Thryv v. Click-to-Call: Accuracy vs Efficiency; Merits vs Technicality

Thryv, Inc., fka Dex Media, Inc., v. Click-To-Call Technologies, LP (Supreme Court 2019)

Oral arguments are set for December 9, 2019 in this case that again questions the meaning of “nonappealable” in the AIA trial context.

The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.

35 U.S.C. 314(d).

The inter partes review (IPR) petition challenging Click-to-Call’s U.S. Patent 5,818,836 was filed by Ingenio who later became Dex Media and who is now known as Thryv.  The PTAB instituted the petition and later found the claims unpatentable.  On appeal, Federal Circuit sided with the patentee — holding (on rehearing) that the IPR should not have been instituted in the first place and thus vacating the final written decision.  In particular, the court held that prior litigation on the patent triggered the 1-year time-bar of Section 315(b). The en banc majority also held that the “nonappealable” statutory language was not strong enough to bar appeals of situations like this – where Director’s decision to institute went outside of her statutory authority. In Cuozzo v. Lee (2015), the Supreme Court arguably authorized such review:

While the decision to institute inter partes review is “final and nonappealable” in the sense that a court cannot stop the proceeding from going forward, the question whether it was lawful to institute review will not escape judicial scrutiny. This approach is consistent with the normal rule that a party may challenge earlier agency rulings that are themselves “not directly reviewable” when seeking review of a final, appealable decision. 5 U. S. C. §704. And it strikes a sensible balance: The Patent Office may proceed unimpeded with the inter partes review process … but it will be held to account for its compliance with the law at the end of the day.

Cuozzo. Still, the Supreme Court granted certiorari in this case on the following single question:

1. Whether 35 U.8.C. § 314(d) permits appeal of the PTAB’s decision to institute an inter partes review upon finding that§ 315(b)’s time bar did not apply.

[Thryv Petition].  In its briefing, the Gov’t has provided a more neutral question:

Whether, in an appeal from the final written decision of the [PTAB] in an [IPR], the Federal Circuit is authorized to vacate the Board’s decision as to patentability on the ground that the review was improperly instituted because the petition was time-barred by 35 U.S.C. 315(b).

Merits Briefing is now ongoing with petitioner’s opening brief filed along with a Gov’t brief and amici supporting either (1) reversal or (2) neither party.

Although expected, the Gov’t brief is important. The Gov’t originally opposed certiorari and has now switched sides to support petitioner.  That change was foreshadowed at the petition stage in the Gov’t brief:

Although the government agrees that the court of appeals lacked jurisdiction to consider Click-to-Call’s challenge to the institution determination in this case, the court’s contrary jurisdictional holding does not warrant further review.

[Gov’t Brief Opposing Certiorari].  The Gov’t explains its conclusion of no-appellate-authority as consistent with Cuozzo.  In particular, Cuozzo explains that the no-appeal provision applies to questions “closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review.”  The Gov’t key authority on this front is the dissent filed by Justice Alito in Cuozzo itself.  Alito particularly argued that limitations in the Cuozzo majority opinion would leave the courts “powerless” to curb abuses by the PTO, including improper policing of the 315(b) time bar.  [Gov’t Brief on the Merits].

Petitioner Merits Brief substantially parallels the brief of the Gov’t, although going a bit further by arguing that the no-appeal provision was designed to ensure that a patentee could not save its patent on a technicality not related to patentability.

This is critical, because overturning an IPR decision based on tangential, non-merits grounds decided at the institution stage would permit the patent owner to continue to enforce an invalid patent, thereby substantially harming the public interest.

Petitioner Brief.

So far, eight amici briefs have been filed:

  1. Supporting neither party: Federal Circuit Bar Association. (arguing that initiating a petition in violation of the time-bar is an “ultra vires” agency action appealable even when appeals are barred by statute).
  2. Supporting neither party: PTAB Bar Association. (this brief essentially requests that the Supreme Court write a careful opinion that considers its impact beyond the facts of this particular case).
  3. Supporting neither party: American Intellectual Property Law Association. (section 314(d) should not shield Board action that contravenes its statutory authority).
  4. Supporting petitioner: AARP. (quick and efficient IPR proceedings are saving lives by making drugs and biosimilars available at a lower cost).
  5. Supporting petitioner: Atlanta Gas Light Company. (“Providing greater opportunities for appellate review may increase accuracy, but at a cost to efficiency.”)
  6. Supporting petitioner: Intel Corporation. (decrease efficiency).
  7. Supporting petitioner: ON Semiconductor Corporation, et al. (the result here is to allow patentee to enforce invalid patents).
  8. Supporting petitioner: Superior Communications, Inc. (the only way this situation comes-up is where the patent has been found unpatentable on the merits but is seeking to escape judgment on a technicality).

Respondent’s brief and briefs in support will be filed over the next few weeks.

Guest Post: Design Patents After Curver Luxembourg: Design FOR an Article of Manufacture.

Ed. Note: I summarized the Federal Circuit’s design patent decision in Curver Luxembourg v. Home Expressions in a recent post titled Federal Circuit Rejects Patenting Designs “in the Abstract.” Prof. Burstein has previously written about the case and the topic and I invited her to provide some remarks on the case. – D.Crouch

_______

By Sarah Burstein, Professor of Law at the University of Oklahoma College of Law (@designlaw)

Two quick observations at the outset:

  1. This decision is consistent with previously-decided case law on infringement.* (For a full run-down, see my law review article: The Patented Design.)
  2. This decision not consistent with the USPTO’s current novelty rule. According to the MPEP, “[a]nticipation does not require that the claimed design and the prior art be from analogous arts,” relying on an out-of-context quote (which, as the Federal Circuit pointed out, was also dicta) from In re Glavas. See MPEP § 1504.02. The court’s ruling on this point is a welcome correction and should spur the USPTO to revise its examination procedures.

