Posts Tagged: "technology"

I recently authored an article for IPWatchdog arguing that the Federal Circuit in ChargePoint Inc. v. SemaConnect, Inc., (2018-1739) effectively overruled the new U.S. Patent and Trademark Office (USPTO) patent eligibility guidance. In my opinion, the ChargePoint decision was the very case that the Supreme Court in Alice Corp. v. CLS Bank warned would swallow all of patent law. After all, the Federal Circuit had the opportunity to take the Court’s caution seriously and interpret the abstract-based eligibility decision narrowly. It did not. Hoping for the remote chance the court will correct its error, I filed an amicus brief seeking rehearing en banc. My blunt assessment of the court’s reasoning and repercussions has been called inflammatory by SemaConnect. But it was the Supreme Court’s warning, not mine.

This week in Other Barks & Bites: The Trump Administration’s Final Rule that would have required list prices of drugs to be displayed in television ads is blocked by the U.S. District Court for the District of D.C.; the STRONGER Patents Act is reintroduced into both houses of Congress; the leadership of the Senate IP Subcommittee releases a statement on the splintered Federal Circuit en banc denial in Athena; the U.S. Copyright Office designates the mechanical licensing collective; Huawei is the top earner of Chinese patents thus far in 2019; Intel enters a period of exclusive talks in its wireless patent auction; T-Mobile and Sprint extend their merger deadline; Amazon launches initiative to retrain 100,000 employees for high-tech positions; and major drugmakers ask the Supreme Court to take up a patent case involving functional claiming issues.

Through the first half of June, a series of hearings on the state of patent eligibility in America held by the Senate Intellectual Property Subcommittee rendered a variety of interesting exchanges regarding current U.S. subject matter eligibility under Section 101 relating to various important sectors of the U.S. economy. During the second hearing, Senator Richard Blumenthal (D-CT) talked to panelists regarding his concerns about patent abuses in the pharmaceutical industry. During his period of questioning, Blumenthal grilled witnesses on the subject of whether the expansion of subject matter eligibility that would result from the proposed Section 101 draft text would exacerbate issues related to “patent thicketing,” a process by which drug companies attain large patent portfolios covering various aspects of a single drug formulation. Along with Senators Thom Tillis (R-NC) and Mazie Hirono (D-HI), Senator Blumenthal entered a series of questions for the record to be answered by panelists attending the recent patent eligibility hearings. Although the questions don’t overtly single out the pharmaceutical industry, panelist answers largely indicate that this sector was on most people’s mind while responding.

Last week, the Patent Trial and Appeal Board (PTAB) issued 31 decisions related to petitions for inter partes review (IPR) proceedings, instituting 14 IPRs and denying the other 17. Although Comcast saw a total of 11 IPR petitions denied institution, it succeeded on another six petitions, successfully initiating challenges of all four patents for which it sought review. Ten of the IPR petitions were part of the telecom giant’s ongoing legal battle with Rovi Guides. Unified Patents saw two of its IPR petitions denied, but the PTAB instituted two others. Another two IPRs, filed by a trio of major tech giants, were also instituted after the patent owner opted against responding to the asserted grounds for invalidity.

I don’t really know why we need the Federal Circuit anymore. Witness the denial of en banc rehearing in Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC on July 3. This denial of rehearing provoked eight separate opinions, with no single opinion achieving more than four judges in support. With 12 judges deciding whether to rehear the case en banc that means no single opinion gained support from more than one-third of the Court. And that opinion that gained the most support was a dissenting opinion, meaning those judges wanted to rehear the case and specifically said that the claims “should be held eligible”.  In fact, as Retired Chief Judge of the Federal Circuit, Paul Michel, noted yesterday, “all 12 active judges agreed that the Athena patent should be deemed eligible, even though seven judges apparently felt helpless in view of Mayo.”  The truth is the Federal Circuit is not helpless. The Federal Circuit is choosing to interpret Mayo—on the life science side—and Alice—on the software side—expansively. The Federal Circuit has one primary job, which is to bring stability and certainty to U.S. patent laws. It would be easy to distinguish both Mayo and Alice, but rather than recognize the peculiar facts of these cases as representing the most trivial of innovations, the Federal Circuit has used Mayo to destroy medical diagnostics and Alice to destroy software. More analytical prowess would be expected from a first-year law student.

