Tag Archives: Section 101

Pending En Banc Petitions at the Federal Circuit

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by Dennis Crouch

The Federal Circuit recently decided the en banc design patent case of LKQ v. GM, but the court has not issued an en banc decision in a utility patent case since 2018.  There are currently four interesting petitions pending before the court.

Brumfield – Consistency and Proving International Damages: The Federal Circuit panel affirmed the district court’s grant of summary judgment that the asserted claims of the two asserted patents are invalid under 35 U.S.C. § 101. Brumfield v. IBG LLC, No. 2022-1630 (Fed. Cir. Mar. 27, 2024).  Although the Federal Circuit had previously held that the claimed invention was “technological,” the court here concluded that it was not bound by that prior non-precedential decision. In the petition for rehearing, Brumfield argues the improperly disregarded the Federal Circuit’s prior finding that the patents claim technological improvements.  The contention here is that “the interest of consistency would be ‘ill served'” by allowing different panels to make contradictory findings about the same patent claims.” See, Burke, Inc. v. Bruno Indep. Living Aids, Inc., 183 F.3d 1334 (Fed. Cir. 1999). Id.

The panel also affirmed the district court’s exclusion of Brumfield’s damages expert’s testimony on obtaining foreign damages based on IBG’s domestic making of the accused product. The panel held that although the Supreme Court’s WesternGeco  decision permits awarding damages based on foreign conduct in cases involving domestic infringement, the expert had failed to establish the required causal relationship between the domestic infringement and the foreign conduct. In the rehearing petition, Brumfield argues the improperly decided this fact-intensive causation issue sua sponte, depriving Brumfield of the opportunity to present evidence on an issue that IBG never disputed below or on appeal. [Note: I was involved in litigating patents from this patent family when owned by the predecessor-in-interest. I am no longer involved the litigation. DC]

Edwards Lifesciences – Expanded 271(e)(1) Safe Harbor: In Edwards Lifesciences Corp. v. Meril Life Sciences Pvt., a split Federal Circuit panel affirmed the district court’s summary judgment that Meril’s importation of its transcatheter heart valve fell within the safe harbor provision of 35 U.S.C. § 271(e)(1) and thus, did not infringe Edwards’ patent. No. 2022-1877 (Fed. Cir. Mar. 25, 2024). The majority held that the safe harbor applied because Meril’s importation was “reasonably related to submitting information to the FDA,” even though there was evidence of other commercial uses. The dissent argued that the majority perpetuated the court’s failure to give meaning to the word “solely” in the statute, which cabins the safe harbor to uses solely related to the federal regulatory process. Section 271(e)(1) states that it “shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention … solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.”

Edwards has now petitioned for en banc rehearing, arguing that the panel decision vastly expands § 271(e)(1)’s safe harbor by reading the term “solely” out of the statute, in contravention of the provision’s plain text, history, and purpose. According to Edwards, any non-regulatory use is disqualifying under the correct reading of “solely.” Edwards contends the panel was bound by circuit precedent incorrectly holding that once a defendant identifies any use reasonably related to FDA approval, the safe harbor applies regardless of other non-regulatory uses. (citing AbTox, Inc. v. Exitron Corp., 122 F.3d 1019 (Fed. Cir. 1997)).

Edwards argues this precedent flouts the statutory text and history showing Congress struck a “careful balance” in § 271(e)(1) to allow infringement only for the singular purpose of seeking regulatory approval. By judicially rewriting this compromise to protect non-regulatory and commercial conduct, Edwards claims the Federal Circuit has distorted the market for patented products, undermined the patent bargain, and created a powerful statutory immunity ripe for abuse.

Salix Pharms – Improper Appellate Obviousness Fact Finding: The Federal Circuit recently affirmed the district court’s judgment that several claims of Salix’s patents covering methods of treating irritable bowel syndrome with diarrhea (IBS-D) using rifaximin were invalid as obvious. Salix Pharms., Ltd. v. Norwich Pharms. Inc., 2022-2153 (Fed. Cir. Apr. 11, 2024). Salix has petitioned for rehearing en banc, arguing that the panel majority improperly found facts in the first instance rather than reviewing and analyzing the district court’s fact-finding as required by precedent. See Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709 (1986); Atl. Thermoplastics Co. v. Faytex Corp., 5 F.3d 1477 (Fed. Cir. 1993).

The petition contends that after correctly determining the district court erred in its obviousness analysis by misapplying the prior-art range precedent, the CAFC panel majority should have reversed or remanded for further fact-finding by the district court. Instead, Salix argues, the majority improperly made its own findings on key disputed factual issues never resolved by the district court, such as whether skilled artisans would have viewed small intestinal bacterial overgrowth (SIBO) as a cause of IBS-D or as a separate disorder. The majority relied on prior art references and made factual findings that the district court never made to conclude there was a reasonable expectation of success in using the claimed rifaximin dosage to treat IBS-D.

Additionally, Salix asserts the panel majority applied the wrong standard in determining that the district court’s erroneous reliance on a non-prior art reference (the “RFIB 2001 Press Release”) was harmless error. Rather than considering whether that reference induced the district court to make findings it otherwise would not have made, the majority simply concluded other evidence “established” the relevant fact. But as Judge Cunningham noted in dissent in the original panel decision, the district court heavily relied on the press release to discount evidence of skepticism in the art. The press release factored significantly into the court’s analysis.

Luv N’ Care – Scope of Unclean Hands Defense: The Federal Circuit affirmed the district court’s application of the unclean hands doctrine to bar Eazy-PZ’s patent and trade dress claims against Luv N’ Care due to Eazy-PZ’s litigation misconduct. Luv N’ Care, Ltd. v. Laurain, 2022-1905 (Fed. Cir. Apr. 12, 2024). In its petition for rehearing, Eazy-PZ argues that the panel majority departed from Supreme Court and Federal Circuit precedent requiring that unclean hands be based on misconduct having an “immediate and necessary relation to the equity that he seeks.” Keystone Driller Co. v. Gen. Excavator Co., 290 U.S. 240 (1933); see also Gilead Scis., Inc. v. Merck & Co., 888 F.3d 1231 (Fed. Cir. 2018).

The district court concluded that the patentee Eazy-PZ had engaged in litigation misconduct—all of which was associated with the asserted utility patent. However, the resulting unclean hands penalty was to dismiss the entire case, including the design patent and trade dress claims. The petition argues this was an improper extension without analyzing how the alleged misconduct related to or provided Eazy-PZ an unfair advantage regarding those claims. The petition asserts that withholding information relevant to utility claim construction could not have advantaged the design and trade dress claims. Eazy-PZ argues this expansive application of unclean hands, untethered to the specific relief sought, vitiates the Supreme Court’s “immediate and necessary” relation requirement.

Regarding the ‘903 utility patent itself, Eazy-PZ argues the panel affirmed based on factual findings the district court never made about how any false or evasive testimony impacted Luv N’ Care, violating the rule that appellate courts cannot make factual findings in the first instance.

