Under the 2011 America Invents Act, certain Covered Business Method Patents (CBM) can be broadly challenged as part of a Post-Grant Review (PGR). CBM filing was opened on September 16, 2012 – 1 year after AIA enactment. So far, about 600 CBM petitions have been filed.
The CBM program is “transitional” — and is set to sunset (i.e., become inactive) soon. Under the law, the program sunsets “upon the expiration of the 8-year period beginning on the date that the regulations … take effect.” That takes us to September 16, 2020 — CBM Sunset Date. The particular language of the law indicates that Section 18 of the AIA is “repealed” as of the sunset date. However, the provision will still apply to “any petition … filed before the date.”
So, get your petition filed by the 16th of September 2020.
I’ll add a couple of notes.
A powerful aspect of the CBM program is that the patents can be challenged on any ground (including patent eligibility) whereas inter partes review (IPR) proceedings are tightly limited to anticipation and obviousness grounds based upon patents and printed publications. Post-Grant Review will still be available, but there is a very tight window for filing such a petition (within nine months of patent issuance).
I believe that the last day to file is Sept 16, but I have not fully analyzed this — so do some of your own legwork if you want to wait for the deadline.
Poll:
The Transitional program of Post-Grant Review (PGR) for Business Method (CBM) patents was created in 2011 and is set to Sunset in September 2020.
Question – Should Congress Extend the program for at least a few more years?
Prof. Shine Tu (WVU Law) has been doing interesting work studying patent prosecution and how differences between patent examiners impact the process. I asked him to provide a guest post to help readers get started on his work. – DC
by Shine Tu
Although we know that individual patent examiners can greatly affect an inventor’s chance to (1) get a patent at all and (2) get it in a timely way, there has been very little work determining how examiners are able to either delay or compact prosecution while still maintaining their quotas via the count system. Understanding how examiners work the quota system with very different outcomes can be critical for practitioners trying to understand what sort of responses or claim narrowing they should make. It also has significance for those looking to understand and improve the very process intended to spur invention.
In a previous study, I have shown that there are extreme variations on allowance rates between examiners. For example, in analyzing 10 years of patents from Technology Center 3700 I found that there were approximately 200 examiners from 3700 who had issued over 120,000 patents (approximately 51% of the patents from this Technology Center). In contrast, there was a group of approximately 300 examiners who issued less than 800 patents (less than 1% of the patents from this Technology Center). [See https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1939508]. In this current dataset, I find that not only is there a difference in allowance rates, but there is a significant difference in prosecution times. Fast examiners allow applications in approximately 1.64 years, average examiners in 3.07 years, and slow examiners on average will allow a case in 5.85 years. This delay of over four years (fast versus slow examiners) increases direct costs to applicants in the form of PTO and attorney fees, as well as indirect costs such as reduced growth, sales, and follow-on innovation.
In a set of two articles, I explored how examiners can either: (1) slow down the patent prosecution process by using a strategy of constant rejections [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3539731] or (2) speed up the patent prosecution process by using a strategy of fast allowances [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3546944]. To create a sufficiently large sample to be statistically significant, I coded the patent prosecution histories of 300 patents and reviewed 100 patents from slow, average, and fast examiners from workgroup 1610. Every rejection issued by the examiner and every response and traversal argument by the applicant was recorded.
As an initial matter, these data show that examiners in each group have similar amounts of experience at the PTO and similar average current docket sizes. However, the allowance rates of these examiner groups vary dramatically, with 79.55%, 61.65%, and 27.7% allowance rates corresponding with fast, average and slow examiners, respectively. The Office Action to Grant (OGR) score shows that these fast examiners grant a patent for every 1.5 Office Actions written, while it takes average examiners roughly 4 Office Actions and slow examiners a stunning 10.5 Office Actions before they grant one patent.
Fast examiners seem to be using a count maximization strategy based on allowances. A typical applicant who gets a fast examiner will usually have one or two Office Actions before an allowance. Fast examiners do not use many prior art rejections. Additionally, the rejections employed by fast examiners rely heavily on Obviousness-type Double Patenting (ODP) and/or 35 USC 112 rejections. Fast examiners have four times as many ODP rejections compared to slow examiners. Most applicants can (and do) traverse these ODP rejections by simply filing a terminal disclaimer. Interestingly, use of the ODP rejection is a super-efficient way to employ a count maximization strategy. This is because little work is needed to find an ODP rejection, due to the closed universe of patents, and an ODP rejection is relatively easy for the applicant to traverse. Thus, an ODP rejection followed by a terminal disclaimer gets the examiner to maximum counts with minimal effort.
In contrast, slow examiners seem to be using a strategy based on rejections. First, slow examiners have a much higher restriction rate (almost twice) and encounter three times as many traversals to these restriction requirements. These data are consistent with a rejection strategy because examiners can create a large patent family and cycle through rejections with less work, especially since they should already be familiar with the specification from the other restricted family members. Furthermore, slow examiners may not be able to avail themselves of the ODP rejection strategy employed by fast examiners because of the safe harbor created by 35 USC 121.
Not only do slow examiners use more prior art, the sources of prior art differ for slow examiners versus fast and average examiners. Slow examiners employ a rejection strategy based on prior art, with five times as many 102(a/e) rejections and six times as many 103 rejections compared to fast examiners. For 102(a/e) rejections, slow examiners rely on both US patents as well as printed publications, while fast and average examiners rely on US patent applications. Interestingly, for 102(b) rejections all examiners rely more on printed publications and secondarily on US patents. With 103 rejections, examiners also all mainly rely on US patents and, secondarily, on printed publications. Thus, all examiners search and employ prior art from different databases, however, they use the prior art that they find in different ways.
Unsurprisingly, applicants traverse prior rejections from slow examiners at a much higher rate than fast examiners. Specifically, with 102 and 103 rejections, applicants will push back against slow examiners most commonly with a missing elements argument. In contrast, most applicants respond to fast examiner 102 and 103 prior art rejections by simply filing claim amendments. Interestingly, applicants will also push back against 103 rejections from slow examiners by making a “no motivation to combine” argument. This may be because slow examiners use seven times as many references as fast examiners.
Slow examiners also put the brakes on prosecution by filing multiple 112 rejections. Specifically, slow examiners utilize three times as many 112 second rejections, four times as many enablement rejections and seven times as many written description rejections. With slow examiners, applicants use arguments to traverse enablement and written description rejections. In contrast, applicants with fast examiners usually only make claim amendments to traverse enablement or written description rejections.
Practitioners need to understand what type of examiner they have. Understanding and using this data is paramount to help manage client expectations as well as to help create a rational prosecution strategy. I note that all of these data can be accessed through services such as LexisNexis PatentAdvisor® to help determine which examiner you may encounter. This may also be important for patent prosecution strategy since slow examiners may require a strategy that involves an appeal. While fast examiners may require a strategy that involves fewer amendments and more arguments.
Although I do not make any definitive judgements about the quality of the claims passed by different examiners nor even if there is an “optimal” or “ideal” allowance rate, these varying trends indicate a wide discrepancy in examiners’ methodology that may be affecting the overall quality and number of patents created. By analyzing the differences, my studies suggest how the counts system might be modified to ensure a more efficient and balanced process where all examiners apply the rules of patentability fairly and consistently. One possible solution, for example, would be to review applications from both fast and slow examiners at a higher rate. Another solution may be to deduct counts from examiners who make too many erroneous rejections. Conversely, adding counts for examiners who dealt with difficult applicants could also be in order. Alternatively, we could completely reform the count system and create an examiner incentive structure that focuses more on quality and less on quantity. Only by looking in-depth at examiner behaviors will we be able to (1) better understand and navigate the current system and (2) make reforms to the current process that will truly encourage innovation.
Uniloc 2017 LLC v. Hulu, LLC & Netflic, Inc. (Fed. Cir. 2020)
A divided Federal Circuit has authorized the PTAB to consider patent-eligibility challenges during inter partes review (IPR) proceedings in the context of a patentee’s motion to amend the claims. Uniloc had moved to amend with substitute claims and Hulu opposed. The PTAB then denied the motion to amend — concluding that the proposed claims were not subject matter eligible under Section 101. The PTAB’s subsequent rehearing denial was designated as precedential — holding that any ground of unpatentability can be considered in the context of a motion to amend.
The PTAB holding is controversial because inter partes review proceedings are strictly limited to cancellation of claims “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).
On appeal, the Judge Wallach wrote the majority opinion joined by Judge Taranto. Judge O’Malley dissented.
In his opinion, Judge Wallach looks to the statute and concludes that the limitations on the “grounds” for challenging a patent via IPR do not apply to whether the PTAB allows amendments to the claims.
The PTAB correctly concluded that it is not limited by § 311(b) in its review of proposed substitute claims in an IPR, and that it may consider § 101 eligibility. The determination is supported by the text, structure, and history of the IPR Statutes, which indicate Congress’s unambiguous intent to permit the PTAB to review proposed substitute claims more broadly than those bases provided in § 311(b).
Slip Op. Rather, under Section 318, the PTO appears to be required to determine whether any new claim is patentable before issuing a certificate saying as much.
Any proposed amended or new claim determined to be patentable and incorporated into a patent following an [IPR] shall have the same effect as that specified in section 252 for reissued patents. . . 35 U.S.C. 318(c).
[E]very reissued patent shall have the same effect and operation in law, on the trial of actions for causes thereafter arising, as if the same had been originally granted in such amended form. . . 35 U.S.C. 252.
The implication here is that any new or amended claim must be fully reviewed for patentability–under all of the patentability doctrines–before being allowed. This is different from the limitations of Section 311 that are directed toward cancellation of already existing claims. The majority did not reach the issue of whether the PTO determination should be given deference — since the “text, structure, and history of the IPR Statutes are unambiguous.”
Note here that this outcome is in sharp tension with the language of Aqua Products Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017) (en banc). In that case, the plurality opinion explained that challenges to amended claims should be limited since the PTO requires that substitute claims be narrower than the original claims. Here, the majority rejected this portion of Aqua Products–explaining that the en banc case did not have a majority opinion and that aspect of the case was thus merely dicta of a handful of judges.
No opinion in Aqua Products garnered a majority, leaving the only holding as a burden of proof determination, concluding that the USPTO had improperly adopted regulations assigning the burden of proof with respect to proposed substitute claims.
Slip Op.
Writing in dissent, Judge O’Malley would have dismissed this appeal as moot. In particular by the time the PTAB issued its rehearing denial, the Federal Circuit had already held these claims invalid in the parallel infringement proceeding.
After our affirmance of the district court’s ineligibility determination, and once the time expired for Uniloc to seek Supreme Court review of that affirmance, it did not possess any patent rights that it could give up in exchange for a substitute claim. It owned nothing and could not, therefore, substitute its old claims for new ones. If Uniloc were to prevail in this appeal and return to the Board, the Board would be without power to effectuate a substitution. . . .
To analogize to ownership of real property, if a
court finally determines that a deed to property is defective such that the property belongs to someone else, the former “owner” cannot “substitute” that property for a new parcel—even if the owner is in the middle of closing a sale. The former “owner” has nothing to give up and, indeed, never had anything to bargain with in the first place.
