Tag Archives: patent law

Attorney Fees on Undecided Inequitable Conduct Issues

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by Dennis Crouch

United Cannabis Corp (UCANN) vs. Pure Hemp Collective, — F.4th — (Fed. Cir. 2023)

The UCANN vs. Pure Hemp patent case has come to a close with the Federal Circuit affirming the district court’s decision to deny attorney fees to Pure Hemp. The original infringement lawsuit was filed in 2018, with UCANN suing Pure Hemp for infringing US Patent No. 9,730,911, covering various high concentration cannabis and CBD extract formulations. During the litigation, UCANN filed for bankruptcy, causing the case to be stayed, and eventually, the parties stipulated to a dismissal of the infringement claims with prejudice. However, the stipulated dismissal did not include any discussion of attorney fees — leading to the current appeal.

Following the dismissal, Pure Hemp moved for attorney fees and sanctions, arguing that UCANN’s counsel committed inequitable conduct during patent prosecution and that UCANN’s litigation counsel had a conflict of interest. The district court sided with UCANN and denied attorney fees, stating (1) that Pure Hemp was not the prevailing party and (2) that Pure Hemp did not prove that the case was exceptional. The Federal Circuit has now affirmed the decision, finding that the district court did not abuse its discretion in finding the case unexceptional. Although district court the district court erred in not finding Pure Hemp to be the prevailing party, the error was harmless.

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An API for the Human Mind

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by Dennis Crouch

The pace of technological advancement never ceases to amaze me, and it seems like even science fiction is struggling to keep up with reality. In recent months, we’ve witnessed some truly remarkable breakthroughs in the field of artificial intelligence (AI), and this latest development is right up there.

Researchers have used GPT-style machine learning architecture to decode human thoughts by analyzing their functional MRI (fMRI) brain scans. That’s right – we’re talking mind reading. The AI was initially trained trained by exposing participants to 16 hours of narrative stories while recording their brain activity.  And, once trained, the AI was able to accurately describe the content of their thoughts.  Of some interest, the AI was better at identifying concepts and meaning rather than the actual words at issue.

While this technology has the potential to revolutionize communication for individuals with disabilities or neurological conditions, it also raises some privacy concerns that could involve both reading thoughts and writing them.

I imagine that all this wouldn’t require a fMRI technology and instead could rely upon much smaller safe-for-home equipment such as Functional near-infrared spectroscopy (fNIRS) devices shown in the image above or made by Artinis.

A key for me here is that this is potentially moving toward an API for the human mind and body.  For those outside the software world, an API (Application Programming Interface) is a set of protocols, tools, and standards that allow different computer applications to communicate with each other. APIs provide a standardized way for software components to interact.  An API for the human mind and body would create an interface that allows software systems to access and interact with the brain or and other body parts. Over the past several years, folks have been making huge advances with brain/body connection, and I’m excited about where we are headed in this expanded mind approach.

Enjoy!

Generative AI and Copyright

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A few days ago I wrote an essay about the ongoing economic war between the leaders of the US and those of China, with a focus on the impact US attorneys representing Chinese clients. For the article, I used an AI tool to create some art for my publication. The image above shows the resulting four images. I chose the bottom right and had the AI enhance the image for publication by pushing a single button. I then did a cut and paste before publishing.

Although I didn’t contribute any of the expression seen in the work, after these actions and then publishing it, I actually feel some gut level of ownership. And, that I might be upset if someone else used _my_ image without permission.

My questions for you:

  • Do I deserve to “own” this image?
  • Should I be able to claim authorship?
  • Should I disclose my AI creation methodology when I use the image in published works?

Comment on LinkedIn: https://www.linkedin.com/posts/patentlyo_ai-publishing-art-activity-7059984906633842688-eGgf

 

Bringing Home the Bacon with Joint Inventorship

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Guest Post by Jordan Duenckel.  Jordan is a second-year law student at the University of Missouri, head of our IP student association, and a registered patent agent.  He has an extensive background in chemistry and food science.

HIP, Inc., v. Hormel Foods Corp., 2022-1696, — F.4th — (Fed. Cir. May 2, 2023)

Joint inventorship requires a substantial contribution to the invention. In the decision HIP, Inc. vs. Hormel, Judge Lourie writes for a unanimous panel to reverse a district court’s determination of joint inventorship involving a new process for precooking bacon. US Patent 9,980,498 has four inventors that are employees of and assigned their interest to Hormel.  HIP sued Hormel, alleging that David Howard was either the sole inventor or a joint inventor of the ’498 patent. The district court determined that Howard was a joint inventor based solely on his alleged contribution to the infrared preheating concept in independent claim 5.  

Bacon is an interesting food with unique preservation and cooking properties. Being a cured product, for food safety reasons, no additional cooking of the bacon is needed when bought off the shelf in a refrigerated section. Of course, most people are not consuming the bacon without additional cooking and some companies will precook the product for consumer convenience. When precooking, Hormel is trying to avoid the loss of salt, and therefore flavor, through condensation and prevent the creation charred off flavors (as opposed to the desirable char on a steak).  

 In the process of viability testing the new method, prior to filing the application, the inventors consulted with David Howard of Unitherm, HIP’s predecessor, to discuss methods related to Unitherm’s cooking equipment to create a two-step process of preheating then a higher temperature step. After some difficulties, Hormel leased the equipment and returned to their own R&D lab. The method created, the subject matter of the ‘498 patent, involves a first step that allows the fat of the bacon to seal the surface of the bacon and prevent condensation. The charring was remedied by adjusting the heating method of the oven in the second step of high-temperature cooking. In Hormel’s product development, Hormel tried an infrared oven and a conventional spiral oven.

HIP argued that Howard contributed to the ‘498 patent in the preheating by hot air in claim 5 and/or preheating with an infrared oven in claim 5.  Claim Five reads in the relevant part:  

  1. A method of making precooked meat pieces using a hybrid cooking system, comprising: preheating meat pieces in a first cooking compartment using a preheating method selected from the group consisting of a microwave oven, an infrared oven, and hot air to a temperature of at least 140º F. to create preheated meat pieces…

On appeal, Hormel argues that Howard’s contribution is well-known in the art and insignificant when measured against the full invention. With inventorship being a question of law, and the issuance of a patent creating a presumption of inventorship, an alleged joint inventor must provide clear and convincing evidence to substantiate their claim. In evaluating whether a significant contribution was made by Howards, the parties apply the test from Pannu v. Iolab Corp., 155 F.3d 1344, 1351 (Fed. Cir. 1998). The test requires that the alleged joint inventor: 

(1) contributed in some significant manner to the conception of the invention; (2) made a contribution to the claimed invention that is not insignificant in quality, when that contribution is measured against the dimension of the full invention; and (3) did more than merely explain to the real inventors well-known concepts and/or the current state of the art. 