Eolas Seeks Supreme Court Review of Federal Circuit’s Patent Eligibility Decision

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Eolas is seeking a writ of certiorari from the Supreme Court — hoping that the court will overturn the Federal Circuit’s decision invalidating its distributed computing (WWW) claims as ineligible under Alice Corp. and Mayo and ostensibly under 35 U.S.C. § 101. The petition presents three key questions: (more…)

Patenting Informational Innovations: IOEngine Narrows the Printed Matter Doctrine

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by Dennis Crouch

This may be a useful case for patent prosecutors to cite to the USPTO because it creates a strong dividing line for the printed matter doctrine — applying the doctrine only to cases where the claims recite the communicative content of information. 

IOEngine, LLC v. Ingenico Inc., 2021-1227 (Fed. Cir. 2024).

In this decision, the Federal Circuit partially reversed a PTAB invalidity finding against several IOEngine patent claims. The most interesting portion of the opinion focuses on the printed matter doctrine.   Under the doctrine, certain “printed matter” is given no patentable weight because it is deemed to fall outside the scope of patentable subject matter. C R Bard Inc. v. AngioDynamics, Inc., 979 F.3d 1372 (Fed. Cir. 2020).  In this case though the Federal Circuit concluded that the Board erred in giving no weight to IOEngine’s claim limitations requiring “encrypted communications” and “program code.”

The printed matter doctrine a unique and somewhat amorphous concept in patent law that straddles the line between patent eligibility under 35 U.S.C. § 101 and the novelty and non-obviousness requirements of §§ 102 and 103. (more…)

The Use of Mandated Public Disclosures of Clinical Trials as Prior Art Against Study Sponsors

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By Chris Holman

Salix Pharms., Ltd. v. Norwich Pharms. Inc., 2024 WL 1561195 (Fed. Cir. Apr. 11, 2024)

Human clinical trials play an essential role in the discovery, development, and regulatory approval of innovative drugs, and federal law mandates the public disclosure of these trials. Pharmaceutical innovators are voicing concern that these disclosures are increasingly being used as prior art to invalidate patents arising out of, or otherwise relating to, these trials, in a manner that threatens to disincentivize investment in pharmaceutical innovation. A recent Federal Circuit decision, Salix Pharms., Ltd. v. Norwich Pharms. Inc., illustrates the concern.  In Salix, a divided panel upheld a district court decision to invalidate pharmaceutical method of treatment claims for obviousness based on a clinical study protocol published on the ClinicalTrials.gov. website. The case garnered amicus curiae briefs filed by several innovative pharmaceutical companies in support of the patent owner, Salix Pharmaceuticals. (more…)

De Forest Radio v. GE: A Landmark Supreme Court Decision on the Invention Requirement

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By Dennis Crouch

In 1931, the United States Supreme Court decided a landmark case on the patentability of inventions, De Forest Radio Co. v. General Electric Co., 283 U.S. 664 (1931), amended, 284 U.S. 571 (1931). The case involved a patent infringement suit over an improved vacuum tube used in radio communications. While the case predated the codification of the nonobviousness requirement in 35 U.S.C. § 103 as part of the Patent Act of 1952, it nonetheless applied a similar requirement for “invention.”

I wanted to review the case because it is one relied upon in the recent Vanda v. Teva petition, with the patentee arguing that the court’s standard from 1931 has been relaxed by the Federal Circuit’s “reasonable expectation of success” standard. The decision also provides an interesting case study in the way that the court seems to blend considerations of obviousness and (more…)

Rader on 101 and the Statutory Text

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By David Hricik, Mercer Law School

Over on Gene Quinn’s IPwatchdog page, former chief judge Rader has written an article about the Supreme Court’s 101 jurisprudence.  I clerked for then chief-judge Rader in 2012-13 (I think I have been the clerk’s oldest clerk, then 51 years old).  Alice was issued by the Federal Circuit during my tenure and of course I can’t talk about what I saw, but I can say that the article aligns with my own thoughts about 101: Congress in 1946 (and then 1952) did its level best to get rid of “eligibility” as condition of patentability. The fact that Section 101 is not a “condition of patentability” lends great support to that, as does the legislative history of the 1946 and 1952 act.

I blogged about the textual arguments 11 years ago (sigh) and you can find those comments here.

Tilting at wind mills but maybe this strongly textualist court will realize it has run astray from the text… And maybe I’ll win the Powerball…

 

Federal Circuit Affirms Invalidity of Blockchain Gemstone Tracking Patent Under Section 101

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by Dennis Crouch

In Rady v. The Boston Consulting Group, Inc., No. 2022-2218 (Fed. Cir. Mar. 27, 2024), the Federal Circuit affirmed the dismissal of a patent infringement lawsuit, holding that the asserted claims of Rady’s US10469250 were ineligible under 35 U.S.C. § 101.  The patent, owned by Max Rady, patent describes scanning a physical item, determining its unique pattern of imperfections (i.e., “signature”), and recording that signature to a blockchain if not previously registered.

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Certiorari Denied in Eligibility Cases

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by Dennis Crouch

In spite of robust amicus backing, including from the US Solicitor General, the Supreme Court has declined to review two pending patent-eligibility petitions: Interactive Wearables v. Polar and Tropp v. Travel Sentry. These cases contended that the Alice/Mayo framework produced (1) instability and unpredictability in the law; (2) facilitated non-evidence based judgments by district courts; and (3) prohibited patenting of subject matter that has traditionally been eligible for patents.

In my perspective, these cases wouldn’t have led to pro-patentee opinions from the Supreme Court as the inventions involved were not firmly rooted in technology. Rather, the court would likely have regarded the appellate cases as correctly denying eligibility.

The case of utmost importance still awaiting judgment, in my opinion, is CareDx Inc. v. Natera, Inc. CareDx is centered around the eligibility of an important diagnostic method for early detection of transplant organ failure. In this instance, the patent holder (Stanford University) solved a significant, longstanding problem that others had been unable to resolve. However, the lower courts determined that the patent claims were improperly directed towards a law of nature. Another petition pending before the Court is the eligibility appeal in Avery Dennison Corp. v. ADASA Inc. In the Avery Dennison case, the patent for RFID unique-ID encoding was deemed eligible and therefore valid on debatable grounds. The patent challenger has petitioned the Supreme Court, arguing that the lower courts are unduly narrowing their eligibility assessment.

A further petition, Killian v. Vidal, was reportedly filed in April but has yet to appear on the Supreme Court docket. Killian’s patent application proposes a computerized algorithm for detecting “overlooked eligibility for social security disability insurance.” The petition contends that the uncertainty created by the courts, along with the non-statutory eligibility exceptions, amount to violations of the Administrative Procedure Act (APA) and Due Process. Furthermore, the petition asserts that these judge-made exceptions “overstep the constitutional authority of the courts.” This petition has a minimal likelihood of being granted.

