Sitting by designation in Delaware District Court, Federal Circuit Senior Judge William Bryson found claims 1-10 of GeoComply's U.S. Patent No. 9,413,805 ineligible under 35 U.S.C. § 101. On appeal, the Federal Circuit has now affirmed that judgment -- albeit in a Rule 36 summary affirmance. GeoComply Sols. Inc. v. Xpoint Servs. LLC, No. 23-1578 (Fed. Cir. Nov. 13, 2024). The inventor, Anna Sainsbury, co-founded GeoComply in 2011 and has served as CEO for most of the past 13 years. GeoComply processes billions of transactions annually - mostly for the online gaming (casino) industry. The successful defendant in this case - Xpoint - is a key competitor.
The Federal Circuit's pending en banc review in EcoFactor v. Google is heating up, to address fundamental questions about the reliability standards for expert damages testimony in patent cases. The case highlights growing tensions between robust judicial gatekeeping under Federal Rule of Evidence 702 and the Constitutional right to a jury determination of all facts at issue. At base, Google is seeking to create additional procedural hurdles and appeal off-ramps that help them avoid large damage awards.
In its en banc order, the court directed the parties to brief whether the district court properly applied Rule 702 and Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993) in admitting testimony from EcoFactor's damages expert deriving a per-unit royalty rate from portfolio license agreements. The case presents a critical opportunity for the Federal Circuit to clarify when damages theories "cross the line" from permissible approximation to unreliable speculation.
Google has now filed its opening brief, arguing that EcoFactor's damages testimony failed to meet Rule 702's reliability standards in two key respects: its use of portfolio license "whereas" clauses that contradicted the operative terms of the agreements and its unsupported assumption that various "pressures" on the royalty rate would offset each other. The brief emphasizes that these methodological flaws rendered Kennedy's opinions purely speculative and therefore inadmissible under both Daubert and the recently amended FRE Rule 702.
Patent law cases continue to be brought to the Supreme Court's attention, even though the court has not granted certiorari in any patent case for some time. Twelve potential cases have documents on file with the court. Currently, eight certiorari petitions are briefed and pending before the Court, while four additional petitions are anticipated in the coming months based on recently-filed extension requests.
As has been true in recent years, patent eligibility petitions occupy a substantial portion of the docket, mostly focusing on software patents. Two Hatch-Waxman cases are pending as is a case focusing on the on sale bar post-AIA and post-Helsinn. In addition, two cases focus on the Federal Circuit's ongoing and unjustified use of summary affirmances for a large portion of its docket.
Today at 2pm Eastern, the Federal Circuit will hear arguments in a case that could significantly shape pharmaceutical patent listing practices under the Hatch-Waxman Act. In Teva v. Amneal (No. 24-1936), the court will consider whether device patents that don't explicitly recite active drug ingredients can be properly listed in FDA's Orange Book. William Jay of Goodwin Procter will argue for Teva; Steven Maddox of Procopio will represent Amneal. The judges are not yet listed for the case, but I expect it will be three judges picked from these six: Chief Judge Moore, Judge Dyk, Judge Prost, Judge Chen, Judge Hughes, or Judge Stark. (Update: It is judges: Prost, Taranto, and Hughes).
The case centers on several Teva patents related to its ProAir HFA inhaler device and dose counter. After Amneal filed an ANDA for a generic version, it counterclaimed--seeking delisting of these patents from the Orange Book. The N.J. district court granted Amneal's motion, ordering Teva to delist the patents. The key question on appeal is whether device patents must explicitly claim the active drug ingredient to qualify for Orange Book listing under 21 U.S.C. § 355(b)(1)(A)(viii). The key benefit to patentees is an automatic 30-month stay of FDA approval that kicks in if the patentee sues a generic ANDA filer. This effectively blocks generic entry during litigation without requiring the patentee to show likelihood of success or irreparable harm as would be needed for a preliminary injunction.
