Posts in Litigation

A number of organizations, including Ericsson, Nokia, Philips, Qualcomm, the Innovation Alliance and the Licensing Executives Society, have sent two separate letters to U.S. Attorney General William Barr, USPTO Director Andrei Iancu, and Secretary of Commerce Wilbur Ross stating their support for the United States’ decision to withdraw the Department of Justice, Antitrust Division’s assent to the 2013 joint DOJ-U.S. Patent and Trademark Office “Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments” (the 2013 Joint Policy Statement). The letter sent by Ericsson, Nokia, Philips, and Qualcomm begins by explaining that those signing the letters collectively spend many billions of dollars annually to “the development of cutting-edge that substantially contribute to the social welfare and quality of life of U.S. consumers,” and “and employ tens of thousands of people in the U.S.” The letter goes on to explain that injunctions are necessary to address the widespread patent infringement that has occurred in recent years; infringement that risks innovators’ ability to continue to innovate and create next generation technologies. Without property protections it is economically irrational to invest the billions of dollars required to create cutting-edge technologies.

The Federal Circuit recently reversed a decision of the Patent Trial and Appeal Board (Board) finding claims of a patent owned by PersonalWeb Technologies, LLC to be invalid.  Apple, Inc. (Apple) petitioned for inter partes review (IPR), and the Board found certain claims of the patent to be invalid as obvious in light of two references.  The Federal Circuit reversed, holding the Board provided insufficient evidence to support a finding of inherency.  Pers. Web Techs., LLC v. Apple, Inc., No. 2018-1599, 2019 U.S. App. LEXIS 6919 (Fed. Cir. Mar. 8, 2019) (Before Moore, Taranto, and Chen, Circuit Judges) (Opinion for the Court, Chen, Circuit Judge).

This week in Other Barks & Bites: the U.S. Patent and Trademark Office promotes Scott Boalick to Chief Judge of the Patent Trial and Appeal Board (PTAB); the agency also announces a new pilot program for motions to amend at the PTAB; India’s Cabinet votes to bring trademark and industrial design law into accord with international standards; a trial date is set in the copyright case brought by the heirs of Marvin Gaye against Ed Sheeran; a Southern California district judge rules that a Dr. Seuss/Star Trek mash-up is a transformative fair use; Apple alleges that someone has tampered with a key witness in the Qualcomm patent infringement case; and UK finance ministers issue a report calling for more antitrust activity against American tech giants, including Facebook and Google.

The first decision issued by the new USPTO Precedential Opinion Panel (POP) tackled the difficult issues of statutory interpretation of sections 35 U.S.C. § 315(b) and 35 U.S.C. § 315(c). In sum, the Board determined that both same party and issue joinder is proper in inter partes reviews (IPRs). The Board also determined that otherwise time-barred petitions are proper when accompanied by a joinder request to a pending IPR. The Board interpreted the statute in a manner to maintain broad discretion for the Agency. The POP could have properly interpreted Section 315(c) by first focusing on the statutory language “join as a party” as being limited to any person not already a party. Instead, the decision dismissed this viewpoint and stated that “the statutory phrase ‘any person’ broadly applies to the phrase ‘join as a party’.” Although I disagree with the emphasis on “any person,” I anticipate that the Board’s reasoning on both same party and issue joinder would be upheld as proper statutory interpretations by the Federal Circuit, if appealed.

In September 2018, the United States Patent and Trademark Office (USPTO) announced the substantial revision of Standard Operating Procedures (SOPs) for the paneling of matters before the Patent Trial and Appeal Board (PTAB) (SOP1) and precedential and informative decisions (SOP2), based upon feedback the Office received from stakeholders, courts, legislators, and six years of experience with America Invents Act (AIA) trial proceedings. Now, the USPTO’s Precedential Opinion Panel (POP)—which includes USPTO Director Andrei Iancu, Commissioner for Patents Drew Hirshfeld, and Acting Chief Administrative Patent Judge Scott Boalick—has issued its first ever decision, holding that a petitioner may be joined to a proceeding in which it is already a party; that the Board has discretion to allow joinder of new issues in an existing proceeding; and that the existence of a time bar under 35 U.S.C. § 315(b) is one of several factors to consider when exercising this discretion. Despite that guidance, the POP emphasized that such discretion should be used only in limited circumstances, “namely, where fairness requires it and to avoid undue prejudice to a party.” Because the instant request for joinder was filed as a result of Petitioner’s errors, the Board dismissed the IPR petition, noting that “there are no fairness or undue prejudice concerns implicated, and the Petition is otherwise time-barred under § 315(b).”

