Guest Post by Walker and Wasserman: Situating PTAB Adjudication Within the New World of Agency Adjudication

Guest post by Christopher J. Walker, The Ohio State University Moritz College of Law and Melissa F. Wasserman, The University of Texas School of Law

In 2011, Congress created a series of novel proceedings for private parties to challenge issued patents before the newly formed Patent Trial and Appeal Board (PTAB). While the PTAB proceedings are immensely popular, they have also been controversial. A series of legal challenges to these new adjudicatory proceedings are working their way through the federal judiciary and up to the Supreme Court, and the latter is deciding this Term the constitutionality of PTAB adjudication. Yet to date, there has been no sustained comparison of these new adjudicatory proceedings with other agency adjudications. This comparison could be provide numerous payoffs, including highlighting the unique facets of PTAB adjudication that may serve for successful legal challenges as well as providing opportunities for improving the decisional processes of adjudicatory boards.

In The New World of Agency Adjudication, we seek to begin this endeavor by situating PTAB adjudication in the modern administrate state. Every administrative law student learns the basics of “formal” adjudication under the Administrative Procedure Act (APA). The paradigmatic APA-governed formal adjudication involves an evidentiary hearing held before an administrative law judge (ALJ) wherein parties are entitled to oral arguments, rebuttal, and cross-examination of witnesses. The ALJ’s decision is then reviewable by the agency head, who typically can reverse the decision for largely any reason. Thus, the critical difference between APA formal adjudication—also known as Type A adjudication—and the judicial model is that the agency head has final decision-making authority.

The vast majority of agency adjudications today, however, do not take the form of APA-governed formal adjudication. The new world of agency adjudication comprises agency actions that are adjudicated by non-ALJ agency personnel that have diverse titles, such as administrative judge, administrative appeals judge, hearing officer, immigration judge—just to name a few. These non-ALJ judges have less independence and protections than ALJs. A substantial portion of these proceedings are known as Type B adjudications which still require evidentiary hearings, and hence are relatively formal. In contrast to APA governed formal adjudication, however, the APA imposes virtually no requirements on these proceedings including agency head review. Yet similar to Type A adjudication, a common feature of Type B adjudication is that the agency head has final decision-making authority.

How do the PTAB proceedings fit within this modern world of agency adjudication? Although the new PTAB proceedings have many of the hallmarks of APA formal adjudication, they lack at least two features that suggest they should not receive a Type A classification. Perhaps most saliently, the Patent Act requires these proceedings to be presided over by administrative patent judges, not administrative law judges. The second critical difference is that the Director of the Patent Office does not have final decision-making authority over PTAB determinations. Although an aggrieved party to a PTAB proceeding can file a request for a rehearing by the Board, the Director does not have the authority to review PTAB determinations as a matter of right. As a result, we argue the best understanding of PTAB proceedings is that they are Type B rather than Type A adjudication. The more difficult question is how do the new PTAB proceedings stack up to its Type B adjudication peers? We conclude quite favorably. Drawing on a recent ACUS study that focuses on identifying the best practices of Type B adjudications, we find that PTAB meets the majority of these recommendations and scores as well as most Type B proceedings.

Our Article concludes by exploring one critical difference between PTAB proceedings and most Type B adjudications: the lack of agency-head review of PTAB determinations. The standard administrative model vests final decision-making authority with the agency head for a number of reasons, including providing the agency head with policy control and the ability to bring consistency to the adjudicatory board decisions. While the Director does not have the authority to directly review PTAB determinations, she does have the ability to influence PTAB outcomes. More specifically, the Director can assign APJs to a panel that share her policy views in hopes that they will vote in accordance with her preferences. This “panel-stacking” often occurs once a rehearing and an expanded panel has been granted, so that the expanded, stacked panel reverses the original three-member decision.

Although we conclude that the Director’s designation procedures are statutorily authorized, we argue this procedure raises a colorable due process violation. Case law on permissible agency-head designation procedures is relatively sparse. One exception is the Sixth Circuit’s opinion in Utica Packing Co. v. Block, in which the Secretary of Agriculture replaced an agency adjudicator with another when the initial adjudicator failed to rule as she wished. The appellate court refused to accept the argument that the Secretary, having delegated to the agency adjudicator the original authority to resolve certain matters, could reappropriate that power at will based on disagreement with the adjudicator’s conclusions. Instead, the court held, “[t]here is no guarantee of fairness when the one who appoints a judge has the power to remove the judge before the end of proceedings for rendering a decision which displeases the appointer.”

Under the reasoning set forth in Utica, there is at least a colorable argument that the Director’s designation procedures raise substantial due process violations. Similar to the Secretary of Agriculture in Utica, the Director in effect removes the original panel before the end of the proceedings when she designates an expanded panel that she hopes will arrive at a different substantive outcome. Although the Director does not technically replace any judge, the practical effect of adding a sufficient number of new members to reverse the original panel decision is functionally equivalent to the Secretary of Agriculture’s removal of the judicial officer in Utica.

Given this colorable due process concern, our Article concludes by examining alternative mechanisms the Director of the Patent Office could utilize to ensure that PTAB consistently applies the agency’s policy preferences. While a congressional grant of agency head review would be the most straightforward way to proceed, our Article also urges the Patent Office to consider an increased reliance on rulemaking and precedential PTAB decisions. With respect to the latter, our Article encourages the Patent Office to consider streamlining the process by which it designates PTAB decisions as precedential to provide the Director with more unilateral authority in making this determination.

The current draft of our article is available on SSRN here. It’s forthcoming in the California Law Review in 2019, so there’s plenty of time for us to incorporate any comments you may have.


Welcome to Iowa Law’s New Dean, Kevin Washburn

By Jason Rantanen

It’s an exciting time for Iowa Law–we have some phenomenal junior faculty members who joined us this past fall and, as of Tuesday, we have a new dean.  Kevin Washburn, Regents Professor of Law and former dean of the University of New Mexico School of Law, will be joining the Iowa College of Law as its 18th dean in mid-June.

Dean Washburn has an amazing professional history, including serving as the Assistant Secretary of Indian Affairs from 2012-2016 (a position for which he was confirmed unanimously by the Senate), an AUSA in the violent crimes section of the Department of Justice, and General Counsel of the National Indian Gaming Commission.   I’m ecstatic about the provost’s selection of dean Washburn and am looking forward to seeing where he leads Iowa Law.

You can read more at the University’s press release:

Administering Patent Law: the Iowa Law Review Symposium

By Jason Rantanen

I’m thrilled to announce that this fall’s Iowa Law Review symposium will focus on one of the most significant issues of patent law today: the intersection of patents and administrative law.   The symposium, Administering Patent Law, is co-sponsored by the Iowa Law Review and the center I direct, the Iowa Innovation, Business and Law Center.  I’m looking forward to both serious debates about the impact of this term’s Supreme Court decisions (especially Oil States v. Greene’s Energy) and more wide-ranging discussions about the place of patents, the patent office and patent law itself within the broader context of administrative law.

