Tag Archives: obviousness

In my view, Obviousness is the most fundamental of patent law doctrines, and certainly much of the work of patent attorneys is to convince patent examiners that the claims are not obvious.

Patentlyo Bits and Bytes by Anthony McCain

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Scan-to-Email Patent Finally Done; Claim Scope Broadened by Narrow Provisional Application

MPHJ Tech v. Ricoh (Fed. Cir. 2017)[16-1243-opinion-2-9-2017-11]

MPHJ’s patent enforcement campaign helped revive calls for further reform of the patent litigation system.  The patentee apparently mailed out thousands of demand letters to both small and large businesses who it suspected of infringing its scan-to-email patents.  The primary patent at issue is U.S. Patent No. 8,488,173.

Ricoh, Xerox, and Lexmark successfully petitioned for inter partes review (IPR), and the PTAB concluded that the challenged claims (1–8) are invalid as both anticipated and obvious.[1] On appeal, the Federal Circuit has affirmed.

Claim 1 is a fairly long sentence – 410 words, but basically requires a scanner with the ability to both store a local file and also email a file that can be operated with a “go button” followed by “seamless” transmission.  The patent itself is based upon a complex family of 15+ prior US filings, most of which have been abandoned, with the earliest priority filing of October 1996.

Although more than 20 years ago, there was prior art even back then.  However, the identified prior art process was apparently not entirely “seamless” in operation. On appeal, the patentee asked for a narrowing construction of the claim scope to require “a one-step operation without human intervention.”  Unfortunately for MPHJ, the claims are not so clear.

Relying upon the Provisional to Interpret the Claims: Attempting to narrow the claim scope, MPHJ pointed to one of the referenced provisional applications that disclosed a “one step” process requiring the user to simply push “a single button”  On appeal, the Federal Circuit agreed that the provisional is relevant, but not how MPHJ hoped. Rather, the court found that the fact MPHJ omitted those limiting statements when it drafted the non-provisional serves as a suggestion that the claims were not intended to be limited either.

We agree that a provisional application can contribute to understanding the claims.[2] . . . In this case, it is the deletion from the ’798 Provisional application that contributes understanding of the intended scope of the final application. . . . We conclude that a person of skill in this field would deem the removal of these limiting clauses to be significant. The [challenged] Patent in its final form contains no statement or suggestion of an intent to limit the claims to the deleted one-step operation. Neither the specification nor the claims state that this limited scope is the only intended scope. Instead, the ’173 Patent describes the single step operation as “optional.” . . . A person skilled in this field would reasonably conclude that the inventor intended that single-step operation would be optional, not obligatory.

MPHJ’s efforts really should be written up as a case-study.  Unfortunate for patentees that this is the case members of the public will continue to hear about for years to come.

For patent prosecutors.  Here we have another example of how a low-quality provisional filing failed the patentee.  Now, you have to recognize that changes you make when filing the non-provisional will be used against you in the claim construction process.  While there may be ways to use this strategically, I expect that more patentees will be trapped than benefited.




= = = = =

[1] Ricoh Ams. Corp. v. MPHJ Tech. Invs., No. IPR2014-00538, 2015 WL 4911675, (P.T.A.B. Aug. 12, 2015).

[2] See Trs. of Columbia Univ. in New York v. Symantec Corp., 811 F.3d 1359, 1365 (Fed. Cir. 2016) (looking to the provisional application for guidance as to claim construction); Vederi, LLC v. Google, Inc., 744 F.3d 1376, 1383 (Fed. Cir. 2014) (same).

IPO’s Next Legislative Proposal: 35 U.S.C. 103

commonsenseFollowing IPO’s recent proposal to effectively eliminate 35 U.S.C. 101, a Patently-O reader (“MM”) proposed the following amendment to 35 U.S.C. 103 for the organization’s consideration:

35 U.S.C. 103:  A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Common sense shall not be used or references in any part of the analysis of the claim. Under no circumstances will any element in the claim be deemed to be non-limiting for any reason. Individual claim elements, whether or not disclosed by the prior art, shall never be discussed or analyzed separately from the other claim elements. The term ‘monopoly’ must never appear in the analysis.

(Added language underlined.) According to the anonymous Patently-O reader, this would make it the “Best. Patent. System. Ever.”  Certainly, the provision would take care of KSR v. Teleflex that has been so frustrating for patentees and time consuming for the Court of Appeals.  (Satire).

First Rehearing Request Challenging No-Opinion Judgments

by Dennis Crouch

LSI v. FLIR (Fed. Cir. 2017) (request for rehearing) [16-1299-leak-surveys-v-flir_combined-rehg]

In its newly filed petition for rehearing, Leak Surveys has asked the Federal Circuit to withdraw its Judgment Without Opinion. Leak’s Counsel (Donald Puckett) argues:

It is hard to imagine an appeal more unsuitable for affirmance without opinion under Fed. Cir. R. 36 than this one.

The petition makes two primary arguments:

  1. If the Federal Circuit’s judgment is based upon new or alternative grounds not stated by the PTAB, then it must write an opinion.  Although the reason for a judgment without opinion are not directly discernible, the petitioner here suggests that it was likely based upon theories first espoused by the court and respondent at oral arguments — sufficient to form a prima facie conclusion that the judgment relied upon new or alternate grounds.
  2. LSI urges the en banc Court to grant rehearing to decide whether this Court can ever affirm a PTAB IPR decision without opinion. See 35 U.S.C. § 141 (in USPTO appeal, Federal Circuit “shall issue to the Director its mandate and opinion . . .”) (emphasis added). See also Crouch, Wrongly Affirmed Without Opinion, Univ. of Missou. L. Stud. Research Paper No. 2017-02, Forthcoming 52 Wake Forest Law Review ___ (2017) (http://ssrn.com/abstract=2909007).

In offering the first weaker option, LSI gives the court an option in case it “may hesitate to open a floodgate of rehearing requests.”  Of course, there are only about a dozen R.36 decisions that are still within the court’s 30-day deadline for requesting rehearing.  (The Supreme Court has a 90-day deadline).  The stronger approach that I argue for: “LSI presents this argument here to preserve it for further appeal to the U.S.
Supreme Court if necessary.”  [Amicus support due within two weeks]

The underlying appeal center on the validity of Leak’s U.S. Patent No. 8,193,496 and 8,426,813 that cover gas-leak detection equipment and methods using a passive-IR camera and bandpass filter.  The primary issues were claim construction (“leak” and “normal operating conditions”) and motivation to combine in the ultimate obviousness conclusion.   The original brief began as follows:

The IPR proceedings below resulted in the creation of a dense factual record involving 24 declarations and 14 depositions. Almost all witnesses were scientists (many with Ph.D. degrees) having personal knowledge of the petroleum industry’s extensive efforts (and failures) to develop a commercially viable imaging system for detecting hydrocarbon gas leaks in the field. Most of these same witnesses also offered first-hand testimony of [the inventor] David Furry’s own efforts to solve the same technical problem. Several witnesses -top scientists from the largest petroleum companies – described the day in 2004 when Furry showed up at the industry’s “Scan Off” to demonstrate his “Hawk” camera against the industry’s then-best optical leak detection systems. These scientists, having dedicated years of work and countless resources to creating a commercially viable optical leak detection system, testified that they were completely surprised and astonished by the Hawk’s unexpected results. It was immediately apparent that Furry had solved an important technical problem that the petroleum industry had been unable to solve.




