Posts in Patents

On October 15, 12 state universities and state university systems filed an amicus brief in support of the University of Minnesota in its appeal to the U.S. Supreme Court of the June 2019 Federal Circuit (CAFC) ruling in Regents of the University of Minnesota v. LSI Corporation. In that decision, the CAFC said that the University of Minnesota (UMN)—an arm of the state of Minnesota—is not protected by state sovereign immunity from a number of inter partes review (IPR) petitions filed against UMN patents by LSI Corporation (LSI). The court relied heavily on its 2018 decision in Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc., 896 F.3d 1322 (Fed. Cir. 2018), which found that “tribal sovereign immunity cannot be asserted in IPRs.” Despite UMN’s arguments to the contrary, the Federal Circuit answered a question left open in its decision in Saint Regis Mohawk by concluding today that “the differences between tribal and state sovereign immunity do not warrant a departure from the reasoning in Saint Regis.”

The Federal Circuit recently held in Campbell Soup Company v. Gamon Plus, Inc. (September 26, 2019) that a prior art reference lacking one of only two features shown in solid line was similar enough to the claimed design to constitute a proper primary reference. Campbell Soup et al. appealed the final written decisions of the PTAB holding that they had not demonstrated that the claimed designs of U.S. Patent Nos USD612646 Gamon and USD621645 Gamon were obvious over the asserted prior art of U.S. Patent No. D405622 (USD405622 Linz) and GB Patent Application No. 2,303,624 (Samways GB2303624A). In their holding, the Board found that neither Linz nor Samways constituted proper primary prior art references. The Federal Circuit affirmed-in-part, vacated-in-part and remanded.

Chrimar Systems, Inc. filed a petition for en banc rehearing with the Federal Circuit on October 21 asking it to review the so-called Fresenius-Simmons preclusion principle. The petition has a high hurdle to meet, as the underlying Federal Circuit decision was nonprecedential, but the petitioners argue that the case qualifies as a rare exception warranting en banc review.

On Thursday, October 17, the USPTO issued new patent eligibility guidance. The new guidance discusses and elaborates on the 2019 Revised Patent Subject Matter Eligibility Guidance (PEG) that was issued on January 7, 2019. The new guidance begins by stating that “all USPTO personnel are expected to follow the [PEG].” This statement is somewhat helpful given that some eligibility rejections still do not apply the PEG. After making the statement above, the guidance begins clarifying certain items from the PEG. In terms of Step 2A, Prong One regarding whether a claim “recites” a judicial exception, the guidance notes that a claim can recite more than one judicial exception. The judicial exceptions may be distinct in that there might be separate judicial exceptions in different claim elements. In other instances, there might be two judicial exceptions at play throughout the claim, in which case the examiner should identify the claim as reciting both and make the analysis clear on the record.

This week in Other Barks & Bites: US Inventor will host an inventor rally during AIPLA’s Annual Meeting to protest the PTAB; the Federal Circuit vacates dismissal of infringement case against Sirius XM; the USPTO updates subject matter patent eligibility guidelines, changes TEAS access, and seeks participants for a beta release of the Patent Center; WIPO reports that China received half of all patent application filings in 2018 while the United States saw its first patent filing decline in a decade; Google files a supplemental brief at the Supreme Court in its case against Oracle; Katy Perry files a motion to overturn the “Dark Horse” copyright verdict against her; the FCC approves the merger between mobile wireless firms T-Mobile and Sprint; and U.S. Customs proposes rulemaking to improve its detention of copyright-violating goods imported at the U.S. border.

On Thursday, October 17, a Capitol Hill staff briefing will take place at 3:30 PM in 226 Dirksen Senate Office Building on a proposal to increase the amount of time that patent examiners at the U.S. Patent and Trademark Office have to examine patent applications. At the briefing, Professors Michael Frakes of the Duke University School of Law and Melissa Wasserman of the University of Texas at Austin School of Law will present findings from their paper, Irrational Ignorance at the Patent Office , recently published by Vanderbilt Law Review. While the professors’ conclusions regarding increasing time spent by examiners on patent applications are seemingly innocuous, the entire paper is infected with the “bad patent” premise that has proven to be incredibly detrimental to the U.S. patent system in recent years. Branded as a work that updates prior research on patent quality produced by law professor Mark Lemley, the Frakes and Wassserman paper concludes that the costs of increasing USPTO resources for weeding out “bad patents” during the patent prosecution process are far outweighed by the costs borne by society in waiting for the courts to invalidate those patents during litigation.

In Knauf Insulation, Inc. v. Rockwool International, the U.S. Court of Appeals for the Federal Circuit vacated and remanded the Patent Trial and Appeal Board’s determination in an inter partes reexamination that certain patent claims for two of Knauf’s patents covering fibrous products and related methods and binder and fiber glass products were obvious. The Court also found that certain other claims of the two patents were not unpatentable as obvious, and Rockwool International cross-appealed that determination, but the Court held that Rockwool did not have standing to cross-appeal and thus dismissed it. The decision was not precedential, but some have commented that the Court’s holding with respect to Rockwool’s lack of standing for a cross-appeal could have significant implications.

