Don't Miss a Deadline in Your Inter Partes Review

An inter partes review is a litigation proceeding brought before the Patent Trial and Appeal Board (“PTAB”) to challenge the patentability of claims in a patent.  A successful inter partes review can cause cancellation of the patent claims so as to prevent future assertion of these claims, wiping out any pending verdict related to these claims and preventing the patent owner from seeking additional claims that are not patentably distinct from those claims found to be unpatentable.  The challenge to patentability in an inter partes review can be based only on the theory that the claims are anticipated or rendered obvious by one or more prior art patents or printed publications.

This comprehensive  flowchart shows a typical timeline for IPR proceedings with key deadlines that guide the reader from before the filing of a petition for an IPR all the way to the appeals process after conclusion of an IPR.

We recommend contacting an attorney before relying on any deadlines for Inter Partes Review reached using this flowchart.


Please see the Inter Partes Review web page for general information regarding Inter Partes Review.

For more information, contact Robert Asher.

Following a Congressional Mandate, the Federal Circuit Streamlines the Patent Litigation Process

By Brandon Arey, Legal Intern, and Thomas Carey, Chair of our Business Practice Group 

 

In three recent cases decided by the Federal Circuit Court of Appeals, jurisdictional issues have limited the options available to patent litigants.  The general effect of the decisions has been to restrict the ability to appeal and, in the case of appeals of proceedings before the Patent Trial and Appeals Board (PTAB), to direct the appellant to the Federal Circuit, eliminating an intermediate level of review by local district courts.

1.  Intellectual Ventures II LLC v. JP Morgan Chase Co. began when IV sued JPMC for infringement of five patents. JPMC moved to have the district court stay further proceedings until it filed petitions for covered business method (“CBM”) review with the PTAB. (CBM review is a type of post-grant review that allows a company accused of infringing a business method patent related to the administration of a financial product or service to challenge the validity of the patent.) Before the district court ruled on its motion for a stay, JPMC filed its CBM review petitions with the PTAB.  The district court denied JPMC’s motion before the PTAB acted on the CBM review petitions. JPMC then asked the Federal Circuit to review the denial.

The America Invents Act (“AIA”) gave the Federal Circuit jurisdiction to hear appeals of this nature when the PTAB has commenced proceedings. In May 2015 the Federal Circuit ruled, however, that filing a petition for a CBM review did not commence a PTAB proceeding for purposes of the AIA. Since at the time the district court denied the motion the PTAB had not acted on the JPMC petitions, proceedings had not commenced and thus the Federal Circuit had no jurisdiction to hear the appeal.

As a result of this case, a business accused of infringing a business method patent and that seeks CBM review will have to wait until the PTAB decides to initiate a proceeding if it wishes to have a right to appeal a district court’s denial of a motion to stay.

2.  Biogen Idec MA Inc. v. Japanese Foundation for Cancer has history dating back to the early 1980’s with a series of patent interference disputes between Walter Fiers (who assigned his patent to Biogen) and Haruo Sugano (who assigned his to JFC) relating to claims to certain DNA sequences. Biogen filed the most recent suit in federal court in Massachusetts in December 2013 to set aside a PTAB decision against Fiers in an interference that was declared earlier that year. (An interference is a pre-AIA proceeding to determine who was the first to invent of two or more competing patent applicants.) The district court concluded it no longer had jurisdiction to hear the appeal from the PTAB after the enactment of the AIA, and transferred the case to the Federal Circuit. (More)

Federal Circuit Moves Claim Construction One Step Closer to Uniformity

By Robert Asher. Chair of the Patent Office Litigation Group, Co-Chair of our Patent Practice Group

 

The America Invents Act of 2012 gave accused infringers a robust set of options for challenging patents before the Patent Trial and Appeal Board (PTAB), an adjudicatory body of the Patent and Trademark Office. These challenges–– inter partes reviews, covered business method reviews, and post-grant reviews–– have raised fears among patent owners, especially because patent claims have frequently been cancelled based upon standards that have stripped patents of their presumption of validity.

A dominant factor in this trend is the PTAB’s policy of applying the “broadest reasonable interpretation” to patent claims. The broader the scope of a claim the more likely it will be deemed invalid for encompassing a subject matter already known in the prior art. Courts, on the other hand, must presume that a patent is valid and apply a construction based on the claim language, the patent specification and the prosecution history.  The courts also sometimes consider extrinsic evidence such as expert testimony. These considerations often lead courts to a narrower claim construction, which can reduce a challenger’s opportunity to invalidate a patent.

I have discussed this disparity in claim construction in “Harmonizing Standards for District Court and PTAB Claim Construction.” I explained that, when the Supreme Court took claim construction away from juries in its 1996 decision in Markman v. Westview Instruments, it cited “the importance of uniformity in the treatment of a given patent as an independent reason to allocate all issues of construction to the court.”

