Posts Tagged: "patents"

This week in Other Barks & Bites: The United Nations highlights the importance of women in innovation on International Women’s Day; Comments due today on USPTO Section 101 Guidance; FDA Commissioner Scott Gottlieb resigns; a Senate bill with six bipartisan co-sponsors would increase requirements on patent disclosures for biologics; USPTO Director Iancu speaks out on Alice; Apple announces its intention to increase its presence in San Diego while its patent battle with Qualcomm heats up; Chinese copyright registrations increased by double digit percentage points in 2018; Stanley Black & Decker faces off against Sears in a trademark infringement battle over branding for Craftsman tools; Amazon announces that it will close dozens of pop-up stores in the U.S.; and Democrats from both houses of Congress introduce a new net neutrality bill.

The state of patent eligibility in America is shocking. Between the passage of the 1952 Patent Act and 2012, when the U.S. Supreme Court decided Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct. 1289 (2012), the patent eligibility threshold was an exceptionally low hurdle. A group of Senators and Representatives are currently considering a legislative fix to this patent eligibility debacle created by the Supreme Court and perpetuated by a Federal Circuit unwilling to define the contours of a sensible patent eligibility test. These talks, which are being held in closed-door roundtable format, will seek legislative language to introduce soon. It is anticipated that bills will be introduced in both the House and Senate sometime this summer. What those bills will look like seems to be genuinely up in the air—or perhaps it’s better to say open for discussion. If the discussion should turn to the one thing Congress could do that would have the most impact, the answer would be clear. In order to have the most immediate, positive impact Congress must expressly overrule Mayo. The root of all the patent eligibility evil lies with that single Supreme Court decision.

What happens when technology convergence fundamentally changes your patent risk profile? What do you do when your customer demands broad intellectual property (IP) indemnification and your supplier provides almost none? Industries that clear patents as a standard practice are integrating technology from industries that specifically do not clear patents. If this sounds like a potential train wreck, well, it is. We recently completed a survey of 16 companies’ activities with respect to freedom to operate. In that study, we found substantially divergent patent risk mitigation strategies. For example, as you would expect in the chemical industry, companies did full patent clearance searches of their new molecules and processes—they wanted freedom to operate. That means they searched in all their major markets for any patents they might infringe prior to releasing new products. In contrast, high technology companies did no clearance search prior to product launch, but they adopted other techniques for reducing their overall risk—they wanted freedom of action. For professionals in each Industry, their respective risk mitigation strategy makes sense. But how can it be that in one industry people review and clear patents and in another they do not? The answer lies in the specific patent risks faced in each industry, and we will explore some of those risks.

In May of 2017, the United States Supreme Court delivered a unanimous decision in TC Heartland LLC v. Kraft Food Group Brands LLC that reversed the Federal Circuit and said that 28 U.S.C. 1400(b) remains the only applicable patent venue statute, that 28 U.S.C. 1391(c) did not modify or amend 1400(b) or the Court’s 1957 ruling in Fourco Glass Co. v. Transmirra Products Corp., and that the term “residence” in 28 U.S.C. 1400(b) means only the state in which a company is incorporated. Since TC Heartland, courts and plaintiffs have struggled to understand the real world application of this decision; most recently, the Federal Circuit in In re Google allowed a case to remain in the Eastern District of Texas because Google had servers there. Thus, while the decision has undoubtedly resulted in a shift away from the heyday of the Eastern District of Texas, the precise parameters of a “physical presence” sufficient to satisfy venue remain murky. To examine the effect TC Heartland has had so far, I recently sat down with Mike Oropallo of Barclay Damon, who has been out there litigating patent cases around the country. Among other observations, Oropallo says that—as usual—it all comes down to the Federal Circuit. Read on for more.

