Joint Inventorship: Court Maintains Low Standard for Joint Inventorship

by Dennis Crouch

In an interesting inventorship dispute, the Federal Circuit has affirmed a lower court ruling that two scientists should be added to the list of inventors on a set of patents obtained by Ono Pharmaceuticals. The change in inventorship means a change in ownership rights as well, and these are valuable patents.

Dana-Farber Cancer Institute, Inc. v. Ono Pharma Co. (Fed. Cir. 2020).

Ono holds a number of tied to cancer therapies that disrupt PD-1 receptor/ligand activity on certain cancer cells.  That disruption then allows a stronger immune response by the patient’s body. US7595048; US8168179; US8728474; US9067999; US9073994; and US9402899.

In the 1990’s Dr. Tasuku Honjo discovered the PD-1 receptor, isolated its DNA sequence, and studied various aspects of its relationship to “programmed cell death.” He was awarded the Nobel Prize for this research. Honjo then started a quest to find a ligand binding to PD-1.

At some point, Honjo began collaborating with Drs. Freeman and Wood who were working in the US.  The trio shared substantial data and plans back-and-forth and began a collaborative research project.

Then what happened — Freeman and Wood filed a patent application on a response-modulation therapy but did not include Honjo on the application (even after he asked to be included). Honjo then filed his own patent application in Japan — the parent application for all of the patents at issue here. Although years later, Dana-Farber eventually sued for correction of inventorship under 35 U.S.C. § 256(b) — a move that would give it partial ownership over the patents.

Invention is generally thought to have two key points of demarcation: (1) conception of the invention; (2) reduction of the invention to practice.  That said, the primary focus is usually on the first point – conception.  Joint inventorship creates some confusion on this point – but the basic requirement is that each joint inventor must significantly contribute to the conception or reduction to practice. On this point, the Judge Lourie quotes one of his own opinions from 1998:

All that is required of a joint inventor is that he or she (1) contribute in some significant manner to the conception or reduction to practice of the invention, (2) make a contribution to the claimed invention that is not insignificant in quality, when that contribution is measured against the dimension of the full invention, and (3) do more than merely explain to the real inventors well-known concepts and/or the current state of the art.

Quoting Pannu v. Iolab Corp., 155 F.3d 1344 (Fed. Cir. 1998). Regarding conception, the court also notes that “conception” may be somewhat speculative:

[C]onception is complete when an idea is definite and permanent enough that one of skill in the art could understand the invention. An inventor need not know, however, that an invention will work for its intended purpose in order for conception to be complete, as verification that an invention actually works
is part of its reduction to practice.

Slip Op. citing Burroughs Wellcome Co. v. Barr Laboratories, Inc., 40 F.3d 1223 (Fed. Cir. 1994).

Some of the information provided by Freeman and Wood had already been made public by the time of the “complete invention.”  The Federal Circuit, however refused to “hold categorically that research made public before the date of conception of a total invention cannot qualify as a significant contribution to conception of the total invention.”

[A] collaborative enterprise is not negated by a joint inventor disclosing ideas less than the total invention to others, especially when, as here, the collaborators had worked together for around one year prior to the disclosure, and the disclosure occurred just a few weeks prior to conception.

Id.  In the end, the court concluded that Ono’s arguments were essentially a request to “adopt an unnecessarily heightened inventorship standard.” The court declined.

In Eligibility Doctrine – What Claim Elements do you Ignore?

by Dennis Crouch

Thomas v. Iancu (Supreme Court 2020)

Doug Thomas is a silicon valley patent attorney at a small (and thriving) firm. Thomas is also a prolific inventor and entrepreneur. In April 2020, I wrote about the Federal Circuit’s opinion affirming a USPTO rejection of his claimed method of “notifying users having patents of subsequent publications that reference the patents.”  The April decision was one of four cases that he has brought to the Federal Circuit:

  1. In re Thomas, Appeal No. 17-1100 (November 17, 2017) (Affirming anticipation rejection for Application No. 12/878,19–method for creating an electronic document using a word processing program).
  2. In re Thomas, Appeal No. 17-1149 (December 13, 2017) (Affirming rejection for Application No. 13/099,285 without opinion– managing computer
    temperature by measuring temp and changing fan speed) [ThomasThermalTemp].
  3. In re Thomas, Appeal No. 19-2053 (March 5, 2020) (Affirming 101 rejection for Application No. 11/253,299 without opinion–method for producing an online survey).
  4. In re Thomas, Appeal No. 19-1957 (April 8, 2020) (Affirming 101 rejection of method for notifying users of publications that reference their patent). See, Dennis Crouch, Patenting the Patenting Process, Patently-O (April 8, 2020).

Thomas now filed a petition to the Supreme Court in the third case (the ‘299 application) that was rejected for lack of eligibility. Thomas writes the question as follow:

Contrary to Congress’ directives and this Court’s guidance, the United States Court of Appeals for the Federal Circuit (“Federal Circuit”) fabricated legal theories to unfairly discriminate against software innovations. The Federal Circuit incorrectly held that the Patent Trial and Appeal Board of the United States Patent and Trademark Office (“USPTO”) did not commit legal error when, under the guise of following the framework provided in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014) (so called “Alice/Mayo framework”), it (i) excessively abstracted the claims, and (ii) ignored claim limitations that were found to be nonobvious when concluding that the claims lacked an inventive concept. The questions presented are:

1. Whether software innovations, simply because they are implemented on a general purpose computer, are ineligible for patenting unless they claim some hardware limitations beyond a general purpose computer that provide an improvement to computer technology.

2. Whether, contrary to Diehr, claim limitations can be ignored, under the guise of the Mayo/Alice framework, when a claim is evaluated for presence of an inventive concept, even when the ignored claim limitations were found to be nonobviousess.