Analyzing the second Pannu factor, the Court found that the alleged contribution of preheating meat pieces using an infrared oven to be insignificant in quality because it was mentioned only once in the patent specification as an alternative heating method to a microwave oven and was recited only once in one Markush grouping in a single claim. In contrast, preheating with microwave ovens and microwave ovens themselves were prominently featured throughout the specification, claims, and figures. The examples and corresponding figures also employed procedures using preheating with a microwave oven, but not preheating with an infrared oven.  

Infrared heating seems to have been an afterthought in the creation of the two-step precooking method. Whatever discussions Howard might have had about the importance of the infrared, Hormel seems to have focused on microwave heating to solve the condensation problem. From one step further back, it seems absurd to permit joint ownership by a cooking equipment manufacturer when the significant discoveries and refinements of the methods were made in Hormel’s R&D facility without Howard present. The prevention of condensation and avoiding the char flavor were both made independent of Howard’s contributions. Considering the second Pannu factor, the reversal of inventorship seems appropriate.  

The Split on Pleading Scienter for Inequitable Conduct

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by David Hricik, Mercer Law School

Federal Rule of Civil Procedure 9(b) requires that fraud or mistake be pled with particularity.  The Federal Circuit has held that, although inequitable conduct is “broader than fraud” inequitable conduct must be pled with particularity in Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1330 (Fed. Cir. 2009).  (A digression:  I think this is wrong because the Supreme Court has held that Rule 9(b) is limited to “fraud” and “mistake” and it is improper to rely on judicial policies to expand the plain meaning of the rule.  See David Hricik, Wrong about Everything: The Application by the District Courts of Rule 9(b) to Inequitable Conduct, 86 Marquette Law Review  895 (2003) (here).)

One issue that has split the district courts is whether the “single most reasonable inference” standard for scienter applies at the pleading stage. The court in Deere & Co v. Kinze Mfg., Inc (No. 4:20-cv-00389-RGE-HC, C.D. Iowa May 1, 2023) collected the cases:

iLife Techs. Inc. v. AliphCom, No. 14-CV-03345-WHO, 2015 WL 890347, at *4 n.1 (N.D. Cal. Feb. 19, 2015) (“I recognize that there is currently a dispute among courts as to the pleading requirements for an inequitable conduct counterclaim.”) (collecting cases); see also Wyeth Holdings Corp. v. Sandoz, Inc., CIV.A. No. 09-955-LPS-CJB, 2012 WL 600715, at *7 (D. Del. Feb. 3, 2012) (“Several district courts have recently confronted this question and have reached different conclusions.”) (collecting cases); Cutsforth, Inc. v. LEMM Liquidating Co., L.L.C., No. 12-cv-1200 (SRN/JSM), 2013 WL 2455979, at *4 (D. Minn. June 6, 2013) (“District courts are currently conflicted on the effect of the Federal Circuit’s holding in Therasense on the pleading requirements for the specific intent to deceive element.”) (collecting cases). More recent decisions, however, have acknowledged that a majority of courts do not view Therasense as requiring pleadings of inequitable conduct to satisfy the “single most reasonable inference” standard. See Jaguar Land Rover Ltd. v. Bentley Motors Ltd., No. 2:18cv320, 2021 WL 8086357, at *2 (E.D. Va. May 6, 2021) (“[T]he majority position among district courts is that even applying the Rule 9(b) standard requiring heightened specificity when pleading fraud, it is not necessary that intent to deceive be the ‘single most reasonable inference,’ at the pleading stage.” (quoting W.L. Gore & Assocs., Inc. v. Medtronic, Inc., 850 F. Supp. 2d 630, 633 (E.D. Va. 2012))); Front Row Techs., L.L.C. v. NBA Media Ventures, L.L.C., 163 F. Supp. 3d 938, 986 (D.N.M. 2016) (A “line of cases . . . hold[s] that the pleader ‘need only allege facts from which the Court could reasonably infer that the patent applicant made a deliberate decision to deceive the [US]PTO.’ . . . Th[is] . . . line of cases is now the majority position.” (quoting Wyeth Holdings, 2012 WL 600715, at *7)).

The John Deere court ultimately held pleadings showing only a reasonable inference of scienter was required, not the single most reasonable inference, reasoning in part:

Moreover, as multiple courts have noted, the Federal Circuit’s opinion in Delano Farms Co. v. California Table Grape Commission––decided after Therasense––affirmed the Exergen pleading standard on a motion to dismiss an inequitable conduct counterclaim alleging the withholding of material references. Delano Farms Co. v. Cal. Table Grape Comm’n, 655 F.3d 1337, 1350 (Fed. Cir. 2011). The Delano Farms court stated the charge of inequitable conduct would survive “only if the plaintiff’s complaint recites facts from which the court may reasonably infer that a specific individual both knew of invalidating information that was withheld from the [US]PTO and withheld that information with a specific intent to deceive the [US]PTO.” Id. (emphasis added); see also Wyeth Holdings, 2012 WL 600715, *8 (citing Delano Farms, 655 F.3d 1337); Human Genome Scis., Inc., 2011 WL 7461786, at *3 (“Delano Farms, a post-Therasense case . . . also seems to indicate that the less rigorous standard applies.” (citing same)); accord Cutsforth, 2013 WL 2455979, at *4; Mentor Graphics Corp. v. EVE-USA, Inc., 13 F. Supp. 3d 1116, 1125–26 (D. Or. 2014); Illumina Inc. v. BGI Genomics Co., Ltd., No. 20-cv-01465-WHO, 2021 WL 428632, at *4 (N.D. Cal. Feb. 8, 2021); Jaguar Land Rover Ltd., 2021 WL 8086357, at *2; Front Row Techs., 163 F. Supp. 3d at 986; TiVo Inc. v. Verizon Commc’ns, Inc., No. 2:09-cv-257, 2011 WL 13134426, at *3 (E.D. Tex. Sept. 7, 2011); Graphic Packaging Int’l, Inc. v. C.W. Zumbiel Co., No. 3:10–cv–891–J–37JBT, 2011 WL 4862498, at *3 (M.D. Fla. Sept. 12, 2011).

It seems to me that it’s much too high a bar to require the single most reasonable inference at the pleading stage in part because the facts to establish scienter largely will be in the patentee’s possession and if pleading is denied, there won’t be any discovery since it is, largely, limited to information relevant to a pled claim or defense.