The Federal Circuit recently vacated a district court’s decision dismissing a complaint under Federal Rule of Civil Procedure 12(b)(6). Coda Development S.R.O. v. Goodyear Tire & Rubber Co., No. 2018-1028, 2019 U.S. App. LEXIS 5144 (Fed. Cir. Feb. 22, 2019) (Before Prost, C.J., Wallach, Hughes, J.) (Opinion for the Court, Prost, C.J.) Coda Development and Frantisek Hrabal (collectively “Coda”) sued Goodyear Tire & Rubber Company for trade secret misappropriation and correction of inventorship of 12 Goodyear patents directed to self-inflating tire (SIT) technology. Coda alleged that, during several confidential meetings held between the parties, Goodyear copied Coda’s inventions and filed patent applications based on those inventions without naming Coda as an inventor or co-inventor. The district court dismissed the complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted and denied the Plaintiff’s motion for leave to amend the complaint.

I am sure that the justices of the Supreme Court did not anticipate the confusion they created when they issued their controversial decision in Alice Corporation v. CLS Bank in 2014. That case effectively upended well-established precedence when the Court unanimously held that a computer-implemented scheme for mitigating settlement risk was not patent eligible subject matter because the claims were drawn to an abstract idea, and that merely requiring generic computer implementation fails to transform the claims to eligible subject matter. The Court itself said their holding was to be narrowly construed, but in providing a vague, two-step test to determine whether something is patent eligible, they unleashed a world of hurt on some of our domestic industries seeking patents in cutting-edge technologies. The application of the Alice test to some of our health-related industries is having disastrous effects. On February 6, 2019, in a split decision, the United States Court of Appeals for the Federal Circuit (CAFC) found in Athena Diagnostics v. Mayo Collaborative Services that diagnostic methods are not patent subject matter eligible unless they embody a separate technical improvement beyond the correlation of certain antibodies in bodily fluids to particular diseases. In a footnote, the majority lamented that they felt compelled by Supreme Court precedence to render their decision, but recognized that protection of diagnostic methods would be for good for society. The Athena case does not portend well for the CAFC adoption of the recent USPTO guidance on Section 101. The courts will eventually be able to either put their imprimatur on those guidelines or discard them. The sooner that is done, the better.

USPTO Director Andrei Iancu’s 2019 Revised Patent Subject Matter Eligibility Guidance promises to virtually eliminate the greatest patent problem of our time. If implemented properly by the examiners and Patent Trial and Appeal Board (PTAB) judges, the guidance could solve the 101 mayhem and the incredible harm that it has done to inventors of computer implemented inventions. The guidance will also increase the value of patents, since strategic infringers will not be able to use the PTAB as the killing ground for patents using subject matter eligibility. Director Iancu needs us to support him with positive public comments as justification for his guidance and, very importantly, to suggest improvements to his guidance for its final/future version(s) and its implementation. Please send the following text with any of your edits to [email protected] by the March 8, 2019 deadline.

The Licensing Executives Society (LES) 2017 High Tech Deal Term & Royalty Rate Survey is a milestone event for at least three reasons. First, it was the third survey since the inaugural survey in 2011, and the three surveys fully covered the time period of a decade—from 2008 to 2017. Second, the 2017 Survey marked the fifth anniversary of Inter Partes Review (IPR) procedure and the third anniversary of the Supreme Court’s ruling in Alice v. CLS Bank. Third, at the time of the Survey, a new USPTO Director was nominated by the Trump Administration, bringing a fresh glut of uncertainties, anxieties, and hopes to the already jittery IP market.

Earlier this month, the Federal Circuit dismissed an appeal from the Patent Trial and Appeal Board (Board) where the Board upheld the patentability of a biologics patent. After Momenta Pharmaceuticals petitioned the Board for an inter partes review (IPR) of the patentability of Orencia® (abatacept), the Board sustained patentability and Momenta appealed. During the course of the appeal, Momenta ceased development of an abatacept biosimilar. The Federal Circuit held that the cessation of potential infringement mooted the injury and removed Momenta’s standing to maintain the appeal. Momenta Pharm., Inc. v. Bristol-Myers Squibb Co., No. 2017-1694, 2019 U.S. App. LEXIS 3786 (Fed. Cir. Feb. 7, 2019) (Before Newman, Dyk, and Chen, Circuit Judges) (Opinion for the Court, Newman, Circuit Judge).