= = = =

The court also denied certiorari in the skinny-label FDA-Patent case of Teva Pharmaceuticals USA, Inc. v. GlaxoSmithKline LLC.

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

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by Dennis Crouch

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

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

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

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

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

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

Amgen Scores Partial Victory in Efforts to Maintain OTEZLA Exclusivity

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By Chris Holman

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

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

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

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

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

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

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

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

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

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

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

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

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

Patently-O Bits and Bytes by Juvan Bonni

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Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

Eligibility and the U.S. Solicitor General: Patenting the Scientific, Technological, and Industrial Arts

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by Dennis Crouch

A decade ago, the US Supreme Court issued a pair of decisions that upended substantial aspects of patent practice. Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012); and Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014).  These cases broadened scope of the “abstract idea” and “law of nature” exclusions in ways that largely overlap with other patent law doctrines, such as obviousness, indefiniteness, and even enablement.  But, unlike those doctrines, subject-matter eligibility jurisprudence is more of free-wheeling approach that typically does not require evidence.  In court, these cases are often decided at pleading-stage, before any evidence is introduced or considered.

Many thousands of patents have been denied or invalidated under the expanded doctrine.  Opponents of the change argue that it has created unpredictability, lack of respect for the law, and overreach that inhibits our culture of innovation historically fostered by the fuel of potential exclusive rights.

One difficulty with the law here is that it is entirely judge made.  The statute isclear that patents should be awarded to “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof” so long as the other requirements of patentability are met.  35 U.S.C. 101.  The Supreme Court added its admittedly atextual gloss of excluding “laws of nature, natural phenomena, and abstract ideas.”  And, although those limits have been longstanding, the court expanded their scope and simplified the procedures for invalidating patents in Mayo and Alice. A substantial number of prior petitions have asked the Supreme Court to clarify and revise its stance on Section 101 eligibility, but the Supreme Court has repeatedly denied certiorari.  We may be moving to the next step with the two pending cases discussed below.

Most recently, the Solicitor General has provided its views in two pending cases and has recommended that the court grant certiorari and revise its eligibility doctrine. “These cases would be suitable vehicles for providing much-needed clarification in this area.”

In its briefing, the SG ties itself to the idea of “technological inventions”; arguing that “quintessentially technological inventions” should be patent eligible. SG Brief. A positive SG amicus brief usually indicates a high likelihood that the Supreme Court will hear the case. The two parallel pending cases are:

  • Interactive Wearables, LLC, v. Polar Electro Oy, 21-1281.  Interactive Wearables asserts two patents covering a wearable content player connected to a screen-based remote control that permits users to view information about the song being played from the remote. U.S. Patent Nos. 9,668,016 and 10,264,311.  The district court dismissed the case with prejudice on the pleadings for lack of eligibility. On appeal, the Federal Circuit affirmed without opinion.
  • Tropp v. Travel Sentry, Inc., 22-22.  Tropp’s asserted patents claim a method of improving airline luggage inspection by selling TSA-labelled locks having a master key held by TSA authorities.  If TSA needs to open the luggage for inspection, they use their key rather than cutting the lock. U.S. Patent Nos. 7,021,537 and 7,036,728. The district court found the claims ineligible on summary judgment.  On appeal, the Federal Circuit affirmed with a non-precedential per curiam opinion. Importantly, Tropp does not claim to have created any new technology here, but rather a new process.  Of course, Section 100 of the Patent Laws defines process to “include[] a new use of a known process, machine, manufacture, composition of matter, or material.”

In its brief filed jointly in both cases, the Solicitor General distinguishes between the inventions in Interactive and in Tropp; arguing that only the first represents a patent eligible invention because it is directed to the “scientific, technological, [or] industrial arts” rather than “non-technological methods of organizing human activity.”

Properly construed, [the abstract idea] exception helps cabin Section 101’s reach to patent law’s traditional bailiwick of the scientific, technological, and industrial arts. The category of patent-ineligible abstract ideas thus does not encompass quintessentially technological inventions, like the improved content player that the patentee claimed in Interactive. By contrast, as the court of appeals correctly recognized, Section 101 excludes non-technological methods of organizing human activity like the luggage-inspection method claimed in Tropp.

SG Brief.  In looking at the court decisions, the SG also argued that the lower courts had unduly considered other doctrines such as novelty, obviousness, and enablement and overlayed them into the obviousness analysis.

A court at step two therefore should ask whether a claimed invention sufficiently transforms an abstract idea into the kind of innovation eligible for patent protection. Rather than undertake that inquiry, however, the Interactive court placed undue emphasis on considerations of novelty, obviousness, and enablement. Although those considerations may sometimes overlap with the abstract-idea inquiry, they are the purview of different statutory provisions and perform different functions. See 35 U.S.C. 102, 103, 112. By contrast, the Tropp court correctly held that nothing in the claimed method transforms it into a technological invention.

Id. Although not clear, the Supreme Court may consider whether to grant or deny certiorari in these cases as early as its May 18, 2023 conference.  Meanwhile, a third eligibility case of Avery Dennison v. ADASA is also pending and could be taken-up on the same date.

It is of some importance here that the USPTO also signed the brief – indicating that it is on board with creating a technological invention dividing line.

Only Some of the Claims are Invalid

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by Dennis Crouch

Hantz Software v. Sage Intacct (Fed. Cir. 2023) (non-precedential) 

The district court sided with the defendant Sage, dismissing the complaint for lack of eligibility.  In a short opinion, the Federal Circuit has largely affirmed, but made an important caveat — that the district court held only that claims 1 and 31-33 are invalid.

[W]e agree that the operative complaint asserted infringement of only claims 1 and 31–33 of each asserted patent, and because Sage did not file any counterclaim of its own (instead, it simply moved to dismiss Hantz’s complaint), we conclude that the ineligibility judgment should apply to only claims 1 and 31–33 of the asserted patents. We therefore vacate the district court’s judgment insofar as it held any claim other than claims 1 and 31–33 of each asserted patent ineligible and affirm in all other respects.

Slip Op.  Despite the limit here, claim preclusion will prevent Hantz from reasserting any of the remaining claims against Sage. Non-mutual collateral estoppel should also apply here to to prevent Hantz from asserting any of the claims against a third party — unless the claims are meaningfully distinct on eligibility grounds from those already adjudged to be invalid.  Normally, collateral estoppel only applies to issues actually litigated, but in the patent context, the Federal Circuit has ruled that it may also apply to non-litigated claims when the differences do not “materially alter the question of invalidity.” Ohio Willow Wood Co. v. Alps South, LLC, 735 F.3d 1333, 1342 (Fed. Cir. 2013); MaxLinear, Inc. v. CF CRESPE LLC, 880 F.3d 1373, 1377-78 (Fed. Cir. 2018) (Asking “whether the remaining claims present materially different issues that alter the question of patentability”).