Eligibility: Explaining the IPO Legislative Proposal

by Dennis Crouch

Following Bilski, Prof. Rob Merges and I published a paper titled “Operating Efficiently Post-Bilski by Ordering Patent Doctrine Decision-Making” arguing, inter alia, that eligibility decisions are largely out of the normal bailiwick of PTO examiners.  As imagined by the Supreme Court, the eligibility doctrine really became too philosophical and policy based to be administrable.  Alice and Mayo were subsequently released and did not help the situation.  Under Dir. Lee, the USPTO did figure out a way to administer the test — by not following the test set-out by the Supreme Court.  Rather than looking for abstract ideas and laws of nature as imagined by the Supreme Court, examiners are guided to look specifically only for concepts that the courts have already identified as problematic.  Of course, as the number of court cases finding ineligible subject matter rises, the PTO’s approach has necessarily expanded as well.

The administration concern is one factor behind the IPO’s newly proposed legislative change to 35 U.S.C. 101.   For the IPO, though, the larger issue though is “revers[ing] the recent Supreme Court rulings and restore the scope of subject matter eligibility to that intended by Congress in the passage of the Patent Act of 1952.”

IPO Steps Up: Proposes Statute to Overturn Mayo and Alice

In a newly published whitepaper, the IPO explains its proposed legislative amendment. [PDF20170207_ipo-101-tf-proposed-amendments-and-report]

Following an explanation rejected by the Supreme Court in its eligibility doctrine, IPO explains that the traditional subject matter exceptions including abstract ideas and laws of nature were part of the pre-1952 “invention” requirement.  That requirement was eliminated in the 1952 Act in a way that, according to the IPO, should have opened the door to broad subject matter jurisprudence.  As the organization sees it, the Supreme Court began to go off track in the 1970s – a path revived in recent years.

With this avenue of legal argument rejected by the courts, the IPO sees itself forced to appeal to Congress for a more direct statement of broad subject matter eligibility.

The IPO’s proposed amendment is as follows:

101 Inventions patentable.

101(a) ELIGIBLE SUBJECT MATTER: Whoever invents or discovers, and claims as an invention, any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereto, shall be entitled to thereof, may obtain a patent for a claimed invention thereof therefor, subject only to the exceptions, conditions, and requirements set forth in this Title of this title.

101(b) SOLE EXCEPTION TO SUBJECT MATTER ELIGIBILITY: A claimed invention is ineligible under subsection (a) if and only if the claimed invention as a whole, as understood by a person having ordinary skill in the art to which the claimed invention pertains, exists in nature independently of and prior to any human activity, or exists solely in the human mind.

101(c) SOLE ELIGIBILITY STANDARD: The eligibility of a claimed invention under subsections (a) and (b) shall be determined without regard as to the requirements or conditions of sections 102, 103, and 112 of this Title, the manner in which the claimed invention was made or discovered, or the claimed invention’s inventive concept.

In describing the 101(a) amendment, the IPO explains that, in the amended structure “utility [is] the sole basis of eligibility.”  The requirement that the entitlement to a patent is “subject only to the exceptions and conditions set forth in this Title” is, according to the IPO, intended “to foreclose the development of any future ‘judicial exceptions” to section 101.” and to recognize that the “only exceptions to the entitlement to a patent … are those defined in the statute.”  The IPO statement does not consider the impact of other already-existing non-statutory exceptions such as double-patenting, but presumably those will disappear unless a sufficient statutory hook is found.

Proposed 102(b) includes a very narrow exception to eligibility.  I would suggest that there is almost nothing on earth that provably “exists in nature independently of and prior to any human activity” leaving the only actual exception that the invention “exists solely in the human mind.”  On this second exception, IPO writes:

This ineligibility criterion … makes eligible any claim limitation that requires some external involvement with the physical world or any representation thereof (e.g., data in a computer).
. . . [However] ideas that do not have physical or tangible aspects . . . are not patentable.

The IPO does not indicate whether the exception would be triggered if a single embodiment of the invention could conceivably exist solely in a human mind.  I expect that it would.

According to the IPO, 101(c) is designed to ensure that eligibility is not determined based upon the novelty, obviousness, or definiteness of a patent claim.  I would suggest that the language does not quite achieve the purpose suggested.  A more effective revision might state instead that “eligibility of a claimed invention. . . shall be determined without regard to its novelty, obviousness, or definiteness, or lack thereof.”

I compliment the IPO on taking this major step and beginning a conversation on legislative fixes to the eligibility doctrine.

I agree with the IPO members that the current situation is quite problematic both because the lines are so unclear and because they are ruling-out many inventions that should qualify in my conception.  That said, I believe that the provision likely goes too far.  I would suggest that the proposal take at least two further steps: (1) include a third exception to eligibility derived from the printed matter doctrine; and (2) include a new 102(d) that expressly defines the scope of the utility doctrine so that it becomes clear what work will be going on there.  It should be clear from the statute that ordinary works of authorship, for instance, are not patent eligible.

Supreme Court Update: Are Secondary Indicia of Invention Relevant to Eligibility?

by Dennis Crouch

The Supreme Court is on recess until Feb 17.

I don’t know if my end-of-April prediction will hold true, but I do expect Neil Gorsuch to become a Justice on the United States Supreme Court.  As a 10th Circuit Judge, Gorsuch never decided a patent case, but does have a handful of interesting IP cases.

There are a few petitions filed that we have not discussed here: 

 In its newest petition, DataTreasury takes 101 for a new spin by taking the 101/103 analysis to its next logical level.  If we are going to include a 103 analysis as part of the eligibility doctrine then lets go whole hog.  Thus, DataTreasury asks: whether a court must consider secondary indicia of invention as evidence in its eligibility analysis? In the case, the Federal Circuit had affirmed the PTAB judgment without opinion under R.36. A second eligibility petition is found in TDE Petroleum Data Solutions, Inc. v. AKM Enterprise, Inc., dba Moblize, Inc. TDE asks the court to “please reconcile Diehr and Alice.” (I’m not literally quoting here).  The patent at issue (No. 6,892,812) claims a four-step process of “determining the state of a well operation.” (a) store several potential “states”; (b) receive well operation data from a plurality of systems; (c) determine that the data is valid by comparing it to a threshold limit; and (d) set the state based upon the valid data.

In Wi-LAN v. Apple, the patentee revives both Cuozzo and Markman claim construction arguments – this time focusing on “whether claim terms used to define the metes and bounds of an invention are generally given their “plain and ordinary meaning,” or are redefined (limited) to match the scope of the exemplary embodiments provided in the specification.”

duPont v. Macdermid asks whether summary judgment of obviousness is proper because of the factual disputes at issue.  Similarly, in Enplas v. Seoul Semiconductor, the petitioner argues that a finding of anticipation by the PTAB must be supported by findings each and every element of the subject patent claim is disclosed in the prior art.  In Enplas, the Federal Circuit affirmed the PTAB on a R.36 Judgment Without Appeal — it difficult for the petitioner to point to the particular deficiencies.