We have a phenomenal lineup of scholars, including both Professor Chris Walker of The Ohio State University Moritz College of Law and Professor Melissa Wasserman of the University of Texas School of Law, whose post on their recent article Situating PTAB Adjudication Within the New World of Agency Adjudication, I’ll be running shortly.  You can read more about the October 5 symposium on the symposium website.  I’ll post about public registration as we get closer to the date.

AIA Trials and the Sunsetting of Covered-Business-Method Review

by Dennis Crouch

In the America Invents Act (AIA), Congress created two primary new forms of challenging issued patents in an administrative trial setting before the Patent Trial and Appeal Board.  The more popular form is Inter Partes Review while Post Grant Reviews have seen less interest.  The comparative popularity appears to stem primarily from the fact that IPRs can be used to challenge any issued patent — including pre-AIA patents and patents issued years-ago.  PGRs, on the other hand has two important timing limitations:  (1) PGRs are only applicable to post-AIA patents (effective priority date > March 2013); and (2) a PGR petition must be filed within 9-months after the patent grant.  That said, IPRs have a comparative downside: While a PGR may challenge patent claims on any patentability ground (except best mode), IPRs are limited only to anticipation and obviousness challenges based upon prior patents and published prior art.

The Covered Business Method Review (CBM) program is added as a layer atop IPRs and PGRs.  CBMs can only be used to challenge patents directed to financial, non-technological business methods.  However, like PGRs, those CBM patents can be challenged on any ground (including eligibility, enablement, and indefiniteness).  Further, like IPRs, CBM petitions can challenge any patent regardless of its filing and issuance dates.

The CBM program is also Transitional — it sunsets in two years 2020 (no petitions accepted after that date).

Rep. Issa is heading-up hearings and a review of the program to consider whether the CBM program should be made permanent and potentially expanded beyond its current narrow scope.  Issa has stated he sees the program as a more efficient mechanism for eliminating low quality patents.

In the recent hearing, three witnesses testified:

David Hale – TD Ameritrade.  “Thankfully, the America Invents Act appears to have turned the tide [against abusive patent litigation]. Upon the implementation of the CBM process, TD Ameritrade has actively used the process to combat several of the low quality patents brought against it, bringing a total of eight CBM petitions. [Testimony]

John Neumann – Government Accounting Office. “Stakeholders we interviewed generally agreed the effects of the CBM program on innovation and investment have been minimal or mostly positive.” [Report]

Aaron Cooper – Business Software Alliance and former Chief IP Counsel for Senate Judiciary Committee.  “Programs that target specific areas of technology – such as the Transitional Program for Covered Business Method Patents (CBM Program) – are detrimental to the patent system in general, and the software industry in particular.” [Testimony]

Watch the hearing here:


Means-Plus-Function and Attorney Fees

by Dennis Crouch

Sarif Biomed v. Brainlab (Fed. Cir. 2018) [SarifBiomed]

Sarif’s patent is directed to a “computer-assisted microsurgery installation” couples position sensors with images to place the location of a tool within a fixed reference frame. U.S. Patent No. 5,755,725 (1993 priority).

In the dispute, Sarif first sued Brainlab for infringement.  Brainlab responsively petitioned for inter partes review (IPR). That petition was rejected after the PTAB determined that it couldn’t decide anticipation because the claims were too indefinite. Although the PTAB statements denying the petition are not binding in any way, they are obviously influential.  Here, the district court followed the PTAB and ruled that the claims were invalid as indefinite.  In particular, the court looked at the following claim term:

(d) a computer adapted to: . . . (3) control position and displacements of the tool . . .

Although not in traditional means-plus-function language, the district court held that the claim lacks structure regarding the function of controlling position and displacement.

Claim 1’s “computer adapted to” perform this function is an insufficient disclosure of structure as there is no disclosure as to how the computer would perform the function. “[I]f a claim recites a generic term that, properly construed in light of the specification, lacks sufficiently definite structure to a person of ordinary skill in the art, the presumption is overcome and the patentee has invoked means-plus-function claiming.” Apple (2014). Moreover, as recently stated by the Federal Circuit in Williamson, “the fact that one of skill in the art could program a computer to perform the recited functions cannot create structure where none otherwise is disclosed.”

The claim lacked structure.  It turns out that specification also lacked support for the claimed means and thus is indefinite under In re Donaldson Co., 16 F.3d 1189 (Fed.Cir. 1994) (en banc).

The appeal here does not focus on the merits of the indefiniteness discussion, but rather involves the accused infringer’s petition for attorney fees that was denied.  On appeal here, the Federal Circuit has affirmed the lower court’s denial of fees — holding that the district court acted within its discretion in finding no “exceptional case.”

Law of Attorney Fees: The usual rule in patent litigation is that each party is responsible for compensating their own attorneys win-or-lose.  The Patent Act authorizes a judge to order fee shifting, but only in “exceptional cases.” In Highmark and Octane Fitness, the Supreme Court collectively held that the exceptional case determination involves a flexible analysis involving the “totality of the circumstances” considered at the discretion of the district court.  The analysis involves, inter alia, consideration of any unreasonable actions, party motivations, and strength of arguments.  Because patent litigation is expensive, fee awards can easily reach into the millions-of-dollars.

On the merits here, the Federal Circuit agreed that Sarif’s claim construction position of no-means-plus-function was “well supported” – despite ultimately losing the case.  Regarding the PTAB’s statement of invalidity, the Federal Circuit wrote:

Brainlab places too much significance on the PTAB’s determination. The PTAB does not have authority to institute an inter partes review under § 112. See 35 U.S.C. § 311(b). Therefore, as Brainlab admitted, any conclusion regarding indefiniteness is dicta.

Without the weight of that objective evidence of presenting weak arguments, it was easy for the Federal Circuit to affirm the denial of fees. AFFIRMED.

Consolidating Briefs and Word Limits

Indivior v. Dr. Reddy’s (Fed. Cir. 2018) [DrReddysOrder]

This “case” is actually a consolidation of 14 filed-appeals that collectively stem from six different district court cases involving three sets of appellants.  In his consolidation order, the Federal Circuit Clerk Peter Marksteiner wrote:

The above-captioned appeals appear to be related. We consolidate the appeals, and thus one set of briefs should be filed for the appeals.

Order of November 1, 2017.

Rather than filing a single consolidated brief, the appellant’s filed three (Dr. Reddy’s; Teva + Watson; and IntelGenX + Par).  Although each brief individually complied with the Federal Circuit’s 14,000 word limit — relied upon co-appellant briefs by incorporating-by-reference arguments made by co-appellants.  For instance, Dr. Reddy’s brief explains:  “The asserted claims of the ’514 patent are invalid as indefinite. DRL adopts by reference Par’s arguments on this issue.”  The patentee then asked for extra space in its brief to respond to all of the arguments.