The U.S. Senate gets busy today with hearings on the tech world’s impacts on America’s youth as well as NASA’s plans for manned missions on the 50th anniversary of Apollo 11. On Wednesday, Senator Coons and Representative Stivers will reintroduce the STRONGER Patents Act, which is aimed at strengthening the patent system and promoting innovation. NASA’s plans to commercialize low Earth orbit will also be discussed in the House of Representatives, along with biometric technologies employed by the Department for Homeland Security and cybersecurity threats to the U.S. energy grid. Around the U.S. capital, both the Brookings Institution and the Information Technology and Innovation Foundation will look at tech issues involved in the current trade war between the U.S. and China. ITIF will also explore the potential use of antitrust law to break up American tech giants on Thursday.

The Court of Appeals for the Federal Circuit was created to provide much-needed clarity and consistency to the nation’s patent law. In prior decades, the law had become hopelessly confused and incoherent due to disparate decisions of the regional courts of appeals. Two successive presidential commissions called for rectifying the situation because U.S. industrial competitiveness was lagging, and industries were faltering as a result of the weakness that had compromised the effectiveness of the patent system. For the previous century-and-a-half it had helped transform the country from a poor, agrarian land into the most advanced, powerful and wealthy nation on earth. In the 20th Century, nearly every significant scientific invention was created in America. But that was beginning to fade in the 1970s and beyond. Congress responded in 1982 by creating the Federal Circuit to hear all patent appeals…. These welcome developments increased incentives to invest in expensive research and development and the even more costly process of commercializing new inventions, putting new cures, products and services into the public’s hands and onto store shelves. In just the last few years, those incentives have lagged again due to sudden increases in uncertainty in the patent system, particularly regarding eligibility.

On July 3, the Court of Appeals for the Federal Circuit denied en banc rehearing in Athena Diagnostics v. Mayo Collaborative Services. The 86-page order from the Federal Circuit includes eight separate opinions—four concurring with the en banc denial and another four dissenting from the decision. The separate opinions reflect a Federal Circuit that isn’t divided so much on the issue of the importance of Athena’s now invalidated patent claims but, rather, the application of the U.S. Supreme Court’s Section 101 jurisprudence under Mayo Collaborative Services v. Prometheus Laboratories (2012). Throughout the opinions, it seemed clear that the Federal Circuit was eager to have the Supreme Court take this case up on appeal in order to clarify Mayo’s judicial exception to laws of nature and its impact on patent claims covering medical diagnostics.

Happy 4th! This week Barks & Bites comes early, starting with a bite: The Federal Circuit denies rehearing of Athena Diagnostics v. Mayo Collaborative Services, shattering the hopes of many amici and diagnostic companies; Huawei warns against politicization of IP law after the Trump Administration rolls back part of its ban against Huawei’s U.S. suppliers; Chinese President Xi Jinping talks IP theft compensation at G20 summit; USPTO announces new rule for attorneys representing foreign-domiciled trademark applicants and amends its software acquisition plan; the University of California earns a seventh patent covering CRISPR-Cas9 gene editing; Toshiba registers the UK’s first motion trademark; major U.S. tech firms plan to move production away from China; and Ed Sheeran’s copyright case is stayed until the “Stairway to Heaven” case is resolved at the Ninth Circuit.

I thought the Electric Power Group decision was effectively dead. It used an overbroad characterization of patent claims under Step 1 of Mayo/Alice. Following that decision, I encountered many Section 101 rejections that put forth an extremely broad characterization of claims, citing Electric Power Group as authority. I saw no rebuttal until the 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50, 52 (January 7, 2019). “Claims that do not recite matter that falls within these enumerated groupings of abstract ideas should not be treated as reciting abstract ideas.”  See id. at 53. The Electric Power Group decision was nowhere cited, and “collecting information” was not listed as one of the abstract ideas. Indeed, the Patent Trial and Appeal Board’s (PTAB’s) art unit 3600 soon decided that “‘collecting usage information’ … is not an abstract idea.” See Final Decision in Ex parte Fanaru, Appeal 2017-2898 at page 5 (PTAB 2019). I was thus able to use the 2019 Revised Patent Subject Matter Eligibility Guidance and Ex parte Fanaru to counter an examiner’s broad characterization of claims. Now, however, Electric Power Group may make a comeback. The very recent Cellspin decision again cited to Electric Power Group to support a very broad Step 1 characterization of claims. The Federal Circuit panel (Lourie, O’Malley, and Taranto) found the claims were “drawn to the idea of capturing and transmitting data from one device to another.”  See Cellspin Soft, Inc. v. Fitbit, Inc., et al., at page 16 slip opinion (CAFC, decided June 25, 2019).