Thomas Petition. The basic thrust of the petition is that innovative engineering solutions do not require a new physical technological component — and that the claimed creation of online documents should be treated as eligible.

The petition goes on to argue that the abstract idea exception should be eliminated or severely curtailed:

The time has come for this Court to reevaluate the abstract idea exception to Section 101. This exception is entirely a judicial creation, having no basis in the text of the statute. The Court should undertake to implement Section 101’s broad and explicit language. Thus, where, as here, the patents claim a “new or useful process” or new and useful improvement to a process, the inventions should be eligible under Section 101 as Congress intended based on the language of that provision.

Id. The 15-step method claim at issue is listed below — directed to a method for producing an online survey:

20. A method for producing an on-line survey through interaction with a remote server from a network browser operating on a client computer associated with a requestor of the online survey, the network browser and the remote server capable of communicating via a data network, said method comprising:

(a) requesting initial survey remarks to be provided for the on-line survey;

(b) receiving, at the remote server, the initial survey remarks from the survey requestor;

(c) requesting identification of one or more participant groups from a plurality of available participant groups;

(d) receiving, at the remote server, selection from the survey requestor of one or more participants groups from the plurality of available participant groups;

(e) requesting at least one survey question;

(f) receiving, at the remote server, at least one survey question from the survey requestor;

(g) requesting an answer format for the at least one survey question;

(h) receiving, at the remote server, the answer format from the survey requestor;

(i) receiving content for at least one answer choice for the at least one survey question;

(j) repeating (e) – (i) for one or more additional survey questions;

(k) requesting subsequent survey remarks to be provided for the online survey;

(l) receiving, at the remote server, the subsequent survey remarks from the survey requestor; and

(m) producing, at the remote server, the on-line survey to include the initial survey remarks, the survey questions, the answer choices corresponding to the survey questions and the answer format utilizing the answer formats, and the subsequent survey remarks;

(n) providing and storing the on-line survey in an electronic manner to an Internet-based survey manager that hosts the on-line survey; and

(o) thereafter inviting a plurality of survey participants that are classified to be within the selected one or more participant groups to take the on-line survey by interaction with the Internet-based survey manager.

The application here claims priority back to a 1996 provisional application filed by Thomas. The provisional was followed by a non-provisional application that was prosecuted for 8 years before being abandoned following a Board decision affirming an obviousness rejection. (At the time, the process only had steps a-f). At that time, Thomas filed the present continuation and prosecution kept going for 15 more years.  Much of this time has been occupied by two appeals. The first appeal was actually successful with the examiner being reversed with the Board finding no prima facie case of obviousness. [11253299 First Board Decision].  However, by that time Alice had been released and the examiner added the new eligibility rejection.

Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

 

Asking about Upcoming Bar Dates

Follow-up survey from on my post regarding Eakin Enterprises, Inc. v. Stratton Ballew, PLLC2020 Wash. App. LEXIS 691 (Wash. Ct. App. March 24, 2020).

When is the Attorney-Client Relationship Created?

 

Impact of Notice-of-Allowance in Parallel IPR

by Dennis Crouch

ESIP Series 2, LLC v. Puzhen Life USA, LLC (Fed. Cir. 2020)

In its original decision, the Federal Circuit affirmed a PTAB IPR decision invalidating ESIP’s claimed essential-oil-diffuser and “method for introducing a scent into breathable air,” US9415130; IPR2017-02197.  ESIP then petitioned for rehearing en banc and the Federal Circuit has now denied that petition as well. [ESIP-petition][Original Fed.Cir. Decision]

In the petition, the patentee focuses on a family-member (continuation) patent application that had recently received a notice of allowance after the examiner expressly considered the same prior art being applied in the inter partes review.  (That application is now US9943621).  Thus, ESIP asked the following question:

Whether a Notice of Allowability in a child application of a patent in an Inter Partes Review proceeding, facing the same prior art relied upon in the Inter Partes Review, is objective evidence that must be properly considered by the Board.

During the IPR, the PTAB refused to give any weight to the examiner’s decision in a parallel case–reasoning that it should not give weight to a collateral decision since it gives no weight to the examiner’s original decision.

If the Office’s allowance of the very claims at issue does not render the challenged claims non-obvious, it is unclear why the Office’s allowance of merely similar claims would do so.

PTAB Final Decision. On appeal, the Federal Circuit panel decision did not address the issue even though it had been fully briefed. Now, the Federal Circuit has also refused to consider the issue via rehearing or en banc.

So, the question remains: What deference or consideration should be given to a contemporary examiner determination involving the same patentee and the same prior art? 

The issue here is similar to what the PTAB has been working through over the past five years regarding prior decisions by Article III courts, just closer to home.

When is the Attorney-Client Relationship Created?

Question: When you first talk with a new potential client, do you ask about potential bar dates?

Eakin Enterprises, Inc. v. Stratton Ballew, PLLC, 2020 Wash. App. LEXIS 691 (Wash. Ct. App. March 24, 2020)

John Eaken publicly displayed his cattle-foot-bath invention and then waited more than a year before filing a patent application.  During that time, Eaken had called-up a patent attorney (Svendsen, then of Stratton Ballew) who spoke to Eaken before running a conflict check with the firm.  During the call, Svendsen did not ask the status of invention development, or whether it had been on public use or display (or would be in the near future).  Eaken then hired Svendsen

Eaken later learned that his public displays would limit his patent protection and then sued the firm for malpractice.  The district court, however dismissed the case–holding that there was no duty-to-warn until the the creation of an attorney-client relationship and that the initial screening call did not create such a relationship.

On appeal, the Washington Court of Appeals has reversed — asking the lower court to delve deeper into whether an attorney-client relationship had been created.  The reversal – I believe – was primarily based upon one answer in Svendsen’s deposition where he stated that the client considered their relationship to have started in the fall of 2006:

Q When do you believe the attorney-client relationship began for the effort to get a patent for the cattle foot-bath system?