=== THE LIST===

1. 2016-2016 Decisions:

  • Design Patent Damages: Samsung Electronics Co. v. Apple Inc., No 15-777 (Total profits may be based upon either the entire product sold to consumers or a component);  GVR order in parallel case Systems, Inc. v. Nordock, Inc., No. 15-978.  These cases are now back before the Federal Circuit for the job of explaining when a component

2. Petitions Granted:

3. Petitions with Invited Views of SG (CVSG): 

4. Petitions for Writ of Certiorari Pending:

  • Claim Construction: Wi-LAN USA, Inc., et al. v. Apple Inc., No. 16-913 (“plain and ordinary meaning”)
  • Is it a Patent Case?: Boston Scientific Corporation, et al. v. Mirowski Family Ventures, LLC, No. 16-470 (how closely must a state court “hew” federal court patent law precedents?) (Appeal from MD State Court)
  • Anticipation/Obviousness: Google Inc., et al. v. Arendi S A.R.L., et al., No. 16-626 (can “common sense” invalidate a patent claim that includes novel elements?) (Supreme Court has requested a brief in response)
  • Anticipation/Obviousness: Enplas Corporation v. Seoul Semiconductor Co., Ltd., et al., No. 16-867 (“Whether a finding of anticipation under 35 U.S.C. § 102 must be supported by findings that each and every element of the subject patent claim is disclosed in the prior art?”)
  • Anticipation/Obviousness: E.I. du Pont de Nemours and Company v. MacDermid Printing Solutions, L.L.C., No. 16-905 (summary judgment of obviousness proper)
  • Jury Trial: Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, et al., No. 16-712 (“Whether inter partes review … violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.”) [oilstatespetition]
  • Jury Trial: Nanovapor Fuels Group, Inc., et al. v. Vapor Point, LLC, et al., No. 16-892 (Can a party forfeit a properly demanded trial by jury without an explicit, clear, and unequivocal waiver?)
  • Is it a Patent Case?: Big Baboon, Inc. v. Michelle K. Lee, No. 16-496 (Appeal of APA seeking overturning of evidentiary admission findings during reexamination – heard by Federal Circuit or Regional Circuit?)
  • LachesMedinol Ltd. v. Cordis Corporation, et al., No. 15-998 (follow-on to SCA); Endotach LLC v. Cook Medical LLC, No. 16-127 (SCA Redux); Romag Fasteners, Inc. v. Fossil, Inc., et al, No. 16-202 (SCA Redux plus TM issue)
  • Eligibility: TDE Petroleum Data Solutions, Inc. v. AKM Enterprise, Inc., dba Moblize, Inc., No. 16-890 (Please reconcile Diehr and Alice)
  • Eligibility: DataTreasury Corporation v. Fidelity National Information Services, Inc., No. 16-883 (secondary indicia as part of eligibility analysis).
  • Eligibility: IPLearn-Focus, LLC v. Microsoft Corp., No. 16-859 (evidence necessary for finding an abstract idea)

5. Petitions for Writ of Certiorari Denied or Dismissed:


Apple Samsung: Federal Circuit Remands Design Patent Damages Decision to District Court

iphonedesignpatentimageBy Dennis Crouch

Apple v. Samsung (Fed. Cir. 2017)

In a non-precedential decision, the Federal Circuit has remanded this design patent damages dispute back to the district court reconsideration.  The basic question is whether the patented “article of manufacture” (which serves as the basis for profit disgorgment) should be the entire article sold to consumers or some component of that whole.  A patentee would obviously prefer the whole-article basis because it would result in a greater total-profit award. In Samsung Elecs. Co. v. Apple Inc., 137 S. Ct. 429 (2016), the Supreme Court held that the statute is broad enough to encompass either the entire-article or simply a component.  However, the Court refused to provide any guidance as to how to determine the appropriate basis in any particular case (including this case involving Apple’s iPhone design patents).

On remand here, the Federal Circuit has also refused to particularly decide the case but instead has remanded to the District Court for her analysis.  “[W]e remand this case to the district court for further proceedings, which may or may not include a new damages trial.”

The court did provide some commentary:

The Supreme Court clarified that a damages award under § 289 involves two steps: (1) “identify the ‘article of manufacture’ to which the infringed design has been applied;” and (2) “calculate the infringer’s total profit made on that article of manufacture.”

The parties here dispute whether the jury instructions were appropriate based upon this clarification of the law.   Apparently, Judge Koh read the statute to the jury, and did not particularly indicate whether the “article of manufacture” was the phone as a whole or some component thereof.  So, while the instructions are not wrong, they could be more detailed.

On remand, the District Court will need to review the trial record and determine whether a new damages trial is necessary based upon more detailed jury instructions.

= = = = =

I like what the court did here.  When the Federal Circuit does decide this issue, its precedential approach is likely to stick for many years to come.  It makes sense then for the court to seek the perspective of at least one other judge before jumping into the foray.  Here, there is no question that the district court more fully understands the case and the particulars of the trial and so it is also right to remand for consideration of how the Supreme Court’s decision impacts what has already been decided. We can also recognize that the parties are fighting over past damages and both have sufficient cash-on-hand so that a delay in judgment does not create irreparable harm.

= = = = =

In a Footnote, the court looked to foreclose a separate argument on remand. The court writes:

Samsung also argued that § 289 “contains a causation requirement, which limits a § 289 damages award to the total profit the infringer made because of the infringement.” We rejected that argument, and Samsung abandoned this theory during oral argument to the Supreme Court.

Thus, although causation may still be an issue to be debated – it appears out for this case.

ABA: If moving to withdraw for non-payment of fees, try to say as little as possible to the court.

This is probably obvious, but while nonpayment of fees (or expenses) may under some circumstances permit a lawyer to withdraw from a case, it does not permit the lawyer to reveal confidential information.  What does a lawyer do if (as sometimes happens) the client objects to withdrawal?

The ABA in ABA Formal Ethics Op. 476 (Dec. 19, 2016) (here), said that the lawyer should (a) in the initial motion say nothing more than “professional considerations” or the like; (b) if pressed by the court, point out that the court should rule without requiring disclosure; and (c) only if pressed or in the alternative, offer to provide the information for in camera review.

Can Your Patent Block Repair and Resale and Prevent Arbitrage?

resaleby Dennis Crouch

The first rounds of merits briefs have now been submitted to the Supreme Court in Impression Prods. v. Lexmark. The case questions the extent a patentee can control the entire resale and repair market for its products.  For products originally sold in the US, the Federal Circuit held that express use/resale limits at the point of first-sale are effective – even against subsequent bona fide purchasers. For products sold overseas, the Federal Circuit held that US Courts should presume no exhaustion of the US patent – this would automatically prohibit 3rd party importation into the US.

As a property law professor, I tend to think about about the mass confusion among the students as they try to work through the law associated with real covenants and equitable servitudes on land.  It creates substantial confusion among lawyers. But what we want is a system where property rights can be fairly and openly traded without even having lawyers extensively involved with each of our purchases.  With personal property courts long ago rejected servitudes (such as use and resale restrictions) that bind subsequent purchasers. Unlike real property, personal property moves and is often transferred without substantial paperwork or record-keeping, and allowing a set of unique restrictions has the potential of gumming up the marketplace.  The Federal Circuit in this case went all the way to the other side — holding that the presumption in foreign sales is that no US patent rights are exhausted.  I purchased my last couple of smart phones through the used market – and have also repaired them several times.  Under the law, I probably should have taken steps to ensure that all of the original equipment manufacturers affirmatively granted repair and resale rights.  Coming together, the Federal Circuit’s approach here has the potential to limit the market for the repair and reselling of goods.  I would suggest that those activities are incredibly beneficial to our society in terms of resource allocation and avoiding waste as well as empowering citizens and avoiding anticompetitive market behavior.  Although these policy goals are relevant to the Supreme Court decision-making, the Court’s primary analysis pathway should be doctrinal.

