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.
The court just denied Sandoz’s petition for en banc rehearing in this case, but the issue is pretty interesting and is set-up for a Supreme Court petition. The basic question in the case is whether companies are permitted to work-out an ownership scheme that avoids court scrutiny for obviousness-type-double-patenting.
The basic setup here is that folks at Immunex invented a tumor necrosis factor (TNF) blocker known as etanercept and obtained two patents on the protein and methods of use. U.S. Patent Nos. 5,605,690 and 7,915,225. Roche separately patented its own fusion protein, and Immunex (Amgen) effectively purchased this third patent. However, rather than receiving a formal assignment, Immunex “insisted on styling the U.S. agreement as a license.” Although a license, the grant included sole rights to make, use, sell, import products covered; grant sublicenses; and exclude others (including the patent owner) from commercializing the invention. The license also included a right to sue to enforce the patent and control any litigation including authority to determine any settlement as well as the right to control patent prosecution. En banc petition. This was a complete assignment – except that Roche continued to hold legal title even though Immunex effectively held all rights.
Why license instead of assign?: One reason is obviousness-type-double-patenting. Without common-ownership, the doctrine has no application. The following excerpt comes from the testimony of Stuart Watt, Immunex’s lead negotiator for the agreement:
After taking control of the patents, Immunex amended the claims to focus on its own activity rather than Roche’s prior approach. The benefit is that these new patents expire in 2028-2029 — ten years after expiry of Immunex’s other patent. Of importance — the drug at issue here (Enbrel) generated $5 billion in US sales in 2019.
In its decision, the Federal Circuit agreed with Sandoz that a strict common-ownership test for OTDP could allow for “unjustified patent term extensions” and “harassments” of defendants from multiple lawsuits. In particular, the court focused on transfer of right to control prosecution of the patents as a key feature. In the end, however, the court found that all-substantial-rights had not been granted since Roche retained a “secondary right to sue” infringers “if Immunex fails to rectify any infringement within 180 days after written request by Roche.” The distinction here of course is not actually meaningful in any way with regard to Immunex’s attempt to extend its exclusive rights over its product.
In its now failed petition for rehearing Sandoz asks the following:
A party that obtains an exclusive license conveying “all substantial rights” to a patent, including the right to control prosecution, is effectively that patent’s owner for purposes of obviousness-type double patenting.
May a party nonetheless avoid becoming an effective owner under the all-substantial-rights test, and thereby evade double-patenting scrutiny, merely by leaving the nominal owner with a theoretical secondary right to sue, which the licensee can prevent from ever ripening by issuing a royalty-free sublicense?
Petition. The petition was supported by amicus briefs from Samsung Bioepis (who is being sued on the same patent); the Association for Accessible Medicines; and America’s Health Insurance Plans, Inc.
Great question in the new Supreme Court petition of SRAM, LLC v. FOX Factory, Inc. The Federal Circuit has tightened its belt on Secondary Indicia of nonobviousness — only rarely finding that the claimed indicia are closely enough tied to the claims at issue and creating additional hoops of proof for the patentee. The petition argues that those requirements go beyond the statute and Supreme Court precedent. When I wrote about the original 2019 FedCir decision, I explained that This is “not a good case for patent holders.”
The court here again raised the “nexus” hurdle by holding that a presumption of nexus can only be achieved by proving that the product being sold by the patentee is “essentially the claimed invention.”
In Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966), this Court recognized the pivotal importance of “objective indicia” of nonobviousness (also known as “secondary considerations”) – including the long-felt but unsolved need for the patented invention, the failure of others to arrive at the invention, and the invention’s subsequent commercial success – in determining whether a patent’s claims were obvious to a person of ordinary skill in the art at the time of the invention under 35 U.S.C. § 103.
In this case, the Federal Circuit effectively undermined this Court’s standard by improperly creating a new categorical and overly restrictive limitation on the consideration of objective indicia of nonobviousness that exists nowhere in the Patent Act or this Court’s jurisprudence.
The question presented is:
Whether the Federal Circuit erred in holding that, under 35 U.S.C. § 103, before a nexus can be presumed between objective indicia of nonobviousness and the patent claim, a patentee must first prove that a commercial product is “essentially the claimed invention” – to the exclusion of all other product features.
The Federal Circuit originally decided this claim construction case in June 2020 on the topic of when a claim preamble is limiting. The court has now denied Firebug’s petition for rehearing.
The case is interesting because it involves two Firebug patents with identical claim preambles. On appeal the Federal Circuit found one preamble limiting, and the other non-limiting. The result here shows that (1) this continues to be a tricky issue; and (2) whether a preamble is limiting is substantially determined by the body of the claim (rather than simply an examination of the preamble itself).
The preamble at issue: “1. An internally illuminated textile footwear comprises.” U.S. Patents 8,992,038 and 9,301,574. The prior art internally illuminates a piece of plastic that is part of the shoe upper, and the patentee argues that its claims require the textile itself to be internally illuminated. The problem for the patentee is that the limitations in the claim body do not expressly require light diffusion through the textile — hence its reliance on the preamble.
Construction of a claim preamble is a holistic process and requires “review of the entire patent” with any particular litmus test. Coning Glass. The court has offered a number of platitudes regarding claim preamble limitations — like most platitudes, these are rarely sufficient resolve any particular dispute.
Limiting: recites essential structure or steps.
Limiting: necessary to give life, meaning, and vitality to the claim.
Limiting: reliance on preamble phrase for antecedent basis.
Not Limiting: body of the claim defines a structurally complete invention.
Not Limiting: preamble merely states a purpose or intended use for the invention.
= = = =
‘038 Patent
’574 Patent
1. An internally illuminated textile footwear comprises:
a footwear; the footwear comprises a sole and an upper; …
the upper being light diffusing …
1. An internally illuminated textile footwear comprises:
a sole and an upper;
the upper being a light diffusing section;
an illumination system; … the illumination system being housed within the footwear; …
The two patents at issue share the same (almost the same) specification and the claims are also quite similar. The table above shows the most relevant portion of the two claims. As mentioned, the during the IPR, the patentee wanted the claims to be construed to require that the textile be internally illuminated.
In distinguishing between these two claims, the court basically put on its simplistic grammar hat. The preamble recites a “footwear”, but the ‘038 claim body reintroduces “a footwear” while the ‘574 claim body’s first reference is to “the footwear.”
The preamble [of the ‘038 claim] cannot be said to provide essential structure or necessary meaning to the claimed invention because the same element—the footwear—is independently recited in the body of the claim. . .
Unlike claim 1 of the ’038 patent, claim 1 of the ’574 patent does not reintroduce “footwear” in the body of the claim but instead relies on the instance of “footwear” introduced in the preamble for “antecedent basis.” . . . Because the claim requires that the illumination system be housed in the textile footwear recited in the preamble, the preamble is essential to understanding the structural limitations of the illumination system. Accordingly, rather than merely reciting an intended purpose of the claimed invention, we conclude that the preamble of claim 1 of the ’574 patent limits the scope of claims 1–10 of the ’574 patent to require the use of a textile upper
Slip Op. Despite its strong reliance on “a” vs “the”, the court reiterated that the process is holistic and noted that nothing in the specification or prosecution history demanded that the light pass through a textile.
Still Obvious: Although the patentee got its limiting construction for the ‘574 patent, the Federal Circuit still affirmed the obviousness determination. Basically, the PTAB had offered an “alternative fact finding” that the prior art “suggests using a woven, porous material in a light diffusing, internally illuminated part of footwear”, and the court affirmed that finding as based upon substantial evidence.
The patentee petitioned for rehearing with a seemingly important argument. The Board’s “alternative fact finding” was written in an aside within FN16 of the Final Written Decision. Firebug argues that the conclusion was introduced for the first time in the final written decision and “Firebug did not have the opportunity to address” the issue. The petition has now been denied without new opinion.
= = = = =
Firebug also argued secondary indicia of nonobviousness. In particular, the patentee presented two third-party license agreements for the patents at issue as well as testimony of Ralph Shanks who negotiated one of the licenses (against Firebug). On appeal, the Federal Circuit noted that the licenses included “eight patents, two patent applications, and one trademark.” The court questioned the nexus to the particular invention here, but affirmed on the ground that the evidence is so weak that even if a nexus exists the claims are still obvious. An odd bit of the decision is that the conclusion of “weakness” appears to be directly tied to the no-nexus argument that was not affirmed.
In this short decision, the Federal Circuit has affirmed the PTAB’s determination that Kross’s claimed invention would have been obvious. Apn. No. 13/275,400. (Real party-in-interest here is Poly-Gel L.L.C.).
The invention: A method of printing using “non-gelatin viscoelastic gel printing plates.” The gel used here is designed to solve cracking problems that were “a hallmark of gelatin plates.” The claimed viscoelastic gel was already known in the art for its non-cracking properties. In its decision, the Board concluded that PHOSITA would have been motivated to solve the known cracking problem by using “known properties of a known material.”
The difficulty in this case involves the claimed viscoelastic gel. The prior art (Chen) discloses the gel and its non-cracking and ease-of-manufacture properties. However, Chen only describes this outside of the printing context. On appeal, the Federal Circuit affirmed that PHOSITA would have been motivated to use Chen’s disclosure:
[T]he fact that Chen does not teach the use of viscoelastic compositions in any type of printing does not undermine the Board’s finding of a motivation to combine. We agree with the Board that Chen’s silence “as to a particular application is of little or no moment given the teachings of the properties and the resulting general uses of the viscoelastic gel-like materials, which would have suggested those materials as, more likely than not, a successful solution to the problems of gelatin cracking and splitting.”
