2016 Patent Year End Review: Insiders Reflect on the Biggest Patent Moments of the Year

Year in review 2016It is one again time to take a moment to look back on the year that was, reflecting on the biggest, most impactful moments of 2016. For us that means looking backward at the most impactful events in the world of intellectual property.

This year we received such a strong response from our panel of experts that we decided to break this column into two parts. In this first installment we will focus on the biggest moments relating to patents during 2016. In the second installment we will focus on the biggest moments relating to copyrights and trade secrets.

Unlike two years ago where there was near unanimous agreement that the Supreme Court’s decision in Alice v. CLS Bank was the biggest moment of the year, and last year where there was a wide variety of opinion on what constituted the biggest moments, our panel of industry experts came up with a few different topics that qualified for one of the biggest moments of the year. As you might expect, the two recurring themes in this 2016 patent year end review relate to patent eligibility and the Patent Trial and Appeal Board.

I will circle back with my own thoughts on 2016, but for now… without further ado… I present these reflections on 2016 from a diverse and distinguished panel of patent industry insiders.

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bob-stoll-200-200Bob Stoll
Partner, Drinker Biddle
Former Commissioner for Patents, USPTO

One of the biggest moments for IP and, for that matter, just generally, was the surprise election of Donald Trump as the President of the United States. In the field of intellectual property, President Trump is expected to lead an Administration that works for strong IP rights internationally. I believe that one of his main focuses will be in strong enforcement of intellectual property to assure our national security and the safety of Americans. He will aggressively guard against counterfeit products that can harm consumers and endanger health and help rid our supply chains of faulty and shoddy counterfeit parts that can compromise the reliability of our weapons systems and the safety of military personnel. Often today, the worst offenses against intellectual property rights come from abroad, especially in China. Congress and the new Republican President will act swiftly to enforce intellectual property laws against all infringers, whether foreign or domestic. I also believe that he will focus on rules in his Administration that provide for broad patent subject matter eligibility to prevent research funds from moving to foreign shores where patent protection has recently been broader than in the US.

The second most important event in IP was not a single event but a series of decisions from the Federal Circuit Court of Appeals (CAFC). During 2016, the CAFC issued a several opinions that help clarify that the Supreme Court’s (SC’s) decisions relating to patent subject matter eligibility are to be narrowly applied. With decisions including: MCRO (Planet Blue), Enfish and Bascom, the CAFC began to limit the harmful and overly broad application of rulings from SC cases that are hindering economic growth and job creation.

My final contestant for biggest moments of IP for 2016 is the grant of cert by the Supreme Court in TC Heartland. I believe that the reason for granting cert in this case is to somehow limit the ability of patent owners to bring suit in the Eastern District of Texas and that this decision will have a wide impact.

 

steve_kunin_200-200Stephen Kunin
Partner, Oblon, McClelland, Maier & Neustadt, L.L.P.
Former Deputy Commissioner for Patent Examination Policy, USPTO

Subject matter eligibility of software and computer related inventions contests post-Alice v. CLS Bank have been a series of battles resulting in many casualties in federal district courts, the Federal Circuit and USPTO ex parte and inter partes proceedings.  This is particularly troubling because of the ubiquitous nature of software inventions and their significance to the U.S. economy.  The U.S. is one of the leading nations in software innovation and the importance of the need to adequately protect innovation in this field through the patent system is not being reflected under current Supreme Court law.

However in 2016, hopefully, we have seen a turning point in the trend of invalidating patents under 35 U.S.C 101 where software or computer related patents with robust specifications and claims emphasizing non-generic technical features have been upheld by the Federal Circuit.  The pendulum appears to swinging back in favor of subject matter eligibility based on the 2016 Federal Circuit decisions in Enfish v. Microsoft (May 12, 2016), BASCOMM v. ATT & T Mobility (June 27, 2016), McRo v. Bandai (September 13, 2016) and Amdocs v. Openet (November 1, 2016) which have sharpened the contours of how to establish that the claimed inventions of patents in this field involve inventive concepts that are significantly more than preempting abstract ideas.

This is a refreshing trend that extends the safe harbors set forth in Alice of improving the operation of a computer (Enfish) and the application of performance improvements from one field of technology to another (Diehr) to new contours such as refocusing on the principle of lack of preemption of excluded subject matter (McRo), that improvements may be based new rules for improving user performance, that subject matter eligibility does not require tangibility (McRo), focusing on the claims as a whole and that the inventive concept may arise from a new ordered arrangement of claim elements or steps (BASCOMM), rejuvenating computer program product claims if properly written reciting computer code limitations and providing an unconventional technical solution to a technical problem (Amdocs).  To me this matters greatly as it provides more than a ray of hope that software patents will fare better when put under the microscope of subject matter eligibility if practitioners take to heart and apply the lessons learned from these recent Federal Circuit opinions when drafting patent applications with specifications and claims that conform to the new contours laid out in these cases.