 

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Eligibility for Dummies; Benson Redux

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by Dennis Crouch

I’ve become somewhat callous toward patent eligibility jurisprudence and so was surprised when I read the Federal Circuit’s decision in ADASA Inc. v. Avery Dennison Corp., 55 F.4th 900 (Fed. Cir. Dec 16, 2022). The case concluded that constructively dividing a fixed-length binary number into different sub-portions was not an abstract idea.  Now, the accused infringer has asked the Supreme Court for review.

ADASA’s US Patent 9,798,967 is directed toward an RFID chip “encoded with a unique object number.”  This object number as various blocks pre-allocated to identify the selling-company, product reference, and serial number as shown below.  The serial number has a unique feature of being divided into a section of “most significant bits” (MSBs) and “least significant bits” (LSBs). This division between MSBs and LSBs help in the allocation of unique serial numbers in a distributed production system.  The basic approach:

  • A product-line will be exclusively allocated a particular MSB and all possible accompanying LSBs. It will then enable RFID chips using the allocated MSB and then sequentially incrementing the LSB.
  • A separate product line might also be simultaneously enabling other other chips. To ensure no overlap in serial numbers, the second-line will be allocated a different MSB.
  • The result then is that we can guarantee that each chip has a unique serial number despite parallel production lines.

The claims do not appear to include any novel features other than this constructed division between bits in a binary number.  (Claim 1, is reproduced below). In its petition, the adjudged infringer relies heavily on the old cases of Benson and Flook to argue that the setup here lacks eligibility.

Question presented:

Radio Frequency Identification Device (RFID) tags are encoded with lengthy serial numbers that uniquely identify particular items. The patent at issue in this case designates the leading bits in a binary serial number as “the most significant bits,” and directs that all serial numbers in an allocated block begin with the same “most significant bits.”

The question presented is whether that claim, by subdividing a serial number into “most significant bits” that are assigned such that they remain identical across RFID tags, constitutes patent-eligible subject matter under 35 U.S.C. § 101.

Avery Dennison Petition.

Chief Judge Moore wrote the opinion and concluded that the claims were not directed to an abstract idea but rather provides a novel data structure within a serial number.  Here, the idea is that the patentee was able to create a new data field that was “not a mere mental process, but a hardware-based data structure focused on improvements to the technological process by which that data is encoded;” and an improvement with “important technological consequences.”

An interesting feature is that the general idea presented by the patentee was already identified and discussed in the book RFID for Dummies.  If Avery Dennison loses here, then the district court will hold a trial on anticipation.  Still, the “for Dummies” label has strong rhetorical appeal — should everything in that book title be considered an abstract idea?  The petitioner writes:

“[A]bstract ideas are not patentable.” … It is hard to imagine a more blatant transgression of that rule than the claim in this case, which sought a patent monopoly over the simple concept of treating one long serial number as the combination of two shorter numbers, and then [requiring] blocks of RFID tags all start with the same shorter number. At bottom, that claim is no different from a direction to mentally subdivide all telephone numbers into two component parts and then assign the same leading part to an allocated block of numbers (e.g., all telephone numbers in the District of Columbia start with 202). That may be a good idea (indeed, the concept in ADASA’s patent appears in the pages of RFID for Dummies), but it is no more patentable than the other good but abstract ideas that this Court has held unpatentable for more than 150 years.

Id.  I’m confident that if the Supreme Court takes this case, it would even further expand eligibility doctrine.

= = = (more…)

Are Drill Bits Now Abstract Ideas Too?

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The following is a really wonderful Guest Post from UC San Francisco Law School Professor Jeffrey Lefstin focusing on a recent ITC decision finding a claimed drill bit abstract because of its functional limitations. 

by Jeffrey Lefstin

Not too long after the Supreme Court decided Mayo v. Prometheus, I wrote an article suggesting, based on some of the history that followed Funk Brothers, that patents on ordinary industrial processes and compositions could become ineligible in Mayo’s wake. As the Federal Circuit has interpreted Mayo and Alice, some of that has come to pass. In the controversial case of American Axle v. Neapco, the Federal Circuit held claims to a process of manufacturing automobile driveshafts ineligible under § 101, because the claims were directed to ‘laws of nature’ and nothing more. And in Yu v. Apple, the Federal Circuit held claims directed to a digital camera ineligible as “abstract ideas.”

The latest development in that trend is the International Trade Commission’s decision in a section 337 investigation, In The Matter of Certain Polycrystalline Diamond Compacts and Articles Containing Same. [2022-10-26 [DI 783166].Commission Opinion] Affirming the Initial Determination, the ITC found that all of the asserted claims, directed to diamond composites that can be used in drill bits, were ineligible ‘abstract ideas’ under § 101.

The claims in the case were directed to polycrystalline diamond compacts (PDCs), which can be used as the cutting elements in tools such rotary drill bits. A PDC is composed of a diamond-containing layer (a “table”) bonded to a substrate. The diamond table is fabricated by mixing diamond grains with a metal-solvent catalyst, usually including cobalt. When the substrate and the diamond-catalyst mixture is subjected to heat and pressure, the diamond grains become bonded to each other and to the substrate.

The patents are based on the technique of fabricating the PDC at elevated pressures, at least 7.5 GPa. According to the patent specifications, PDCs fabricated under those conditions show improved diamond bonding and density, resulting in higher thermal stability and resistance to wear.

The asserted claims define the diamond table in terms of three kinds of properties: (i) structural properties, such as the size of the diamond grains; (ii) performance measures, such as the degree of thermal stability or wear resistance achieved in a compact; and (iii) other parameters, such as electrical conductivity or magnetic coercivity of the table, that are said to reflect the amount of remaining metal-solvent catalyst or the distance between the diamond grains in the table.[1]  A representative claim is from patent US10507565, with the claim limitations at issue in the case highlighted:

18. A polycrystalline diamond compact, comprising:

a polycrystalline diamond table, at least an unleached portion of the polycrystalline diamond table including:

a plurality of diamond grains directly bonded together via diamond-to-diamond bonding to define interstitial regions, the plurality of diamond grains exhibiting an average grain size of about 30 μm or less;

a catalyst occupying at least a portion of the interstitial regions;

wherein the unleached portion of the polycrystalline diamond table exhibits a coercivity of about 115 Oe to about 175 Oe;

wherein the unleached portion of the polycrystalline diamond table exhibits an average electrical conductivity of less than about 1200 S/m; and

wherein the unleached portion of the polycrystalline diamond table exhibits a thermal stability, as determined by distance cut, prior to failure in a vertical lathe test, of at least about 1300 m.

All the asserted claims were upheld against enablement challenges under § 112. However, the Initial Determination found, and the Commission affirmed, that all the asserted claims were directed to “abstract ideas” and thus not patent-eligible subject matter under § 101.