Slip Op. (Quoting PTAB determination). Here, the Federal Circuit was guided by its reading of the prior art — which identified the particular problematic parameters (cracking, splitting) to be addressed. That guidance from this prior art brought this case outside of the “obvious to try” world and into one of “reasonable expectation of success.” I’ll note here that the court was guided by its reading of the prior art — it turns out that there are many many problems with gel-based printing recognized in the prior art. The court skipped over how those additional problems might have guided PHOSITA off of the neat invention pathway offered by the opinion here.
Doug Thomas is a silicon valley patent attorney at a small (and thriving) firm. Thomas is also a prolific inventor and entrepreneur. In April 2020, I wrote about the Federal Circuit’s opinion affirming a USPTO rejection of his claimed method of “notifying users having patents of subsequent publications that reference the patents.” The April decision was one of four cases that he has brought to the Federal Circuit:
In re Thomas, Appeal No. 17-1100 (November 17, 2017) (Affirming anticipation rejection for Application No. 12/878,19–method for creating an electronic document using a word processing program).
In re Thomas, Appeal No. 17-1149 (December 13, 2017) (Affirming rejection for Application No. 13/099,285 without opinion– managing computer
temperature by measuring temp and changing fan speed) [ThomasThermalTemp].
In re Thomas, Appeal No. 19-2053 (March 5, 2020) (Affirming 101 rejection for Application No. 11/253,299 without opinion–method for producing an online survey).
In re Thomas, Appeal No. 19-1957 (April 8, 2020) (Affirming 101 rejection of method for notifying users of publications that reference their patent). See, Dennis Crouch, Patenting the Patenting Process, Patently-O (April 8, 2020).
Thomas now filed a petition to the Supreme Court in the third case (the ‘299 application) that was rejected for lack of eligibility. Thomas writes the question as follow:
Contrary to Congress’ directives and this Court’s guidance, the United States Court of Appeals for the Federal Circuit (“Federal Circuit”) fabricated legal theories to unfairly discriminate against software innovations. The Federal Circuit incorrectly held that the Patent Trial and Appeal Board of the United States Patent and Trademark Office (“USPTO”) did not commit legal error when, under the guise of following the framework provided in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014) (so called “Alice/Mayo framework”), it (i) excessively abstracted the claims, and (ii) ignored claim limitations that were found to be nonobvious when concluding that the claims lacked an inventive concept. The questions presented are:
1. Whether software innovations, simply because they are implemented on a general purpose computer, are ineligible for patenting unless they claim some hardware limitations beyond a general purpose computer that provide an improvement to computer technology.
2. Whether, contrary to Diehr, claim limitations can be ignored, under the guise of the Mayo/Alice framework, when a claim is evaluated for presence of an inventive concept, even when the ignored claim limitations were found to be nonobviousess.
Thomas Petition. The basic thrust of the petition is that innovative engineering solutions do not require a new physical technological component — and that the claimed creation of online documents should be treated as eligible.
The petition goes on to argue that the abstract idea exception should be eliminated or severely curtailed:
The time has come for this Court to reevaluate the abstract idea exception to Section 101. This exception is entirely a judicial creation, having no basis in the text of the statute. The Court should undertake to implement Section 101’s broad and explicit language. Thus, where, as here, the patents claim a “new or useful process” or new and useful improvement to a process, the inventions should be eligible under Section 101 as Congress intended based on the language of that provision.
Id. The 15-step method claim at issue is listed below — directed to a method for producing an online survey:
20. A method for producing an on-line survey through interaction with a remote server from a network browser operating on a client computer associated with a requestor of the online survey, the network browser and the remote server capable of communicating via a data network, said method comprising:
(a) requesting initial survey remarks to be provided for the on-line survey;
(b) receiving, at the remote server, the initial survey remarks from the survey requestor;
(c) requesting identification of one or more participant groups from a plurality of available participant groups;
(d) receiving, at the remote server, selection from the survey requestor of one or more participants groups from the plurality of available participant groups;
(e) requesting at least one survey question;
(f) receiving, at the remote server, at least one survey question from the survey requestor;
(g) requesting an answer format for the at least one survey question;
(h) receiving, at the remote server, the answer format from the survey requestor;
(i) receiving content for at least one answer choice for the at least one survey question;
(j) repeating (e) – (i) for one or more additional survey questions;
(k) requesting subsequent survey remarks to be provided for the online survey;
(l) receiving, at the remote server, the subsequent survey remarks from the survey requestor; and
(m) producing, at the remote server, the on-line survey to include the initial survey remarks, the survey questions, the answer choices corresponding to the survey questions and the answer format utilizing the answer formats, and the subsequent survey remarks;
(n) providing and storing the on-line survey in an electronic manner to an Internet-based survey manager that hosts the on-line survey; and
(o) thereafter inviting a plurality of survey participants that are classified to be within the selected one or more participant groups to take the on-line survey by interaction with the Internet-based survey manager.
The application here claims priority back to a 1996 provisional application filed by Thomas. The provisional was followed by a non-provisional application that was prosecuted for 8 years before being abandoned following a Board decision affirming an obviousness rejection. (At the time, the process only had steps a-f). At that time, Thomas filed the present continuation and prosecution kept going for 15 more years. Much of this time has been occupied by two appeals. The first appeal was actually successful with the examiner being reversed with the Board finding no prima facie case of obviousness. [11253299 First Board Decision]. However, by that time Alice had been released and the examiner added the new eligibility rejection.
Toyota Motor Corp. v. Reactive Surfaces Ltd., LLP (Fed. Cir. 2020) (nonprecedential)
Toyota’s US8394618 covers a method of removing fingerprints using a lipase “capable of enzymatically degrading a component of the fingerprint” by vaporization.
Reactive had previously attempted to trigger an interference proceeding at the PTO and then unsuccessfully sued in Federal Court to have the patent rendered unenforceable (or to transfer ownership rights). Those approaches failed.
This inter partes review is what worked. After granting the IPR petition, the Board conducted a trial and then issued a Final Written Decision that the challenged claims were unpatentable as obvious. On appeal, the Federal Circuit affirmed with the following notes:
Analogous arts: The Board relied upon a scientific article titled “Chemical characterization of fingerprints from adults and children” in part of its obviousness analysis. On appeal, Toyota argued that the article should not have been available for obviousness because it was not “analogous art” to the invention.
Analogous prior art includes art from the same field as the invention at issue. But it also encompasses references from other fields if such reference is “reasonably pertinent to the particular problem with which the inventor is involved.”
Slip Op. Here, the court found substantial evidence to support the Board’s finding that the scientific article would be a “natural starting point” for an inventor looking to vaporize finger prints. (The test is for substantial evidence, because analogous art is a factual finding given deference on appeal).
What the combination inherently teaches: The method claim at issue includes three steps:
provide a substrate
associate a lipase with the substrate (where the lipase is “capable of enzymatically degrading a component of a fingerprint”)
facilitate “the removal of a fingerprint by vaporization from the lipase associated substrate … when contacted by a fingerprint.”
A combination of references provided by the Board taught the first two steps, but did not expressly teach the third step. The Board concluded that step three is simply an inherent result of the first two steps: “any combination of prior art that teaches the first two limitations of the challenged claims inherently would teach the [facilitating step]. . . . [A] surface-associated lipase . . . capable of degrading lipids . . . inherently will facilitate the removal of lipid-containing stains, such as fingerprints, by vaporization from the surface.”
While prior art may include a variety of inherent teachings, the Federal Circuit requires evidence that “the limitation at issue necessarily must be present, or the natural result of the combination of elements explicitly disclosed by the prior art.” PAR Pharm (Fed. Cir. 2014). Because of this “exacting” standard, inherency is typically difficult for an Examiner to show during ex parte examination. However, during an IPR the patent challenger is able to marshal expert testimony that connects the dots. Here, the petitioner’s expert explained the connection and inherent result. That was enough for the Board and the Federal Circuit on appeal.
Hospira, Samsung Bioepis, Celltrion, and Pfizer each filed one or more inter partes review (IPR) petitions challenging Genentech breast-cancer slow-down patents: US7846441 and US7892549. The patents recognize that some breast cancer patients make too much ErbB2 protein. The offered solution is administration of an antiErbB2 antibody and “a taxoid, in the absence of an anthracycline derivative.” The claims do not require a specific dosing except that it be adequate to do the job without causing major problems:
… in an amount effective to extend the time to disease progression in said human patient, without increase in overall severe adverse events.
‘441 patent, claim 1 (elsewhere claimed “effective amount”). The Board found a number of the claims invalid and Genentech appealed. None of the petitioners participated in the appeal to defend the Board’s decision as part of a settlement with Genentech, but the USPTO intervened.
The question on appeal is the meaning of the claimed “amount effective to extend the time to disease progression.” The problem for the patentee is that the specifications do not define the required comparisons. During prosecution the examiner originally rejected “extend the time to disease progression” as indefinite after explaining that the specification “never set[s] forth what the extension of time to disease progress is relative to.”
