by Dennis Crouch

It is interesting that we continue to have cases fighting over what counts as a “printed publication” under 35 U.S.C. § 102.

In Weber, Inc. v. Provisur Technologies, Inc., Nos. 2022-1751, 2022-1813 (Fed. Cir. Feb. 8, 2024), the PTAB sided with the patentee, but on appeal the Federal Circuit reversed — finding that Weber’s food slicer operating manuals was a printed publication.  The case shows that documents with quite limited distribution, such as operating manuals sent to ~10 customers, may still meet the public accessibility standard for prior art depending on the circumstances of disclosure and expectations around further dissemination.

Although this case involves pre-AIA 35 U.S.C. § 102(b), the same “printed publication” language is found in post-AIA 35 U.S.C. § 102(a).

The case involved a dispute between competitor food slicer manufacturers Weber and Provisur. Provisur sued Weber for infringing two of its patents relating to high-speed mechanical slicers used to slice and package meats and cheeses. U.S. Patent Nos. 10,639,812 and 10,625,436. Weber filed two inter partes review petitions asserting that the patents were invalid as obvious based on Weber’s own operating manuals for its commercial slicers, in combination with other prior art references. IPR2020-01556, IPR2020-01557.

The Board initially found in its institution decisions that Weber provided enough evidence to support the public availability of the manuals as printed publications. But in its final written decisions, the Board changed course and found that the manuals were not sufficiently publicly accessible due to limited dissemination and confidentiality restrictions.

On appeal, the Federal Circuit against the patentee. Writing for the panel, Judge Reyna explained that “[t]he touchstone of whether a reference constitutes a printed publication is public accessibility” and that “[t]he standard for public accessibility is whether interested members of the relevant public could locate the reference by reasonable diligence.”

The scope and content of the prior art is a question of fact. Thus, the Federal Circuit gave deference to the PTAB’s determination of inadequate public accessibility, but ultimately concluded that the Board’s decision was not supported by substantial evidence:

The record evidence shows that Weber’s operating manuals were accessible to interested members of the relevant public by reasonable diligence. For instance, Weber employees testified that the operating manuals could be obtained either upon purchase of the Weber food slicer or upon request directed to a Weber employee.

Id. The Board had relied heavily on the Federal Circuit’s decision in Cordis Corp. v. Boston Scientific Corp., 561 F.3d 1319 (Fed. Cir. 2009).  In Cordis, the court faced the question of whether two two academic monographs describing an inventor’s work
distributed to several university and hospital colleagues as well as two companies interested in commercializing the technology.  Although there was no express confidentiality agreement, the court found that “academic norms” included an expectation that the disclosures would remain confidential. With regard to the distribution to commercial entities, the court found found that the inventor had requested and expected confidentiality. The court noted the lack of evidence showing these types of entities typically made such documents publicly available or that they had incentives to do so. Dr. Palmaz also testified that confidentiality was requested and honored in practice.  The written agreement with one of the companies expressly disclaimed any confidentiality obligations, but the court still found that the document was kept within the company and that the expectation of confidentiality was reasonable.

On appeal, the Federal Circuit distinguished Cordis from the situation in Weber:

Weber’s operating manuals were created for dissemination to the interested public to provide instructions about how to assemble, use, clean, and maintain Weber’s slicer, as well as guidance for addressing malfunctions that users might encounter.

Id.  Somewhere between 10 and 40 entities received the manuals. But, the Federal Circuit concluded that “No minimum number of occasions of access is dispositive of the public accessibility inquiry in all cases.”  Accessibility does not actually require that it was accessed.

The commercial slicers were quite costly and so the manual was only distributed to this small number of companies. The manual also included a copyright notice that the Board found prevented substantial distribution.  On appeal, the Federal Circuit found these limits inadequate.  The purchasers were the interested public that obviously could “afford the high-cost slicers.” And, “Weber expressly instructed customers who were re-selling their slicers to transfer their operating manuals to purchasing third parties.”

I wonder how the court would have ruled if the manuals distributed to customers included a stronger confidentiality expectation.

by Dennis Crouch

Today’s decision in Cap Export, LLC v. Zinus, Inc., 21-2159 (Fed. Cir. 2022) (non-precedential) offers some insight into the difficulty of proving an anticipation case with something other than a prior patent or printed publication.  Cap Export particularly focuses on a prior sale.  The problem is that the item sold way-back-when typically no longer exists in its original form.  And, although you might have product manuals, those documents themselves are not on-sale prior art.  They may still be admissible to help show what the prior art looked like, but only as a proxy for the real thing.

Zinus’ U.S. Patent No. 8,931,123 covers a bed-in-a-box system.  All the parts for the bed frame fit neatly within the headboard.  A zipper on the backside allows the purchaser to unpack them at home for assembly. Zinus did not invent this general concept, but rather offered an improvement with various limitations regarding how the parts are packaged and then connect together on assembly.  The particular claim limitation at issue requires a connector on a longitudinal bar (running down the center of the bed); that is configured to attach to a connector on the footboard.  This connection is shown in the image from the patent below.

The sales activity in the case is slightly quirky.  Zinus’ agent purchased “Mersin” beds from Woody Furniture.  As it was shipping those beds, the folks at Woody created an “inspection report” that included a number of photographs of the bed, including a photograph of how the longitudinal bar connects with the footboard, and a photo of the instructions being sent.

If the instructions were prior art, they would clearly be anticipating.  But the on sale bar does not relate to sales of instructions, but rather sales of the embodiment itself.  Zinus presented two arguments as to why the instructions differ from the product sent.  First, the instructions indicate that they are for a different “Fusion” bed rather than the “Mersin” bed.  Second, the actual photo of the product from the inspection report appears to potentially show a different connection mechanism.  I have included the photo below, and you cannot really tell how the longitudinal board is connecting with the base.  Zinus expert suggest that it might be a hole/slot in the base (a non-infringing alternative) rather than each party having their own ‘connectors.’

Zinus provided declarations of potential witness testimony in support of the hole/slot theory, and Cap Export responded with accusations that those were “inadmissible sham declarations.”  R.56 permits a district court to end a case on summary judgment prior to trial, but only in situations where the moving party “shows that there is no  genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).  At times, courts will rephrase the standard as stating: summary judgment is appropriate if “no reasonable jury” could decide the case otherwise.  The fact-law divide is relevant to this issue as well — juries decide the facts; why judges ordinarily decide the law.  And on this point, the Federal Circuit has repeatedly held that anticipation is a question of fact. After considering the evidence presented, the district court sided with the accused infringer on summary judgment. On appeal though, the Federal Circuit has vacated that determination–finding ongoing factual disputes.

Looking at the particular dispute, the appellate court found plenty of genuine disputes: “whether the Fusion bed and Mersin bed are the same structurally, whether the Fusion instructions describe the structure of the as-sold Mersin bed, and what exactly the ambiguous photo of the Mersin bed depicts. Accordingly, summary judgment was improperly granted.”