In these cases, the most important brief is often the amicus filing by the U.S. Government. Here, the brief USG brief was filed on January 24 by President Trump’s newly appointed acting solicitor general (Noel Francisco) who (like Obama’s SG) has taken the position of supporting the challenger (Impression) against the patentee (Lexmark) and the Federal Circuit.  Time will tell whether this stance is more generally predictive of the new administration’s stance on patent rights and patent enforcement. [15-1189_amicus_reversal_united_states]

The Government frames the questions presented as follows:

  1. Whether a U.S. patent owner may invoke patent law to enforce restrictions on the use or resale of a patented article after the first authorized sale of the article in the United States.
  2. Whether and under what circumstances a U.S. patent owner may authorize the sale of a patented article in a foreign country, either under a foreign patent or otherwise in accordance with foreign law, while reserving its exclusive rights under U.S. patent law.

Answering these questions, the Government argues simply that “restrictions on post-sale use or resale are not enforceable under U.S. patent law” and that the Federal Circuit’s approach is wrong.  This is the same rule that applies generally to attempts to place a restrictive covenant on personal property.  As a minor caveat, the Government takes the position that, under limited circumstances, a foreign sale might not exhaust the associated U.S. patent rights.

The basic justification for this approach is to ensure that we have a working commercial market. The brief quotes the 1895 Keeler decision: “The inconvenience and annoyance to the public” if patent rights are not exausted by the first authorized sale [is] “too obvious to require illustration.”

Since A.B. Dick was overruled in 1917, this Court has rejected every attempt to invoke patent law to control the use or resale of an article after the first authorized sale in the United States.

At the international level, the Government suggests that the court allow express reservation of rights for foreign sales – this would thus allow a German company to sell its products in Germany (with an express export restriction) and then use its U.S. to patent to prevent those products from being sent to the U.S.  This gives the manufacturer more control over the market and would allow for price discrimination (i.e., charging higher prices in the U.S.).

In its merits brief, petitioner Impression Prods. takes a harder stand on international exhaustion — arguing that the court should follow its own prior precedent in the copyright case of Kirtsaeng and hold that any authorized sale by the patentee exhausts all U.S. patent rights – even if the authorized sale is abroad.  [15-1189-merits-petitioner]   Professor Feldman agrees in her brief, naming the Federal Circuit’s actions as “reversal from below” [15-1189_amicus_pet_professor_robin_feldman] as did the Huawei brief (although in different words) [15-1189_amicus_pet_huawei_technologies].

A common argument for exhaustion is that it allows for a robust resale market that greatly benefits consumers and helps price discrimination by allowing third party arbitrage.  Although U.S. prices are low for some goods, they are very high for others (such as pharmaceuticals and printer ink).  International exhaustion would help to solve that problem (although there are many regualtory hurdles associated with importing .  In its brief, the AARP join with EFF and Public Knowledge (and others) to argue this point: “Manufacturers currently exploit weak exhaustion rules to harm consumers. . . . Limitations on resale and repair rights lead to monopolization rather than competition.” [15-1189_amicus_pet_public_knowledge]

Costco is a business that is actively engaged in the sort of price lowering arbitrage discussed by AARP and argues that the Federal Circuit’s exhaustion rules “impose enormous costs for manufacturers, retailers, and consumers.”  They effectively ask – will the american retailers need to inspect patent licenses for all of the components and sub-components found in the products they sell? [15-1189_amicus_pet_costco_wholesale_corporation]  Similarly, an interesting trade group – the Association of Service and Computer Dealers International filed its brief and explained how the no-exhaustion rules impact the market for hard drives, DVDs, Flash Memory, and other consumer product. [15-1189_amicus_pet_ascdi] The UCC (Article 2) provides some protections here, but does not, for instance, provide authority to repair.

FSU Professor Frederick Abbott has an interesting take. Abbott is an expert on international trade law.  He writes:

A fundamental flaw in the approach of the Federal Circuit involves its reasoning that a rule of territoriality of patent rights precludes U.S. courts from taking into account activities of U.S. patent owners outside of the United States. The international agreements governing the international patent system do not prescribe such a rule of territoriality. . . The rule of independence of patents prescribed by the Paris Convention[] provides that acts taken by patent authorities in one country do not affect patent rights in other Paris countries.  recognition by this Supreme Court that first sales in foreign countries exhaust U.S. patent rights would not affect patents granted outside the United States.


Finally, Stanford’s IP Clinic filed a law professor’s brief signed by Mark Lemley, Dan Burk, Sam Ernst, Shubha Ghosh, Orly Lobel, Pamela Samuelson, Jessica Silbey, and others that explains:

A clear exhaustion rule promotes the alienability of patented articles and reduces transaction costs. Unlike clear, reliable property rights, idiosyncratic arrangements of rights that depend on what covenants or conditions an upstream seller has attached to a chattel impose high information costs on purchasers. . . . Exhaustion doctrine also prevents patentees from extracting a patent royalty at multiple stages in a product’s distribution chain, which would compensate them in excess of the societal benefit their inventions have provided.


It will be interesting to see how the ‘other side’ responds here .


The Last Inventorship Case? (102(f))

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.


Judgment of Not-Invalid Affirmed.


PTAB initiation of PGR Does not Negate Preliminary Injunction

tinnuspatentby Dennis Crouch

Tinnus Enterprises v. Telebrands (Fed. Cir. 2017) [tinnustelebrands]

In an opinion by Judge Stoll, the Federal Circuit has affirmed an E.D.Texas preliminary injunction barring the accused infringer from selling its “Balloon Bonanza” product “or any colorable imitation thereof.”

I previously wrote about the case that involves Telebrands’ patented balloon-filling-toy. U.S. Patent No. 9,051,066.  The case is one of the first lawsuits involving a post-AIA patent.

Preliminary Injunctive Relief: Even before eBay, courts applied a four-factor test to determine whether to award a preliminary injunction to stop ongoing infringement pending a final judgment in the case. (eBay changed the rule for permanent injunctive relief.).

A decision to grant or deny a preliminary injunction is within the sound discretion of the district court, based upon its assessment of four factors: (1) the likelihood of the patentee’s success on the merits; (2) irreparable harm if the injunction is not granted; (3) the balance of hardships between the parties; and (4) the public interest.

The factors are slightly different than those considered for permanent relief in eBay.  Most importantly, at the pre-trial stage, the patentee has not established that it will actually win the case and be eligible for any remedy at all. Thus, the Preliminary Injunction factors include consideration of who is likely to win.  The Prelminary Injunction factors also eliminate the eBay factor that “remedies available at law are inadequate to compensate for the injury” by rolling that factor into the irreparable harm consideration.  A fifth element that is not usually stated in the test is that the patentee must also be willing and able to post a bond to the court that will compensate the enjoined party if it turns out that the injunction was improper. Rule 65(c) requires a bond “in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.” Fed. R. Civ. P. 65(c). Two important aspects on appeal: (1) A district court’s PI order (either grant or denial) is immediately appealable even though it is a non-final interloctutory order. 28 U.S. Code § 1292. (2) Because district courts are given discretion in awarding preliminary injunctive relief, those judgments are given deference on appeal.