After receiving the indefiniteness rejection during prosecution, the patent applicant did not amend the claims but rather explained that “clearly” the effectiveness of the claimed combination should be compared with the baseline “relative to an untreated patient.” Later, during the IPR, the Board used the statement to construe the claim term as stated and find the claim invalid as obvious.
Genentech argues that its claims should not be limited “Based on a single inartful statement in the prosecution history.” In particular, Genentech argues that the claimed improvement in disease progression should be compared to treatment with paclitaxel (the taxoid alone) – not with an untreated patient. And, that in that framework the improvement in outcomes would have been nonobvious.
On appeal, the Federal Circuit has affirmed the PTAB claim construction and the obviousness determination. The appellate panel noted that Genentech might have an argument except for the fact that “[t]he specification does not … expressly define the disputed terms.” In its indefininteness rejection, the examiner asked particularly — is the time “relative to untreated patients? Pateients who received antibody or taxoid alone? …” The patentee then responded “untreated patients” and is now arguing that the correct answer should have been “taxoid alone.”
Genentech expressly rejected this comparator during prosecution and instead clearly stated that it was effectiveness relative to an untreated patient. Genentech provided an unequivocal, direct response to the examiner’s inquiry—that the term “extend the time to disease progression” was compared to an untreated patient.
Slip Op. The response discussed above was provided in the ‘441 patent prosecution history. In the appeal, the Federal Circuit also agreed that the same construction should apply in the ‘549 patent “which shares a specification and is in the same patent family.” “We see no error in the Board’s constructions.”
Hospira lost at the district court on obviousness — with the court finding its asserted Claim 6 of US8648106 invalid as obvious. On appeal, the Federal Circuit affirmed and now Hospira has petitioned for en banc rehearing — focusing in on the role of inherency in combining prior art.
The claim is directed to the sedative dexmedetomidine in a “ready use liquid pharmaceutical composition” in a glass container and a shelf-life of 5-months with “no more than about 2% decrease” in the concentration of the active drug.
The “no more than about 2%” loss claim appears functionally described result — if you build the vial and fill it in the way described by the inventor then you’ll presumably get the shelf life.
Here, all of the limitations found in the claim are found within the prior art and the district court held that it would have been obvious for PHOSITA to combine the references as such. The one lacking element was the <2% loss limitation — that one was not expressed in the prior art. However, the district court concluded that the functional limitation is an inherent result of the combination — and thus the whole claim is obvious.
Petition question:
Whether a party seeking to show that a property is inherent in a combination of prior art disclosures must affirmatively prove that the property is necessarily present in that combination, regardless of how that combination is prepared.
Hospira’s basic arguments here are (1) that inherency for obviousness must be proven with clear and convincing evidence and (2) that inherency for obviousness only ‘counts’ if necessarily present in the proposed combination, not merely likely or possibly present.
In their 2005 paper on Inherency, Professors Dan Burk and Mark Lemely took the position that inherency should have almost no role in the obviousness analysis because of its hindsight approach.
Hindsight reconstruction of the invention, looking back at the prior art to second-guess the inventor once the invention is available, is anathema to an obviousness assessment. But inherency is all about hindsight—a recognition today that an invention was present in the prior art, even though it was not understood to be there at the time.
Given the hindsight limitations on obviousness, we expect the role of inherency under § 103 to be extremely limited, if not altogether nonexistent.
Dan Burk, Mark Lemley, Inherency, 47 William & Mary Law Review 371 (2005).
Google & Microsoft teamed-up to challenge Phillips’ U.S. Patent 7,529,806 in an inter partes review (IPR). The Board complied and cancelled claims 1-11 — finding the claimed quasi-streaming method unpatentably obvious. On appeal here, the Federal Circuit has affirmed — adding important context to obviousness determinations based upon general knowledge.
In KSR, the Supreme Court indicated that the obviousness analysis should consider the “background knowledge possessed by a person having ordinary skill in the art.” KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398 (2007). Under KSR, information deemed within PHOSITA’s general knowledge is more powerful than that found buried in a prior art reference because we assume that PHOSITA would consider using their general knowledge in combination with the prior art — even absent any express motivation to do so. Because of its potential power, the Federal Circuit has been somewhat concerned that the approach could serve as an end-run around traditional obviousness analysis. Here though, the court found that Google had presented enough evidence to assume that the pipelining (see next paragraph) was part of the general knowledge of PHOSITA.
The invention: The claims call for downloading the “next file” in the background while playing the prior file. This setup is effectively a form of buffering (also known as pipelining or stream emulation). The approach uses a client-side “control information file” that facilitates sequential file retrieval. The claims have an additional feature of having a variety of media file formats, and the client device is able to “choose the format compatible with the client’s play-out capabilities.”
In its petition, Google alleged (1) anticipation based upon SMIL 1.0 (Synchronized Multimedia Integration Language 1.0 Specification); and (2) obviousness based upon SMIL 1.0 when combined with the general knowledge of PHOSITA. In describing the general knowledge that “pipelining is well known”, Google cited a prior art reference (Hua) and also an expert declaration.
Extra Ground on Institution: Before getting to the obviousness issue, I’ll note an appeal/SAS issue decided by the Court. The Board instituted the IPR on both grounds raised by Google, but also added a third ground: SMIL in view of Hua. On appeal, the Federal Circuit found the third-ground improper — quoting the Supreme Court’s decision in SAS to the effect that the AIA does not “contemplate a petition that asks the Director to initiate whatever kind of inter partes review he might choose.” SAS Inst. Inc. v. Iancu, 138 S. Ct. 1348, 1355 (2018). Under the statute as interpreted in SAS, the petitioner decides how to structure the IPR, and the initiation stage is a yes/no determination. The Federal Circuit did not address the no-appealability-of-institution-decisions provision of Section 314(d).
Role of General Knowledge in IPR Obviousness: The first Obviousness-focused question that the court considered was an interesting albeit fruitless contention — that “obviousness” in IPR proceedings should be treated differently than in other areas of patent practice. In particular, the patentee noted that Section 311(b) of the AIA limits IPR considerations to only “prior art consisting of patents or printed publications.” As such, Philips argued that “general knowledge” could not be considered in the analysis. On appeal, the Federal Circuit rejected that argument — holding that the 311(b) limits the types of prior art available in an IPR, but does not otherwise alter the obviousness analysis of Section 103.
Although the prior art that can be considered in inter partes reviews is limited to patents and printed publications, it does not follow that we ignore the skilled artisan’s knowledge when determining whether it would have been obvious to modify the prior art. Indeed, under 35 U.S.C. § 103, the obviousness inquiry turns not only on the prior art, but whether “the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious . . . to a person having ordinary skill in the art to which the claimed invention pertains.” 35 U.S.C. § 103. Regardless of the tribunal, the inquiry into whether any “differences” between the invention and the prior art would have rendered the invention obvious to a skilled artisan necessarily depends on such artisan’s knowledge.
Slip Op. The implication here is that “general knowledge” is not “prior art” but instead part of the definition of PHOSITA under Graham.
General Knowledge: A primary case in tension with broad use of general knowledge is Arendi S.A.R.L. v. Apple Inc., 832 F.3d 1355, 1361 (Fed. Cir. 2016). In that case, the court warned against invoking “common sense . . . to supply a limitation that was admittedly missing from the prior art” and that was not “supported by evidence and reasoned explanation.” On appeal here, the Federal Circuit distinguished Arendi — holding that Google’s argument for general knowledge was supported by evidence and reason:
In Arendi, the Board [improperly] relied on nothing more than “conclusory statements and unspecific expert testimony” in finding that it would have been “common sense . . . to supply a limitation that was admittedly missing from the prior art.” Conversely, here the Board relied on expert evidence, which was corroborated by Hua, in concluding that pipelining was not only in the prior art, but also within the general knowledge of a skilled artisan. Moreover, Philips offered no evidence to rebut the conclusion that a skilled artisan would have known about pipelining.
Id. “Pipelining” was the only claim feature not found in the asserted prior art reference. However, since pipelining was part of the “general knowledge,” then its use was proper to invalidate the claims.
So far there are still no precedential opinions issued in 2020, and this is the first non-precedential patent related decision.
Philips’ patent RE44,913 (“text entry method”) claims a 2001 filing date. At that time, a key focus of mobile-device development was on how to facilitate typing on these small devices with relatively imprecise touchpads. The basic idea behind the invention can be seen in the two figures below. On the left is a “default” keypad with showing “primary characters.”; holding down the “5” key will then switch the display to the keypad on the rights that has more available options (“secondary characters”). After selecting one of those options, they keypad returns to the default state.
Philips sued Acer and others for infringement based upon their use of the Chrome and Android OS — that led Google to petition for inter partes review (IPR).
In its final decision, the PTAB sided with the patentee in holding that Google failed to prove that the claims were obvious. On appeal, the Federal Circuit has reversed.
On appeal here, the Federal circuit has reversed the PTAB’s final decision siding with the patentee and holding that Google failed to prove that the claims were obvious. The basic issue here is that there is only a minimal difference between Philips’ claimed invention and the key prior art reference. The court explains:
The parties do not dispute that the [Philips’] ’913 patent claim differs from that Sakata II method in only one respect. In the ’913 patent claim, after a secondary character is selected, the relevant key “return[s] . . . to the default state” rather than, as in the described Sakata II method, changing to the selected secondary character.