The Supreme Court and Patent Protection for Medical Diagnostics: A Closer Look at CareDx and Stanford U v. Eurofins

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by Dennis Crouch

The recently filed petition for certiorari in CareDx and Stanford University v. Eurofins Viracor, Inc. (Supreme Court 2023) offers an opportunity to examine the patent eligibility doctrine in the context of an important health diagnostics innovation. The inventions at issue relate to early detection of organ transplant failure, which obviously hold significant potential to save lives and reduce reliance on invasive exploratory surgical procedures. The detection method involves identifying DNA fragments from the transplant within the bloodstream, a challenge that had stumped scientists for over a decade.  Although various scientists had proposed mechanisms for using this information, the evidence shows more than a decade of failed ideas, and at least one article reported that the process is “difficult and impractical.”  The breakthrough came when Stanford researchers successfully applied high-throughput multiplex sequencing (“shotgun sequencing”) to detect single nucleotide polymorphisms (SNPs) unique to donor organs.  Of potential importance, the Stanford researchers did not create these new sequencing techniques, but they were the first to take advantage of them in this particular context and, as the claim language below shows, the scientists focuses on creating thresholds as part of a method that particularly work in this situation.

Three patents are central to this case: U.S. Patent Nos. 8,703,652, 9,845,497, and 10,329,607. Claim 1 of the ‘607 patent exemplifies the claimed method, which includes the following steps:

  1. Providing a plasma sample from the recipient;
  2. extracting cell-free DNA from the sample;
  3. performing “selective amplification” of target DNA sequences, wherein that amplification “amplifies a plurality of genomic regions comprising at least 1,000 [SNPs]” using PCR;
  4. performing “high throughput sequencing” comprising a “sequencing-by-synthesis reaction” with an error rate of less than 1.5%;
  5. providing sequences comprising “at least 1,000 [SNPs]”; and
  6. quantifying the proportion of donor-derived DNA, using distinguishing biomarkers drawn from those at least 1,000 SNPs, and wherein the donor’s cell-free DNA comprises at least 0.03% of the total in the sample.

The Infringement Lawsuit: The Delaware District Court initially denied defendants’ motions to dismiss and for summary judgment of ineligibility. However, Chief Judge Connolly later reconsidered the summary judgment motion and ultimately ruled that the claims were ineligible under the two-step analysis set forth in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012). The Federal Circuit affirmed this decision.

The petition to the Supreme Court raises the following simple question: Is a new and useful method for measuring a natural phenomenon, which improves upon prior methods for measuring the same phenomenon, eligible for patent protection under Section 101? The petition emphasizes the importance of this case compared to Tropp and Interactive Wearables, and it underscores the need for the Supreme Court to review its application of eligibility exceptions to medical diagnostics.

This case has potentially significant implications for US patent law doctrine as well as potential impact on investment in medical diagnostics. We’ll be following the case closely and talking more about its potential effects.

Supreme Court Holds Over Two Patent Cases, Considers Two More on Patent Eligibility

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by Dennis Crouch

On May 1, the U.S. Supreme Court revealed its decisions from the April 28 conference. Among the three patent cases considered, the court denied certiorari for the pro se case of Wakefield v. Blackboard, while holding over the other two for reconsideration at a later conference. This development increases the likelihood of these two cases being heard by the court, although a grant of certiorari has not yet been announced.

The held-over cases include: (more…)

Professional Liability risks of filing in DOCX

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Carl Oppedahl has been focused on the USPTO’s electronic filing and docketing system for several decades. Most recently, he has been calling out the USPTO for “pants-on-fire lies” about the workability of the DOCX standard.  The PTO plans to institute a $400 surcharge for those who fail to use DOCX starting at the end of June 2023.

Oppedahl is presenting two webinars on the topic, focusing on professional liability risks associated with the new process and some tips for reducing the risks:

Professional Liability Risks of Filing in DOCX – for users of Microsoft Word.  Wednesday, May 10, 2023, 10 AM to 11:30 AM Mountain Time.  Executive summary from 10 AM to 10:40 AM, details from 10:40 AM to 11:30 AM.  For more information, or to register, click here.

Professional Liability Risks of Filing in DOCX – for users of non-Microsoft word processors.  Friday, May 12, 2023, 10AM to 11:30 AM Mountain Time.   Executive summary from 10 AM to 10:40 AM, details from 10:40 AM to 11:30 AM.   For more information, or to register, click here.

Importance of Due Diligence for Patent Practitioners and the US/China Economic War

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by Dennis Crouch

37 C.F.R. § 11.18(b) imposes crucial responsibilities on patent applicants, attorneys, and agents. Documents submitted to the USPTO implicitly certify that:

  1. Statements made are true or are are believed to be true (based upon information and belief) and do not include any attempt to conceal a material fact; and
  2. That a reasonable inquiry was conducted to confirm that: (i) statements have no improper purposes, (ii) legal contentions are supported by existing law or valid arguments for change, (iii) allegations and factual contentions have or are likely to have evidentiary support, and (iv) denials of factual contentions are based on evidence or a reasonable lack of information or belief.

Recent USPTO disciplinary cases underscore the seriousness of these obligations. Examples include filing a micro entity status request without proper investigation and submitting an information disclosure statement (IDS) by a non-practitioner without practitioner review. Rubber stamping is not permitted.

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Functional Claims: Morse, Halliburton & Amgen

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by Dennis Crouch

In the patent context, functional limitations describe inventions in terms of their function or intended use, rather than their specific structure or components. Such claims have been subject to much debate and litigation throughout the history of the US patent system. Notable Supreme Court cases like O’Reilly v. Morse, 56 U.S. (15 How.) 62 (1854) and Halliburton Oil Well Cementing Co. v. Walker, 329 U.S. 1 (1946) significantly impacted patent practice and the balance between functional and structural claim drafting.

The pending Supreme Court case of Amgen Inc. v. Sanofi, No. 21-757 (2023) is another example, with the potential to further shift the landscape regarding functional claim limitations. The title of my essay on the case following oral arguments, “Bye Bye Functional Claims,” hints at my outlook. Although the patentee focused on other issues in its briefing, the Justices repeatedly questioned the permissibility of broad functional claim limitations.

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Patent Law Primer: A Newsletter Series on Key Patent Law Topics

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I am happy to announce the launch of my newsletter series, “Patent Law Primer: A Short Introduction to Key Issues in Patent Law,” currently distributed through LinkedIn. This series is designed for a broader audience, making it accessible for anyone interested in the subject, not just patent attorneys.

