patently-O (November 15, 2012). In its 2012 decision, the Federal Circuit rejected the lower court’s conclusion that the challenger (Meng & Hor) claims were barred by laches or equitable estoppel.[4] A difficulty with the case is that the patents were filed in the 1980’s but did not issue until 2006 and 2010 respectively. Meng & Hor worked with Chu during the research, but were not listed as inventors.
In the remand, the district court held an eight day bench trial on the inventorship claims and ultimately rejected both Meng & Hor’s claims – finding (1) that Meng had failed to show that her contribution exceeded the ordinary skill in the art; and (2) that Hor had not provided sufficient corroborating evidence so as to overcome the clear-and-convincing standard required for correcting inventorship. On appeal here, the Federal Circuit has affirmed.
In order to prevail on a § 256 claim, an alleged co-inventor must show that he contributed to the conception of the claimed invention and that his contribution was “not insignificant in quality, when that contribution is measured against the dimension of the full invention.” Acromed Corp. v. Sofamor Danek Grp., 253 F.3d 1371 (Fed. Cir. 2001). An alleged co-inventor’s testimony regarding his contribution must be corroborated, which courts assess under a “rule of reason” analysis. Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456 (Fed. Cir. 1998).
Here, the Federal Circuit reviewed the evidence presented and agreed that it was ambiguous at best. As such it was insufficient to overcome the ‘heavy burden.’
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[1] As most patent attorneys know, the old rules provided a mechanism for an owner to file for patent protection on behalf of an uncooperative or unavailable inventor. However, that model is different than the rights-holder filing on its own behalf.
[2] See Beech Aircraft Corp. v. EDO Corp., 990 F.2d 1237 (Fed. Cir. 1993).
[3] U.S. Patent Nos. 7,709,418 (“’418 patent”) and 7,056,866 (“’866 patent”).
[4] See Hor v. Chu, No. 4:08-CV-3584, 2015 WL 269123 (S.D. Tex. Jan. 21, 2015) and Hor v. Chu, 765 F. Supp. 2d 903, 906 (S.D. Tex. 2011), aff’d in part, rev’d in part and remanded, Hor v. Chu, 699 F.3d 1331 (Fed. Cir. 2012).
The chart below uses the breakdown of patent documents into their various workgroups. As shown here, the workgroups are basically an intermediary classification that falls between the micro-art-units and the macro technology centers. Dividing into workgroups is especially useful for looking at Technology Center 3600 because that center examines perhaps the widest variety of technologies. For the chart below, I collected inventor information on all U.S. patents issued from January 2010 – August 2014 and simply displayed the percent of patents whose first-listed inventor claimed a U.S. residence in the application documents.
Today, just about half of newly issued patents are non-US originated. That datum is dramatically different from historical figures where U.S. inventors dominated the U.S. patent rolls. I have written before that this change likely signals a future shift in U.S. policy as the population is less likely to support foreign-owned patent rights blocking access or raising prices for goods and services. To the extent policymakers are relying upon this concern, the chart provides some additional insight because it points to areas of technology where U.S. inventors continue to dominate in the U.S. Patent market.