Dissent. Judge O’Malley then explains that the majority kept this case alive in order to enact misguided policy:
Here, rather than follow that usual procedure, the majority breathes life into a dead patent and uses the zombie it has created as a means to dramatically expand the scope of inter partes review (“IPR”) proceedings. . . .
After concluding that an invalid patent can serve as a vehicle to reach the merits of this appeal, the majority announces that, when it comes to substitute claims, the Board can engage in a full-blown examination. This revelation runs contrary to the plain language of the statute and the policy of efficiency that underlies the IPR system.
The Federal Circuit here affirms the PTAB IPR final determination that Merck failed to prove the Microspherix claims invalid. US9636401; US9636402; US8821835. Microspherix sued Merck — accusing Merck’s implantable contraceptive of infringing. Merck responded with the three IPR petitions.
The patents here cover implantable therapeutic/diagnostic devices that also have a radiopaque marker that helps find the device after insertion. As originally filed, the claims were directed to “brachytherapy” — slow release of radioactive agents to treat cancer. However, the claims were expanded in various continuation applications to broadly claim any “therapeutic, prophylactic, and/or diagnostic agent”
The interesting legal question on appeal has to do with the timing of the asserted prior art reference Zamora. The chart below shows the patent filings in question, and each party argued that the opposing non-provisional applications could not properly claim priority to their respective provisional applications.
Question 1: Does 102(e) (pre-AIA) apply in inter partes review?: 35 U.S.C. 311 limits IPR validity challenges “the basis of prior art consisting of patents or printed publications.” Under 102(e), Zamora’s 2001 non-provisional application became prior art once the resulting patent issued. However, as of its 2001 filing date, the application was neither a “patent or printed publication.” In its decision here, the court simply assumed that 102(e) prior art counts under the IPR statute (as it has done in prior cases as well) See In re Cuozzo Speed Techs., LLC, 793 F.3d 1268, 1281 (Fed. Cir. 2015), aff’d sub nom. Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016). Post-AIA 102(a)(2) does not have the same problem because the statute makes clear that it is the patent / published application that is the prior art.
Question 2: Does Zamora’s provisional date allow for further back-dating of the 102(e) date?: Here, the court explains that Zamora would get the 2000 prior art date of its provisional “if it was entitled to the date of the Zamora provisional.” The court quoted Drinkware, LLC v. Nat’l Graphics, Inc., 800 F.3d 1375, 1381 (Fed. Cir. 2015) in explaining that the “‘reference patent is only entitled to claim the benefit of the filing date of its provisional application if the disclosure of the provisional
application provides support for the claims in the reference patent in compliance with’ the written description requirement.” Here, the court noted that 2001 Zamora claimed three options for placement of a radiopaque medium, but one of those was not present in the provisional application. That failure of written decription meant that Zamora’s prior art date was 2001, not Jan. 2000.
Question 3: Does Microspherix’s provisional date work as a priority date?: In considering priority claims, the courts generally operate on a claim-by-claim basis. Thus, in a complex patent family, a single patent may include claims with a variety of priority dates. One problem with our current system is that a patent only tells us the earliest claimed priorty date — not the actual priority date. The actual date is only realized and determined through ex post litigation. Here, Merck argued that some of the claims went beyond the provisional disclosure. On appeal, the Federal Circuit disagreed — explaining that the the written description requirement requires the disclosure to “reasonably convey” possession of the invention.
Here, the particular written description argument focused on the length of the claimed strands that were inserted into a body. The original provisional disclosed a variety of strand lengths, but none of them were longer than 1 cm (10 mm). Some of the patent claims claim strands without any length limitation, and Merck argued that Microspherix was not in possession of such a broad range of strand lengths. On appeal, the Federal Circuit agreed with the PTAB that the description found int he provisional “adequately supports the claimed strand recited in Microspherix’s patent
claims.”
The USPTO is seeking comments on amending certain PTAB Rules of Practice. While it proposes many amendments, two seem key: one for instituting on all challenged claims and grounds (to conform with SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018)) and the other to eliminate the presumption at institution favoring the petition as to testimonial evidence. Comments will be accepted through June 26, and the notice is available here.
As to the first major proposal, as amended the PTAB will institute an IPR, PGR, or CBM proceeding on all claims and all grounds if preponderant evidence in the petition shows at least one claim is unpatentable. The Office explained in part:
In light of SAS, the Office provided guidance that, if the Board institutes a trial under 35 U.S.C. 314 or 324, the Board will institute on all claims and all grounds included in a petition of an IPR, PGR, or CBM. To implement this practice in the regulation, the first proposed change would amend the rules of practice for instituting an IPR, PGR, or CBM to require institution on all challenged claims (and all of the grounds) presented in a petition or on none. Under the amended rule, in all pending IPR, PGR, and CBM proceedings before the Office, the Board would either institute review on all of the challenged claims and grounds of unpatentability presented in the petition or deny the petition.
As to the second, the USPTO spent a lot more ink explaining it, writing in part:
In April 2016, after receiving comments from the public and carefully reviewing them, the Office promulgated a rule to allow new testimonial evidence to be submitted with a patent owner’s preliminary response. Amendments to Rules of Practice for Trials Before the Patent Trial and Appeal Board, 81 FR 18750 (April 1, 2016). The Office also amended the rules to provide a presumption in favor of the petitioner for a genuine issue of material fact created by such testimonial evidence solely for purposes of deciding whether to institute an IPR, PGR, or CBM review. Id. at 18755–57.
Stakeholder feedback received in party and amicus briefing as part of the Precedential Opinion Panel (POP) review in Hulu, LLC v. Sound View Innovations, LLC, Case IPR2018–01039, Paper 15 (PTAB Apr. 3, 2019) (granting POP review), indicated that the rule has caused some confusion at the institution stage for AIA proceedings. For example, certain stakeholders have indicated that the presumption in favor of the petitioner for genuine issues of material fact created by patent owner testimonial evidence also creates a presumption in favor of the petitioner for questions relating to whether a document is a printed publication. Additionally, the Office has concerns that the presumption in favor of the petitioner may be viewed as discouraging patent owners from filing testimonial evidence with their preliminary responses, as some patent owners believe that such testimony will not be given any weight at the time of institution.
Section 314(a) of 35 U.S.C. provides that ‘‘[t]he Director may not authorize an inter partes review to be instituted unless the Director determines that the information presented in the petition. . . and any response . . . shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.’’ 35 U.S.C. 314(a). Thus, the statute provides that a petitioner is required to present evidence and arguments sufficient to show that it is reasonably likely that it will prevail in showing the unpatentability of the challenged claims. Hulu, LLC v. Sound View Innovations LLC, Case IPR2018– 01039, Paper 29 at 12–13 (PTAB Dec. 20, 2019) (citing 35 U.S.C. 312(a)(3), 314(a)). For a post-grant review proceeding, the standard for institution is whether it is ‘‘more likely than not’’ that the petitioner would prevail at trial. See 35 U.S.C. 324(a). In determining whether the information presented in the petition meets the standard for institution, the PTAB considers the totality of the evidence currently in the record. See Hulu, Paper 29 at 3, 19.
In this notice of proposed rulemaking, the Office proposes to amend the rules of practice to eliminate the presumption in favor of the petitioner for a genuine issue of material fact created by testimonial evidence submitted with a patent owner’s preliminary response when deciding whether to institute an IPR, PGR, or CBM review. Thus, consistent with the statutory framework, any testimonial evidence submitted with a patent owner’s preliminary response will be taken into account as part of the totality of the evidence.
Interestingly, the Office specifically asked for input as to implementation, stating “the Office may apply any rule changes, if adopted, to all pending IPR, PGR, and CBM proceedings in which a patent owner’s preliminary response is filed on or after the effective date.”
Google & Microsoft teamed-up to challenge Phillips’ U.S. Patent 7,529,806 in an inter partes review (IPR). The Board complied and cancelled claims 1-11 — finding the claimed quasi-streaming method unpatentably obvious. On appeal here, the Federal Circuit has affirmed — adding important context to obviousness determinations based upon general knowledge.
In KSR, the Supreme Court indicated that the obviousness analysis should consider the “background knowledge possessed by a person having ordinary skill in the art.” KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398 (2007). Under KSR, information deemed within PHOSITA’s general knowledge is more powerful than that found buried in a prior art reference because we assume that PHOSITA would consider using their general knowledge in combination with the prior art — even absent any express motivation to do so. Because of its potential power, the Federal Circuit has been somewhat concerned that the approach could serve as an end-run around traditional obviousness analysis. Here though, the court found that Google had presented enough evidence to assume that the pipelining (see next paragraph) was part of the general knowledge of PHOSITA.
The invention: The claims call for downloading the “next file” in the background while playing the prior file. This setup is effectively a form of buffering (also known as pipelining or stream emulation). The approach uses a client-side “control information file” that facilitates sequential file retrieval. The claims have an additional feature of having a variety of media file formats, and the client device is able to “choose the format compatible with the client’s play-out capabilities.”
In its petition, Google alleged (1) anticipation based upon SMIL 1.0 (Synchronized Multimedia Integration Language 1.0 Specification); and (2) obviousness based upon SMIL 1.0 when combined with the general knowledge of PHOSITA. In describing the general knowledge that “pipelining is well known”, Google cited a prior art reference (Hua) and also an expert declaration.
Extra Ground on Institution: Before getting to the obviousness issue, I’ll note an appeal/SAS issue decided by the Court. The Board instituted the IPR on both grounds raised by Google, but also added a third ground: SMIL in view of Hua. On appeal, the Federal Circuit found the third-ground improper — quoting the Supreme Court’s decision in SAS to the effect that the AIA does not “contemplate a petition that asks the Director to initiate whatever kind of inter partes review he might choose.” SAS Inst. Inc. v. Iancu, 138 S. Ct. 1348, 1355 (2018). Under the statute as interpreted in SAS, the petitioner decides how to structure the IPR, and the initiation stage is a yes/no determination. The Federal Circuit did not address the no-appealability-of-institution-decisions provision of Section 314(d).
Role of General Knowledge in IPR Obviousness: The first Obviousness-focused question that the court considered was an interesting albeit fruitless contention — that “obviousness” in IPR proceedings should be treated differently than in other areas of patent practice. In particular, the patentee noted that Section 311(b) of the AIA limits IPR considerations to only “prior art consisting of patents or printed publications.” As such, Philips argued that “general knowledge” could not be considered in the analysis. On appeal, the Federal Circuit rejected that argument — holding that the 311(b) limits the types of prior art available in an IPR, but does not otherwise alter the obviousness analysis of Section 103.
Although the prior art that can be considered in inter partes reviews is limited to patents and printed publications, it does not follow that we ignore the skilled artisan’s knowledge when determining whether it would have been obvious to modify the prior art. Indeed, under 35 U.S.C. § 103, the obviousness inquiry turns not only on the prior art, but whether “the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious . . . to a person having ordinary skill in the art to which the claimed invention pertains.” 35 U.S.C. § 103. Regardless of the tribunal, the inquiry into whether any “differences” between the invention and the prior art would have rendered the invention obvious to a skilled artisan necessarily depends on such artisan’s knowledge.
Slip Op. The implication here is that “general knowledge” is not “prior art” but instead part of the definition of PHOSITA under Graham.