The court went on to particularly find that the district court had erred by making factual inferences in the movant’s favor. In particular, the district court had concluded that the Fusion/Mersin beds were the same and ignored the contrary declarations from Zinus.  “Taking the record as whole, some evidence supports a conclusion that the Fusion assembly instructions apply to the Mersin bed and some detracts from that conclusion.”

The court also found the issues here material since the challenger’s anticipation case relies upon the Fusion instruction manual to provide that the Mersin bed anticipates.

Should a jury agree with non-movant Zinus and find that the Fusion assembly instructions do not apply to the Mersin bed, Cap Export would be left with the photograph of the Mersin bed as the only evidence with which to prove that the on-sale Mersin bed anticipates the ’123 patent claims. But what exactly that photograph shows is also a disputed factual question for the jury to consider.

Slip Op.

= = =

Anyone practicing in this area knows that the Federal Circuit has lots of quirks regarding the fact/law divide.  Any given issue might be a question of fact; a question of law; a mixed question of fact and law; a question of law based upon underlying conclusions of fact; etc.  The particular fact/law framework will then determine judicial role on issues like summary judgment as well as the standard of review on appeal.

As I mentioned above, anticipation is a question of fact.  Telemac Cellular Corp. v. Topp Telecom, Inc., 247 F.3d 1316 (Fed. Cir. 2001).  But, whether a patent is invalid under the on-sale bar is a question of law based on underlying fact findings. Meds. Co. v. Hospira, Inc., 827 F.3d 1363 (Fed. Cir. 2016).  In some ways, these two sentences seem in tension.

= = =

The decision here is authored by Judge Stoll and joined by Judges Dyk and Taranto.  Matthew Wolf led the winning team from Arnold & Porter representing Zinus.  David Beitchman (Beitchman & Zekian) for Cap Export.

by Dennis Crouch

In a new opinion the court asked and answerd an interesting question: What if most on-point prior art was accidentally created due to a typographical error? In LG Electronics, Inc. v. ImmerVision, Inc., — F.4th — (Fed. Cir. 2022), the Court sided with the patentee in holding that a person of skill in the art would have “disregarded or corrected” the  error rather than relying on the error as the foundation of an inventive project.  A key to the analysis was a finding that the error would have been apparent to someone of skill in the art.  See In re Yale, 434 F.2d 666 (CCPA 1970).

ImmerVision’s patent claims an improved method for panoramic images.  The basic idea is to use a non-linear objective lens that captured and then digitally mapped onto a linear pixel grid. The claims require that the lens compress the image at its center and edges and expands intermediate zones.  You can compare the prior art linear objective lens results (Fig. 4A) with those of the proposed panorama lens (Fig 7A).

Because of lens curvature, the center and edges of a super-wide-angle-lens are typically produce lower image quality. The approach here improves the quality of those areas but at the same time creates odd distortions in the image that then need to be corrected using digital image processing.   There are other solutions that would work as well. One example would be higher sensor density in these particular areas.

Lots of smartphones now have multiple lenses, including panorama lenses.  ImmerVision sued LG (and others) for patent infringement and LG responded with two IPR petitions. The PTAB instituted the IPR here, but eventually concluded that LG had failed to prove that the claims should be cancelled. On appeal, the Federal Circuit has affirmed.  Judge Stoll penned the majority opinion joined by Judge Cunningham.  Judge Newman wrote in partial dissent — arguing that the error in the prior art was not an obvious-enough error.

Typo in the Prior Art: The key prior art (Tada) included one table of aspherical data that appeared to show a non-linear lens similar to ImmerVision’s.  The problem — those figures do not match-up with other descriptions of the embodiment in the Tada specification and there is no discussion in Tada of having such a non-linear lens.  Tada is a U.S. patent, and the clincher for the court was that the original Japanese priority document included different numbers that actually matched the other portions of the specification.  Finally, LG did not dispute that “the aspheric coefficients in Tada’s Table 5 were erroneous.”

Of course patent lawyers usually don’t get a balcony scene asking: O Prior Art, Prior Art, wherefore art thou Prior Art?  Rather, we take the printed publication as it is and compare the published words and figures to the patent document.  But for obviousness we do ask an additional WWPD question: What would POSITA do? And here, we have some precedent with the court announcing that a Person of Skill in the Art (POSITA) would disregard an obvious typographical in the prior art and instead fix the typo before trying to modify the reference. In re Yale, 434 F.2d 666 (C.C.P.A. 1970).

In Yale, a patentee was seeking protection for a specific compound of inhalation  the anesthetic—CF3CF2CHClBr.  The USPTO rejected Yale’s claims as obvious based upon a prior art publication that listed that same compound (CF3CF2CHClBr) as an known important analgesic compound.  At the time though the compound was not actually known and it was clear from context that the author of that prior art publication meant CF3CHClBr which was actually well known at the time. In correspondence, the author of the prior art admitted that was “of course, an error.” Still, the PTO rejected the claims as obvious since the compound was actually disclosed in the prior art.  On appeal, the CCPA reversed — holding that such an POSITA would “mentally disregard” such an “obvious error” in the prior art.

Certainly he would not be led by the typographical error to use the erroneous compound as an anesthetic even if as a chemist of ordinary skill in the art he would know how to prepare the compound. He simply would not get so far in the thought process as to determine if he knew how to make CF(3) CF(2) CHClBr, as it would have long since been discarded by him as an obvious typographical error.

Yale. One aside about Yale.  Yale was decided by the Federal Circuit’s predecessor court, the Court of Customs and Patent Appeals (CCPA) and remains good law and binding precedent on the Federal Circuit.  In its first decision back in 1982, the Federal Circuit adopted all prior CCPA holdings as binding precedent. South Corp. v. U.S., 690 F.2d 1368 (Fed. Cir. 1982):

In LG, the Board concluded that the Tada error was an obvious error in line with the holding of Yale. On appeal, the Federal Circuit affirmed — holding that substantial evidence supported the Board’s findings.

This is where Judge Newman dissent comes into play.  She notes that the error was not discovered “until an expert witness conducted a dozen hours of experimentation and calculation.”  Further, Tada’s owners had filed a certificate of correction to fix some aspects of the patent — but did not correct the table.  Judge Newman also notes that the only way that the expert witness firmly concluded that the error existed was by translating the Japanese priority document–something even optics experts are unlikely to do.

I agree with the panel majority that Yale establishes the correct standard to determine if an error would be obvious to a person of ordinary skill in the field. However, I do not agree with the majority’s application of this standard to the facts herein. An “obvious error” should be apparent on its face and should not require the conduct of experiments or a search for possibly conflicting information to determine whether error exists. When a reference contains an erroneous teaching, its value as prior art must be determined.