 

Peter HarterPeter Harter
The Farrington Group

The biggest moment of 2016 is the theft of applicant and maintenance fees to subsidize the PTAB coupled with the USPTO’s unilateral refunding of failed petitioner fees. This adds an insult to the general public on top of the injuries to specific parties. PTAB has enjoyed a substantial amount of criticism starting with former CAFC Chief Judge Randy Rader’s infamous “death squad” comment.  ALJs are already under scrutiny at the SEC and other agencies. Many patent owners have complained about Director Lee’s failure to use her discretion to intervene in cases where petitions should not have been instituted.  The fact that she has chosen to interpret her AIA delegation powers to PTAB judges on both institution and merit decisions is already in court litigation and reinforces the growing “IPR breaks the Constitution” lawsuits. The fourth cert petition in the past year was filed at SCOTUS in November.  Congress is debating legislation to rein in deference to agencies under the Chevron doctrine. Trump campaigned on reducing the size of government.  The patent community is always unified behind fighting Congressional diversion of user fees paid to the USPTO. That could make PTAB a popular “House of Cards” episode.

 

John White
Berenato & White
PLI Patent Bar Review

The single, over-arching, most important patent event in 2016 was, for me, easily, the denial of cert by the Supreme Court in Sequenom. It was one of those events where – I remember where I was when I heard the news.

I Chair a number of patent programs for PLI through a calendar year. It is fun to get together with eminent thinkers in the field and exchange views. On this occasion, Prior Art, Obviousness and Patent Eligibility had just occurred. During the round table that is the lecturer lunch, I raise issues and seek feedback, surveying the room. One such issue was the fate of Sequenom. All agreed that it was the single best chance for the Supreme Court to put 35 USC 101 jurisprudence “back on the rails”. If the CAFC really believed that Mayo-Myriad-Alice required dismissing such a profound diagnostic discovery from patent protection, clearly they were wrong.

Turns out, they were right. As soon as the news broke regarding the denial, one of the program lecturers circulated an email to each of the others – all it said: cert denied in Sequenom. It left me unable to think. For several minutes I pondered whether the S.Ct., in their profound anti-patent ignorance, understood what they had done? Clearly they did not.

 

 

Alden AbbottAlden F. Abbott
Rumpel Senior Legal Fellow
Deputy Director, Meese Center for Legal and Judicial Studies
The Heritage Foundation

Among the many interesting IP-related developments in 2016, one matter that has potentially significant long-term ramifications is the Supreme Court’s failure to curb the PTAB.

The Supreme Court’s June 20 decision in Cuozzo Speed Technologies, LLC v. Lee further undermined patent rights. In upholding the Patent and Trademark Office’s (PTO) regulation requiring the Patent Trial and Appeal Board (PTAB) to apply the broadest reasonable interpretation (BRI) standard in Inter Partes Review (IPR) proceedings, the decision ensured that final issued patents would be accorded less respect by PTAB bureaucrats than by federal district courts, which apply the more neutral “correct claims construction” standard. As I pointed out in a Truth on the Market commentary written five months prior to the Supreme Court’s decision:

BRI is the standard patent examiners apply before deciding whether to issue a patent. Because it errs on the side of reading claims very broadly, it raises the probability that particular claims will be read as unpatentable because they “claim too much” and stray into existing art. By contrast, federal district courts have never applied BRI, instead construing claims based on the neutral standard of “correct claims construction.” This means that IPRs are not a speedy neutral substitute for district court litigation – they are instead an inherently biased forum that fails to accord challenged patents the dignity the statutory presumption of validity merits. This degrades the value of patents and diminishes returns to patenting. In other words, although application of an onerous standard (BRI) may be appropriate in deciding whether to grant a patent right initially, applying that same standard to “second guess” a patent right that has been granted diminishes its status as a presumptively valid property right.

The Court’s holding enables PTAB to continue to analyze patents in a manner that is in tension with (if not flatly inconsistent with) Congress’s teachings that “patents shall have the attributes of personal property”, 35 U.S.C. § 261, that “[a] patent shall be presumed valid”, 35 U.S.C. § 282, and that “[t]he burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity”, 35 U.S.C. § 282. Regrettably, the Court failed to acknowledge, let alone address, the serious separation of powers question raised by the fact that PTAB, an Executive Branch agency, is authorized to expunge a validly recognized property right without judicial review. This shortcoming was compounded by the Court’s separate holding that the PTAB’s decision to institute an IPR proceeding is not appealable to the federal courts.

In short, by effectively lending its imprimatur to problematic PTAB decisionmaking, the Supreme Court’s Cuozzo decision provides further ammunition to those who believe that swift congressional action is needed to curb (or, better yet, eliminate) PTAB patent review.