How could the ITC reach such a result? While the reasoning is not always easy to follow (the Initial Determination dismissed the electrical and magnetic properties recited by the claim as “gratuitous rather than inventive”), the crux of the Commission’s decision is its finding that the claims recite desired properties but not the way to achieve those properties:

The claims here cover a set of goals for the PDCs that the specifications posit may be derived from enhanced diamond-to-diamond bonding. The claims do not recite a way of achieving the claimed characteristics; they simply recite the desired range of values for each characteristic.

The Commission acknowledged that the specification may have taught the conditions and input materials needed to make PDCs with the recited properties – consistent with its finding that lack of enablement had not been shown. But those conditions were not recited by the claims. According to the Commission, under the Federal Circuit’s decision in American Axle v. Neapco, “unclaimed features of the manufacturing process ‘cannot function to remove [the claims] from the realm of ineligible subject matter.’” (quoting American Axle). The claims were therefore directed only to the result or goal of a diamond table with the desired properties – an abstract idea under § 101.

The Commission thus held that a composition of matter or manufacture claim, which defines subject matter in part by effect or result, is patent-eligible under § 101 only if it additionally recites the process by which the claimed material is made. Otherwise, the claim is only directed to the abstract idea of achieving that result.

That is a remarkable proposition, and would represent a drastic change in the law. For it has long been settled that composition or manufacture claims may be defined in part by function or result, so long as the claims meet the definiteness and disclosure requirements now embodied in § 112.

It is true that for a time after the Supreme Court’s condemnation of “conveniently functional language at the exact point of novelty” in General Electric v. Wabash Appliance, 304 U.S. 364 (1938), the Patent Office and the courts were hostile to the use of ‘functional’ limitations to define compositions. In In re Fullam, 161 F2d. 247 (CCPA 1947), the Court of Customs and Patent Appeals considered a claim to a method for polishing a baked resin finish, which recited the use of a novel abrasive powder – the powder being characterized in the claim only by the property of forming flocculates with the abraded material. The CCPA held that when a claim defines a material “not in terms of what it is, but of what it does,” the claim was ‘functional’ and therefore unpatentable under General Electric. This theory survived through In re Fisher, 307 F.2d 948 (CCPA 1962), where the CCPA affirmed the rejection of a claim to a hormone concentrate defined by its potency. Now framed as a question of indefiniteness under of § 112 under the 1952 Act, (now § 112(b)), the court found the claim invalid because it defined “what that concentrate will do rather than what it is.” The courts did not invalidate these claims because the boundaries of the claim were unclear, or because the claims were broader than the disclosure. Rather, any use of functional language to define a composition was sufficient to invalidate a claim.

But after casting doubt on the Fullam doctrine in In re Fuetterer, 319 F.2d 259 (CCPA 1963)[2], the CCPA settled the issue conclusively in favor of such claims in In re Swinehart, 439 F.2d 210 (CCPA 1971). Swinehart considered the following claim to an infrared-transparent crystal (useful, among other things, for the front window of heat-seeking missiles):

24. A new composition of matter, transparent to infra-red rays and resistant to thermal shock, the same being a solidified melt of two components present in proportion approximately eutectic, one of said components being BaF2 and the other being CaF2.

Notably, eutectic compositions of barium fluoride and calcium fluoride were known in the prior art. The desirable properties of infrared transparency and thermal resistance arose from the conditions for preparation described in the disclosure. The disclosure even stated: “The essential feature of the present invention is the growing of the instant bodies under controlled conditions.”[3] Thus exactly like the claims in Polycrystalline Diamond Compacts, the claim recited desired characteristics of the crystal, but did not state how those characteristics were achieved.

The Patent Office rejected the claim as “functional,” because not all eutectic mixtures of BaF2 and CaF2 would have the properties of infrared transparency and thermal resistance recited by the claim. Reversing the rejection (and explicitly overruling Fisher), the CCPA held that there was nothing intrinsically wrong in defining a composition “by what it does rather than by what it is.” The court explained that the only issues from using such a mode of definition were (1) possible lack of novelty, where the functional characteristics were inherent in the prior art; (2) possible indefiniteness under § 112, where the language was not sufficiently precise to delineate the subject matter embraced by the claim, and (3) possible insufficient disclosure under § 112, where the breadth of the claim raised questions such as scope of enablement.

Subsequent cases confirmed that claims could define compositions by results or effects, where the results depended on the unclaimed manufacturing process rather than being derived solely from the chemical or structural properties recited by the claim. For example, in In re Miller, 441 F.2d 689 (CCPA 1971), the claim at issue recited a powdered PFTE composition defined in part by desired results (such as tensile strength when sintered), and in part by ‘gratuitous’ properties (such as dielectric strength), where the recited properties arose from the process of grinding the powder. The inclusion of properties that derived from the preparation did not even raise any issue at the Patent Office, the issue in the case being whether the powder could be defined by properties manifested only when the powder was sintered in a mold[4]. Likewise, in In re Roberts, 470 F.2d 1399 (CCPA 1973) the court approved of a claim to “Corrugated polyethylene terephthalate film having a surface coefficient of friction of less than about 0.40 as determined by the Bell test,” where the claimed reduction in friction arose from production steps disclosed in the specification but absent from the claim.  According to the CCPA, “the absence in the claim of specific steps which would bring about the desired friction property is no defect. The claims define the limits of the claimed invention, and it is the function of the specification to detail how this invention is to be practiced.”

This line of authority is hardly obsolete. As recently as 2017, in BASF v. Johnson Matthey, 875 F.3d 1360 (Fed. Cir. 2017) the Federal Circuit relied on Swinehart to reverse a district court which had invalidated claims that defined a composition with functional language. Very much like the Commission in this case, the district court invalidated the claims for indefiniteness because they “recite a performance property the composition must display, rather than its actual composition.” The Federal Circuit reversed, holding that functional language was permissible so long as the claim satisfied the Nautilus standard of reasonable certainty.

But all that was before today’s regime of patent-eligibility, and before the Federal Circuit decided American Axle. When Professor Peter Menell and I filed our amicus brief urging the Supreme Court to grant certiorari in American Axle, one of the points we made was that, by making a claim’s alleged failure to describe how to carry out an invention a question of § 101, the Federal Circuit had effectively supplanted § 112. Whereas § 112 requires factual inquiries about what the disclosure teaches, American Axle teaches that under § 101 the only question is whether the “claim on its face” describes a way to reach a particular result.

At least in American Axle there might have been questions whether the claims met the requirements of § 112.[5]  So perhaps we could justify the outcome in American Axle as an I-know-it-when-I-see-it test for lack patentability under § 112, much as Alice has become an I-know-it-when-I-see-it test for lack of patentability § 103. Yet in Polycrystalline Diamond Compacts the Commission specifically found that lack of enablement had not been proven. The claims were nonetheless invalid under § 101 as directed to results rather than solutions.