The error in the Tada reference is plainly not a “typographical or similar error,” for the error is not apparent on its face, and the correct information is not readily evident. It should not be necessary to search for a foreign document in a foreign language to determine whether there is an inconsistency in a United States patent. The foundation of the “typographical or similar” standard is that the error is readily recognized as an error. I am concerned that we are unsettling long-standing law, and thus I respectfully dissent in part.

Slip Op. (Newman, J. in dissent).  The majority disregarded Judge Newman’s arguments: “The distinction between the typographical error in Yale and the copy-and-paste error here is a distinction without a difference.”  Id. (majority opinion).

LG had asked the court to shift its standard — only disregard typographic errors that are “immediately” obvious.  The court rejected this temporal urgency as not required by Yale.

by Dennis Crouch

If you have never tried a third-party pre-issuance submission with the USPTO or UKIPO Observation. Give it a whirl.

[https://efs.uspto.gov/EFSWebUIUnregistered/EFSWebUnregistered]

The UK Intellectual Property Office recently announced its plans to provide the public with a bit more access to the patent examination system—making it easier for third parties to provide pre-grant observations that can be used by examiners and seen by others.[1]  UK law already allows any person to offer observations “on the question whether the invention is a patentable invention” that must be considered during examination.[2]  The UK law requires that any observations be in-writing and also provide reasoning.   In the recent accessibility pilot project, over half of submitted observations were identified as useful by the examiner.  The UK accessibility proposal is simple—the UKIPO will add an “OBSERVATIONS” button to its new Ipsum service that already provides docketing information.

The USPTO has an online submission form in-place that is a bit clunky, but remains somewhat user friendly. The largest problems with the system: (1) it requires someone to find the “Confirmation Number” from either PAIR or the Patent Center in order to provide a submission; (2) it is limited only to the submission of printed publication material under 35 U.S.C. 122(e); and (3) has a fairly tight timeline — i.e., after publication but before to the first OA rejection.  The result here is that the submissions will be easy for patent professionals, but tricky for the laity.

The system might be improved by adding a button directly to the Patent Center search results; easing the timing; and allowing for observations unrelated to printed publications. A simplistic mock-up is offered below: 

I looked for third-party submissions within the dockets of a set of recently issued patents.  I found submissions in about 0.14% of cases (14 out of every 10,000).  The number should be larger. Dennis Crouch, USPTO Third Party Submissions, Patently-O (Feb. 2, 2022).

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by Dennis Crouch

The Supreme Court has not yet granted writ of certiorari in any patent cases this term.  And, absent an unusual shadow-docket patent case, it is now too late for any case to be granted and heard this term. Rather, any new grant this term will very likely be pushed back to the October 2022 Term for hearing and decision.

Still, there are a number of important patent cases pending before the court. Lets talk them through.

Although no petitions have been granted, the Supreme Court has requested amicus briefs from the Federal Government in four particular cases.  The request, known as a CVSG, typically requires four of the nine Justices — the same number needed to grant certiorari.  Because of that heavy threshold, a CVSG is typically seen as an important signal that the court is likely to grant certiorari.  But, the real boost only happens if the government brief supports certiorari.

Here are the four CVSG cases, I describe them in more detail below.

• Eligibility under Section 101: American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, et al., No. 20-891 (CVSG requested May 3, 2021);
• Res Judicata and the Patent-Specific Kessler Doctrine: PersonalWeb Technologies, LLC v. Patreon, Inc., et al., No. 20-1394 (CVSG requested October 4, 2021);
• Undermining Jury Decisions: Olaf Sööt Design, LLC v. Daktronics, Inc., et al., No. 21-438 (CVSG requested October 4, 2021); and
• Appellate Standing for IPR Challenger: Apple Inc. v. Qualcomm Incorporated, No. 21-746 (CVSG requested February 22, 2022).

Standing: The most recent CVSG is in Apple v. Qualcomm, a case focusing on appellate standing following an IPR final written decision favoring the patentee.  The statute indicates that any party to an IPR final-written-decision has a right to appeal. 35 U.S.C. § 319. However, a statutory right is insufficient for Constitutional standing.  Rather, an appellant must show concrete injury caused by the PTAB decision and redressability of that injury.  Qualcomm had previously sued Apple for patent infringement, and Apple responded with a set of inter partes review petitions.  The parties settled the litigation before the IPRs were complete, but agreed that the IPRs could continue.  The settlement also included a license to thousands of Qualcomm patents.  Here’s the problem — in its appeal, Apple was not able to show Apple’s rights or duties under the license would change if the patents were cancelled. And, although the license is set to expire before the patents, the court found that potential future infringement to be too speculative. The petition asks the following question: Whether a licensee has Article III standing to challenge the validity of a patent covered by a license agreement that covers multiple patents.  This question ties the case directly to MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007) where the Supreme Court found standing for a licensee to challenge a patent — and rejecting the Federal Circuit’s reasonable-apprehension-of-suit requirement.  Apple’s petition attracted four amicus briefs, including a bipartisan brief from Senator Patrick Leahy  (D) and Congressman Darrell Issa (R).

Intel v. VLSI Tech, also focuses on IPR standing, albeit in somewhat different posture.  Intel’s IPR petition was denied under the NHK-Fintiv Rule that permits the PTAB to deny institution of otherwise sufficient IPRs based upon the existence of ongoing parallel litigation involving the same patent and parties.  The statute includes a statement that the USPTO’s discretionary denial of institution is “final and nonappealable,” but Intel argues that appeal is still proper here because the denial was “arbitrary and capricious”, “violates the AIA and undermines the role of IPR in Congress’s effort to improve the integrity of the patent system.”

Eligibility: American Axle v. Neapco has been awaiting views of the SG since May of 2021.  The asserted patent covers a new method of manufacturing an automobile drive-shaft with reduced vibration.  The basic idea: insert a “tuned” liner into a hollow shaft.  The liner  is special–it is made of a “reactive absorber” and its mass and stiffness have been “tuned” all for the purpose of attenuating both “shell mode vibrations” and “bending mode vibrations” of the shaft.  The petition asks two questions: (1) What does it mean to be “directed to” an ineligible concept? (Alice Step 1). and (2) Is eligibility a pure questions of law (based upon the claims); or does it also involve a “question of fact for the jury based upon the state of the art at the time of the patent?”  A number of folks filed amicus briefs in the case.  The most interesting was submitted by Profs. Menell and Lefstin.  Still, we are awaiting the views of the Solicitor General in American Axle.

Three other eligibility cases are pending:

• PersonalWeb Technologies LLC,  v. Google LLC;
• Universal Secure Registry LLC v. Apple Inc.; and
• Gabara v. Facebook, Inc.

These cases have all tied their mounts to the lead horse of American Axle and so may rise or more likely fall together.  The court recently denied certiorari in Yu v. Apple.  The invention in Yu was a multi-lens camera deemed abstract by the Federal Circuit.

