This is the third eligibility post in as many days. In a non-precedential decision issued September 10, 2024, the Federal Circuit affirmed the PTAB's rejection of claims in a patent application directed to eliciting tips for media content -- finding them ineligible. In re McDonald, No. 24-1015 (Fed. Cir. Sept. 10, 2024).
The applicant here is a Utah start-up VidAngel, Inc., that helps folks "Filter out the stuff you don’t want to see or hear in your streaming movies & TV shows, like profanity, nudity, violence & more. But, the invention here has a different focus - it is a setup for eliciting and receiving tips from consumers of media content like streaming movies.
As its name suggests, the Patent Eligibility Restoration Act (PERA) is designed to substantially overturn the Supreme Court's decisions in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012), and Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014). Together those cases created a firestorm of invalid patents and challenges for the patent office and patent holders alike. The bipartisan proposal was introduced in the Senate (Coons/Tillis) earlier this term and most recently introduced to the US House of Representatives (Kiley/Peters). Although Alice and Mayo doctrine created substantial confusion, much of that confusion has now died down in the past decade.* The bigger issue is that it is substantially harder to obtain patents and easier to invalidate issued patents -- particularly in cases where the invention lies in software or diagnostic methods. This post examines the proposed PERA and its potential impact -- along with providing a bit of data.
* Although the extreme confusion is gone, there is still plenty to go around. A case in point is the Federal Circuit's September 3, 2024 decision in BBiTV v. Amazon. In that case, the court showed its linguistic flexibility in distinguishing the claimed user interface (deemed ineligible) from those in Core Wireless and Data Engine (deemed eligible).
For over 150 years, "user interfaces" have been a staple of patent protection, evolving from the physical realm of tool handles and knobs to today's digital screens. Although tangible interface elements continue be patented as components of larger systems, the market shift towards on-screen interfaces has been paralleled with the anti-eligibility shift in Mayo and Alice. The Federal Circuit recently waded into these murky waters in Broadband iTV, Inc. v. Amazon.com, Inc., No. 23-1107 (Fed. Cir. Sept. 3, 2024), examining the patent eligibility of electronic programming guides and content recommendation systems. Affirming a decision by Judge Albright, the appellate panel held that the claimed inventions lacked eligibility under 35 U.S.C. § 101, distinguishing some prior GUI cases that sided with the patentee.
The Federal Circuit has affirmed a D.N.J. court's dismissal of patentee Beteiro's infringement complaints against DraftKings, et al., agreeing that the asserted claims are directed to patent ineligible subject matter under 35 U.S.C. § 101. Beteiro, LLC v. DraftKings Inc., No. 2022-2275 (Fed. Cir. June 21, 2024). The patents at issue were directed to methods of facilitating remote gambling activity using devises equipped with GPS.
Douglas Dynamics v. Meyer Prods (W.D. Wisc 2017) [2017-04-18 (68) Order re post IPR invalidity defenses].After Douglas sued Meyer for infringing its U.S. Patent No. 6,928,757 (Snowplow mounting assembly), Meyer petition for inter partes review -- alleging that several of the claims were invalid. Although the "director" iniated the review, the PTAB eventually sided with the patentee - reaffirming the validity of the claims.
Back at the district court, Douglass asked the court to apply the estoppel provisions that of Section 315(e)(e):
The petitioner in an inter partes review ... that results in a final written decision under section 318(a) . . . may not assert . . . in a civil action arising [under the patent laws] . . . that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.
35 U.S.C. § 315(e)(2). The question for the district court here, was the scope of estoppel - what constitutes grounds that were "raised or reasonably could have [been] raised" during the IPR. Here, the court took a position for fairly strong estoppel:
If the defendant pursues the IPR option, it cannot expect to hold a second-string invalidity case in reserve in case the IPR does not go defendant’s way. In many patent cases, particularly those involving well-developed arts, there is an abundance of prior art with which to make out an arguable invalidity case, so it would be easy to have a secondary set of invalidity contentions ready to go. The court will interpret the estoppel provision in § 315(e)(2) to preclude this defense strategy. Accordingly, the court will construe the statutory language “any ground that the petitioner . . . reasonably could have raised during that inter partes review” to include non-petitioned grounds that the defendant chose not to present in its petition to PTAB.
In Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., 817 F.3d 1293 (Fed. Cir.), the Federal Circuit wrote in dicta that no estoppel should apply to grounds that were petitioned, but not instituted. The Wisconsin court here suggested some potential problems with that outcome, but decided to follow the CAFC's lead, writing:
So until Shaw is limited or reconsidered, this court will not apply § 315(e)(2) estoppel to [petitioned but] non-instituted grounds, but it will apply § 315(e)(2) estoppel to grounds not asserted in the IPR petition, so long as they are based on prior art that could have been found by a skilled searcher's diligent search.
What this means for the defendant here is that the only 102/103 arguments that it gets to raise are ones already deemed total failures by the PTAB - and thus are unlikely winners before a district court.
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Of some importance, the PTAB's final written decision was released in November 2016. For estoppel purposes, that final decision is all that is required for estoppel to kick-in. However, the case currently on appeal to the Federal Circuit -- already giving the defendant its second bite at the apple.
In the latest decision by the UK High Court of Justice (Patents) in Unwired Planet v. Huawei ([2017] EWHC 711 (Pat), 5 Apr. 2017], Mister Justice Colin Birss has issued a detailed and illuminating opinion regarding the assessment of royalties on standards-essential patents (SEPs) that are subject to FRAND (fair, reasonable and non-discriminatory) licensing commitments. Among the important and potentially controversial rulings in the case are:
Single Royalty: there is but a single FRAND royalty rate applicable to any given set of SEPs and circumstances,
Significance of Overstep: neither a breach of contract nor a competition claim for abuse of dominance will succeed unless a SEP holder’s offer is significantly above the true FRAND rate,
Global License: FRAND licenses for global market players are necessarily global licenses and should not be limited to a single jurisdiction, and
Soft-Edge: the “non-discrimination” (ND) prong of the FRAND commitment does not imply a “hard-edged” test in which a licensee may challenge the FRAND license that it has been granted on the basis that another similarly situated licensee has been granted a lower rate, so long as the difference does not distort competition between the two licensees.
Background
This case began in 2014 when Unwired Planet, a U.S.-based patent assertion entity, sued Google, Samsung and Huawei for infringement under six UK patents (corresponding actions were filed in Germany). Unwired Planet claimed that five of the asserted patents, which it acquired from Ericsson in 2013 as part of a portfolio comprising approximately 2000 patents, were essential to the 2G, 3G and 4G wireless telecommunications standards developed under the auspices of the European Telecommunications Standards Institute (ETSI). Because Ericsson participated in development of the standards at ETSI, any patents shown to be SEPs would necessarily be encumbered by Ericsson’s FRAND commitment to ETSI.
The UK proceedings involved numerous stages, including five scheduled “technical trials” which would determine whether each of the asserted patents was valid, infringed and essential to the ETSI standards. During these proceedings Google and Samsung settled with Unwired Planet and Ericsson (which receives a portion of the licensing and settlement revenue earned by Unwired Planet from the patents), leaving Huawei as the sole UK defendant. By April 2016 three of the technical trials had been completed, resulting in findings that two of the asserted patents were invalid and that two were both valid and essential to the standards. These findings are currently under appeal. The parties then agreed to suspend further technical trials. In October 2016 a “non-technical” trial began regarding issues of competition law, FRAND, injunction and damages. Hearings were concluded in December 2016, and the court’s opinion and judgment were issued on April 5, 2017.
A. The High Court’s Decision – Overview
The principal questions before the court were (1) the level of the FRAND royalty for Unwired Planet’s SEPs, (2) whether Unwired Planet abused a dominant position in violation of Section 102 of the Treaty for the Formation of the European Union (TFEU) by failing to adhere to the procedural requirements for FRAND negotiations outlined by the European Court of Justice (CJEU) in Huawei v. ZTE (2014), and (3) whether an injunction should issue in the case. In the below discussion, Paragraph numbers (¶) correspond to the numbered paragraphs in the High Court’s April 2017 opinion.
B. FRAND Commitments – General Observations
Justice Birss begins his opinion with some general observations and background about the standard-setting process and FRAND commitments. A few notable points emerge from this discussion.
After Douglas sued Meyer for infringing its 