It was also clear that the “return-to-default” option was available and familiar to someone skilled in the art (e.g. shift key). Philips argued that particular step would not have been obvious-to-try since it one of many potential keypad techniques available. On appeal, the Federal Circuit rejected the “wide-scope inquiry” as a red herring in this case — finding language from KSR directly on point:
[W]hen a patent claims a structure already known in the prior art that is altered by the mere substitution of one element for another known in the field, the combination must do more than yield a predictable result.”
KSR International Co. v. Teleflex Inc. (KSR), 550 U.S. 398 (2007). The Fed. Cir. explained somewhat obliquely that:
[T]he obvious-to-try inquiry at least sometimes must focus on known options at what is undisputedly the sole point of novelty in the claim at issue.
See Perfect Web Techs., Inc. v. InfoUSA, Inc., 587 F.3d 1324 (Fed. Cir. 2009). The practical point here is that inventions with a sole-point-of-novelty set themselves up as a target for an obviousness finding because the court will ask “if the sole contested step of the claim at issue was obvious to try, taking the remaining steps as a given.”
In this case, the Court found additional reasons for obviousness — notably the primary prior art reference was actually an improvement over prior return-to-default techniques.
Sakata II itself asserts that the character substitution at the last step provides an efficiency benefit over the evident alternative of requiring that the secondary-character menu be summoned each time one of those characters was to be re-used. . . . This efficiency assertion is on its face a comparative one, and what is plainly being compared to the Sakata II choice is the no-substitution option—where the primary character returns to the key upon disappearance of the secondary-character menu. That is Philips’s returnto-default claim element.
Slip Op. In the end, the appellate panel did not appear to directly fault the Board’s factual conclusions but rather Board’s legal analysis — in particular the meaning of “obvious-to-try” and its impact on the ultimate (legal) conclusion of obviousness.
We hold that claims 1 and 3–16 of the ’913 patent are unpatentable for obviousness. The Board’s decision is reversed.
Odds are good that the biggest patent case of the year will be a copyright case. The Supreme Court recently granted certiorari in Google v. Oracle— a case focusing on copyright protections for the JAVA programming interface. The innovations at issue in the case sit near the fuzzy ‘borders’ of copyright and patent law and a number of members of the court will be looking to define those dividing lines.
What is perhaps the key case on-point well known but quite old: Baker v. Selden, 101 U.S. (11 Otto) 99 (1880). Selden had invented a new set of “condensed ledger” forms that improved the practice of bookkeeping. Baker apparently copied the forms and sold them at a good profit. Selden’s Widow then sued for copyright infringement and won in the district and circuit courts. However, the Supreme Court reversed — holding that copyright does not extend to the “art itself:”
The copyright of a book on book-keeping cannot secure the exclusive right to make, sell, and use account books prepared upon the plan set forth in such a book.
Instead of copyright, the Supreme Court suggested that Selden should have pursued patent rights. Here is a long quote from the case:
To give to the author of the book an exclusive property in the art described therein, when no examination of its novelty has ever been officially made, would be a surprise and a fraud upon the public. That is the province of letters-patent, not of copyright. The claim to an invention or discovery of an art or manufacture must be subjected to the examination of the Patent Office before an exclusive right therein can be obtained; and it can only be secured by a patent from the government.
The difference between the two things, letters-patent and copyright, may be illustrated by reference to the subjects just enumerated. Take the case of medicines. Certain mixtures are found to be of great value in the healing art. If the discoverer writes and publishes a book on the subject (as regular physicians generally do), he gains no exclusive right to the manufacture and sale of the medicine; he gives that to the public. If he desires to acquire such exclusive right, he must obtain a patent for the mixture as a new art, manufacture, or composition of matter. He may copyright his book, if he pleases; but that only secures to him the exclusive right of printing and publishing his book. So of all other inventions or discoveries.
The copyright of a book on perspective, no matter how many drawings and illustrations it may contain, gives no exclusive right to the modes of drawing described, though they may never have been known or used before. By publishing the book, without getting a patent for the art, the latter is given to the public. The fact that the art described in the book by illustrations of lines and figures which are reproduced in practice in the application of the art, makes no difference. Those illustrations are the mere language employed by the author to convey his ideas more clearly. Had he used words of description instead of diagrams (which merely stand in the place of words), there could not be the slightest doubt that others, applying the art to practical use, might lawfully draw the lines and diagrams which were in the author’s mind, and which he thus described by words in his book.
Even if the Supreme Court was serious at the time that Seldon should have gone after patent protection, today we know that such an attempt would be seen as improperly claiming an abstract idea under Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014). In its petition, Google explains that – as in Seldon, a “monopoly over those
methods and diagrams could be secured only by patent law, not copyright.”
So too here: the Federal Circuit’s decision to extend copyright protection to the Java API declarations effectively grants Oracle a patent-like monopoly over the Java language. . . . The Federal Circuit’s approach wreak havoc on copyright law, but it also risks disturbing the balance between copyright law and patent law, the two principal bodies of law that govern innovation. The Federal Circuit has effectively provided blanket copyright protection to an entire class of computer code. . . . .
[I]f the creator of computer code “wishes to obtain a lawful monopoly on the functional concepts in its software, it must satisfy the more stringent standards of the patent laws,” including novelty and nonobviousness. Quoting Sony Computer Entertainment, Inc. v. Connectix Corp., 203 F.3d 596, 603 (9th Cir.), cert. denied, 531 U.S. 871 (2000).
Google Petition. Google does not point out that these “functional concepts in its software” also lack patent eligibility under the new Supreme Court decisions.
By Sarah Burstein, Professor of Law at the University of Oklahoma College of Law
Gamon Plus has filed a petition for rehearing in its design patent dispute against Campbell (previous Patently-O coverage of the case by Professor Crouch here).
Like the majority and the dissent in the panel decision, the petition does not directly address the main difficulty raised by this case—namely, how should we apply the design patent “primary reference” test for multi-article designs?
According to Gamon Plus, its two patents claim “designs of displays developed by Appellee Gamon Plus specifically for the display of Campbell Soup cans in stores.” Here are the illustrations Gamon Plus included in its petition for rehearing:
However these claims are interpreted (a matter of much dispute in this case), they are each clearly directed to what we might call a “multi-article” design. Each design defines parts of the shapes of separate articles—a dispenser and a can.
The problem is that the design patent “primary reference” requirement was created in the context of—and implicitly assumes—a single-article design. The lesson in Durling and Rosen was that you can’t create a Franken-article to serve as a primary reference. If the patent (or application) claims a design for a table, you can’t splice parts of different tables together to form a single, hypothetical table. You have to find a table that actually exists (or a sufficient description thereof) in the prior art.
But what happens when the design extends over separate articles? Gamon Plus (and Judge Newman, in dissent) seem to argue that there must be a single reference that explicitly discloses both articles being used together in the same way. That can’t possibly be right—especially on the facts of this case.
Gamon Plus conceptualizes its design as a “display” with a label and a can with “specific dimensions” is placed “at a specified relative location spaced below the [dispenser] label.” But Gamon Plus didn’t invent that can shape. To the contrary, as quoted above, Gamon Plus says the dispenser was designed specifically for Campbell’s Soup cans.
The only shape that Gamon Plus invented was the shape of the dispenser. That shape may be defined by and adapted to the shape of the can. And it may be meant to display that can in a particular position. But a patentee should not be able to effectively immunize a design for one article from § 103 scrutiny merely by claiming the “design” is really the use of that article with some other (unoriginal) article.
Whether inherency is the best way to get at these issues is another question. Perhaps, when it comes to multi-article designs, the primary reference test should be applied on an article-by-article basis. Or maybe § 171 should be interpreted to exclude multi-article designs. But in any case, it would be nice to see the Federal Circuit confront these issues directly.
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Side note: As someone who’s studied design patent nonobviousness for a long time, the thing I found most surprising thing about this decision was that the majority thought Linz looked similar enough to be a primary reference—hypothetical can or no hypothetical can. In recent cases, it’s been hard to see much blue sky between “basically the same” (the primary reference standard) and “the same” (the anticipation standard), at least as the former is applied by the Federal Circuit. For more on some of these cases, and design patent nonobviousness more generally, see this article and this post. If Campbell signals a shift away from that overly strict application of the test, that would be a welcome development.
Liqwd’s U.S. Patent 9,498,419 covers a method for bleaching hair that includes maleic acid (0.1% – 50% by weight) alongside a bleaching formulation and without any hair coloring agent. The maleic acid apparently protects the hair from some damage caused by the bleaching agent. L’Oreal filed a post grant review (PGR) challenge soon after the patent issued, and the PTAB eventually concluded that the claims would have been obvious.
On appeal, the Federal Circuit has vacated and remanded — holding that the Board did not give proper weight to evidence of copying by L’Oreal in its obviousness analysis.
The gory setup is that Liqwd’s founder Dean Christal and the ‘419 inventor (Eric Pressley) met with L’Oreal folks in pursuit of a deal; provided L’Oreal with a copy of the then-confidential parent patent application; and disclosed to L’Oreal various technical details — all subject to a non disclosure agreement. Although L’Oreal has argued that it independently invented its product, the PTAB found copying — that L’Oreal’s use of maleic acid was “because of L’Oreal’s access to Liqwd’s confidential information.”