The Kessler Doctrine: If you want to really dig into this case, please read my article on the topic that I wrote for an Akron Law review IP symposium issue.  Dennis Crouch & Homayoon Rafatijo, Resorbing Patent Law’s Kessler Cat into the General Law of Preclusion, 54 Akron Law Ref. ___ (2022)(forthcoming).

The basics you know about res judicata (claim preclusion) and collateral estoppel (issue preclusion), but in patent law we have a third and apparent co-equal form of judge-made preclusion known as the Kessler Doctrine.  Although the doctrine derives its name from a 1907 Supreme Court decision, the doctrine in the form know it today was created by the Federal Circuit in its 2014 Brain Life decision and then expanded later in SpeedTrack (Fed. Cir. 2015) and again in PersonalWeb Techs. (Fed. Cir. 2020).   In its petition, PersonalWeb argues that Kessler should not be seen as a freestanding doctrine and should not apply in situations involving voluntary dismissal.

I expect that the SG’s office will agree with our argument that the Kessler should be seen as falling fully within the bounds of issue and claim preclusion and that the Federal Circuit improperly expanded its reach.

The fourth and final case with a pending CVSG is Olaf Sööt Design, LLC v.  Daktronics, Inc. The petition offers a classic argument that the Federal Circuit’s sua sponte claim construction on appeal undermined the jury verdict in a way that conflicts with Soot’s Seventh Amendment rights.  Although patent infringement is a question of fact that goes to the jury, in many cases the courts effectively decide the infringement questions as part of the claim construction.  Here, the Federal Circuit did that, but in a further offensive way — sua sponte; after the jury had already decided the case; and in a manner that “essentially recasts” the factual infringement  question as a claim construction issue.

For litigators familiar with the case law, the focus here is the Federal Circuit’s 2008 decision in O2 Micro and its subsequent expansion.  The petition explains: “This line of authority … extends well beyond this Court’s Markman ruling and now fundamentally disrupts the orderly resolution of patent disputes at the trial level.”

A somewhat similar pending petition is Daikin Industries v. Chemours Co. Rather a jury trial, Daikin involved an IPR decision by the PTAB.  The question in the petition is whether the Federal Circuit is permitted to “reverse an administrative agency’s decision on a factual ground not addressed by the agency.”  And, rather than basing its argument on the 7th Amendment, Daikin’s petition is grounded in the Administrative Procedure Act and “the principles of separation of powers embedded within that Act.”

Full Scope Enablement: Amgen v. Sanofi has the potential of being a huge case in terms of how it impacts the future of biotech innovation. The patent here claims a genus of monoclonal antibodies that the Federal Circuit lacked sufficient enabling disclosure.  The petition asks two particular questions: 1. Is enablement a question of fact for the jury or a question of law as the FedCir held; 2. Does the statutory “make and use” requirement require enablement to the “full scope of the claimed embodiments”?

Prior Art for IPRs: An interesting statutory interpretation petition is pending in Baxter v. BD.  Congress was careful to limit the scope of IPR proceedings.  The IPR petition may request claims “only on the basis of prior art consisting of patents or printed publications.”  35 U.S.C. 314(b).  In the case, expert testimony was used to fill a gap in the prior art, and the question is whether the use of expert testimony in this manner violates the statutory provision.

PTAB Practice: The Supreme Court recently denied a number of NHK-Fintiv discretionary dismissal cases.  One more is still pending – Intel Corporation v. VLSI Technology LLC.  The Solicitor’s office filed a strong responsive brief which makes me think that we’ll see a denial here.

A lot of litigation power is being spent on whether or not the plaintiff’s choice of judge (Judge Albright) will stick.  The statute for proper venue in patent narrowly proscribes appropriate venues and the Federal Circuit has further limited venue with its aggressive granting of mandamus actions on convenience grounds.

Ikorongo Texas LLC, v. Samsung Electronics Co., Ltd., the patentee (Ikorongo) attempted to alter the terms of the debate by geographically dividing its patent — with a particular company (Ikorongo Texas) rights to the patent only with respect to the counties encompassed by Judge Albright’s court in the Western District of Texas.  When the defendants attempted to transfer venue to N.D.Cal., the patentee explained that district would not be proper under the venue statute 1400(b).  On mandamus, however, the Federal Circuit cut through the corporate form — finding that this division of rights “recent, ephemeral, and artificial” and thus could not be used to keep the case in Texas.  The petition directly challenges this aspect of the Federal Circuit decision and also asks the Supreme Court to rethink its public-and-private factors used for convenient forum — they are extremely outdated.

Last case still pending: Heat On-The-Fly, LLC. v. Energy Heating, LLC.  In the case, the patentee lost due to inequitable conduct. Basically, the patentee failed to disclose pre-filing sales of the invention.  The court also found the case exceptional and awarded attorney fees to the defendant.  In addition to the fact of inequitable conduct, the court also noted that the patentee pursued aggressive litigation despite knowing that the patent was unenforceable.  The trial court award was affirmed on appeal.  Now, the patentee petitioned for certiorari with an argument that any analysis of attorney fees “must consider litigation misconduct, or lack thereof, in determining whether a case is exceptional under 35 U.S.C. § 285?”  I don’t see this going anywhere.

by Dennis Crouch

The Supreme Court has not yet granted a writ of certiorari in any patent cases this term, and has denied certiorari in several dozen cases.  A handful of important petitions are pending whose outcome could be transformative to the law.

Eligibility: American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, No. 20-891. The Federal Circuit concluded that American Axle’s  vehicle-manufacturing claims are ineligible under the two-part tests of Alice and Mayo.  U.S. Patent No. 7,774,911 (Claim 22). The claims here are directed to a method of manufacturing an automobile drive-shaft with reduced vibration.  The basic idea is to insert a liner into a hollow shaft.  The liner though is special — it is made of a “reactive absorber” and its mass and stiffness have been “tuned” all for the purpose of attenuating both “shell mode vibrations” and “bending mode vibrations” of the shaft.  The petition asks two questions:

1. What does it mean to be “directed to” an ineligible concept? (Alice Step 1).
2. Is eligibility a pure questions of law (based upon the claims); or is it a “question of fact for the jury based upon the state of the art at the time of the patent?”

The Federal Circuit released a first opinion in the case followed by a toned-down second opinion.  Both opinions were opposed by Judge Moore who explained that even the second try was an “unprecedented expansion of § 101.”  The en banc petition failed, but in a 6-6 tie.  The petition includes several features making certiorari more likely: Issue of historic interest to the Supreme Court; Divided lower court; Multiple amici in support of hearing the case; Multiple similar petitions in other cases; and Prior statement from US Gov’t (Trump Admin) that the Post-Alice eligibility setup needs recalibration.  The Court has also shown signs of interest, including an order for responsive briefing from Neapco, and a request for the views of the Solicitor General (CVSG).  We are now awaiting those views, and I expect that the SG’s brief will give us the best clue as to the likely outcome.  The Supreme Court requested briefing almost 8 months ago – on May 3, 2021. The five most recent CVSG briefs took an average of 5.5 months from the request to the brief. So, we’re at the extreme end of the scale for this one.