PTAB Interplay: As with so many US patent lawsuits, the case involves a parallel AIA-trial. Since the patent at issue here is a post-AIA patent, the challenger was able to file for post-grant-review (PGR).

The timeline is relevant:

  • Patentee files the lawsuit and requests a preliminary injunction.
  • District court awards PI – after considering but rejecting invalidity challenges by defendant.
  • Defendant files PGR petition – making the same invalidity arguments (indefinite and obvious).
  • USPTO initiates PGR – finding claims likely invalid as obvious and indefinite.
  • Defendant appeals court PI.

As noted above, a key factor for awarding preliminary relief is the likelihood that the patentee will ultimately win the case on the merits.  Although a patent is presumed valid, a challenger can overcome this hurdle by showing that the patent is “vulnerable” to a specific validity challenge.  The court has also termed this as finding a “substantial question concerning the validity of the patent.”  A seemingly reasonable approach here would be to say – “If the PTO concludes that claims are likely invalid, then those claims are probably vulnerable to being found invalid.”  Here, the court does not follow that approach and – in fact – does not even mention the PTAB initiation decision in its discussion of the aforementioned vulnerability.  (The court does state that the PTAB has taken action, but does not appear to draw any conclusions for this case from that parallel proceeding).  Implicit holding here is that the PTAB initiation of a PGR Does not negate a preliminary injunction.

Rather, the appellate panel walked through the district court decision and found that (1) someone of skill in the art would likely understand the term “substantially filled” and thus it is not indefinite; and (2) the district court did not err in holding that prior art associated with filling an endoscopic balloon was not analogous or pertinent to the problem of filling toy water balloons.

Preliminary Injunction Affirmed.

= = = =

Motivated to Consider vs Motivated to Combine: The Federal Circuit is still working through how to deal with the analogous arts test post KSR.  Here, the court ultimately found there was no ‘motivation to combine’ the prior art since one of the references was not ‘analogous art.’  In at least pre-KSR tradition, these were separate inquiries within the obviousness process outlined in Graham v. John Deere.  The analogous arts test has long been thought of as part of the initial factual Graham inquiry – identify the scope and content of the prior art.  Under the doctrine as explained in Clay, the court limits the scope of prior art only to references that a worker may have been motivated to consider.  These are generally thought of as references in the same field of endeavor or addressing similar problems as those faced by the inventor.  Of course, just because two prior art references are within the same field does not mean that the worker would have been motivated to combine the elements of references in the way claimed by the inventor.  Thus, traditionally, the motivation to consider a reference is a unique and different inquiry than that of the motivation to combine the elements of multiple references.  Here, the court appears to mix them together in a way that adds to confusion in the inquiry rather than offering clarity.

Now, maybe it makes sense to throw-out the old Graham v. John Deere structured approach, but that should be an explicit process rather than a set of (perhaps-unintentional) undermining decisions.

Trading Technologies: User Interface for Stock Trading

Before writing more about Trading Technologies v. CQG, I will first note that TT is my former client and I personally filed the original complaint in this very case 12 years ago (2005).  Although TT is no longer my client, I am bound by and respect the rules of professional ethics and the duties owed to former clients.  

The new non-precedential opinion from the Federal Circuit affirms the district court ruling that TT’s asserted claims are patent eligible.

The patent claims here cover a computerized method and system used for trading stocks and similar products.  When buying and selling stocks, speed and accuracy are both critically important and in this invention, TT created a Graphical-User-Interface design (and operational software) that helps traders buy and sell stock more quickly and more accurately. See U.S. Patents No. 6,772,132 and No. 6,766,304.

The court writes:

It is not disputed that the TTI System improves the accuracy of trader transactions, utilizing a software implemented programmatic [method]. For Section 101 purposes, precedent does not consider the substantive criteria of patentability. For Section 101 purposes, the claimed subject matter is “directed to a specific improvement to the way computers operate,” Enfish, for the claimed graphical user interface method imparts a specific functionality to a trading system “directed to a specific implementation of a solution to a problem in the software arts.” Id.

The opinion is authored by Judge Newman and joined by Judges O’Malley and Wallach.  The court’s opinion is a short and interesting read:

Precedent has recognized that specific technologic modifications to solve a problem or improve the functioning of a known system generally produce patent-eligible subject matter. … [I]neligible claims generally lack steps or limitations specific to solution of a problem, or improvement in the functioning of technology.

For some computer-implemented methods, software may be essential to conduct the contemplated improvements. Enfish… Abstraction is avoided or overcome when a proposed new application or computer-implemented function is not simply the generalized use of a computer as a tool to conduct a known or obvious process, but instead is an improvement to the capability of the system as a whole.

We reiterate the Court’s recognition that “at some level, all inventions . . . embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.” Alice, quoting Mayo. This threshold level of eligibility is often usefully explored by way of the substantive statutory criteria of patentability, for an invention that is new, useful and unobvious is more readily distinguished from the generalized knowledge that characterizes ineligible subject matter. This analysis is facilitated by the Court’s guidance whereby the claims are viewed in accordance with “the general rule that patent claims ‘must be considered as a whole’.” Alice, quoting Diamond v. Diehr.

As demonstrated in recent jurisprudence directed to eligibility, and as illustrated in the cases cited ante, the claim elements are considered in combination for evaluation under Alice Step 1, and then individually when Alice Step 2 is reached. Applying an overview of this evolving jurisprudence, the public interest in innovative advance is best served when close questions of eligibility are considered along with the understanding flowing from review of the patentability criteria of novelty, unobviousness, and enablement, for when these classical criteria are evaluated, the issue of subject matter eligibility is placed in the context of the patent-based incentive to technologic progress.


The patents are also currently being challenged on 101 grounds in CBM proceedings before the USPTO.  Although I feel that it should have a direct impact, it is unclear to me whether this decision will impact the PTO proceedings addressing the identical question.  (For instance, the court here holds that the patent covers a technological invention – and CBM proceedings can only proceed for non-technological inventions.) Patentees may also consider petitioning the court to make this decision precedential.

E.D. Magistrate Love Orders Disclosure of Whether Mock Trial Done, Other Info In Camera

This is interesting and the case name (wait for it) sort of ironic.  The district judge ordered the parties to disclose to each other whether they had done a mock trial, to keep a list of participants, and to cross-check participants against potential jurors and notify the other side if there was a match.  In addition, the judge ordered the parties to disclose in camera a list of participants.

Obviously, I think, a lawyer who knows that a potential juror participated in a mock trial has to disclose that fact, but this goes beyond that and is not something I’d seen before.

The case is 3rd Eye Surveillance, LLC v. City of Ft. Worth (E.D. Tex. Jan. 12, 2017), here.

Supreme Court 2017 – Patent Preview

by Dennis Crouch

A new Supreme Court justice will likely be in place by the end of April, although the Trump edition is unlikely to substantially shake-up patent law doctrine in the short term.