To be clear, L’Oreal did not copy Liqwd’s product (Liqwd didn’t have one at the time covered by the patent), but rather copied (allegedly copied) Liqwd’s technology after obtaining a copy of its yet-unpublished patent application.
Copying by a competitor is a classic objective indicia of nonobviousness. As the story goes, if the innovation were obvious, the competitor wouldn’t have needed to copy. Here, however, the PTAB ruled that this copying didn’t count because ““copying
requires the replication of a specific product” and “cannot be established without showing that Petitioner copied a patented product, rather than Patent Owner’s technology generally.” PTAB Final Written Decision, quoting Iron Grip Barbell Co., Inc. v. USA Sports, Inc., 392 F.3d 1317 (Fed. Cir. 2004). On appeal, the Federal Circuit has rejected that analysis — narrowing its interpretation of Iron Grip to the following one-liner:
In other words, more is needed than merely showing that similarity exists between the patent and the competitor’s accused product.
Liqwd. The basic copying-of-a-product focus was designed by the court to avoid an undue overlap between proof of infringement and the nonobviousness secondary indicia of copying. Copying is often proven by the combination of access + resulting similar product, the court felt that the doctrine could get out of hand if proof of infringement + access to the patent document were sufficient. In Liqwd, the court looked back to its prior cases on this issue and summarized:
Our primary concern in each of these cases has been to avoid treating mere infringement as copying simply because the claims of a patent arguably read on a competitor product.
Id.
Evidence of Access vs Evidence of Copying: In Liqwd, the court found a different situation than many prior cases because the copying was not based simply upon access and resulting product, but instead found “evidence of actual copying efforts.” When such evidence exists, “that evidence is always relevant.”
The evidence presented by Liqwd shows more than merely a “competing product that arguably falls within the scope of a patent.” Wyers. Determining that this evidence is relevant does not implicate our concern with avoiding every infringement suit turning into a confirmation of the nonobviousness of a patent. Because this evidence of actual copying efforts is relevant, the Board erred by disregarding its finding.
Id. On remand, the PTAB will now need to give weight to the copying in the obviousness analysis and ask whether that shift is enough to tip the scales in favor of patentability.
Campbell Soup Co. v. Gamon Plus, Inc. (Fed. Cir. 2019) (Campbell Soup II) (non-precedential).
This is the second appellate decision this month involving these two parties and Gamon’s patented rack for displaying and dispensing cans. As in Campbell Soup I, this decision stems from an IPR challenge filed by Campbell Soup against a Gamon patent. The difference – while Campbell Soup I involved design patents; Campbell Soup II focuses on the related utility patent.
These patents are all part of a big patent family that started with a 2002 provisional application followed by a non-provisional in 2003, then the utility patent at issue here (US Patent 8,827,111), followed later by the design patents at issue in Campbell Soup I. The design patents do not appear to claim priority to the provisional (since that is not allowed under the law).
In the utility case, the PTAB partially instituted Campbell’s requested IPR but declined to institute as to some of the claims and some of the grounds. Under SAS, that partial institution was improper and thus the case is remanded “to address the non-instituted claims and grounds in Campbell’s petition.” SAS Institute, Inc. v. Iancu, 138 S.Ct. 1348 (2018) (all claims challenged) as expanded by Adidas AG v. Nike, Inc., 894 F.3d 1256 (Fed. Cir. 2018) (all grounds challenged). As discussed below, the court also addressed the PTAB’s holding in favor of the patentee as to the instituted claims (particularly claim 27).
The claimed dispenser has a few interesting features — the most important is that its design that allows a customer to replace a can that had been removed. The basic approach is to have two chutes of cans that snake their way down the structure. At the bottom, the lower chute and upper chute each have a flange to stop cans from rolling off, with the upper stopper offset rearwardly to leave a space for replacing a can. “This feature allows the customer to replace a product that they decide not to purchase.” The prior art had two-chutes with an offset upper chute, but apparently was not offset enough to create a stable pocket for replacement. (Prior art shown in drawing below)
Campbell noted that the replacement feature would work if someone used smaller cans — noting the prior art statement that “[o]bviously, the device may be made … in any desired size to accommodate varying sizes of cans to facilitate the dispensing thereof.” Note Campbell’s argument:
The dispenser claimed in Weichselbaum—without any modification to the structure of the device—is capable of the functionality described in limitation [9] when Weichselbaum is used with cans smaller than those shown for illustrative purposes in its figures.
Appellants’ Br. 31 (emphasis in original). In other words, Campbell argues that the stopper location of the prior art works by changing the size of the cans relative to the dispenser (or by increasing the dispenser size relative to the cans).
On appeal, the Federal Circuit sided with the patentee — holding that the cans are part of the prior art design. Thus, “changing the [relative] size of the cans . . . is a modification” of the prior art reference. In referencing the “obviously” quote from the patent (recited above), the Federal Circuit held that the statement could be interpreted as indicating a change in can size could be accommodated by a change in dispenser size. Thus, “substantial evidence” supported the PTAB’s findings regarding the differences between the prior art and the claimed invention that served as a foundational fact for the PTAB’s obviousness conclusion.
As a separate reason for affirmance, the Federal Circuit concluded that the patentee’s objective indicia of nonobviousness are “sufficient to affirm” the not-proven-invalid conclusion. The Federal Circuit did not review these findings in particular, but the PTAB held particularly:
Commercial Success: Patent Owner has established that an appreciable amount of Campbell’s increased commercial success of soup during the relevant time period is attributable to the display rack covered by claim 27 of the ’111 patent. (Query how this relates to the parallel patents that are all part of the same family.)
Copying: Patent Owner has established that Petitioner copied Patent Owner’s
display racks.
Note here that the commercial success element is a bit interesting and unusual. The “success” identified by the PTAB is not that the patented device is a huge commercial success, but instead that it led to more sales of cans — i.e., it worked well for its purpose.
Guest post by Colleen V. Chien, Professor, Santa Clara University Law School. This post is the third in a series about insights developed based on USPTO data.
“If we could further narrow this gap in prior art between examination and litigation, then the accuracy of the patent grant – and therefore, its reliability – would increase.”
As Congress charts its path for the rest of the year, many in the patent community are eagerly awaiting new legislation on patentable subject matter. But to the extent that the Supreme Court’s jurisprudence can be understood as a clumsy response to the proliferation of weak patents, reversing these decisions will not address the underlying root causes of poor patent quality. It is therefore crucial to address the question raised at a recent Hearing before the Senate Subcommittee on Intellectual Property: how can the quality of US patents be ensured?
This post focuses on an aspect of patent quality that, though receiving scant focused attention by scholars (with some exception, such as the excellentwork of Professor Steve Yelderman, now clerking at the Supreme Court), comes up in the examination of over 90 percent of all patent applications.[1] No other issue comes close: the USPTO reports that only about a third of office actions include a rejection based on 35 U.S.C. § 112 and just 11% percent receive a rejection based on § 101. The aspect is the robustness of prior art vetting under §§ 102 (novelty) and 103 (nonobviousness). Below I argue that policymakers should pay more attention to the patent system’s most important tool for ensuring a patent’s quality: not § 101 or inter partes review, but prior art.
The task of vetting inventions in view of the prior art is old, but there are a number of new challenges. As Director Iancu has repeatedly acknowledged, the “ever-accelerating publication and accessibility explosions” strain the ability of examiners to find the best prior art during examination. Foreign patenting, which creates harder-to-evaluate foreign language prior art, is on the rise. In areas of rapid development like artificial intelligence, not unlike the early days of software in which a President’s Commission recommended prohibiting software patents because of the inability to vet them, prior art is being generated at an extraordinary rate – but in repositories like arxiv.org or Google scholar, not necessarily in filings at the Patent Office. As part of its continued focus on prior art, the Office has multiple initiatives to improve access to prior art, including the Collaborative Search and Search Feedback Pilots. It’s asked about prior art in its recent call for comments about patenting artificial intelligence (deadline extended to 11/8). But how can we know if current or piloted approaches are enough?
In a recent paper, Comparative Patent Quality, I argue that the age-old tool of benchmarking can yield valuable insights for tracking quality in patent examination, and in particular the robustness of considered prior art. In it, I describe and apply an approach for benchmarking examiner citation patterns exploiting the natural experiment that occurs when the same application is filed in the USPTO and a foreign patent office (such as the European Patent Office (EPO)). The paper specifically considers the extent to which examiners are considering the full range of prior art—not just patents but also non-patent literature (NPL)—when vetting applications.
A second project, Rigorous Policy Pilots, considers two other prior art benchmarks. The first is the patent applicant’s Information Disclosure Statement (IDS), in which an applicant must disclose to the USPTO all of the prior art or other information of which she is aware material to her application. Another is the Patent Trial and Appeals Board’s inter partes review decisions, in which administrative law judges cite what they believe to be the most relevant prior art.