 

Chris GallagherChris Gallagher
Senior Policy Director, New Venture Advisors

I believe 2016’s most significant occurrence was growing Hill awareness about a patent-bypass mega-tech business model called “efficient infringement”. Efficient infringement both describes and pin-points the driving force behind the Innovation Act (HR 9 and S.1137 collectively, the Act), which was reported favorably last session in slightly different forms by House and Senate Judiciary but not acted on.

We all share a vestigial preference for narratives. When patent law’s comprehensive revision first launched, patent reform’s arcane complexity enabled its proponents to condense their arguments for enactment into a crisis narrative about “patent trolls” who were “taxing innovation” and clogging our courts. Flying the flag of system abuse they bolstered their narrative with junk science and pumped it into the media. Their troll narrative not only cleverly masked their intent, it shifted the burden of explaining arcane patent law and litigation from their lobbyists over to pro-patent advocates forcing us to sound like we sided with patent trolls. The troll meme worked well with AIA. Enacted in 2011, AIA was widely supported as a bill to curb patent trolls. Its didn’t. What it curbed was early stage innovation. Before AIA’s enacting ink was dry, the IT tech titans showed their true colors by launching bi-cameral versions of the Innovation Act, another “bait-and-switch” ploy ostensibly aimed at patent trolls but applicable again to all patent holders.  But In fact it was the Act was designed to shield its proponents from exposure to infringement damages and to protect their market incumbencies from disruptive innovation. If enacted it would have confined court access to patent enforcement solely to well-resourced firms like themselves while punishing lesser-resourced patent holders who dared to assert their rights by increasing court costs and one-sided cost-shifting. In 2013, the troll narrative worked well once again. The Act overwhelmingly passed in the House. But by session’s end, it had stalled in Senate Judiciary. In 2015, its big tech proponents pushed the Act through House and Senate Judiciary committees. But when the session ended in 2016 both bills still awaited floor consideration. Technically they were dead. What happened? By then, inventors, research universities and others involved in early stage innovation had carried their narratives to Capitol Hill. Moreover a different narrative of patent system abuse began to emerge, piercing the troll trope’s fog.

Enter “efficient infringement,” a descriptive term that captures the essence of an IP business model perpetrated by well-resourced IT firms whose established market access might be endangered by delay or disruptive competition. IT markets shift fast. First-mover status is more economic than licensing from pesky patent holders. It is cheaper to steal new or potentially disruptive patented technology knowing that infringement can be litigated later when and if judicial enforcement is attempted. Efficient infringement enables incumbents to maintain their market dominance by depriving innovative patent holders of first-mover status, timely market access and future customers. Because injunctions are virtually unavailable to non-practicing patent holders, and most cannot counter the legal and tactical resources of their market-incumbent tormentors, court patent assertions by independent inventors have become rare. Patent asserters are now branded as trolls. The troll narrative has enabled efficient infringement to deprive under-resourced patent holders of their patents’ exclusivity. Those daring to sue can be attrited or defeated by better-resourced infringers. By making judicial assertion more risky and expensive, the Act would have pushed more patent holders beyond their financial capacity to legally establish infringement. Enacting the Innovation Act thus would have institutionalized the efficient infringement business model. But by 2016 direct member contact by universities, early stage investors and inventors began piercing the patent troll fog. Members began to see through it. They discovered a different patent system abuse that was anchored in reality, not fairy tales. Moreover when actually read, the Act’s punitive content itself confirmed efficient infringement’s economically compelling relevance to the conflict. More members who earlier had supported the Act understood they had been played. Some resented being having been lobbied to shield efficient infringers from exposure to infringement damages. Many more lost interest in blindly supporting it twice. At the least the issue had two sides. It had become controversial. By late 2016, the Act had become a “tough vote” in an election year. Floor consideration was out of the question .

New versions will be offered again. Big tech still wants protection. Its infringer lobby hasn’t gone away. But the 2016 emergence of efficient infringement awareness has broken the troll narrative’s barrier to informed debate. It too is here to stay. Next year even more members will see past the Act’s misleading narrative. More will understand congressional sanction of efficient infringement is what is driving the Act. When it returns, as it most surely will, another narrative will contend with the obscuring dominance of the tired troll narrative. Because the narratives changed in 2016  released from “ troll-crisis”politics, Hill debate next year will more likely focus on the economic benefits of balanced patent policy. Honest debate favors the pro-patent side. And if in 2017, a District Court exercises its  Halo discretion to put a “willfulness fork” into a guilty defendant’s pattern and practice of efficient infringement, the abusive business model may finally die and thus end a decade-long congressional quest to pass anti-patent “Patent Reform”.

 

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32 comments so far.

  • [Avatar for Night Writer]
    Night Writer
    January 5, 2017 08:08 am

    @31 Eric. I agree with you. And, you forgot to add that each year Google is pouring in more money to lobby to burn the system down.