General Knowledge: A primary case in tension with broad use of general knowledge is Arendi S.A.R.L. v. Apple Inc., 832 F.3d 1355, 1361 (Fed. Cir. 2016). In that case, the court warned against invoking “common sense . . . to supply a limitation that was admittedly missing from the prior art” and that was not “supported by evidence and reasoned explanation.” On appeal here, the Federal Circuit distinguished Arendi — holding that Google’s argument for general knowledge was supported by evidence and reason:
In Arendi, the Board [improperly] relied on nothing more than “conclusory statements and unspecific expert testimony” in finding that it would have been “common sense . . . to supply a limitation that was admittedly missing from the prior art.” Conversely, here the Board relied on expert evidence, which was corroborated by Hua, in concluding that pipelining was not only in the prior art, but also within the general knowledge of a skilled artisan. Moreover, Philips offered no evidence to rebut the conclusion that a skilled artisan would have known about pipelining.
Id. “Pipelining” was the only claim feature not found in the asserted prior art reference. However, since pipelining was part of the “general knowledge,” then its use was proper to invalidate the claims.
Intellectual Property Owners Association (IPO) Board has proposed a “clarifying” amendment to Section 101(a)(1) of the Patent Act:
(a) Novelty; Prior Art.—A person shall be entitled to a patent unless— (1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the publicpublicly disclosed before the effective filing date of the claimed invention, provided that no act of patenting, publication, use, sale, commercialization, or any other act, shall constitute prior art with respect to this section, except to the extent the act results in a public disclosure of the claimed invention; or
The proposal here would legislatively overrule Helsinn Healthcare S.A. v. Teva Pharm. USA, Inc., 139 S. Ct. 628 (2019) and remove undisclosed sales activity & commercialization from the scope of prior art. Europe uses this approach found in Article 54 of the European Patent Convention:
An invention shall be considered to be new if it does not form part of the state of the art.
The state of the art shall be held to comprise everything made available to the public by means of a written or oral description, by use, or in any other way, before the date of filing of the European patent application.
Additionally, the content of European patent applications as filed, the dates of filing of which are prior to the date referred to in paragraph 2 and which were published on or after that date, shall be considered as comprised in the state of the art.
EPC Art. 54. Note that 54(1) and 54(2) are parallel to 35 U.S.C. 102(a) while 54(3) is parallel to 102(a)(2) which the IPO does not propose to change. Regarding these secret prior patent application filings identified in 54(3) and 102(a)(2); the European approach is broader than the US in some ways because it creates prior art even when the prior filing is the same inventor / owner; at the same time, the European approach is narrower than the US because 54(3) prior art does not apply to the inventive step (obviousness) analysis.
An invention shall be considered as involving an inventive step if, having regard to the state of the art, it is not obvious to a person skilled in the art. If the state of the art also includes documents within the meaning of Article 54, paragraph 3, these documents shall not be considered in deciding whether there has been an inventive step.
My patent law course at Mizzou is primarily practice based — the students all write patent claims, reject claims, respond to office actions, and compete in a moot court competition. But, they also take a short exam. Here is the 2019 edition. – DC
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Introduction: Mr. Crunch’s newest venture known as “Pause” is designed to help people relax and take a momentary meditative pause.
The basics: Crunch has designed an App (software program) to be installed an electronic device such as a mobile phone. At points in time throughout the day, the App will provide a notification “ding” to the user indicating that it is time for a meditative pause.
The notification sound: One special feature of the App is that the notification ding is specially designed to elicit a relaxation response. The default sound is modeled from a Tibetan Singing Bowl. However, App includes a customization process where App can measure a user’s relaxation response to the various sounds using biofeedback (heart rate; skin temperature; sweat gland activity; digestion via breath sensor, etc.) and then automatically select the most effective; alternatively a user can manually select from various sounds.
Timing of the notification: The other feature of the App is timing of the notification dings. Timing may be a pre-set time (such as 1:00 pm daily) or may be spaced randomly during awake hours. App may also rely on biofeedback to identify stressful points during the day and target those times for the ding.
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Crunch conceived of the idea during a Kundalini Yoga session in August 2018. As he moved forward with development of the business, in September 2018 he fully disclosed all aspects of the invention to his banker (seeking a business development loan) and also to two software engineers that he hired on a contract basis to write the code. He also told everything to his spouse and <18 y.o. children, although not until January 2019.
It is now December 2019 and Crunch is ready to file his patent application. He understands that he cannot obtain a patent simply on an app that plays a sound. However, he thinks his customization processes are novel features. His proposed claim 1 is listed below.
I claim:
1. A process for customizing an application stored on a mobile electronic device, wherein the application is designed to elicit a relaxation response in a user, the process comprising:
(a) customizing the notification sound:
causing the device to play a plurality of notification sounds for the user;
recording a biofeedback response for each notification sound, wherein the biofeedback response includes user heartrate; and
selecting a preferred notification sound based upon the biofeedback response; and
(b) customizing the notification timing:
measuring a stress level of the user based upon a biomarker, wherein the biomarker including user heartrate; and
selecting a notification time at a point of relatively higher stress.
Question 1. Is claim 1 directed toward eligible subject matter?
Question 2. Provide a concise argument why the USPTO should reject claim 1 as indefinite.
Question 3a. Crunch is concerned that his own pre-filing disclosures (as discussed above) might block him from receiving a patent. Do those disclosures qualify as prior art against his own application filing?
Question 3b If Crunch could go back in time, what are two steps he could have taken to better ensure that his pre-filing disclosures were not prior art?
Question 4. Crunch’s patent attorney performed a prior art search and found a publication from March 2019 describing an app that helps users maintain good posture. Key relevant features of the good-posture app publication:
It measures heartrate and provide a signal to users when heartrate slows telling users to improve their posture (apparently slumping typically occurs as heartrate slows);
Users can customize the signal according to their preferences. The publication suggests choosing a signal that the user finds pleasing.
Although the good-posture app is described in the printed publication, there is no evidence that the good-posture app was ever actually created. Will the good-posture publication prevent Crunch from obtaining a patent?
Question 5. The year is now 2021; Crunch’s US patent has issued without any amendment. An India-based company (Vishraam) has started distributing an app (globally) that is quite similar to Crunch’s proposal. A user has the option of customizing both the notification sound and the notification timing in same way claimed by the patent. Can Crunch hold Vishraam liable for patent infringement?
Everyone understands an important limitation of inter partes review — that an IPR petition are only permitted in the form of anticipation and obviousness challenges relying upon published prior art documents. 35 U.S.C. § 311(b).
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.
Id. An issue arises when the patentee amends its claims or adds new claims during the IPR proceedings. Namely, may the PTAB consider other conditions of patentability with regard to the proposed new or amended claims?
In Uniloc v. Hulu now pending before the Federal Circuit, the patentee submitted a set of substitute claims during the IPR proceedings after its original claims were found ineligible in a separate court proceedings. The PTAB denied Uniloc’s motion to enter the substitute claims — finding that those new claims are also ineligible under 35 U.S.C. § 101. I’ll note here that the the amended claims are narrower than the original claims (the amendment added additional limitations).
On appeal, Uniloc argues that the denial on 101 grounds was improper:
Interpreting the IPR statutes to allow a § 101 challenge through the back door, merely because a patent owner exercises the right to propose a narrowing amendment, threatens to disrupt the streamlined and focused nature of the IPR adjudication. Amended claims that meet the statutory requirements for motions to amend are narrower than claims that have previously been examined in full and, to the extent there is any room for further challenges under § 101, an accused infringer that cannot avail themselves of a PGR or CBM challenge can still assert ineligibility in a civil action for infringement.
In its briefing, the PTO agrees that § 311(b) limits the scope of petition, but focuses on § 318(a) that requires the PTO to address “patentability of . . . any new claim added” during the course of the proceeding. For the PTO, Uniloc’s approach appears to be off-the-rails because it could force the PTO to issue new claims via IPR that were never examined for eligibility, utility, written description, or enablement.
One distinguishing feature here, however, is that PTO issued particular regulations regarding amendments and Section 112 — requiring a showing of “support in the original disclosure” for any amendments. The regulations say nothing about eligibility. 37 C.F.R. § 42.121(b). The basic idea here favoring Uniloc is that this is an area where the PTO could regulate, but it cannot regulate from the hip via PTAB decisions. See Aqua Prods.
The additional feature of the argument here has to do with the nature that IPR amendments are narrowing amendments. Narrowing amendments basically do not raise new eligibility problems.
In its brief, Uniloc also has an alternative request — that the Court remand for a new eligibility analysis based upon the PTO’s new eligibility guidance. (The PTAB’s denial here was made prior to the Jan 2019 eligibility guidance, and that guidance was recently updated in October 2019). USPTO responds that Uniloc did not explain how its amendments would be sufficient to overcome the collateral district court invalidity finding — “Uniloc bears the burden of showing that the Board committed reversible
error.”
Askeladden filed an amicus brief supporting the PTO and patent challenger arguing that the Board has “a statutory obligation to consider the subject-matter eligibility” of proposed amended claims during IPR proceedings.
New use of a known compound: This decision focuses on OSI’s U.S. Patent 6,900,221 — a method for treating non small cell lung cancer (NSCLC) with the drug erlotinib (sold by OSI as Tarceva). In the US dosage is about $200 per day that continues “until disease progression or unacceptable toxicity.”
44. A method for the treatment of NSCLC … comprising administering to [a] mammal a therapeutically effective amount of a pharmaceutical composition comprised of at [erlotinib] and a carrier.
Apotex petitioned the USPTO to cancel several claims, including Claim 44 so that it could begin marketing a generic version. The PTAB agreed to hear the case and eventually cancelled the claims — finding them obvious when laid next to a prior patent (Schnur) in view either of an academic review article on anticancer drug targets (Gibbs) or OSI’s own 10-K (OSI SEC filing).
Schnur lists Erlotinib as a preferred compound for treating cancer in mammals — and note that the class of drugs (erbB) is good for treating human tumors, including “renal, liver, kidney, bladder, breast, gastric, ovarian, colorectal, prostate, pancreatic, lung, vulval, thyroid, hepatic carcinomas, sarcomas, glioblastomas, various head and
neck tumors.” (Lung emphasized in the court decision, but not in the original prior art). Schnur discloses lung cancer treatment – but does not particularly discuss “non small cell lung cancer.”
Gibbs is a review of prior publications and makes the conclusion that erlotinib (and a parallel compound) “appear to have good anti-cancer activity in preclinical models … particularly in patients with non-small cell lung cancer.” However, when the Federal Circuit looked-into the articles cited by Gibbs — none of them provided any “data regarding the use of erlotinib to treat NSCLC.” OSI also hired Gibbs to provide a declaration that he was “not aware of any published abstracts or articles describing the clinical or preclinical response of a NSCLC tumor to [erlotinib] that were available as of the time my article was published, and I reviewed no such abstracts or articles in drafting my article.”
The SEC Filing by the patentee is a prior printed publication from more than 1 year before OSI’s filing date. The Filing states that the company is pursuing research on Erlotinib “which targets a variety of cancers including ovarian, pancreatic, non-small cell lung and head and neck. . . . [The drug] is a potent, selective and orally active inhibitor of . . . a key oncogene in these cancers.” The SEC Filing also indicates that Phase I safety trials had been completed and Phase II clinical trials were ongoing. The SEC filing does not include any “DATA.”