The Supreme Court has before it another important petition highlighting the Federal Circuit's approach to statutory interpretation and administrative authority. Soto v. US stems from a Federal Circuit appellate decision focusing on the statute of limitations for awarding back pay associated with Combat-Related Special Compensation. The Supreme Court also recently heard oral arguments in Bufkin v. McDonough, which presents another important question about veterans' benefits - specifically whether the Court of Appeals for Veterans Claims must independently review the VA's application of the "benefit-of-the-doubt" rule in veterans' cases. The University of Missouri Veterans Clinic has played an active role in both of these pending cases as amicus counsel.
The pending Soto v. US petition highlights a recurring philosophical divide between Federal Circuit Judges Hughes and Reyna, with Hughes taking a formalist approach requiring specific statutory language while Reyna advocates for a more functional analysis that favors the underdog (disabled veterans). This post first walks through the Soto case and pending petition and then delves a bit deeper into the contrast between these two leading jurists at the Federal Circuit.
The Supreme Court is set to hear arguments in Dewberry Group v. Dewberry Engineers (No. 23-900) in December 2024, addressing the trademark-specific question of whether courts can disgorge profits earned not by the defendant itself, but also by legally separate non-party corporate affiliates. In many ways, I see this case largely as a corporate "structure of the firm" case. Does trademark law permit business owners to formally structure their set of closely related businesses to avoid spillover liability? Most notably, corporate attorneys are regularly looking at ways to divide companies to limit spillover liability. The golden target is to create low-profit (or non-profit) entities that hold all the potential liability; and then shift profits to other corporate affiliates that do not have any liability. In the trademark sense, you may have a media holding company that does all the infringing advertising; and then a set of franchisees that don't do any advertising themselves, but do reap the profits.
Background: The Dewberry dispute involves two real estate-related companies: Dewberry Group (defendant/petitioner) and Dewberry Engineers (mark-holder/respondent). After finding that Dewberry Group had infringed Dewberry Engineers' trademarks, the district court ordered Dewberry Group to disgorge nearly $43 million in profits. But here's the twist - those profits were earned not by Dewberry Group itself (which actually showed losses), but by its affiliated companies that were never parties to the litigation.
Miller Mendel, Inc. has petitioned the Supreme Court to review a Federal Circuit decision invalidating its background check software patent in a case that raises questions about both judicial independence and patent eligibility standards. The petition comes after both the district court and Federal Circuit found Miller Mendel's US Patent No. 10,043,188 ineligible under § 101 as directed to an abstract idea.
The Patent and Technology at Issue: The '188 patent covers a software system for managing pre-employment background investigations. The claimed system automates many aspects of the background check process, including collecting and storing applicant information, managing communications with references via email hyperlinks, and automatically generating suggested lists of law enforcement agencies based on an applicant's residential address. Miller Mendel accused the City of Anna police department (northern Texas) of infringement through its use of Guardian Alliance Technologies' background check platform. The City successfully moved for judgment on the pleadings arguing patent ineligibility under § 101. The court characterized the claimed automation features as merely implementing conventional background check steps on generic computer components.
Three Questions for Supreme Court Review
The petition, filed by Kurt Rylander of Rylander & Associates, presents three questions that go to fundamental issues in patent law and judicial administration:
1. Constitutionality of Removing Article III Judges
The most striking issue challenges the Federal Circuit's effective removal of Judge Pauline Newman from judicial duties for refusing to submit to mental health evaluations. The petition argues that the Federal Circuit's self-policing usurped Congress's exclusive constitutional authority to remove Article III judges through impeachment.
DISH Network is seeking en banc review of a Federal Circuit panel decision that vacated a $3.9 million attorney fee award to the victorious defendant in Realtime Adaptive Streaming L.L.C. v. Sling TV, L.L.C., 113 F.4th 1348 (Fed. Cir. 2024). The petition challenges the panel's approach to reviewing district court fee determinations under 35 U.S.C. § 285, arguing that it contradicts Supreme Court precedent of both Octane Fitness and Highmark, which provided district courts with substantial autonomy in determining whether to award attorney fees.
The case stems from Realtime's assertion of patents related to digital data compression against DISH. After protracted litigation including inter partes review proceedings and multiple stays, the District of Colorado ultimately found Realtime's asserted claims from U.S. Patent No. 8,867,610 patent ineligible under 35 U.S.C. § 101. The district court judge, R. Brooke Jackson, then deemed the case "exceptional" under § 285 and awarded DISH $3.9 million in attorney fees.