This case also raises a deeper and more important question—namely, what does it mean for something to be a “design for an article of manufacture”?

Design patents are available for “any new, original and ornamental design for an article of manufacture,” subject to the other requirements of Title 35. See 35 U.S.C. § 171(a). Prior to this case, some suggested that a “design for an article” refers to merely a design that is capable of being applied to one or more articles, not a design that is in any sense “for” any particular article. Under this view, the longstanding USPTO requirement that an applicant identify an article could be viewed as a type of reduction-to-practice requirement or mere formality that should not (or even must not) limit the scope of the claim.

The Federal Circuit’s decision in Curver seems to reject that conception of the patentable “design.” Although it doesn’t fully answer the question of what it means to be a “design for an article of manufacture,” this decision is a step in the right direction.

So what happens now? The USPTO requires a design patent applicant to identify an article in the verbal portion of the claim and (the same article) in the title. See 37 CFR § 1.153. But it also instructs examiners to “afford the applicant substantial latitude in the language of the title/claim” because, under 35 U.S.C. § 112, “the claim defines ‘the subject matter which the inventor or joint inventor regards as the invention.’” MPEP § 1503.01(I).

The Federal Circuit’s decision in Curver creates incentives for applicants to seek broader titles in order to obtain broader scope. In theory, that incentive would be counter-balanced by the fact that a broader title would create a broader universe of § 102 prior art. But given how difficult it is for patent examiners and accused infringers to find relevant prior art (an issue I discuss here), that seems unlikely to be a significant deterrent to over-claiming.

The risk of prosecution history estoppel might be a more significant practical deterrent. Curver initially claimed a “design for a furniture part.” When the examiner deemed that “too vague,” Curver amended the claim to refer to a “chair.” The Federal Circuit ruled that this amendment did limit the claim. Future applicants will have every incentive to push back on these types of rejections, putting pressure on the USPTO to enunciate clearer rules about how specific article identifications need to be.

In that respect, the USPTO (and anyone who’s interested in this topic) may want to revisit the CCPA’s 1931 decision in In re Schnell. In that case, the applicant attempted to frame its claim very broadly and the CCPA rejected that attempt. In doing so, the CCPA engaged in a thoughtful and nuanced discussion about how different types of designs might lend themselves to different types of claiming and how those claims might affect a design patent’s scope. The approach taken in Schnell is not the only possible (or necessarily the best) approach, but it’s worth considering.

I’ve also been asked how Curver might affect arguments about what constitutes the “relevant article” for the purposes of § 289. (For more on that issue, see this previous post.) At this point, it’s hard to answer that question with any certainty because the Federal Circuit has still not picked a test for Samsung step one. If it adopts the test proposed by the U.S. Government in its Samsung v. Apple amicus brief, the article identification in the patent would be relevant to the damages inquiry. This approach gives applicants incentives to direct the verbal portions of their claims to he largest salable unit. See, e.g., U.S. Patent No. D852,236 (stating that the design is “for a refrigerator” but only actually claiming a small part of the shape of the interior of a refrigerator). In some circumstances, these incentives might conflict with the ones provided by Curver; it will be interesting to see how applicants balance them in future applications.

And while Curver is only directly relevant to the scope of § 102 prior art, I suspect applicants will also argue that it should also narrow the universe of § 103 prior art. But when it comes to designs, it actually makes sense for the universe of § 103 prior art to be broader than the universe of § 102 prior art. (For more on these points, see here and here).

One final note: In Curver, the panel described the asserted patent as “atypical” because “all of the drawings fail to depict an article of manufacture for the ornamental design.” But it’s actually quite common for surface-ornamentation designs to be illustrated in this way. Whether or not that is a good policy (and whether it is consistent with § 112) is another question. The answer probably depends on what it means for a surface design to be “for an article of manufacture”? Even for repeating patterns like the one claimed in Curver, it could be argued that placement and proportion are still essential elements of a design for a particular article. If that’s true, then the disembodied-fragment drawing convention also needs to be reconsidered.

_______
* Other commentators have asserted that, in the past, courts treated surface-ornamentation as designs per se. But they cited no cases in support of that assertion and I have not been able to find any. For more details, see FN 480 here.

Patent Term Adjustment: When does the RCE End?

Mayo Foundation v. Iancu (Fed. Cir. 2019)

This case involves a patent term adjustment (PTA) challenge by Mayo, the owner of of U.S. Patent 8,981,063.  On appeal, the Federal Circuit has affirmed the PTO’s statutory interpretation — holding that the RCE period (pausing PTA Calculation) is not ended by an interference proceeding.

Utility patents have a term of 20-years from the effective filing date of the patent application (not counting national-stage priority or provisional applications).  Since patent rights are not complete until the patent issues, a long period of prosecution can eat-into the effective length of the patent term.  However, Congress has provided for a generous Patent Term Adjustment (PTA) designed to add extra days to the patent term in order to compensate for lengthy prosecution periods.

This appeal is focused on the PTA guarantee of “no more than 3-year application pendency.”  35 U.S.C. § 154(b)(1)(B).  If the application is pending for more than three years, then the patentee will receive day-for-day additional patent term.  One major exception to the 3-year timeline is that it does not include RCE time: “not including — (i) any time consumed by continued examination of the application requested by the applicant under § 132(b).”

In Novartis AG v. Lee, 740 F.3d 593 (Fed. Cir. 2014), the Federal Circuit held that this RCE-time exception stops at the mailing of the notice-of-allowance.

Mayo’s here prosecution was complicated by an interference proceedings that was declared after Mayo initially filed its RCE. Timeline below comes from Mayo’s brief.

From the chart above: Mayo filed an RCE and then a few months later the PTO declared an interference (at Mayo’s suggestion).  Once the interference ended, the PTO sua sponte re-reopened prosecution before finally issuing a notice of allowance.