The new PTAB proceedings threaten this goal of uniform treatment. The Federal Circuit’s recent decision in Microsoft Corporation v. Proxyconn, Inc. may serve to alleviate these fears somewhat if seen as continuing a trend toward shrinking the differences between claim construction in the district courts and the PTAB.

Microsoft brought an inter partes review against U.S. Patent No. 6,757,717 (the ’717 patent) owned by Proxyconn. The PTAB found all of the challenged claims unpatentable except claim 24. Microsoft appealed the confirmation of claim 24, and Proxyconn appealed the invalidation of the remaining claims. (Read the complete article)

The Specter of Indefiniteness: Recent Rulings Pose Further Challenges for Computer Software Patents

By Jay Sandvos. A member of our Patent Practice Group

 

In 1980, the Supreme Court declared that “anything under the sun that is made by man” could be patented. At that time, the main challenge in getting a patent was to demonstrate how the claims were novel and inventive over the teachings of the prior art.  But more recent court decisions now require a fiendishly difficult consideration of the “subject matter” of patent claims, which probably is fatal for most business method inventions and many inventions implemented in computer software.  (The lecturing, sanctimonious tone of these decisions is a little grating, too.)

In June 2015, two decisions continued the recent trend in patent law by revising the law on “functional” claim language—that is, language that describes what something does, as opposed to “structural” claim language, what something is.  There are various kinds of claims that can be used in a patent (device claims, method claims, etc.), and the United States Code governing patent law expressly permits functional claim language:

“An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.”

35 U.S.C. 112(b).

Such claims are referred to as means-plus-function claims.  Until now, a patent claim using the magic word “means” signaled that what followed was a functional description rather than a structural one. And if the claim language did not recite any particular structure, the proper construction of a means-for claim element referred to “the corresponding structure, material, or acts described in the specification and equivalents thereof.”

Since computer software is not structural in the same physical way as an eggbeater or a swing set, the claims in a computer software patent will have mainly functional language rather than structural language. In WMS Gaming Inc. v. Int’l Game Tech, the Federal Circuit Court of Appeals in 1999 held that when a software claim is set forth in means-plus-function form, the functional language is understood to refer to a “corresponding structure” in the specification in the form of “a specific algorithm” for performing the function recited by the claim.

In other words, to prevent a claim from being deemed invalid for indefiniteness, the specification must recite a specific algorithm for each software means-for element recited by a claim or else the claim is invalid. On the other hand, the Federal Circuit later acknowledged in In re Katz (2011) that a standard microprocessor could serve as sufficient structure for some generic functions that could be achieved by any general purpose computer without special programming, for example, “processing,” “receiving,” etc.

Recently, the Federal Circuit significantly narrowed the applicability of In re Katz.  In Eon Corp. IP Holding LLC v. AT&T Mobility LLC, the patentee, Eon, conceded that for some of the means-for claim elements at issue, the specification did not recite a specific algorithm as required by WMS Gaming. But, argued Eon, the various means-for claim elements could all be achieved by any general purpose computer without special programming, and hence, the “Katz Exception” should be applied. The Federal Circuit rejected that argument, concluding that the rule recited by WMS Gaming was broad and general, while the exception recited by Katz was narrow and limited, covering only a few of the most generic means-for claim elements. (Read the full article)

Recent (and Anticipated) Developments in the International Application of US Patent Laws

By Thomas Carey. Chair of our Business Practice Group

 

The international patent system is premised on the notion that each country regulates patent laws and their enforcement within its own borders.  International commerce does not always lend itself to such tidy compartments, however, forcing courts and legislatures to address complex situations.  Two recent decisions of the Federal Circuit Court of Appeals, as well as another case that is ripe for decision by that court, offer new guidelines for patent owners.

Inbound Sales.  Lelo Inc. v. International Trade Commission, decided in May 2015, considered the power of the International Trade Commission (ITC) to ban the import of items made abroad.  That power stems from 19 USC § 1337, which permits the ITC to ban imports of infringing articles that pose significant harm to an industry (actual or nascent) in the U.S.  To demonstrate the existence of a protectable industry, the statute requires the patent holder to prove that there has been substantial investment in plant and equipment; or significant employment of capital or labor; or significant investment in the exploitation of the patent, which may take the form of engineering, R&D or licensing activity.

In Lelo, the patent holder was Standard Innovation Corporation (SIC), whose products were not manufactured in the US.  Instead, they were made in China by a manufacturer that assembled components sourced from many countries.  Four of the components, accounting for about 5% of the total cost of the bill of materials, came from the US.

