Posts in Litigation

On November 1, Meredith Addy of AddyHart P.C. and I submitted an Amici Curiae brief to the U.S. Supreme Court on behalf of Freenome Holdings and New Cures for Cancers in support of the Petition for Certiorari in Athena Diagnostics v. Mayo Collaborative Services. If the Supreme Court does not take this case, it is unlikely to reconsider its decisions on Section 101 of the U.S. patent law. This may be our last gasp judicial effort. The Supreme Court takes cases raising inconsistencies in the law or a circuit split. We knew parties/amici would focus on the Federal Circuit’s “internal circuit split,” so we took a different approach and urged the Court to resolve five critical inconsistencies in the law, summarized below.

On October 22, the U.S. House of Representatives passed, by a vote of 410-6, the Copyright Alternative in Small-Claims Enforcement Act (the “CASE Act”). The Act proposes to set up what is in essence a voluntary administrative procedure conducted in the U.S. Copyright Office whereby artists and other copyright holders can protect their copyrights without the cost, expense and difficulty associated with filing a full-blown copyright infringement litigation in federal court. Based on the vote in the House, the CASE Act appears to enjoy widespread, bipartisan support in Congress—a rarity these days, to be sure. The appeal is simple: give individual artists and small companies an affordable mechanism to enforce their rights in their creative works. But although the political appeal of the CASE Act is obvious, the practical reality of the CASE Act is something entirely different. Indeed, there are three gaping holes in the CASE Act which may cause the small claims process it sets forth to have only very narrow appeal and to be an effective dispute resolution mechanism in only a narrow subset of cases.

The Federal Circuit’s decision in Arthrex, Inc. v. Smith & Nephew, Inc. generated excitement late last week, when many initially speculated that the Patent Trial and Appeal Board (PTAB) would not be able to continue operations as usual in light of the ruling. However, now that the dust has settled, it seems more likely that the effects of Arthrex will be limited to a small subset of cases. While he could not comment on next steps directly as it is a pending matter, USPTO Director Andrei Iancu suggested during a panel at the John Marshall Law School’s 63rd IP Conference in Chicago on Friday that the Office would not be significantly burdened by the decision. USPTO guidance is likely to be issued soon. Of course, the decision has not done much to bolster the already shaky reputation of the PTAB or its Administrative Patent Judges with some, and there are several scenarios in which the Federal Circuit’s quick fix to avoid shutting down the Board entirely might be challenged. Below are some early reactions to the ruling and predictions about how it may play out. 

This week in Other Barks & Bites: the Federal Circuit hands out three precedential decisions; the USPTO sends its SUCCESS Act Report to Congress; the Copyright Royalty Board proposes royalty rates on ephemeral recordings for certain Internet transmissions; China unveils legislation to create a public blacklist for patent offenders; the Ninth Circuit revives a copyright case against Taylor Swift’s “Shake It Off”; Google agrees to buy Fitbit for $2.1 billion; and the USPTO seeks public comments on the type of IP protections that should be extended to inventions developed by AI technology.

The U.S. Court of Appeals for the Federal Circuit, in an opinion authored by Judge Moore, has ruled that the current statutory scheme for appointing Administrative Patent Judges (APJs) to the Patent Trial and Appeal Board (PTAB) violates the Appointments Clause of the U.S. Constitution as it makes APJs principal officers. APJs are presently appointed by the Secretary of Commerce, but principal officers must be appointed by the U.S. President under the Constitution, Article II, § 2, cl. 2. To remedy this, the statutory removal provisions that are presently applied to APJs must be severed so that the Secretary of Commerce has the power to remove APJs without cause, said the Court. Dismissing the government’s and appellees’ arguments that the Appointments Clause issue had been waived by the appellant, Arthrex, Inc., because Arthrex had not raised the issue with the PTAB, the Federal Circuit said that “this is an issue of exceptional importance, and we conclude it is an appropriate use of our discretion to decide the issue over a challenge of waiver.”

Dismissing the government’s and appellees’ arguments that the Appointments Clause issue had been waived by the appellant, Arthrex, Inc., because Arthrex had not raised the issue with the PTAB, the Federal Circuit said that “this is an issue of exceptional importance, and we conclude it is an appropriate use of our discretion to decide the issue over a challenge of waiver.”

The United States Court of Appeals for the Federal Circuit decided on October 3 to affirm the ruling by the United States District Court for the District of Delaware that the asserted claims of U.S. patent number 7,774,911 are directed to patent ineligible subject matter under Section101. Much has been written about the majority and dissenting opinions. Here, we concentrate on what the patent practitioner can do when drafting a patent application in light of the case. Whether one personally agrees or disagrees with the court ruling, and there are interesting comments in the dissent about both claim limitations and legal principles, the lessons from the court ruling are clear.

Just two months after the end of her second copyright infringement lawsuit, fashion model Jelena Noura “Gigi” Hadid was sued for a third time, on September 13, for copyright infringement for posting paparazzi photos to her social media accounts without the license or permission of the photographer. Other celebrities, including Jennifer Lopez, Victoria Beckham and, most recently, Justin Bieber, have made news for the same situation. This trend falls into an interesting intersection of two significant tenets of law: a celebrity’s right of publicity in their own image and a photographer’s right to copyright their artistic work.