A I would say that that would have been in the mind of John Eakin and — and is a big part of that. And I’m sure he considered this in the fall here of 2006. That that—that relationship was—a formal relationship had started.

Slip Op.

One of the judges wrote in dissent — arguing that Eaken failed his burden of producing sufficient evidence to prove the existence of an attorney-client-relationship.

Note about the invention: The cattle-foot-bath seems all spa-like when you hear the name, but actually it is a mechanism for coating the feet with chemical fungicide (concentrated medicinal agent).

 

Vaporize your Fingerprints: Toyota’s Invention Inherently Obvious

by Dennis Crouch

Toyota Motor Corp. v. Reactive Surfaces Ltd., LLP (Fed. Cir. 2020) (nonprecedential)

Toyota’s US8394618 covers a method of removing fingerprints using a lipase “capable of enzymatically degrading a component of the fingerprint” by vaporization.

Reactive had previously attempted to trigger an interference proceeding at the PTO and then unsuccessfully sued in Federal Court to have the patent rendered unenforceable (or to transfer ownership rights).  Those approaches failed.

This inter partes review is what worked.  After granting the IPR petition, the Board conducted a trial and then issued a Final Written Decision that the challenged claims were unpatentable as obvious. On appeal, the Federal Circuit affirmed with the following notes:

Analogous arts: The Board relied upon a scientific article titled “Chemical characterization of fingerprints from adults and children” in part of its obviousness analysis. On appeal, Toyota argued that the article should not have been available for obviousness because it was not “analogous art” to the invention.

Analogous prior art includes art from the same field as the invention at issue. But it also encompasses references from other fields if such reference is “reasonably pertinent to the particular problem with which the inventor is involved.”

Slip Op. Here, the court found substantial evidence to support the Board’s finding that the scientific article would be a “natural starting point” for an inventor looking to vaporize finger prints. (The test is for substantial evidence, because analogous art is a factual finding given deference on appeal).

What the combination inherently teaches:  The method claim at issue includes three steps:

  1. provide a substrate
  2. associate a lipase with the substrate (where the lipase is “capable of enzymatically degrading a component of a fingerprint”)
  3. facilitate “the removal of a fingerprint by vaporization from the lipase associated substrate … when contacted by a fingerprint.”

A combination of references provided by the Board taught the first two steps, but did not expressly teach the third step.  The Board concluded that step three is simply an inherent result of the first two steps: “any combination of prior art that teaches the first two limitations of the challenged claims inherently would teach the [facilitating step]. . . . [A] surface-associated lipase . . . capable of degrading lipids . . . inherently will facilitate the removal of lipid-containing stains, such as fingerprints, by vaporization from the surface.”

While prior art may include a variety of inherent teachings, the Federal Circuit requires evidence that “the limitation at issue necessarily must be present, or the natural result of the combination of elements explicitly disclosed by the prior art.”  PAR Pharm (Fed. Cir. 2014).  Because of this “exacting” standard, inherency is typically difficult for an Examiner to show during ex parte examination. However, during an IPR the patent challenger is able to marshal expert testimony that connects the dots.  Here, the petitioner’s expert explained the connection and inherent result.  That was enough for the Board and the Federal Circuit on appeal.

Obviousness affirmed.

USPTO Grants

For patent issuance, we are just over 1/2 way through the calendar year after passing through 27 of  52 tuesdays.  (The USPTO always releases newly issued patents on Tuesday morning just after midnight). The chart below shows the number of utility patents issued per calendar year for the past decade. For 2020, the blue portion shows thus-far in 2020 and the orange forecasts the rest of 2020 based upon the year thus far.

What is happening here – Although the PTO was set to continue its trend from 2019, COVID-19 has stalled everything.  Patent examination is going slower, and patent applicants are also delaying prosecution.  That said, although 2020 will not be an all-time-high, it is likely to be in the top-5 years in terms of number of patents issued.

Novel, Technological, and an Abstract Idea

by Dennis Crouch

Primbas, et al. v. Iancu (Supreme Court 2020)

This new petition for certiorari asks the following question:

Whether recitation in a patent claim of a combination of steps determined to be inventive over an idea is “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [idea] itself.”

Petition, quoting Alice.

Christopher Primbas and his co-inventor Philip Stamataky are seeking to patent their method of eliminating coins from cash transactions. [claim 1 is below].  The figures below attempt to highlight the invention — instead of receiving coins from a transaction, you receive a merchant credit.

The examiner actually allowed the claims back in 2014 with a notice of allowance just before the Supreme Court’s decision in Alice. The applicant paid the issue fee, but the PTO withdrew the application from issue.  The examiner then issued a new rejection — finding the claims ineligible as directed to an abstract idea under Alice. That decision was affirmed by the PTAB and by the Federal Circuit (R.36 judgment without opinion).  This setup leads folks to fight hard — they were given real hope via notice of allowance and that was pulled-out from under them.

The basic

 

Here is the claim now on appeal:

1. A method involving a retail cash transaction in which a customer uses physical currency to pay a merchant for goods or services received, in which an amount between 1¢ and 99¢ in coin change is due to the customer and used as payment for credit purchased, the method comprising the steps of:

the customer tendering cash to the merchant as payment for the goods or services and there being an amount of coin change due back to the customer, which amount the customer does not receive in the form of physical coins but rather in the form of a cash purchase of credit equal to the amount of coin change otherwise due;

in a different financial transaction than the cash-tender transaction, debiting, using an electronically readable device physically present at the customer-merchant transaction and in electronic communication with an electronic processor and a financial network, one or more accounts associated with the customer in an amount equal to a tracking fee, which is equal to the entire amount of the cash purchase of credit; and

subsequently crediting to the one or more accounts associated with the customer the sum of both the cash purchase of credit and the tracking fee;

wherein the debiting and crediting steps are performed electronically and the tracking fee reflects both the cash purchase of credit and its transfer into the one or more customer accounts.