On Tuesday, I attended a panel discussion on the National Security Implications of Patents along with my siblings, Madeline and Gideon Malone, and we were informed that inventors like the Wright brothers pose a threat to innovation. We were joined by approximately 50 attendees at the Capitol event moderated by Charles Duan from R Street Institute, along with panelists Abby Rives from Engine, Daniel Takash from Niskanen Center, and Ian Wallace from New America. They argued that patents harm innovation, and government subsidies are a better alternative to incentivize innovation. In order for R Street (a free-market think tank) to justify these blatantly anti-free-market claims, they focused on the problems with “bad patents” and how patent monopolies prevent competition. To top it all off, their example of a “bad patent” was the one granted to the Wright brothers, which the panelists felt unreasonably excluded their competitors from making improved versions of their airplane.

On October 9, the Patent Trial and Appeal Board issued a final written decision in a covered business method (CBM) review which invalidated all 38 claims of Nasdaq’s U.S. Patent No. 7747506, Recipient Status Indicator System and Method, challenged by Miami International Holdings (MIAX), on Section 101 grounds for being directed to unpatentable subject matter. The decision is the latest in a series of CBM reviews at the PTAB which stem from a district court patent infringement proceeding targeting fintech technologies employed by MIAX’s technological securities trading platform.

The Federal Circuit’s decision in In re HTC Corp., 889 F.3d 1349 (Fed. Cir. 2018), considered whether the TC Heartland decision extended to foreign defendants to afford them the protections of the special patent venue statute, 28 U.S.C. § 1400(b). By finding that no such protections existed, the Federal Circuit reaffirmed the longstanding rule that suits against foreign (alien) defendants “are wholly outside the operation of all the federal venue laws, general and special.” HTC, 889 F.3d at 1354 (citing Brunette Machine Works, Ltd. v. Kockum Industries, Inc., 406 U.S. 706, 714 (1972)). While foreign defendants can still try to persuade a district court judge to transfer a case to a new venue on the basis of the parties’ convenience, the venue laws otherwise offer no protection for foreign defendants.

On October 9, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued a decision in HZNP Medicines LLC v. Actavis Laboratories UT, Inc. affirming the U.S. District Court for the District of New Jersey’s findings of invalidity and noninfringement of certain claims of some of the asserted HZNP (Horizon) patents, as well as the district court’s finding of nonobviousness of one claim of another Horizon patent. The finding of nonobviousness means that Actavis, owned by generic drug maker Teva Pharmaceuticals, is enjoined from engaging in the commercial use, offer for sale, or sale of its product covered in its Abbreviated New Drug Application (ANDA) until the expiration of U.S. Patent No. 9,066,913 (the ‘913 patent) in 2027.

This week in the nation’s capital, subcommittees in the House of Representatives will hold a series of technology-related hearings focused on online competition in data privacy, artificial intelligence (AI) and cloud computing in the financial sector, Internet consumer protections and NASA’s goal to speed up the return of a manned mission to the moon. The House Investigations Subcommittee will also hold a field hearing outside of D.C. exploring innovation in lead mitigation employed within the state of New Jersey. Elsewhere in D.C., the R Street Institute will discuss their theory on the national security implications of patents, the Brookings Institution will look at the impact of digital technologies on African entrepreneurship and the American Enterprise Institute hosts an event exploring the impact of globalization and robotic innovation on the workforce.

Here we go again! Another day, another ridiculous attack on the U.S. patent system. This time the attack comes from the R Street Institute, who claims that patents are too strong and are inhibiting American companies from achieving success in the race for leadership in the 5G marketplace and continued leadership in Artificial Intelligence (AI). R Street will hold a panel discussion on their wildly outlandish theory, for which they can’t possibly have any factual support, on Tuesday, October 15, in the Capitol Visitor Center. In the announcement they claim that patents are inhibiting American companies because Chinese telecommunications company, Huawei, asserted more than 200 patents against Verizon Communications earlier this year. Therefore—and ipso facto—patents are too strong and American companies are suffering. There may be legitimate security concerns around Huawei’s infrastructure, but to suggest that the company’s patents are at the root of these threats is in a word—Absurd!

Insurance is a highly regulated field. New approaches to innovation are sorely needed. The need for innovation itself is undeniable as the tech world runs head long into the world of insurance. For example, the regulation of insurance is hundreds of years in the making and steeped in arcane regulation. However, the patent system—ostensibly an engine of innovation—has been notably hostile to insurance innovations, especially since the Supreme Court’s 2014 decision in Alice Corp. Pty Ltd. v. CLS Bank Intern. Indeed, the USPTO’s latest guidance on applying Alice specifically lists insurance as a type of fundamental economic practice that should be treated as unpatentable. While the federal patent system may be restricting the protection available for insurance innovations, there are other ways of supporting innovation, and Kentucky is leading the way with its recently passed regulatory sandbox for insurance innovation.

This past week in Other Barks & Bites: the Federal Circuit issued precedential decisions affirming the invalidation of patent claims covering osteoarthritis treatments and a costs award to Facebook, but reversed the PTAB on a reasonable expectation of success finding; the U.S. Supreme Court issued orders denying certiorari to several intellectual property cases; North Korea acceded to the Geneva Act of WIPO’s Lisbon Agreement; the Dollywood theme park was hit with a copyright suit over use of the Peanuts’ “Christmas Time is Here”; Nokia announced 2,000 patent families declared as 5G SEPs; former CAFC Chief Judge Rader has called on China to move forward with promised pharmaceutical patent reforms; 2019’s third quarter showed growth in the global PC market; and the USPTO announced that it has met its patent application pendency goals as well as a new senior-level position for an AI expert.