For the Board, the combination of these references rendered the broad claim 44 obvious — the claim just requires administration of “a therapeutically effective” of the drug and a carrier.
On appeal, however, the Federal Circuit has reversed — holding that the references did not create a “reasonable expectation of success.” As such, the Board’s factual conclusion was not supported by substantial evidence.
Over the past several years, the Federal Circuit has been rebuilding its obviousness doctrine post-KSR. The court now asks two key questions of fact: would a person of ordinary skill in the art (1) have been motivated to combine/modify the prior art teachings in order to make the invention; and (2) have had a reasonable expectation of success in doing so.
The combination of references state rather plainly that erlotinib is believed to has anti-cancer activity against non-small cell lung cancer and that the drug is safe (enough). On appeal, however, the Federal Circuit rejected the obviousness claim because the prior art did not provide any evidence that the drug would work in humans. “These references thus contain no data or other promising information regarding erlotinib’s efficacy in treating NSCLC.” In its explanation, the court notes that this area is “highly unpredictable” — 99.5% failure rate of NSCLC treatments entering Phase II.
The court concludes with a caveat — attempting to cabin-in this ruling:
To be clear, we do not hold today that efficacy data is always required for a reasonable expectation of success. Nor are we requiring “absolute predictability of success.” We conclude only that, on these particular facts, a reasonable fact finder could not find a reasonable expectation of success. The Board’s finding is thus not supported by substantial evidence, and accordingly we reverse its obviousness determination.
The decision here has a substantial amount of merit.
What gives me a lump in my throat is that the prior art discloses almost exactly what was claimed in these broad claims — with the addition of the functional language “therapeutically effective” amount.
SIPCO, LLC v. Emerson Electric Co. (Fed. Cir. 2019) On appeal from CBM2016-
00095 (Covered Business Method Review).
In its final written decision, the PTAB sided with the patent challenger Emerson Electric — finding claims of SIPCO’s U.S. Patent 8,908,842 invalid as lacking eligibility and as obvious. Claims 1, 7, 9, 16, and 17.
The patent at issue requires a “low-power transceiver” connected to the internet and wirelessly connected to a remote device. The patent included dependent claims 3 and 4 that defined the remote device as a “vending machine” and “ATM” respectively. However, those claims were disclaimed during prosecution — and part of appeal argument is the role of disclaimed claims in construction of the remaining claims.
Note for younger attorneys, the item labeled 110 is a “pay phone.”
Covered Business Method Review (CBM) allows a third-party to challenge to certain business-method patents in an AIA-Trial. Inter partes review (IPR) proceedings are limited to novelty and obviousness challenges and “only on the basis of prior art consisting of patents or printed publications.” 35 U.S.C. 311. Post-grant review (PGR) proceedings have much broader scope — any condition of patentability except best-mode. 35 U.S.C. 321. However, PGR proceedings may only be filed against post-AIA patent and must be filed within 9 months of issuance.
The third category – CBM – has the same scope of patentability challenges as PGR (including eligibility, enablement, and indefiniteness), but can only be filed against patents that meet the definition of a “covered business method patent”
a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.
SEC. 18 of the AIA. Looking at the definition above, you’ll note that this is a narrow definition of a “business method” patent — especially the notion that it cannot cover “patents for technological inventions.” (Technological is left undefined in the statute). Note, the CBM provisions are not codified in Title 35 because the program is not permanent — it is set to sunset 8-years after the first CBM was permitted to be filed. My calculation of that date is September 16, 2020 and no new petitions will be accepted after that date.
NonAppealable: In the appeal, SIPCO argues that its patent is a technological invention and thus should be immune from CBM challenge. And, although the PTO’s decision to initiate a CBM proceeding is “nonappealable,” the Federal Circuit has repeatedly ruled that it can review the PTO decision of whether the challenged patent satisfies the legal limits of the CBM process — i.e., whether the patent challenged in a CBM is a technological invention.
Two Step Test for Technological: The USPTO has issued regulations defining technological inventions as requiring (1) recitation of a nonobvious technological feature; and (2) solving a technical problem using a technical solution. 37 C.F.R. § 42.301(b). Thus, claims that recite “post-solution” technology could still be deemed not technological. A reminder here – that the judgment of whether a patent is amenable to CBM review is considered on a patent-by-patent basis — it is either all-in or all-out — and not on a claim-by-claim basis.
After reviewing “both the claims and the specification,” the Federal Circuit concluded that the invention satisfied step two of the two step test – the invention “implements a communication system that connects an unconnected, remote device with a central station . . . by taking advantage of a set of intermediate nodes … connected to the central station over an existing communication network.” The patent discusses the problems of signal interference, contention, and hacking — and offers its solution of using a “two-step” communications and low-powered transceivers that limit transmission range. The PTAB had not considered step 1 and so on remand the PTAB will consider whether the claims recite nonobvious technological features. Although the court left this issue for the PTAB to decide, it noted that the nonobviousness here might be a different sort of analysis than what is used for Section 103.
Low Power = Limited Range: The Federal Circuit’s conclusion of technological solution is substantially based upon a narrow claim construction of the term “low power transceiver.” The court found that the term should be interpreted (as properly read in light of the specification) as meaning a transceiver with a limited transmission range. That result comes from one of the goals of the invention — avoiding conflict between transceiver communications. “It is only if the signal transmission is limited in range that the problems of unwanted circumvention, contention, and unlawful interception of the electromagnetic signals described in column six [of the patent] are alleviated.” This construction differs from the PTAB who had found the “low power” aspect of the transceiver did not necessarily limit its range to only a few feet. This “limited range” aspect of the invention appears to be the major key to the technological result.
Writing in dissent, Judge Reyna argued that the construction of “low power” as meaning “low range” involves “improperly reading a functional limitation into the claim from a preferred embodiment.”
= = = =
Looking back to the Vending Machine and ATM limitations of cancelled Claim 3 & 4. The PTAB used those claims (and the written description) to conclude that the invention was “financial” in nature — a qualifying characterization for CBM review. On appeal, the majority affirmed the agency’s determination.
As the Board explained, claims 3 and 4 recite the remote device being associated with an ATM or vending machine. The patent expressly contemplates that the information communicated through the claimed system is financial information that identifies the user’s bank account and the user’s identity. The Board is correct in its assessment that the concept of communicating financial information from a device associated with an ATM to a central location is “central to the operation of the claimed device” in claim 3.
Those two claims were disclaimed and SIPCO originally argued that they could not be used to show that the patent was a CBM patent. However, at oral arguments SIPCO’s attorney conceded that it was proper for the PTO to consider those claims in its analysis.
Stephen Yelderman is a Professor of Law at the University of Notre Dame Law School.
Continuing our study of prior art in the district court, in this post we’ll take a closer look at printed publications. As I discussed in my original post, around 13% of anticipation invalidations and 34% of obviousness invalidations rely on art in this category. (The numbers may be a touch higher than that, as a result of invalidations for which we could not determine the prior art supporting the court’s conclusion). For more background on this project, you can find the full paper here.
The potential sweep of this prior art category is breathtaking. By the terms of the statute—both before and after the America Invents Act—a printed publication found anywhere in the world can qualify as prior art. Moreover, under Federal Circuit precedent, this category includes a number of things that would seem to stretch the colloquial meaning of “publication.” For example, a single copy of a doctoral thesis stored in a university library, a drawing available only by travelling to another country’s patent office, and a posterboard displayed for several days at a conference have all been held to constitute “printed publications.” In dicta, the Federal Circuit has even suggested that a transient display of slides, or a billboard (!?) could, on certain facts, count as a printed publication.
When I teach patent law, our discussion of the printed publications category tends to dwell on these extreme possibilities. But how often do these non-traditional publications actually invalidate patents in practice?
To get a handle on this question, we further classified printed publication prior art into several sub-categories:
This chart illustrates the percentage of invalidations relying on printed publications in each sub-category, as a share of invalidations relying on printed publications at all. Encouragingly, the majority of invalidations based on printed publications relied on traditional reference publications. Just over half of anticipating publications were categorized as regularly published books and journals. Among obviousness invalidations citing a printed publication, 68% cited at least one regularly published book or journal. (The percentages of obviousness invalidations sum to more than 100% because of invalidations citing publications in multiple sub-categories.) Though some of these regularly published books and journals may have come from obscure outlets, they are at least the kind of documents that a library might collect and an interested researcher might access.
The next sub-category—catalogs, manuals, and brochures—consists of documents distributed to teach the public about the features or availability of a product. This category is conceptually interesting for two reasons. First, though catalogs and manuals are typically mass-produced and widely disseminated, they are not usually collected in research libraries. By their nature, many publications in this category are intended to be transient. These characteristics suggest that publications in this sub-category would likely be much more difficult for a hypothetical prior art searcher to find than a regularly published book or journal.
The second reason that the catalog, manuals, and brochures category is conceptually interesting is that these documents are often evidence of a different kind of prior art entirely—that is, prior uses and sales. In fact, in a few cases we found it unclear whether a product manual was coming in as a distinct prior art reference, or as evidence about the features present in a prior sale. The fact that district courts sometimes rely on publications in this category suggests that activity prior art may be even more important than our top-level analysis suggested.
That said, catalog, manuals, and brochures were fairly insignificant in the larger scheme of things. About a quarter of anticipating printed publications fell into this sub-category. But since only 13% of anticipation events cited a printed publication, that means only about 3% of anticipation events overall relied on a catalog, manual, or brochure. Likewise, though 15% of obviousness events citing a printed publication relied on a catalog, manual, or brochure, that comes out to only about 5% of obviousness events overall. So whether one conceives of these cases as invalidity by prior sale or invalidity by printed publication, the high-level picture of prior art does not change very much.
The next sub-category—“other”—includes all identifiable printed publications not falling into the other two sub-categories. For example, we found patents that had been invalidated by poster board displays, industry whitepapers, proposals circulated at working group meetings of technical standards bodies, doctoral dissertations, and postings on Internet discussion forums. (We did not, for the record, find any cases of patents invalidated by billboards.) The good news was that reliance on potentially obscure or idiosyncratic documents like these appeared to be rare. About 19% of anticipating printed publications fell into this sub-category, amounting to just about 2% of anticipation events overall. A little more than a quarter of obviousness invalidations citing a printed publication included one in the “other” category. These constituted about 9% of obviousness invalidations overall.
There were, however, some publications that defied further classification—usually because sealed court records prevented us from finding more than a shorthand reference to the relevant document. For anticipation, this was rare enough that it could not change our results very much. But this happened frequently enough in cases of obviousness that we must acknowledge some potential uncertainty. If all of the unidentifiable publications turned out to be non-traditional publications, it’s possible that up to 16% of obviousness invalidations may have relied on a publication in the “other” category.
Finally, it’s important to remember that this data only tells us how district courts invalidate patents—not how many or why patents might be invalid in general. It is possible that cases involving non-traditional publications are more likely to settle than other cases, or, for that matter, that they’re less likely to settle. There is a significant possibility of selection effects here, which prevents us from making any inferences about patent quality overall. So, in the end, I’ll have to keep teaching those cases about slide presentations and unpublished college theses, even if “publications” like those only rarely invalidate patents in court.