The Supreme Court has decided one patent case this term. Samsung (design patent damages).  Five more cases have been granted certiorari and are scheduled to be decided by mid June 2017. These include SCA Hygiene (whether laches applies in patent cases); Life Tech (infringement under 35 U.S.C. § 271(f)(1) for supplying single component); Impression Products (using patents as a personal property servitude); Sandoz (BPCIA patent dance); and last-but-not-least TC Heartland (Does the general definition of “residence” found in 28 U.S.C. 1391(c) apply to the patent venue statute 1400(b)).

Big news is that the Supreme Court granted writs of certiorari in the BPCIA dispute between Sandoz and Amgen.   The BPCIA can be thought of as the ‘Hatch Waxman of biologics’ – enacted as part of ObamaCare.   The provision offers automatic market exclusivity for twelve years for producers of pioneer biologics.   Those years of exclusivity enforced by the FDA – who will not approve a competitor’s expedited biosimilar  drug application during the exclusivity period.   The statute then provides for a process of exchanging patent and manufacturing information between a potential biosimilar producer and the pioneer – known as the patent dance.  The case here is the Court’s first chance to interpret the provisions of the law – the specific issue involves whether the pioneer (here Amgen) is required to ‘dance.’ [Andrew Williams has more @patentdocs]

A new eligibility petition by Matthew Powers in IPLearn-Focus v. Microsoft raises eligibility in a procedural form – Can a court properly find an abstract idea based only upon (1) the patent document and (2) attorney argument? (What if the only evidence presented supports eligibility?).  After reading claim 1 and 24 (24 is at issue) of U.S. Patent No. 8,538,320, you may see why the lower court bounced this. Federal Circuit affirmed the district court’s ruling without opinion under Federal Circuit Rule 36 and then denied IPLF’s petition for rehearing (again without opinion).

1. A computing system comprising:

a display;

an imaging sensor to sense a first feature of a user regarding a first volitional behavior of the user to produce a first set of measurements, the imaging sensor being detached from the first feature to sense the first feature, the first feature relating to the head of the user, and the first set of measurements including an image of the first feature, wherein the system further to sense a second feature of the user regarding a second volitional behavior of the user to produce a second set of measurements, the second feature not relating to the head of the user; and

a processor coupled to the imaging sensor and the display, the processor to:

analyze at least the first set and the second set of measurements; and determine whether to change what is to be presented by the display in view of the analysis.

24. A computing system as recited in claim 1, wherein the system capable of providing an indication regarding whether the user is paying attention to content presented by the display.

=== THE LIST===

1. 2016-2016 Decisions:

  • Design Patent Damages: Samsung Electronics Co. v. Apple Inc., No 15-777 (Total profits may be based upon either the entire product sold to consumers or a component);  GVR order in parallel case Systems, Inc. v. Nordock, Inc., No. 15-978.  These cases are now back before the Federal Circuit for the job of explaining when a component

2. Petitions Granted:

3. Petitions with Invited Views of SG (CVSG): 

4. Petitions for Writ of Certiorari Pending:

  • Is it a Patent Case?: Boston Scientific Corporation, et al. v. Mirowski Family Ventures, LLC, No. 16-470 (how closely must a state court “hew” federal court patent law precedents?) (Appeal from MD State Court)
  • Anticipation/Obviousness: Google Inc., et al. v. Arendi S A.R.L., et al., No. 16-626 (can “common sense” invalidate a patent claim that includes novel elements?) (Supreme Court has requested a brief in response)
  • Civil Procedure – Final Judgment: Johnson & Johnson Vision Care, Inc. v. Rembrandt Vision Technologies, L.P., No. 16-489 (Reopening final decision under R.60).
  • Anticipation/Obviousness: Enplas Corporation v. Seoul Semiconductor Co., Ltd., et al., No. 16-867 (“Whether a finding of anticipation under 35 U.S.C. § 102 must be supported by findings that each and every element of the subject patent claim is disclosed in the prior art?”)
  • Post Grant Admin: Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, et al., No. 16-712 (“Whether inter partes review … violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.”) [oilstatespetition]
  • Eligibility: IPLearn-Focus, LLC v. Microsoft Corp., No. 16-859 (evidence necessary for finding an abstract idea)
  • Post Grant Admin: SightSound Technologies, LLC v. Apple Inc., No. 16-483 (Can the Federal Circuit review USPTO decision to initiate an IPR on a ground never asserted by any party)
  • Is it a Patent Case?: Big Baboon, Inc. v. Michelle K. Lee, No. 16-496 (Appeal of APA seeking overturning of evidentiary admission findings during reexamination – heard by Federal Circuit or Regional Circuit?)
  • LachesMedinol Ltd. v. Cordis Corporation, et al., No. 15-998 (follow-on to SCA); Endotach LLC v. Cook Medical LLC, No. 16-127 (SCA Redux); Romag Fasteners, Inc. v. Fossil, Inc., et al, No. 16-202 (SCA Redux plus TM issue)
  • Eligibility and CBM: DataTreasury Corporation v. Fidelity National Information Services, Inc., No. 16-883 (I have not seen the petition yet, but underlying case challenged whether (1) case was properly classified as CBM and (2) whether PTAB properly ruled claims ineligible as abstract ideas) (Patent Nos. 5,910,988 and 6,032,137).

5. Petitions for Writ of Certiorari Denied or Dismissed:

Post-PTO Trials: Party must Prove Injury-in-Fact for Appellate Standing

Phigenix v. ImmunoGen (Fed. Cir. 2017)

In this case, the patentee ImmunoGen won its case before the Patent Trial & Appeal Board (PTAB) with a judgment that the challenged claims are not obvious.  U.S. Patent No. 8,337,856. Phigenix appealed, but the appellate court has dismissed the case for lack of standing – holding that the challenger-appellant failed provide “sufficient proof establishing that it has suffered an injury in fact.”

Article III of the U.S. Constitution provides for federal judicial power over “cases [and] controversies.”  Although not found in the text, the Supreme Court requires existence of an “actual” conflict between the parties — thus prohibiting the courts from issuing advisory opinions.  The doctrine of standing requires that a plaintiff/appellant “have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the [defendant/appellee], (3) that is likely to be redressed by a favorable judicial decision.” (quoting Spokeo (2016)).  As a Constitional limit on judicial power, standing must always exist during a lawsuit and may be raised sua sponte by a trial or appellate court.

The case here began with Phigenix’ filing its inter partes review (IPR) petition.  Since the PTO/PTAB is an administrative agency empowered by statute and Article I of the Constitution, its power is not limited by Article III.  Thus, for IPR petitions, the PTO Director need not concern herself with the question of whether the petitioner has standing in the Federal Courts sense.  When the case is appealed, however, the appellant must provide the required proof of injury.

In this case, Phigenix is something of a competitor of the patentee ImmunoGen and, although Phigenix does not plan to use the patented invention itself (at this point the company is only a licensor), the appellant argues that the existence of the patent makes ImmunoGen a stronger market competitor – leading to actual economic injury. In the appeal, the Federal Circuit suggests that the injury might be sufficient – but that Phigenix failed to prove its existence.

The conclusory statements in the Gold Declaration and the [attorney] letter as to the hypothetical licensing injury therefore do not satisfy the requirements of Rule 56(c)(4).

Without providing the evidence of injury, the court could not hear the case.   The court also reiterated its prior position that the right-to-appeal created by 35 U.S.C. 141(c) does not replace the standing requirement. See Lujan and Consumer Watchdog.



