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)