Lelo, a California corporation, imported a product competitive with SIC’s product and, it turns out, one that infringed SIC’s patents.  SIC sought a ban on the import of Lelo’s product into the US.

The initial review of the matter was conducted by an administrative law judge who held that the ITC lacked the power to ban the import of Lelo’s product because there was insufficient evidence of a US industry that would be harmed by the infringement.  Specifically, there was no proof that SIC’s purchases of US-sourced components were the result of significant capital investment or R&D in the US, or that they resulted in an increase in labor here.

On appeal, the ITC reversed the judge because it deemed the US-sourced components to be qualitatively significant because of “the critical nature of the components to the patented products.”

The Federal Circuit then reversed the ITC, stating that the statute compels a quantitative analysis.  The court referred to a 2007 decision that, where US subcontractors contributed 34% of the value of a product, there was a significant US industry to protect.  That earlier case was distinguished both because of the gap between 34% and 5% and because of the different nature of the sourcing.  The 2007 case involved US subcontractors to a US patent holder.  By contrast, SIC did not subcontract the manufacture of the US components; its Chinese supplier bought off-the-shelf articles from retailers. (More)

Issues Resolved in an Administrative Trademark Proceeding May Bind Federal Courts in Subsequent Infringement Actions

By Steven Abreu. A member of our Trademark Practice Group

 

In B&B Hardware, Inc. v. Hargis Industries, Inc., B&B opposed Hargis’s attempt to register its trademark SEALTITE, arguing that it would create confusion with its own SEALTIGHT mark.  The Trademark Trial and Appeal Board (TTAB) agreed and refused to register the mark.  Hargis did not appeal this ruling.

B&B Hardware then sued Hargis for trademark infringement. It asked the federal district court to preclude Hargis from arguing that the mark SEALTIGHT was not similar to SEALTITE because likelihood of confusion had already been decided in B&B’s favor by the TTAB.

The district court denied B&B’s request, and on appeal the Eighth Circuit Court of Appeals agreed because, it said, the courts use different criteria from the TTAB in evaluating likelihood of confusion. In March 2015, the Supreme Court reversed, ruling that TTAB decisions could have a preclusive effect on other trademark proceedings, including those in federal courts.

The Supreme Court held that if the TTAB has materially considered all factors relevant to the federal court’s determination and the normal elements of issue preclusion are also present, then the TTAB’s decision on an issue may preclude further litigation of the same issue in federal court. (MORE)

Designing a Stronger International Portfolio: The Hague Agreement and US Industrial Design Remedies

By Emmanuel Filandrianos. A member of our Patent Practice Group

 

Business-savvy designers with an eye towards global design protection should be excited. The U.S. has recently joined the international design system established by the Hague Agreement Concerning the International Registration of Industrial Designs, giving designers a streamlined procedure for obtaining protection of their design. The U.S. began accepting these industrial design applications on May 13, 2015. Although the term “industrial design” may sound more relevant to an engineer than to a fashion designer, the concept has broad applicability.

  
From Ferragamo^[1] to Ferrari^[2], diverse designers can now take advantage of the broadly applicable “industrial design” protection afforded to the ornamental design of manufactured products.

What are the benefits of adding an industrial design to your intellectual property portfolio? First, the application provides a single procedure for filing, maintaining and managing industrial design protection internationally. This is a cost-effective approach for applicants with limited legal budgets.

This consolidated procedure was unavailable to U.S. inventors before the U.S. joined the Hague Agreement. Previously, U.S. applicants had to file a new application locally in every country in which they wanted their designs protected. This involved the headache of filing multiple applications in different languages, with accompanying high fees and translation costs, and of complying with diverse in-country procedures. As of May 13, an application in English, French or Spanish, accompanied with a single currency filed at a designated receiving office such as the USPTO, will launch the procedure for registering an industrial design in all member jurisdictions selected by the applicant. These 62 jurisdictions include the United States, the European Union, Korea and Japan.

Some countries, such as the United States, issue design patents protecting industrial design and provide particularly strong remedies for infringement of designs. Other countries merely register the industrial design and leave for a later day the question of whether the design satisfies applicable standards for protection.

The Hague Agreement introduces provisional rights that accrue upon publication of the industrial design application, rather than upon later issuance of the design patent itself. Applications will be published in the online “industrial design bulletin” approximately six months after the filing date, unless the applicant requests delayed publication or immediate publication. Provisional rights may provide a reasonable royalty to the patent owner for the period before the patent’s issuance.  This is of particular importance to designers in industries where popular designs have rapid turnover, for example, in the fashion industry where styles change seasonally. Previously, a designer filing a new U.S. design patent application had to wait until the patent issued to start accruing damages, by which point the infringement may have already ceased.