Proving the existence of Functional Limitations in the Prior Art

In re Chudik (Fed. Cir. 2017)

This non-precedential decision offers a nice refresher on the law of anticipation for functional claim elements and discusses the patent casebook favorite – In re Schreiber, 128 F.3d 1473 (Fed. Cir. 1997).

In Schreiber, all of the structural limitations of a popcorn funnel were found in a prior art oil can spout.  However, the prior art did not expressly teach that the oil spout would “allows several kernels of popped popcorn to pass through at the same time.”  In its decision, the Federal Circuit held that the “where the Patent Office has reason to believe that a functional limitation … may, in fact, be an inherent characteristic of the prior art” the PTO can shift the burden to the applicant to prove that the prior art does not possess the characteristic.  (Quoting In re Swinehart, 439 F.2d 210 (C.C.P.A. 1971)).

Here, the court writes:

The price [of including functional limitations is] that when the structural limitations are met by a single prior art reference, and when the examiner “has reason to believe” that the prior art reference inherently teaches the functional limitation, the burden shifts to the patent applicant to show that the functional limitation cannot be met by the single prior art reference.

Of course, the benefit of functional claim limitations is that they can offer broad scope with little linguistic difficulty.  This case also shows how these functional limitations help avoid prior art.

In Chudik’s case, there is no dispute that all of the structural limitations for the claimed surgical scalpel are found within a single prior art reference. U.S. Patent No. 5,843,108 (“Samuels”).  A difference is that, Chudik’s invention is “configured for creating a passageway through skin and soft-tissue to a target site on a bone” while Samuels blade was designed for merely making ‘nicks’ in the skin for catheter insertion.  The examiner/PTAB concluded that the Samuels blade nicking could reach a shallow bone – and thus satisfied the limitation.

On appeal, the Federal Circuit has reversed — finding that the examiner did not have (or at least explain) a substantial ‘reason to believe’ that the prior art inherently taught the functional limitation of being configured to reach a bone.

The [PTO] gave no justification for this belief, and nothing in Samuels offers an indication of the size of the blade or indicates that it would be able to contact subdermal anatomical features. If anything, Samuels explains that its design specifically prevents incisions that could damage structures near the skin. The examiner and the Board failed to explain how the Samuels blade could be employed in a manner to reach a shallow bone, but without the “disastrous consequences” that the blocker in Samuels is designed to prevent. For that reason, the examiner failed to make the necessary prima facie showing to shift the burden of going forward the applicant.

Reversed and remanded. It will be interesting to see whether the PTO now issues the patent or reopens prosecution with an obviousness rejection.


When is the PTO’s claim construction “reasonable”?

dagostinoimageD’Agostino v. Mastercard (Fed. Cir. 2016)

John D’Agostino’s patents cover processes for creating limited-use transaction codes to improve credit card security. U.S. Patent Nos. 7,840,486 and 8,036,988.  The approach basically keeps the card number out of the hands of the merchant (where most scamming occurs).  After being sued for infringement, MasterCard filed for inter partes review and successfully challenged many of the claims as obvious and anticipated by Cohen (U.S. Patent No. 6,422,462). On appeal, however, the Federal Circuit has vacated – holding that the PTAB’s claim interpretation was unreasonable.

Claim construction continues its reign as a messy hairball.  Rather than looking to the “proper” claim construction as defined by Phillips v. AWH, the PTAB defines claims according to their Broadest Reasonable Construction (BRI). That approach largely follows Phillips, but allows the PTO to select the “broadest” construction for any given limitation from the potential set of reasonable constructions.  The express intent here is to broaden the claims in order to make it easier to invalidate them during the IPR process. The idea then is that claims which survive the IPR-scope-puffery-gauntlet will be strong – giving confidence to judges and juries and fear into the hearts of infringers.

Reasonable is a Question of Law: In most areas of law ‘reasonableness‘ is considered a factual conclusion and conclusions regarding reasonableness are given deference on appeal.  The Federal Circuit however has ruled that the reasonableness of claim construction in the BRI context is reviewed de novo on appeal. Unfortunately, the court has not provided much helpful guidance in terms of knowing when a given construction is reasonable.  Their koan states that – although the BRI construction need not be the correct interpretation, the chosen BRI construction may not be “a legally incorrect interpretation.” (Quoting Skvorecz 2009).

Here, the question was whether the claims required a temporal separation between two communications.  The PTAB said no – since it was not expressly required and broadened the claims.   On appeal, the court looked at the claims and found that the express language did in fact require two separate communications: A first request that occurs “prior to” the merchant being identified  and then a second communication that includes the merchant ID.  According to the court, the PTAB’s interpretation (allowing for a single communication) was simply not reasonable.

On remand, the PTAB will decide whether the prior art the claim elements as they are more narrowly defined.

= = = = =

PTO Bound by its own Prior Construction?: Interesting issue ducked by the Federal Circuit involved the prior reexam of the patent where the PTO expressly narrowly construed the same claim scope. Court did not remark on the patentee’s suggestion here that PTO should be bound by its prior express constructions.  Seems reasonable to me.


My Letter to the USPTO About Duty of Candor Amendments



Dear Mr. Sked:

I write solely in my personal capacity as someone who advises patent practitioners on ethical issues and litigates patent cases.  These views are not those of my employer or my clients.

I have one broad concern and several more specific ones.

The USPTO Should Interpret the Patent Act Correctly and not Give False Security to Practitioners. 

            At a broad level, I agree uniformity is a good thing.  However, there will not be uniformity because of the different claim constructions given in litigation than in proceedings before the Office. I also agree with the USPTO that it need not follow the Federal Circuit’s definition of materiality (or anything else) from Therasense. However, it seems incongruous for the agency, as the entity charged by Congress with implementing the Patent Act, to adopt a definition that it rejected. Given than uniformity will not exist, what does the USPTO believe is required by the Patent Act of applicants?

More troublesome, however, is the real likelihood that the narrow definitions from Therasense will be rejected by the Supreme Court.  The Supreme Court has in recent years routinely rejected the Federal Circuit’s rigid, cabined interpretations of the Patent Act.  While no one knows what the future holds, today’s practitioner’s conduct may be judged by a more stringent standard than suggested in Therasense and proposed here. That has happened with eligibility, obviously.  Given that the Supreme Court could hold that the Patent Act requires more than avoiding intentionally obtaining a patent that you know you shouldn’t get, and given that that interpretation will likely be applied to all issued patents, and given the USPTO’s statement that it hopes that the new definition will result in less disclosure, one can see a trap for the unwary practitioner.  This may give practitioners a false sense of security.

My more specific comments relate primarily to “who” is covered by these rules.  They don’t make sense.

Rule 1.56 Makes Sense as to Who is Covered; Rule 1.555 Does Not.

As written, Rule 1.56 applies to “[e]ach individual associated with the filing and prosecution of a patent application,” and is further narrowed by subsection (c) which requires “substantive involvement.”  The rule ties the individual to substantive involvement in prosecution or filing.