In a new (non-precedential) order, the clerk has attempted to resolve the issue by striking the briefs filed and demanding a single joint opening brief <18,000 words and then allowing the patentee to also file an expanded responsive brief.

One problem with the Court’s approach here is that it made no determination as to whether the incorporation-by-reference was problematic in this situation.  In particular, Federal Rule Appellate Procedure 28(i) permits incorporation by reference in consolidated cases involving multiple appellants or appellees.  In a parallel case, the 8th Circuit indicated that incorporation-by-reference in this situation does not count toward the word-limit. In re Target Corp. Customer Data Security Breach Litig., 855 F.3d 913 (8th Cir. 2017) (“Nothing in Rule 28(i) suggests that parts of briefs adopted by reference should be treated as literally incorporated into a party’s principal brief for wordcount purposes.”).  In Microsoft Corp. v. DataTern, Inc., 755 F.3d 899 (Fed. Cir. 2014), the Federal Circuit barred a party from incorporating-by-reference (finding the incorporated argument waived).  However, that case did not fall under R. 28(i) and so is distinguishable from this situation.


Dell’s Arguments Too Late to Cancel Acceleron’s Claim

by Dennis Crouch

Dell Inc. v. Acceleron, LLC (Fed. Cir. 2018)

In its original decision, the PTAB cancelled claim 3 of Acceleron’s U.S. Patent No. 6,948,021 (inter alia). That holding was based upon an argument first presented by Dell at Oral Arguments (over Acceleron’s procedural objections).  The Federal Circuit in 2016 vacated that first PTAB decision — “the Board denied Acceleron its procedural rights by relying in its decision on a factual assertion introduced into the proceeding only at oral argument, after Acceleron could meaningfully respond.”  The Federal Circuit explained:

The agency must timely inform the patent owner of the matters of fact and law asserted . . . , must provide all interested parties opportunity for the submission and consideration of facts and arguments . . . and hearing and decision on notice, . . . and must allow a party to submit rebuttal evidence as may be required for a full and true disclosure
of the facts.

On remand, the Board rewrote its decision – this time excluding and ignoring Dell’s late argument and thus finding the claim valid.

On appeal again, the Federal Circuit has now affirmed the validity finding — holding that the Board properly ignored Dell’s argument – even though the result is that we confirm the validity of a patent claim that is thought to be invalid.  The problem for Dell is that the procedural rules are clear – “No new evidence or arguments may be presented at the Oral Arguments.” (Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756 (Aug. 14, 2012)).

The primary holding here is that the PTAB was not required to allow for any re-briefing of the arguments and evidence.  In its decision, however,, the Federal Circuit goes further and states that the Board could not reopen arguments even if had wanted to:

The Board was obligated to dismiss Dell’s untimely argument given that the untimely argument in this case was raised for the first time during oral argument. See, e.g., Wagner v. United States, 365 F.3d 1358 (Fed. Cir. 2004) (“[A]n agency is bound by its regulations.”); Dell contends that ignoring evidence of unpatentability is against public policy because it will not improve patent quality. We find that under these circumstances, due process and preserving the Board’s discretion outweigh any negative effects of not invalidating a patent claim, especially since our decision does not preclude another party from challenging the validity of claim 3 on the same basis.

This final quoted paragraph is potentially dicta, but will certainly carry the day within the Board.


Hrdy: A Response to ‘Innovation Kills Jobs’

Last week I posted a discussion of Prof. Hrdy’s intriguing new article on Technological Un/employment.  Prof. Hrdy has now provided a short response that basically explains how I took a portion of her article (automation killing jobs) while ignoring other aspects of the 79-page article (e.g., many positive benefits of innovation, including job creation).  – DC

by Prof. Camilla Hrdy

I am so honored that you found my article worth a post on Patently-O.  In the nature of academic discussion and in good fun, I would like to briefly respond. (And please do feel free to post this).

First, I really appreciate the provocative title, “Prof. Hrdy: When Inventions Kill Jobs“, but want to add a bit more color. My thesis, as reflected by the title of my paper, Technological Un/employment, is that innovation, and thus intellectual property, both create and eliminate jobs. Historically, we have had more of the former than the latter.

Second, I think some readers may have come away with the idea that I am a bit of a Luddite, when I am the opposite. Innovation is good. No: innovation is great! It is the secret to economic prosperity and where the good jobs will come from in the future. I also believe IP is, on aggregate, good for innovation. As you astutely noted, my belief in the need for some form of regulation is motivated, at present, largely by distributional concerns, not by a fear of innovation itself. Even if technology won’t be doing all work by the year 2048, the number of humans needed to build, maintain, and operate that technology is dwindling, and access to jobs is increasingly restricted to highly educated people with unique opportunities — which most people do not enjoy. (Please see Part II of the Article). Those opportunities are also unequally distributed geographically, an issue I have raised in much of my work, particularly in my papers Cluster Competition and Patent Nationally, Innovate Locally. If current trends continue, the job market will more and more resemble a pyramid consisting of a select few at the top with high quality jobs —  and a lot of IP —  and the rest of humanity unemployed or consigned to “gap filling” for the machines. I also think that when inventions make others’ skills completely obsolete, this resembles a negative externality not unlike pollution. (Please see Part IV). There is at least a case to be made that those who profit should have to internalize some of the harms their inventions impose on others.

Third, while I do support some form of regulation to help avoid these outcomes, I do not support denying patents on labor displacing inventions. While it (might have) made sense in Queen Elizabeth’s time, I reject a “labor displacing patent bar” in favor of more effective tools. Likewise, I oppose fully banning labor displacing inventions like self-driving cars. Instead, I suggest a small —  key word small —  tax on profits from certain innovations that are found, upon adoption, to displace a significant number of workers.

This “labor displacing IP tax” would have a two-fold effect. First, it would permit giving back to workers at least some of what they lose, either in the form of skills training or — hopefully we won’t come to this — a universal basic income in the scenario where skills training doesn’t help because machines are capable of performing most tasks in the economy. Second, a small tax on underlying IP would at most marginally slow down the pace at which companies take advantage of improvements in machine learning and develop ever-more sophisticated forms of automation. The leading alternative proposal is a “robot tax” levied on businesses that adopt labor displacing inventions. To me, it makes far less sense to tax the mom-and-pop restaurant that adopts software to keep costs low than it does to tax whichever mega company owns the intellectual property covering the software.

The reason I turn to regulation is not to halt innovation. It is so that we can innovate with abandon. Also, I have a video to respond to your creative use of the Mr. Rogers’ segment, courtesy of Daniel Day Lewis in There Will Be Blood  

In any event, thanks again for your thoughtful post. It is great to have this opportunity to engage in discussion on Patently-O.