See Petition Appendix.  The petition argues that the claim here recites a patent-eligible “technical solution” that the patent office has expressly admitted is a novel solution to a long-considered problem.

The petition particularly point to its claims that require debiting with a e-readable device (credit card) and communication with a financial network.  The petitioner argues that a benefit of the solution here is that it works with existing credit card networks and thus does not need an expensive merchant retrofit. “[T]he ability to use a conventional card reader and an existing credit card network are advantages of this technical solution, as the use of conventional electronic hardware and card networks that are already in use at most point of sale registers allows for use of this solution by retailers without purchasing or installing any new hardware.”

Jeremy Doerre filed the petition in this case and also filed Judge Rader’s recent amicus brief in Chamberlain Group.

 

The Light That You Shine can be Seen: Federal Circuit on Seal

by Dennis Crouch

Uniloc 2017 LLC v. Apple, Inc. and the Electronic Frontier Foundation (EFF) (Fed. Cir. 2020)

This is a case about open courts and the public nature of our civil justice system. During litigation, Uniloc designated some amount of material as “highly confidential” as defined by a protective order entered by N.D. Cal. Judge Alsup.  Apple then referenced the material in a motion to dismiss as did Uniloc in its brief-in-opposition. The parties filed motions to seal the material with the district court–with Uniloc indicating that the documents “contain sensitive, confidential and proprietary information related to financial data, licensing terms and business plans with respect to various Uniloc entities … disclosure of this extremely sensitive information would create a substantial risk of serious harm to the Uniloc entities.”

EFF then intervened into the case requesting the documents be unsealed (after first asking the parties to un-seal). The sealed information related to Uniloc’s ownership of its patents.  Because Uniloc was in the process of threatening and suing a dozens of of entities, that information was especially of-interest to the public.

The district court agreed with EFF, concluding that the “generalized assertions” of secrecy and harm were insufficient to “outweigh the public’s right” to know about the patent ownership.  The district court also noted that the sealed portions were “astonishing[ly]” broad – even including quoted portions of Federal Circuit decisions. Uniloc then submitted a revised motion to seal, which the district court rejected — holding that Uniloc should have done it right the first time but instead began its case by “over-classifying and then trying to get away with [it].”

The Federal Circuit has taken-up the interlocutory appeal under the non-statutory Collateral Order Doctrine:

To fall within the collateral order doctrine, “an order must at a minimum satisfy three conditions: It must [1] ‘conclusively determine the disputed question,’ [2] ‘resolve an important issue completely separate from the merits of the action,’ and [3] ‘be effectively unreviewable on appeal from a final judgment.’” Richardson-Merrell, Inc. v. Koller, 472 U.S. 424 (1985). . . . These requirements are met here.

Slip Op.

On the merits the Federal Circuit affirmed the original no-seal order but then vacated to consider interests of third-party licensees who had been promised confidentiality. In its decision, the court contrasted a prior decision in Apple v. Samsung.

Our decision in Apple I [ordering partial sealing] is not to the contrary. There, we concluded that the district court abused its discretion in refusing to redact certain product-specific financial information, such as profit, cost, and margin data, as well as certain proprietary market research reports. Importantly, however, the parties in that case supported the need for such redactions with detailed declarations describing both the competitive injury that would result if such information were disclosed and the significant efforts they had made to keep their product-specific financial information confidential. Furthermore, because the documents in question were not “introduced into evidence . . . the financial information at issue was not considered by the jury and [was] not essential to the public’s understanding of the jury’s damages award.”

Apple Inc. v. Samsung Elecs. Co., 727 F.3d 1214 (Fed. Cir. 2013).

The court went on:

In denying Uniloc’s sweeping motion to seal, the district court sent a strong message that litigants should submit narrow, well-supported sealing requests in the first instance, thereby obviating the need for judicial intervention. Because the court “took seriously the presumption of public access and did so in accord with precedent from the Supreme Court and [the Ninth Circuit],” Kamakana, we conclude that there was no abuse of discretion in its decision to deny Uniloc’s requests to seal its purportedly confidential information and that of its related entities.

Slip Op. With regards to the refusal for reconsideration, the court found that the local rules put the parties sufficiently on notice of what was required and so there was no compelling reason to give Uniloc a re-do.

Regarding third-party licensees, Several licensees submitted declarations to the court indicating that they wanted their material kept secret as was required by contract and separate court order (from prior litigation).  On remand, the district court should consider whether that third-party information includes any information “protectable as a trade secret or otherwise entitled to protection under the law” and thst should be redacted from public view.

= = = =

An important aspect of the decision is that it asks district courts to balance the sealing factors on a case-by-case basis.  For each portion being redacted, the court should consider both any “compelling reasons” for redacting from public view against the public’s interest in viewing the particular material.  In this process, the court should recognize that the party or parties asking for sealing have the burden of persuasion.

The court also spells out the process: (1) make sure that the party/parties asking for redaction have presented compelling reasons for redaction supported by evidence.  If not, then no redaction.  (2) If compelling reasons have been presented, then also consider the public’s interest in viewing the particular material. One important implicit point here is that even if there are compelling reasons to seal, that may still be outweighed by the public interest.  Here, the district court considered both the compelling reasons and the public’s interest.  On appeal, the Federal Circuit stopped at step-1 and held that Uniloc failed to present a compelling reason to seal.  Thus, the appellate panel did not “address” whether the lower court’s public interest findings were correct. Slip Op. at FN 6.

One note – the Federal Circuit attempted to follow 9th Circuit law in this case and so the approach will be different in different venues.