The PTAB sided with Apple in the underlying IPR proceedings, finding that VirnetX patent claims were obvious. U.S. Patent No. 8,504,696 (claims 1–11, 14–25, and 28–30). On appeal, the Federal Circuit has refused to consider the patentability merits — rather holding that the appeal is barred by issue preclusion (collateral estoppel).
Issue preclusion involves two separate legal actions — and operates to bar a party from relitigating an issue of law or fact already decided in a separate case involving the same party. Elements:
A prior action presents an identical issue to an issue in the later action;
The prior action actually litigated and adjudged that issue;
The judgment in that prior action necessarily required determination of the identical issue; and
the prior action featured full representation of the estopped party.
The case here started in December 2015 when Apple filed two separate IPR challenges to VirnetX’s ‘696 patent — both relied upon a 1998 Request for Comments from the Internet Engineering Task Force (IETF) – RFC 2401 – as a key prior art reference. The PTAB followed Apple’s suggestions and determined that RFC 2401 was a prior art printed publication that rendered the claims unpatentable (when combined with other references).
Meanwhile, the RFC 2401 had already been used by the PTAB to cancel several other VirnetX patents. In March 2018, the Federal Circuit affirmed those decisions in a R.36 No-Opinion Judgment.
Often, a R.36 Judgment (without opinion) cannot be used for issue preclusion purposes because it is impossible to tell whether the issue-at-issue was the reason for the judgment. However, the court has ruled that “a Rule 36 judgment may serve as a basis for collateral estoppel so long as … the resolution of the issue was essential or
necessary to the Rule 36 judgment.” Citing Phil-Insul Corp. v. Airlite Plastics Co., 854 F.3d 1344 (Fed. Cir. 2017).
Here, collateral estoppel works since – in the prior appeal – each ground of unpatentability relied upon RFC 2401. Thus, the court’s affirmance required an implicit rejection of VirnetX’s argument that the reference was not prior art. The court explains:
Indeed, in three of the seven final written decisions appealed in VirnetX I, the only issue raised was whether RFC 2401 was a printed publication. Accordingly, by affirming all
seven of the Board’s decisions, this court in VirnetX I necessarily found that RFC 2401 was a printed publication.
I’ll note here that the court particularly focused on this issue at oral arguments in the second case and the litigating attorney was forced to admit that the issue was necessary to the decision.
Other Federal Circuit decisions make clear that a R.36 judgment cannot be used for issue preclusion when there are alternative explanations for the judgment.
= = = =
As an interesting inside-issue. Oral arguments in this case were heard in September 2018. On November 28, 2018, VirnetX filed a motion with the Federal Circuit asking the appeal to be dismissed — expressly admitting that the Rule 36 judgment had collateral estoppel effect. By then, the court had already written its almost-final-draft opinion and so denied the motion. In this circumstance, is the decision only advisory (and thus not precedential?)
Guest Post by Dmitry Karshtedt, Professor at GW Law. Prof. Karshtedt attended the Supreme Court oral arguments in Helsinn v. Teva, and provides the following discussion. A transcript of the arguments is available here: Helsinn Transcript.
The oral argument in Helsinn Healthcare v. Teva Pharmaceuticals had a little bit of everything. First, the Court extensively aired the statutory interpretation question whether the phrase “otherwise available to the public” in the America Invents Act (AIA) expanded or contracted the universe of prior art or perhaps did a bit of both. More to the point of the question presented, the advocates argued extensively over whether the statutory revision modified the meaning of “on sale.” Second, the Justices explored weighty issues of patent policy, such as the role of Section 102 in preventing withdrawal of inventions from the public domain and effective extensions of patent term through pre-patent secret commercial exploitation. Third, undergirding these points were debates on the notion of “congressional ratification” and the role of various facets of legislative history in statutory interpretation—and even what an ordinary consumer would understand “on sale” to mean. As one would expect, there was no shortage of creative hypotheticals, one of which generated an extensive discussion of the meaning of “brownie.” All in all, the Court repeatedly praised the advocates for excellent briefing, and the Chief Justice promised that the Court will issue an excellent opinion—another thing to look forward to in 2019!
Petitioner’s counsel, Kannon Shanmugam, began the argument with the point that the AIA “clarified” the meaning of “on sale” with the phrase “otherwise available to the public.” He explained a that a private offer to his friend on the opposing side, William Jay, should not be a patent-barring event, but an offer to the courtroom audience to sell something to the highest bidder would be. This contention drew immediate, skeptical responses from the Chief Justice and Justice Kavanaugh. Isn’t the phrase “on sale” self-defining, and thus in no need of clarification? And, as relevant to this case, doesn’t a private offer still put something “on sale” under the plain meaning of this term—why should a public availability requirement be read in? Justice Breyer then entered the discussion with the policy argument that, since the time of Pennock v. Dialogue, the purpose of the on sale bar has been to prevent extensions of patent monopolies via initial commercial exploitation of the invention followed by patenting. Petitioner’s response here was that the precedent is better read as focusing on protection the public domain after the public has gained possession of the invention, which implies some level of public availability. In addition, in a point that the government later returned to, the counsel explained that the “extension” policy cannot be all that robust because the on sale bar clearly cannot reach certain pre-patent invention exploitation activities, such as using the invention to draw in venture funding.
Judge Kavanaugh then returned to the statute. If Congress sought to modify the meaning of “on sale,” then weren’t there clearer ways to do this, and didn’t early drafts of the AIA actually have some direct language abrogating the “secret prior art” case law? Further, Justice Ginsburg asked the petitioner to clarify whether or not he thought the AIA was actually a change in the law on the “secret prior art” point. Petitioner’s response here was that Congress wanted to keep the term “on sale” to retain much the underlying jurisprudence around it (such as the “ready for patenting” test) while abrogating certain outlier Federal Circuit cases like In re Caveney and Special Devices, which deemed secret sales to be patent-barring. That, in his view, was not inconsistent with adding an extra “catchall” category of publicly available art that didn’t formally fall into any of the preceding categories. He also maintained that the petitioner’s reading of the AIA was not inconsistent with Supreme Court case law, which has not endorsed the lower-court secret prior art decisions, so there was no clear rule for Congress to ratify in this area. Finally, he explained that the AIA’s first-to-file rule would discourage pre-patent commercial exploitation.
Judge Kavanaugh then referred to the Law Professors’ amicus brief, led by Mark Lemley, which maintained that the Court did indeed endorse the secret prior case law. Petitioner disagreed here, and reiterated that none of the Supreme Court on sale or public use rulings would be disturbed under Helsinn’s reading of the AIA. Justice Breyer countered with a discussion of Bonito Boats, which did address the notion of a “monopoly” going beyond the patent term, though in a different context. He also suggested that perhaps the petitioner’s real argument is that the transaction at issue in this case doesn’t really fit within the definition of the sale. Petitioner offered a variation on this theme, suggesting that a contract with a distributor subject to various contingencies was maybe not the kind of a sale meant to be covered by Section 102.
Malcom Stewart, representing the Solicitor’s office, then argued in support of Helsinn. He emphasized the point that MGI, Helsinn’s “buyer,” was only an intermediary, and there was no assurance of a passage of title to MGI—let alone to the end user of a drug at issue in this case. Indeed, the consumer might not see a transaction at issue in Helsinn as a sale at all. This situation contrasts with Pfaff, which the parties and the government seem to agree remains good law post-AIA, as Pfaff involved a firm offer to an end user. Justice Sotomayor retorted that, surely, commercial entities understand a sale to a distributor to still be a sale, as the product has left the hands of the inventor and begins to wind its way through the stream of commerce. Moreover, she maintained that there seemed to be no precedent, or even textual support, for the government’s definition.
Justice Kagan then picked up on a particularly important point in this case. Was there really settled law in this area, and did it include secret sales as prior art? The government responded that there was no such settled law, and what Congress was doing in the AIA is clarifying and modifying some prior decisions, rather than ratifying any secret prior art rule. Assuming such a rule was in fact settled, the government conceded that the “otherwise available to the public” phrase would be an oblique way to overturn it. Justice Kavanaugh amplified this point, again noting that more direct efforts to overturn the secret prior art case law have failed (which, incidentally, also suggests that such case law was at least somewhat settled). Here, the government responded by contending that the early proposals have failed because they were going so far as to take non-informing sales to the public out of the universe of the prior art, an unpalatable proposal. Instead, Congress reached a happy medium by overturning some outlier secret prior art case law, but not non-informing public sale case law.
William Jay argued for respondent. He started with the plain language argument that the phrase “on sale” just means “sold” or “subject to an offer for sale”—no public availability is required. The “otherwise available to the public” art is an entirely different category. Here, justice Alito zeroed in on the meaning of “otherwise available to the public.” That phrase would seem incompatible with the notion that “on sale” means “on sale publicly or on sale privately.” Indeed, the string “on sale publicly, on sale privately, or otherwise available to the public” seems incoherent. The response was that some “on sale” events are surely public, and if the “otherwise available to the public” does refer back to “on sale,” it concerns only those the public sales (of course, a possible response here is that a sale, any sale, is simply deemed in the eyes of the law to make the invention “available to the public”). Petitioner further contended that the new Section 102 is better read as mainly adding an extra category of prior art, such as oral presentations, with the “otherwise available to the public” language—and it would be odd to have a category broadening the definition of prior art that at the same time narrowed it by eliminating secret sales from the definition.
After noting that other countries do not seem to recognize secret art as patent-barring, Justice Sotomayor returned Mr. Jay to Justice Alito’s “otherwise” question. He responded that the role of “otherwise” is, in part, to avoid the potential for interpreting terms like “printed publications” so as to include non-public documents and, more generally, to prevent unsettling the other categories by making clear that “otherwise available to the public” is a residual category of its own. Justice Breyer continued with an inquiry into the phrase by noting that a hypothetical string of “basketball, running, swimming, or otherwise - or games that otherwise involve a ball” as being incoherent. Respondent explained that, while awkward, this phrase doesn’t change the meaning of “swimming” into something like water polo. Justice Kagan added a particularly insightful hypothetical: “suppose I say don’t buy peanut butter cookies, pecan pie—this is the key one, ready—brownies, or any dessert that otherwise contains nuts. Do I—do I violate the injunction if I buy nutless brownies?” The implication, of course, is that nutless brownies are ok to buy, and maybe by analogy then non-public sales (like nutless brownies) are not a danger from the inventor’s perspective. The response here was that, while brownies might have nuts or be nutless, a notion of sale encompasses both public and private sales, though Justice Kagan retorted than maybe the meaning sale is not so clear. Justice Kavanaugh returned to point that maybe “otherwise available to the public” is there to summarize the preceding terms, but Mr. Jay’s response that “on sale” has a definitive meaning—”make available to a willing purchaser”—that this phrase could not unsettle.
Justice Gorsuch asked whether, assuming “on sale” is at all ambiguous, the PTO is entitled to some deference to its interpretation, which excludes secret prior art. The respondent countered that, as a plain language matter, that interpretation is just not persuasive. He then maintained that there is no dispute that the transaction at issue in Helsinn was a sale, and that the industry would so understand it. Indeed, he noted that most drugs are sold to distributors, and rule that such a transaction is not a sale will be unduly lenient to the pharmaceutical industry. Justice Kagan then finally brought up the point of third-party secret sales (the fact that Section 102 is party-neutral always seemed important to me), and Mr. Jay responded that they are patent barring. This is correct—the holding in Caveney supports this point. But the implication of this law for the “inventor forfeiture” view was unfortunately not further explored.
