Posts in Patents

In Part I of this article, we briefly summarized how O’Reilly v. Morse was relied upon in the denial for rehearing in the recent case of AAM v. Neapco to assert that a patent claim to a method of making a motor vehicle axle failed to qualify as patent eligible subject matter under 35 U.S.C. § 101. The concurring opinions concluded that claim 22 of the patent at issue, U.S. 7,774,911, “merely invoked” natural law, and did not describe what had been obtained in the patent. Consequently, as in O’Reilly v. Morse, the claim was “too broad, and not warranted by law.”  We also noted an apparent paradox in that, while claims cannot preempt natural law and must be supported by an enabling specification, they necessarily must be able to read on embodiments that incorporate later-developed technology. The key to resolving this dilemma is the notion of invention, which was the basis for the holding by the Court of the King’s Bench in Hornblower v. Boulton.

In his address to the Intellectual Property Owners Virtual Annual Meeting yesterday, USPTO Director Andrei Iancu said that, despite sharp declines in filings and renewals, COVID-19 seems to have spurred innovation in some areas. “Small and micro entity patent filings are at a historic high, with more than 112,000 filed during the first 11 months of fiscal year 2020,” Iancu said. In an August interview with IPWatchdog Founder and CEO Gene Quinn, Iancu discussed one of the COVID-19 relief programs the Office has instituted to support small inventors during the pandemic. A pilot that offers free prioritization of COVID-19 related patent applications has been working well, Iancu told Quinn, and is expressly geared to assisting smaller entities.

The USPTO recently revised the Manual of Patent Examination Procedure (MPEP) Section 706.07(b) to retroactively impose a first action final rejection (FAFR) policy that significantly reduces a patent applicant’s options (MPEP, E9R10.2019. Fed. Reg. Vol. 85, No. 133 page 41,571). Here, in Part I of this two-part series, we identify and analyze the final agency petition decision behind the policy change. In Part II, we provide summary and analysis of petition decisions relating to premature final office actions. Codifying the new FAFR standard in the June MPEP revision opens the door for all patent examiners to impose FAFRs on substantively amended claims, if they so wish.

It may seem surprising that the patent eligibility of making an axle for a motor vehicle could be so divisive among judges of a court tasked by design with the most difficult questions of patent law. And this internal division might appear particularly surprising given that the roots of the views expressed among the judges in the split decision by the Court of Appeals for the Federal Circuit in American Axle & Mfg., Inc. v. Neapco Holdings LLC et al., Case No. 2018-1763, slip op. (Fed. Cir., July 31, 2020) pre-date a famous 170-year old Supreme Court decision involving Samuel F. B. Morse’s telegraphy method, which was featured by the concurring opinions in the denial of the petition to rehear the case en banc. When viewed in a larger context, however, the most significant realization might be a unifying and constructive underlying message from the Federal Circuit bench.

The U.S. Patent and Trademark Office (USPTO) earlier this week announced the creation of the National Council for Expanding American Innovation (NCEAI), an initiative ostensibly intended to “build a more diverse and inclusive innovation ecosystem by encouraging participation demographically, geographically, and economically.” Reactions to the Council were mixed, with a number of IPWatchdog sources contacting us to alternately express their confusion, skepticism or support. We put out a call for official reactions to share these varying responses, which raise a number of questions to be monitored as the NCEAI moves forward.

Intellectual property rights continue to be the Rodney Dangerfield of assets – they “can’t get no respect.” The reasons are complex, but not terribly surprising, given the increased speed and importance of technology in recent years. Compounding the disconnect are many individuals and businesses who prefer to view IP rights as impediments, not assets that can be licensed or otherwise monetized. In their mind, pilfering content, using someone else’s invention or borrowing a name or image is akin to a “white” lie that does no real harm. This myth has been perpetuated over time in different ways by other IP holders and consumers who would prefer not to pay for what they need. The result is a strangely inhospitable environment for IP that dissuades innovation and depresses value.

Packet Intelligence, LLC has filed a combined request for rehearing and rehearing en banc with the U.S. Court of Appeals for the Federal Circuit, asking the Court to review a July 2020 panel decision relating to its interpretation of the patent marking statute, 35 U.S.C. §287(a). In that case,  Packet Intelligence, LLC v. NetScout Systems, Inc., the panel reversed a pre-suit damages award for Packet Intelligence on the ground that NetScout was entitled to judgment as a matter of law that it was not liable for pre-suit damages based on intervening case law in Arctic Cat Inc. v. Bombardier Recreational Prods. Inc.