Mayo’s argued that the time “consumed by continued examination” was only Period-1 that ended with the interference declaration.  Its reasoning has to do with interference declarations that require examination to be “completed” and the invention otherwise “patentable” before declaring the interference.

On appeal here, the Federal Circuit sided with the PTO — holding that a declaration of an interference not is the equivalent of a Notice of Allowance.  Rather, here “examination clearly did not end until the date the Notice of Allowance was mailed.”  Bottom line was that the court counted the post-interference examination time as caused by the RCE filing — and thus not eligible for PTA.

Although interference proceedings are now rare (and on their way out), the reasoning here would apply equally to cases where an examiner reopens prosecution following a successful appeal by the patent applicant. 

The majority opinion was penned by Judge Lourie and joined by Judge Dyk.  Writing in dissent, Judge Newman sided with Mayo since all of the claims pending in the interference had been indicated to be allowable by the examiner.

Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

State Rights; Sovereign Immunity; and the Patent System

Regents of the University of Minnesota v. LSI Corporation (Supreme Court 2019) (petition stage)

Question presented in this new petition:

Whether the inter partes review proceedings brought by private respondents against the University of Minnesota in this case are barred by sovereign immunity.

UMN Petition.

UMN sued LSI and Ericsson for infringing several of its semiconductor related patents. U.S. Patents 5,859,601, 7,251,768, RE45,230, 8,588,317, 8,718,185, and 8,774,309. Those two companies then petitioned the USPTO for inter partes review (IPR) of the asserted claims.  The PTAB then dismissed the proceedings – holding that 11th Amendment sovereign immunity applied to IPR proceedings.  On appeal, however, the Federal Circuit reversed – holding that sovereign immunity does not protect state-owned patents from being cancelled by the PTAB.

A key Supreme Court precedent on-point is Fed. Mar. Comm’n v. S.C. State Ports Auth., 535 U.S. 743  (2002) (FMC) (presumptive state immunity even in administrative adjudications).  Here a major difference is that we have property-rights at stake that create special in rem jurisdiction potential and that UMN has already attacked the IPR petitioners by suing them for infringement, creating potential waiver.

This case is parallel to the Indian Tribe immunity case of Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc., 896 F.3d 1332 (Fed. Cir. 2018).  The Supreme Court denied certiorari in that case earlier this year.  A major difference here is that Indian Tribe immunity stems from common law and statutory law (and sometimes treaty) while State immunity is grounded in the U.S. Constitution.

 

Federal Circuit Rejects Patenting Designs “in the Abstract”

by Dennis Crouch

Curver Luxembourg, SARL v. Home Expressions Inc. (Fed. Cir. 2019)

The district court dismissed Curver’s design patent infringement lawsuit for failure-to-state-a-claim.  Asserted U.S. Design Patent D677,946 is titled “Pattern for a Chair”
and claims an “ornamental design for a pattern for a chair, as shown and described.”

Note from the figure above that the drawings (and thus the claims) are not dirercted to a whole chair, but only a pattern that apparently could be used on a chair.

The accused product is not a chair but instead a basket that (arguably) uses the same pattern.  The district court looked to the “for a chair” limitation in the claim and made the easy conclusion that a basket is not a chair. Before moving forward, I’ll note the famous Van Gogh chalk drawing titled “woman sitting on a basket with head in hands.”  I wonder if she just tried to reconcile a set of Federal Circuit precedents.

On appeal, the Federal Circuit has affirmed — holding that claim language specifying a particular article of manufacture (a chair) limits the scope of the design patent in cases where “the claim language supplies the only instance of an article of manufacture that appears nowhere in the figures.”

In this case, the patentee essentially asked for the Federal Circuit to construe the patent as covering a disembodied design that could be applied to any article of manufacture.  In rejecting that argument, the court first noted that it “has never sanctioned granting a design patent for a surface ornamentation in the abstract such that the patent’s scope encompasses every possible article of manufacture to which the surface ornamentation is applied.”

Given that long-standing precedent, unchallenged regulation, and agency practice all consistently support the view that design patents are granted only for a design applied to an article of manufacture, and not a design per se, we hold that claim language can limit the scope of a design patent where the claim language supplies the only instance of an article of manufacture that appears nowhere in the figures.

Slip opinion.  As the court notes, PTO design patent practice bars patentees from obtaining coverage for an abstract design.

The title of the design must designate the particular article. No description, other than a reference to the drawing, is ordinarily required. The claim shall be in formal terms to the ornamental design for the article (specifying name) as shown, or as shown and described.

37 C.F.R. § 1.153.  This provision has not been challenged at the Federal Circuit (and this litigation appeal does not allow for a direct challenge of the PTO regulation).  However, the court suggests that the limit is also good policy — citing Prof. Sarah Burstein’s work on-point:

If we adopted a design per se rule, “the title and claim language would provide no useful information at all.” Sarah Burstein, The Patented Design, 83 TENN. L. REV. 161 (2015). In contrast, tying the design pattern to a particular article provides more accurate and predictable notice about what is and is not protected by the design patent.

Id.

= = = =

The Samuelson Clinic at Berkeley Law filed an amicus brief on behalf of the Open Source Hardware Association. The brief argues that allowing patenting of designs in the abstract would deter innovation.

= = = =

Although the design patent here was ‘examined,’ the examiner did not issue a single office action rejection.  Both the examiner’s search and references cited by the applicant focus on material for the backing or seat of a chair.

= = = =

Note here that the inventor has patented a number of baskets, and Curver sells baskets using this patented design.  But, Curver did not patent its basket with the design.

Prosecution History Disclaimer 1880 – 2019

Technology Properties Limited LLC v. Huawei Technologies Co., Ltd. (Supreme Court 2019)

In its new petition for writ of certiorari, Tech. Properties focuses on claim construction and the Federal Circuit’s application of prosecution history disclaimer.