After talking through the en banc petition, this post spends some time focusing in on another recent fee award - this one a $9 million award against Dartmouth College and its exclusive licensee ChromaDex.
In Zebra Technologies Corporation v. Intellectual Tech LLC, No. 24-114, IT has filed its brief in opposition to Zebra's petition for writ of certiorari. The case focuses on patent-owner standing in situations where multiple entities share patent rights — particularly whether a patent owner loses Article III standing when because of a patentee default that provides a third party (here, a security interest holder) the right to license the patent.
This portion of the case stems from a 2011 loan agreement where OnAsset Intelligence (IT's parent company) pledged the asserted patent (US7233247) as collateral to Main Street Capital. After OnAsset defaulted in 2013, the security agreement gave Main Street significant rights, including the ability to "sell, assign, transfer, pledge, encumber or otherwise dispose of the Patents." OnAsset later assigned the patent to its subsidiary IT, who then sued Zebra for infringement. The key question is whether Main Street's post-default rights stripped IT of the exclusionary rights necessary for Article III standing. The Federal Circuit sided with the patentee - finding that IT retained sufficient rights as the patent owner even though Main Street had the concurrent ability to license the patent. That outcome is now being challenged at the Supreme Court, with Zebra arguing that the ability to obtain a license from Main Street negates IT's standing to sue for infringement.
In a pending petition for certiorari, the Maltese company Celanese Int'l is poised to ask the Supreme Court to resolve an important question about the scope of the AIA's on-sale bar: whether sales of products made using a secret process can bar later patent protection for that process. The issue arises from a Federal Circuit decision upholding the ITC's invalidation of Celanese's patents covering methods for manufacturing the artificial sweetener Ace-K. Celanese Int'l Corp. v. Int'l Trade Comm'n, 67 F.4th 1361 (Fed. Cir. 2024). The court recently granted Celanese with an extension of time to file its formal petition for writ of certiorari, due December 10, 2024. As is typical, the petitioner used its request for extension as a first opportunity to highlight the importance of the case and preview its primary arguments.
The ongoing dispute between Inari Agriculture and Pioneer Hi-Bred over utility plant patents has taken its next step, with Inari seeking Director Review of the PTAB's denial of institution in PGR2024-00020 -- arguing that a patentee's reliance on its own trade secret information when developing its invention (here a maize variety) is directly relevant to the question of obviousness. The case raises interesting and fundamental questions about the intersection of trade secrets and patent law in the context of plant breeding. Inari Agriculture, Inc. v. Pioneer Hi-Bred International, Inc., PGR2024-00020, Paper 19 (P.T.A.B. Oct. 24, 2024).
In a recent decision, the PTAB affirmed an examiner's obviousness rejection of claims related to an anodizing process for aluminum and magnesium alloys. Ex parte Eidschun, Appeal 2023-003437 (PTAB Oct. 16, 2024). The case offers an example of a R132 declaration from the inventors that was deemed insufficient to provide evidence of unexpected results in order to rebut obviousness arguments. To be more precise, the declaration appears to have overcome the examiner's obviousness rejection, but the Board provided new reasoning (based on the same references) and so sustained the rejection based upon these new grounds.
A Central District of California jury has awarded SPEX Technologies nearly $316 million in damages against Western Digital for infringement of a patent related to hardware encryption technology. The verdict, handed down on October 18, 2024, comes after an eight-year legal battle and raises interesting questions about infringement of means-plus-function claims and the calculation of reasonable royalty damages.
Is it proper at the motion-to-dismiss stage? (Answer: Yes, but with major caveats)
Is a plural also singular? (Answer: Sometimes, because in patent law, even basic grammar isn't safe from interpretation)
The case involves technology for detecting and identifying underground utility lines, with the dispute centered on the interpretation of the phrase "group of buried asset data points" in UTTO's US9086441. The accused device uses one data point at a time and argues no infringement.
Starting with my 2017 article chastising the Federal Circuit for its R.36 practice, dozens of parties have challenged the Federal Circuit's ongoing habit of regularly issuing a large number of no-opinion judgments. So far, the Federal Circuit has refused to address any of the legal process complaints - favoring silent efficiency over transparency.