Once the U.S. design patent is issued, damages that accrue thereafter may be calculated based on total profits reaped by an infringer.  Recent U.S. case law indicates that a patented design feature can lead to damages for total profits for the entire article, a rule that is in stark contrast with damages for utility-patent infringement, which usually provide reasonable royalty or lost profits attributable to the smallest saleable component containing the patented feature.

For example, Apple’s design patents covering the exterior of the iPhone likely were responsible for the enormous $1.05 billion verdict for profits on an entire smartphone against Samsung in the Northern District of California (2012). Although the decision to award total profits from the sale of an entire article for a design patent claiming only a portion of the article was controversial, in May 2015 the Federal Circuit upheld the award. Clearly, a design patent can be a powerful weapon, especially for a plaintiff suing a well-to-do defendant in a lucrative industry.

The distinction between utility-patent lost profits and design-patent total profits is subtle but significant. To recover lost profits, the patentee must prove that, but for the infringement, the patentee would have made the profits that were lost. Usually, this requires the patentee to establish demand for the patented product; absence of acceptable non-infringing substitutes; manufacturing and marketing capacity to exploit the demand; and the amount of profit that would have been made. Notably, the infringer may argue that some portion of the sales and profits resulted from factors other than the patented feature. (More)

^[1] Ferragamo design published on international bulletin at http://www.wipo.int/designdb/hague/en/ on March 20, 2015.

^[2]  Ferrari design published on international bulletin at http://www.wipo.int/designdb/hague/en/ on August 22, 2014.

Free Webinar: Patent Strategies for Getting a Software Invention through the Alice Thicket

 

 

 

By Bruce Sunstein. A member of our Patent Practice Group

 

A recent decision by the Federal Circuit, DDR Holdings, LLC v. Hotels.com, L.P, offers a glint of hope for protecting some software inventions after the same court’s discouraging decision 

 

Last year’s Supreme Court decision in CLS Bank v. Alice Corp has provided a host of challenges for anyone involved in software innovation. Noted patent attorney Bruce Sunstein provides --for in-house and outside counsel, software engineers, patent practitioners and managers -- a road map for dealing with the ramifications of this landmark decision. In this 40-minute webinar, Bruce identifies practical steps for addressing the Patent and Trademark Office’s post-Alice resistance to granting More...software patents.

Bruce D. Sunstein is the founder of the Boston law firm Sunstein Kann Murphy & Timbers LLP. His practice focuses on the development, management and monetization of intellectual property portfolios. Patents issuing on applications on which Bruce has worked have led to 8- and 9-figure infringement awards. Bruce has served as an expert witness, and as an arbitrator, in a range of intellectual property disputes. He is a frequent lecturer in intellectual property matters and has authored numerous papers on intellectual property subjects. His practice involves computer hardware and software, electronic circuits and systems, bioinformatics, pharmaceuticals, medical devices, communications and speech, and mechanical devices. He is a named co-inventor in a business method patent, number 6,985,887, covering methods for assisting in the prevention of identity theft. Bruce holds degrees from the Massachusetts Institute of Technology (B.S.), Indiana University (M.A.), and Boalt Hall School of Law of the University of California at Berkeley (J.D.). He also serves as a mentor for start-up companies in MIT’s Venture Mentoring Service.

 

Bruce Sunstein’s webinar teaches practical steps to overcome the PTO’s post-Alice resistance to software patents. Download webinar.

By Peter Karol. Peter is an Associate Professor Of Law, New England Law | Boston and Of Counsel To Sunstein Kann Murphy & Timbers LLP

 

The following article appeared first in Bloomberg BNA’s Patent, Trademark and Copyright Journal in a slightly different form.  The article follows up on Prof. Karol’s previous article published here discussing a widely-followed copyright case involving the preparation of course packs for university students in which portions of copyrighted texts are electronically assembled.  In the article below, Prof. Karol discusses an important but largely ignored aspect of the case, one that arises because the university in question was a state university.  Prof. Karol assumes familiarity with the four-factor fair use analysis common to copyright cases that is explained in his earlier article.

The most significant—and difficult—aspect of the Eleventh Circuit’s recent opinion in the electronic course pack fair use fight known as Cambridge University Press v. Patton^[1] might be the one that received the briefest treatment.

It took the district court just one paragraph to dispose of defendants’ contention that, as state actors sued in their official capacities as board members and officials of a state university, they were shielded from suit by Eleventh Amendment sovereign immunity. Through their failure to cross-appeal the issue, defendants waived the right to have the court of appeals consider that issue at all.^[2]

The problem with this back-of-the-hand treatment, though, is not simply that the district court might have erred in its analysis of a hard issue. Plaintiffs had at least a decent argument, accepted by the district court, that the Ex parte Young exception (explained below) to that constitutional bar allowed it to hear a case against state actors accused of violating federal law on a continuing basis.