These papers validate and quantify what Director Iancu has called, the “gap between the prior art found during initial examination and the prior art found,” in this case, in inter partes review. Non-patent literature (NPL) is not being cited by US examiners in the majority of cases, and US examiners are citing it less than European examiners. Within a random sample, 3.2% of the prior art relied upon by a U.S. Examiner (as provided in an 892 Form) was non-patent literature while the comparable rate in European Patent Office cases (as an X or Y reference in the search report) was 20%.[2]
Figure 1 shows the gap in NPL citation rates among Examiners, PTAB judges, and applicants vetting the same invention (906 patents whose claims have been invalidated in inter partes review). While US Examiners cited non-patent literature on average 13% of the time, the PTAB was more than three times more likely to do so (41%). (Figure 1) Applicants were more than five times (66%) more likely to include NPL in an IDS than Examiners (13%) were to cite it. Though the sample size does not permit fine-grained comparisons, the basic finding – that US examiners are citing NPL far less frequently than PTAB judges or applicants – held across all technical centers.[3]
These comparisons have their limits: in inter partes review, the challenger, not Examiner supplies the prior art, and the patents of IPR are not representative of patents in general. An applicant’s inclusion of a reference in an IDS is very different than an Examiner’s consideration, then application of a reference. European examination is closer to US examination, however, and there’s also a gap, though it’s smaller: among the patents analyzed above that had a European counterpart, EPO examiners cited NPL at a 34% rate, more than double the US examiner rate on the same applications of 14% of the time.[4] But applicants do not necessarily treat European and US “twin” applications identically, and European patent law is not identical to US patent law. Perhaps most importantly, correlation does not imply causation, and it can’t be assumed from these contrasts that a lack of robust vetting is responsible for the issuance of patents later proved to be invalid.[5]
Still, because inter partes review only revisits the patent’s validity in light of the prior art under §§ 102 (novelty) and 103 (obviousness), it squarely presents the question, were there references that the examiner missed? This analysis suggests that the robustness of examiner-cited prior art in general, and the consideration of NPL in particular, deserves attention. Work is ongoing to tease out the differences and their relationship to quality not only according to this metric, but also other aspects of robustness pertaining for example to foreign patents and the classes from which patent citations are drawn.
What can the USPTO do now to pay more attention to the robustness of prior art and narrow the gap? I recommend a few steps. First, the Office should make the “robustness of the prior art considered,” whether measured by NPL citation, foreign patent citation, diversity of references, or other measure, an explicit quality metric within existing and future prior art initiatives, consistent with the Office’s commitment to continuous improvement. Studying the link between the robustness of cited prior art and quality and tracking this explicitly as a quality metric would signal the importance of this aspect of prosecution.
Second, the USPTO, as it seeks to leverage artificial-intelligence to improve examination, should take into account the “bias” against non-patent literature currently embedded in examiner citations. If a tool is trained primarily on examiner citations it will reinforce this bias, growing, not narrowing, the gap. As to artificial intelligence applications in particular, the USPTO should also work to ensure that US examiners have access to the same references and resources (including time and information) that those in industry[6] and their international counterparts do. With many AI patent applications coming from non-US sources, high patent quality now can protect freedom to operate later, for US innovators.
Second, as the USPTO continues to evolve its approach towards prior art, including through pilots, it should do so with an eye towards rigorous evaluation. This means explicitly identifying the goal of the piloted policy (the “treatment,” like enhanced search capabilities or examiner collaboration), the theory of change behind it, and a way to measure whether or not the approach being tested has succeeded in increasing the robustness of prior art cited, using experimental or quasi-experimental approaches. To see if a new approach is working, the Office would compare the robustness of art in applications receiving and not receiving the treatment.
While treating otherwise identical applications differently can present non-trivial challenges, existing caselaw and the experiences of agencies including the USPTO, in its own randomized trademark audits, suggest that they are surmountable and the resulting knowledge, well-worth pursuing. The “hard evidence” generated by a rigorous policy pilot, implemented with sufficient power and controls, could be particularly important for justifying changes, perhaps costly, to examination and prior art processes. More importantly, applying rigorous approaches to prior art pilots would do more to support the discovery of what works to advance patent quality, using the patent system’s most important tool for doing so: prior art vetting.
Thanks to research assistant Nick Halkowski, 3L at SCU Law, for providing excellent data support.
[1] Author’s analysis, using the USPTO Office Action Dataset.
[3] Across all TCs except TC2800, where the gap was 17%, the gap between Examiner and PTAB NPL citation among the 906 invalidated patents was of 20% or more . (N=74-186).
[5] While several excellent studies of patent quality have considered the role of prior art including Wasserman and Frakes’ studies of the time devoted to patent examination, and work by my colleagues Professors Brian Love and Christian Helmers uncovering the determinants of quality, none of that I am aware has explicitly considered the “gap”, or “relative” citation of non-patent literature citation by US examiners, as compared to PTAB judges, judges, applicants, and EPO examiners as is contemplated by this analysis. Some evidence suggests that the robustness of US examiner vetting, relative to EP examiner vetting, may have implications for outcomes. Among the US patents granted by the USPTO but fully invalidated in IPR, 202 had an EPO counterpart application. Of these, approximately 1/3 of the EPO applications never matured into patents, primarily because they were withdrawn or revoked. But while applications that did not proceed in the EPO but were granted in the US were 30% more likely to have NPL cited in the search report than their US counterpart, the difference in non-patent literature citation among cases where both offices granted the patent was much smaller, a third of that or 10%.
The Supreme Court is back in session and is holding its first conference – the Long Conference – on October 1, 2019. The court is scheduled to consider whether to grant certiorari in a number of important patent cases:
Obviousness: Acorda Therapeutics, Inc. v. Roxane Laboratories, Inc., No. 18-1280 (When should the objective indicia of nonobviousness be discounted based upon alleged “blocking” by an existing prior patent). This case is supported by five additional friend-of-the-court briefs
Obviousness: Senju Pharmaceutical Co., Ltd. v. Akorn, Inc., No. 18-1418 (Whether no-opinion judgments comply with 35 U.S.C. § 144; Whether objective evidence of non-obviousness must be considered before cancelling claims as obvious).
Prosecution Procedures: Hyatt v. Iancu, No. 18-1285 (Whether MPEP 1207.04 – allowing for reopening prosecution – violates patent applicants’ statutory right of appeal following a second rejection).
Eligibility: Glasswall Solutions Limited v. Clearswift Ltd., No. 18-1448 (role of factual assertions when patent eligibility is challenged in a R.12(b)(6) motion to dismiss for failure to state a claim) (Link to Berkheimer).
Eligibility: StrikeForce Technologies, Inc. v. SecureAuth Corporation, No. 19-103 (Facts in step two of Alice) (Link to Berkheimer).
Damages: Zimmer, Inc. v. Stryker Corporation, No. 18-1549 (is negligence enough for enhanced damages).
Litigation Procedure: Xitronix Corp. v. KLA-Tencor Corp., dba KLA-Tencor, Inc., No. 19-58; and No. 18-1170 (Does appellate jurisdiction over Walker Process claims lie in the regional circuits, or in the Federal Circuit?).
Litigation Procedure: Imperium IP Holdings (Cayman), Ltd. v. Samsung Electronics Co., Ltd., No. 19-101 (Overturning jury verdict and the Seventh Amendment).
Covered Business Method Review: IBG LLC v. Trading Technologies International, Inc., No. 19-120 (what is a “technological invention” under the CBM review program).
Gamon Plus’s two design patents at issue here are directed to particular aspect of a design for a gravity feed can dispenser. U.S. Design Pats. D612,646 and D621,645. Campbell’s filed IPR challenges after Gamon sued for infringement. After initiating the IPRs, the PTAB eventually concluded decided that the claimed design had not been proven obvious. On appeal, the Federal Circuit has vacated and remanded — holding that the Board had improperly excluded a prior art reference (Linz) as a “primary reference” for the obviousness analysis.
OK – Look at these to “designs.” Note here that only solid lines count for the actual patented design — the broken (ghost) lines show what the rest of the product might look like. My replacement drawings are below – showing the design without the ghost lines.
D612,646 (on the left) has that curved top portion – no borders claimed so it might continue on wider or stop; two little tabs holding a can; and a portion of a cylindrical object.
D621,645 (on the right) is the same except the can might be longer, and the tabs are not claimed.
Design patents are governed by the same obviousness statute – Section 103 – and follow the same Graham v. John Deere inquiry. The inquiry as restated by the Federal Circuit is whether it would have been obvious to PHOSITA to have “combined teachings of the prior art to create the same overall visual appearance as the claimed design.” Apple v. Samsung (Fed. Cir. 2012). In Apple, the court also provided a methodology of first beginning with a primary reference — a single reference whose “design characteristics … are basically the same as the claimed design” i.e., creates “basically the same visual impression.” See Durling v. Spectrum Furniture Co. (Fed. Cir. 1996); In re Rosen, 673 F.2d 388 (CCPA 1982)
The key reference in this case is Linz, but you’ll note that Linz does not disclose the tabs and neither show a can.
In its decision the PTAB found that the lack of a disclosed can was critical and that adding a “hypothetical can” would be improper. PTAB: Linz “fails to disclose a cylindrical object below the label area in a similar spatial relationship to the claimed design.” On appeal, the Federal Circuit found that Linz was a proper primary reference since it is clear Linz “is made to hold cylindrical objects in its display area.” Note – the Federal Circuit did an extremely poor job of explaining this key part of the holding. The court did rule that the PTAB’s decision lacked ‘substantial evidence’ which indicates its problem is associated with improper factual conclusions rather than improper application of law. However, the court should have analyzed this case with direct reference to Durling and other design patent obviousness precedent.