Rule 1.555, in contrast, is (I think) unintentionally broad.  It states that the duty is owed by “the patent owner, each attorney or agent who represents the patent owner, and every other individual who is substantively involved on behalf of the patent owner.”  The way this is worded, every attorney and other person “associated with” the patent owner must disclose material information, even if the person has no involvement whatsoever in the reexamination. I believe if the sentence were written much like 1.56(c) is, this would clear this up: “The persons who owe a duty to disclose to the Office all information known to them to be material to patentability in a reexamination proceeding are every person who is substantively involved in the reexamination and who is associated with the patent owner, including each attorney or agent who represents the patent owner in the proceeding.”

            Who, in Both Rules, can Commit “Affirmative Egregious Misconduct?”

             The amendment to Rule 1.555 seems to limit who can commit “affirmative egregious misconduct” to the patent owner and those who act “on behalf of” the patent owner.  Rule 1.56 is not so limited, and is also written in the passive voice.

These differences and wordings raise three questions.

First, as noted above, the definition for reexamination would seem to allow for a patent to be held unenforceable due to conduct by every person “associated with” a patent owner, whether that person was involved in the reexamination, or not.  Granted, it likely won’t be affirmative egregious misconduct if the person wasn’t involved, but having a clear definition may help.

Second, under Rule 1.555, can someone other than “the patent owner, each attorney or agent who represents the patent owner, and every other individual who is substantively involved on behalf of the patent owner” in a reexamination commit affirmative egregious misconduct?  Presumably so; but is that the intent of the Office? Again, the comment in the prior paragraph may make this an academic point, but the way the rule is worded the person doesn’t need to be substantively involved in prosecution (and, as noted above, presumably substantive involvement is what was intended).

Third, when read in pari materia, Rule 1.56 is broader than Rule 1.555, since Rule 1.56’s “affirmative egregious misconduct” prong is not limited in the same way as Rule 1.555.  When read together, under Rule 1.56 a person’s conduct can result in non-issuance of a patent even if that person was not acting on behalf of the patent owner.  This seems harsh and unintended.  My suggestion would be to make the two provisions in the different rules have the same scope, and affirmative egregious conduct “by or on behalf of the patent owner” probably is reasonably clear and meaningfully limited in scope.

A Closing Thought:  Uniformity.

In closing, as noted at the outset, uniformity can be a good thing.  To that end, the USPTO has rules that relate to the same general concept – candor and disclosure – but which cover different groups of people. While there may be a policy basis to make the distinctions the rules make, I am not able to guess them.

For example, in addition to the differences discussed above, I note that Section 42.11 – the “rule 11” of IPR — applies to “parties and individuals involved” in an IPR.  Section 42.11 does not require “substantive involvement,” just “involvement.”  Further, because it includes “parties,” it creates the same problem discussed above with respect to Rule 1.555:  everyone who works for a “party” apparently is covered by 42.11, even if that person has nothing to do with the IPR.  As a final example of the varying coverage of these somewhat related rules, Section 42.51(b)(1)(iii) – the obligation in IPR to disclose inconsistent information — requires disclosure by “inventors, corporate officers, and persons involved in the preparation or filing of the documents or things.” Again, substantive involvement is not required, merely “involvement,” but “parties” are not subject to this rule.

It may be helpful to strive toward a single definition in these different rules is my point in closing.  These create practical problems and potential traps and needless litigation.

Glad to provide further information if I can.

Very truly yours,


David Hricik



The “Right” to Challenge a Patent

by Dennis Crouch

The Supreme Court in Lear, Inc. v. Adkins (1969) held that a licensee can challenge a patent’s validity — overruling the prior presumption of licensee estoppel found by Automatic Radio Mfg. v. Hazeltine Research (1950).

In his recent article, Antitrust Economist (and lawyer) Erik Hovenkamp argues that the “right to challenge a patent” should also be an important consideration in antitrust analysis.  Hovenkamp defines these “challenge rights” as “the (statutory) rights of third parties to challenge patents as invalid or uninfringed.” Antitrust comes into play when a license or settlement agreement includes challenge restraints that would contractually prevent the exercise of the challenge rights.

There are obvious collateral problems with the way that Hovenkamp identifies the ability to challenge a patent as a “right” – especially if we call it a property right. However, for antitrust-contract consideration, forbearing the ability-to-challenge at least fits the definition of a legal detriment incurred by the promisee.

Although patent licenses are entitled to substantial safe harbor from antitrust regulations, Hovenkamp argues that challenge restraints should not be so entitled “but rather exist within antitrust’s domain” and barred when impermissible anticompetitive.

A problem with the argument is the way that Hovenkamp lumps-together validity and non-infringement challenges as roughly equivalent.  However, I see the two as substantially distinct.

Read the Paper: Challenge Restraints and the Scope of the Patent

The contractual waiver of challenge rights has risen in importance since the Supreme Court’s decision in MedImmune (2007) (licensee retains right to challenge patent without breaching) and creation of the Inter Partes Review system following enactment of the AIA (2011).  Prior to the availability of IPRs (and CBM/PRG), settlement of an infringement lawsuit would effectively preclude later validity challenges even without specific contractual terms. (Res Judicata).  However, those estoppel principles do not apply the same way in AIA proceedings.

Chicken?: Test your Patent Test Taking Skills 2017

Introduction: Although not a poultry expert, Prof Crunch recently designed and built his own back-yard chicken coop (Coop) (started and completed in August 2016).  Among its special features, the coop includes a translucent roof to allow additional winter light, a hinged trap-door in the floor for removing waste, and a vertically sliding door opening to the chicken-run.  The vertically sliding door is operated by a pulley system and can be controlled while standing next-to the nesting box door.   Thus, a user can provide access to the chicken-run at the same time as collecting eggs. The coop is also designed to be long-and-narrow in order to fit through a 40-inch wide gate while also providing at least 21 square feet of floor area.  While Crunch expects that many of these features are not unique, he believes that the combination is unique.  Crunch is an idea-man. Rather than production is looking to sell plans and instructions for making his Coop.

Crunch drafts the following two patent claims in his patent application filed December 5, 2016:

I claim:

1.     A poultry coop having a length, width, and height, said poultry coop comprising:

a roof made of a translucent material with at least 50% light transmission;

a floor having a hinged trap door and having an area of at least 21 square feet;

a first side wall that includes a nesting box with an externally hinged door; and

a second side wall that includes a vertically sliding door operated via a pulley system; wherein said pulley system is operable by a user standing near said nesting box and wherein said coop is configured with a width of less than 40-inches.

2.     A set of instructions comprising: instructions for making the poultry coop of claim 1.

Question 1. (120 words).  Crunch had considered adding an additional limitation that precisely defines the configuration of the pulley system and its components.  What are major pros and cons of adding these additional limitations to claim 1 (considering primarily the doctrines of patentability and infringement)?

Question 2. (200 words) Are these claims patent eligible subject matter?

Question 3. (60 words) Provide a concise argument that claim 1 fails for lack of definiteness.

Question 4. (80 words) Should Crunch be concerned that his back-yard prototype constitutes prior art that could be used against his own patent application?

Question 5. (240 words) Assume the following for this question: (a) the back-yard prototype is not prior art; and (b) Crunch’s expectations are correct that while many of the patented elements are known in the prior art, the combination as a whole is unique.  What can we say about the novelty/nonobviousness of the claims.

Question 6. (25 words) Assuming claim 1 is patented but not claim 2. Does Crunch have an infringement claim against a third party who begins teaching others how to make the coop?