There are two other eligibility cases pending: Yanbin Yu, et al. v. Apple Inc., No. 21-811; and WhitServe LLC v. Dropbox, Inc., No. 21-812.  Neither of these are likely to garner interest.

PTAB Practice: The Supreme Court has shown extensive interest in various aspects of AIA Trials.  The top pending case in this area is Mylan v. Janssen.  Mylan filed an IPR petition that was denied based upon the six-factor NHK-Fintiv Rule established under Dir. Iancu. NHK-Fintiv permits the PTAB to deny IPR institution in situations where a parallel district court litigation is already well under way.  Mylan appealed the IPR institution denial, but the Federal Circuit dismissed for lack of appellate jurisdiction, citing 35 U.S.C. § 314(d) (“The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.”) In its petition, Mylan asks two questions:

1. Does 35 U.S.C. § 314(d) categorically preclude appeal of all decisions not to institute inter partes review?
2. Is the NHK-Fintiv Rule substantively and procedurally unlawful?

Mylan Laboratories Ltd. v. Janssen Pharmaceutica, N.V., No. 21-202.  The petition has received amicus support as has a parallel petition in Apple Inc. v. Optis Cellular Technology, LLC, No. 21-118.  Apple asks whether the law permits either appeal or mandamus in situations where the PTO exceeds its authority in a way that “is arbitrary or capricious, or was adopted without required notice-and-comment rulemaking.”

More Appellate Standing: A third PTAB related appellate standing case is Apple Inc. v. Qualcomm Incorporated, No. 21-746, this one focusing on standing to appeal a final written decision.  The patent act is clear that any “person” other than the patentee can file an IPR petition and, if granted, participate in the trial as a party.  The statute goes on to indicate that “a party dissatisfied with the final written decision” has a right to appeal that decision to the Federal Circuit. 35 U.S.C. 319.   Despite the statutory right to appeal, the Federal Circuit has still refused to hear appeals in situations where the appellant cannot show concrete injury caused by the PTAB decision and redressability of that injury.  The appellate court’s grounding stems from the Constitutional requirement from Article III of an actual case or controversy.

Here, Apple licensed a large number of Qualcomm patents as part of a portfolio license, but has only challenged a couple of them via IPR.  The PTAB sided with Qualcomm and Apple appealed.  On appeal, the Federal Circuit found that Apple had not provided any immediate concrete injury associated with the patent’s existence and so dismissed the appeal. In particular, (1) the court was not shown how the license would change in any way if those patents fell-out; and (2) although the license was set to expire prior to the patents, the court found that potential infringement liability a few years now was too speculative.  Apple has now petitioned for writ of certiorari with the following question: Whether a licensee has Article III standing to challenge the validity of a patent covered by a license agreement that covers multiple patents.  As you can see, this question attempts to tie the case directly to MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007) where the Supreme Court found standing for a licensee to challenge a patent.

Prior Art for IPRs: An interesting statutory interpretation petition was recently filed in Baxter Corporation Englewood v. Beckton, Dickinson and Company, No. 21-819.  Congress was careful to limit the scope of IPR proceedings.  The IPR petition may request claims “only on the basis of prior art consisting of patents or printed publications.”  35 U.S.C. 314(b).  In the case, expert testimony was used to fill a gap in the prior art, and the question is whether the use of expert testimony in this manner violates the statutory provision.

Full Scope Enablement: LDL (“bad cholesterol”) is removed by LDL receptors in the liver.  That’s a good thing. But, the body also makes PCSK9, a protein that can bind to the LDL receptors and destroy them.  Amgen’s solution is an antibody that competitively binds to PCSK9 in a way that prevents them from binding and harming the LDL receptors.  The result then is lowering of LDL in the body.

A monoclonal antibody is a type of protein made up of amino acids.  Amgen’s claims at issue here do not recite the particular amino acid sequence or how the protein is structured and chemically linked.  Rather, the claims are directed to a whole genus of monoclonal antibodies defined by the ability to bind with PCSK9 in a way that blocks PCSK9 from also binding with the LDL receptor.

The jury sided with the patentee on the issue of enablement, but the district court rejected the verdict on renewed JMOL. On appeal, the Federal Circuit sided with the accused infringer — holding that enablement is a question of law, and that the claims were so broad that full-scope-enablement is virtually impossible. In its petition, Amgen argues that (1) enablement should be seen as a question of fact; and (2) that the law does not require “full scope enablement” to the extent demanded by the Federal Circuit here.

A Novel form of Preclusion, the Kessler Doctrine: Finally, we get to res judicata. Lawyers all learned about claim preclusion and issue preclusion. Those two principles of law are designed to ensure finality of judgment and avoid relitigation.  History shows substantial confusion about both terminology and scope, but things have been substantially clear and steady since the adoption of the Restatement (Second) of Judgments in 1982.  One aspect of the historic confusion stems from the Supreme Court’s 1907 decision of Kessler v. Eldred.  Kessler has been on a back-burner for decades, but in 2014 the Federal Circuit revived the case and found that it deserved to co-equal — a preclusion doctrine separate and distinct from issue or claim preclusion.  That 2014 Brain Life decision was followed by a further expansion of Kessler in Speedtrack (Fed. Cir. 2015)  and again in PersonalWeb Techs. (2020). 

PersonalWeb’s certiorari petition the Supreme Court asks two questions:

1. Whether the Federal Circuit correctly interpreted Kessler to create a freestanding preclusion doctrine that [applies] even when claim and issue preclusion do not.
2. Whether the Federal Circuit properly extended its Kessler doctrine to cases where the prior judgment was a voluntary dismissal.

The Supreme Court has shown interest in the case, and recently called for the Solicitor General to submit a brief on behalf of the U.S. Gov’t.   I have an article on the case coming out in the Akron Law Review that I’ll post in a week or so (after fixing a few citations).

Two More: Although no petitions have been filed yet, the parties in two other cases have  publicly indicated their intent to file petitions by the end of 2021:

• Intel Corporation v. VLSI Technology LLC (Follow-on case to Mylan v. Janssen and Apple v. Optis); and
• Ikorongo Texas LLC v. Samsung Electronics Co., Ltd. (proper venue in a situation where the plaintiff holds territorially limited patent right).

See you in January.

by Dennis Crouch

Inter partes review (IPR) is an incredibly powerful process for cancelling patent rights. We have a set of expert judges who are not afraid of digging into the details of a complex obviousness analysis.  Still, IPR petitions are strictly limited to petitions based upon obviousness and anticipation theories and “only on the basis of prior art consisting of patents or printed publications.”  35 U.S.C. 311(b).

Successful IPR petitions always focus on prior art as the central basis for cancelling the patent claims.  And yet, the petitioner usually also presents additional evidence to contextualize the prior art — most typically this comes in the form of expert testimony.