= = = =

Prof Hrdy: When Inventions Kill Jobs


Blogs: The Newest Form of Communication

Although the point of the new ABA Formal Ethics Opinion is important–“don’t reveal information relating to the representation”–its first paragraph appears at least a decade behind.  The article begins:

Lawyers comment on legal topics in various formats. The newest format is online
publications such as blogs . . .

The line included a footnote explaining the term “blog.”  As a an FYI – “Blog” was Merriam-Webster’s word-of-the-year in 2004.

“The newest format is online publications such as blogs . . . “ (followed by a FN explaining the term).



For Predictable Arts: Written Description of Genus Satisfied by Single Species Disclosure and Fact that Other Members of Genus are Well Known in the Art

by Dennis Crouch

35 U.S.C. 112(a) requires that a patent specification include a “written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms.”  That statutory language serves as the basis for the written description requirement — whose purpose is to ensure that “the inventor actually invented the invention claimed.” Ariad Pharm., Inc. v. Eli Lilly & Co., 598 F.3d 1336 (Fed. Cir. 2010) (en banc). Claims that were not sufficiently described in the originally filed specification will be deemed invalid or, if a priority filing is involved, the patentee will be barred from relying upon that document for its filing date.

Most often, the written description requirement arises in situations where the patent applicant substantially modified its patent claims during prosecution in a way that creates some distance between the original disclosure and the new claims.  Commonly, the application will include a set of specific disclosures and the patentee will attempt to later amend its claims to cover a broad genus.  (Recognize that in Ariad, the Federal Circuit explained that there can be a failure of written description with never-amended claims.)

In Hologic v. Smith & Nephew (Fed. Cir. March 14, 2018), patentee (Smith & Nephew) claimed the use of a light-guided endoscope for uteral surgery.  The original specification of the parent application did not include the “light guide” language, but did explain that the endoscope included “a fibre optics bundle which provide for lighting at the end of [the] lens.”  During prosecution, the examiner objected to the use of “light guide” in the claims since that term was never discussed in the specification — in response, the patentee amended the specification to state that the aforementioned firbre optics bundle is an example of a light guide: “a light guide such as, a fibre optics bundle which provide for lighting at the end of [the] lens.” (underlined language added to specification during prosecution).  The disclosure also included drawings showing the connection between the lens and the light source.

The specification amendment satisfied the original examiner and U.S. Patent No. 8,061,359 was duly issued to Smith & Nephew.  However, on inter partes reexamination, the new examiner raised the problem again – concluding that the disclosed single example of “fibre optics bundle” language did not satisfy the broad genus of “light guides.”  The PTAB (Board) sided with the patentee.  Although the Board identified the case as a “close call,” it ultimately held that the disclosure was sufficient to satisfy the written description requirement.  On appeal here, the Federal Circuit has affirmed.

The written description inquiry begins with the “four corners” of the original patent specification as read from the perspective of a person of ordinary skill in the art.  To satisfy test, the specification must describe the invention in a way understandable to that PHOSITA and that shows possession of the invention now being claimed.  This is an objective inquiry and the court applies a reasonableness test — does the specification reasonably convey possession of the invention?  Here, the question is whether the disclosure of fibre-optics reasonably conveyed the claimed “light guide.”  As part of the analysis of the test, the court also considers the level of predictability — finding that this field (at least as far as equipment construction) is predictable. That conclusion means that “a lower level of detail is required to satisfy the written description requirement than for unpredictable arts.”

On appeal, it is also important to recognize that satisfaction of the written description requirement is deemed a question of fact.  As such, Board conclusions are given substantial deference on appeal.

In walking through its analysis the Federal Circuit appeared to fully base its decision on two agreed-upon facts:

  1. Everyone agrees that the patent discloses one light guide – the fibre optic bundle: “Board properly relied on the fact that the parties do not dispute that a
    “fibre optic bundle” is a type of light guide.”
  2. Everyone agrees that various types of light guides are well-known in the art: “Nor did the parties dispute that various types of light guides were well-known
    in the art.”

Based upon these two facts (and presumably the predictability of the art), the Federal Circuit found that the validity conclusion appropriate:

Accordingly, we conclude that substantial evidence supports the Board’s finding that Emanuel PCT reasonably conveys to a person of ordinary skill that the inventor had possession of a “light guide.”

The bottom line is suggested by the article title: For Predictable Arts, the written description requirement to a claim for a genus is satisfied by disclosure of a single species of that genus along with the (later proven) fact that other members of the genus are also well known in the art.  

Note here that the challenger also argued that the written description did not show the light guide being “permanently affixed” in the “first channel.” On appeal, the court also rejected those arguments.

Decision here authored by Judge Stoll and joined by Judges Newman and Wallach.

Examples of Linguistic (In)definiteness

After reading his recent law review note on indefiniteness, I asked Michigan Law student Gary Fox to apply his framework to the new Federal Circuit decision of Capital Security Systems, Inc. v. NCR Corp. – DC

Guest Post by Gary M. Fox (, University of Michigan Law School

In Nautilus, Inc. v. Biosig Instruments, Inc., the Supreme Court articulated the standard for indefiniteness under 35 U.S.C. § 112: “[A] patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.”[1] Since then, courts have had nearly four years to apply this new standard.

I have previously argued that the reasonable-certainty standard might be understood as imposing two separate requirements: linguistic and physical definiteness.[2] Under my proposed framework, a claim is linguistically indefinite if it is open to multiple constructions but one construction is not clearly correct. Additionally, a claim is physically indefinite if it uses a comparative term or involves an ambiguous spatial relationship but is not limited to a narrow range. In this view, a claim that is either linguistically or physically indefinite fails to meet Nautilus’s reasonable-certainty standard.

Last week, the Federal Circuit handed down a nonprecedential decision in Capital Security Systems, Inc. v. NCR Corp.[3] In that case, the court considered whether two different claim terms were definite.

Capital Security holds four patents that are directed to an automated document cashing machine.[4] Three of those patents are continuation patents that share the parent patent’s specification and priority date.

The independent claims in the continuation patents contain the phrase “ascertains an apparent signature” or a highly similar variation.[5] For example, a representative claim includes the following limitation: “the processor reviews images from a legal amount recognition (LAR) line and a courtesy amount recognition (CAR) line and ascertains an apparent signature from the document image in order to validate the document.”[6]

The other term at issue was “transactional operator.” One claim in the parent patent includes the following language: “a transactional operator for operation by the user to perform a transaction upon deposit of sufficient cash by user for the requested transaction.”[7] The parent patent’s specification does not use the term “transactional operator,” but it does describe a microcomputer, keyboard, and display.

