Source: https://www.ipwatchdog.com/2018/12/29/year-patents-top-2018/id=104584/
Timestamp: 2019-04-22 23:58:06+00:00

Document:
It is that time once again when we look back on the previous year in preparation to close the final chapter of 2018 in order move fresh into the year ahead. 2018 was a busy year in the patent world, although change was not as cataclysmic in past years, such as 2012 when the PTAB and post grant challenges began, in 2013 when AIA first to file rules went into effect, or in 2014 when the Supreme Court decided Alice v. CLS Bank. It was, nevertheless, still a very interesting year. A year that may well be remembered in the years to come as the moment in time when things finally started to settle down, when hope returned to the Patent Office, and even those judges of the Federal Circuit most unlikely to find inventions patent eligible began to find at least a few claims worthy of passing muster under §101.
Personally, in 2018 I was recognized by IAM Magazine as one of the top IP Strategists in the world for the second time, which certainly isn’t a top story, but a recognition I am humbled to have received. IPWatchdog also started offering training courses, with a patent prosecution training course aimed at those with 0-2 years of experience, and a real world seminar called Patent Masters™. We are looking forward to a great year in 2019, with more iterations of the Patent Masters™ symposium planned, more patent training courses, and our 20th Anniversary Celebration in October 2019!
In any event, to come up with the list below I’ve reviewed all of our patent articles, and have come up with these top 10 patent stories for 2018. They appear in chronological order as they happened throughout the year. If you’d like to review my selections from past years see Top Patent Stories from 2017 and Top 10 Patent Stories from 2016 and Top 10 Patent Stories from 2015.
Before proceeding it is worth noting two things. First, that my list focuses on specific and identifiable events. Second, there are a number of stories worth mentioning, but which just missed the cut for one reason or another. The two that will probably be most glaring omissions are the Federal Circuit’s decision in Vanda Pharmaceuticals v. Westward Pharmaceuticals, 887 F.3d 1117 (Fed. Cir. 2018), and the final rules implementing the Phillips claim construction standard. With respect to Vanda, while it is a pro-patent decision, the claims found eligible are virtually indistinguishable from those held ineligible in Mayo, so it seems virtually certain a different panel of the Federal Circuit would have ruled differently. Thus, all Vanda did was seem to create uncertainty, which may be good for settlements, but likely not a repeatable decision. As for the Phillips standard, while it makes perfect sense for the PTAB to be using the same claim construction standard as used in federal district courts, many have questioned whether it will make any real difference in outcomes. Still, it is a big event and would have been 11th on my list. Had a chance to Phillips been accompanied by patent claims being presumed valid and requiring clear and convincing evidence to be declared invalid at the PTAB, that would certainly be worthy of top 10 inclusion. Alas, that would require an amendment to the statute and beyond the powers of Director Iancu. Thus, the banishment of BRI, while important, finds itself on the outside looking just in at this year’s top 10.
While the United States continues to do well overall, patent protection continues to be problematic. In 2017 the U.S. ranked 10th worldwide in terms of offering patent protection to innovators. In 208, the U.S. fell out of the top 10, tumbling to a tie for 12th with Italy. Countries ahead of the United States for patent protection were (in order from first place on the Chamber patent index): Signapore, France, Germany, Ireland, Japan, Netherlands, South Korea, Spain, Sweden, Switzerland, and the United Kingdom.
The U.S. Chamber is expected to release its 2019 ranking in early February 2019, with a further slide by the U.S. patent system a distinct possibility.
Berkheimer absolutely deserves to take up two spots on this top ten list for 2018. It was a monumental decision, but one that strictly did not need to be adopted by the Patent Office. For example, the Patent Office does not follow standard for determining indefiniteness set forth in the Supreme Court’s decision in Nautilus, Inc. v. Biosig Instruments, Inc., 134 S.Ct. 2120 (2014). Instead, the Office believes the proper test for indefiniteness remains the Federal Circuit in In re Packard, 751 F.3d 1307 (Fed. Cir. 2014), which was decided prior to the Supreme Court’s Nautilus decision. This is because the Supreme Court has previously explained the Office can have a more restrictive test when allowing patents than would be applied in a litigation context. Therefore, although I and others would certainly disagree, an argument could be made that the procedural posture of Berkheimer as a patent infringement litigation matter might not have direct applicability to the Office.