  • [Avatar for Eric Berend]
    Eric Berend
    December 31, 2016 12:31 pm

    Some of you guys, all due respect noted, are too optimistic. The powers that be erelvant to this topic, are well served by inertia. Having finally had the din of outrage reach their precious little ears, they will bury their collective (SCTOTUS) heads in the sand, having so badly botched the radical changes called for in the past decade. Who can credibly argue, that these cowards will come out of their comfortable shells and reverse their own jurisprudence, so soon after being rhetorically lambasted about the issue?

    And, Congress is still full of deluded legislators whose idea of so-called “bipartisan” politics, is to enthusiastically screw over the ‘little guy’, while studiously avoiding the more important concerns of the electorate; along with their responsibilities to uphold the U.S. Constitutional public interest (e.g., “welfare”).

    So: no, I do not agree that there is nearly quite such reasons for hope that the effects of this enormous cabal will miraculously be rolled back, in the baleful glare of the wealthy infringers’ illicit influences.

  • [Avatar for step back]
    step back
    December 31, 2016 01:06 am

    I’m not a biotech guy. Much of this PCR stuff goes right over the top of my head.

    If I listen to Ned-who-loves-the-Fed and to those Fed. Cir. biotech geniuses it sounds like one PCR is like the next. They are all generic, conventional and routine. Nothing to look at here folks.

    However if I do a little independent research like trying to read some of this stuff:

    https://en.wikipedia.org/wiki/Polymerase_chain_reaction

    it appears there are all kinds of different PCRs and follow up procedures. It isn’t just all cut of the mill stuff. The entire DNA is not replicated. Just a specific, targeted strand is replicated. And then specific follow up analysis is done on the replicated strand.

    Next I go to the patent in suite: 6,258,540
    There is a section in the ‘540 patent that discloses the following (which is above my pay scale):

    Polymerase chain reaction (PCR)
    The polymerase chain reaction (PCR) was carried out essentially as described (Saiki et al 1988) using reagents obtained from a GeneAmp DNA Amplification Kit (Perkin Elmer, Foster City, Calif., USA). The detection of Y-specific foetal sequence from maternal plasma, serum and cellular DNA was carried out as described using primers Y1.7 and Y1.8, designed to amplify a single copy Y sequence (DYS14) (Lo et al 1990). The sequence of Y1.7 is 5′ CAT CCA GAG CGT CCC TGG CTT 3′ [SEQ ID NO: 1] and that of Y1.8 is 5.degree. CTT TCC ACA GCC ACA TTT GTC 3’ [SEQ ID NO: 2]. The Y-specific product was 198 bp. Sixty cycles of Hot Start PCR using Ampliwax technology were used on 10 .mu.l of maternal plasma or serum or 100 ng of maternal nucleated blood cell DNA (denaturation step of 94.degree. C. 1 minute and a combined reannealing/extension step of 57.degree. C. 1 minute). Forty cycles were used for amplification of amniotic fluid. PCR products were analysed by agarose gel electrophoresis and ethidium bromide staining. PCR results were scored before the foetal sex was revealed to the investigator.

    Sounds like a very particular kind of PCR is being carried out. Not your every day vanilla run.

    So who should I buy my Brooklyn Bridge from?
    Ned and the Feds?
    Or the guys who filed the amicus briefs in support of cert?

    Maybe one of you biotech guys out there can point me in the right direction.

  • [Avatar for Anon]
    Anon
    December 30, 2016 09:52 pm

    not sufficient “invention” to justify a patent.

    What section of 35 USC et al did Congress write the law as to “sufficiency of invention.”

    Oh wait, they explicitly chose a different path (way back in 1952).

    Can you guess what that path was (and which jurist would know best what Congress did there – because he helped Congress write that specific section of law)?

  • [Avatar for Edward Heller]
    Edward Heller
    December 30, 2016 05:03 pm

    Paul and step, I do not disagree that the discovery that maternal plasma contained fetal DNA and thus would provide a noninvasive source of fetal DNA for analysis was a discovery of great value. But it is also true, I believe, that once this information is considered part of the prior art because it is a phenomena of nature, then there appears to be nothing at all inventive about the subsequent steps actually claimed – which consists primarily of amplifying paternal DNA without explaining just how one got the paternal DNA to amplify. This is why I gave you, step, the example of Edison inventing the tungsten filament lightbulb. Would that have been an invention had he been told by others that tungsten would be a good filament, with the rest of the lightbulb having already been invented?

    I agree with Paul that there may have been nonroutine, nonconventional methods involved in isolating and preparing paternal DNA from a maternal sample to place it in a condition for amplification. But that is not claimed even if it was described in the specification. Now consider that if one can get a broad claim that does not require this critical step to actually be set forth in the claim, what incentive does one have actually disclose the critical technology that actually enables the process to be performed? I submit to you, that the crown jewel technology might henceforth be protected by trade secrets, not disclosed. Let others try to figure out actually how to do it, etc.