 

Fast-track Appeals

The USPTO has started its appeal fast-track program — “Fast-Track Appeals Pilot Program.”  The program includes a $400 cut-in-line progrea launches July 2, 2020. The required petition fee for cutting-in-line is $400. There are already a group of cases that are treated “special” for appeals, including reissues, reexaminations, and cases “made special.”  But, the USPTO Examination Track-1 cases are not currently treated as special on appeal.

The Patent Act provides a right to appeal to the PTAB once your claims have “been twice rejected” and you have “paid the fee.” 35 U.S.C. 134(a).  The fee structure is a bit unusual.  It costs $800 to file a notice-of-appeal at which point briefing begins.  Quite often examiners withdraw their rejections after seeing the patent applicant’s brief.  Once the briefing is complete the case is ready to be “forwarded” to the Board — which requires $2,240. [Current Fees]  There is also a $1300 fee if you want an oral hearing rather than having the PTAB decide your case on the briefs.

This is a good move from the PTO. A modest fee for a modest timing improvement.  The current pilot is limited to 125 per quarter for the next year. 500 total before a reevaluation.

Modest timing improvement.  The petition can be filed only after the case has been forwarded to the PTAB and the applicant has received an appeal docket number.  From that point, the current PTO timeline is about 14-15 months for an ex parte appeal.  The office is expecting that an expedited appeal will take about 6 months.

Note here that most cases are already pretty old by the time they get to an appeal. Folks have gone through a non-final rejection and a final rejection, and typically also one round of an RCE (request for continued examination) to attempt to resolve issues with the examiner. Most appealed cases are also not “original” application filings in that most claim priority to one or more earlier filed applications (US non-provisional; US provisional; PCT international application; or foreign application filing).

After the final rejection, a patent applicant has a six-month deadline for filing a notice of appeal (NOA) followed by an appeal brief within two-months of the NOA. The examiner then has two months to file a responsive brief (answer). And, that may be followed by a reply brief.  The fast-track will not impact these timelines.

Federal Register Notice: https://www.federalregister.gov/documents/2020/07/02/2020-14244/fast-track-appeals-pilot-program

USPTO Announcement: https://www.uspto.gov/about-us/news-updates/uspto-announces-fast-track-appeals-pilot-program

 

Correcting Patents During an IPR

by Dennis Crouch

Fitbit, Inc. v. Valencell, Inc. (Fed. Cir. 2020)

In this decision, the Federal Circuit makes two important statements going forward relating to inter partes review proceedings:

  • A joined party has full rights to appeal a PTAB final decision – even as to claims or grounds not raised by the joined party.
  • During an IPR, the PTAB must correct errors in a patent when a certificate of correction would be appropriate and when requested by the parties.  (When you read the case, you’ll note that the court doesn’t quite say this, but almost.)

Valencell’s US8923941 covers methods of generating data relating to blood oxygen level, heart rate, and other physical activity.  The claimed method includes two primary steps: (1) sensing; and (2) processing.  The sensing step requires a single device “attached” to a user that includes a motin sensor (accelerometer) and a pulse-oximeter (photoplethysmography – PPG).  The processing step creates a signal that includes heart rate, respiration rate, and a plurality of physical activity parameters.

This setup is now common with many millions of such devices being sold across the country.  According to its court filings, Valencell repeatedly approached various major players–including Fitbit and Apple–looking for partnership & licensing opportunities. The companies refused and Valencell eventually filed a set of infringement lawsuits back in 2016.  Apple & Fitbit then petitioned for inter partes review.

This case is partically an IPR procedure case and so the following timeline is somewhat important:

  • Apple filed its IPR petition on claims 1-13. The Board partially granted the petition in part — only as to claims 1, 2, and 6-13.
  • Fitbit then filed its IPR petition on claims 1, 2, and 6-13 and moved for joinder with Apple’s case. The Board granted that motion.
  • The Supreme Court then issued SAS — barring the practice of partial institution.  As such, the Board issued a new institution decision adding all of the challenged claims (3-5).
  • The Board then found the originally granted claims to be unpatentable, but found no problem with claims 3-5 (“not unpatentable.”)

Apple did not appeal, but Fitbit has appealed — arguing that claims 3-5 are also invalid.

Joinder and Right of Appeal: The first question in the case is whether Fitbit has a right to appeal regarding claims that it did not challenge in the first place.  Here, the Federal Circuit says yes they do get to appeal — holding that a joined party’s rights apply “to the entirety of the proceedings and includes the right of appeal.” The court here was primarily guided by the right-of-appeal statute that states plainly “Any party to the inter partes review shall have the right to be a party to the appeal.” 35 U.S.C. § 319.  And, the joinder provision indicates that the new entity is “join[ed] as a party.” 35 U.S.C. § 315(c).

On the merits of obviousness: I discussed the general scope of claim 1 above.  Claims 3-5 are all dependent and add a few additional limitations:

  • Claim 3 – the processed data is usable with an application specific interface (abbreviated API)
  • Claim 4 – the “the application” generates statistical relationships between the various parameters. [Note – there is no antecedent basis for “the application”]
  • Claim 5 – adds further definition to the stats developed, including “Bland-Altman plots.”

Do the Analysis: As to claim 3, the parties had offered competing constructions of the term application-specific-interface.  The Board chose the patentee’s narrower construction and ruled the claim not-proven-unpatentable. On appeal, the Federal Circuit ruled that the Board should have completed its analysis and walked through whether the claim was obvious under the narrow construction.

Lack of Antecedent Basis: The limitations of claims 4 & 5 lack antecedent basis. In particular, the claims appear to add limitations to “the application” but that portion of the invention is not previously claimed.   The Board didn’t get into its obviousness analysis because of this technical issue with the claims:

Although we agree that the recitation of the term “the application” in claim 4 lacks antecedent basis in claim 1, we declined to speculate as to the intended meaning of the term.   Although Petitioner and Patent Owner now seem to agree on the nature of the error in claims 4 and 5 [citing briefs], we find that the nature of the error in claims 4 and 5 is subject to reasonable debate in view of the language of claims 1 and 3–5 and/or that the prosecution history does not demonstrate a single interpretation of the claims.