On NCR’s motion for summary judgment, the district court held that “ascertains an apparent signature” and “transactional operator” were both indefinite.[8] The court credited NCR’s expert, who offered four possible meanings for “apparent signature.”[9] NCR’s expert also offered three possible meanings for “transactional operator.”[10] In both cases, he testified that a skilled artisan would not have been able to decide amongst the possible options. The district court agreed and found the claims invalid.

In its decision on appeal, the Federal Circuit reversed the district court’s holding that “ascertains an apparent signature” was indefinite. The court reasoned that “a skilled artisan would understand the claimed ascertaining step to correspond to determining the presence of a signature on the signature line of a check.”[11] It found that the claim had been written to encompass all four of the options that NCR’s expert presented. The court rejected NCR’s argument that the term was indefinite because it was not tied to an “objective standard of measure.”[12] It also pointed out that Capital Security had not “muddle[d] the scope” of the term during prosecution.[13]

On the other hand, the Federal Circuit affirmed the district court’s holding that “transactional operator” was indefinite. The court noted that it was unclear whether that term included the microcomputer, the keyboard, and the display, or only a subset of those components.[14] During oral argument, counsel for Capital Security contended that the microcomputer and keyboard counted as the “transactional operator” but that the display did not count. Because “transactional operator” did not have a “commonly-accepted definition,” the court found the term indefinite.[15]

For both “ascertains an apparent signature” and “transactional operator,” NCR presented arguments grounded in linguistic indefiniteness. For each term, it asserted that there were multiple possible constructions but that no construction was clearly correct. That strategy makes sense. After all, the Federal Circuit had previously held claim terms with three or four possible meanings indefinite.[16]

For “ascertains an apparent signature,” the court essentially found that NCR’s expert presented a false choice among four constructions when the claim was drafted to encompass all four options. With one slightly broader construction that was clearly correct, any potential linguistic indefiniteness problem disappeared.

But for “transactional operator,” there was a legitimate linguistic indefiniteness problem. The court could not identify which components counted. For example, the “transactional operator” could have been the microcomputer and keyboard; the microcomputer and display; the keyboard and display; or the microcomputer, display, and keyboard. Even if some of these combinations were likelier than others, a skilled artisan would not have known which construction was correct. Therefore, the term suffered from linguistic definiteness.

As I have said before, my proposed framework of linguistic and physical definiteness might not work for every conceivable case.[17] But it seems to work for Capital Security Systems v. NCR, and it may be a helpful starting point for understanding the reasonable-certainty standard in the wake of Nautilus.

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[1] 134 S. Ct. 2120, 2124 (2014).

[2] Gary M. Fox, Note, Understanding Nautilus’s Reasonable-Certainty Standard: Requirements for Linguistic and Physical Definiteness of Patent Claims, 116 Mich. L. Rev. 329 (2017).

[3] Capital Security II, No. 2017-2368, 2018 WL 1181197 (Fed. Cir. Mar. 7, 2018).

[4] U.S. Patent No. 5,897,625; U.S. Patent No. 7,653,600; U.S. Patent No. 7,991,696; U.S. Patent No. 8,121,948.

[5] Capital Security II, 2018 WL 1181197, at *1.

[6] Id. at *2 (emphasis added by court) (quoting U.S. Patent No. 7,653,600 col. 39 l. 35 – col. 40 l. 11).

[7] Id. (emphasis added by court) (quoting U.S. Patent No. 5,897,625 col. 24 ll. 31–53).

[8] Id. at *3 (citing Capital Sec. Sys., Inc. v. NCR Corp. (Capital Security I), 263 F. Supp. 3d 1366, 1375 (N.D. Ga. 2017)).

[9] According to NCR’s expert, the four possible meanings were as follows: “(1) determining if anything in the way of a mark was present in the signature field, useful or otherwise; (2) distinguishing a mark resembling legible text from a mark never intended to be a signature, such as a scratch or smudge mark; (3) determining if the scanned image field corresponds to a handwritten cursive signature versus an otherwise legitimate block letter printed name; or (4) determining if the signature is forged.” Id. (quoting Capital Security I, 263 F. Supp. 3d at 1373).

[10] Again, according to NCR’s expert, the options for this term were “(1) a user interface allowing user selections; (2) an internal computer component like software executing an algorithm; or (3) a computer component that performs” a certain task. Id. at *4.

[11] Id.

[12] Id. at *5.

[13] Id.

[14] Id. at *5.

[15] Id. at *6.

[16] Fox, supra note 2, at 344–45, 345 n.118 (first citing Teva Pharms. USA, Inc. v. Sandoz, Inc., 789 F.3d 1335 (Fed. Cir. 2015); then citing Dow Chem. Co. v. Nova Chems. Corp. (Can.), 803 F.3d 620 (Fed. Cir. 2015)).

[17] Id. at 348.

Berkheimer En Banc: HP Asks Whole Court to Consider whether Eligibility is Predominately Factual

by Dennis Crouch

In its February 2018 decision in Berkheimer v. HP, the Federal Circuit – led by Judge Moore – held that fundamental aspects of the patent eligibility test question are based upon questions of fact.  That holding appears in tension with prior Federal Circuit holdings, such as Intellectual Ventures I LLC v. Capital One Fin. Corp., 850
F.3d 1332 (Fed. Cir. 2017) and OIP Techs., Inc. v., Inc.,
788 F.3d 1359 (Fed. Cir. 2015).

In its new petition for en banc rehearing, HP asks the court to reconser — raising particular questions:

  1. Is the threshold inquiry of patent eligibility under 35 U.S.C. § 101 a question of law without underlying factual issues that might prevent summary judgment?
  2. Is the appropriate inquiry under Alice’s step 2 whether the claims transform an abstract idea into a patent-eligible application, or merely “whether the invention describes well-understood, routine, and conventional activities”?
  3. Is a statement in a patent specification reciting that the invention is new and improves upon the prior art enough to create a genuine issue of material fact that precludes summary judgment as to patent eligibility under 35 U.S.C. § 101?

The case has good shot at being heard by the whole court.  I expect that the court would agree with Judge Moore that underlying factual issues are possible in the eligibility analysis, but would also hold that the exercise is not “a predominately factual one that ‘opens the door in both steps of the Alice inquiry for the introduction of an inexhaustible array of extrinsic evidence, such as prior art, publications, other patents, and expert opinion.'” (HP Petition, quoting Judge Reyna’s dissent in Aatrix).

  • Read HP’s petition here: Berkheimer_v._HP_Inc.
  • Amicus filings have a quick timeline for en banc petitions (7 days 14 days?)
  • The brief quoted my blog post statement that the decision is “in substantial tension with prior treatment of eligibility analysis.”