    I see the primary dispute we have here is not that the Federal Circuit made a mistake in applying Mayo to the invention actually claimed here. I think the Federal Circuit analysis based upon Mayo is correct. This means that what we are really disputing here is the rule of Mayo itself – that one cannot simply apply conventional technology, well-known, to detect a phenomena of nature.

    But all this was known when Mayo came down. The petition for the Supreme Court to overturn the Federal Circuit in this case was essentially a request that Supreme Court overturn Mayo. They were not about to do that.

    The angst by Judge Lynn that what was discovered here was extremely valuable is angst better directed at Mayo and the general rule that products of nature, phenomena of nature and laws of nature cannot be patented and that applying conventional technology to determine the presence of a phenomena of nature of law of nature is not sufficient “invention” to justify a patent.

  • [Avatar for Paul Cole]
    Paul Cole
    December 30, 2016 12:29 pm

    @ Edward

    One of our paralegals who has just had a child had a blood test at 12 weeks, which provided reassurance that all was well. The alternative, much later, would have been an amniocentesis which apart from lateness presents a risk to the unborn child. So try telling her, or the hundreds of thousands of expectant mothers who have benefited from the test, or their doctors and nurses, that nothing new or improved was created. The proposition would have been treated with ridicule, and very rightly so.

    I think this will be my last posting this year so very happy new year to Gene, Renee and family and all who read and contribute to this blog.

  • [Avatar for step back]
    step back
    December 30, 2016 12:26 pm

    Ned @25

    Kidding aside, it is you I respectfully submit who is missing a step or two.

    We don’t apply “conventional” to mere “information” (which information is not inherently always true).

    We apply a physical process to a physical and allegedly pregnant individual female where that specific process (taken in whole) has not been applied before. It is new because it has never been applied before. It is useful because it informs us of the state of the developing fetus. It is an improvement because previous methods were more invasive and dangerous (sticking an amnio needle into the womb).

    Mother Nature does not naturally perform the process taken in whole. It is all by intervention of the hand of man.

  • [Avatar for step back]
    step back
    December 30, 2016 12:16 pm

    Once you dig for the “substantial” quantities of gold I “told” you about you too can apply “conventional” isolation and amplification techniques so as to magnify your wealth beyond dreams. Worry not about feasibility. Just go for it! 🙂

  • [Avatar for Edward Heller]
    Edward Heller
    December 30, 2016 10:59 am

    Step, I think you are missing a step. The problem is not that the discovery is not valuable and useful, it is not an invention to the extent that invention requires that something new or improved be created. Applying the conventional to the new information discovered is not invention. The discovery must be used to improve a process that makes something. Applying conventional amplifying techniques to paternal DNA that is obtained from a given sample is not different than applying amplifying techniques from paternal DNA obtained from a different kind of sample. The amplification process is the same.

  • [Avatar for step back]
    step back
    December 30, 2016 10:34 am

    Ned @21-22

    I’m “telling” you there are substantial quantities of gold directly under the cesspool behind your house. The rest should be “conventional” as you say.

    Do you dig?

  • [Avatar for Edward Heller]
    Edward Heller
    December 30, 2016 10:22 am

    Step@20, if Edison had been told by others that tungsten would make a better filament, would he be an inventor of the improved lightbulb with a tungsten filament?

  • [Avatar for Edward Heller]
    Edward Heller
    December 30, 2016 10:18 am

    Paul, thanks for the links to your briefs.

    1. Regarding the ordered combination: all the claims require only amplifying paternal DNA from the “sample.” Yet, your ordered combination argument seems to suggest that the combination produces something unexpected after people of ordinary skill are informed that maternal plasma contains fetal DNA. I do not see that. As explained in Mayo regarding the ordered combination consideration, once one knows about the correlation, everything else is conventional.

    2. I was intrigued, however about your argument that there was invention in “transforming paternal DNA obtained from the serum of a pregnant female to a state where it could subsequently be amplified” was neither well understood, routine or conventional activity previous engaged in by researchers.

    “Conversion of the maternal serum or plasma into paternal DNA is a technical process carried out by the hand of man as explained (Patent 2: 26-42) with reference to the examples (see also the reference in claim 21 to separation of a maternal blood sample into a cellular and a non-cellular fraction).” CIPA amicus brief, at 21.

    Note, that the claims do not actually require transforming paternal DNA from one state to another. The claims start with paternal DNA and then amplify it. What the claims actually require seems well known, including the part where amplified DNA of any kind serves as a better platform or substrate for later detection.

    That said, I think there must have been invention in the process of isolating paternal DNA in maternal serum so that it might be amplified. A claim to this invention probably would had been patent eligible. But it was not claimed.

    In the invention that was actually claimed, there was nothing new except for the discovery that fetal DNA, the source of paternal DNA, existed in maternal plasma.

