Posts in Guest Contributors

Disruptive innovation, like what we are seeing in the health care industry, often causes disruption elsewhere, and the legal landscape is no exception. The life cycle of digital health products and services — from conception to promotion — presents a unique set of legal challenges, and there is no one-size-fits-all approach to the matrix of issues facing these products. As a lawyer, these are the kind of projects that remind us of law school exams — lots of issues and, often, no clearly defined answers or solutions… This article explores some of those tools and why one might choose to pursue one or, in the more probable case, some combination of them.

The analysis of unique patent numbers asserted each year surprisingly suggested a decline since 2010. This is an important measure, because it shows that the rise in the number of lawsuits reported by many studies is the result of only a few players (plaintiffs) who had to file many cases due to AIA and joinder rules. Additionally, although it was assumed by many experts that the number of patents per case will increase over time in order to reduce the risk of invalidation through IPR, that number has not changed significantly. In fact, it dropped last year.

The Court recognized that “‘[c]ommon sense has long been recognized to inform the analysis of obviousness if explained with sufficient reasoning.’” However, “there are at least three caveats to note in applying ‘common sense’ in an obviousness analysis.” First, common sense is typically invoked to provide a known motivation to combine, and not to supply a missing claim limitation. Second, while some cases have allowed use of common sense to supply a missing claim limitation, “the limitation in question was unusually simple and the technology particularly straightforward.” Third, common sense “cannot be used as a wholesale substitute for reasoned analysis and evidentiary support, especially when dealing with a limitation missing from the prior art references specified.”

On appeal, the Federal Circuit reviewed whether there was substantial evidence supporting the district court’s finding that Nathan and Matheson should be added as co-inventors. In determining that the inventorship evidence below was sufficient, the Court reiterated that all inventors are required to be named even if their contribution is limited to a single aspect of a single claim, and that co-inventors need not have collaborated at the same time to be named.

While much of the specification focuses on a scheme involving patient-identifying information, the Court held that a specification’s focus cannot be limited on one particular embodiment where it expressly contemplates other embodiments or purposes. The specification clearly disclosed that sorting and storage could be done in a number of ways, not only by patient-identifying information. The Court held that the district court erred when it determined that the specification limited the invention to storing prescription containers based on patient name and slot availability. Thus, the Court reversed the grant of summary judgment and remanded the case for further proceedings.

The Court held that the Board improperly continued to apply the BRI standard following the expiration. While the examiner properly applied the BRI prior to expiration, the BRI standard no longer applies the moment the patent expires – even if it means the Board applies a different standard than the examiner.

The Court noted that all of Warsaw’s arguments related to the Board’s findings of fact, and were therefore reviewed for “substantial evidence.” The Board’s reconciliation of the potentially conflicting descriptions in the reference amounted to a re-weighing of evidence, which is not permitted under the standard of review. The Court also affirmed the Board’s motivation to combine analysis. Finally the Court summarily rejected Warsaw’s arguments presented for the first time on appeal.

However, in spite of the Court’s determination that the Markush group was closed, the Court agreed with Multilayer that the use of the transitional phrase “consisting of” does not necessarily suggest that a Markush group is closed to mixtures, combinations, or blends. Although recognizing that, typically, there exists a presumption that Markush groups are closed to “blends,” the Court acknowledged that the presumption can be overcome by a combination of other claim language and the specification itself. Here, the Court found explicit evidence of an intent to include blends insofar as the Markush group itself included blends and categories of resins that overlap, and certain dependent claims required layers of film to comprise blends of at least two resins.

Pactiv, LLC v. Lee presents a question fundamental to all ex parte reexaminations: whether, after the PTO initiates an ex parte reexamination, that proceeding is limited in scope to the question determined to qualify as the “substantial new question of patentability.” The “substantial new question of patentability” identified by the Director included certain prior art references. But the examiner subsequently rejected several of Pactiv’s claims due to wholly different prior art references. There was never any determination under 35 U.S.C. § 303 that these other references raised a “substantial new question of patentability,” nor did the Director issue the order required under Section 304 identifying a “substantial new question of patentability” based on these wholly different prior art references.

The validity of secondary markets for a variety of goods and services is never questioned. Securities are sold and resold many times after their initial offering, homes and buildings and built and resold many times, as are automobiles. A quick review of the products listed an eBay leaves little doubt that a robust secondary market exists for many goods and services across the American economy. However, not everyone is in agreement that a secondary patent market is beneficial. For some reason, many people villainize companies that practice patent licensing. Even resorting to the use of pejorative terms such as “patent troll” to describe these businesses. These detractors fail to account for the fact that inventors may not be the most efficient licensors. In addition, they don’t take into account that, just as a builder generates revenue to build more buildings by selling their current ones, companies that sell or license patents help fund further R&D with the proceeds.

It is the personal relationships and dynamics between those junior and senior examiners where the final, hidden gate to patentability stands. Between them, the junior examiners perform the heavy lifting of searching the prior art and preparing the official actions, and the more senior examiners carry the burden of signing those official actions and allowing applications to grant… To be effective, patent practitioners can do more than narrowly obsess over a single novel and non-obvious element in the claims… Patent practitioners can provide junior examiners with an “elevator pitch” for allowability. They can arm junior examiners with technically clear and concise arguments that are fast to recount and express.

What causes operating companies to sell their patents? Our intuition tells us that patent sales take place when the seller is in financial distress or the company is underperforming. We asked ourselves whether data aligned with our intuition… 71% of the sales occurred when the seller underperformed the overall market by more than 5 percentage points.

The information the FTC has been collecting regarding patent assertion entities is extensive. Along with standard corporate information, the FTC is making a survey of each patent in PAE portfolios going back to 2008 to investigate the date of patent acquisition, the patent’s maintenance fee status as well as the assertion history for all patents upon which the PAE has attempted to enforce its rights. Firms are also being asked to describe their business model, the methods used to organize their patent portfolios and the aggregate costs of patent acquisition and assertion. The FTC has sent information requests to 25 PAEs in order to build its evidence.

A consistent charge against the patent system is that it denies the poor access to critical medicines. This belief led the UN Secretary General to launch his High Level Panel on Access to Medicines that is supported by groups like Universities Allied for Essential Medicines (UAEM)… As to UN Secretary General’s claim of a “policy incoherence” between IP rights and access to medicines, without the patent system there will be a lot fewer drugs to access here or abroad. That’s a thought he might ponder.

Companies at the cutting edge of their industries have realized the immense value of their patent portfolios and are still trying to make the most of that value – but it is not easy. A semiconductor or electronics company can have tens of thousands of patents; finding the patents that are the most valuable is one of its biggest problems. These patents are needed to determine the strategy for patent sale, licensing or litigation, and without them the company is basically stuck and can’t move forward. The process is like sorting the grain from the chaff.