In an expected move, Huawei filed a lawsuit against the United States in the U.S. District Court for the District of Texas on March 6. Huawei Technologies v. U.S., 4:19-cv-00159, U.S. District Court, Eastern District of Texas (Sherman). In its mammoth 54-page complaint, the company alleges the United States and its agencies violated the Federal Constitution when it singled out Huawei in the 2019 National Defense Authorization Act (NDAA). U.S. authorities are concerned that China could use Huawei’s equipment to spy on communications networks. Having offices in Plano, Huawei had jurisdiction to file in the Eastern District of Texas, widely recognized as a plaintiff-friendly court for technology matters. But despite its considerable resources and legal muscle, Huawei will have a challenging time proving its case in court.

The Electronic Frontier Foundation (EFF) is at it again, this time with what they refer to as a Save Alice campaign. The EFF does not like the Revised Patent Eligibility Guidance published by the United States Patent and Trademark Office (USPTO) in January 2019 and is charging USPTO Director Andrei Iancu with attempting to subvert the United States Supreme Court and essentially ignore Alice v. CLS Bank. These assertions are bogus, and truthfully, they are hardly worth the consideration of thoughtful individuals interested in a meaningful dialogue about the state of the U.S. patent system. Director Iancu has issued guidance that strictly follows exactly what the Supreme Court ruled in Alice, period. Over the years patent examiners, Administrative Patent Judges, district courts, and the Federal Circuit have dramatically expanded Alice. It was admitted in Alice that the “invention” could be coded over a weekend by a second-year college student, which means it was extremely trivial and not innovative.

This week on Capitol Hill, both houses of Congress are abuzz with a full schedule of hearings related to science, technology and innovation topics. In the House of Representatives, various committees explore a proposed net neutrality bill, innovation in the aviation industry, and ways to improve competition in the pharmaceutical industry—a hot topic of debate in recent weeks. Both the House and the Senate will hold hearings on the future of America’s space program. The Senate will also consider consumer data privacy regulations, rural broadband investments, and military applications of artificial intelligence. On Tuesday, a pair of events at the Brookings Institution will look at the impact of technological advances on public policy, as well as the artificial intelligence race between the U.S. and China.

In a previous essay, I discussed a U.S. Supreme Court case that had nothing to do with patent law, but that patent practitioners may wish to note. That discussion pertained to a decision indicating that constitutional arguments ought to be preserved before an administrative agency?such as the United States Patent and Trademark Office?even if the agency lacks the jurisdiction to decide constitutional questions on their merits. In this essay, I turn to one of the most humorous Supreme Court decisions in recent years. Even though this case seems far removed from patent law, it may hold a serious lesson for patent practitioners.

The U.S. Supreme Court’s 2013 ruling in Association for Molecular Pathology v. Myriad Genetics changed the landscape of what is considered patentable material in the context of genetic inventions. In the five years since Myriad, companies have pushed the boundaries of patenting certain types of genetic materials. Despite Myriad’s express statement that it was not considering “the patentability of DNA in which the order of the naturally occurring nucleotides has been altered,” the courts have not yet established the contours of how much nucleotide sequences need to be altered in order to “create something new” in order to be patentable. However, as we discuss in the next section, we expect the Court to address these questions as biotechnology companies increasingly invest resources into emerging, expensive technologies involving genes and seek to protect their investments through patents.

This week in Other Barks & Bites: The United Nations highlights the importance of women in innovation on International Women’s Day; Comments due today on USPTO Section 101 Guidance; FDA Commissioner Scott Gottlieb resigns; a Senate bill with six bipartisan co-sponsors would increase requirements on patent disclosures for biologics; USPTO Director Iancu speaks out on Alice; Apple announces its intention to increase its presence in San Diego while its patent battle with Qualcomm heats up; Chinese copyright registrations increased by double digit percentage points in 2018; Stanley Black & Decker faces off against Sears in a trademark infringement battle over branding for Craftsman tools; Amazon announces that it will close dozens of pop-up stores in the U.S.; and Democrats from both houses of Congress introduce a new net neutrality bill.

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.

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.