Each essay delves into legal and practical aspects of various patent law topics while weaving in stories of notable court cases and patent disputes, in an attempt to provide readers with more memorable context.

I have already published the first three essays in the series:

  1. When to File a Patent Application
  2. A Primer on Obviousness
  3. Patent Claim Construction

Over the next year or so, I plan to explore an extensive list of about 50 topics. I welcome your thoughts and suggestions on this project, as well as any specific areas of interest you’d like me to cover in future essays.  Your input will help make this newsletter series a useful and engaging resource.

— Dennis

What Does it Mean to be an Inventor? The Inventor Diary Project and Kicking off the Diversity Pilots Initiative Blog Series

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Guest Post by Colleen V. Chien, Founder of the Diversity Pilots Initiative (DPI), Professor of Law and Co-Director the High Tech Law Institute, Santa Clara University School of Law

A down payment on a house, a sense of being seen, the pride of one’s parents and children, validation of one’s creativity, a permanent mark, and confidence – these are just some of the answers received to the question, “what does being an inventor mean to you?” Though the patent system exists to promote innovation, it also serves to promote inventors and innovators. Today, on World IP Day, this post shares the often-overlooked personal journeys of invention that patent professionals play a crucial role in, by encouraging idea submission, collaborating with engineers and innovators, managing outside counsel, and in patent drafting, prosecuting claims,  patent examining, and studying and teaching patenting. This post is the first in a series by the Diversity Pilots Initiative (DPI), which strives to advance inclusive innovation so that all may access its benefits – including the social, confidence, and economic boosts chronicled in these diaries –  through rigorous research.

The question in various forms was asked in a survey of inventors and recognized innovators carried out from April 15-24, 2023 by myself and the IP team at Pure Storage, a company partner of the Diversity Pilots Initiative doing innovative work in invention and innovation led by Elizabeth Morris (SCU Law ‘06), Frances Winkler, and Joseph Kucera.  (response rate of ~25%). For more stories, and to add your own story , visit the “Inventor’s Diary” at www.diversitypilots.org.

What did becoming an inventor mean to you?

“As an engineer you are usually stuck in an endless cycle of building the next billion-dollar product and in the world of every evolving and every updating software, most of our work is never permanent. But when you become an inventor and build something which no one ever thought of, you make a permanent mark of your existence in the tech industry. I still remember how happy I was when I filed my first patent back which was a moment of great joy and pride. And as time went by, I filed multiple patents and I felt more confident and more accomplished.” – Kshithij Iyer, became an inventor at age 27

“Being recognized as an inventor validates one’s creativity, empowering one to do more.” – Sujesha S.,  became an inventor at age 38

“My kids have bragged to their friends at school that I have a patent. My mom knows and I think I’m the first in my family to get one. So that’s pretty cool for her when she talks to her friends about her son. I sent her a copy so she knows it is real. It’s probably up on her wall next to the rabbit I finger-painted in school.” – Scott S., young-at-heart

What has becoming inventors meant to your team?

“Previous to our first invention being approved, my team had never really wanted to submit anything, due to concerns about the possible negative impact that may result if it was not a success.  With this first patent, we have put this concern behind us and are driving forward.  The help and advice of the patent team has massively helped give us confidence in our abilities, as has as the slick process they have developed. The team and myself believe we are seen and perceived as the go-to experts in many areas of technology and much of this could be attributed or linked to this first patent.” – Chris R, Senior Director of Engineering

What has being an inventor meant to your family and community?

“My family directly benefited from the patent awards I received … they helped increase the down payment on my home.  This helped me put down more permanent roots in my community.  We needed increased space at the time due to my third child on her way.  My family know that I have received patents, and they know that my employer is happy with me. I have applied my engineering mind to help solve problems in my condo community and church, and have seen some benefit there.”  – Randy S., became an inventor at age 28.

What has becoming a recognized innovator* meant to you?

“I would say that becoming a recognized innovator meant creativity for me. Often legal isn’t seen as a creative department but Pure Inclusive Innovation program that the IP Team at Pure has built proves that wrong. After my experience, I am more confident in my ideas and sharing them. Becoming a recognized innovator taught me that you don’t have to hold a specific title or have a certain tenure to make a difference. Everyone has something to offer, and change can come from the most unexpected places.” – Amber Winburn, Legal Operations Analyst,  first received company recognition for becoming an innovator at age 29.

“The IP team came to the office to do a presentation on the Innovator program. A couple weeks later, I was in a situation where I heard a customer’s struggle with the upgrade process due to his colorblindness. It seemed like there would be a simple fix for this accessibility issue and, while I thought it over, I thought I didn’t know where to go with it. And then when I came to the office, I remembered the team’s presentation and immediately reached out. The rest is history!”   – Jennifer A., first received company recognition for becoming an innovator at age 55.

For more stories, and to add your own story , visit the “Inventor’s Diary” at www.diversitypilots.org/diary.

= = =

About the Diversity Pilots Initiative and DPI Blog Series

 Researchers with the Diversity Pilots initiative work with firms, organizations and others to conduct and produce empirical research, including surveys and rigorous (randomized or quasi-experimental) pilots, to produce insights to advance diversity and inclusion in innovation and invention. If you are interested in our work, we’d love to work with you too! We have expertise in econometric, observational, survey and other empirical methods, and are experts in topics ranging from mentoring to inequality in innovation to government policy. We intend for our blog to disseminate research findings on “what works” to advance diversity and inclusion in innovation and inventing. Watch this space for more blog posts from the Initiative, many of which will draw from last fall’s inaugural Innovator Diversity Pilots Conference, subscribe to our updates, and get in touch to share your own innovator or innovation journey with us at www.diversitypilots.org.

Professor Chien thanks Sydney Yang, SCU Law ’22, for her help with the blog post.

Are you an inventor? Share your story

 

Hrdy & Seaman: Are NDAs unenforceable when they protect more than trade secrets?

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Guest post by Camilla A. Hrdy, Professor of Intellectual Property Law at University of Akron School of Law

Are NDAs unenforceable when they protect more than trade secrets? The standard answer is no. NDAs can prevent disclosure of contractually-defined “confidential” information that is shared in the course of a confidential relationship, even if it is not technically a trade secret. NDAs can, in other words, go beyond trade secrecy.

NDAs have also not traditionally been treated as contracts in restraint of trade, like noncompetes are. An NDA’s purpose is, ostensibly, just to protect secrets. Similar to trade secret law, NDAs only prevent an employee from disclosing (and using outside authorization) specifically-defined information. They don’t prohibit competition per se. NDAs are thus seen as comparatively “narrow restraints” which, all else being equal, should be preferred to noncompetes.

