Posts in IPWatchdog Articles

I hold nine U.S. computer security device recovery and communication patents relating to Findmyphone technology, which helps owners display return or recovery information before or with the lock screen to help get their smartphone, tablet, computer or laptop back. In February, I was notified that my latest U.S. application overcame a 35 USC 101 objection following an amendment that explicitly referenced Director Andrei Iancu’s Section 101 Guidance. My story should provide some hope that the guidance can provide a clearer path for inventors on how to adjust their claims to meet the USPTO’s new high standards to achieve success and satisfy the requirements that Iancu is looking for to ensure stronger U.S. software patents.

The state of patent eligibility in America is shocking. Between the passage of the 1952 Patent Act and 2012, when the U.S. Supreme Court decided Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct. 1289 (2012), the patent eligibility threshold was an exceptionally low hurdle. A group of Senators and Representatives are currently considering a legislative fix to this patent eligibility debacle created by the Supreme Court and perpetuated by a Federal Circuit unwilling to define the contours of a sensible patent eligibility test. These talks, which are being held in closed-door roundtable format, will seek legislative language to introduce soon. It is anticipated that bills will be introduced in both the House and Senate sometime this summer. What those bills will look like seems to be genuinely up in the air—or perhaps it’s better to say open for discussion. If the discussion should turn to the one thing Congress could do that would have the most impact, the answer would be clear. In order to have the most immediate, positive impact Congress must expressly overrule Mayo. The root of all the patent eligibility evil lies with that single Supreme Court decision.

What happens when technology convergence fundamentally changes your patent risk profile? What do you do when your customer demands broad intellectual property (IP) indemnification and your supplier provides almost none? Industries that clear patents as a standard practice are integrating technology from industries that specifically do not clear patents. If this sounds like a potential train wreck, well, it is. We recently completed a survey of 16 companies’ activities with respect to freedom to operate. In that study, we found substantially divergent patent risk mitigation strategies. For example, as you would expect in the chemical industry, companies did full patent clearance searches of their new molecules and processes—they wanted freedom to operate. That means they searched in all their major markets for any patents they might infringe prior to releasing new products. In contrast, high technology companies did no clearance search prior to product launch, but they adopted other techniques for reducing their overall risk—they wanted freedom of action. For professionals in each Industry, their respective risk mitigation strategy makes sense. But how can it be that in one industry people review and clear patents and in another they do not? The answer lies in the specific patent risks faced in each industry, and we will explore some of those risks.

On February 12, the China Trademark Office (CTMO) published a draft regulation titled “Several Provisions on Regulating the Application for Registration of Trademarks” for public comment. This draft is the first attempt at providing a vetting system to spot and reject fraudulent trademark applications by malicious squatters and punishing bad actors and their trademark agents for such activity.

In May of 2017, the United States Supreme Court delivered a unanimous decision in TC Heartland LLC v. Kraft Food Group Brands LLC that reversed the Federal Circuit and said that 28 U.S.C. 1400(b) remains the only applicable patent venue statute, that 28 U.S.C. 1391(c) did not modify or amend 1400(b) or the Court’s 1957 ruling in Fourco Glass Co. v. Transmirra Products Corp., and that the term “residence” in 28 U.S.C. 1400(b) means only the state in which a company is incorporated. Since TC Heartland, courts and plaintiffs have struggled to understand the real world application of this decision; most recently, the Federal Circuit in In re Google allowed a case to remain in the Eastern District of Texas because Google had servers there. Thus, while the decision has undoubtedly resulted in a shift away from the heyday of the Eastern District of Texas, the precise parameters of a “physical presence” sufficient to satisfy venue remain murky. To examine the effect TC Heartland has had so far, I recently sat down with Mike Oropallo of Barclay Damon, who has been out there litigating patent cases around the country. Among other observations, Oropallo says that—as usual—it all comes down to the Federal Circuit. Read on for more.