Whether the United States Court of Appeals for the Federal Circuit’s development and application of the doctrine of “prosecution history disclaimer” is consistent with fundamental principles of separation of powers, the Patent Act, and long-established Supreme Court precedent.

[Petition][Appendix].

The patent at issue here (5,809,336) stems from a 1989 application and a divisional filed just before the 1995 change-over to the 20-year-from-filing patent term. The microprocessor system claims require an “oscillator.”  In interpreting that limitation, the court added some additional negative limitations that (1) the oscillator “does not require a command input to change the clock frequency” and (2) the oscillator’s frequency “is not fixed by any external crystal.” The addition was based upon arguments that the patentee made during prosecution.  That narrowing, the patentee argues “runs afoul of the separation of powers among Congress, the USPTO, and the federal courts embodied in the Patent Act.”

The most interesting aspect of the petition here is reliance on so many 19th century decisions by the Supreme Court:

  • Keystone Bridge Co. v. Phoenix Iron Co., 95 U.S. 274 (1877) (The Patent Act of 1836 “relieving the courts from the duty of ascertaining the exact invention of the patentee by inference and conjecture. . . . This duty is now cast upon the Patent Office. There his claim is, or is supposed to be, examined, scrutinized,
    limited, and made to conform to what he is entitled to.”)
  • Merrill v. Yeomans, 94 U.S. 568 (1876) (claims are of primary importance).
  • Goodyear Dental Vulcanite Co. v. Davis, 102 U.S. 222 (1880) (prosecution history cannot “enlarge, diminish, or vary” the claim limitations).
  • White v. Dunbar, 119 U.S. 47 (1886) (“unjust to the public, as well as an evasion of the law, to construe it in a manner different from the plain import of its terms”).
  • McCarty v. Lehigh Val. R. Co., 160 U.S. 110 (1895) (“[I]f we once begin to include elements not mentioned in the claim, in order to limit such claim, . . . we should never know where to stop.”).

Of course, the petition also includes the mystery statement: “While the prosecution history can play some role in claim construction, it should not be used to diminish or enlarge the scope of the claims.” What is this mystery role?

STRONGER Patents Act of 2019

by Dennis Crouch

Patent reform legislation continues its slow pathway through Congress.  The leading bill is the STRONGER Patents Act of 2019 (“‘Support Technology and Research for Our Nation’s Growth and Economic Resilience”) with identical bills pending in both the House and Senate. H.R.3666; S. 2082.

Upcoming Hearing: September 11, 2019 held by the Intellectual Property Subcommittee of the Senate Judiciary Committee with testimony from: Bradley Ditty (InterDigital); Prof. Mossoff (Scalia Law); Prof. Cotter (Minnesota); Dan Lang (Cisco); Josh Landau (CCIA); and Eb Bright (ExploaMed). [Written testimony will be available on the Hearing website sometime on the 11th.]

The Bill is designed to strengthen the power of an individual patent — making it harder to invalidate and easier to enforce as follows:

  • AIA Trials: PTAB must require clear and convincing evidence before invalidating an issued patent;
  • AIA Trials: Petitioner must have standing (business or financial reason to challenge a patent’s validity);
  • AIA Trials: Bar multiple trials on the same claims; Bar multiple petitions on the same patent by a single petitioner.
  • AIA Trials: Allowing petitioner to appeal most insitution question; barring appeal of institution denials;
  • AIA Trials: Splitting institution judges from trial judges;
  • Enforcement: Presume that infringement causes irreparable harm and that the remedy at law is inadequate.
  • . . .

[Read the Bill]

A group of law professors have submitted a letter to Congress arguing against the STRONGER Patent Act.  The core argument of the letter is that the inter partes review (IPR) system “has proven to be a robust and efficient check on patent validity, and has had a positive impact across industries, including high-tech, Main Street, and pharmaceuticals, where invalid patents can keep drug prices high.”   [Read it here]  Prof. Cotter signed the letter; Prof. Mossoff did not.

Vacating the Entire Patent Office Proceedings on Equitable Grounds

by Dennis Crouch

Valspar Sourcing, Inc. (Sherwin Williams) v. PPG Indus. (Fed. Cir. 2019) (nonprecedential) (Valspar II)

This short decision reads like a study of my parenting style — “You should have understood my meaning based upon my facial expression!”  From a patent-law perspective, the Federal Circuit here has vacated an entire IPR proceeding because the challenger lacks standing to appeal.  Note here that the “R” is reexamination rather than review and the decision is nonprecedential.

This case involves two inter partes reexaminations filed by PPG back in 2012. U.S. Patents 7,592,047 and 8,092,876.  On reexamination, the examiner rejected all the claims; then the Board (PTAB) reversed all of those rejections (favoring the patentee).

On appeal, the Federal Circuit refused to hear the case on standing grounds — holding that Valspar had granted a covenant-not-to-sue that mooted the appeal.  PPG Industries, Inc. v. Valspar Sourcing, Inc., 679 Fed. Appx. 1002 (Fed. Cir. Feb. 9, 2017)(nonprecedential) (Valspar I).  Still, although it did not hear the merits of the case, the court still vacated the PTAB Final decisions in the interests of “justice.” In particular, the court appeared to be looking to punish Valspar for filing its covenant-not-to-sue late in the appeal — “tardily and unilaterally.”

“If a judgment has become moot, this Court may not consider its merits, but may make such disposition of the whole case as justice may require.” Walling v. James V. Reuter, Inc., 321 U.S. 671 (1944). . . .

“A party who seeks review of the merits of an adverse ruling, but is frustrated by the vagaries of circumstance, ought not in fairness be forced to acquiesce in the judgment. The same is true when mootness results from unilateral action of the party who prevailed below.” U.S. Bancorp Mortg. Co. v. Bonner Mall P’ship, 513 U.S. 18 (1994). . . .