In rebuttal, petitioner emphasized the context of the phrase “on sale” and maintained that respondent’s reading would read the word “otherwise” out of the statute. The next “otherwise” string was from a case called United States v. Standard Brewery, which concluded that the phrase “beer, wine, and other intoxicating liquor” excluded alcohol-free beer. After presenting this example, Mr. Shanmugam maintained that there is no legislative history support for respondent’s interpretation. Perhaps more importantly for making the Court comfortable with its position, he reiterated that Pfaff would not be overruled under Helsinn’s interpretation of the AIA. Thus, the parties and the government all agree at least on that. As a patent law Professor, I took this to heart because, whatever happens in Helsinn, my Section 102 notes will not be completely upended by whatever the Supreme Court decides.
Stephen Yelderman is a Professor of Law at the University of Notre Dame Law School.
This week we’ll take a closer look at “activity” prior art—prior uses, sales, and “invention by another.” As I mentioned in my last post, a little more than half the time district courts find a claim anticipated, they rely on art in this category. Activity prior art is less common for obviousness invalidations, but still quite routine: just over a quarter of obviousness invalidations cite activity prior art. (For more background on this project, you can find the full paper here.)
The 2011 America Invents Act (“AIA”) changed the rules for determining when activity qualifies as prior art in several respects. At a minimum, the AIA constricted this category of prior art by removing the “prior invention by another” path previously found in § 102(g). Arguably, the AIA trimmed the category in another way too—by imposing a new “available to the public” requirement on prior uses and sales. (Whether it did or not is the question the Supreme Court will take up next week in Helsinn Healthcare v. Teva Pharmaceuticals.) In the opposite direction, the AIA eliminated the limitation that uses and sales qualify as prior art only if they occurred in United States. Given all this, one might wonder: just how significant are the AIA’s changes when it comes to the prior art district courts actually rely on?
All of the district court invalidations in our study (except for one) involved applications of pre-AIA law, so we can use our data to predict how many cases might come out differently if the stricter aspects of the new prior art rules had applied instead. The answer is not many. For prior invention by another, this exercise was straightforward: under pre-AIA law it was its own legally distinct category, and there is no question that it was eliminated by the AIA. Based on our coding, we found that prior invention by another constituted about 8% of anticipation events relying on activity, and was a basis for roughly 1% of obviousness invalidations citing any activity. From the perspective of anticipation and obviousness overall, just a little more than 2% of district court invalidations relied on this prior art path. (And we can’t rule out the possibility that some of that art might have qualified by a different path anyway.)
The effect of requiring prior uses and sales to be “available to the public” is slightly harder to predict, since we do not yet know what that language will mean (or, until Helsinn is decided, if it applies to prior uses and sales at all). To get a bit of purchase on this question, we coded prior uses and sales that were potentially kept secret from the public: offers / sales made to an identified counterparty (fact patterns like Pfaff v. Wells), internal commercial uses (fact patterns like Metallizing Engineering), and uses by a limited and identified group of outsiders (fact patterns like Egbert v. Lippmann). It’s important to note that this classification scheme is likely overbroad: from the documents before us, we could not always determine whether a use or sale was in fact secret at the time. Instead, we categorized activity based on whether the use or sale could have potentially been secret.
Despite our likely overbroad classification scheme, potentially secret uses or sales appeared to be cited only rarely. When a court found a claim anticipated based on activity, that activity was potentially secret about 14-15% of the time. (These figures are presented as ranges because of a few cases in which we could not determine whether the cited activity was potentially secret under our framework.) When activity was cited in support of obviousness, the cited activity was potentially secret somewhere between 2-7% of the time. To look at the same data from another angle, among all the uses and sales district courts relied upon to invalidate patents, 88-90% lacked any indications of potential secrecy. As a share of anticipation and obviousness invalidity overall, potentially secret uses and sales were cited in about 4-5% of claim invalidations.
So if the past is a guide, it appears that few of the cases litigated to a decision of invalidity under the old law would be flipped under the AIA’s (purported) constriction of the activity prior art category. We must hedge a bit here, however, since we cannot say what the post-Helsinn law will be, or how inventors and litigants might adapt their behavior in light of new rules. What we can say with certainty is that, among the set of all recent court decisions invalidating patents under pre-AIA law, we find only a small number (an average of 3-4 patent invalidations a year) that would be affected by the question in Helsinn.
Unfortunately, the nature of our study does not allow us to predict the effects of the AIA’s amendments in the opposite direction—that is, the changes that made it easier for some activities to qualify as prior art. As mentioned above, the AIA eliminated the longstanding rule that uses and sales may qualify as prior art only if they were conducted in the United States. Because we were observing cases litigated under pre-AIA law, all of the activities we coded had occurred within the United States. We therefore did not observe the non-U.S. activity prior art that may have been waiting in the wings but was excluded by the pre-AIA’s domestic limitation on this category. Likewise, we cannot predict what the effect of adding “otherwise available to the public” as a distinct prior art category might be (not to be confused with the Helsinn question of whether that language modifies other categories).
Finally, some might expect the importance of activity prior art in district courts to be increasing over time, for reasons that are related to the AIA but unrelated to the prior art rules themselves. Readers of this blog do not need to be told of the overwhelming popularity of inter partes review (“IPR”) as an alternative forum for adjudicating patent validity. (By my count, in 2016, roughly 380 patents were invalidated in IPR, dwarfing the number of patents invalidated on prior art grounds by district courts.) But activity prior art is categorically excluded from consideration in IPR, leaving district courts as the primary venue for adjudicating validity when activity prior art is at issue. It would seem logical, therefore, for the share of district court cases involving activity prior art to grow over time, as defendants challenging patents based only on non-activity art select into IPR for its speed, cost, and lower burden of persuasion.
Surprisingly, however, this is not what we found:
This chart illustrates the percentage of district court patent invalidations relying on activity prior art to invalidate any claim. As this chart shows, this number has remained remarkably stable throughout the advent of IPR. Though defendants may be opting in to IPR in large numbers, it is not the case that only activity-based invalidations remain in district court.
To be clear, the availability of IPR could still be having an effect on the kinds of cases that remain for validity decisions in district court. For example, courts may now be deciding only validity challenges in which the defendant made a strategic decision not to petition for IPR, or did petition for IPR without success. Moreover, during the time period illustrated above, the patent system was undergoing a number of changes simultaneously, so it is difficult to isolate the effects of IPR.
All of this is to say that the relationship between IPR and the work of district courts defies a simple explanation. But we can say with confidence that prior art patents and printed publications continue to play an important role in district court invalidations, notwithstanding the availability of IPR.
Edited 11/30: Clarified that 2% reliance on “prior invention by another” and 4-5% reliance on potentially secret uses and sales are stated percentages of claim invalidations for anticipation or obviousness. As a share of invalidations on any grounds, these numbers would be even smaller.
Stephen Yelderman is a Professor of Law at the University of Notre Dame Law School.
Not all prior art is created equal. The ease of finding what’s been done before can vary dramatically—from a prior U.S. patent cited by hundreds of applicants, to the dusty doctoral thesis sitting on the shelf of a foreign library. So one might wonder: when district courts invalidate patents on prior art grounds, do they typically rely on prior art that the inventor, or the USPTO, or even a reasonably diligent searcher could plausibly have found? Or do courts regularly invalidate patents on the basis of art that only the most determined litigant could have possibly uncovered?
For the last year or so, I have been working with a team of research assistants to attempt to answer these and other questions. Drawing directly from district court dockets, we collected every decision invalidating a patent claim over a six-and-half-year period. We then coded these on a claim-by-claim, reference-by-reference basis to learn how district courts rely on prior art. Over the next several weeks, I’ll be highlighting some of the more interesting things we’ve uncovered. In this post, I’ll start by sharing some of our top-level findings and briefly explaining our collection methodology. (If you’d like to see our full results right away, a draft of the paper is available for download here.)
First, some may be surprised to learn that district court invalidation appears to be evenly split between anticipation and obviousness. This is true whether one measures by patents or claims:
Over our study period, the number of claims invalidated for anticipation (1,636) almost exactly equaled the number of claims invalidated for obviousness (1,620). As the chart above shows, while there was some up and down from year to year, the ratio held very close to 1 throughout our study period.
However, the similarities end there. In terms of the prior art relied upon to invalidate claims, anticipation and obviousness are two very different animals:
The black columns indicate the percentage of anticipation invalidations citing each category of prior art. As you can see, district court findings of anticipation rely predominantly on activity prior art (defined to include prior uses, sales, and invention by another—old § 102g). After that, in descending order of frequency, come U.S. patents, printed publications, and foreign patents.
Obviousness invalidations are a bit harder to summarize concisely, since they can be based on multiple references. The hashed columns indicate the percentage of obviousness invalidations citing any art in that category; the gray columns indicate the percentage of obviousness invalidations citing art only in that category. The headline here is that U.S. patents are by far the most commonly cited category of prior art for obviousness: nearly two thirds of obviousness invalidations cite at least one U.S. patent. But less than one third of obviousness invalidations cite only U.S. patents. A similar theme bears out across the rest of the chart. When courts combine multiple references to find a claim obvious, they often do so by combining art across categories—a U.S. patent combined with a prior sale, for example, or a foreign patent combined with a printed publication.
Each of these top-level categories will be explored in more detail in subsequent posts. I’ll close this one with a bit of background about our collection methodology. For purposes of this study, our focus was limited to claim invalidity as found by district courts. Therefore, our data does not capture every distinct argument the defendant made for invalidity, or judicial findings that a claim was “not invalid.” It also does not reflect the ways these decisions may have been modified on appeal. We believe our data does capture every district court determination that a claim was invalid, whether in a published opinion, unpublished document, or jury verdict. In a few cases, these documents did not clearly specify on their face which references supported the conclusion of invalidity. When this occurred, we consulted other documents on the docket (such as post-trial briefing) to identify the prior art supporting the court’s conclusions. When we could not find a conclusive answer, we coded the prior art as “unknown” (the final category in the chart above). Additional details about how we collected and coded these documents can be found in Part II of the paper.
Finally, when interpreting all of this data, one should keep in mind that this is a study of how district courts cite prior art, not a study of patent quality overall. A tiny fraction of issued patents are ever litigated, and only a tiny fraction of those are litigated to a determination of validity. Moreover, the incentives to litigate or settle a patent dispute could very well turn on the nature of the prior art in a case, so the possibility of selection effects is real. Therefore, this data should only be used to answer questions about why patents are invalidated in district court, not why patents might be invalid in general.
Acceleration Bay, LLC v. Activision Blizzard Inc., Docket No. 17-2084 (Fed. Cir. 2018)
This consolidated appeal involves 12 different inter partes review proceedings collectively challenging three Acceleration Bay patents.[1] The patents at issue here are all related to methods of broadcasting information over a peer-to-peer network. The basic approach here is to ensure that the network is sufficiently connected and then send data through each node to its neighbor participants. I made the gif below that provides a simple example.