  • [Avatar for step back]
    step back
    December 30, 2016 10:12 am

    NED o’ 19

    The only thing that Thomas Edison did was to “discover” that tungsten was a feasible filament material for a low voltage incandescent light bulb. He did not “create” a new universe as you insist all inventors must do.

  • [Avatar for Edward Heller]
    Edward Heller
    December 30, 2016 08:14 am

    Paul, this is a comment to two posts of yours not yet posted here. I see that Reyna did say that the output product was “paternally inherited DNA.” He did not say that “amplified cffDNA was a natural product,” which you contend he did say. Perhaps the briefings did not clearly apprise him of the fact that the output product itself was not a product of nature. But what he did say, even if it was in error, is, it seems to me, correct. Paternally inherited cffDNA is in fact a product of nature.

    That does not change that the essence of the holding was that the only thing that the inventors contended that they discovered, the only thing new in the claim, given it everything else was old and conventional, was the discovery of fetal DNA in maternal plasma.

  • [Avatar for Paul Cole]
    Paul Cole
    December 30, 2016 07:42 am

    Following on from my last comment, neither the legal nor the technical expertise of a skilled patent professional should be attributed to the first instance or appellate judges who hear a case. It is therefore imperative that the relevant technical facts should be set out simply and straightforwardly in the expert evidence (if not already present in the patent in issue) so that a non-expert judge will not fall into technical or (at the appellate stage legal) error. The case is likely to be considered by skilled lawyers who a priori may have no more relevant knowledge than an intelligent lay person. Given the severe limits on the word count for appellate briefs in the Federal Circuit and the only slightly more relaxed limits in the Supreme Court, space and opportunity to explain the simple facts of life may not be available, and avoidable errors may turn up in the judicial opinions. We cannot rely on the courts doing their own research and discovering for themselves the relevant facts and law when they are not already present in the evidence and briefs.

  • [Avatar for Paul Cole]
    Paul Cole
    December 30, 2016 07:29 am

    @ Edward Heller

    Believe me, we are indeed looking at the same case which has been studied over here in some detail.

    Using your helpful link to a word-processable text Judge Reyna said:

    “The method ends with paternally inherited cffDNA, which is also a natural phenomenon. The method therefore begins and ends with a natural phenomenon. Thus, the claims are directed to matter that is naturally occurring.”

    and later in his opinion

    “As we noted above, the claimed method begins and ends with a naturally occurring phenomenon.”

    It is inescapable that Judge Reyna indeed held that the amplified cffDNA was a natural product, and that this holding was an important factor in his overall decision.

    These passages were the inspiration for my comment (see the EPI brief) on a method of cooking an omelette: it begins with eggs which are a natural phenomenon, it ends with eggs which are a natural phenomenon, and therefore the cooking method is directed to eggs. The contribution of the chef and the improved palatability of the omelette are to be completely disregarded. In the context of the claimed process, the opinion of Judge Reyna is no different from, and no better than, the example just given.

    As can be seen from his online biographies, Judge Reyna is an acknowledged expert on international trade, but has no scientific training and prior to his appointment to the Federal Circuit little or no experience of patent law. That may explain why he fell into such elementary and egregious error.

    The Linn concurring opinion does not even purport to consider whether the first part of the Mayo/Alice test is satisfied. Although Judge Linn is experienced in patent matters, his degree, as I recall, was in electrical engineering rather than biotechnology.

  • [Avatar for Edward Heller]
    Edward Heller
    December 30, 2016 03:23 am

    Paul Cole@12: This is the court’s reasoning and holding:

    “Like the patentee in Mayo, Sequenom contends that the claimed methods are patent eligible applications of a natural phenomenon, specifically a method for detecting paternally inherited cffDNA. Using methods like PCR to amplify and detect cffDNA was well-understood, routine, and conventional activity in 1997. The method at issue here amounts to a general instruction to doctors to apply routine, conventional techniques when seeking to detect cffDNA. Because the method steps were well-understood, conventional and routine, the method of detecting paternally inherited cffDNA is not new and useful. The only subject matter new and useful as of the date of the application was the discovery of the presence of cffDNA in maternal plasma or serum.”

    https://scholar.google.com/scholar_case?case=7423019950723776446&q=sequenom&hl=en&as_sdt=2006

    Are we talking about the same case? The court did not rest its holding on any assertion that amplified cffDNA was a natural product.

  • [Avatar for Edward Heller]
    Edward Heller
    December 30, 2016 03:14 am

    Night@10, I still invite you to give me a claim that you think that I think is not eligible. You have not, but continue to criticize me as if we were in disagreement when we may not be.

  • [Avatar for Edward Heller]
    Edward Heller
    December 30, 2016 03:11 am

    Step: “Just because cffDNA is “present” does not inherently mean it can be practically captured within a practical sized blood sample and survive the capture or further processing.”