In its new petition for certiorari, Baxter Corp. argues that the statute does not permit supplemental evidence such as expert testimony.  Question presented:

Whether the Federal Circuit’s practice of allowing IPR petitioners to rely on evidence other than patents and printed publications, such as expert testimony, to fill in gaps in the prior art violates the plain text of § 311(b).

Baxter Corp. v. Becton, Dickinson and Co. (Supreme Court 2021) (petition).

In this case, the PTAB sided with the patentee and upheld the validity of Baxter’s U.S. Patent No. 8,554,579.  The Federal Circuit reversed that judgment on appeal. Although the prior art did not show all of the claimed elements, BD’s expert witness testified that the missing material would have been obvious. The Federal Circuit found the testimony credible and unrebutted and therefore rendered the claim obvious.

The case here comes down to one of statutory interpretation.  On the one hand, Baxter argues that 311(b) bars IPR petitioners from asserting of any evidence beyond the prior patents and publications in their original challenge grounds.  A broader approach would interpret the statute as purely focusing  on available prior art, but then permitting other forms of evidence directed toward other elements of the obviousness or anticipation analysis (such as level of skill in the art; likelihood of success; etc.).

(b) Scope. A petitioner in an inter partes review may request to cancel as unpatentable 1 or more claims of a patent only on a ground that could be raised under section 102 or 103 and only on the basis of prior art consisting of patents or printed publications.

35 U.S.C. 311(b).

Baxter also raises a second question in its petition focusing on the Federal Circuit’s approach here of imposing its own view of the facts:

Whether the Federal Circuit’s practice of resolving contested issues of patentability on appeal from Board decisions—rather than remanding those issues for the agency to decide in the first instance—violates the “ordinary remand rule.”

Petition, Question 2.   Here, the “ordinary remand rule” is an approach to appellate review of agency decisions. The approach is that a rejected agency decision “should
typically return the matter to the agency to address any outstanding questions in the first instance.” Petition;  See, e.g., INS v. Orlando Ventura, 537 U.S. 12, 16-18 (per curiam); Christopher J. Walker, The Ordinary Remand Rule and the Judicial Toolbox for Agency Dialogue, 82 Geo. Wash. L. Rev. 1553 (2014).

by Dennis Crouch

So far, the Supreme Court has not granted certiorari in any patent cases for its 2021-2022 Term.  Still, there are a couple dozen cases pending that may offers some interest.  On September 27, 2021, the court is meeting privately for what is known as the “long conference” to decide the fate of the petitions for writ of certiorari that have piled-up over the summer.  There are also a host of additional petitions scheduled for a later conference or not yet scheduled.  Although the total number of petitions is down from last year, there is much more diversity since we have now largely moved past the appointments-clause issues.

Capacity to Sue: My favorite pending case is Tormasi v. Western Digital.  Tormasi is a convicted murderer and also a patentee seeking to enforce his disk-drive patent. The Federal Circuit held that Tormasi lacked the “capacity to sue” under Fed. R. Civ. Pro. 17(b).  That provision states that an individual’s capacity to sue is determined by “the law of the individual’s domicile.” Tormasi lives in New Jersey (state prison) and the administrative rule in N.J. bars a prisoner from conducting business activities without the Wardon’s approval.  The courts held that his enforcement action is an “unauthorized patent monetization business” and thus that he has no capacity to sue.  Tormasi argues that this conclusion violates his due process and other constitutionally protected rights.  There are other standing-related cases pending in the trademark context: Naked TM, LLC v. Australian Therapeutic Supplies Pty. Ltd. (standing to petition cancel a TM registration); See also Kaszuba v. Hirshfeld (pro se, standing of USPTO to intervene in TM appeal).

Eligibility: The Supreme Court has shown the most interest in hearing American Axle & Manufacturing, Inc. v. Neapco Holdings LLC by Calling for the Views of the Solicitor General (CVSG).  I expect for the SG to file a brief by the end of calendar year 2021.  And, there is a good chance that the SG brief will support the petition. At that point, there would still be time for the Court to grant certiorari and decide the case before the end of June 2022. American Axle asks two questions:

1. What is the appropriate standard for determining whether a patent claim is  directed to” a patent-ineligible concept under step 1 of the Court’s two-step framework for determining whether an invention is eligible for patenting under 35 U.S.C. § 101?

2. Is patent eligibility (at each step of the Court’s two-step framework) a question of law for the court based on the scope of the claims or a question of fact for the jury based on the state of art at the time of the patent?

There are Am.Axle follow-on cases asking the same questions: iLife Technologies, Inc., v. Nintendo of America, Inc.; VoIP-Pal.com, Inc. v. Apple, Inc. (also raising 112/101 coordination issue). See also Mohapatra v. Hirshfeld (pro se)

Preclusion: I am generally interested in the concept of preclusion. This typically comes in the forms of issue and claim preclusion. In patent law, we also have the “Kessler doctrine,” which sits between the two.  PersonalWeb Technologies, LLC v. Patreon, Inc. challenges the ongoing viability of Kessler, especially as expanded by the Federal Circuit in recent cases.  Kessler allows for non-mutual issue preclusion even in cases where the particular issue was not actually litigated or decided.

Process-by-Product Claim: In Biogen MA Inc., Petitioner v. EMD Serono, Inc., the Federal Circuit found the claimed treatment method anticipated by use of a naturally occurring protein. But, the claims required use of a “recombinant” protein — i.e., genetically modified.   Can Biogen distinguish the prior art by simply adding a “man made” limitation? “Whether courts may disregard the express claim term “recombinant” so as to render a method-of-treatment patent anticipated—and thus invalid—in light of prior-art treatments that used the naturally occurring human protein, where it is undisputed that the recombinant protein was not used in the prior art?”

Printed Publication: A core patent law question is what can qualify as a printed publication under 35 U.S.C. § 102(a).  Centripetal Networks, Inc. v. Cisco Systems, Inc., asks whether a user-manual counts for a machine that costs $25,000. (The Federal Circuit said “yes, it counts.”)

Writing Opinions: A few years ago, I wrote a paper arguing that the Patent Act requires the Federal Circuit to actually write opinions when judging appeals from the USPTO. Although dozens of briefs have subsequently argued this point, the Federal Circuit has refused to make any statement regarding its ongoing practice of no-opinion R.36 judgments.  Ultratec, Inc. v. CaptionCall, LLC asks the Supreme Court to weigh in on the question of whether the use of Federal Circuit Rule 36 to summarily affirm decisions from the PTAB “without opinion” violates 35 U.S.C. § 144.  A second case, Bobcar Media, LLC v. Aardvark Event Logistics, Inc., also argues that R.36 decisions are improper, although relies upon Constitutional principles rather than statutory guidance.