The trouble, rather, is that such a cursory disposition of the issue obscures the dramatic role that the Ex parte Young posture should be (and, quietly, is) playing in the litigation. Namely, Ex parte Young slants every aspect of a case towards the future. Its entire reason for being is to alter future conduct by state actors, and avoid future violations of federal law (especially, but not neces­sarily, the federal constitution).

Prospective, Retrospective Conflict. Yet the analytic fair use framework adopted by the court of appeals in its recent decision in Cambridge Univ. Press is purposefully retrospective. Through its insistence on work-by- work, particularized fair use inquiries, it focuses the litigation on a series of discrete, unique events (48 infringements, each alleged to be a fair use) in the past, by specific people far removed from the state apparatus (academic professors and librarians) at a few moments in time (namely, in 2009).

This deep and undiscussed conflict—between Ex parte Young’s prospective, and fair use’s retrospective, vantages—places the otherwise leading case on disconcertingly weak ground as general precedent.

To step back, in Cambridge Univ. Press a group of academic publishing houses sued officials and board members of Georgia State University in a challenge to that university’s institutional practices regarding so-called electronic or digital course packs. (Electronic course packs are the digital analog to paper course packs—usually collections of articles and book excerpts selected by professors for students to read in their courses. The selections are generally uploaded to password-protected electronic reserve systems maintained by university libraries for student access.)

The particular allegations in Cambridge Univ. Press shifted somewhat throughout the litigation. By the time of trial, however, the district court understood plaintiffs primarily to allege that Georgia State University’s 2009 copyright policy, because of its misapplication of fair use principles, caused professors and librarians (non-parties) to commit widespread copyright infringement as they, among other things, selected, scanned, and electronically posted unlicensed materials for students to read for their GSU courses.^[3] The named defendants, in turn, were alleged to be responsible for that infringement (a theory sometimes considered an allegation of direct, and sometimes indirect, infringement). Plaintiffs urged the district court to sharply limit the practice going forward.

After some back and forth regarding the number of alleged infringements, all occurring in 2009, the district court found that of the 74 claimed infringements, plaintiffs had established a prima facie case in 48 infringements. It then proceeded to perform a fair use analysis on each of the 48 instances, concluding that fair use applied as a defense to infringement in all but five instances.^[4]  (More)

^[1] 769 F.3d 1232, 112 U.S.P.Q.2d 1697 (11th Cir. 2014)(88 PTCJ 1623, 10/24/14).

^[2] Cambridge Univ. Press, 769 F.3d at 1255.

^[3] Id. at 1242-1246.

^[4] Id. at 1252.

 

Briefings from the Trademark Universe

By Steven Abreu. A member of our Trademark Practice Group

 

From Sunstein’s trademark curiosity desk, here is a look at some recent developments:

• Tacking: When owners of similar trademarks argue over who has superior rights to the mark, the question often arises as to which owner first used it.  This may give rise to the further question of whether a modification of the mark over time results in a different mark (and therefore a shorter period of use of the current mark), or whether the uses of the variants can be “tacked” to each other so that the owner can claim one long, continuous period of use.  The U.S. Supreme Court has held that this is a question of fact, not law, and thus in a jury trial it is a matter for the jury to decide.
• Quantifying the value of marks: A study published by Markables, a trademark valuation service, demonstrates the value of trademarks by analyzing the figures in the most expensive brand acquisitions of 2013. Among these acquisitions were expensive brands such as HJ Heinz, Corona (beer), Joseph A. Bank (clothier), Saks Fifth Avenue (department store) and Skippy (peanut butter). The study compared the total purchase price paid for the acquisition less the value of tangible assets acquired, such as equipment, inventory and receivables. The difference between the two figures is attributable to brand value. For the top 20 acquisitions in 2013, the average percentage of the total purchase price attributable to the value of the brand is 34%. Thus, in deals reaching into the billions, the value of the brands, the trademarks, and a robust trademark protection strategy was evident.

For example, Markables valued the Heinz brand alone at $12 billion when the tangible assets were subtracted from the overall purchase price. The Sprint brand, used in telecommunications, was valued at $6.4 billion. Further down the list at number 16, Wish Bone, a salad dressing brand name, was valued at $348 million.

 

World Trademark Review observed that the Markables study highlights the role of brands and, by extension, trademark protection, as a “direct contributor to the corporate bottom line.”