Patent Eligibility: Underlying Questions of Fact


Guest Post: The Substantial Identity Requirement of Patent Infringement

Guest Post by Professor Samuel F. Ernst, Golden Gate University School of Law

Every patent litigator knows that if a product or process accused of patent infringement contains every limitation of the asserted patent claim, there is infringement.  “It is fundamental that one cannot avoid infringement merely by adding elements if each element recited in the claims is found in the accused device.”[1]  In fact, this is not the law.  In 1898 the Supreme Court held in Westinghouse v. Boyden Power Brake Co. that two steps are required for a patent holder to prove infringement.[2]  Yes, the patent holder must prove that the accused product falls within the literal language of the patent claims, but this does not end the infringement analysis.  The patent holder must further prove that there is “substantial identity” between the claimed invention and the accused device, “whether that identity be described by the terms, same principle, same modus operandi, or any other.”[3]  Hence, in Westinghouse, the Court held that although George Boyden’s accused air pressure train brake fell within the semantic scope of George Westinghouse’s patent claims, there was no infringement because the accused device “is a novel one and a manifest departure from the principle of the Westinghouse patent . . . because it solved at once in the simplest manner the problem of quick action, whereas the Westinghouse patent did not prove to be a success until certain additional members had been incorporated into it.”[4]  Hence the Court stated the correct rule for patent infringement as follows:

But even if it be conceded that the Boyden device corresponds with the letter of the Westinghouse claims, that does not settle conclusively the question of infringement.  We have repeatedly held that a charge of infringement is sometimes made out, though the letter of the claims be avoided [i.e., the doctrine of equivalents].  The converse is equally true.  The patentee may bring the defendant within the letter of his claims, but if the latter has so far changed the principle of the device that the claims of the patent, literally construed, have ceased to represent his actual invention, he is as little subject to be adjudged an infringer as one who has violated the letter of a statute has to be convicted, when he has done nothing in conflict with its spirit and intent.[5]

The Westinghouse case has never been overruled by the Supreme Court.  In fact, the principle of Westinghouse was reaffirmed by the Supreme Court in dictum in the 1950 Graver Tank case.[6]  The Graver Tank opinion held that infringement may be proven by equivalents, even if there is no literal infringement.  But the Court also noted that infringement may be avoided despite literal infringement, under what has subsequently come to be known as the reverse doctrine of equivalents:

The wholesale realism of this doctrine [of equivalents] is not always applied in favor of a patentee but is sometimes used against him.  Thus, where a device is so far changed in principle from a patented article that it performs the same or a similar function in a substantially different way, but nevertheless falls within the literal words of the claim, the doctrine of equivalents may be used to restrict the claim and defeat the patentee’s action for infringement.[7]

In 1997, the Court declined to “speak the death” of the affirmative doctrine of equivalents, rejecting the petitioner’s argument that the doctrine was overruled by the 1952 Patent Act’s requirement that a patent applicant claim her invention in definite terms.[8]  The Court held that “[i]n the context of infringement, we have already held that pre-1952 precedent survived the passage of the 1952 Act.”[9]  This reasoning applies with equal force to the reverse doctrine of equivalents.  It also survived the passage of the 1952 Act.

Despite this history, since its creation in 1982 the Federal Circuit has all but overruled the reverse doctrine of equivalents.  The Federal Circuit has (accurately) warned litigants and the lower courts that “[n]ot once has this court affirmed a decision finding noninfringement based on the reverse doctrine of equivalents.”[10]  The Federal Circuit refers to the reverse doctrine of equivalents as “one anachronistic exception, long mentioned but rarely applied.”[11]  In the process of vacating findings of infringement under the reverse doctrine of equivalents, the Court has also cabined the doctrine in various ways, making it exceedingly difficult to prove.  Specifically, the court has: (1) held that the plaintiff no longer has the burden of proving substantial identity as part of the affirmative infringement case; rather, reverse equivalency is an affirmative defense with the burden on the accused infringer;[12] (2) overruled a previous case to hold that reverse equivalency is a question of fact, not an equitable determination or a question of law,[13] meaning that an accused infringer cannot readily use the doctrine as a tool to obtain summary judgment; and (3) held that the defense is only available when there is literal infringement, not when any of the claim limitations are infringed merely by equivalents.[14]

In a pair of recent law review articles, I argue that the Federal Circuit is wrong that the reverse doctrine of equivalents was an anachronistic exception, long mentioned but rarely applied.  In The Supreme Court Case that the Federal Circuit Overruled,[15] I dig deeply into the facts and reasoning of the Westinghouse case and several regional circuit court cases relying on the doctrine to argue that the reverse doctrine of equivalents is an essential safety valve in the patent infringement analysis to ensure that substantial innovations are not unduly enjoined or taxed by the patent thicket.  And in The Lost Precedent of the Reverse Doctrine of Equivalents, I review every published case finding or affirming non-infringement under the reverse doctrine of equivalents between 1898 and 1988, to conclude that the doctrine was regularly (even if not routinely) applied to find non-infringement in every decade from the 1900s through the 1980s, when the Federal Circuit effectively killed the doctrine.[16]  Of particular importance, opinions in the Second, Fifth, Sixth, Seventh, and Ninth Circuit courts of appeals hold that both literal and substantial infringement must be proven as part of the plaintiff’s prima facie case.[17]  The Second Circuit stated this fundamental, black letter law of patent infringement poetically: “There is no magic in a name, nor in a claim; that the words preferred by a patentee to define his invention apply literally to another’s device suggests, but does not prove, infringement.”[18]  In 1983, the Sixth Circuit bemoaned the fact that some courts “continue to pay lip service to the doctrine of literal infringement as though it were the rule…. Perhaps we are embarrassed to expose the ‘wholesale realism’ which controls many infringement cases, and we choose instead to present the facade of precision and certainty which attends the doctrine of literal infringement.”[19]

It is now time for the en banc Federal Circuit or the Supreme Court to overrule the erroneous doctrine of literal infringement and revive the reverse doctrine of equivalents.  As properly applied, the reverse doctrine of equivalents allows for accused innovations to escape infringement when they are substantially superior, practically and commercially, to the invention claimed by an asserted patent. [20]  Opponents of legislative patent litigation reform often argue that prospective legislation could have unforeseen adverse consequences on the incentive to invent.  An invigorated doctrine of equivalents would therefore be a more sensible, cautious, patent law reform than prospective legislation because it is applied by the courts on a case-by-case basis, with the court weighing the value of the patented invention against the value of the allegedly superior accused innovation and only granting relief in unusual cases.  Because the doctrine is not applied prospectively, it does not raise the concerns with unknown consequences that prospective litigation does.  Finally, the doctrine is a proven commodity because it was the law in this country from at least the 1900s through most of the 1980s, a period that saw substantial innovative advances, from the airplane to the rocket ship to the internet.  If a proper litigation vehicle is identified, a petition for certiorari arguing for the revival of the reverse doctrine of equivalents may well attract the attention of the Supreme Court.  The Supreme Court has been inclined to review the work of the Federal Circuit in recent years in cases where the Federal Circuit has applied a rigid rule (like the doctrine of literal infringement), given insufficient deference to district court determinations (as occurs when the district court is not permitted to weigh the principle of the asserted patent against the accused substantial innovation), and disregards or cabins Supreme Court precedent (as has been done with Westinghouse v. Boyden).[21]

= = = = =

[1] Stiftung v. Renishaw PLC, 945 F.2d 1173, 1178 (Fed. Cir. 1991).