A new en banc petition in Converter Manufacturing, LLC v. Tekni-Plex, Inc., raises the issue in a new way, particularly focusing on dicta from the Supreme Court's landmark ruling in Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024). The petition highlights the tension between judicial efficiency and the court's constitutional duty to independently review agency actions.
This post offers some insight into four patent-focused academic articles that I've been reading lately.
1. A textualist approach to patent eligibility under § 101;
2. Reflections on the Myriad, ten years later
3. Message to Competition Regulators: Patents are not simply a necessary evil
4. Philosophical critique of AI inventorship
These pieces offer insights into ongoing debates within patent law and policy. Although I don't necessarily agree with the conclusions made by the various authors, each article provides fodder for continued discussion on these important topics.
We continue to see lots of action focusing on obviousness-type double patenting (ODP) in the U.S. patent law context. In Allergan v. MSN, the Federal Circuit created a major loophole for patentees and undermined the 2023 Cellect decision by holding that extended PTA in one family-member patent does not create an ODP problem so long as the extended term is in a first-filed, first-issued patent. Allergan USA, Inc. v. MSN Laboratories Priv. Ltd., 111 F.4th 1358 (Fed. Cir. 2024). Sun Pharma has petitioned for en banc rehearing - hoping to invalidate Allergan's protected patent.
Two amicus briefs were recently filed supporting the petition - One by the Association for Accessible Medicines (AAM) and the other by a corporate group led by Alvogen PB.
The USPTO has issued final rules aimed at expanding opportunities for practitioners to appear before the Patent Trial and Appeal Board (PTAB). The rules, which go into effect on November 12, 2024, make several changes to the requirements for counsel in AIA-trial proceedings. However, the final rules do not go as far as some had proposed in allowing non-registered practitioners to take lead roles. In other words, lead counsel must be a registered patent practitioner.
In AlexSam v. Aetna, the Federal Circuit recently revived the patentee's infringement lawsuit against health insurance giant Aetna over its Visa and Mastercard-branded health savings account (HSA) debit cards. AlexSam, Inc. v. Aetna, Inc., No. 22-2036 (Fed. Cir. Oct. 8, 2024). The district court has dismissed the case on 12(b)(6) for failure to state a claim of infringement. The case will likely be highly cited by future infringement plaintiffs seeking to overcome motions to dismiss, especially whether allegations in the complaint are unduly conclusory. The appellate panel also narrowly construed a prior license agreement between AlexSam and Mastercard
AlexSam's asserted U.S. Patent No. 6,000,608 covers a "multifunction card system" that can serve as both a debit card and a medical services card. I have reproduced the two asserted claims below. And no, this is not an eligibility case.
The landscape of patent litigation has been dramatically reshaped by the rise of third-party litigation funding (TPLF) over the past decade. As someone who has been involved in patent law issues for 20+ years, I can confidently say that if I were asserting a patent today, I would actively seek litigation finance to mitigate risk, even if I had sufficient resources to self-fund (which I don't). The availability of TPLF allows patent holders to create high-caliber legal teams and can also provide a strategic advantage by demonstrating to opponents that the case has been vetted by sophisticated investors willing to back it financially.
However, this trend toward litigation finance comes with complications and controversies. While TPLF has undoubtedly increased access for many patent holders, it has also given rise to significant ethical concerns and abuses. One of the most pressing issues is the potential for effectively sidelining the nominal plaintiff – the actual patent holder – in favor of the financial interests of funders and attorneys. In addition, there is some notion that TPLF is often channeled into the US via foreign sources -- something that has raised concerns that this could somehow destabilize the rule of law.
At the same time, it's important to acknowledge the positive impacts of TPLF. The availability of litigation finance has allowed larger, more established law firms to take on plaintiff-side patent cases that they might have previously declined due to risk or resource constraints. Anyone working in a law firm knows how difficult it is to convince partners to take on risk, and TPLF offers guaranteed partial payouts from funders even if the defendant wins. That means that these firms can assemble formidable legal teams, potentially leveling the playing field against well-resourced defendants and improving the overall quality of patent litigation.