VACATED, and . . . DISMISSED

Valspar I.  Here, the vacatur is seen as an equitable remedy and, it turns out that the Federal Circuit was not interested in punishing the patentee for its late action, but only to ensure that the mootness holds.

Following Valspar I on “remand” and with its decision upholding the patent vacated, the Board went the other way and ordered the examiner to issue reexamination certificates cancelling all of the challenged claims.  In particular, the Board found that the vacatur of its prior decision terminated the appeal and thus the examiner was required by law to issue the reexamination certificate upholding the claims.

The Federal Circuit, now in Valspar II, found the Board’s approach inequitable — the very opposite of equitable.

The ordered vacatur was designed to protect the challenger from being forced to acquiesce to an unreviewable adverse ruling by the Board. But by effectively canceling all the challenged claims, the Board’s approach unfairly converted the vacatur shield into a sword for the challenger. That is an inequitable result—especially here, where the Board previously determined that the challenged claims are not invalid.

Had we intended such an incongruous result, we would have made that intent explicit in our opinion. The Board should have interpreted the scope of the vacatur based on the context provided by this court’s opinion. . . . With this context, it was clear that this court’s intent was to nullify the entire inter partes reexamination without any collateral effect on other litigation.

Valspar II.  On remand here, the Board is instructed to either (1) do nothing or (2) “To the extent the Patent Office interprets our mandate to require further action, such action should be limited to concluding the reexaminations by vacating the proceedings without any further adjudication, and without the issuance of any reexamination certificate.”

Issues Here: To my knowledge, the Federal Circuit has not begun vacating Inter Partes Review proceedings based upon lack of appellate jurisdiction, but this decision shows how it is within the court’s equitable power.

Query: Is anyone else a little bit creeped out by the Sherwin Williams logo?

= = = =

Andy Baluch (Smith Baluch) represented the patentee Valspar on appeal; Tony Figg (Rothwell Figg) represented PPG.

= = = =

Note that Valspar has an ongoing lawsuit against PPG that asserts continuations of the disclaimed patents here.

Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

Eligibility: Commercial Success is Irrelevant to Inventive Concept Analysis

In re Greenstein (Fed. Cir. 2019) (nonprecedential decision)

Mark Greenstein is trying to patent an automated investment system to “automatically adjust the amount [a] person saves” in order to achieve a projected income amount. A key element of the claims, according to Greenstein, is to “utilize a projected amount of income at a future date for at least one person.”  The Examiner and PTAB found the claims unpatentable as both lacking eligibility and as either anticipated or obvious.

On appeal, the Federal Circuit has affirmed the eligibility rejection — finding:

  1. Alice Step 1: Representative claim 1 recites receiving investment data, adjusting an individual’s savings, and investing the adjusted savings to achieve a projected retirement income. This describes no more than the automation of the longstanding fundamental economic concept of personal financial planning. We have routinely held that such claims are directed to abstract ideas.
  2. Alice Step 2: The claims merely recite an abstract idea with instructions to implement it “using one or more computers with associated software.” And as the Board correctly stated, these are “generic, purely conventional elements.”

On appeal, Greenstein argued that the claimed utilization of projected income was an inventive concept and noted that it “was the basis for the successful commercial launch of a new product, demonstrating its material advantages to persons in the relevant market.” On appeal, the Federal Circuit found that argument failed to connect the dots.

Even if Mr. Greenstein is correct that the claimed utilization of a projected future income was the basis for a commercially successful product, this is insufficient to transform the claims into a patent-eligible application. It is well-settled that a claimed invention’s “use of the ineligible concept to which it is directed cannot supply the inventive concept that renders the invention ‘significantly more’ than that ineligible concept.”

Slip opinion, Quoting BSG Tech LLC v. Buyseasons, Inc., 899 F.3d 1281 (Fed. Cir. 2018).

Greenstein filed this application back in 2014 (provisional in 2013). He was represented by Bacon Thomas before the PTO, but took it on pro-se before the Federal Circuit.

 

Sovereign Indignity: Texas must Litigate its Infringement Case in Delaware

by Dennis Crouch

University of Texas v. Boston Scientific Corp. (Fed. Cir. 2019)

UT sued Boston Scientific for patent infringement in its home district of W.D. Texas (Austin).  BSC responded with a motion to transfer/dismiss on venue grounds — arguing that venue was improper under 28 U.S.C. 1400(b).  BSC is not a Texas corporation and has no regular-and-established place of business in W.D. Texas.  As such, the district court found venue improper and transferred the case to D.Delaware. (BSC does have a few dozen employees in W.D.Tex., all of whom work from home, but that did not create proper venue.)

UT appealed the transfer — arguing sovereign immunity, sovereignty, and “State Dignity”.  In particular, UT argued that an implicit exception to the venue statute allows for State of Texas has a right to sue for patent infringement in the state of Texas. The argument:

Venue is proper in the Western District of Texas because UT is an arm of the State of Texas, has the same sovereign immunity as the State of Texas, it would offend the dignity of the State to require it to pursue persons who have harmed the State outside the territory of Texas, and the State of Texas cannot be compelled to respond to any counterclaims, whether compulsory or not, outside its territory due to the Eleventh Amendment. . . .

[T]he federal patent venue statute cannot abrogate a State’s right to choose the forum when asserting infringement of its federal patent rights. UT also argues that the District
of Delaware lacks jurisdiction because UT never consented to suit in Delaware, never waived its sovereignty in Delaware, and never had its sovereignty abrogated by statute.

On appeal, the Federal Circuit “disagree[d] with UT on all grounds. . .  state sovereignty principles asserted by UT do not grant it the right to bring a patent infringement suit in an improper venue.”

We acknowledge that States are sovereign entities that entered the Union with particular sovereign rights intact. We are not convinced, however, that the inherent powers of Texas as a sovereign allow UT to disregard the rules governing venue in patent infringement suits once it chose to file such a suit in federal court.

