Posts Tagged: "Federal Circuit"

American Axle & Manufacturing, Inc. filed a petition for certiorari with the U.S. Supreme Court on December 28, 2020, asking it to review the Federal Circuit’s July 31, 2020 modified judgment and October 2019 panel opinion in a closely-watched Section 101 patent eligibility case involving driveshaft automotive technology. The Federal Circuit has been sharply divided by the issues presented, leading Judge Moore to refer to the original panel’s analysis as “validity goulash” and to state that the “majority’s Nothing More test, like the great American work The Raven from which it is surely borrowing, will, as in the poem, lead to insanity.”

In 2015, Randy dela Fuente launched Snapizzi. Randy had bet big, putting his career, savings, and company at risk. Later, Randy brought in a business partner, Chris Scoones, who cleaned out his savings and mortgaged his house. But they believed in the patent. On the patent’s government-issued cover, it stated that Snapizzi would have the “right to exclude others from making, using, offering for sale, or selling” the invention. This meant that U.S. Patent No. 8,794,506 would protect their company from infringers and give them enough time to carve a toehold in the market. That patent cover also said that the patent was “granted under law”, which meant that it was a legally granted and presumed valid property right. In America, we are a nation of laws. Randy trusted the U.S. government, and this made the burden of huge risk much more tolerable. But in December 2019, a court held that the claims are all ineligible for patenting because they are “abstract ideas”.

On December 23, the United States Court of Appeals for the Federal Circuit (CAFC) vacated a decision of the USPTO’s Patent Trial and Appeals Board (PTAB), holding that the PTAB’s conclusion that Raytheon Technology Corp.’s (Raytheon’s) patent was non-obvious lacked substantial evidence. See General Electric Company v. Raytheon Technologies Corporation. The CAFC also found that General Electric Company (GE) had alleged sufficient facts to establish that it was engaging in activity that created a substantial risk of future infringement, and therefore had standing to bring the appeal.

If you’re looking for some positive patent news from 2020, count the heightened civic awareness of our intellectual-property/innovation policies, as a result of the global pandemic, as a silver lining. But our present task is to report on the 2020 highlights from the Federal Circuit; unfortunately, it’s all downhill from here. If 2019 had Section 101 law as its defining issue, given the Federal Circuit and
Supreme Court’s slate of rulings and non-rulings, 2020 only seemed to make the Section101 exclusions even broader. The capstone was AAM, Inc. v. Neapco Holdings LLC, 966 F.3d 1347 (Fed. Cir. 2020), the Federal Circuit’s denial of en-banc consideration (again) of Section 101 rulings that, all judicial protests aside, seemed to plainly expand a reviewing court’s power under Section 101 (again). And in ways many would’ve thought unimaginable just six-to-eight years ago, when Mayo-Alice emerged from the Supreme Court with only “inventive-concept” tests ringing about. Neapco’s panel ruling in the fall of 2019 was the proverbial shot across the Section112 bow.

On December 14, the United States Court of Appeals for the Federal Circuit (CAFC) affirmed a decision of the United States District Court for the Central District of California in Adaptive Streaming Inc. v. Netflix, Inc., holding that that claims of Adaptive Streaming Inc.’s patent were invalid under 35 U.S.C. § 101. In particular, the CAFC agreed with the district court that the claims of the patent in suit were directed to the abstract idea of “collecting information and transcoding it into multiple formats” and that the claims did not incorporate anything more that would transform the claimed subject matter into an eligible application of the abstract idea.

On December 7, the U.S. Court of Appeals for the Federal Circuit held that a district court erred in its assessment that it lacked authority to compel the transfer of ownership of foreign patents from Hamamatsu Photonics, K.K. to SiOnyx LLC, and that the court abused its discretion in distinguishing between the U.S. and foreign patents at issue in the case. The CAFC affirmed the district court on most other issues, including that Hamamatsu breached its non-disclosure agreement (NDA) with SiOnyx, and that SiOnyx was entitled to co-inventorship and sole ownership of the U.S. patents, as well as damages and an injunction.

In the late 1990s, prolific inventor David Petite invented a foundational technology for the Internet of Things. His invention drove proliferation of wirelessly networked machines and met with huge commercial success. But last month, the U.S. Court of Appeals for the Federal Circuit upheld the revocation of his patent through a byzantine and controversial administrative proceeding. This patent was subjected to a Covered Business Method Review (CBM) at the Patent Trial and Appeal Board (PTAB). The PTAB is a division of the U.S. Patent and Trademark Office (USPTO) created by the 2011 America Invents Act that has invalided a whopping 84% of the 3,000 patents they have reviewed. Coming too late to save Petite’s patent, the “transitional” CBM program expired September 16 of this year (two other types of PTAB proceedings remain in effect). CBM was not used nearly as much as the other PTAB proceedings, which have no restrictions on subject matter. Yet, corporate interests are still trying to revive CBM, and there’s buzz that attempts are being made to reinstate the program via the fiscal 2021 spending bill this week. There’s no logical basis to do so.

