Posts in Patents

On July 31, Trading Technologies, a firm that develops software used for electronically trading derivatives, filed a combined petition for panel rehearing and rehearing en banc at the U.S. Court of Appeals for the Federal Circuit. The appellant is seeking review of the Federal Circuit’s earlier decision this May in Trading Technologies International v. IBG LLC (IBG IV), which confirmed the results of four covered business method (CBM) review proceedings at the Patent Trial and Appeal Board (PTAB) that invalidated patent claims owned by Trading Technologies as unpatentable under Section 101 of the patent law. In doing so, Trading Technologies argues that the Federal Circuit panel failed to follow both U.S. Supreme Court and Federal Circuit precedent, as well as previous Federal Circuit decisions upholding the validity of other Trading Technologies patents that share a specification with one of the invalidated patents.

Let’s face it, intellectual property (IP) litigation is a very expensive and risky endeavor. For the accused infringer, the prospect of going to trial means high legal fees and, even worse, a substantial disruption to the business. Even in cases where an accused infringer has viable defenses, leaving a ruling in the hands of the judge or jury is nothing more than a Las Vegas roll-of-the-dice. Whether through informal settlement discussions, mediation, or court-mandated settlement conference, IP defense litigators must arm their clients with a bevy of effective, business-minded settlement strategies. Settling does not have to mean capitulating and paying the other side an arbitrary sum of money to go away. Instead, think of ways to put your client’s available settlement dollars to work. Here are a few practical concepts to set your client on a viable settlement path.

The United States Court of Appeals for the Federal Circuit last week affirmed-in-part, vacated-in-part, and remanded a decision of the Patent Trial and Appeal Board (PTAB) in the long-running case of VirnetX Inc. v. Apple Inc., Cisco Systems, Inc. The case relates to three inter partes reexaminations maintained by Apple and Cisco. The PTAB found that Apple could proceed with its reexaminations under the America Invents Act (AIA) and held that claims of VirnetX’s patent numbers 7,418,504 (“the ’504 patent”) and 7,921,211 (“the ’211 patent”) were unpatentable as anticipated/obvious. These patents were directed to methods for “establishing a secure communication link between [computers] over a computer network, such as the Internet” and are “built on top of the existing Internet protocol.” Basically, the patents claim a way to create secure communication links via domain name service (DNS) systems.

The Federal Circuit recently vacated and remanded a decision by the Patent Trial and Appeal Board (PTAB), finding that the PTAB applied the wrong legal standard for determining whether a reference was publicly accessible before the critical date of the challenged patent. The Court found that the asserted reference was publicly accessible because a person of ordinary skill in the art could, through the exercise of reasonable diligence, access the reference. The decision, authored by Judge O’Malley, held that a patent challenger does not have to establish that the asserted reference was actually accessed or received or available to a significant portion of those skilled in the art to show that the work was publicly accessible. 

Recently a group out of the University of Surrey provided a new challenge to the definition of inventor, asking “who what may be an inventor on a patent?” The group has created an artificial intelligence (AI) named DABUS. Using a first system of networks to generate new ideas, and second system of networks to determine consequences, DABUS invented a beverage container and a flashing device used for search and rescue that are the subjects of patent applications filed in the United States and Europe.

On Wednesday, July 31, Acting Chief Financial Officer of the USPTO Sean Mildrew posted an announcement on the USPTO’s blog explaining the Office’s reasoning for its proposal to raise patent fees in a number of areas. The increase will enhance quality and timeliness of examination, America Invents Act (AIA) trials, and replenish the patent operations reserve to stabilize the Office’s finance, Mildrew said. According to the Notice of Proposed Rulemaking, at least part of the need for the proposed increase is due to the fact that patent application filings are down. “Actual Utility, Plant, and Reissue (UPR) application filings in FYs 2017 and 2018 were less robust than expected,” said the Notice. “In the FY 2020 Budget, given the lower than expected previous year filings, and an analysis of domestic and global economic forecasts, the USPTO has lowered future year filing projections from what was expected when the January 2018 Final Rule was published.”

As we enter the August heat, it’s worth remembering some of the patents that have made summers more bearable through the years, for kids and adults alike. Below are three that stand out from my lifetime—unfortunately, the oft-cited on IPWatchdog and now-popular Bunch O’ Balloons toy was well after my time. Let us know in the comments which inventions made your summers cooler.

This week in Other Barks & Bites: The Federal Circuit issues several precedential decisions, including one reviving the patent claims in VirnetX and another determining that America Invents Act (AIA) validity trials don’t violate the Fifth Amendment’s Takings Clause in Celgene. This week in Other Barks & Bites: The Federal Circuit issues several precedential decisions, including one reviving the patent claims in VirnetX and another determining that America Invents Act (AIA) validity trials don’t violate the Fifth Amendment’s Takings Clause in Celgene; the USPTO proposes fee increases to patent examination and AIA trials and issues a final rule on e-filing in trademark registrations; Katy Perry is ordered to pay $2.7 million for copyright infringement; free OTA TV service Locast is targeted in a copyright suit filed by Disney and other major broadcasters; Pfizer and Mylan consider creating a global giant in off-patent drugs; the University of California files patent suits against major retailers over LED light bulb technology; and patent applications listing artificial intelligence machine inventor are filed in patent offices across the world.

