The Senate Judiciary Committee’s Subcommittee on Intellectual Property, headed by Senator Thom Tillis (R-NC), yesterday heard from five witnesses on ways to improve patent quality at the U.S. Patent and Trademark Office (USPTO). Suggestions ranged from fixing patent eligibility jurisprudence to strengthening efforts on international work sharing, increasing patent application fees, and allotting more time for the examination process. The majority of panelists warned against the dangers of using patent quality as a means to simply block broad swaths of patents that particular industries or entities don’t like, and emphasized that clarifying U.S. patent law would likely go a long way to curbing invalidation rates.
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.
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.
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.
Navigating the patent process can often be challenging and filled with subtleties and nuances for the entrepreneur-inventor, especially for first-time filers. Having a trusted patent attorney who can not only help guide you through the process, but help inventors learn about it is truly invaluable to new entrepreneur-inventors. However, for many inventors, understanding what patent attorneys do and why they do it does not always come as second nature. Over the course of my career as both an inventor and entrepreneur, I’ve had the pleasure of working with many excellent patent attorneys on my companies’ patent filings. The best attorneys I’ve worked with have played an integral role in educating me and my colleagues on the patenting process, what makes a good specification and claim and how infringement lawsuits work should we ever pursue them. I’ve also learned that inventors and patent attorneys often have different visions for what the final patent will look like. As someone who’s been through the process a few times now, here are the four things patent attorneys taught me that I think would be useful to entrepreneur-inventor clients.
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.
Yesterday, we published a response from Daniel Takash, the Regulatory Policy Fellow at the Niskanen Center’s Captured Economy Project, asking for a more civil IP debate. The response was itself responding to Lydia Malone’s critical view of the R Street panel on Capitol Hill that she attended, and which she felt took the position that patents are too strong. I, too, wrote an article in advance of the R Street presentation where I was highly critical of the motivations of R Street. Mr. Takash suggests “[w]e should all do our best to live by Antonin Scalia’s maxim to ‘attack arguments, not people.’” That is perfectly reasonable. It is, however, also perfectly reasonable to question the motivations of those who are making claims that are unquestionably false. To be quite direct about it, the R Street supposition that patents are too strong is pure fantasy of the first order. Anyone with even fleeting familiarity with the subject matter who has at all been paying attention to the demise of the U.S. patent system over the last 12+ years knows that U.S. patents are not too strong. U.S. patents are too weak. So weak that for the first time in a decade the number of U.S. patent applications has decreased while patent applications worldwide surged forward by more than 5% during 2018. Moreover, U.S. applicants are not foregoing patent protection, they just aren’t filing as much in the United States. Indeed, U.S. applicants continue to be the hungriest for patents worldwide.
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.
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.
Experts agree that public health issues in the United States are not being solved despite an abundance of highly trained personnel, remarkable facilities, and access to the newest drugs and technologies. Instead, health care costs keep rising as the technology advances. A significant part of the problem is that governments are more likely to grant patents to drugs, devices, and treatments over nutrition innovations, making treatments more financially rewarding than prevention and increasing the disease burden and health care costs. Though there is no restriction against nutritional inventions in most patent laws, in practice the patent system favors drugs, devices, and treatments over nutritional solutions. Further, when nutritional patents are granted, they are severely restricted, such as to a narrow formulation or to fortification of foods with certain nutrients for certain use.
On Monday, the U.S. Supreme Court denied a petition for certiorari filed by Imperium IP Holdings (Cayman) Ltd., thus letting stand a U.S. Court of Appeals for the Federal Circuit decision that reversed a more than $22 million enhanced damages award against Samsung. Imperium Holdings petitioned the Supreme Court in July seeking to overturn the January 2019 Federal Circuit ruling that agreed with Samsung’s argument “that the only reasonable finding on this record is that the ’884 patent claims at issue here are invalid for anticipation,” largely due to the Court’s interpretation of the expert witness testimony during the jury trial. “Juries have wide leeway to assess evidence and credibility,” said the Court, “but under the requirement of substantial evidence, a jury’s rejection of expert testimony must have some reasonable basis.”
On September 26, the U.S. Patent and Trademark Office filed a motion to dismiss a class action complaint filed by two inventors alleging violations of the Privacy Act created by the agency’s handling of its Sensitive Application Warning System (SAWS). The USPTO is seeking a Rule 12(b)(6) dismissal for failure to state a claim, arguing that application flags under the SAWS program don’t concern individual patent applicants and that omission of those flags from patent application files isn’t the proximate cause of adverse determinations such as increased scrutiny holding up patent grants. The case was first filed this June in the U.S. District Court for the District of Columbia by Paul Morinville and Gil Hyatt, two inventors who allege that they have filed patent applications on inventions that have been flagged by the SAWS program. Morinville is an inventor on nine patents who has had 26 patent applications pending at the USPTO since February 2000. Hyatt is listed as an inventor on 70 patent applications and has had patent applications pending at the agency since 1990. Hyatt was first informed that he had patent applications flagged by the SAWS system in June 2017, more than two years after the USPTO officially retired the SAWS program.
In May, the USPTO held the first of three hearings prompted by the Study of Underrepresented Classes Chasing Engineering and Science (SUCCESS) Act, which requires the USPTO Director to provide Congress with a report on publicly available patent data on women, minorities, and veterans, and to provide recommendations on how to promote their participation in the patent system. The hearing featured emotional testimony from five inventors, one of whom said she had joined Debtors Anonymous as a result of her patent being invalidated in the Southern District of New York.Responses to the USPTO’s request for written comment on 11 questions the Office had posed have now been published. Eleven organizations and 58 individuals submitted comments, underscoring a range of concerns. While many organizations focused on the need to collect demographic information and increase exposure to STEM education at the K-12 level, a number of other organizations and individuals emphasized the broader issue that was addressed during the hearing in May—that the current patent system is stacked against the individual inventor across demographics.