As IPWatchdog’s Virtual CON2020 continues, in a session on Day 7 titled “The Gender Gap: Stem Education, Funding & Inventorship,” a panel discussed the current underrepresentation of women and possible steps forward in science, technology, engineering, and mathematics (STEM) disciplines, patent professions and inventing. The panelists included Hope Shimabuku, the Director of the USPTO Texas Office; Megan Carpenter, Dean of the University of NH Franklin Pierce School of Law; Efrat Kasznik, President of Foresight Valuation Group; Delicia Clarke, Associate at WilmerHale; and Sandra Nowak, Assistant Chief IP Counsel at 3M.

On September 9, a panel of three administrative patent judges (APJs) at the Patent Trial and Appeal Board (PTAB) issued a decision denying institution of a petition filed by Apple seeking inter partes review (IPR) proceedings to challenge the validity of a patent owned by Unwired Planet. In denying institution to Apple’s IPR petition, the APJ panel relied on a discretionary multi-factor test referred to as NHK-Fintiv, which weighs the efficiencies of handling validity reviews at the PTAB when parallel proceedings on similar issues are ongoing in U.S. district court. On September 14, a number of “Small Business Inventors” also filed a Notice of Motion and Motion to Intervene and related Complaint in the California case. The Small Business Inventors argue that the disposition of the case will “have lasting impacts on their proprietary and legal interests” that are “distinct from the interests of the Original Plaintiffs, and of the Defendant.”

District court filings were substantially lulled this week, with about a third of what’s normal—33—filed to the Patent Trial and Appeal Board’s 32 petitions, propped up by lithium-ion battery company Amprius filing eight inter partes reviews (IPRs) against the Japanese Softbank (via Fortress IP)-owned Traverse CF non-practicing entity (NPE). CBM Sunset: The little-used covered business methods (CBM) program sunsets today. As evidenced by the lack of any substantial rush to file any at the last minute, the proceeding had for years been eclipsed both by Federal Circuit rulings narrowing the scope of the program and by the explosion and success of subject matter challenges in the district courts. While there have been rumors of a last-minute attempt to revive the program, for now it seems destined for the dustbin of history.

Greenberg Traurig and The Rader Group – which is headed by retired Chief Judge of the U.S. Court of Appeals for the Federal Circuit, Randall Rader – have submitted a petition for certiorari to the U.S. Supreme Court on behalf of Acer America Corp. asking the Court to review the CAFC’s precedential opinion in Intellisoft v. Acer. On April 3, the CAFC held that the United States District Court for the Northern District of California (the district court) erred in refusing to remand a case to California state court where removal to a district court was improper under 28 U.S.C. § 1441 and §1454. Despite Acer’s contentions, the CAFC found that Intellisoft’s trade secret misappropriation claim did not “necessarily” raise patent law issues that would result in district court original jurisdiction.

The U.S. Patent and Trademark Office (USPTO) announced yesterday a major initiative to “build a more diverse and inclusive innovation ecosystem by encouraging participation demographically, geographically, and economically.” Dubbed the National Council for Expanding American Innovation (NCEAI), the project includes 29 representatives from industry, academia, and government, and was conceived based on recommendations made in the USPTO’s 2018 SUCCESS Act study and congressional report transmitted to Congress in December 2019.

Starting this week, Bruce Berman, author and CEO of Brody Berman Associates and founder and chairman of the Center for Intellectual Property Understanding, an independent non-profit, will publish his well-known column, the “Intangible Investor” with IPWatchdog.The column ran for 17 years in IAM Magazine and will continue to focus on trends and observations in the realm of IP valuation and investment. Berman spoke with IPWatchdog about the history of the column and what readers can expect going forward.

The Federal Circuit has repeatedly confirmed that secondary consideration evidence is an integral part of an obviousness analysis (indeed, it “may be the most pertinent, probative, and revealing evidence available to the decision maker in reaching a conclusion on the obviousness/nonobviousness issue”) and thus has mandated consideration of such evidence in assessing obviousness (Mintz v. Dietz & Watson, Inc.). The United States Patent and Trademark Office (USPTO) similarly requires consideration of secondary consideration evidence (MPEP 2145 (9th ed. Rev. 10.2019, June. 2020). This requirement makes sense. Among the many benefits to a patent challenger, IPRs have also effectively provided petitioners (i.e., patent challengers) with a shield against disclosure of evidence that might directly undermine their obviousness arguments – evidence that they typically would have been forced to disclose in district court litigation.