IPR Issues: Ultratec, Inc. v. CaptionCall, LLC (retroactive application of IPR to already issued patents). Mylan Laboratories Ltd., v. Janssen Pharmaceutica (appealing institution denials); Apple Inc. v. Optis Cellular Technology, LLC (appealing institution denials); Infineum USA L.P. v. Chevron Oronite Company LLC (post-arthrex timing issue)

Utility: Hu v. Hirshfeld, focuses on a heightened utility requirement that seems to appear when a patentee seeks rights covering an invention that pushes the bounds of traditional scientific principles.  Hu’s inventions, for instance, cover various ways to make use of quantum entanglement.  Hu argues that the court moved the standard from a preponderance of the evidence to something akin to “a statistical certainty.”

Indefiniteness: Rain Computing, Inc. v. Samsung Electronics America, Inc. focuses on the intersection of Sections 112(b)/112(f). The Federal Circuit uses an algorithmic approach: if a claim is interpreted under Section 112 and the specification fails to include corresponding structure, then the claim is invalid as indefinite.  Rain says ‘not so fast.’  The court is forgetting to ask the actual pertinent question: whether the scope is reasonably certain to a person of skill in the art.  The petition also argues that underlying issues of fact tending to show invalidity must be proven with clear and convincing evidence. Infinity Computer Products, Inc. v. Oki Data Americas, Inc. also raises an indefiniteness question — again arguing that the Federal Circuit took a shortcut in its analysis and refused to give deference to factual findings.

In re DMF, Inc. (Fed. Cir. 2021)

The court has denied DMF’s mandamus petition on an interesting post-IPR estoppel question.

DMF sued ELCO Lighting in 2018 for infringing DMF’s U.S. Patent No. 9,964,266.  As is usual these days, ELCO turned-around and filed an inter partes review petition — challenging the patent’s validity based upon a 2011 product catalog (printed publication) that had featured the Hatteras lighting product.  Although the PTAB instituted the IPR, it eventually sided with the patentee in holding that the prior printed publication wasn’t enough render the invention obvious.

Back in the district court, ELCO is seeking again to invalidate the claims based upon the Hattaras lighting product.  The difference now is that they are not simply raising the defense based upon the printed publication but rather are presenting the actual product as prior art based upon it being “in public use, on sale, or otherwise available to the public.”  35 U.S.C. 102.

Section 315(e)(2) estops an IPR petitioner from later asserting in litigation that a “claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.”  IPRs are limited only to arguments based upon patent documents and printed publications — and so the actual prior product could not have been used as the basis for the IPR.  The district court went a bit further and found that there must be “a substantive difference” between the publication and the physical product that is “germane to the invalidity dispute.”

Here, the district court found substantive, germane differences.  In particular, the failing of the prior art reference was that the elements of the invention required cobbling together images from different products in the catalog.  The PTAB found that mix-and-match approach improper.  In the district court litigation, ELCO is seeking to use the single product to show each element.

On Mandamus, the Federal Circuit did not delve into whether the substantive-germane legal standard was correct or whether the facts had been properly decided — but did find them not “clearly and indisputably erroneous.”  Further, the court found that mandamus was not necessary — the patentee should wait until final judgment and appeal. “DMF has not shown that a post-judgment appeal is an inadequate remedy for asserting a statutory estoppel argument.”

by Dennis Crouch

Valve Corp. v. Ironburg Inventions (Fed. Cir. 2021)

Duncan Ironmonger and Simon Burgess founded the UK companies Scuf Gaming and also Ironburg with the goal of reengineering the gaming console.  Corsair purchased the companies in 2019, but by that time the litigation with Valve was well underway.  Ironburg won a $4 million judgment regarding two patents (now on appeal) and the district court stayed the litigation regarding U.S. Patent Nos. 9,289,688 and 9,352,229.  Those two patents are the subject of this appeal.

After being sued for infringement, valve filed inter partes review (IPR) petitions challenging the validity of Ironburg’s US Patent Nos. 9,289,688 and 9,352,229.  The Board split its decision, cancelling some claims obvious and left others in place. On appeal, the Federal Circuit has sided with Valve — upholding the obviousness determination and holding that the remaining claims may also be invalid.

The focus of the appeal is whether the purported “Burns” reference should count as prior art. Valve submitted a printout of Burns and argues that it was a printed copy of an online review of a Scuf controller from 2010.  The same reference had been submitted and cited in both patents, although Valve submitted a more recent print-out.

Authentication: Before relying upon a documented evidence, it must first be authenticated — a showing that the document “is what the proponent claims it is.” Fed. R. Evid. 901(a).  Here, the Board found that the Burns printout submitted by Valve had not been authenticated as the same document cited during the examination.  On appeal, the Federal Circuit quickly rejected that finding — holding instead that the new submission can quickly be authenticated by comparison.

Here, a simple comparison of the Exhibit with the ’525 Burns article confirms their near identity. The text of the twelve paragraphs and the 23 images (depicting the controller and a user guide) are the same in the Exhibit and the ’525 Burns article—i.e., the prior art disclosures of these documents are the same.

Slip Op. The Board had refused to compare the two documents since Valve had not presented any testimony that the two were substantially identical.  On appeal here, the Federal Circuit found that the comparison here needed no testimony because the comparison was not burdensome. (10 pages, 23 images).

Isenburg also argued that the document had not been shown to be a prior printed publication. On appeal, the Federal Circuit found “overwhelming evidence” that the reference was prior art.   In particular, one of the inventors (Burgess) testified that he had facilitated the publication back in 2010 for marketing purposes.  The court also gave weight to an examiner statement during prosecution that the document was “published on October 20, 2010.”

Patent examiners are trained and required to determine publication dates. See, e.g., MPEP § 2128 (9th ed. Rev. 10, June 2020). The patent examiner’s determination of the publication date is a “factual finding[] from a legally authorized investigation.” Fed. R. Evid. 803(8)(A)(iii). It also “is supported by sufficient guarantees of trustworthiness.” See Fed. R. Evid. 807(a)(1).

Slip Op.  The applicant did not, at that time, dispute the examiner’s statements regarding the publication.   The court also looked to the IDS document where the applicant had stated that the document was published in 2010. Finally, the court also suggests that the PTAB should have relied upon the Internet Archive – Wayback Machine to further verify the authenticity.

Vacated and remanded.

Ex parte Zhang, Reexam No. 90/014,234, 2021 WL 633718 (PTAB)

Folks continue to file anonymous ex parte reexaminations.  Michael Piper of Conley Rose filed this one on behalf of an anonymous party challenging Zhang’s U.S. Design Patent No. D810,925 (“breast pump”).   The reexamination examiner agreed with the challenge and issued a final rejection that the claimed design was anticipated by four different prior art references.  Note that design patent anticipation asks whether the design to be patented is “substantially the same” as the prior art in the eyes of an ordinary observer.

Two designs are substantially the same if their resemblance is deceptive to the extent that it would induce an ordinary observer, giving such attention as a purchaser usually gives, to purchase an article having one design supposing it to be the other.