On December 4, the United States Patent and Trademark Office (USPTO) designated three Patent Trial and Appeals Board (PTAB) decisions as precedential.  In Apple Inc. v. Uniloc 2017 LLC, the PTAB refused to institute inter partes review (IPR) based on Apple’s “follow-on copycat petition.” SharkNinja Operating LLC v. iRobot Corporation and Applications in Internet Time, LLC v. RPX Corp. both related to real parties in interest (RPI). In SharkNinja, the PTAB declined to engage in a lengthy analysis to consider whether a non-party must be named as an RPI and in Applications in Internet Time the PTAB found the non-party to be an RPI and denied institution.

On November 17, 2020, in SIPCO LLP v. Emerson Electric Co., No. 2018-1635, slip op. (Fed. Cir. Nov. 17, 2020), the Court of Appeals for the Federal Circuit extended the reasoning of the Supreme Court in Thryv, Inc. v. Click-to-Call Technologies, LP, 140 S. Ct. 1367 (2020) barring appeal of decisions to institute inter partes review (IPR) under 35 U.S.C. § 314(d), and held that decisions made by the Patent Trial and Appeal Board (PTAB) to institute proceedings for covered business methods (CBMs) are not subject to appeal under 35 U.S.C. § 324(e). While the CBM transitional program of the America Invents Act (AIA) expired on September 16, 2020, the statutes applied when instituting and conducting review under the program were those of post-grant review (PGR) (under § 18(a)(1) of the AIA), and so the effect of the Federal Circuit’s decision in SIPCO is likely to be much more far-reaching.

On December 2, eComp Consultants (eComp) filed an amicus brief urging the U.S. Supreme Court to find Administrative Patent Judges (APJs) of the Patent Trial and Appeal Board (PTAB) in U.S. v. Arthrex, Inc., Nos. 19-1434/-1452/-1458. In its brief, eComp argues that the U.S. Supreme Court should reverse the decision of the Federal Circuit and confirm that APJs of the PTAB are merely inferior officers of the United States who were, therefore, constitutionally appointed. eComp’s Amicus Brief clarifies the errors in the Federal Circuit’s decision. 

On November 25, the Federal Reserve Bank of Atlanta (Bank of Atlanta) filed a brief in opposition in response to a petition for a writ of certiorari filed by Bozeman Financial LLC (Bozeman) with the U.S. Supreme Court on September 8. Bozeman’s petition followed a decision of the U.S. Court of Appeals for the Federal Circuit (CAFC), which affirmed a decision of the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) holding that the PTAB correctly determined claims 21–24 of U.S. Patent No. 6,754,640 (’640 patent) and claims 1-20 of U.S. Patent 8,768,840 (’840 patent), both owned by Bozeman Financial LLC (Bozeman), to be directed to patent ineligible subject matter under 35 U.S.C. § 101. In reaching the decision, the CAFC first determined the appellees, all 12 of the United States Federal Reserve Banks, were considered “persons” under the America Invents Act (AIA) and, therefore, eligible to petition for post-issuance review under the AIA. In its brief in opposition, the Bank of Atlanta asserted that the CAFC “correctly concluded that the Reserve Banks should not be viewed as part of the sovereign for purposes of the AIA’s post-grant review provisions” and that the Supreme Court’s review is not warranted.

On November 25, the Federal Circuit affirmed a decision of the Patent Trial and Appeal Board in VidStream LLC v. Twitter, Inc., in which the PTAB held VidStream’s patent claims unpatentable as obvious over the applied prior art. In particular, the CAFC affirmed the PTAB’s holding that Twitter properly established an earlier filing date of a reference based on evidence submitted in a reply brief.

On October 13, 2020, Cybergenetics filed a notice of appeal to the Federal Circuit from a decision of the Northern District of Ohio, Eastern Division, that held the patent claims asserted by Cybergenetics invalid under 35 U.S.C. 101, and granting the defendant’s Rule 12(b)(6) motion to dismiss.  Cybergenetics’ brief on appeal is due December 28, 2020.

On November 19, the Federal Circuit issued a precedential decision in Vectura Limited v. GlaxoSmithKline LLC in which the court affirmed a judgment entered against GSK finding that Ellipta-brand inhalers infringed patent claims asserted by Vectura. On appeal, GSK had argued that it was entitled to new trials on infringement and damages, but the Federal Circuit disagreed.

On November 20, the Federal Circuit issued a modified opinion following a petition for panel rehearing filed by Network-1. The petition came after the CAFC affirmed-in-part and reversed-in-part a district court’s claim construction and remanded the case to the district court on September 24, 2020, in Network-1 Technologies, Inc. v. Hewlett-Packard Company. In the revised opinion, the CAFC said that it would not consider Network-1’s alternative grounds for granting a judgment as a matter of law (JMOL) on validity nor its new trial motion in the first instance.