In its decision, the court agreed with the PTO that the second reference – Samways – could not be a primary reference because of its “dual dispensing area” and “taller” dispensing area. I’ll note here that this decision appears faulty since the patent itself (especially if looking at its priority documents) contemplates that the dispensers will be lined-up side-by-side — creating the same look as a double-dispenser; and, the ‘taller’ label in Samways should not be a factor since the patent as drawn does not set any limits on the height of the label portion.
On remand, the Board will need to reconsider obviousness. In addition, the Federal Circuit ordered the Board to “also consider the non-instituted grounds for unpatentability consistent with the Supreme Court’s decision in SAS.
The opinion here was penned by Judge Moore and joined by Judge Prost. Judge Newman wrote in dissent — arguing that a primary reference must show the can. “The cylindrical object is a major design component.”
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A third patent was invalidated by the PTAB. D595,074. I don’t think that one was appealed. The ‘074 patent is part of the same patent family as the ones above and here you can see the way that they are designed to go side-by-side. The key prior art here was U.S. Patent No. 3,203,554, issued Aug. 31, 1965 (“Pendergrast”).
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Another pending appeal has to do with a utility patent that is part of the same patent family. As part of the IPR, Gamon cancelled claims 1-16, and the PTAB agreed that the rest of the challenged claims were OK (not proven unpatentable). Campbell’s appeal is pending before the Federal Circuit.
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I pulled-up the original provisional application from this family of patents and found this interesting image (below). Gamon (who is suing Campbell for infringement) used Cambell soup displays for the figures in its provisional patent application.
“If I have seen further than others, it is by standing upon the shoulders of giants.” Sir Isaac Newton’s observation has never been more true than in the development of medicines.
Scientific advances have brought us to the verge of a golden age of medicine. In the years ahead we have the opportunity to alleviate enormous human suffering: more and more cancers will be cured; gene therapies and precision medicines will turn fatal genetic diseases in children into diseases that kill no more; seniors and the families who care for them will no longer be afflicted by Alzheimer’s. To help ensure that we will benefit from such advances, our policies and laws must be aligned with the interests of patients.
A patent issue pending before the United States Supreme Court, if left unaddressed, could have serious consequences for us all: slowing medical innovation by deterring researchers from improving upon existing medicines. This should alarm every patient who needs a new medicine today and every person who may need one tomorrow.
Rarely, if ever, can scientists deliver a cure for a disease at the beginning of their research. Biology is complex and magic bullets for diseases are extraordinarily rare. In practice, scientists build new therapies brick by brick. Each incremental step can be meaningful on the way to a cure: by buying time – time with better quality of life, and time until the next advance can provide even more benefit.
To develop these advances requires hundreds of millions – and often billions – of dollars of investment, over periods that average more than a decade. The average failure rate is about 90% for those drugs that actually make it to patient trials. Any addition to these enormous hurdles slows investment in medical innovation and deprives patients of new and more effective medicines.
We understand this in very personal ways. One of us, John Crowley, has two children with a rare and serious neuro-muscular disorder, Pompe disease. They were not supposed to live to see kindergarten. Today those children are now in their early 20s and thriving despite their disability because of a novel medicine that has improved and significantly prolonged their lives, though it has not cured them. It has, however, given our family the chance to see birthdays and graduations that otherwise never would have been. It has also given us time to build on this progress to experiment on potentially better ways to treat our children’s devastating diseases.
Paul Hastings was diagnosed with Crohn’s disease as an adolescent – long before any of the innovations over the last twenty years to treat this condition; as a result, he lost his colon at age 13. Had today’s medicines been developed then, he likely would not have had to.
We have each devoted our lives and our careers to the development of innovative medical treatments. We have seen first-hand the thought, dedication and the enormous investment of human and financial capital that goes into the approval of even one new drug. We have seen that even an incremental improvement over existing treatments can result in substantial quality of life enhancements for those living with disease and disability.
A critical case has now put the backbone of this progress – improvements to earlier innovation – under threat. In Acorda Therapeutics v. Roxane Laboratories, a lower federal court ignored 50 years of Supreme Court precedent to nullify patents that were integral to Acorda’s work in turning a failed compound into a first-of-its kind, FDA- approved medicine that improves walking in patients suffering the debilitating effects of multiple sclerosis.
The legal issue in the case revolves around the lower court’s dramatic expansion of the so-called “blocking patent” doctrine, which weakens protections for patents for medicines, like the Acorda patents, that improve upon prior patents.
The U.S. Supreme Court will decide next month whether to hear the case. We are deeply concerned that leaving the lower court’s ruling intact will deter investment in science and medicine needed to improve upon existing treatments. In so doing, it would deprive patients of cutting-edge medicines that can dramatically enhance the quality and length of their lives.
The Founders authorized Congress to grant patent protections to “promote the Progress of Science.” More than two hundred years later, we are in an age of unprecedented medical innovation, but patent law is moving ominously in the other direction. Let’s not turn the clock back on the progress we all need.
John F. Crowley is the Chairman and Chief Executive Officer of Amicus Therapeutics
Paul Hastings is the President and CEO of Nkarta Therapeutics
SIPCO, LLC v. Emerson Electric Co. (Fed. Cir. 2019) On appeal from CBM2016-
00095 (Covered Business Method Review).
In its final written decision, the PTAB sided with the patent challenger Emerson Electric — finding claims of SIPCO’s U.S. Patent 8,908,842 invalid as lacking eligibility and as obvious. Claims 1, 7, 9, 16, and 17.
The patent at issue requires a “low-power transceiver” connected to the internet and wirelessly connected to a remote device. The patent included dependent claims 3 and 4 that defined the remote device as a “vending machine” and “ATM” respectively. However, those claims were disclaimed during prosecution — and part of appeal argument is the role of disclaimed claims in construction of the remaining claims.
Note for younger attorneys, the item labeled 110 is a “pay phone.”
Covered Business Method Review (CBM) allows a third-party to challenge to certain business-method patents in an AIA-Trial. Inter partes review (IPR) proceedings are limited to novelty and obviousness challenges and “only on the basis of prior art consisting of patents or printed publications.” 35 U.S.C. 311. Post-grant review (PGR) proceedings have much broader scope — any condition of patentability except best-mode. 35 U.S.C. 321. However, PGR proceedings may only be filed against post-AIA patent and must be filed within 9 months of issuance.
The third category – CBM – has the same scope of patentability challenges as PGR (including eligibility, enablement, and indefiniteness), but can only be filed against patents that meet the definition of a “covered business method patent”
a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.
SEC. 18 of the AIA. Looking at the definition above, you’ll note that this is a narrow definition of a “business method” patent — especially the notion that it cannot cover “patents for technological inventions.” (Technological is left undefined in the statute). Note, the CBM provisions are not codified in Title 35 because the program is not permanent — it is set to sunset 8-years after the first CBM was permitted to be filed. My calculation of that date is September 16, 2020 and no new petitions will be accepted after that date.
NonAppealable: In the appeal, SIPCO argues that its patent is a technological invention and thus should be immune from CBM challenge. And, although the PTO’s decision to initiate a CBM proceeding is “nonappealable,” the Federal Circuit has repeatedly ruled that it can review the PTO decision of whether the challenged patent satisfies the legal limits of the CBM process — i.e., whether the patent challenged in a CBM is a technological invention.
Two Step Test for Technological: The USPTO has issued regulations defining technological inventions as requiring (1) recitation of a nonobvious technological feature; and (2) solving a technical problem using a technical solution. 37 C.F.R. § 42.301(b). Thus, claims that recite “post-solution” technology could still be deemed not technological. A reminder here – that the judgment of whether a patent is amenable to CBM review is considered on a patent-by-patent basis — it is either all-in or all-out — and not on a claim-by-claim basis.
After reviewing “both the claims and the specification,” the Federal Circuit concluded that the invention satisfied step two of the two step test – the invention “implements a communication system that connects an unconnected, remote device with a central station . . . by taking advantage of a set of intermediate nodes … connected to the central station over an existing communication network.” The patent discusses the problems of signal interference, contention, and hacking — and offers its solution of using a “two-step” communications and low-powered transceivers that limit transmission range. The PTAB had not considered step 1 and so on remand the PTAB will consider whether the claims recite nonobvious technological features. Although the court left this issue for the PTAB to decide, it noted that the nonobviousness here might be a different sort of analysis than what is used for Section 103.
Low Power = Limited Range: The Federal Circuit’s conclusion of technological solution is substantially based upon a narrow claim construction of the term “low power transceiver.” The court found that the term should be interpreted (as properly read in light of the specification) as meaning a transceiver with a limited transmission range. That result comes from one of the goals of the invention — avoiding conflict between transceiver communications. “It is only if the signal transmission is limited in range that the problems of unwanted circumvention, contention, and unlawful interception of the electromagnetic signals described in column six [of the patent] are alleviated.” This construction differs from the PTAB who had found the “low power” aspect of the transceiver did not necessarily limit its range to only a few feet. This “limited range” aspect of the invention appears to be the major key to the technological result.
Writing in dissent, Judge Reyna argued that the construction of “low power” as meaning “low range” involves “improperly reading a functional limitation into the claim from a preferred embodiment.”
= = = =
Looking back to the Vending Machine and ATM limitations of cancelled Claim 3 & 4. The PTAB used those claims (and the written description) to conclude that the invention was “financial” in nature — a qualifying characterization for CBM review. On appeal, the majority affirmed the agency’s determination.