[2] Westinghouse v. Boyden Power Brake Co., 170 U.S. 537, 568 (1898).

[3] Id. at 568 (internal citations omitted).

[4] Id. at 572.

[5] Id. at 568 (emphasis added) (internal citations omitted).

[6] Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 608-611 (1950).

[7] Id. at 608-09.  It appears that this fundamental principle of infringement analysis came to be known as “the reverse doctrine of equivalents” due to a 1966 article by Charles F. Pigott, Jr.  See Charles F. Piggott, Jr., Equivalents in Reverse, 48 J. Pat. Off. Soc’y 291 (1966).

[8] Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 21, 26 (1997).

[9] Id.  at 26-27 ((citing Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 342 (1961) (new section defining infringement “left intact the entire *27 body of case law on direct infringement”).

[10] Tate Access Floors v. Interface Architectural Res., Inc., 279 F.3d 1357, 1368 (Fed. Cir. 2002).

[11] Id.

[12] SRI Int’l v. Matsushita Elec. Corp. of Am., 775 F.2d 1107, 1123-24 (Fed. Cir. 1985) (en banc).

[13] Id. at 1126 (overruling Kalman v. Kimberly-Clark Corp., 713 F.2d 760 (Fed. Cir. 1983)).

[14] Texas Instruments, Inc. v. United States Int’l Trade Comm’n, 846 F.2d 1369, 1372 (Fed. Cir. 1988).  It should be noted that the Federal Circuit once mercifully vacated a sanctions award of over $10 million and attorney’s fees of over $400,000 that the district court had imposed on a defendant for the offense of merely raising the reverse doctrine of equivalents.  See DePuy Spine, Inc. v. Medtronic Sofamar Danek, Inc., 567 F.3d 1314, 1337-39 (Fed. Cir. 2009).  The Court acknowledged (incorrectly, in this author’s opinion) that “The Supreme Court has recognized it to be a viable defense, even if it is rarely asserted.”  Id. at 1339.  As set forth above, lack of substantial identity is not a defense; proving substantial identity is part of the affirmative infringement case.

[15] Samuel F. Ernst, The Supreme Court Case that the Federal Circuit Overruled: Westinghouse v. Boyden Power Brake Co., 68 Syracuse L. Rev. 53 (2018).

[16] Samuel F. Ernst, The Lost Precedent of the Reverse Doctrine of Equivalents, 18 Vand. J. Ent. & Tech. Law 467 (2016).

[17] See The Supreme Court Case that the Federal Circuit Overruled, 68 Syracuse L. Rev. at 62-66.

[18] Linde Air Prods. Co. v. Morse Dry Dock & Repair Co., 246 F. 834, 838 (2d Cir. 1917).

[19] Mead Digital Sys., Inc. v. A.B. Dick Co., 723 F.2d 455, 462 (6th Cir. 1983) (quoting Graver Tank, 339 U.S. at 608).

[20] By “innovation” I am referring to a practically and commercially functional product or process that has overcome the hurdles of financing, market-testing, regulatory approval, production, and other obstacles to become available for the benefit of the public.  This is distinguished from an “invention,” which is the articulation of an inventor’s idea, but not necessarily a fully realized innovation.  See Robert P. Merges, Commercial Success and Patent Standards: Economic Perspectives on Innovation, 76 Cal. L. Rev. 803, 807 (1988).

[21] See also John F. Duffy, Counterproductive Notice in Literalistic Versus Peripheral Claiming, 96 B.U. L. Rev. 1197, 1221 (2016) (opining that the Supreme Court may review the Federal Circuit’s “literalistic claiming approach” in the next five to ten years).

Eligible: Method of Measuring Body Temperature

by Dennis Crouch

Exergen Corp. v. Kaz USA (Fed. Cir. 2018)

Following trial, a jury sided with the patentee Exergen – finding the asserted body thermometer claims infringed and not-invalid.  Post trial, the District Court confirmed the judgment and denied Kaz’s motion for invalidity under Section 101.  On appeal, a divided Federal Circuit has affirmed-in-part — with Judges Moore and Bryson siding with the patentee (valid under 101) and Judge Hughes arguing invalidity.  Although nonprecedential, the decision offers a key explanation for when medical diagnostic methods can be patent eligible and highlights a major split between members of the Court.  I would recommend that you read both the majority and dissenting opinions.

Claim 14 of U.S. Patent No. 6,292,685 is probably the most – borderline claim at issue. Below, I have listed claim 14 against Claims 54/55 of Exergen’s U.S. Patent No. 7,787,938, whose invalidity was previously affirmed by the Federal Circuit (judgment without opinion).

Claim 14 of ‘685 Patent – VALID

14. A method of detecting human body temperature comprising

making at least three radiation readings per second while moving a radiation detector to scan across a region of skin over an artery to electronically determine a body temperature approximation, distinct from skin surface temperature.


Claims 54/55 of the ‘938 Patent — INVALID

54. A method of detecting human body temperature comprising:

measuring radiation as target skin surface of the forehead is viewed, and
processing the measured radiation to provide a body temperature approximation based on heat flow from an internal body temperature to ambient temperature.

55. The method of claim 54 wherein the region of the skin is over an artery.

According to the Federal Circuit, the claims “employ a natural law to achieve their purpose.” The dispute in the case related to Alice/Mayo step-two — whether the claims include an inventive concept beyond the temperature calculations “sufficient to transform the claims into a patent-eligible application.” The difference here is that the valid claims include the additional technique of “scanning while moving a radiation detector.”  Now, it turned that the approach was found in the prior art — i.e., was “well understood,” but not in a clear enough form to be “routine and conventional.”   Judge Moore has previously explained that the question of whether aspects of a claim are “well understood, routine, and conventional to a skilled artisan in the relevant field” is a question of fact.  Here, that meant that the district court decision was not disturbed.

More to come on this one.

As you read the opinions here, you’ll see that these are good candidates for being precedential.  FedCir R.32.1(e) provides a mechanism to request to make an opinion precedential – open to any person within 60 days of opinion.


Dismissed with Prejudice

Ottah v. Fiat (Fed. Cir. 2018)

On appeal, the Federal Circuit has affirmed the lower court’s dismissal of Chikezie Ottah’s infringement claim against Fiat, Toyota, Nissan, GM, Ford, and other auto manufacturers — holding it not infringed.