    The solution to this problem seems inherently patentable. But that is not claimed, now is it?

  • [Avatar for Paul Cole]
    Paul Cole
    December 30, 2016 02:25 am

    Very occasionally the judges are not merely wrong but quantifiably wrong. It is great fun to catch them out when that happens.

    The Ariosa/Sequenom opinion characterized the amplified DNA as a natural product. As anyone knowledgeable in the field knows, it is in fact a synthetic product produced by enzymatic polymerization of nucleotides. Further, its abundance on the face of the decision is 1000 to 1,000,000 times that of the original paternal nucleic acid, such an increase creating a product of new form and new utility within the meaning of the Hartranft and Chakrabarty decisions. So the judges in the panel opinion were not just wrong but demonstrably wrong by a factor identifiable on the face of their opinions by a factor of 1000 to 1,000,000.

  • [Avatar for Paul Cole]
    Paul Cole
    December 30, 2016 02:09 am

    @ Edward Heller, comment 9.

    Respectfully you are considering the claim in Sequenom only as isolated elements and not as an ordered combination. The point is made in my brief to the Federal Circuit, which you can access here

    http://patentlyo.com/media/2015/08/Ariosa.COLE_.pdf

    It is further developed in the brief filed by CIPA in support of the CIPA petition, of which I was the lead author

    http://www.scotusblog.com/wp-content/uploads/2016/04/15-1182.amicus.final_.pdf

    As I have briefed in support of the claim, I should not criticize its language or scope.

  • [Avatar for step back]
    step back
    December 30, 2016 12:46 am

    NED @9

    OMG
    You are talking naively just like the science ignorant SOTeti.

    In the Sequenom opinion there is mention of “feasibility”.
    Will the idea work for its intended purpose?
    Just because cffDNA is “present” does not inherently mean it can be practically captured within a practical sized blood sample and survive the capture or further processing. The inventors/discoverers did the nonroutine experimentation of proving that it is “feasible”.

    Before the Wright brothers flew their plane, other people also had the idea of machine powered flight. Try as they might, the others could not make it “feasible”. The Wrights came up with the right stuff (the Wright control system) that made it “feasible”. Feasibility is not a natural, inherent phenomenon. Look up Theranos !!!

    http://www.vanityfair.com/news/2016/09/elizabeth-holmes-theranos-exclusive

  • [Avatar for Night Writer]
    Night Writer
    December 29, 2016 10:41 pm

    >> Even in Europe, the courts and the EPO

    The EPO’s technical natural case law is a disgrace.

    @9: I hope come people respond to Edward. And, I hope you can see the medieval thinking about laws of nature, and also the game of reduction.

  • [Avatar for Edward Heller]
    Edward Heller
    December 29, 2016 08:42 pm

    John and Paul, assuming, for the sake of argument, that the Supreme Court is right that that patents are reserved for “inventions,” and that inventions require that something new or improved, and useful, be created by man, just what did the “inventors” of Sequenom create? The only thing the “inventors” claimed was “new” was the discovery of fetal DNA in maternal plasma. All the other process steps claimed were conventional. The output of the claim was information, not something new or improved.

    Here is the claim:

    1. A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises amplifying a paternally inherited nucleic acid from the serum or plasma sample and detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample.

    The requirement for invention, as are the judicial exceptions as a whole, seem constitutional in nature. It is hard to believe that Congress would have the power to award patents on products of nature, laws of nature and natural phenomenon in the public domain, albeit, yet unknown, for these are not inventions.

    Now, I can see the argument that awarding patents for discovering new products of nature, new natural phenomenon, etc. would provide incentives to make these discoveries. But, truly, would such a law be constitutional?

    Also, Paul, the Supreme Court left nominalism behind decades, if not, centuries, ago. They look instead to the substance of the invention being claimed. What is it that the inventors actually invented? Even in Europe, the courts and the EPO look to the nature of the discover to determine whether it is directed to eligible subject matter.

  • [Avatar for David]
    David
    December 29, 2016 12:24 pm

    The biggest story is perhaps the one that very few understand. The SCOTUS blessed the CAFC’s holding that patents are not private property rights but public rights by denying cert in MCM and Cooper. This holding, first established in the 1980s, first gave us reexamination and then, later, the PTAB.

    What’s next? Under this holding, Congress has free rein decide.

    It will be interesting to watch the renewed Article III challenges once the 9th Justice is seated.

  • [Avatar for EG]
    EG
    December 29, 2016 08:46 am

    “The EPI argued that the petition should be granted because decisions of the lower courts have world-wide implications, repeatedly conflict with internationally accepted standards of patent-eligibility which decisions of this Court do not.”