Door-Master Corp. v. Yorktowne Inc., 256 F.3d 1308 (Fed. Cir. 2001) (citing Gorham Co. v. White, 81 U.S. 511 (1871)).

Not Prior Art: On appeal, the PTAB has reversed — finding that cited references are not prior art at all.

First to Disclose: Two of the references were Chinese Design Registrations filed and published a couple of months before Zhang’s filing date.  Prior to that date, but still within one-year, Zhang had already licensed the design and licensed pumps embodying the patented design were on sale in China. The timing of this prior public disclosure was just right to save the day under Section 102(b)(1)(B).

(b)(1) A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if—(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor … or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.

Zhang apparently did not make this argument until the appeal, and, the examiner withdrew his rejection after receiving the declaration with supporting evidence.

The other two references were internet publications purportedly published online two-years before Zhang’s application filing date.  However, the PTAB found insufficient evidence proving their publication dates.

Here, an anonymous third party, through counsel, provided the USPTO with copies of two webpages in a foreign language … each paired with an uncertified English translation. Both documents and translations were submitted by a third party requester in a very unclear, grainy or pixelated manner and the text and details over the figures are very difficult to discern.

The submitted material do include printed dates, but the PTAB found them unclear and insufficient without any corroborating evidence regarding context or accuracy. Further, no evidence was submitted showing that the sites were publicly accessible as of those dates, and the pages are no longer available on the internet.

There is simply no explanation or verification of the source, date or accessibility of the information presented on these documents. While we can put some weight in the duty of a signatory of a registered patent attorney in accordance with 37 C.F.R. § 11.18 that statements of fact are “believed to be true,” we simply cannot find the evidence sufficient to establish the documents as prior art.

Zhang.  Thus, the PTAB reversed the rejection.

by Dennis Crouch

Caterpillar v. ITC & Wirtgen (Fed. Cir. 2020)

Caterpillar filed a complaint with the International Trade Commission (ITC) against Wirtgen — arguing that the German manufacturer was importing infringing devices into the US.  However, the ITC found the claims invalidated by the company’s pre-filing sales.  On appeal here, the Federal Circuit has affirmed.

Caterpillar’s U.S. Patent No. 7,140,693 covers a milling machine with retractable wheels (or tracks).   The invention here was originally created by engineers at the Italian company Bitelli in the late 1990’s.  Caterpillar purchased Bitelli in 2000, the priority patent application was not filed (in Italy) until April 2001, followed by the PCT in 2002.  Bitelli had already been selling embodiments of the invention even before 2000.

Pre-AIA patent law included some geographic limits on prior art.  The on-sale bar in particularly only applied to sales in the United States.

A person shall be entitled to a patent unless — (b) the invention was … sale in this country, more than one year prior to the date of the application for patent in the United States.

35 U.S.C. 102(b) (pre-AIA). Since this is a pre-AIA patent, the pre-AIA laws apply.

During litigation, patent claims are presumed valid unless proven invalid with clear and convincing evidence.  Here, Wirtgen presented records showing the sale of two Bitelli SF 102 C machines were sold to a U.S. Customer. One in June 1999 and the other in July 2000.  The machines were apparently delivered to the Bitelli factory gates in Italy, and the customer may have brought them to America.  The July-2000 machine (or at least a machine bearing that serial number) is actually located in the U.S., but there are no historic records of its location prior to 2018.

In finding the patent claims invalid, the ITC concluded the deliveries in Italy were still “directed to the United States” in a manner sufficient to satisfy the “in this country” prong of the on sale bar “by at least July 2000.”

On appeal, the Federal Circuit has affirmed.

Sale to US Company Not Enough: Wirtgen argued that “Under black-letter law, a sale to a U.S. company is an invalidating sale under § 102(b).” On appeal, the Federal Circuit rejected that contention — “our cases do not hold that the mere fact that the sale was made to a United States company is sufficient” to be “in this country.”

Sale Directed to the US is Enough: A foreign sale can be consider a US sale if it constituted “commercial activity directed to the United States.”  Here, the court found substantial evidence to support that conclusion for the 1999 invoice:

• Buyer located in US;
• Invoice suggests that US Tariffs were due (although the same tariff number is used in EU and other countries around the world);
• Sale in US dollars;
• Description of the machine in US;
• the VAT assessment was at 0% rate — the rate used for export out of Italy and the EU. (20% for items staying in Italy); and
• No other evidence indicating that the purchase was for use anywhere but the US.

Based upon all of this, the Federal Circuit affirmed that sales were in the US for the purposes of the on-sale bar.  Note here that the court’s conception of “directed to” analysis here is similar to the Supreme Court’s test for personal jurisdiction.  A key difference though is that the on sale bar is a statutory provision and the geographic limitation has been eliminated for post-AIA (2011) patents.

= = = =

In this case, the the Italian patent application was filed in April 2001, followed by a PCT in 2002 and then the U.S. national stage in 2003. The ITC decision concluded that July 2000 was “more than a year before the application for the ‘693 was filed.”

These facts, considered collectively, are clear and convincing evidence that the Bitelli SF 102 C was “on sale in this country” by at least July 2000, more than a year before the application for the ‘693 patent was filed, thus qualifying as prior art under section 102(b).

Calendarios will note that July 2000 is less than one year before the Italian priority date of 2001.  The problem is that the pre-AIA US statute granting priority for foreign national filings expressly excluded on-sale and public-use activity from the priority claim:

[A foreign-filed application] shall have the same effect as the same application would have if filed in this country on the date on which the application for patent for the same invention was first filed in such foreign country, if … filed within twelve months …; but no patent shall be granted on any application for patent for an invention which had been patented or described in a printed publication in any country more than one year before the date of the actual filing of the application in this country, or which had been in public use or on sale in this country more than one year prior to such filing.

35 U.S.C. 119(a) (Pre-AIA). Thus, for the on-sale and public use bar, the Italian national filing does not count as priority.  A separate provision on the code allowed the PCT date to still count. Thus, for Caterpillar, the critical date is April 2001 — 1 year before the PCT filing date.

Important additional note, these quirks were eliminated in the AIA.  Public uses and on-sale activity in Italy now count as prior art.  And, the Italian priority filing counts for all purposes.

[Note – I updated this statute after re-reading pre-AIA Section 119.]

= = = =

Odd side-note.  Figure 1 of the patent document includes two versions – one with wheels 1 and one with tracks 1a.  The priority documents only included the drawing with wheels (as shown above).  During prosecution, the examiner objected to claims directed toward tracks rather than wheels (Cat’s preferred emobidment as shown in the photo below), and the patentee added the new drawing 1a in the midst of prosecution with the statement that “no new matter has been added by these amendments.”  The examiner accepted the amendment without further comment. I’m rusty on Italian reading, but I believe that the Italian priority document does mention tracks, but only as follows:

As alternatives to wheels on the machine, track units can be applied and henceforth the word “wheel” may be replaced with the word “track unit.”

[Priority Document].