While perhaps surprising, the Commission’s decision is a logical development of American Axle’s approach. To quote American Axle, “features not claimed are irrelevant to step 1 or step 2 of the Mayo/Alice analysis.” The CCPA’s articulation of the basic truth of patent law in Roberts – that the claims define the limits of the invention, and the specification details how the invention is to be practiced – is arguably no longer good law following American Axle.

Rather ironically, the Commission’s patent-eligibility analysis begins with this quote from Classen Immunotherapies:[6] “The statement of patent-eligible subject matter has been substantially unchanged since the first Patent Act in 1790.” But if the Commission is correct in its application of American Axle, the Supreme Court and the Federal Circuit have swept away decades of patent jurisprudence. No doubt the judges of the CCPA would have been surprised to learn that the claims in Fuetterer, Swinehart, Miller, Roberts, and similar cases I have not mentioned here, were all “abstract ideas,” because the claims recited functions depending on “features not claimed.”

And when courts wrestled with the enablement of biotechnology claims in cases like In re Fisher, 427 F.2d 833 (CCPA 1970), or Amgen v. Chugai, 927 F.2d 1200 (Fed. Cir. 1991), where the claims recited molecules defined by their biological activity, the judges could have avoided painstaking inquiry into the facts of enablement, because the claims failed to recite how to achieve the desired activities. And today the Supreme Court can save itself a great deal of time in in the pending enablement case of Amgen v. Sanofi, because the claims are clearly directed to the ‘abstract idea’ of antibodies that block the interaction of the PSCK9 and LDLR proteins, without identifying how those antibodies are achieved.

The Commission’s decision is currently on appeal. No doubt the Federal Circuit could resolve the case, if it is so inclined, with an ad hoc rule that claims to compositions of matter are not directed to abstract ideas – much as Vanda imposed an ad hoc rule that methods of treatment are not directed to laws of nature.[7] But without addressing the deeper doctrinal and historical errors of American Axle (and ultimately Mayo), the courts may find themselves endlessly plugging their fingers in the leaking holes of today’s patent-eligibility regime. At some point we  might come to think that the whole edifice is built upon a rotten foundation, and perhaps would be better swept away.

= = = = =

[1] Less remaining catalyst and shorter grain-grain distances are both advantageous.

[2] Fuetterer cited the 1952 Act’s new provision on functional claiming that now appears as § 112(f). Some, but not all, of the CCPA’s subsequent case law on compositions relied on this provision as well. Swinehart was not based on this provision, but the court took it as evidence that its approach was consistent with Congress’s intent. The CCPA extended the use of functional claiming to the radical group of a compound (as compared to an ingredient in a composition) in In re Barr, 444 F.2d 588 (CCPA 1971).

[3] U.S. Patent 3,766,080. Those techniques were described in the disclosure as “conventional crystal-growing techniques.”

[4] It could be so defined, according to the CCPA.

[5] In American Axle the district court denied the defendants’ indefiniteness challenge, and the defendants did not raise lack of enablement or written disclosure.

[6] 659 F.3d 1057, 1063 (Fed. Cir. 2011).

[7] But ominously, the Federal Circuit’s recent decision in Chromadex applies the Mayo/Alice two-step inquiry to a composition claim as an alternative analysis.

Federal Circuit: System is Not a Method (and therefore patent must be delisted from Orange Book).

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by Dennis Crouch

Jazz Pharms, Inc. v. Avadel CNS Pharms, LLC (Fed. Cir. 2023)

In the pharmaceutical industry, there is a lot of interplay between the patents and FDA regulation.  A party with an approved drug product will often list related patents in the Orange Book.  Jazz’s approved drug is sodium gamma-hydroxybutyrate (“GHB”).  GHB is an infamous date-rape drug and the FDA conditioned its approval on Jazz developing “Risk Evaluation and Mitigation Strategies” (REMS).  Jazz created a set of strategies, and also obtained a patent covering the strategy. US8731963.  The patent basically overs a computer system that keeps track of prescriptions and inventory using a “single-pharmacy system” as well as a focus on whether the drug was purchased by a cash-payer.  Jazz listed this REMS patent in the Orange Book as covering its drug product.   And, although the patents covering the drug use itself expired in 2022, the REMS patent is still in force.  But, the FDA is actually no longer requiring Jazz to use the system.

In my view, this is a pretty weak patent, and a court will probably eventually hold that it is ineligible.  But, the “beauty” of the orange book listing is that patent quality often does not really matter.   As the Federal Circuit explained Orange Book listing “arm[s] the patent owner with the ability to trigger a presumptive, thirty-month suspension of the FDA’s approval of a competitive product.”  In other words, if a competitor wants to enter the market, the mere existence of a listed Orange Book patent creates a 2.5 years delay in approval of their product.  The law also makes it an act of infringement for a third party to submit a NDA alleging that it is either not infringing or that the patent is invalid/unenforceable.

In this case, Avadel is wanting to market its own GHB drug and has its own proposed REMS using multiple pharmacies.  After Avadel filed its NDA, Jazz sued.  Avadel responded with a counterclaim seeking a court order to delist the patent.

Orange Book listing is proper when the patent either (1) covers the approved drug; or (2) covers an approved method of using the drug.  The Federal Circuit appeared ready to allow this type of REMS patent as an Orange Book Listing.  But, here is the rub for Jazz — its patent doesn’t claim a method, but rather claims a computer system.

Each of the ’963 patent’s three independent claims describes a ‘computer-implemented system’ that comprises ‘one or more computer memories’ and a ‘data processor.’ . . . That the claimed systems can be used in the course of treating patients suffering from narcolepsy does not alter the fact that these are system claims.

Slip Op.  Jazz  unsuccessfully argued that the FDA required submission of a “system,” and that should alter the method requirement.  In fact, the FDA does not directly review the submitted patents and has never definitively stated that REMS patents can be listed.

Thus, the Federal Circuit affirmed the lower court order to delist the patent.

= = =

My key struggle with this case is the background law that a “system” claim automatically covers both the system itself and using the system.   This stems from the definition of patent infringement that covers making, using, selling, etc. 35 USC 271(a).

Federal Circuit Gives Stare Decisis Effect to a Judgment of Claim Validity

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by Chris Holman

C.R. Bard, Inc. v. Med. Components, Inc., 2023 WL 2064163 (Fed. Cir. Feb. 17, 2023)

In Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation (1971), the Supreme Court held that a judgment of invalidity in a suit against one infringer accrues to the benefit of any other accused infringer unless the patent owner shows that he did not have a fair opportunity procedurally, substantively and evidentially to pursue his patent claim the first time.  Collateral estoppel (i.e., issue preclusion) under Blonder-Tongue is non-mutual.  While a judgment of invalidity binds the patent owner and its successors in interest because it is a party to the suit with adequate opportunity to contest the matter, a judgment of validity cannot operate in the patent owner’s favor to bind persons who are neither parties nor in privity with parties to the suit.