Board Op.

It turns out that during prosecution, the patent applicant cancelled a dependent claim discussed the Application, and the stray reference was not caught by either the attorney nor the examiner.

On appeal, the Federal Circuit holds that the Board should have fixed the error here.

The preferable agency action is to seek to serve the agency’s assignment under the America Invents Act, and to resolve the merits of patentability. Although the Board does not discuss its authority to correct errors, there is foundation for such authority in the America Invents Act, which assured that the Board has authority to amend claims of issued patents. See 35 U.S.C. § 316(d). . . . The concept of error correction is not new to the Agency, which is authorized to issue Certificates of Correction.

In particular, all the parties agreed that the error was inadvertent and could be corrected by the Board.

Although the Board states that the intended meaning of the claims is “subject to reasonable debate,” we perceive no debate. Rather, the parties to this proceeding agree as to the error and its correction. The Board erred in declining to accept the parties’ uniform position and correct the error that claim 4 depend from claim 3. With this correction, the rejection of claims 4 and 5 for absence of antecedent basis for “the application” disappears.

Slip Op. On remand, the Board will correct the error and actually judge the obviousness of these three remaining claims.

Sufficiency of a Range: UK Supreme Court

by Dennis Crouch

Regeneron Pharmaceuticals Inc. v Kymab Ltd., [2020] UKSC 27.

This important patent decision comes from the UK Supreme with a holding that Regeneron’s patents are invalid for insufficiency of the disclosure.  The insufficiency doctrine in the UK is parallel to US enablement law.

In the U.S., the courts have limited the enablement doctrine – especially considering McRO, Inc. v. Bandai Namco Games Am. Inc., 959 F.3d 1091 (Fed. Cir. 2020) (claims are valid absent identification of “concrete” and “particular” embodiment covered by the claim but not enabled).  Of course, the US now has a powerful eligibility doctrine that overlaps as well.

The Regeneron patents cover transgenic mice that produce human immunoglobulin used to create drugs.

1. A transgenic mouse that produces hybrid antibodies containing human variable regions and mouse constant regions, wherein said mouse comprises

an in situ replacement of mouse VDJ regions with human VDJ regions at a murine chromosomal immunoglobulin heavy chain locus and

an in situ replacement of mouse VJ regions with human VJ regions at a murine chromosomal immunoglobulin light chain locus.

EP2264163 (EP1360287 also asserted).  If I understand this correctly, mice were first generically modified to contain DNA sequences for creating the human antibody.  However, those mice died easily and so the researchers added back some amount of murine (mice) DNA.  With just the right mix, the mice lived well and also produced antibodies that could be given to humans without triggering a human anti-mouse antibody response (HUMA).

UK statutory law requires:

The specification of an application shall disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the art.

14(3) of the UK Patents Act 1977 (Replicating the EPC Article 83). In the UK and Europe, courts have also used the undue-experimentation test and have also considered whether a skilled person would need create a follow-on invention in order to practice the invention.

Typically a claimed “range” in patent law is thought of as a numerical spread with the claim covering all potential embodiments in-between.  The full-scope of a claimed range must be enabled, and this is a common attack-point for defendants.  Here, the claims do not specify such a range, but the defendant was able to characterize the claimed replacement regions as constituting a wide swath of potential transgenic mice — thus a range (“range of products”).  The Supreme Court agreed here that it is the full scope of claimed “range of products” that must be enabled.

In the case, the trial court sided with the defendants — holding that “the teaching in the patent did not enable any type of mouse within the range to be made, let alone mice across the whole of the relevant range.” (quoting here from the Supreme Court opinion).  The appellate court disagreed — finding that the claim did enable something within the claimed scope — and that the disclosure was sufficient because the invention was inventive and groundbreaking.

Finally, at the Supreme Court, the Lord Justices followed a third path – that ultimately resulted in the claims being invalid. Like the appellate court, the Supreme Court agreed that some embodiments covered by the claim were enabled.  However, the court ruled that “some embodiments ” was not enough.

Patentees are free to choose how widely to frame the range of products for which they claim protection. But they need to ensure that they make no broader claim than is enabled by their disclosure.

A claim which seeks to protect products which cannot be made by the skilled person using the disclosure in the patent will, subject to de minimis or wholly irrelevant exceptions [such as the length of a mouse’s tail], be bound to exceed the contribution to the art made by the patent, measured as it must be at the priority date.

Enablement across the scope of a product claim is not established merely by showing that all products within the relevant range will, if and when they can be made, deliver the same general benefit intended to be generated by the invention, regardless how valuable and ground-breaking that invention may prove to be.

Id. In applying these principles to the Regeneron patents, the court found that the wide-range of potential products claimed were not sufficiently disclosed. In particular, the claimed range of products included transgenic mice with long segments of the human variable region gene locus.  But, the specification only taught how to do this with short-segments.  Invalid.

Biosimilars and Temporary Restraining Orders

by Dennis Crouch

Genentech and City of Hope v. Immunex and Amgen (Fed. Cir. 2020)

Genentech’s bevacizumab (Avastin) is a large-molecule biologic cancer chemotherapy.  The FDA approved (licensed) Amgen’s biosimilar (aka generic) version – that is sold as Mvasi.  As a biosimilar, the approval process was quicker and cheaper for Amgen because the FDA relied upon some of the data originally provided by Genentech.

Under the Biologics Price Competition and Innovation Act (BPCIA), the biosimilar producer must provide the innovator company with notice at least 180-days before marketing the product:

The [biosimilar] applicant shall provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k).

42 U.S.C. § 262(l)(8)(A).  Here, Amgen provided notice, but then supplemented its FDA application to add an additional manufacturing facility and to make a change to its drug label.