The Japan Patent Office recently added ten new case examples pertinent to artificial intelligence-related technology to Annex A of its Japanese Patent Examination Handbook. The examples are meant to facilitate understanding of the description requirements and the inventive step requirement in Japan as applied to AI-related inventions. In doing so, they provide a useful preview for how other patent offices might begin treating AI-related inventions. The examples are also very useful for any practitioner with clients in the AI space who intend to file in Japan.

Mozilla, Mapbox, Medium, Patreon, Etsy, and Wikimedia have filed an amicus brief in support of Google in its case against Oracle at the U.S Supreme Court. The platforms disagree with the Federal Circuit’s March 27, 2018, ruling that Google’s use of Oracle’s Java application programming interface (API packages) was not fair as a matter of law, reversing the district court’s decision on the matter. The brief is the latest of 14 that have been filed in the last week in support of granting the petition.

The United States Court of Appeals for the Federal Circuit recently issued a ruling reversing a district court’s grant of summary judgment of non-infringement and invalidity for failure to satisfy the written description requirement. See CenTrak, Inc. v. Sonitor Techs., Inc., 2019 U.S. App. LEXIS 4442 (Fed. Cir. Feb. 14, 2019) (Before Reyna, Taranto, and Chen, Circuit Judges) (Opinion for the Court, Chen, Circuit Judge). The Court said the written description requirement does not require that the specification provide either examples or an actual reduction to practice. Instead, a constructive reduction to practice may be sufficient if the specification identifies the claimed invention in a definite way.

Last week, Senator Chris Coons (D-DE) and Senator Thom Tillis (R-NC)—respectively, Ranking Member and Chair of the Senate Judiciary Committee’s Subcommittee on Intellectual Property, which was resurrected on February 7 for the first time since 2007—met with Congressman Doug Collins (R-GA) and others for their second bipartisan meeting in three months in search of a possible legislative solution to the patent eligibility crisis facing biotechnology, medical diagnostics and software related innovations. The same players met in December to begin discussing the issue, and stakeholders are now being told that they should join the conversation sooner rather than later if they want their voices to be heard. With the Senate IP Subcommittee back up and running and the seeming momentum on fixing patent eligibility law, it’s worth taking a look at the Subcommittee’s leadership and what their collective experience could mean for substantive change.

The United Stated Court of Appeals for the Federal Circuit recently held that a district court erred in its claim construction and vacated the district court’s judgment of noninfringement, which the parties stipulated to based on the erroneous construction. See Continental Circuits LLC v. Intel Corp., No. 2018-1076, 2019 U.S. App. LEXIS 3920, 2019 WL 489069 (Fed. Cir. Feb. 8, 2019) (Before Lourie, Linn, and Taranto, J.) (Opinion for the court, Lourie, J.). The Court highlighted that the first step in claim construction should always be to determine the plain and ordinary meaning of the claims. Further, the specification should serve to limit the plain and ordinary meaning only when it includes a definition for a claim term or a clear disclaimer or disavowal of claim scope.

When the Supreme Court believes that the Federal Circuit has made an error, they will reverse and remand with broad guidance, but often are not able to determine what the proper test should be. The Supreme Court wants, and expects, the Federal Circuit to determine the proper test because, after all, it is the Federal Circuit that is charged with being America’s chief patent court. But the Federal Circuit has become myopic. It is getting tiring to read in case after case— where real innovation is involved—the Federal Circuit saying that they are constrained, even forced by either Alice or Mayo, to find the very real innovation to be declared patent ineligible. This madness has to stop! It is time for the judges of the Federal Circuit to stand up and fulfill their Constitutional Oaths. They must interpret Supreme Court precedent—all of it—consistent with the statute and the Constitution.