The Federal Circuit recently vacated a district court’s decision dismissing a complaint under Federal Rule of Civil Procedure 12(b)(6). Coda Development S.R.O. v. Goodyear Tire & Rubber Co., No. 2018-1028, 2019 U.S. App. LEXIS 5144 (Fed. Cir. Feb. 22, 2019) (Before Prost, C.J., Wallach, Hughes, J.) (Opinion for the Court, Prost, C.J.) Coda Development and Frantisek Hrabal (collectively “Coda”) sued Goodyear Tire & Rubber Company for trade secret misappropriation and correction of inventorship of 12 Goodyear patents directed to self-inflating tire (SIT) technology. Coda alleged that, during several confidential meetings held between the parties, Goodyear copied Coda’s inventions and filed patent applications based on those inventions without naming Coda as an inventor or co-inventor. The district court dismissed the complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted and denied the Plaintiff’s motion for leave to amend the complaint.

I am sure that the justices of the Supreme Court did not anticipate the confusion they created when they issued their controversial decision in Alice Corporation v. CLS Bank in 2014. That case effectively upended well-established precedence when the Court unanimously held that a computer-implemented scheme for mitigating settlement risk was not patent eligible subject matter because the claims were drawn to an abstract idea, and that merely requiring generic computer implementation fails to transform the claims to eligible subject matter. The Court itself said their holding was to be narrowly construed, but in providing a vague, two-step test to determine whether something is patent eligible, they unleashed a world of hurt on some of our domestic industries seeking patents in cutting-edge technologies. The application of the Alice test to some of our health-related industries is having disastrous effects. On February 6, 2019, in a split decision, the United States Court of Appeals for the Federal Circuit (CAFC) found in Athena Diagnostics v. Mayo Collaborative Services that diagnostic methods are not patent subject matter eligible unless they embody a separate technical improvement beyond the correlation of certain antibodies in bodily fluids to particular diseases. In a footnote, the majority lamented that they felt compelled by Supreme Court precedence to render their decision, but recognized that protection of diagnostic methods would be for good for society. The Athena case does not portend well for the CAFC adoption of the recent USPTO guidance on Section 101. The courts will eventually be able to either put their imprimatur on those guidelines or discard them. The sooner that is done, the better.

USPTO Director Andrei Iancu’s 2019 Revised Patent Subject Matter Eligibility Guidance promises to virtually eliminate the greatest patent problem of our time. If implemented properly by the examiners and Patent Trial and Appeal Board (PTAB) judges, the guidance could solve the 101 mayhem and the incredible harm that it has done to inventors of computer implemented inventions. The guidance will also increase the value of patents, since strategic infringers will not be able to use the PTAB as the killing ground for patents using subject matter eligibility. Director Iancu needs us to support him with positive public comments as justification for his guidance and, very importantly, to suggest improvements to his guidance for its final/future version(s) and its implementation. Please send the following text with any of your edits to [email protected] by the March 8, 2019 deadline.

The Licensing Executives Society (LES) 2017 High Tech Deal Term & Royalty Rate Survey is a milestone event for at least three reasons. First, it was the third survey since the inaugural survey in 2011, and the three surveys fully covered the time period of a decade—from 2008 to 2017. Second, the 2017 Survey marked the fifth anniversary of Inter Partes Review (IPR) procedure and the third anniversary of the Supreme Court’s ruling in Alice v. CLS Bank. Third, at the time of the Survey, a new USPTO Director was nominated by the Trump Administration, bringing a fresh glut of uncertainties, anxieties, and hopes to the already jittery IP market.

Those who practice in the field of patents tend to focus almost exclusively upon developments in patent law and pay less attention to developments in other areas of law. This is to be expected; patent cases don’t usually overlap with issues such as employment law or criminal law; so why bother reading up on those subjects? And yet, it can actually be useful to keep abreast of Supreme Court decisions that on their faces do not pertain to patent law. A few days ago, IPWatchdog Founder and CEO Gene Quinn discussed one such case. Though that case was not patent-related, he felt the decision may be of interest to patent practitioners, especially those dealing with patent eligibility under section 101. In that same vein, following is a discussion of a (less recent) decision from the United States Supreme Court, Elgin v. Department of the Treasury, 567 U.S. 1 (2012), that patent practitioners may have overlooked. On its face, the case deals with employment law, but it includes aspects of federal administrative practice that can affect patent practitioners.