• So-and-so sucks: Vox Populi Registry recently won a yearlong battle to be appointed by ICANN as the registry in charge of the .sucks top-level domain. The .sucks domain has caught the attention of a number of industry insiders for its peculiar pricing structure. Originally it was announced by Vox Populi that a one-year registration for a domain on the .sucks registry would cost $25,000 to trademark owners to register in the “sunrise period.” Concerns over profiteering on the backs of trademark owners prompted Senator Rockefeller of West Virginia to write a letter to ICANN chairman, Dr. Stephen Crocker, regarding the domain. “Will your organization allow a third party to purchase and operate ‘ICANN.sucks’?” the senator wrote.

Vox Populi has been reported to be rethinking its pricing structure. One wonders whether pressure from ICANN or the US Senate has had an impact. CEO John Berard told internet publication Domain Incite that the company has been rethinking its pricing strategy. “We are considering something much more in line with current pricing practices,” he said. (More)

Sour Grapes: When Can a Thief Spoil an Inventor’s Right to a Patent?

By Thomas Carey. Chair of the Business Practice Group

 

Imagine that your company has developed a proprietary technology that it expects to license to several potential customers.  The technology has great commercial potential but its use is not easy to detect. It may consist of a chip, embedded software, a manufacturing process, or even a medical implant.

Unbeknownst to you, an employee has pilfered the details of this technology.  Before your company has even filed a patent application, the employee has disclosed it covertly to some potential customers, telling them to be quiet about their use of the technology.
While you are readying your patent application covering the technology, these customers are integrating it into their own products (or making products with this new process).   Soon after your patent application is filed, they start selling those products without disclosing their use of the technology.

After the patent issues, you license the technology to several customers.  Later, they learn that their competitors have been using the technology without a license, and that this use can be traced to development activity that predates your own patent application.  As a result, they bring a lawsuit asking the court to rule that the patent is invalid because the technology was in public use before the patent application was filed.   Section 102(a) of the Patent Act provides that such public use deprives the inventor of the right to a patent.

What is the outcome of this nightmare?  The recent Federal Circuit court ruling in Delano Farms Company v. California Table Grape Commission suggests that your patent may yet survive.  The context of this case is unusual, however, involving grapes, an older version of the Patent Act, and some skulduggery.

The United States Department of Agriculture developed new grape varieties that it called Scarlet Royal and Autumn King.  The USDA obtained patents on these plant varieties and licensed them exclusively to the California Table Grape Commission, an agency of the State of California.  The Commission sublicensed the patents to grape growers in California and collected royalties that it shared with the USDA.

But before the patent applications for these new grape varieties were filed (and indeed more than one year prior to that date), the USDA held an open house at the University of California at Fresno, at which the grapes (but not the vines) were displayed.  Visiting growers were not allowed to view the plants in the field, only the grapes on the table.

Enter Jim and Larry Ludy, cousins who shared an interest in grapes.  They struck up a conversation with a USDA employee, Rodney Klassen, and asked him if he could get them some plant material for these new varieties.  Klassen had done like favors for the Ludys before and he obliged again this time. A few months later, in early 2002, Klassen gave Jim Ludy some plant material from these grape varieties and told Ludy not to let the material “get away from him” and not to “put them in a box.”  Ludy understood the former comment to mean that he should keep his possession of the plants a secret and the latter to mean that he should not sell the grapes until the varieties were commercially released. (More)

DDR Holdings: The Federal Circuit Leaves a Software Patent Standing

By Bruce Sunstein. A member of our Patent Practice Group

 

A recent decision by the Federal Circuit, DDR Holdings, LLC v. Hotels.com, L.P, offers a glint of hope for protecting some software inventions after the same court’s discouraging decision  in Ultramercial Inc. v. Hulu, Inc. (our article here), which in turn followed the negative decision of the Supreme Court in Alice Corp. v. CLS Bank (our article here). Ultramercial and Alice held that computer programs that are deemed directed to an abstract idea are not eligible to be patented, and the decisions ruled that the patents in question were invalid.

If the decisions in Ultramercial and Alice were not bad enough, they followed two other Supreme Court decisions holding patents invalid: Mayo v. Prometheus (involving medical diagnostics), about which we wrote here, and Ass’n for Molecular Pathology v. Myriad (involving biotechnology; our article here). All of these rulings have furthered the judicial trend of narrowing the scope of 35 U.S.C. § 101, the provision by which Congress defined a vast universe of patent-eligible subject matter.

In DDR Holdings, the Federal Circuit ruled that the abstract-idea exception to patent eligibility created by the Supreme Court did not apply to the software inventions that were the subject of the litigation. The court reached this result even though the software patents—like the patents in Ultramercial and Alice—concerned a business method practiced over the Internet. The technology at issue has applicability to a host website that is made available to third party merchants, each of whom would place a link to its own site on the host website, allowing a user of the host website to conduct business with the merchant.