Here, the appellate panel is effectively making a waiver argument — since UT filed suit in Texas, it implicitly agreed that the suit might be transferred to another state if such a transfer fit under the rules of civil procedure.

When a State voluntarily appears in federal court . . . [i]t logically follows that the State must then abide by federal rules and procedures—including venue rules—like any other plaintiff. We see nothing in UT’s cited authorities that suggests  otherwise. Indeed, it would be “anomalous or inconsistent” for UT to both invoke federal question jurisdiction and then to assert sovereignty to defeat federal jurisdiction.

Slip opinion.

Of some interest — UT might be able to refile the case directly to the U.S. Supreme Court under the “original Jurisdiction” clause of Article III, Section 2 of the U.S. Constitution.

In all Cases affecting Ambassadors, other public Ministers and Consuls, and those in which a State shall be Party, the supreme Court shall have original Jurisdiction.

This jurisdiction is not ‘exclusive’ to the Supreme Court and so the normal route is to go through the district courts.

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Note that ordinarily parties do not have a right to directly appeal a transfer order. Here, however the court found appellate jurisdiction under the collateral order doctrine.

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The patents at issue here cover implantable drug-releasing biodegradable fibers used in stents. U.S. Patent Nos. 6,596,296 and 7,033,603.  The patents are exclusively licensed to TissueGen, another Delaware Corp.

Berkheimer: Coming Up this Fall

The Berkheimer case has been pending for a while.  Steven Berkheimer first filed his infringement lawsuit against HP back in 2012. (N.D. Ill.) In 2016, the district court dismissed the case on summary judgment — finding the claims ineligible. That decision included two key legal findings (1) eligibility is purely a question of law; and (2) the clear and convincing evidence standard does not apply to questions of eligibility.   The appeal then took two years and in 2018 the Federal Circuit vacated that holding — finding that underlying issues of fact may be relevant here to the question of patent eligibility. Judge Moore explained in her decision:

While patent eligibility is ultimately a question of law, the district court erred in concluding there are no underlying factual questions to the § 101 inquiry. Whether something is well-understood, routine, and conventional to a skilled artisan at the time of the patent is a factual determination.

Berkheimer (Fed. Cir. 2018).  Following the Federal Circuit’s decision, HP then petitioned for writ of certiorari and that petition is still pending.  In particular, briefing on the petition was completed in December 2018, but the Supreme Court then requested that the Solicitor General provide an amicus brief with the views of the U.S. Gov’t.  That CVSG request was sent out in January 2019 and the Solicitor General’s office has not yet responded.  I expect that at this point, a draft brief has been completed and there is now some debate between various elements of the administration.  I would have expected the brief to be filed by now (7 months later), but now expect it in by about October 10.

HP’s question presented in the case is as follows:

whether patent eligibility is a question of law for the court based on the scope of the claims or a question of fact for the jury based on the state of the art at the time of the patent.

As I mentioned previously, the petition creates a false dichotomy.  As we know from claim construction, not all questions-of-fact are given to a jury to decide.  And, the Federal Circuit did not hold that eligibility is “a question of fact for the jury.”  Despite the intentional misdirection by HP’s Counsel Mark Perry (Gibson Dunn) and David Salmons (Morgan Lewis), the case is interesting and important and I look for the court to take the case.

“Exceptional Case” Rule does Not apply to Doctrine of Equivalents

by Dennis Crouch

Amgen v. Sandoz (Fed. Cir. 2019) (on rehearing) [RehearingOrder][AmgenBrief][SandozBrief]

When I wrote about this case back in May 2019, I headlined the post with the court’s statement that “The Doctrine of Equivalents Applies ONLY in Exceptional Cases.” I noted that the court’s statement was “a major step without precedential backing.” It is possible that the court was simply intending to state that DOE is rare.  The decision was so problematic though because “exceptional case” is a term of art used elsewhere in patent law and suggests creation of an additional test prior to allowing a patentee to rely upon DOE.  Citing my post, Amgen petitioned for rehearing on the issue.

The court has now responded by altering its opinion to remove the most offensive portion of its decision.  The new statement:

The doctrine of equivalents applies only in exceptional cases and is not “simply the second prong of every infringement charge, regularly available to extend protection beyond the scope of the claims.” London v. Carson Pirie Scott & Co., 946 F.2d 1534, 1538 (Fed. Cir. 1991); see
also Duncan Parking Techs., Inc. v. IPS Grp., Inc., 914 F.3d 1347, 1362 (Fed. Cir. 2019) (“[T]he doctrine of equivalents cannot be used to effectively read out a claim limitation . . . because the public has a right to rely on the language of patent claims.” (citing Primos, Inc. v. Hunter’s Specialties, Inc., 451 F.3d 841, 850 (Fed. Cir. 2006))).

In its decision, the court maintained the ultimate holding that DOE did not apply here — because of substantial differences between the claimed and accused processes.

The decision as it reads now recognizes that DOE winners will be rare — and that rarity stems from the nature of the DOE test. In particular, DOE only applies when the accused device or method is different from what is claimed but may not be “substantially different” on an element-by-element basis.

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Appellate Litigation Strategy. Deanne Maynard (MoFo) represented Sandoz in the case did a masterful job in her en banc brief suggesting that the court take the action that it did — simply strike out the offending words.  The opposition brief explains:

[T]he Court neither adopted nor applied an “exceptional case” standard. Its doctrine of equivalents ruling broke no new ground. Applying settled law to the undisputed facts of this case, it correctly held that Amgen’s equivalents argument fails because Sandoz’s accused “purification process works in a substantially different way” from the asserted claim. For that reason, Amgen can only speculate about what an “exceptional case” standard might require or how one might be applied in future cases. This Court said nothing about that because it adopted no such standard. Without the six words Amgen highlights, the reasoning and outcome of the Court’s decision would remain the same; the only change would be in this observation: “The doctrine of equivalents applies only in exceptional cases and is not ‘simply the second prong of every infringement charge, regularly available to
extend protection beyond the scope of the claims.”