Last week, the Patent Trial and Appeal Board (PTAB) issued 39 decisions on inter partes review (IPR) proceedings, instituting 24 IPRs and denying 15. The PTAB instituted one of four IPR petitions filed by Comcast to challenge a single patent owned by Rovi, adding a new chapter to the legal battle between those two parties over unlicensed television technologies. Spotify also saw the institution of one of three IPR petitions challenging user profile and playlist recommendation patents owned by S.I.S.V.E.L.

Over the past decade—and likely for the rest of our lifetimes—China has become a favored venue for patent filings due to its increasing GDP and expansive market. However, U.S. applicants familiar with U.S. patent rules should be careful not to employ the same prosecution strategies as used in the United States when filing Chinese patents, as the rules in the two jurisdictions are materially different. For example, in the United States, it is common to file a string of continuation applications for inventions that are licensing/litigation worthy. In China, there is no corresponding opportunity.

Yesterday, 24 law professors, former Chief Judges of the Federal Circuit and former heads of the U.S. Patent and Trademark Office (USPTO) sent a letter to Senators Thom Tillis (R-NC) and Chris Coons (D-DE) and Representatives Jerrold Nadler (D-NY) and Doug Collins (R-GA) aimed at correcting what the letter characterizes as “misapprehensions of law and misleading rhetoric” on the subject of pending patent reform legislation. The letter makes specific reference to statements made by the American Civil Liberties Union (ACLU) claiming that the draft legislation to amend Section 101 of the patent law “if enacted would authorize patenting products and laws of nature, abstract ideas, and other general fields of knowledge.” The authors of yesterday’s letter, which included Retired Federal Circuit Chief Judges Randall Rader and Paul Michel and former USPTO Directors Todd Dickinson and David Kappos, called such statements “profoundly mistaken and inaccurate” and laid out in detail the specific inaccuracies. Rather than expanding the scope of 101 to abstract ideas and laws of nature, said the letter, “the proposed amendments preclude ‘implicit or judicially created exceptions to subject matter eligibility,’” and do not eliminate existing constitutional and statutory bars.

Earlier this summer, Intel announced that some 8,500 patent assets (i.e., issued patents and pending patent applications) would be auctioned. Approximately 6,000 assets related to 3G, 4G, and 5G cellular standards, while 1,700 assets relate to wireless implementation of cellular standards. According to initial reports from IAM, Intel was hoping to sell these patents separately from the smartphone modem business, although they were open to the possibility that a prospective buyer might seek to acquire both the patent assets and Intel’s smartphone modem business. Shortly after the Intel patent assets were announced as available for sale, Intel abruptly took the assets off the market in favor of negotiating with a single interested suitor. Very quickly, news broke that the negotiations with that unidentified suitor were quite advanced, suggesting that the Intel auction announcement was nothing more than a negotiating ploy to get the unidentified suitor back to the table and for the suitor to realize that they could lose the patent assets if they did not play their hand correctly and misidentified the leverage involved in the negotiation. It has recently come to light that the unidentified suitor for the Intel patent assets was none other than Apple, just as IAM has predicted in its initial reporting. So, now we know that Apple will buy the majority of Intel’s modem business, including the patent assets, for $1 billion. 

Whenever a company finds itself in the cross-hairs of a cease-and-desist letter or patent infringement lawsuit, a license may not be a viable option. That is often the case when the patent holder is a competitor intent on enforcing a patent against its rivals… The lesson to be taken away is that the efficacy of a design-around is likely to depend on how significant the change is in terms of the claimed invention’s novelty and/or functionality. One should also consider the possibility of incorporating changes that make use of long-standing prior art techniques, methods or elements, especially any that were cited by the patent examiner, in response to which prior art the patentee either amended its claims or distinguished its invention from such prior art during the course of prosecution. 

Global IP Holdings, LLC, the owner of U.S. Patent No. 8,690,233, achieved a victory with the Federal Circuit vacating a decision of the Board and remanding for the Board to address predictability and criticality of the claim term to determine whether the written description requirement has been satisfied. Although victorious, Global did not achieve everything it wanted. Global had requested the Federal Circuit to simply overrule the Board. Judge Stoll, however, explained that there was not support in the record sufficient to determine whether the “plastic” claim limitation was critical or important. Therefore, the Federal Circuit vacated the Board’s decision and ordered the Board, on remand, to address predictability and criticality of the claim term in question in order to determine whether the written description requirement has been satisfied.

This March, the U.S. Supreme Court granted a petition for writ of certiorarito take up Peter v. Nantkwest Inc., on appeal from the Court of Appeals for the Federal Circuit. The case will ask the nation’s highest court to determine whether the phrase “[a]ll expenses of the proceeding” found in 35 U.S.C. § 145, which governs appeals to district court of U.S. Patent and Trademark Office decisions to deny the issue of a patent grant, encompasses personnel expenses incurred by the USPTO, including attorneys’ fees, when its employees defend the agency against Section 145 litigation. On July 22, a series of intellectual property and law associations filed amicusbriefs in the case by and large supporting the position of Nantkwest. This includes the American Bar Association, which argued that the USPTO’s interpretation of the statute would “hamper the equal access to justice and chill the assertion of meritorious claims.” Other Nantkwest amici argued that the government has had the statutory authority to collect ‘expenses of the proceeding’ in patent cases since 1839 but for the 174 years prior to the case against Nantkwest, the USPTO has declined to seek attorney’s fees.