The concern of the host website owner is that when the user seeks to do business on the merchant site, the user experiences a shift away from the host website, and thus the host website loses the attention of the user. The solution offered by the patents at issue in DDR Holdings was that “instead of taking the visitor to the merchant’s website, the system generates and directs the visitor to a composite web page that displays product information from the third-party merchant, but retains the host website’s ‘look and feel.’”

The court held:

[T]hese claims stand apart because they do not merely recite the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet. Instead, the claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks. In particular, the ‘399 patent’s claims address the problem of retaining website visitors that, if adhering to the routine, conventional functioning of Internet hyperlink protocol, would be instantly transported away from a host’s website after “clicking” on an advertisement and activating a hyperlink.

 

The court distinguished these claims from those in Ultramercial as not “broadly and generically” claiming “‘use of the Internet’ to perform an abstract business practice (with insignificant added activity).” “Unlike the claims in Ultramercial, the claims at issue here specify how interactions with the Internet are manipulated to yield a desired result—a result that overrides the routine and conventional sequence of events ordinarily triggered by the click of a hyperlink.” (More)

How Broadly Should Patent Claims Be Construed in Inter Partes Reviews? The Federal Circuit Enters the Debate

By Robert Asher. Co-Chair of the Patent Practice Group

Challenges to issued U.S. patents have grown at an alarming rate since the advent of inter partes review (“IPR”) on September 16, 2012. IPR is a procedure introduced under the America Invents Act that allows for challenging the validity of an issued patent in the Patent Office rather than in the courts.

One of the driving forces behind the popularity of the new procedure is that the implementing rules require the Patent Trial and Appeal Board (“PTAB”) to use the “broadest reasonable construction in light of the specification of the patent” when evaluating patents whose validity is challenged. By construing the patent claims more broadly than is practiced in a court of law, the PTAB makes the patent claims more likely to read on the teachings of prior art references. The result? Claims are more likely to succumb to an anticipation or obviousness challenge.

The very first IPR, decided in November 2013 by the PTAB, has now become the first to be considered on appeal by the Federal Circuit. On February 4, the court’s 2-1 decision in Garmin v. Cuozzo Speed Technologies affirmed the PTAB in all respects, agreeing that three claims of the challenged patent were invalid for obviousness.

Cuozzo Speed Technologies held a patent for “a speedometer integrally attached to [a] colored display” that uses GPS signals to alert drivers to the speed limit at the driver’s location. The company was unsuccessful with its patent claims before the PTAB because “integrally attached” was construed to require “discrete parts physically joined together as a unit without each part losing its own separate identity.”

Cuozzo sought a broader construction that would cover a display that integrated the functions and structures of the two claimed parts in a single display structure.  To the PTAB and the court, such an integral structure lacked the required attachment of two parts.

Despite Cuozzo’s insistence on a broader claim construction, it paradoxically challenged the PTAB’s use of the “broadest reasonable interpretation” (BRI) standard for construction. Cuozzo argued that BRI was applicable only in an examination before a patent examiner, not in an adjudicative IPR procedure before the PTAB where only an extremely limited opportunity to amend the claims is available.  (more)

Supreme Court Reins in the Federal Circuit on Patent Claim Construction, Resulting in Greater Clarity for Litigants

By David Blau. A member of our Patent Practice Group

February 2015 IP Update
 

The Supreme Court recently issued its latest installment in a long-running debate over the deference that is due to a trial judge’s interpretation of patent claim language. The issue was whether the trial court’s interpretation can be reviewed entirely anew on appeal, or whether an appeals court must accept the factual findings that underlie the trial court’s interpretation of the claims.

Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., decided on January 20, 2015, hinged on the question of whether the patent claims at issue were sufficiently clear and precise (or “definite”).  The requirement of claim definiteness provides a measure of certainty to the patent system.  It is part of the bargain struck between inventors and the market. Obtaining a patent grants an inventor the exclusive right to exclude others from making, using, selling, offering for sale, or importing her invention. However, she must communicate exactly what she is claiming as her invention, both for this right to be effectively enforceable by the inventor, and to inform other market participants of the behaviors proscribed by the right.

In Teva, the trial court had determined that the patent claims at issue, involving the MS drug Copaxone®, were sufficiently clear and precise so as to be valid.  In doing so, it resolved competing arguments as to whether the term “molecular weight” was ambiguous or whether its meaning would be clear to a skilled artisan.  Sandoz, the alleged infringer, pointed out that the term could have three different meanings.  The trial court, however, accepted an analysis of Teva’s expert, who explained that a key figure in the patent specification would be interpreted by a skilled artisan to imply one particular interpretation of “molecular weight.”