    Hey Paul,

    A highly important comment to make. The failure of SCOTUS to grant the petition in Sequenom puts the U.S. in breach of its international obligations under TRIPS or at least dangerously close to it. The EPI amicus brief made that clear, especially given that at least four other offices considered the Sequenom subject matter to be patent-eligible. Whether being in breach/potential breach of an international treaty even dawns on SCOTUS is infuriating to say the least.

  • [Avatar for Paul Cole]
    Paul Cole
    December 28, 2016 05:20 pm

    I should have said beyond the mere outward appearance category at (5).

    It is remarkable that Scalia and Garner, Reading Law: the interpretation of legal texts should have received so little attention in the section 101 arguments. At page 73 under the Omitted-Case Canon the authors explain that nothing is to be added to what the text states or reasonably implies (cases omissus pro omissio habendus est) That is, a matter not covered is to be treated as not covered. They go on to quote Felix Frankfurter: “Whatever temptations the statesmanship of policymaking might wisely suggest, construction must eschew interpolation and evisceration. [The judge] must not read in by way of creation.” This chapter provides support for the very point that so many contributors and commentators have made on this topic.

  • [Avatar for Paul Cole]
    Paul Cole
    December 28, 2016 05:00 pm

    Has anyone noticed that the separation of powers issue is addressed in the CIPA brief in Sequenom, though for reasons of tact as CIPA is a UK organization not so strongly in your face?

    The argument was that if claimed subject matter falls as a matter of substance and not mere outward appearance within one of the four categories of Section 101, then it cannot be removed from eligibility by judicial exception, however old the judicial exception rules are. If the judicial exceptions are invoked to deny eligibility to situations within the mere outward appearance category, then it can be argued that the courts are trespassing on the legislative power of congress, a position that the late Justice Scalia, for one, rejected.The point is, I believe, still open and still valid.

    So in future cases, arguments in favor of patentability should not start by invoking Myriad/Mayo but by showing that the claimed subject matter falls clearly and unequivocally as a matter of substance within one of the four eligible categories. It is very striking in the raft of recent CAFC decisions how little attention is paid to these categories and how much attention is paid to Myriad/Mayo. In uncritically following this line of reasoning we are our own worst enemies.

  • [Avatar for Paul Cole]
    Paul Cole
    December 28, 2016 04:44 pm

    @ John White and EG

    The interesting question on Sequenom is not whether cert was denied but in all the circumstances WHY cert was denied and what the implications are.

    The EPI argued that the petition should be granted because decisions of the lower courts have world-wide implications, repeatedly conflict with internationally accepted standards of patent-eligibility which decisions of this Court do not, and jeopardize research investment in medicine and other life sciences. Insofar as the argument was that the lower courts were over-reaching the rules of law laid down by the Supreme Court, the Justices may have concluded that a satisfactory result could eventually be arrived at within the lower courts and without their intervention. They may also have considered that they had already ruled sufficiently on the question in recent years, that the outcome had not been to resolve legal controversy as hoped, and that a further intervention at this time would not be helpful. It does not follow that denial of cert necessarily implies approval of Sequenom and that this decision is a valuable authority for other cases. As has been noted, recent cases in the software arts have pointed to limitations in the applicability of the Mayo/Alice approach, as Bob Stoll and Steve Kunin have pointed out.

  • [Avatar for Anon]
    Anon
    December 28, 2016 10:09 am

    EG,

    Jurisdiction stripping must be seriously considered in regards to a different fox guarding a different henhouse.

    The Supreme Court has shown that it itself cannot be trusted to respect the separation of powers in its addiction to legislating from the bench when it comes to the statutory law that is patent law (especially – but not exclusively – the nasty habit of the Court shoving its fingers into the wax nose of 101).

  • [Avatar for EG]
    EG
    December 28, 2016 09:17 am

    “The single, over-arching, most important patent event in 2016 was, for me, easily, the denial of cert by the Supreme Court in Sequenom.”

    Hey John,

    Amen to that as well! You have the Federal Circuit “crying out” to SCOTUS for help and almost two dozen amicus briefs supporting Sequenom’s petition for cert. Yet Our Judicial Mount Olympus denies a petition on a serious issue of substantive patent law, yet grants one (TC Heartland) on frankly a “rinky dink” procedural issue of proper venue. Just shows you where the priorities of Our Judicial Mount Olympus sadly lie: duck the serious issue of substantive patent law that affects the patent owner, but take yet another petition for an opportunity to “pound” the Federal Circuit,

  • [Avatar for EG]
    EG
    December 28, 2016 09:11 am

    “Congress is debating legislation to rein in deference to agencies under the Chevron doctrine.”

    Hey Peter,

    Amen to that! The Chevron doctrine was a terrible misstep by SCOTUS, amongst many missteps. Deferring to an agency’s view of their enabling statute is like the fox guarding the chicken cop, and amounts, in my view, to an improper abrogation to a non-judicial branch of what Congress meant the statute to say. Any agency interpretation of its enabling statute should be subject to de novo review in all instances.