The PTAB split in its decision – finding many of the challenged claims obvious but some patentable.[2] The decision involves a few patent attorney inside questions:
If a claim has no transition phrase, is it all body? Some of the challenged claims had no transition phrase such as “comprising” — Claim 1 of the ‘966 patent is on point:
1. A computer network for providing an information delivery service for a plurality of participants, each participant having connections to at least three neighbor participants, wherein an originating participant . . .
On appeal, the patentee argued that “information delivery services” should be seen as a limiting claim term — because it is part of the body of the claim — rather than a non-limiting portion of the preamble. Here, challenged term appears toward the start of the claim, but the patentee argues that the claim is all-body (and therefore is all limiting). On appeal, the Federal Circuit sided with the PTAB that the term was part of the preamble and was non-limiting. The court writes “Acceleration’s poor claim drafting will not be an excuse for it to infuse confusion into its claim scope.” Note here that the patents originally belonged to Boeing and were prosecuted by Perkins Coie.
Printed Publication: In its cross-appeal, Blizzard argued that a particular reference (“Lin”) should count as a prior art printed publication. The article in question is captioned:
Meng-Jang Lin, et al., Gossip versus Deterministic Flooding: Low Message Overhead and High Reliability for Broadcasting on Small Networks, Technical Report No. CS1999-0637 (Univ. of Cal. San Diego, 1999).
The unchallenged testimony was that the article by Lin was uploaded to the UCSD Computer Science and Engineering website (on a page of CSE technical reports). The upload took place in 1999 before the critical date for the patents and the site was indexed and searchable – although the search function was limited. Still, the PTAB found that the document was not “published” — a conclusion affirmed on appeal.
To qualify as a “publication” the document must either (1) be actually distributed to the public or (2) be publicly available. Because there was no evidence that the document actually reached members of the public, the focus was on the second prong, public availability. The question here: “whether an interested skilled artisan, using reasonable diligence, would have found Lin on the CSE Technical Reports Library website.” Although the site was indexed and searchable, the PTAB concluded that the search function was limited and that the evidence only “suggests that an artisan might have located Lin by skimming through potentially hundreds of titles in the same year, with most containing unrelated subject matter, or by viewing all titles in the database listed by author, when the authors were not particularly well known.”
Treating public accessibility as a factual determinatoin, the Federal Circuit affirmed — finding that “[s]ubstantial evidence supports the Board’s finding that there “is insufficient evidence of record to support a finding that a person of ordinary skill in the art in 1999 could have located Lin using the CSE Library website’s search function.”
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As noted above, a critical factor in the Federal Circuit’s analysis was the deference given to PTAB fact finding — holding that public accessibility is a question of fact.
Whether a reference qualifies as a printed publication under § 102 is a legal conclusion based on underlying fact findings. Jazz Pharm., Inc. v. Amneal Pharm., LLC, 895 F.3d 1347, 1356 (Fed. Cir. 2018); accord Cooper Cameron Corp. v. Kvaerner Oilfield Prod., Inc., 291 F.3d 1317, 1321 (Fed. Cir. 2002). One such fact question is public accessibility, which we review for substantial evidence. Jazz Pharm., 895 F.3d at 1356.
In a prior post, I walked though a series of low quality citation strings on the question of whether public-accessibility is a question of fact (or instead a question of law).
Here, the court cites Jazz Pharma, and Jazz Pharma does include the holding that “[p]ublicaccessibility is a question of fact.” Jazz Pharma justifies this holding with a citation to In re NTP, Inc., 654 F.3d 1279 (Fed. Cir. 2011). NTP also includes the short statement that “publicly accessible is a question of fact,” again without any reasoning or explanation other than a citation back to In re Klopfenstein, 380 F.3d 1345 (Fed. Cir. 2004) along with the parenthetical (holding that whether a reference is publicly accessible is based on the “facts and circumstances surrounding the reference’s disclosure to members of the public”). It turns out though that Klopfenstein did not actually make that holding. Once again, this citation string goes back to nowhere.
[2] “Claims 1–9 of U.S. Patent No. 6,829,634, claims 1–11 and 16–19 of U.S. Patent No. 6,701,344, and claims 1–11 and 16–17 of U.S. Patent No. 6,714,966” were all found invalid. “Claims 10–18 of the ’634 patent, as well as substitute claims 19 of the ’966 patent, 21 of the ’344 patent, and 25 of the ’634 patent” were all found patentable.
In its July 2018 decision, the Federal Circuit vacated a PTAB IPR final decision over a prior-art dispute — whether a GoPro catalog counts as prior art as a “printed publication” under 35 U.S.C. 35 U.S.C. § 102(b) (pre-AIA). Below I discuss the July Federal Circuit decision as well as the November 1 panel revision decision.
In its IPR institution decision, the PTAB found that the patent challenger had made a threshold showing that the catalog was prior art as a printed publication. However, on final analysis, the PTAB found that its prior art status had not been proven. The patent challenger GoPro appealed.
The Federal Circuit has broadly interpreted “printed publication” to include all sorts of documents — so long as they were either (1) distributed to relevant members of the public; or (2) accessible to the relevant public.
A reference will be considered publicly accessible if it was ‘disseminated or otherwise made available to the extent that persons interested and ordinarily skilled in the subject matter or art exercising reasonable diligence, can locate it.’ Blue Calypso quoting Kyocera Wireless.
Here, the catalog in question was taken to the Tucker Rocky dealer-only trade show in Fort Worth Texas in July 2009 (before the critical date). Tucker Rocky is a wholesaler of “action sports vehicles like motorcycles, motorbikes, ATVs, snowmobiles, and watercraft.” A GoPro employee testified that he took the catalog to the show where it was displayed and distributed to attendees. The employee also testified that the GoPro continued to make the catalog available to “actual and potential customers, dealers, and retailers through its website, direct mail, and other means of distribution.” In its response, Contour provided evidence that the Tucker Rocky show was limited only to dealers — and not open to the public. The PTAB found the GoPro employee’s testimony credible — but found it insufficient to prove public accessibility — since the show was not advertised or announced to the public. According to the Board — the fact that dealers attended was insufficient because dealers do sales not camera engineering — i.e., dealers are not persons of skill in the art of camera making. Thus, this dealer show is different from an academic meeting where the attendees are skilled in the art.
On appeal, the Federal Circuit disagreed with the PTAB’s conclusions — holding that the Board too narrowly “focused on only one of several factors that are relevant to determining public accessibility in the context of materials distributed at conferences or meetings. . . . [O]ur case law directs us to also consider the nature of the conference or meeting; whether there are restrictions on public disclosure of the information; expectations of confidentiality; and expectations of sharing the information.”
After reviewing the matter Federal Circuit rejected the PTAB analysis and found that the catalog’s use at the show counted as prior art.
Its original opinion focused more on factual matters — disputing some findings of the PTAB. The new revised opinion focuses more on legal errors made by the PTAB — making this perhaps a more supportable opinion.
For a conference distribution, the key added line makes clear that the distribution can still count as a publication — even if not directly distributed to any person of skill in the art.
When direct availability to an ordinarily skilled artisan is no longer viewed as dispositive, the undisputed record evidence compels a conclusion that the GoPro Catalog is a printed publication as a matter of law.
It is this line that serves as the source of the essay title. In the original opinion, the court quibbled with the notion that dealers were not PHOSITA. The revised opinion substantially drops that argument and explains that the factor simply is not determinative.
I have black-lined the primary changes in the text based upon the rehearing decision:
Although the trade show was only open to dealers, there is no evidence or indication that any of the material disseminated or the products at the show excluded POV action cameras, or information related to such cameras. Contrary to the Board’s conclusion, the attendees attracted to the show were likely more sophisticated and involved in the extreme action vehicle space than an average consumer. Thus, it is more likely than not that persons ordinarily skilled and interested in POV action cameras were in attendance or at least knew about the trade show and expected to find action sports cameras at the show. While the Board found that GoPro did not provide any evidence as to what products the companies at the trade show make, GoPro was not the only manufacturer of POV action cameras. The vendor list provided with Mr. Jones’s declaration listed a number of vendors who likely sell, produce and/or have a professional interest in digital video cameras. J.A. 4319, 4323–24. This is especially true in light of the evidence that Tucker Rocky is a trade organization directed to action sports vehicles and accessories related thereto. J.A. 4319.
The Board concluded that the GoPro Catalog was not a printed publication because the Tucker Rocky Dealer Show was not open to the general public and GoPro failed to provide evidence that someone ordinarily skilled in the art actually attended the dealer show. But, the standard for public accessibility is one of “reasonable diligence,” Blue Calypso, 815 F.3d at 1348, to locate the information by “interested members of the relevant public.” Constant, 848 F.2d at 1569 (emphasis added). A dealer show focused on extreme sports vehicles is an obvious forum for POV action sports cameras. And although the general public at large may not have been aware of the trade show, dealers of POV cameras would encompass the relevant audience such that a person ordinarily skilled and interested in POV action cameras, exercising reasonable diligence, should have been aware of the show. Mr. Jones testified that the dealer show was attended by actual and potential dealers, retailers, and customers of POV video cameras. Additionally, the GoPro Catalog was disseminated with no restrictions and was intended to reach the general public. Based upon Mr. Jones’s testimony, the evidence provided by GoPro regarding the Tucker Rocky Dealer Show, and the evidence of the Tucker Rocky Distributing website, we conclude that GoPro met its burden to show that its catalog is a printed publication under
Although the court did not well on this issue, the court noted that the patentee did not depose or cross examine the GoPro employee (Jones) who testified. In hindsight, that may have been a strategic mistake. Although Jones would have likely stuck to his testimony, a deposition would have likely been able to poke various holes into the account.
The revised opinion has a few other minor changes:
The Board based this decision on its findingconclusion that a certain GoPro catalog is not a prior art printed publication. We disagree. . . . In its final written decisions, the Board foundconcluded that the GoPro Catalog did not qualify as a prior art printed publication under 35 U.S.C. § 102(b).
The Board’s findings of fact, such as public accessibility, are reviewed for substantial evidence.
The change from “finding” to “conclusion” is not explained but these terms appear to be short-hand for “finding of fact” and “conclusion of law.” The Federal Circuit sees the question of whether a reference is a “printed publication” is a question of law — and so “conclusion of law” is the appropriate term.
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Diversion into the wormhole of whether Public Accessibility a Question of Fact: I’m not confident in the court’s statement here that “public accessibility” is a question of fact. In Klopfenstein, for instance, the court first noted that there were no factual disputes between the parties — but that the court still needed to determine whether the reference was publicly accessible. In re Klopfenstein, 380 F.3d 1345 (Fed. Cir. 2004). Calling “public accessibility” a question of fact and “printed publication” a question of law is also problematic because the court has called the two classifications essentially overlapping — “Thus, throughout our case law, public accessibility has been the criterion by which a prior art reference will be judged for the purposes of § 102(b).” Klopfenstein.