On appeal, the Federal Circuit, which hears all patent litigation appeals, disagreed.  It found the patent claims to be indefinite, and therefore unenforceable, because of the ambiguous nature of the term “molecular weight.”

In doing so, the Federal Circuit exercised authority granted to it by the 1996 Supreme Court ruling in Markman v. Westview Instruments, Inc., which held that interpretation of patent claims is not for the jury (the usual finder of facts in a case involving a jury) but exclusively for the trial judge to decide.  Ever since, the Federal Circuit has routinely considered the interpretation (or “construction”) of patent claims to be strictly a matter of law, not fact, and thus felt authorized in Teva (as it did in hundreds of prior cases) to review the question of claim construction afresh on appeal, with no deference to the findings of the trial court.

Since its 2005 decision in Phillips v. AWH Corp. that interpreted Markman, the Federal Circuit has directed trial courts to define words and phrases in patent claims by looking first to “intrinsic” sources of meaning.  These sources include the plain meanings of claim words, definitions of terms found in the non-claim parts of the application, and any admissions made during the patent application process.  If that review fails to resolve any alleged ambiguity, a trial court must next consider “extrinsic” sources of meaning, such as dictionaries, expert testimony, and scholarly journals.

The process of claim construction often results in a “duel of the experts,” in which each party to a suit offers expert testimony demonstrating why its claim construction is correct. In Teva, this duel focused on the meaning of “molecular weight.” (More)

Our Approach to Strengthening Patents

by Timothy M. Murphy and Robert M. Asher

At Sunstein, we use a mix of strategies to strengthen our clients’ patent position. While we often file continuation applications for this purpose, in some situations a continuation application is not pending, and it may be that the original patent is the one that needs to be buttressed for use in litigation. Lacking a continuation application, a patent can be strengthened through use of a supplemental examination, an ex parte reexamination or a reissue patent application. When our client becomes aware of prior art that may have an impact on the validity of its patent, we consider bringing the prior art to the attention of the USPTO for the purpose of obtaining a second review of the patent. It is more difficult to attack a patent in court if the prior art has already been reviewed by the USPTO. This is particularly true for a patent that has been twice approved by the USPTO. Supplemental examination, ex parte reexamination and reissue all offer the possibility of this second stamp of approval.

Ex parte Reexamination – A reexamination can be sought in a submission of prior art patents or publications to the USPTO with a detailed explanation of how they apply to the claims of the challenged patent. The request for reexamination may be made by a patent owner for reexamination of its own patent or by a third party. The USPTO puts the patent through a second examination if it determines that the request for reexamination has raised a substantially new question of patentability. A special corps of patent examiners has been assigned to give careful consideration to such requests. One of the rationales for the existence of reexamination procedures is to provide a mechanism by which the USPTO can participate in eliminating invalid patents and improving the quality of enforceable patents.

Reexaminations resemble the original patent prosecution, including office actions and responses, but with compressed response periods and no opportunity for continuation practice. An ex parte reexamination is handled by the patent examiner and the patent owner, without participation of third parties once the proceeding is initiated. We work effectively with the patent examiner to maintain for our clients the broadest patent protection possible and to add additional claims when appropriate.

Supplemental examination – A supplemental examination is a process by which a patent owner may cleanse a patent of inequitable conduct issues with respect to prior art not disclosed during the original prosecution of the patent. If the conduct was egregious, however, material fraud cannot be remedied and may instead result in consideration by the U.S. Attorney General. Inequitable conduct has been a common overly used defense against patent infringement, thus, there may be cases where a patent would benefit from supplemental examination. The patent owner has the ability to present not only prior art patents or publications but also other prior art such as an early offer for sale or public use of the invention. The supplemental examination must be requested before alleging patent infringement in a lawsuit for any inequitable conduct to be purged for purposes of that suit. If the supplemental examination determines that a substantial new question of patentability is raised by any of the prior art, however, an ex parte reexamination will be ordered. Under these circumstances, the reexamination may consider prior art other than patents or printed publications, if such art meets the substantial new question of patentability standard.

Reissue application – Another approach to strengthening a patent may involve the filing of a reissue application. A reissue application gives the patentee, if needed, the ability to fall back on a subsequent continuation or divisional application to further negotiate with the examiner for broad claim coverage. If the reissue is applied for within two years of issuance of the original patent, broader claims than those already issued may be sought. The filing of a reissue patent application requires identification of an error in the original patent such as claiming more or less than patentee had a right to claim. The scope of examination of a reissue patent application is more extensive than that of a reexamination. The USPTO may go beyond prior art patents and publications to address other issues of patentability as well. A patentee who survives reexamination or reissue gains enhanced prospects for litigation or licensing success.