As the Board explained, claims 3 and 4 recite the remote device being associated with an ATM or vending machine. The patent expressly contemplates that the information communicated through the claimed system is financial information that identifies the user’s bank account and the user’s identity. The Board is correct in its assessment that the concept of communicating financial information from a device associated with an ATM to a central location is “central to the operation of the claimed device” in claim 3.
Those two claims were disclaimed and SIPCO originally argued that they could not be used to show that the patent was a CBM patent. However, at oral arguments SIPCO’s attorney conceded that it was proper for the PTO to consider those claims in its analysis.
Guest Post by Shubha Ghosh, Crandall Melvin Professor of Law and Director, IP & Tech Commercialization Law Program and Syracuse Intellectual Property Law Institute, Syracuse University College of Law. I asked Professor Ghosh to offer his views on the ACLU and Law Professors’ letter. Below is is response. -Jason
As a law professor, I am in the camp of those who are critical of the proposed bipartisan, bicameral legislation (“the Coons-Tillis bill”) to amend provisions of the Patent Act dealing with patentable subject. I am also in the camp of those who find the “two-step test” introduced by the Supreme Court in its Mayo v, Prometheus, 566 U.S. 66 (2012), and Alice v CLS Bank, 573 U.S. 208 (2014), decisions unworkable and inconsistent with its own precedent. I am also in the perhaps much smaller camp that is skeptical of the approach adopted by the Court in its Association for Molecular Pathology v. Myriad, 569 U.S. 576 (2013) decision (even if I agree with the result that identified genetic sequences are not patent eligible). Here are my thoughts about the Coons-Tillis bill and the comments in the letter from the ACLU and the law professors and practitioners organized by Professor Ted Sichelman of University of San Diego Law School.
A proposed provision of the Coons-Tillis legislation states: “No implicit or other judicially created exceptions to subject matter eligibility, including ‘abstract ideas,’ ‘laws of nature,’ or ‘natural phenomena,’ shall be used to determine patent eligibility under section 101, and all cases establishing or interpreting those exceptions to eligibility are hereby abrogated.”
The language expresses frustrations with judge-made exceptions to patentable subject matter based on implications drawn from the language of the Act or from judge made common law reasoning. If enacted, the amendment would not only remove established exceptions to patentable subject matter, but also would limit the power of the federal judiciary to create exceptions based on its own reasoning and interpretation of the Patent Act. Such legislation is in conflict with the long-established relationship between federal courts and Congress. If enacted, it would invite constitutional challenges claiming violation of the separation of powers, under Article III, of the Constitution. The proposed amendment would very likely be found unconstitutional.
Federal courts have as their role the interpretation of statutes. By abrogating the federal court’s power to develop any implications from the statutory language and to engage in common law reasoning in interpreting the statute, Congress invades long-standing judicial power. Although a full analysis of the separation of powers is beyond the scope of this post, Congressional limitations on judicial power in other realms have failed under judicial scrutiny. At the extreme, Congress is limited in its power to legislate that federal courts cannot hear certain cases or controversies. See Boumediene v. Bush, 553 U.S. 723 (2009) (suspension of writ of habeas corpus unconstitutional); United States v. Klein, 80 U.S. 128 (1871) (Congress’ limitations on claims relating to confiscated and abandoned property unconstitutional). But see Patchak v. Zinke, 138 S.Ct. 897 (2018) (Congress’ stripping federal court jurisdiction over claims arising from Department of Interior’s taking of land into trust was not unconstitutional).
I am not suggesting that the proposed abrogation goes as far as the suspect legislation in Boumediene and Klein. Federal courts can still adjudicate patent law questions under the Coons-Tillis bill. But the bill does put limitations on how courts can decide cases. This attempt to bind the way federal judges approach a federal question is as problematic as taking away their power to adjudicate in the first place. The Coons-Tillis bill if enacted as drafted will invite substantive litigation which may well lead to the legislation being struck down, in part, as an unconstitutional exercise of Congressional power.
The drafters of the ACLU letter express the concern that the abrogation of the established exceptions will essentially reverse the Supreme Court’s ruling in Myriad that isolated gene sequences are not patentable subject matter. I am not as sure of the specter of genes coming back under patent should Coons-Tillis be enacted. My hesitation stems from what I find to be the opacity in the Supreme Court’s analysis in Myriad. If the Court’s reasoning rested on a constitutional holding that natural occurring substances like genetic sequences are not the “discovery of an inventor” contributing to “progress” in the “useful arts,” as required by Article I, Section 8, Clause 8 of the Constitution, then perhaps the Myriad holding survives a possible enactment of the Coons-Tillis bill.
That is the promise of the Law Professor Letter promoted by Ted Sichelman (and his co-authors Kevin Noonan and Adam Mossoff). Their principal point is that courts can base patent subject matter exceptions in the constitutional language rather than in a murky common law. This point they contend is true for the established exceptions of abstract ideas, laws of nature, and natural phenomena. But this optimistic assertion is far from clear; it is certainly possible, but not guaranteed. The Coons-Tillis bill, however, offers no guidance on how the courts should assess patentable subject matter. The proposed legislation requires courts to consider eligibility based on “the claimed invention as a whole” and to disregard the manner in which the invention was made, the state of the art at the time of invention, whether limitations are well-known, conventional or routine, or to the standards of novelty, nonobviousness, or enablement. I would assert that there is some general acceptance for excluding laws of nature, abstract ideas, and natural phenomena from patent eligibility (even if there is disagreement on the scope of these exceptions). I find little comfort in abrogating am established body of law on the hope that a Constitutional analysis will either not change the status quo or provide more light.
In summary, the Constitution may not come to the rescue of the proposed abrogation and more likely the Constitution will be its downfall.
Instead of shackling judicial decision making, a bill more carefully tailored to address the problems with the two-step test of Alice/Mayo and the unclear holding of Myriad would be more desirable.
The two-step test requires the PTO or a court to first determine whether patent claims are directed to an abstract idea, natural phenomenon, or law of nature. If they are not, then the claims are patentable subject matter. If the patent claims are directed to ineligible subject matter, the second step requires the agency or court to identify an inventive concept for which the ineligible subject matter is embodied, used, or applied. What “directed to” and “inventive concept” mean has been the source of controversy with courts often failing to find an inventive concept beyond the ineligible subject matter. The problem is that there is no meaningful definition of an inventive concept beyond the notions of novelty, nonobviousness, usefulness, and enablement. The Coons-Tillis bill attempts to finesse this problem by basing a determination of patent eligibility on a consideration of the “claimed invention as a whole,” but this only begs the issue.
More targeted reform would abrogate the two-step test with its confusing language of “directed to” and “inventive concept.” Instead, Congress might attempt to more clearly define the established exceptions, drawing on precedent. The Supreme Court tried to do something like this in its Bilski v. Kappos, 561 U.S. 593 (2010), decision. Justice Stevens’ concurrence would have established an exception for “business methods” but for the switch in Justice Kennedy’s vote. Although the Court, Congress, and the patent bar disfavor exceptions for broad classes of inventions, like software or business methods, Justice Stevens’ approach would have set forth a more principled approach to defining the exception that rested on a careful interpretation of the word “process” in the Patent Act. Instead of this potentially fruitful approach, we were given an open-ended opinion by Justice Kennedy that quite correctly avoided any specific test while endorsing open ended standards. Justice Stevens’ policy-based interpretation of the word “process” would have taken us further. The irony is that despite Justice Kennedy’s refusal to adopt a specific test, the Court adopts a rigid, unworkable test in Mayo/Alice.
Congress can follow the trail blazed in Justice Stevens’ Bilski concurrence by spending time offering more helpful definitions of the established exceptions. The Court’s Myriad decision illustrates the need for more clear definitions. In determining whether Myriad’s isolated gene sequences were natural phenomena, Justice Thomas’s opinion took us through an exploration of biotechnology that read like outtakes from an episode of Nova. The purpose of his scientific exegesis was to explain why the isolated gene sequences were in fact identical at the level of code to the natural phenomena of the naturally-occurring gene sequences. Justice Scalia would have none of this exegesis and simply concluded, in his concurrence, that the two were in fact the same based on his reading of the record. Notably, the Federal Circuit came to the opposite conclusion, ruling that the isolated sequences differed in chemical composition from the naturally occurring sequences. This conflict as to determining how the subject matter of an invention compares to ineligible subject matter shows to me that guidance from Congress would be desirable.
One source of uproar over the state of the patent subject matter doctrine is the Federal Circuit’s decision in Ariosa v. Sequenom, 788 F.3d 1371 (Fed. Cir. 2015), finding ineligible an arguably valuable pre-natal diagnostic test because it involved cell-free fetal DNA. The court’s analysis is a collision of two errors, combining the two-factor test in Mayo/Alice with the question of when isolated DNA is naturally occurring in Myriad. Finding the claims directed to natural phenomena and laws of nature, the court failed to find an inventive concept. Its analysis reduced the test to its nonpatentable elements and not finding more. The case illustrates the mechanical application of the two-step test combined with the uncertainties of determining when an invention is identical to ineligible subject matter.
Can Congress set forth clearer definitions of the recognized categories of ineligible subject matter? Can it clarify the definition of process as Justice Stevens set forth in Bilski? The politics of patent reform may inevitable corrupt the process. But better than stripping courts of common law decision making in patent law, Congress should nudge the process along through clearer statutory guidance.