Stare decisis,  Latin for “to stand by things decided,” is a legal principle that directs courts to adhere to previous judgments, i.e., precedent, when resolving a case with comparable facts.  According to Chisum on Patents, “Federal Circuit decisions decline to give great weight or stare decisis effect to prior validity rulings.”  For example, in Gillette Co. v. S.C. Johnson & Son, Inc., (1990), the court held that the fact that the validity of a patent claim has previously been upheld in an earlier litigation is not to be given  stare decisis effect, citing Stevenson v. Sears, Roebuck & Co. (Fed. Cir. 1983).

In a recent non-precedential opinion, C.R. Bard, Inc. v. Med. Components, Inc., the Federal Circuit applied stare decisis to a prior validity ruling involving a different patent and a different accused infringer.  The Bard patents at issue are directed to radiopaque markings and structural features that can be used to identify whether a venous access port is power injectable, specifically a venous access port with an alphanumeric message that can be seen on an X-ray and that identifies the port as power injectable.

Representative claim 5 of U.S. Patent No. 7,785,302 claims:

A venous access port assembly for implantation into a patient, comprising:

a housing having an outlet, and a needle-penetrable septum, the needle penetrable septum and the housing together defining a reservoir, wherein:

the assembly includes a radiopaque alphanumeric message observable through interaction with X-rays subsequent to subcutaneous implantation of the assembly, and

the alphanumeric message indicating that the assembly is power injectable.

On motion for summary judgment, the district court found the asserted claims ineligible under § 101 because the claims were solely directed to non-functional printed matter and because the claims were directed to the abstract idea of “[using] an identifier to communicate information about the power injectability of the underlying port” with no inventive concept.

On appeal, the Federal Circuit reversed, explaining:

We are bound by our precedent in C R Bard Inc. v. AngioDynamics, Inc., 979 F.3d 1372 (Fed. Cir. 2020). There, we considered a case that is virtually identical to the one before us now. AngioDynamics also involved patents directed to radiopaque markers that could be used to identify venous access ports as power injectable, and the claims at issue were substantially similar to the asserted claims here. Furthermore, that case asked to consider the exact same question that is before us now: whether claims that include non-functional printed matter could be eligible under § 101. The court in AngioDynamics concluded that, although the asserted claims contained some non-functional printed matter, they were nonetheless eligible under § 101 because the claims were not solely directed to non-functional printed matter—they were also directed to “the means by which that information is conveyed.” Given these similarities, we must reach the same conclusion here as in AngioDynamics.

Because we are bound by our precedent, we conclude that the asserted claims in Bard’s three patents are directed to eligible subject matter under § 101.

As noted above, Chisum’s authoritative treatise on U. S. patent law states that the Federal Circuit does not give “great weight or stare decisis effect to prior validity rulings,” and does not identify any cases which this has occurred.  The C.R. Bard court does not cite to any precedent, case law, or statute to justify its application of stare decisis in the present case.

Perhaps patent eligibility is uniquely amenable to stare decisis, given the amorphous nature of the Alice two part inquiry.  In its opening brief, Bard argued that:

Despite acknowledging the obvious similarities between AngioDynamics and the instant case, the district court . . .  declined to follow it because “the facts and procedural posture are different.” But in AngioDynamics, this Court held that Bard’s patents were valid at Alice step one. Because Alice step one presents a legal question that can be answered based on the intrinsic evidence, CardioNet, LLC v. InfoBionic, Inc., 955 F.3d 1358, 1372 (Fed. Cir. 2020), any supposed differences in the record are irrelevant and thus provide no basis to depart from this Court’s holding that claims directed to features on ports for the purposes of post-implantation identification traverse Alice step one.

AngioDynamics (the company that lost on the issue of patent eligibility in the AngioDynamics decision) filed an amicus brief in C.R. Bard in support of the accused infringer, urging affirmance of the district court’s decision finding the claims patent ineligible. The company argued that the AngioDynamics decision addressed a different factual record and different legal issues, and that:

Unlike the district court in AngioDynamics, the district court here performed a full two-step Alice analysis. The district court also considered a significantly more developed record than the one in AngioDynamics, including multiple prior art references, Bard’s admissions that it did not invent radiopaque identifiers, and Bard’s admissions that adding radiopaque identifiers to ports would be trivial. . . . Bard’s reliance on AngioDynamics is misplaced.

AngioDynamics states in its amicus brief that its interest in the case stems from its involvement in litigation related to the patents asserted in C.R. Bard, as well as other Bard patents directed to “nearly identical subject matter,” which it believes would be impacted by Bard’s appeal. Presumably, the company was hoping to benefit from the collateral estoppel effect of the district court’s patent ineligibility ruling.

A Typical Eligibility Case in 2023

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by Dennis Crouch

The U.S. Constitution authorizes Congress to legislatively create a patent system. And, Congress has so since the beginning, with George Washington signing the the First Patent Act into law in 1790.  As Congress continued to legislatively develop the statute, courts also added common law nuance, including the law of patent eligibility.  In Bilski, the Supreme Court recognized that the traditional exclusions of “abstract ideas” and “laws of nature” were not textually derived, but were of such antiquity that their precedent could be maintained and justified. Bilski v. Kappos, 561 U.S. 593 (2010). Later, in Mayo and Alice, the Supreme Court fleshed-out its two step test for determining eligibility for these categorical exclusions.

  1. Ask whether the claimed invention is directed toward a categorical exclusion.
  2. If yes, ask whether the claimed invention includes something more, such as an inventive concept that transforms the abstract idea into a patent eligible invention.

Mayo v. Prometheus, 566 U.S. 66 (2012); Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014).  Since 2012, almost 2,000 court decisions have referenced these cases along with 8,000+ PTAB decisions.  These were clearly watershed cases that dramatically changed the landscape of patent law and patent litigation.

Prior to Alice/Mayo, most courts focusing on eligibility  issues contended with major policy goals associated with preemption of ideas and fundamental principles.  That analysis reeks of policymaking and helps explain why courts shied away.  The Alice/Mayo revolution systemized eligibility doctrine into a framework more familiar to judges. Although the purpose is still to avoid improper preemption of fundamental ideas, courts no longer have to grapple with the question of preemption, but rather only the jurisprudential proxies created by the Court.

The recent decision in Hawk Tech Sys. v. Castle Retail, — F.4th — (Fed. Cir. 2023), highlights the current state of the law.  Hawk’s patent relates to video surveillance systems, and claims a method of receiving and/or converting stored video images and then displaying them simultaneously on a remote viewing device.  The district court quickly dismissed the case under R.12(b)(6), finding the claim ineligible on its face.  On appeal  the Federal Circuit affirmed.