Trading Technologies International, Inc. (TT) has filed a second petition with the U.S. Supreme Court asking it to review a Federal Circuit holding that computer-implemented inventions that do not improve the basic functions of the computer itself are directed to abstract ideas and therefore patent ineligible. The present petition relates to U.S. Patent Nos. 7,685,055 (the “’055 patent”); 7,693,768 (the “’768 patent”); and 7,725,382 (the “’382 patent”). The petition TT filed in September relates to Patent Nos. 7,533,056, 7,212,999, and 7,904,374. The patents are all from the same family as three other patents found patent eligible by the CAFC in 2017. The latest petition argues that the Federal Circuit “simply declined to address conflicting Federal Circuit authority involving the same patent family or the line of other Federal Circuit decisions adopting and applying that authority’s reasoning,” and, therefore, clarification is needed from the High Court. The company’s argument may also get a boost from another petition filed recently appealing the controversial decision in ChargePoint v. Semaconnect, in which the Federal Circuit held that a vehicle charging station was not patent eligible.

Patent investigations at the International Trade Commission (ITC) have been on an upward trend in the last few years. In 2018, the most recent year with complete data, 74 new complaints were filed and there were 130 active investigations, compared to the 117 active investigations in 2017. The trend appears to be continuing in 2019. In today’s global economy, with so many types of products and components being imported into the United States, a rise in patent investigations means that a large number of U.S. companies and their customers are at risk of having their supply chain disrupted. This can result in a potential loss of income, breached contracts, disgruntled customers and general uncertainty regarding the future.

A professor is entitled to a payment of £2 million (about $2.5 million) from his former employer due to the “outstanding benefit” from his invention, the UK Supreme Court has ruled. The judgment was handed down on October 23, eight months after the Court heard the case and some 37 years after the invention was conceived. Cases over outstanding benefit in the UK are rare, and the amounts involved relatively small. But this decision by the Supreme Court may embolden inventors to bring more applications for compensation, given the clarification of what constitutes “outstanding benefit,” particularly in the context of large, diverse businesses.

On October 23, the U.S. Court of Appeals for the Federal Circuit (CAFC) affirmed a decision of the Patent Trial and Appeal Board (PTAB) that Google failed to meet its burden of establishing that Koninklijke Philips’ patent claims at issue were unpatentable on either of two grounds: 1) anticipation by Patent Cooperation Treaty (PCT) International Application Publication No. 98/52187 (the Tucker invention), or 2) obviousness over Tucker in view of the prior art. n 2016, Google petitioned the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) for inter partes review (IPR) of Claims 10-16 and 20-21 of U.S. Patent No. 6,772,114 (the ’114 patent) owned by Philips, entitled “High Frequency and Low Frequency Audio Signal Encoding and Decoding System.” In 2018, the PTAB issued a final written decision holding that Google had not shown by a preponderance of the evidence that claims 10-16, 20, and 21 of the ‘114 patent were unpatentable.

A petition for certiorari was filed on October 1 in the case of Athena Diagnostics v. Mayo Collaborative Services asking the question: “Whether a new and specific method of diagnosing a medical condition is patent-eligible subject matter, where the method detects a molecule never previously linked to the condition using novel man-made molecules and a series of specific chemical steps never previously performed.” The petitioners hinge their argument throughout the brief on the novel beneficial utility of their claimed method…. However, benefit has not always carried the day in recent eligibility analyses….. Patent eligibility, considered to be the most important question facing the patent system, poses insidious problems under current jurisprudence to some of the most beneficial cutting-edge technology available today. What is most curious is that this problem apparently can be solved simply by reaching back to the foundations of modern patent law and the underlying requirement that inventions be “useful,” a term that has been baked into the statutory provisions since the first patent act.

This week in Other Barks & Bites: new patent collective for video technology launched; inventor rally to be held during live IPR hearing at AIPLA meeting; the White House indicates that the first phase of the U.S.-China trade deal will focus on IP; the USPTO shifts burden of proving patentability in PTAB motions to amend to the petitioner after Aqua Products; the House of Representatives passes the CASE Act in a 410-6 vote; the EU invalidates the three-dimensional trademark to the Rubik’s Cube; Power Integrations settles its patent infringement litigation against ON Semiconductor; Intel files an antitrust suit against SoftBank over patent acquisition and assertion activities; Amazon.com posts its first year-over-year earnings loss in more than two years; and the Federal Circuit overturns Google’s challenge to a Philips patent on appeal from the PTAB.

On October 16, the U.S. Patent and Trademark Office (USPTO) issued two decisions granting renewed petitions filed by patent owner VirnetX to terminate inter partes reexamination proceedings at the USPTO that were petitioned by consumer electronics giant Apple. The decisions terminating the reexaminations with respect to many of VirnetX’s patent claims are based on estoppel provisions arising from the previous adjudication of infringement findings against Apple upheld on appeal to the U.S. Court of Appeals for the Federal Circuit. VirnetX’s success on its recent petitions to terminate reexamination proceedings is the latest bit of positive news for the patent owner in a legal battle which has taken many turns since VirnetX won $368 million in a district court infringement case against Apple back in November 2014.

As anticipated, the Chamberlain Group, Inc., in a corrected petition for rehearing filed today, asked an en banc panel of the Federal Circuit to reconsider its August 21 precedential decision, which in part reversed a district court’s finding that certain claims of Chamberlain’s patent for a “moveable barrier operator” (for example, a garage door opener) were not abstract under Section 101.  “Not only did the panel err in resolving [Alice] step two in the first instance, it misapplied an essential requirement of step two,” says the Chamberlain petition. In addition to contradicting its own assertions that appellate courts should not conduct fact-finding, the Federal Circuit’s approach conflates Alice steps one and two, “focusing the step two inquiry on the abstract idea itself, disregarding the ‘additional elements’ inquiry of Alice,” the petition adds.