In its 2018 Jazz Pharm. decision, the Federal Circuit stated that “Publicaccessibility is a question of fact that we review for substantial evidence.” Jazz Pharm., Inc. v. Amneal Pharm., LLC, 895 F.3d 1347, 1356 (Fed. Cir. 2018). The Jazz Pharm. court did not explain its reasoning for this statement but merely cited In re NTP, Inc., 654 F.3d 1279 (Fed. Cir. 2011). The NTP case also provides a 1-liner that “Whether a reference is publicly accessible is a question of fact that we review for substantial evidence.” NTP did not provide any reasoning for this statement but merely cited back to the aforementioned In re Klopfenstein, 380 F.3d 1345, 1350 (Fed.Cir.2004). Klopfenstein decided the question of public accessibility (which was disputed by the parties) shortly after stating that “there are no factual disputes between the parties in this appeal.” This appears to be a situation where the roots were not properly dyed.
Going back to NTP, the court cited to a particular statement in Klopfenstein for its conclusion that public accessibility is a question of fact:
Whether a reference is publicly accessible is a question of fact that we review for substantial evidence. In re Klopfenstein, 380 F.3d 1345, 1350 (Fed.Cir.2004) (holding that whether a reference is publicly accessible is based on the “facts and circumstances surrounding the reference’s disclosure to members of the public”).
NTP. Unfortunately, the NTP court badly mis-paraphrased Klopfenstein. The more complete quote from Klopfenstein on this issue is as follows:
Where no facts are in dispute, the question of whether a reference represents a “printed publication” is a question of law. . . The determination of whether a reference is a “printed publication” under 35 U.S.C. § 102(b) involves a case-by-case inquiry into the facts and circumstances surrounding the reference’s disclosure to members of the public.
Klopfenstein. NTP took this quote to mean that the issue of public accessibility is a question of fact. But, as you can see, the quote refers to the broader issue of whether a document is a “printed publication” and actually holds that it is a question of law.
Another source of law here is In re Hall, 781 F.2d 897, 899 (Fed. Cir. 1986), which states that “[t]he § 102 publication bar is a legal determination based on underlying fact issues.” For this proposition, Hall cites back to In re Wyer, 655 F.2d 221, 227 (Cust. & Pat. App. 1981), which does not discuss any fact-law divide but only that “[e]ach case must be decided on the basis of its own facts.” Id. Hall also cites to another thesis-publication, Application of Bayer, 568 F.2d 1357, 1357 (Cust. & Pat. App. 1978). In Bayer, the CCPA analyses does the same type of public accessibility analysis seemingly reviewing a large number of facts – but adds a footnote indicating that “we are here concerned only with a question of law.” Id.
This whole series of failed citations makes the Federal Circuit look pretty bad.
Alexander Milburn Co. v. Davis Bournonville Co., 270 U.S. 390 (1926)
Syllabus
1. Where a patent application fully and adequately disclosed, but did not claim, the thing patented to a later applicant alleging a later date of invention, the later applicant was not the “first inventor” within Rev.Stats. § 4920. P. 270 U. S. 399.
2. As regards “reduction to practice,” a description that would bar a patent if printed in a periodical or in an issued patent is equally effective in an application. P. 270 U. S. 401.
MR. JUSTICE HOLMES delivered the opinion of the Court.
This is a suit for the infringement of the plaintiff’s patent for an improvement in welding and cutting apparatus alleged to have been the invention of one Whitford. The suit embraced other matters but this is the only one material here. The defence is that Whitford was not the first inventor of the thing patented, and the answer gives notice that, to prove the invalidity of the patent, evidence will be offered that one Clifford invented the thing, his patent being referred to and identified. The application for the plaintiff’s patent was filed on March 4, 1911, and the patent was issued on June 4, 1912. There was no evidence carrying Whitford’s invention further back. Clifford’s application was filed on January 31, 1911, before Whitford’s, and his patent was issued on February 6, 1912. It is not disputed that this application gave a complete and adequate description of the thing patented to Whitford, but it did not claim it. The district court gave the plaintiff a decree, holding that, while Clifford might have added this claim to his application, yet as he did not, he was not a prior inventor. 297 F. 846. The decree was affirmed by the circuit court of appeals. 1 F.2d 227. There is a conflict between this decision and those of other Circuit Courts of Appeal, especially the Sixth. Lemley v. Dobson-Evans Co., 243 F. 391. Naceskid Service Chain Co. v. Perdue, 1 F.2d 924. Therefore a writ of certiorari was granted by this Court.
The patent law authorizes a person who has invented an improvement like the present, “not known or used by others in this country, before his invention,” etc., to obtain a patent for it. Rev. Sts. § 4886, amended by Act March 3, 1897, c. 391, § 1, 29 Stat. 692. Among the defences to a suit for infringement the fourth specified by the statute is that the patentee “was not the original and first inventor or discoverer of any material and substantial part of the thing patented.” Rev. Sts. § 4920, March 3, 1897, c. 391, § 2, 29 Stat. 692. Taking these words in their natural sense as they would be read by the common man, obviously one is not the first inventor if, as was the case here, somebody else has made a complete and adequate description of the thing claimed before the earliest moment to which the alleged inventor can carry his invention back. But the words cannot be taken quite so simply. In view of the gain to the public that the patent laws mean to secure, we assume for purposes of decision that it would have been no bar to Whitford’s patent if Clifford had written out his prior description and kept it in his portfolio uncommunicated to anyone. More than that, since the decision in the case of the Corn planter Patent, 23 Wall. 181, it is said at all events for many years, the Patent Office has made no search among abandoned patent applications, and by the words of the statute, a previous foreign invention does not invalidate a patent granted here if it has not been patented or described in a printed publication. Rev. Sts. § 4923. See Westinghouse Machine Co. v. General Electric Co., 207 F. 75. These analogies prevailed in the minds of the courts below.
On the other hand, publication in a periodical is a bar. This as it seems to us is more than an arbitrary enactment, and illustrates, as does the rule concerning previous public use, the principle that, subject to the exceptions mentioned, one really must be the first inventor in order to be entitled to a patent. Coffin v. Ogden, 18 Wall. 120. We understand the circuit court of appeals to admit that, if Whitford had not applied for his patent until after the issue to Clifford, the disclosure by the latter would have had the same effect as the publication of the same words in a periodical, although not made the basis of a claim. 1 F.2d 233. The invention is made public property as much in the one case as in the other. But if this be true, as we think that it is, it seems to us that a sound distinction cannot be taken between that case and a patent applied for before but not granted until after a second patent is sought. The delays of the patent office ought not to cut down the effect of what has been done. The description shows that Whitford was not the first inventor. Clifford had done all that he could do to make his description public. He had taken steps that would make it public as soon as the Patent Office did its work, although, of course, amendments might be required of him before the end could be reached. We see no reason in the words or policy of the law for allowing Whitford to profit by the delay and make himself out to be the first inventor when he was not so in fact when Clifford had shown knowledge inconsistent with the allowance of Whitford’s claim, [Webster] Loom Co. v. Higgins, 105 U. S. 580, and when otherwise the publication of his patent would abandon the thing described to the public unless it already was old, McClain v. Ortmayer, 141 U. S. 419, 141 U. S. 424. Underwood v. Gerber, 149 U. S. 224, 149 U. S. 230.
The question is not whether Clifford showed himself by the description to be the first inventor. By putting it in that form, it is comparatively easy to take the next step and say that he is not an inventor in the sense of the statute unless he makes a claim. The question is whether Clifford’s disclosure made it impossible for Whitford to claim the invention at a later date. The disclosure would have had the same effect as at present if Clifford had added to his description a statement that he did not claim the thing described because he abandoned it or because he believed it to be old. It is not necessary to show who did invent the thing in order to show that Whitford did not.
It is said that, without a claim, the thing described is not reduced to practice. But this seems to us to rest on a false theory helped out by the fiction that, by a claim, it is reduced to practice. A new application and a claim may be based on the original description within two years, and the original priority established notwithstanding intervening claims. Chapman v. Wintroath, 252 U. S. 126, 252 U. S. 137. A description that would bar a patent if printed in a periodical or in an issued patent is equally effective in an application so far as reduction to practice goes.
As to the analogies relied upon below, the disregard of abandoned patent applications however explained cannot be taken to establish a principle beyond the rule as actually applied. As an empirical rule, it no doubt is convenient, if not necessary, to the Patent Office, and we are not disposed to disturb it, although we infer that originally the practice of the Office was different. The policy of the statute as to foreign inventions obviously stands on its own footing, and cannot be applied to domestic affairs. The fundamental, rule we repeat, is that the patentee must be the first inventor. The qualifications in aid of a wish to encourage improvements or to avoid laborious investigations do not prevent the rule from applying here.
Jazz Pharms., Inc. v. Amneal Pharms., Inc., — F.3d —, 2018 U.S. App. LEXIS 19268 (Fed. Cir. 2018)
The patented invention at issue in Jazz Pharms is not a drug or drug treatment, but rather to a “drug distribution system for tracking prescriptions” for drugs with a risk of abuse[1] The PTAB found claims from all six patents to be invalid as obvious.
The core issue on appeal was whether a pre-filing disclosure by Jazz counted as a prior art “printed publication.”
Printed Publication: As the language suggests, a “printed publication” must be both “printed” and also a “publication.” These requirements though have been broadly construed. “Printed” publications go well beyond physical hard-copies to allow for various media – including video and online forms. To be a “publication,” the reference needs to be made sufficiently available to the public – publication. In the leading case of In re Hall,[2] the Federal Circuit explained that accessibility to the relevant public is key – we ask “whether interested members of the relevant public could obtain the information if they wanted to.” Although the court has developed a number of guide posts, the question of sufficient availability is seen as a factual inquiry handled on a case-by-case basis.
The prior art here was developed as part of an FDA drug safety review for one of Jazz’s drug products that was known as a potential date-rape drug. In May 2001, the FDA announced in the Federal Register an upcoming public meeting – noting that the focus of the meeting would be on risk management for the drug. The notice included a hyperlink to the pin-cite that eventually included meeting information, including background material, minutes, transcripts, and slides.
With these facts, Jazz Pharms appears an easy case – the materials were freely available online and relevant members of the public were directed to the material via the official public source.
A few caveats here:
The materials were not proven to be searchable or indexed at the time. In response, the court explained that these are not required elements of publication if sufficiently disseminated via other mechanisms.
Jazz argued that folks of skill would not have seen the notice in the Federal Register and therefore not have been pointed to the underlying documents. In response, the Federal Circuit explained that a Federal Register notice might notalways be sufficient to place the relevant public on notice of a publication, but that it was sufficient in this case since it was indexed and directed toward members of the public interested in systems to protect the public from potentially dangerous drugs. The court also endorsed the PTAB’s “sensible observation that the purpose of the Federal Register is to provide notice of government action such as the advisory committee meeting here.”
Note here that with publication, the touch stone is “accessibility” rather than “actual access.” The court has repeatedly explained that “[i]f accessibility is proved, there is no requirement to show that particular members of the public actually received the information.” Constant v. Advanced Micro-Devices, Inc., 848 F.2d 1560 (Fed. Cir. 1988).
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[1] U.S. Patents 7,668,730, 7,765,106, 7,765,107, 7,895,059, 8,589,182, 8,457,988.
Under the 2011 America Invents Act, certain Covered Business Method Patents (CBM) can be broadly challenged as part of a Post-Grant Review (PGR). CBM filing was opened on September 16, 2012 – 1 year after AIA enactment. So far, about 600 CBM petitions have been filed.