Genentech thought that the 180 day notice should be reset based upon the supplemented application. However, Judge Connolly (D.Del.) denied Genetech’s motion for a temporary restraining order.  The Federal Circuit allowed immediate appeal — implicitly finding that the denial of a TRO was an order to refuse an injunction that is immediately appealable under 28 U.S.C. § 1292(a)(1). [See Below for my criticism of this.]

On appeal, the Federal Circuit has affirmed based upon its statutory interpretation of Section 262(l)(8)(A) (quoted above).  In particular, the court looked at the statutory notice requirement — requiring notice of “commercial marketing of the biologic product.”  Here, the “biologic product” – as also defined in the statute – is separate and distinct from its manufacturing facility or its product label.  When Amgen changed those details it did not alter the biologic product. Thus, the original notice was sufficient.

 Genentech’s interpretation, which would impose several timing requirements where each supplement necessarily triggers another notice requirement, is inconsistent with the statute and with Sandoz II. [Sandoz Inc. v. Amgen Inc., 137 S. Ct. 1664 (2017).]  A biosimilar applicant that has already provided Section 262(l)(8)(A) notice regarding its biological product need not provide another notice for each supplemental application concerning the same biological product.

Slip Op.

= = = =

In my brief search on Westlaw, I could not find any other case where the Federal Circuit heard an interlocutory appeal of a denial of a temporary restraining order.  In a 1999 decision, the Federal Circuit refused to hear such an interlocutory appeal on a TRO denial. Nikken USA, Inc. v. Robinson-May, Inc., 217 F.3d 857 (Fed. Cir. 1999) (nonprecedential).  In Nikken, the patentee had requested both a temporary restraining order and a preliminary injunction.  The district court quickly denied the TRO (finding validity + infringement issues) but did not immediately rule on the preliminary injunction.  When the patentee appealed the TRO denial, the Federal Circuit acted sua sponte to deny appellate jurisdiction. Id., See Office of Personnel Management v. American Fed’n of Gov’t Employees, AFL-CIO, 473 U.S. 1301 (1985) (“the established rule is that denials of temporary restraining orders are ordinarily not appealable”).

Thus, the rule is that denial of a TRO motion is not immediately appealable while denial of a preliminary injunction motion is immediately appealable. You could imagine situations where at TRO motion is effectively a PI and thus may be immediately appealed. Here, however, Federal Circuit did not consider the TRO/PI divide but rather simply stated: “We have jurisdiction under 28 U.S.C. § 1292(a)(1).”

Here, because the appellee won on appeal there won’t be any party challenging appellate jurisdiction and so the situation for this case is moot, but does create a precedential foothold for appeals of temporary restraining orders.

= = = =

In looking at the briefing at the district court level, the patentee asked for a TRO and also requested a “statutory prohibition” which it vehemently denied was a request for a preliminary injunction.  The defendants characterized the plaintiffs’ motion as one for preliminary injunction. The different classification approaches stem from the hard-to-meet test for preliminary injunctive relief — the preliminary-injunction four-factor test is even harder than the test for a permanent injunction because it additionally requires a showing of a likelihood of success on the merits.  The district court did not decide this particular dispute because it held that the movant (Genentech) would lose the motion regardless.

Based upon all of this, there is a good argument that appellate jurisdiction exists under 28 U.S.C. § 1292(a)(1), but that argument was never actually made. And, the Federal Circuit failed its duty to consider its own jurisdiction over the appeal.

Confronting Your Accuser via ZOOM

by Dennis Crouch

Federal Courts have been delaying trials since March 2020. There have been a handful here and there – but not jury trials.

One patent case preparing for a jury trial before Judge Leonard Stark (D.Del) is Sunoco Partners Marketing & Terminals L.P. v. Powder Springs Logistics, LLC, 2020 WL 3605623 (D. Del. July 2, 2020).  The lawsuit was filed back in 2017 alleging infringement of Sunoco’s patents for cutting its gasoline with cheaper butane. US9494948 and US9606548 (“continuous in-line blending of butane and petroleum”).

In a recent order, Judge Stark announced that he is moving forward with an in-person jury trial, albeit with a few exceptions.

[Read the Order: RemoteJuryTrialOrder

No face-to-face witness testimony. The key aspect of the order is that the trial will move forward without witnesses being in the court room.  Rather, testimony will be remote.  Although the defendants argued that they could not “receive a fair trial if all the witness examinations must be handled remotely,” Judge Stark concluded that “skilled trial counsel” will make it work.  “I expect that the jury will be given what it needs to make necessary factual findings, including credibility assessments.” Id.  Although not directly in the order, the witness testimony will presumably be via video.

Part of why the court did this was to avoid the politics of face coverings.

By excluding all witnesses from testifying in court, the Court will not confront the issue of whether to permit or require witnesses to testify with face coverings (or alternatively to prohibit witnesses from doing so).

In my opinion, avoiding the politics-of-masks is a horrible reason for the judge to make the call for remote testimony.  On the other hand, the court also gave a very sensible back-up reason:

Not having witnesses in the courtroom will also make it much easier to maintain social distancing in the courtroom and protect the health of those in the courtroom.

Id. In addition to no witness testimony, the court will also be closed except for 4-reps for the plaintiff and 3-reps for each defendant (including local counsel).  These are the total numbers for the whole trial (no swapping). The trial will be simulcast to video.  However, the court is only going to simulcast it to another courtroom and observers can attend there. Hopefully the video will be recorded.

Note on my title: The 6th Amendment of the U.S. Constitution includes a defendant’s right to “be confronted with the witnesses against him.” However, the provision is limited to “criminal prosecutions” not civil actions such as patent cases.

Thanks to Robert A. Matthews (https://www.matthewspatentlaw.com/) for directing me to the decision. 

Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

One more on Aunt Jemima

by Dennis Crouch

I’m sure that there will be a few references to the Aunt Jemima trademarks in upcoming law review articles. Let me direct you to a handful of court decisions regarding the mark. The cases offer an important look at how judges saw race & commerce in the mid-20th century.

The courts here effectively concluded that only one company could sell flour (or syrup) branded with the caricature of a black-skinned person.

(more…)

In this Case, Persuasive Authority Must be Considered

by Dennis Crouch

In law school, we talk about decisions that are binding as precedent and others that are not binding but that may be considered as persuasive authority.  There is very little precedent on when persuasive authority must be considered, and usually we say something flippant about ignoring the other decisions.  The case below is one that comes out the other way — the court abused its discretion by failing to consider persuasive authority. 

Electronic Communication Techs., LLC v. ShoppersChoice.Com, LLC (Fed. Cir. 2020)

ECT sued ShoppersChoice on its US9373261, but the district court (S.D.Fla.) dismissed the case on the pleadings–holding that the claims were ineligible under 35 U.S.C. § 101.  That decision was affirmed by the Federal Circuit in May 2020. See Elec. Commc’n Techs., LLC v. ShoppersChoice.com, LLC, 958 F.3d 1178 (Fed. Cir. 2020).

Because of the oddities of the final-judgment rule, the patentee was able to appeal the eligibility question before the district court reached the issue of attorney fees under 35 U.S.C. § 285.  The district court did eventually deny the attorney fee award as described by the Federal Circuit here:

[T]he District Court denied ShoppersChoice’s motion for the award of attorney fees. In
doing so, the District Court explained that “[u]nder the Lanham Act, ‘[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.’”  . . .

ShoppersChoice contends that the District Court abused its discretion in weighing relevant factors, and by applying the incorrect attorney fee statute. We agree with ShoppersChoice.

Slip Op. (denial of attorney fees vacated and remanded).

Obviously it was a mistake to cite the Lanham Act provision instead of the Patent Act, but it is not a big deal because the statutes have identical provisions:

  • Patent Act: The court in exceptional cases may award reasonable attorney fees to the prevailing party.
  • Lanham Act: The court in exceptional cases may award reasonable attorney fees to the prevailing party.

I don’t think that the Federal Circuit would have vacated simply because of the erroneous citation — especially because interpretation of the two provisions have been harmonized by the Supreme Court in recent years. Rather, the main focus of the was the court’s failure to consider two important points.

  1. ECT’s manner of litigation; and
  2. The objective weakness of the asserted patent claim

Manner of Litigation: ECT’s case against ShoppersChoice was one of a larger number of infringement lawsuits filed by ECT.  Those lawsuits apparently included the type of behavior now associated with classing-patent-trolling: standardized demand letters; low-value settlement offers; failure to proceed in cases. And, ECT had already been sanction by a different court for this type of conduct.  The district court did not consider these issues in its opinions other than a conclusory statement that ECT had not “exhibited the kind of unreasonable behavior that would make
this case stand apart from others.”

On appeal, the Federal Circuit held that the court must go back and “actually assess the totality of the circumstances.” (quoting AdjustaCam).

Objective Weakness: By the time the district court ruled on its attorney fee determination, there were two additional relevant cases out of California federal court.

  • McKinley (C.D.Cal. 2014): finding other claims of the patent invalid under 101.
  • True Grit (C.D. Cal. 2019): holding that  “no reasonable patent litigant would have believed” that claim 11 was “viable” after the McKinley decision.

Although these two district court were not binding on the Florida court, the appellate panel concluded that the district court should have expressly wrestled with their holdings before reaching an alternative outcome.

[T]he absence in the Attorney Fee Order of any reference to either relevant case, or any allusion to their opposing conclusions, is problematic.

Slip Op.

So, on remand the district court will again consider whether the prevailing defendant – ShoppersChoice.Com gets its attorney fees.

Patent Law and Booking.Com: as a whole or by parts

time to register your generic.com

United States Patent & Trademark Office (USPTO) v. Booking.Com B.V. (Supreme Court 2020) [Full Decision PDF]

In this trademark case, the USPTO asked the court to implement its “nearly per se” rule that a generic term remains generic even if coupled with a generic top level domain (such as “.com”).  The 4th Circuit sided with BOOKING.COM and the Supreme Court has now affirmed: “[W]e discern no support for the PTO’s current view in trademark law or policy.” Id.

According to the majority, the question is not whether some portion of BOOKING.COM is generic but rather whether the term “taken as a whole” is generic.  Then the court queries — what type of generic thing is a “booking.com”

That should resolve this case: Because “Booking.com” is not a generic name to consumers, it is not generic.

In its opinion, the court notes the PTO inconsistency (ART.COM and DATING.COM are both registered).

The following quote from the case is probably the most controversial:

[I]f “Booking.com” were generic, we might expect consumers to understand Travelocity—another such service—to be a “Booking.com.” We might similarly expect that a consumer, searching for a trusted source of online hotel-reservation services, could ask a frequent traveler to name her favorite “Booking.com” provider. Consumers do not in fact perceive the term “Booking.com” that way, the courts below determined.

The majority opinion was written by Justice Ginsburg and joined by six other justices, including all five conservatives. Justice Sotomayor concurred in a very short opinion; and Justice Breyer wrote in dissent and would have applied Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U. S. 598, 602 (1888). Justice Breyer writes:

Goodyear recognized that designations such as “Company,” “Corp.,” and “Inc.” merely indicate corporate form and therefore do nothing to distinguish one firm’s goods or services from all others’. . .  .[W]here a compound term consists simply of a generic term plus a corporate designation, the whole is necessarily no greater than the sum of its parts. . . .

Breyer in dissent.

Breyer spends some time focusing on the problems associated with survey evidence.  I suspect that aspect of his dissent will have some impact on how courts conduct trademark cases in the future.