It has been more than two years since I last wrote here that the U.S. Supreme Court’s 2014 Alice Corp. v. CLS Bank decision has left the IP bar without a clear and reliable test to determine when exactly a software (or computer-implemented) claim is patentable versus being simply an abstract idea “free to all men and reserved exclusively to none.” It is now mid-2019, and the USPTO’s newest Section 101 guidelines interpreting Alice—and the accompanying examples—have not cleared the confusion, and Alice continues to distract the USPTO, courts, and practitioners from focusing properly on Sections 102 (novelty) and 103 (obviousness). The net effects still being increased cost, lower patent quality, lower patent portfolio valuations, wasted patent reform lobbying dollars and, in many instances, the denial of patent protection for worthwhile software inventions. Meanwhile, in the real world, which is experiencing the Fourth Industrial Revolution—where even the average modern car contains roughly 150 million lines of code—the importance of software is undebatable.

On June 25, the U.S. Court of Appeals for the Federal Circuit issued an opinion in Cellspin Soft, Inc. v. Fitbit, Inc. (2018-1817, 2018-1819 to 1826), reversing a district court’s grant of various Rule 12(b)(6) motions to dismiss complaints that alleged patent infringement based on U.S. Pat. No. 8,738,794 (the ’794 patent), U.S. Pat. No. 8,892,752 (the ’752 patent), U.S. Pat. No. 9,258,698 (the ’698 patent), and U.S. Pat. No. 9,749,847 (the ’847 patent). The Federal Circuit did so because the district court misconstrued precedent from both Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121 (Fed. Cir. 2018) and Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018). The Federal Circuit panel consisted of Judges Lourie, O’Malley, and Taranto. Judge O’Malley authored the panel’s opinion. he Federal Circuit agreed with the district court that the claims were directed to an abstract idea but reversed anyway on the basis of the district court failing to conduct a proper Alice step two. This was because the district court ignored Cellspin’s factual allegations that, when properly accepted as true, precluded the grant of a 12(b)(6) motion to dismiss.

On Tuesday, June 24, the Patent Trial and Appeal Board (PTAB) declared an interference proceeding  between a collection of entities that are on opposing sides in the race to commercialize CRISPR-Cas9 genomic editing technologies. The patent interference will decide if inventors from the Regents of the University of California, the University of Vienna and the Umea University of Sweden were the first to invent certain methods for gene editing in eukaryotic cells, or plant and animal cells, that are covered by patent claims which have been issued to the Broad Institute, the Massachusetts Institute of Technology (MIT) and Harvard College. The patent interference involves 10 patent applications that have been filed by the University of California group and 13 patents that have been filed by the Broad Institute group. These two groups have been facing off in a series of legal battles regarding which side can properly claim to be the rightful inventor of perhaps the world’s most widely applicable gene editing technology useful for treating diseases, improving life science research and increasing the rate of biotechnology innovations.

IPWatchdog’s third Patent Masters Symposium was held this past week in Arlington, Virginia, and included some of the best and brightest in the patent world. The event focused on the effects of Alice five years on, but more importantly, identified practical approaches for navigating Section 101 law now and in the future. Throughout the event, I also asked attendees to vote on several statements in an effort to come to consensus on certain points relating to the pending patent reform legislation. Those statements that received at least 80% of the vote are included in the letter below, which will be sent to the Senators and Representatives working on the next draft of the new Section 101.

This week in Other Barks & Bites: The Supreme Court today agreed to hear two trademark cases next term; Senators Thom Tillis and Chris Coons issue a statement regarding the recent round of patent eligibility hearings by the Senate Intellectual Property Subcommittee; four bills that would impact pharmaceutical patents and practices have passed out of the Senate Judiciary Committee; Huawei publicly calls out negative impact of Senator Marco Rubio’s legislative amendment preventing it from seeking U.S. patent infringement damages, one day after losing its trade secret case against CNEX Labs; Spotify settles a pair of major copyright suits targeting its music streaming service; Intel will reportedly auction thousands of IP assets related to wireless device technology; and revised data shows that U.S. GDP grew 3.1% during the first three months of 2019.