Or at least that is the common wisdom.  Although there is some support for this viewpoint in treatises and judicial dicta, our new article, Beyond Trade Secrecy: Confidentiality Agreements That Act Like Noncompetes, shows that a growing contingent of courts across jurisdictions are finding NDAs in employment agreements to be unenforceable when they reach too far beyond trade secrecy.  Even Google’s NDA was recently found unenforceable by a California court, because it did not make sure employees could use or share skills they learned at Google with prospective employers. (That said, the Google opinion is quite extreme, even compared to others we reviewed. See pp. 8-11 of the opinion,  Doe v. Google, Inc., Case No. CGC-16-556034 (Cal. Super. Ct., Cty. of San Francisco, Jan. 13, 2022)).

The article is available on SSRN and is forthcoming in Yale Law Journal. It is co-authored by me and Chris Seaman.  This blog post is cross- posted on Patently-O

The Federal Trade Commission recently jumped into the deep end of this swimming pool by proposing a rule that would ban noncompete agreements in employment contracts nationwide. More surprising still, the proposed rule bans what the Commission is calling “de facto” noncompetes,” such as a “non-disclosure agreement between an employer and a worker that is written so broadly that it effectively precludes the worker from working in the same field after the conclusion of the worker’s employment with the employer.”

Our article shows that there is a long history in the courts of finding NDAs are unenforceable — and not just in California. The jurisdictional differences abound. It would probably be unwise to write a nondisclosure agreement today without consulting up-to-date statutes, cases, and regulations from the relevant jurisdiction. That said, from reading the case law, a few main problems stand out.

Confidentiality agreements are far more likely to be unenforceable when they:

(1) protect information that does not constitute trade secrets, in particular by protecting public or generally known information, or information that falls within (what a court is likely to perceive as) an employee’s general knowledge skill and experience;

(2) try to cover information that the employee already knew when they started the job or lawfully gained from a third-party source; or

(3) are so excessively broad that they have the effect of a noncompete, even if they are styled as a “nondisclosure” or “confidentiality” provision. For example, this hypothetical language in a NDA would almost certainly be unenforceable: “Anything you learn at the company that is used or usable in the business is confidential and can’t ever be shared or used by you again without our permission, and there are no meaningful exceptions.”

There is also an important empirical component to our article. These agreements are themselves often kept, or even required to be kept, secret. NDA skeptics like Orly Lobel and Sharon Sandeen have noted that a threshold challenge in assessing NDAs is simply finding them.  Thanks to Chris Seaman and his “army of RA’s” we have a dataset of 450 confidentiality agreements that were disclosed in trade secret litigation. These 450 contracts give a unique snapshot of what NDAs look like in practice. Some people may find the data points alarming. For example, most of the confidentiality provisions in our dataset cover far more than trade secrets, and around 40% of the agreements in our dataset had no carve-outs at all, even for public information. For people in practice, perhaps you will not be surprised at the breadth of the agreements, which is itself interesting. Either way, I hope you will check out our findings on SSRN.

AI Inventor and the Ethics Trap for US Patent Attorneys

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by Dennis Crouch

The Supreme Court denied certiorari in Thaler v. Vidal, a case involving inventor Dr. Stephen Thaler’s attempt to patent an invention created by his artificial intelligence (AI) system, DABUS. Thaler argued that DABUS, not himself or any other human, conceived the invention and identified its significance. However, both the United States Patent and Trademark Office (USPTO) and the Court of Appeals for the Federal Circuit  (CAFC) maintained that US patent laws require a human inventor, and as a result, they refused to consider Thaler’s patent application.

In his petition to the Supreme Court, Thaler asked if the Patent Act restricts the statutory term “inventor” solely to human beings. The current legal stance in the US remains that the answer to this question is “yes,” human inventors and only human inventors.

Moving forward, I am quite concerned for the role of patent attorneys and the upcoming ethical dilemmas — that patent attorneys will be prompted to bury the truth about AI contributions within their patent applications.  In particular, a growing number of inventive entities are developing new products and designs with significant AI input. And, many of the resulting claims will be directed to aspects that were generated by the AI and then first recognized as patentable by either the AI or the patent attorney.  In that situation, the patent attorney will be asked to list the human closest to the invention as the inventor — but, depending upon the circumstances, that listing might turn out to be fraud.

This situation calls for a guidance from the USPTO or the legislature on the definition of “inventor” in the context of AI-generated inventions. The current legal framework does not adequately address this evolving landscape of innovation driven by AI.

I particularly like to think about this situation in the joint inventorship context because the contribution and recognition requirements are much easier to meet than for a solo inventor.  In my experience, generative AI are regularly providing conceptual input that would easily require listing as a joint-inventor, except for the exclusion of non-human inventors.

What do you think here?

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USPTO is holding an AI listening session on April 25 at the USPTO (and webcast). See you there: https://www.uspto.gov/about-us/events/ai-inventorship-listening-session-east-coast

Amgen Scores Partial Victory in Efforts to Maintain OTEZLA Exclusivity

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By Chris Holman

Amgen Inc. v. Sandoz Inc., 2023 WL 2994166, — 4th —   (Fed. Cir. Apr. 19, 2023)

In 2019, Amgen acquired worldwide rights to apremilast (OTEZLA) from Celgene $13.4 billion in cash, in connection with Celgene’s merger with Bristol-Myers Squibb. Apremilast was the only oral, non-biologic treatment for psoriasis and psoriatic arthritis, and in 2020 apremilast generated $2.2 billion for Amgen.

At the time Amgen’s acquired apremilast, Celgene was involved in Hatch-Waxman litigation with numerous generic challengers, including Sandoz. Celgene had asserted three of its 11 Orange Book-listed patents against Sandoz, and in 2020 Amgen was substituted as plaintiff.

The primary patent asserted is U. S. Patent 7,427,638, which is directed to pharmaceutical compositions comprising stereochemically pure apremilast. The original expiration date of this patent was in 2024, but the patent received a patent term extension of more than three years, resulting in an effective patent expiration date of February 16, 2028, according to the Orange Book.

Celgene also asserted U. S. Patent 7,893,101, which is directed to enantiomerically pure solid forms (e.g., crystalline polymorphic forms) of apremilast. This patent is due to expire December 9, 2023.

The third patent asserted by Celgene was U. S. Patent 10,092,541, directed to methods for treating a patient using dose titration of apremilast. According to the Orange Book, this patent was set to expire on May 29, 2034.