Maynard did something here that is really hard for attorneys in battle — admit (albeit implicitly) that the court went too far with its language.  In doing so, she opened the pathway to easy victory.

Broad Interpretation of 315(b) time-bar applied to 315(a) challenge

Cisco Sys., Inc. v. Chrimar Sys., Inc. (PTAB 2019) (precedential)

This case was decided back in January 2019, but the USPTO has now designated the decision as precedential. The decision provides another time-bar / preclusion scenario.

Prior to filing its IPR petition, Cisco had filed a declaratory judgment (DJ) action in district court seeking to invalidate Chrimar’s U.S. Patent 8,902,760. However, rather than pursuing the case to judgment or settlement, Cisco dismissed its lawsuit without prejudice. Under typical principles of preclusion, this type of dismissal would not prohibit or estopp Cisco from challenging the patent again at a later date.  However, the question here was how those rules mesh with the Patent Act.

The Federal Circuit has decided several time-bar cases that arise under Section 315(b). That provision creates a one-year deadline for a challenger to file its IPR petition after being sued (and served) for patent infringement.  315(b) does not apply here because Cisco was not sued for infringement but rather filed its own declaratory judgment lawsuit.

Section 315(a) provides:

An inter partes review may not be instituted if, before the date on which the petition for such a review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent.

The petitioner Cisco easily checks the boxes of the statute — it filed a civil action challenging validity before it filed the IPR petition.  However, Cisco argued that that the voluntary dismissal should reset the case. The voluntary-dismissal argument had already been foreclosed in the 315(b) situation.

Cisco argued that 315(a) (unlike 315(b)) parallels estoppel provisions and thus should follow the same rules.  The PTAB panel rejected that argument — following the Federal Circuit’s lead here to strictly apply the statute as written and without judicial exception. The statute “does not include an exception.”  Thus, the holding: Cisco’s IPR Petition is barred by its prior DJ action even though voluntarily dismissed. 

= = = = =

Representative claim:

73. A BaseT Ethernet system comprising:

Ethernet cabling having at least first and second individual pairs of conductors used to carry BaseT Ethernet communication signals, the at least first and second individual pairs of conductors physically connect between a piece of BaseT Ethernet terminal equipment and a piece of central network equipment, the piece of central network equipment is a BaseT Ethernet hub;

the piece of central network equipment having at least one DC supply,

the piece of BaseT Ethernet terminal equipment having at least one path to draw different magnitudes of current flow via the at least one DC supply through a loop formed over at least one of the conductors of the first pair of conductors and at least one of the conductors of the second pair of conductors,

the piece of central network equipment to detect at least two different magnitudes of current flow through the loop.

= = = =

The patent arguably covers IEEE standards for Power over Ethernet (PoE).

= = = = =

It looks like this was an all male case: James Marina at Kirkland (along with Robert Kang and Eugene Goryunov) represented the petitioner Cisco while Frank Angileri at Brooks Kushman (along with Tom Lewry, Marc Lorelli, and Chris Smith) represented the patent owner.  The opinion was penned by Judge Robert Weinshenk and joined by panel members Karl Easthom and Gregg Anderson.

= = = = =

 

 

Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

Final and Nonappealable: construed as “may be reconsidered” and not reviewable in “at least some circumstances.”

BioDelivery Scis. Int’l v. Aquestive Therapeutics, Inc. (Fed. Cir .2019)

The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.

35 U.S.C. 314(d).

In 2014, BioDelivery filed three separate IPR petitions against Aquestive’s U.S. Patent 8,765,167.  The USPTO partially-instituted the proceedings (on some, but not all grounds) but then sided with the patentee — finding that the claims had not been proven unpatentable. BioDelivery then appealed to the Federal Circuit who vacated the final written decision on SAS grounds — holding that the USPTO cannot partially institute an IPR.

Back on remand, the PTAB essentially restarted the whole case at institution and eventually decided not to institute the case at all (terminating all three IPR petitions).  BioDelivery then appealed again — arguing that the appeal should have remained instituted and that the PTAB should not have reconsidered that decision.

Back on appeal, the Federal Circuit reconstituted the same panel of Judges Newman, Reyna and Lourie.

Not Final Final: In its decision, the Federal Circuit first held that the “final” aspect of an institution decision does not mean that it cannot be reconsidered.  Rather, “administrative agencies possess inherent authority to reconsider their decisions, subject to certain limitations, regardless of whether they possess explicit statutory authority to do so.” Medtronic, Inc. v. Barry, 891 F.3d 1368 (Fed. Cir. 2018). Without interpreting the statutory meaning of “final,” the Board simply concluded that it does not clearly deprive the Board of its “inherent default authority.” (Note a minor problem with the decision in how it conflates statutory authority given to the Board with statutory authority given to the Director who then administrative delegated that authority to the Board).

NonAppealable: Although the “final” portion of the statute carried no weight, the court here ultimately dismissed the appeal — finding that it fell squarely within the nonappealable provision.

Congress clearly intended to bar review of institution decisions in at least some circumstances by passing the “No Appeal” provision—§ 314(d).

In Cuozzo, the Supreme Court explained that an appeal focused on the likelihood of success element of institution would be barred by the provision.  Here, the majority identifies BioDelivery’s appeal as “merely challenge the Board’s determination not to institute review, something the Board has discretion to do even upon a showing that there is a ‘reasonable likelihood of success with respect to at least 1 claim challenged’ in the petition.”

Judge Reyna wrote this order for the majority panel joined by Judge Lourie. Judge Newman wrote in dissent. Judge Newman argued that the prior appellate decision “ordered further proceedings in conformity to the Court’s ruling in SAS” and that the PTAB’s dismissal avoided that order.

= = = =

The patent here covers a dissolvable thin-film used for drug delivery (Clozabim).