Acting pro se, Ottah alleged that his U.S. Patent No. 7,152,840 (“book holder”) was being infringed by the back-up cameras installed on various vehicles.  The problem for Ottah is that the Federal Circuit previously ruled that the patent claim language (“removable attachment”) coupled with prosecution history statements meant that the claims only covered attachments removable by hand — all of the accused devices required specialized tools for removal.

Even after liberally construing the pleadings (for pro se benefit), the court found no plausible claim based upon the patent — as such the dismissal with prejudice was proper.


What are the Rules for Assessing Patent Eligibility?

In Front Row Tech. v. MLB Advanced Media, the patentee has filed a petition for writ of certiorari – asking the Supreme Court flip the lower court rulings on its sports-data-app patents. [Petition including Lower Court Decisions][Supplemental Appendix Including the Patents]

The petition asks two questions:

1. What are the rules, both procedural and substantive, for assessing patent-eligible subject matter under 35 U.S.C. § 101 for patents claiming inventions described as new and useful combinations of existing components and technologies?

2. Should the Federal Circuit be required to revisit its decision in this case in light of its Berkheimer and Aatrix Software decisions?

In this case, the New Mexico district court granted the accused infringer’s motion for judgment on the pleadings (R.12(c)) based upon the only evidence of record – the patents themselves. In making its decision, the court ruled that it was empowered to make a number of factual findings on the pleadings and without the submission of evidence — noting that “courts routinely make similar findings while evaluating§ 101 challenges.”  On appeal, the Federal Circuit affirmed without opinion.


Asserted Claim 15 of Patent No. 7,812,856 is shown below:

15. A method for displaying a particular perspective of a venue-based activity at least one authorized hand held device having a display screen, said method comprising the steps of:

simultaneously capturing a plurality of video perspectives of a venue-based activity utilizing more than one camera located at a sports and entertainment venue;

processing said plurality of video perspectives at a server into encrypted video data packet for display on a touch-sensitive display screen associated with said at least one authorized hand held device provided in the form of at least a smart phone or personal digital assistance, said at least one hand held device further comprising at least one 802.11 wireless module for access to a wireless local area network and a cellular communications module for communication with a wireless cellular communications network;

wirelessly transmitting said encrypted video packet over an 802.11 wireless local area network to said at least one authorized hand held device said plurality of video perspectives of a venue-based activity from said server;

processing said plurality of video perspectives at said at least one authorized hand held device into decrypted video data packet for display on said touch-sensitive display screen associated with said at least one authorized hand held device; and

displaying a particular video perspective on said touch-sensitive display screen, in response to a user selection of said particular video perspective from among said plurality of video perspectives.

The petition was filed by Michael Shore and his team at Shore Chan DePumpo

Termination Rights and the Stormy Daniels Lawsuit

The Stormy Daniels v. Donald Trump lawsuit includes an interesting copyright angle.  [Read the Complaint].  At its core, the so-called “hush agreement” requires Daniels to keep secret “all intangible private information . . . relating to any of [Donald Trump’s] alleged sexual partners, alleged sexual actions or alleged sexual conduct” and also turn over any “tangible materials” that include related information or other physical personal property.

The agreement also includes a copyright transfer – so that any related copyright to works created by Daniels will transfer to Trump.  The clawback or “termination rights” under Section 203 make a permanent transfer a bit difficult.

Notwithstanding the foregoing, if any of the rights herein granted are subject to termination under section 203 . . . [Daniels] hereby agrees to re-grant such rights to [Trump] immediately upon such termination.

Section 3.2 of the Agreement.

Termination Rights: For those not practicing copyright law, the statute provides termination rights that permits authors or their heirs to terminate copyright assignments and licenses 35-40 years after execution of the transfer (notice of termination must to be provided earlier).

The provision in the Agreement purports to skirt around the termination right by requiring a re-granting.  However, I wouldn’t think this work-around would be effective since 203(a)(5) states that “Termination of the grant may be effected notwithstanding any agreement to the contrary, including an agreement to . . . make any future grant,” followed by 203(b)(4) which clearly states an “agreement to make a further grant, of any right covered by a terminated grant is valid only if it is made after the effective date [or at least service of the notice] of the termination.”  The Agreement does include a severability clause – the fact that some provisions are unenforceable “shall not affect the validity or enforceability of the remaining provisions.”

* Thanks to Prof. Sean O’Connor for highlighting this issue for me.

Haptic Feedback Patents: Some Survive Eligibility Challenge by Fitbit

Immersion Corp. v. Fitbit (N.D.Cal. March 5, 2018)

On 12(b)(6) motion for dismiss, Judge Koh has thrown out some of Immersion’s asserted claims covering various haptic feedback approaches. However, some claims survived:

Invalid as Abstract Idea (claims from U.S. Patent No. 8,638,301):

 27. A system comprising

a processor configured to:

receive a first sensor signal from a first sensor, the first sensor configured to detect a movement of a first mobile device;

receive a second sensor signal from a second sensor, the second sensor configured to detect an interaction with the first mobile device;

receive a first data signal from a network interface, the network interface configured to receive signals transmitted by a second mobile device;

determine a change in a display signal based at least in part on the first data signal and the second sensor signal;

determine a haptic effect based at least in part on the first data signal; and

outputting [sic] the haptic effect.

28. The system of claim 27, wherein the first sensor and the second sensor are each configured to detect one or more of: contact, pressure, acceleration, inclination, inertia, or location.

29. The system of claim 27, wherein the second sensor comprises a touch-screen.

31. The system of claim 27, wherein the processor is further configured to transmit a second data signal to the network interface, and the network interface is further configured to transmit the second data signal to the second mobile device.

Not improperly claiming an abstract idea (Claims from U.S. Patent Nos. 8,059,105 and U.S. Patent No. 8,351,299 respectively): 

14. An apparatus comprising:

a sensor that senses motion of at least a portion of the apparatus and provides a sensor output based on the sensed motion;

a timer that provides a periodic timer output;
a vibrotactile device responsive to the timer that provides a corresponding periodic haptic output; and

a processing device that receives the sensor output and accumulates counts associated with the sensor output, the processing device providing an output to the vibrotactile device providing an output to the vibrotactile device once a threshold associated with the accumulated counts is reached.

19. A haptic feedback device, comprising:

one or more processors configured to receive an input signal and generate a force signal based on the input signal, wherein the input signal is associated with a user-independent event,
the user-independent event comprising one or more of a reminder event, an initiation of a task, a processing of the task, a conclusion of the task, a receipt of an email, or an event occurring in a game; and

one or more actuators configured to receive the force signal and impart a haptic effect based on the force signal.

= = = =

Read the Order: ImmersionDismissal