The district court found the claims of the ‘638 and ‘101 patents to be infringed and not invalid, and enjoined generic apremilast until the expiration of the ‘638 patent in February 2028. On appeal the Federal Circuit affirmed, an outcome that Amgen characterizes as a win.

On the other hand, the district court found the asserted claims of the ‘541 patent to be invalid for obviousness, which reportedly “pleased” Sandoz because the ruling “enables Sandoz to launch [its] generic apremilast product in the U. S. in 2028, six years prior to the expiry date of the latest-expiring Amgen patent asserted in litigation.”  On appeal, the Federal Circuit affirmed with respect to the obviousness of the ‘541 patent.

Here is a brief overview of the court’s decision regarding the asserted obviousness of these patents.

The ‘638 patent claims apremilast, which is the stereochemically pure (+) enantiomer of a compound falls that within a class of molecules referred to as phosphodiesterase-4 (“PDE4”) inhibitors.  Sandoz’s obviousness argument was based primarily upon a prior art Celgene patent, U. S. Patent 6,020,058, which includes an Example 12 that describes a racemic mixture containing apremilast, but that does not disclose the purified (+) enantiomer. The Federal Circuit found that the district court had not erred in holding that Sandoz had not proven that a skilled artisan would have had sufficient motivation to purify the (+) enantiomer from the racemic mixture disclosed in Example 12, nor that a skilled artisan would have had a reasonable expectation of success in resolving that mixture into its enantiomeric components, given the unpredictable nature of resolving racemic mixtures.

The Federal Circuit further found that the district court had not erred in its finding of strong objective indicia of nonobviousness, particularly given the unexpected potency of apremilast relative to the apremilast-containing racemic mixture disclosed in Example 12. The court credited testimony from a Celgene researcher listed as an inventor on the ‘638 patent, who noted a 20-fold difference in potency between apremilast alone and the racemic mixture, and stated that the inventors “didn’t expect a 20-fold difference in potency… Normally, if a racemate is a 50/50 mixture of two enantiomers, you might expect a two-fold difference in potency, all things being equal.” The district court also did not err in determining that apremilast satisfied a long felt need for an improved psoriasis treatment suitable for oral administration, that others in the field had tried and failed to develop other PDE4 inhibitors as drugs, and that there had been a degree of skepticism about the safety of apremilast because of its structural similarity to thalidomide, a drug notorious for its teratogenic effects in fetuses leading to severe and debilitating birth defects.

The issue with respect to the ‘101 patent was whether it could rely upon the filing date of a provisional application to which it claims priority. The ‘101 patent claims crystalline Form B of apremilast, and the provisional application includes an Example 2 which discloses a synthetic procedure for preparing apremilast. Although Example 2 does not explicitly disclose that the resulting apremilast has the Form B crystalline structure, Amgen provided the court with the results of over a dozen experiments following the procedure of Example 2, all of which resulted in crystalline Form B of apremilast, while Sandoz had provided no evidence to establish that Example 2 was capable of producing a crystalline Form other than Form B. Although the district court had based its holding on its conclusion that the provisional application inherently disclose crystalline Form B of apremilast, the Federal Circuit found that it did not need to reach the issue of inherent disclosure because the evidence established that Example 2 actually disclosed crystalline Form B of apremilast, albeit without specifically disclosing the crystal structure of the resulting product.

The ‘541 patent claimed a method of treating a patient with apremilast that basically involves starting with a relatively low dose and, over a course of days, gradually increasing the dosage to arrive at a full dosage which is significantly higher than the initial dosage, i.e., a dose-titration schedule. The court found this to be an obvious method, in view of prior art disclosing a similar dosage schedule. The Federal Circuit observed that, as a general matter, varying doses in response to the occurrence of side effects is well-known and obvious to the skilled artisan.

Patently-O Bits and Bytes by Juvan Bonni

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Overlapping Ranges in Claims and Prior Art Result in Invalidation of Patent on Transdermal Patch for Parkinson’s Disease

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By Chris Holman

UCB, Inc. v. Actavis Lab’ys UT, Inc., 2023 WL 2904757, — 4th —   (Fed. Cir. Apr. 12, 2023)

Rotigotine is a drug used to treat Parkinson’s disease. People with Parkinson’s disease experience significant gastrointestinal dysfunction, such as difficulty swallowing, which can frustrate the oral administration of drugs. However, the complications associated with oral treatment can be avoided by means of a transdermal patch that delivers the drug through the patient’s skin.  In order to cross the skin barrier, however, the drug must be in an “amorphous,” i.e., non-crystalline, form.  If the drug crystallizes in the patch, it will generally not be able to cross the skin barrier.

In 2007, UCB invented and marketed “original Neupro,” a transdermal patch for the treatment of Parkinson’s disease containing a dispersion of amorphous rotigotine and polyvinylpyrrolidone (PVP), with the PVP functioning as a stabilizer. Unfortunately, soon after original Neupro entered the market it was found that the rotigotine was crystallizing when stored at room temperature, rendering the drug ineffective.  This caused UCB to recall the product from the U.S. market in April 2008 (although it remained in limited use under a compassionate-use program). In Europe, regulators allowed original Neupro to stay on the market, under the condition that it would only be marketed under “cold-chain conditions,” i.e., it would be stored in a refrigerator.

The patent at issue in this case, U.S. Patent No. 10,130,589, is directed towards UCB’s solution to this problem, which was to essentially double the amount of PVP in the patch, from original Neupro’s weight ratio of rotigotine to PVP of 9:2 to the new, reformulated Neupro’s weight ratio of 9:4. In particular the ‘589 patent claims a method for stabilizing rotigotine by combining a non-crystalline form of rotigotine with PVP to form a solid dispersion, wherein the weight ratio of rotigotine to PVP is in a range from about 9:4 to 9:6. UCB re-entered the U. S. market with its reformulated Neupro in 2012.

In 2019, UCB sued Actavis for infringing the ‘589 patent in a Hatch-Waxman lawsuit.  The district court found the asserted claims to be invalid based on anticipation and obviousness, particularly in view of earlier-issued UCB patents, i.e., the “Muller patents,” which disclosed combinations of rotigotine and PVP present at a range of weight ratios from 9:1.5 to 9.5. Note that the Muller patents cover both original Neupro (9:2) and reformulated Neupro (9:4), while the ‘589 patent (claiming a range of 9:4 to 9:6) only covers reformulated Neupro. Significantly, UCB had successfully asserted a Muller patent in a previous ANDA suit that resulted in an injunction preventing approval of Actavis’s ANDA until the relevant Muller patent’s expiration in March 2021. The ‘589 patent would not have expired until December 2030, and thus could have delayed FDA approval of a generic version of Neupro by nine additional years.