At some level, all inventions rely upon abstract ideas and laws of nature for their operation.  At Step 1, Alice asks a more pointed question — is the claim “directed to” one of those excluded forms.  The primary focus then is on what the patent itself “asserts to be the focus of the claimed advance,” looking to both the claim language and the associated specification. Solutran, Inc. v. Elavon, Inc., 931 F.3d 1161 (Fed. Cir. 2019).   Hawk’s claims are directed to a method of viewing images, and includes a series of steps: “receiving, displaying, converting, storing, and transmitting digital video” that are all claimed “using results-based functional language.”  This combination of a data-manipulation process claimed at a high level of abstraction has been regularly tagged as being directed to an abstract idea.  In other cases, details in the specification showing a technological solution has saved claims at step 1.  Here, however, the court concluded that the abstract idea analysis focuses on the claim language itself.  Here, the court (in my view) mis-cited ChargePoint, Inc. v. SemaConnect, Inc., 920 F.3d 759 (Fed. Cir. 2019).  In that case, the court noted that technical details in the specification shouldn’t be imported into the claims for Alice step-on analysis.  Hawk’s argument was somewhat different — it suggested that the specification provided an explanation as to how the claimed approach solved a particular problem.  Even still, the patentee’s arguments are likely lacking because of the dearth of details in both the claims and the specification.  The court concluded that the claims simply “fail to recite a specific solution to make the alleged improvement … and at most recite abstract data manipulation.”

At step 2 the appellate panel agreed with the district court that the claims failed to show any technological improvement sufficient to be considered an inventive concept.  Here, the court concluded that achieving a novel technological benefit was insufficient because the claims were written in “generical functional language” relying upon “conventional computer and network components operating according to their ordinary function.”

One quirk of the district court decision was that it held a hearing and considered some evidence prior to deciding the R.12(b)(6) motion.  But, those motions are designed to be based simply on the pleadings. The rules further provide that, if a court considers matters outside the pleadings then “the motion must be treated as one for summary judgment.”  FRCP 12(d).  And, once it becomes summary judgment, then the court needs to allow more time for the parties to develop the factual evidence.   On appeal, the Federal Circuit agreed that the district court erred, but concluded that the error was harmless since the district court’s decision did not hinge on any of the additional material presented.

Affirmed.

Note: The patent here claims a 2002 priority date, but the particular application was filed in 2017 and issued in 2019.  I.e., the case was considered and passed muster under the USPTO’s eligibility examination guidelines.

Justin Hasford of Finnegan handled the the case below and the appeal for the defendant, Castle Retail.  Chris Austin of Weide & Miller represented the patentee .

Got Milk? Forget about Patent Eligibility

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

The Federal Circuit weighed in on the amorphous topic of subject matter eligibility in the recent opinion ChromaDex, Inc., V. Elysium Health, Inc., — F.4th —, Docket No. 2022-1116. Writing for a unanimous panel, Judge Prost affirmed a grant of summary judgment that U.S. Patent No. 8,197,807 (“the ’807 patent”) was directed to unpatentable subject matter and therefore ineligible based on 35 U.S.C. § 101.

ChromaDex’s ‘807 patent concerns nicotinamide riboside (“NR”), a form of vitamin B3 found naturally in cow’s milk. When ingested, a human body converts NR into the coenzyme nicotinamide adenine dinucleotide, or NAD+. Claim one of ‘807 states:

1. A composition comprising isolated nicotinamide riboside in combination with one or more of tryptophan, nicotinic acid, or nicotinamide,

wherein said combination is in admixture with a carrier comprising a sugar, starch, cellulose, … or polyanhydride,

wherein said composition is formulated for oral administration and increased NAD+ biosynthesis upon oral administration.

ChromaDex isolates and concentrates naturally occurring NR — selling dietary supplements that contain elevated levels of NR. The levels found in these supplements is significantly above natural levels present in milk or any other food.  Although the claims require isolated NR, they do not require a specific high-concentration, only enough to “increase[] NAD+ biosynthesis upon oral administration.” In its decision, the Federal Circuit focuses on the breadth of the claim and its ability to include natural milk (a product of nature) as the key ingredient providing the NR.

The Supreme Court has two key product of nature cases from the past 45 years: Diamond v. Chakrabarty, 447 U.S. 303 (1980) and Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013).

Under these cases, a determination that milk is within the scope of the claims is not, by itself fatal to eligibility.  Chakrabarty requires that to be patentable the claimed composition must “ha[ve] markedly different characteristics [from the natural phenomenon] and have the potential for significant utility.” 447 U.S. at 310. The chemical composition of isolated NR is not structurally or functionally different from NR found in milk. ChromaDex’s argument at the district court that the characteristics of isolated NR are purportedly different from naturally occurring NR— stability, bioavailability, sufficient purity, and therapeutic efficacy was rejected because these improvements were not required by the claim language. On appeal, ChromaDex insists in their brief that the claims have “markedly different characteristics” that render them patent eligible, specifically that (1) NR is found in milk in only trace amounts, i.e., one part per million, and (2) what little NR is found in milk is not bioavailable because it is bound to the lactalbumin whey protein. Again though, ChromaDex’s argument is thwarted by the overly broad claim language. The claims do not require either a minimum level of NR or even that the isolated NR is more bioavailable by separation from the lactalbumin.

The corollary to Chakrabarty is Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013) and is more similar to the subject matter of ChromaDex. In Myriad, the isolation of specific DNA fragments was found to be patent ineligible. ChromaDex faces the same problem. The act of isolating the NR compared to how NR naturally exists in milk is not sufficient, on its own, to confer patent eligibility.

Federal Circuit held that this Chakrabarty analysis was dispositive on the question of § 101 eligibility and affirmed the grant of summary judgment. One open question is whether the same two-step analysis of Alice/Mayo applies in the product-of-nature eligibility arena.  Without fully deciding that question, the Federal Circuit conducted a subsequent analysis under the Alice/Mayo two-step test and reached the same conclusion — that the claims are ineligible. As noted by this court, the Alice/Mayo test is functionally the same as the Chakrabarty analysis, especially when a composition of matter is at issue.

It appears to me that the primary issue is a patent drafting problem. The ‘807 patent was filed on April 20th, 2006, long before the clarifying guidance from Myriad (2013), Alice (2014), and Mayo (2012). At the time of filing, the isolation and reformulation was not subject to the explicit subject matter restriction in Myriad. However, the patent drafter should have been aware of Chakrabarty (1980). Claim one was written so broadly that potential embodiments include far more than dietary supplement pills.

The Federal Circuit distinguished the current case from Nat. Alts. Int’l, Inc. v. Creative Compounds, LLC, 918 F.3d 1338 (Fed. Cir. 2019). In Natural Alternatives, “natural products ha[d] been isolated and then incorporated into a dosage form”—“between about 0.4 grams to 16 grams”—“with particular characteristics to effectively increase athletic performance.” Id. at 1348–49.  The patentee may have also avoided an eligibility problem by providing evidence in the specification that the NR concentration in milk was insufficient to increase NAD+ biosynthesis as claimed, but that higher levels of concentration did provide that benefit.  To be most clear, the claims could have also added a limitation that the NR is provided in an “effective amount” to achieve the claimed NAD+ synthesis.