Kathi Vidal is the managing partner of of the Silicon Valley office of Winston & Strawn LLP. Kathi is also one of the top patent litigators in America and one of the most interesting thought leaders in the legal industry. During this episode, we discussed how Kathi became so successful, what it’s like to be an IP lawyer in Silicon…

Justice Ruth Bader Ginsburg delivered the opinion for a unanimous Supreme Court in Fourth Estate v. Wall-Street.com, et. al. Monday morning, March 4, holding that copyright registration occurs—and thus, an infringement action can only be brought—once the Copyright Office officially registers a copyright. The case considered whether “registration of [a] copyright claim has been made” within the meaning of Section 411(a) of the Copyright Act “when the copyright holder delivers the required application, deposit, and fee to the Copyright Office, as the Fifth and Ninth Circuits have held, or only once the Copyright Office acts on that application, as the Tenth Circuit and, in the decision below, the Eleventh Circuit have held.” In the end, the Court unanimously agreed that registration is a requirement to commence suit, but, once granted, the copyright owner can sue for infringement that occurred both before and after registration.

On Monday, March 4, Justice Brett Kavanaugh issued the decision for a unanimous Supreme Court in Rimini Street, Inc. v. Oracle USA, Inc., which asked whether the meaning of “full costs” under 17 U.S.C. § 505 of the U.S. Copyright Act extends to damages outside of the six categories of costs that U.S. district courts can award against a losing party as outlined in 28 U.S.C. § 1821 and 28 U.S.C. § 1920. In siding with petitioner Rimini Street, the Supreme Court held that “full costs” in the copyright litigation context are limited to Sections 1821 and 1920, reversing the Court of Appeals for the Ninth Circuit’s decision to award $12.8 million to Oracle covering litigation expenses outside of the statutory schedule of costs.

This week on Capitol Hill and in the Washington D.C. area, the Supreme Court grants cert in Iancu v. NantKwest; the U.S. House of Representatives will hold several hearings on important topics in technology, including electronic health records modernization for veterans, cybersecurity measures for voting systems and research on the nexus between energy and water. House committees will also explore ways to improve broadband access for small businesses and promote generic competition to reduce branded pharmaceutical prices. Drug pricing, which often involves a focus on patents, is the subject of a two-part hearing series in the U.S. Senate. Other Senate hearings this week will look at data breaches in the private sector and IP issues related to Chinese trade. The week is book-ended by a pair of events hosted by the Information Technology & Innovation Foundation, including a Thursday event that looks at the impact of the Bayh-Dole Act of 1980 and controversial calls to enforce certain provisions of the law to reduce drug prices.

Under normal circumstances, infringement and misappropriation of the intellectual property (IP) rights of others are subject to civil liability under U.S. federal (and some states’) law; the remedies for those whose rights have been violated typically include money damages or some form of equitable relief, such as an injunction. However, sometimes the conduct of offenders is so egregious and the remedies so inadequate that pursuit of a private cause of action is insufficient to make IP owners whole. To make matters worse, civil remedies do little to deter further infringement or misappropriation on the part of individuals and entities with more than enough money to game the system. Known as efficient infringers, according to some IP practitioners, they have mastered the business practice of paying out as little in damages as possible and refusing to negotiate licenses with IP owners, all the while bullying IP owners into spending their much smaller fortunes in order to defend their IP rights or to forfeit them—the end result sometimes being the invalidation or cancellation of their IP. Accordingly, lawmakers have enacted legislation with the goal of creating true deterrents against infringement and misappropriation by imposing criminal sanctions on a narrow set of conditions associated with infringement and misappropriation. However, the law does not criminally punish infringement of a particular type of IP: patents.