On appeal, the Federal Circuit reversed the district court’s anticipation ruling, but affirmed on the basis of obviousness. The opinion, authored by Judge Stoll, begins by explaining that Federal Circuit precedent sets forth an established framework for analyzing whether a prior art reference anticipates a claimed range. If the prior art discloses a point within the claimed range, the prior art anticipates the claim. On the other hand, if the prior art discloses an overlapping range, the prior art anticipates the claimed range “only if it describes the claimed range with sufficient specificity such that a reasonable factfinder could conclude there is no reasonable difference in how the inventions operate over the ranges.”

In the case at hand, the prior art Muller patents disclose a range (9:1.5 to 9.5) that overlaps with the range claimed in the ‘589 patent (9:4 to 9:6). The Federal Circuit found that the district court had erred by failing to analyze this as an overlapping range case, but to instead treat this as a case in which the prior art discloses a point within the claimed range.  The Muller patents did not literally disclose any point within the range claimed in the ‘589 patent, but the district court had nonetheless concluded, based on expert testimony, that the range disclosed in the Muller patents would implicitly teach a person of skill “a few examples” of specific weight ratios, including 9:4 and 9:5 weight ratios of rotigotine to PVP. Nonetheless, the district court’s error with regard to its anticipation analysis was rendered moot when the Federal Circuit proceeded to affirm its obviousness finding.

Judge Stoll cited Federal Circuit precedent for the proposition that there is a presumption of obviousness when a claimed range overlaps with a range disclosed in the prior art. Although this presumption can be overcome if, e.g., the prior art teaches away from the claimed range, or the claimed range produces new and unexpected results, or other evidence demonstrates the nonobviousness of the claimed range, in this case the Federal Circuit agreed with the district court that UCB had failed to present evidence to rebut the presumption of obviousness.

For example, the district court had not erred in its decision to disregard the commercial success of reformulated Neupro, based on a lack of a nexus between the drug’s commercial success and the claimed invention. In particular, the Federal Circuit agreed that the existence of the Muller patents weakened UCB’s evidence of commercial success, because these patents operated as blocking patents, dissuading competitors from developing a rotigotine transdermal patch, at least until the Muller patents expired. While rejecting UCB’s suggestion that the court’s analysis had branded all co-owned patents as “blocking” patents, the court noted that in this case UCB had held exclusive worldwide rights to rotigotine for all therapeutic indications since 1998, and that until the Muller patents expired Actavis had been enjoined from marketing a generic version of reformulated Neupro.

Federal Circuit Confirms its Scrutiny of Judge Newman

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The recent controversy at the Court of Appeals for the Federal Circuit involving Chief Judge Kimberly Moore and Judge Pauline Newman has raised concerns and garnered attention. The Court has now confirmed the rumors about Judge Moore’s actions to remove Judge Newman from an active role on the bench. According to a statement of court and two published orders, it seems that Chief Judge Moore also has the support of her fellow judges in this matter.

The primary concern revolves around Judge Newman’s alleged failng to maintain a full workload due to health issues, taking an excessive amount of time to issue opinions, and showing signs of declining mental acuity. Despite these concerns, Judge Newman has refused to participate in the process or receive any documents related to it. Additionally, she has declined to submit to a medical examination or to take senior status or retire.  Her refusal to participate in the process serves as an additional cause in the complaint.

Judge Newman’s obstinance appears to be rooted in her belief that she is “the only person [on the Court] who care[s] about the patent system and innovation policy.”  Throughout her 39 years on the Court, Judge Newman has been a stalwart supporter of strong patent rights.

Judge Newman joined the court in 1984 and is now 95 years old. She has been the oldest member of the court since the death of Judge Giles Rich in 1999 at the age of 95.  Judges Dyk and Lourie are both in their 80s.  

The EU’s Response to National Judicial Determinations of FRAND Royalty Rates

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Guest Post by Professor Jorge L. Contreras

On March 28, 2023, Reuters reported that a proposed European Parliament and Council Regulation would empower the European Union Intellectual Property Office (EUIPO) to determine “fair, reasonable and non-discriminatory” (FRAND) royalty rates for European patents that are essential to industry standards (standards-essential patents or “SEPs”), and also to assess the essentiality of SEPs to the relevant standards.  In this post, I compare the leaked EU Proposal to last year’s Standards Essential Royalty Act (SERA) to which the EU Proposal bears a notable resemblance, with some important differences. Overall, I believe that the EU Proposal makes a positive contribution toward the efficient and fair resolution of FRAND disputes, though its most valuable role may be to nudge stakeholders toward the preferred solution of global rate-setting arbitration.

The Leaked Draft

Even before the official release of the EU Proposal, a significant amount of material has become publicly available. A leaked text of the draft was posted on Kluwer Patent Blog, a summary and detailed synopsis has been posted on FOSS Patents, and a 248-page Impact Assessment by the European Commission (EC) has been widely circulated among stakeholders. As reported by Reuters, the draft EU Proposal was scheduled to be announced by EC Vice President Margrethe Vestager on April 26, but the leaked draft has already sparked significant commentary and debate (see summaries, with links, posted by Tom Cotter and Florian Mueller). Needless to say, a pre-release draft of proposed legislation does not carry the force of law, and as noted by Intellectual Asset Management and others, a lengthy legislative process lies ahead during which the EU Proposal could substantially change or be scuttled entirely. Nevertheless, it is worth discussing some of its potential impacts today.

The Problem: National Judicial Determination of Global FRAND Royalty Rates

The ambitious EU Proposal addresses numerous lingering issues that are inherent in the underspecified world of FRAND licensing, including whether or not patents declared as “essential” to particular industry standards are actually essential (Title V) (issue discussed here and here) and how FRAND licensing commitments can bind subsequent owners of essential patents (Art. 3) (issue discussed and here and here). On a positive note, the EU Proposal clarifies that “royalty-free licensing policies do not raise concerns” (recital 10) – a welcome acknowledgement in view of recent complaints about royalty-free SEP licensing requirements (see, e.g., here). These important issues, however, are beyond the scope of this post.