Refusing to Seal: Should Patent Ownership and Licenses be Public Information?

Uniloc 2017 v. Apple (Fed. Cir. 2019) (appeal pending)

As in most patent cases, the parties to this litigation stipulated to a fairly tight protective order that was entered by Judge Alsup. Many of the documents filed in the case were filed under seal, including elements of the motion to dismiss for lack of standing (arguing that the plaintiff doesn’t actually own the patent).

However, in January 2019, the Electronic Frontier Foundation (“EFF”) moved to intervene and request unsealing of the parties various briefs and documents “for the limited purpose of vindicating the public’s right to access court records.”  EFF explained:

Defendant Apple has filed a dispositive motion asking the Court to dismiss this case on the basis of lack of subject matter jurisdiction. But page after page of the public briefing relating to that motion is hidden behind redactions. The public has no access to the underlying facts. Even lengthy sections of the legal argument are redacted, leaving the public with no way to understand the dispute. This conflicts with the public’s common law and First Amendment right of access.

The Ninth Circuit has held that “compelling reasons,” are required to seal documents used in dispositive motions. . . . While all court proceedings are presumptively open, the public interest in patent disputes is particularly strong because patents potentially govern the conduct of anyone who wants to make, use, or sell the claimed inventions. Thus, the public has an interest in knowing who owns, or might claim rights to enforce, a patent. Plaintiffs in this case appear determined to hide such facts from the public. But Plaintiffs’ desire to confound the public cannot trump the public’s First Amendment right of access. The Court should deny the motions to seal and ensure access to court records.

[EFFMotion] In response, Judge Alsup denied the motion to seal documents — holding that the parties had failed to provide compelling reasons to justify sealing and that generalized assertions of “potential competitive harm” are insufficient to outweight the public’s right to know. [DenialOfMotionToSeal]

Although Judge Alsup agreed to unseal the documents, he also granted a stay of deadlines pending appeal. Thus, the question of sealing is now pending before the Federal Circuit.  Meanwhile, Uniloc has agreed that it was initially overzealous in its approach to sealing documents (offering to unseal 90% of the materials originally filed under seal), but also argues that the court should particularly avoid unsealing a a document that includes “a table of the 109 of licenses Uniloc entered into between 2010 and mid-2017 [that] identifies the licensee, the date of the license, the amount paid and the license type for each license.”  According to Uniloc, the names of patent licensees and their payments are rightfully kept confidential. [Uniloc2017AppealBrief]

[To be updated as EFF and Apple weigh in].

 

 

When the Congress wrote “Nonappealable” . . .

by Dennis Crouch

In Power Integrations, Inc. v. Semiconductor Components Industries, LLC, 926 F.3d 1306 (Fed. Cir. 2019), the Federal Circuit held that the one-year 315(b) time-bar for filing an IPR petition can be impacted by post-petition activity. In the case, the petitioner (Semiconductor Components) merged with Fairchild after filing the petition but before the institution decision.  Fairchild had been previously sued by the patentee more than 1-year prior and so was barred from filing its on IPR petition.  In its decision, the Federal Circuit held that that privy relationships developed post-petition but pre-institution should be considered for the 1-year time bar purposes.

Pre-Institution Merger Foils Inter Partes Review Challenge

Following the Federal Circuit’s June 2019 decision, Semiconductor petitioned for rehearing en banc — arguing (1) a petition’s timeliness should be judged as of the petition’s filing date (as supported by statutory analysis and legislative history); and (2) this sort of issue should not have been appealable under Section 314(d) (“The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.”).  [OnSemiconductorEnBancPetition].

The Federal Circuit has now denied the petition for rehearing — setting-up the case for Supreme Court review. Michael Hawes (Baker Botts) handled the original appeal for petitioner; and Kathleen Sullivan (Quinn Emanuel) was added to the team for this rehearing. Frank Scherkenbach (Fish & Richardson) represents Power Integrations.

Once filed, this will be one of several cases pending before the Supreme Court on the 1-year time bar of 315(b). In Click-to-Call, the Supreme Court has already agreed to hear the question of “Whether 35 U.S.C. § 314(d) permits appeal of the PTAB’s decision to institute an inter partes review upon finding that § 315(b)’s time bar did not apply.” Dex Media, Inc. v. Click-To-Call Techs., LP, 139 S. Ct. 2742 (2019)(petition “granted limited to Question 1 presented by the petition”).

Do No-Opinion Judgments by the Federal Circuit Violate Due Process?

Straight Path IP Group, LLC, Petitioner v. Apple Inc. (on petition for writ of certiorari 2019)

The patentee straight path provides the court with the following question:

Petitioner holds four patents that claim a new method for establishing point-to-point communications over a computer network. The validity of these patents was sustained by the Patent Trial and Appeal Board (“PTAB”) and by two decisions of the Court of Appeals for the Federal Circuit. Claiming infringement of its patents, petitioner sued Apple and Cisco Systems in the Northern District of California, the defendants’ home district. In an unreported decision, the District Judge granted summary judgment to Apple and Cisco Systems. He ruled that statements made by petitioner’s counsel during oral argument in one of petitioner’s successful appeals to the Federal Circuit narrowed the petitioner’s patent claims so that the Apple and Cisco systems did not infringe petitioner’s patents. The District Court decision raised only issues of law. Petitioner appealed to the Federal Circuit with a 54-page principal brief and a 38-page Reply Brief. Apple’s and Cisco Systems’ briefs totaled 110 pages. Less than two weeks after oral argument, a Federal Circuit panel issued a decision that stated, in toto, “AFFIRMED. See Fed. Cir. R. 36.”

The Question Presented is: Whether Rule 36(e) of the Federal Circuit’s Rules of Procedure violates the Fifth Amendment by authorizing panels of the Federal Circuit to affirm, with no explanation whatever, a District Court judgment resolving only issues of law.

Read the petition here.