The biggest issue that the EU Proposal seeks to tackle is the recent tendency of courts in China and the UK (and potentially other countries) to establish FRAND rates for a SEP holder’s entire global portfolio (the Global Approach), rather than only for SEPs issued in that jurisdiction (the National Approach) (discussed in detail here and here). This phenomenon has led to jurisdictional disputes, escalating anti-suit (ASI) and anti-anti-suit injunctions (AASI) (discussed here, here and here), and an international “race to the bottom” as jurisdictions vie to become preferred destinations for resolving global FRAND disputes. As noted in the cited articles, European courts, following civil law principles, have generally been averse to anti-suit injunctions in global FRAND cases, resulting in royalties for European patents largely being established elsewhere. In addition, the European Union, along with the United States and others, is currently involved in a dispute at the World Trade Organization (WTO) over China’s ASI procedures in these cases (a detailed discussion of China’s ASI landscape can be found here).

Summary of the EU Proposal

Some of the key elements of the EU Proposal concerning FRAND rate determination are the following:

1 – Art. 21 would require SEP owners to register their European SEPs with a new “competence centre” (the “Centre”) established within the EUIPO; SEPs must be registered in order to be enforced in European courts (including the new Unified Patent Court (“UPC”));

2 – Arts. 17-18 would permit participants in standards-development organizations (SDOs) to collectively negotiate the aggregate (“top-down”) royalty burden for a particular standard, which would then be published by the Centre – an approach that would significantly improve the transparency and predictability of FRAND licensing negotiations (see here);

3 – Art. 36 would require SEP holders and implementers of FRAND-encumbered standards to request a FRAND rate determination by the Centre prior to initiating litigation over SEPs in a European court;

4 – Art. 40-41 establishes procedures for selecting the “conciliators” who would make the FRAND determination, including the proposal of five qualified candidates by the Centre, from which the parties would select two (though the means by which that selection would be made is not specified);

5 – Art. 60 provides that the determination of the conciliators will be confidential to the parties (a serious mistake, in my view, given the need for greater transparency in this area, as discussed here and here);

6 – Art. 58(4) provides that no European court or the UPC may rule on a case involving a European SEP unless it is notified of the resolution of this rate setting procedure.  While the Centre’s rate determination is not binding on a court, and there is no stated procedure for introducing the FRAND determination in a judicial proceeding, one would hope that the Centre’s determination will be used as evidence in most European judicial proceedings concerning the affected SEPs.

Comparison to the Proposed U.S. Standards Essential Royalty Act (SERA)

As noted in the introduction, concerns over foreign (particularly Chinese) ASIs and judicial determinations of global FRAND rates have also motivated federal legislators in the U.S. to propose a variety of measures designed to reduce the impact of these foreign proceedings on U.S. patents.  In 2022, two such bills were floated within the Senate Judiciary Committee: the Defending American Courts Act (DACA) (discussed here and here) and the Standard Essential Royalty Act (SERA) (discussed here and here). SERA would establish a U.S. judicial tribunal for the determination of FRAND rates applicable to U.S. FRAND-encumbered patents, notwithstanding the findings of any foreign court.  The recent EU Proposal shares some characteristics with SERA, but also has notable differences.  The Table below summarizes some of the areas of commonality and divergence between the U.S. and EU proposals.

Table 1

Comparison of Recent U.S. and EU FRAND Tribunal Proposals

Proposed U.S. Standard Essential Royalty Act (SERA) (June 2022) Proposed EU SEP Regulation (Mar. 2023)
Tribunal A new federal court EUIPO, an EU administrative agency
Authorization of collective negotiation of aggregate royalty burden No Yes
Binding effect Binding in U.S. Non-binding
Effect on foreign FRAND determinations Overrides foreign FRAND determinations for U.S. patents None
Confidentiality of decision No Yes
Creation of SEP registry No Yes
Essentiality testing Possibly, though not required Yes

 

Assessing the EU Proposal

The EU Proposal will likely improve some aspects of global FRAND litigation. For example, it could diminish the force of “global” FRAND rate determinations by non-EU courts in countries like China and the UK, create a more authoritative SEP database than that maintained by the notoriously hands-off SDOs, and eliminate some of the current concern over collective negotiation of aggregate royalty burdens for particular standards.

This being said, the EU Proposal also has a few significant drawbacks.  First, the EU Proposal creates a rate determination structure that is non-binding, thus opening the door to further debate and “new” evidence that could be introduced by parties seeking to convince European courts to deviate from Centre-determined rates. More importantly, the confidential nature of the Centre’s findings eliminates much of their potential systemic benefit, as other market participants will not be able to use the information developed by the Centre in their own FRAND negotiations, reinforcing the non-transparent system that exists today.  The U.S. SERA proposal overcomes both of these weaknesses by proposing a binding rate determination that will be open and transparent.

Another Step Along the Road to Non-governmental Global FRAND Rate-Setting?

Despite their advantages, both the U.S. and EU proposals suffer from a focus on individual party disputes rather than the overall royalty burden for a particular standard.  The most efficient, fair and transparent approach to global FRAND rate determinations is to involve all concerned parties (SEP holders and stakeholders) in a multilateral, multinational rate-setting procedure that addresses all SEPs covering a particular standard and then makes that determination publicly available, much like the copyright royalty rates determined by rate-setting boards in the U.S., UK and other countries (see proposal here).

While the international community has not yet embraced such a comprehensive, multilateral approach to FRAND royalties, an important first step in rationalizing the FRAND royalty system is eliminating the ability of individual jurisdictions (e.g., China/UK) pre-emptively to set global FRAND rates for patents outside of their jurisdictions (see here).  Processes such as those set forth in the U.S. SERA and the EU Proposal would significantly limit the bite of such unilateral global rate-setting efforts. As I have previously written, “country-by-country rate adjudication need not be the end game for global FRAND rate setting”.  If stakeholders find that legislatively mandated rate proceedings in individual countries are burdensome, they may be more amenable to a truly global, yet fair, solution to the FRAND royalty conundrum.

[Disclosures: The author declares no conflicts of interest regarding the subject of this article.]

Judge Newman

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Gene Quinn is reporting that Chief Judge Moore has moved forward with proceedings to remove Judge Newman from the bench — filing a complaint under the Judicial Conduct and Disability Act.  The stage of the action is not clear from Quinn’s reporting, but the usual process allows for any person to file a complaint that is then reviewed by the Chief Judge of the circuit.  If the Chief Judge sees merit in the complaint then she forms a special committee of judges to make a further determination.

Judge Pauline Newman was appointed to the Federal Circuit by President Ronald Reagan in 1984 – 39 years ago. At the time, she was already 50+ years old with a successful career as a research scientist, patent attorney, and in-house counsel (chief of IP).  She is now 95 years old.   If I have done my counting correctly, Newman has authored over 2,800 majority opinions during her time on the bench; as well as 500 dissents.

Chief Judge Moore Said to Be Petitioning to Oust Judge Newman from Federal Circuit