Notwithstanding what might have been, Director Andrei Iancu, who had been at the Patent Office for just a few days by the time Berkheimer was decided, used the clear teaching and instruction of the case — that what is well understood, routine and/or convention is a question of fact — to apply across the board and into the patent prosecution universe. By April 2018, the Office issued fresh §101 guidance, which became known as the Berkheimer memo. The Berkheimer memo took a decidedly patent friendly approach to the §101 inquiry. Cases previously thought long lost were suddenly receiving Notices of Allowance. Cases up on Pre-Appeal Brief Conferences were being issued. Things have been different for well written applications in many Art Units at the Office since Berkheimer. Therefore, both the Federal Circuit decision and the Office guidance on the matter serve as two separate and critically important points for 2018.
On April 24, 2018, the United States Supreme Court issued its highly anticipated decision in Oil States Energy v. Greene’s Energy Group, 138 S.Ct. 1365 (2018), which asked the Court to consider whether post-grant challenges to issued patents at the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) are constitutional under Article III and the Seventh Amendment of the U.S. Constitution. As anticipated by many, in a 7-2 decision, the Court found that post-grant challenges, specifically inter partes review (IPR) challenges, are constitutional.
While the Supreme Court attempted to leave open the faint possibility that they were not foreclosing the possibility that patents are no longer property rights, the truth of the matter is the Supreme Court’s decision in Oil States effectively ends the discussion. Patents are not property rights and will not be property rights until Congress overrules Oil States.
Rather inexplicably, the Trump Administration argued that patents are a government franchise, and that is, in fact, what the Supreme Court ruled. Justice Thomas, writing for the majority, said that all inter partes review involves is “reconsideration of the Government’s decision to grant a public franchise.” Thus, patents are not property rights despite what the statute says to the contrary, and despite what the Supreme Court themselves have ruled to the contrary previously.
On April 24, 2018, the Supreme Court issued a decision in SAS Institute Inc. v. Iancu, 138 S.Ct. 1348 (2018). In a 5-4 majority ruled that there is no authorization in the statute for the Patent Trial and Appeal Board (PTAB) to partially institute a petition for inter partesreview. Thus, the Supreme Court held that when the Patent Office institutes an inter partes review it must decide the patentability of all of the claims the petitioner has challenged.
As explained by Justice Gorsuch, writing for a 5-4 majority, the plain text of §318(a) resolves this case. The language of the statute is “both directive mandatory and comprehensive. The word “shall” generally imposes a nondiscretionary duty, and the word “any” ordinarily implies every member of a group. “So when §318(a) says the Board’s final written decision “shall” resolve the patentability of “any patent claim challenged by the petitioner,” it means the Board must addressevery claim the petitioner has challenged,” Gorsuch wrote. Thus, §318(a) means that the Board must address every claim the petitioner has challenged.
On July 9th, the Court of Appeals for the Federal Circuit issued a decision in Applications in Internet Time v. RPX Corporation, 897 F.3d 1336 (2018), which vacated a series of final written decisions issued by the Patent Trial and Appeal Board (PTAB) invalidating patent claims held by Applications in Internet Time (AIT). The Federal Circuit panel of Circuit Judges Kathleen O’Malley, Todd Hughes and Jimmie Reyna found that the PTAB applied an unduly restrictive test in determining the statutory meaning of real party in interest for the purposes of instituting inter partes review (IPR) proceedings petitioned by RPX on patents asserted against RPX’s client Salesforce.
AIT filed discovery requests seeking documentation that RPX was the agent of Salesforce, which would have time-barred RPX’s IPR petitions under 35 U.S.C. § 315(b), the statute preventing the institution of IPR proceedings if the petition is filed more than one year after the date on which a real party in interest is served with a complaint for patent infringement. Among the relevant documents produced during discovery are included an RPX best practices guide for identifying patents to challenge, a declaration from RPX’s Vice President of Client Relations which identified conversations between RPX and Salesforce on the AIT patents and a history of payments from Salesforce to RPX which showed that Salesforce made a significant payment before RPX filed the IPRs against AIT’s patents. The PTAB, however, instituted RPX’s IPRs despite AIT’s time-bar claims.
The Federal Circuit found that the PTAB didn’t meaningfully examine Salesforce’s relationship with RPX and the nature of RPX as an entity that helps its clients extricate themselves from patent litigation.
Thus, the question with respect to who is a real party in interest will now correctly focus on who will benefit from having claims canceled or invalidated, which is a much more traditional definition of real party in interest and in keeping with hundreds of years of case law from other areas, which we know the Supreme Court prefers since they view patent law as not particularly unique or special.
Since he was confirmed to serve as Under Secretary of Commerce and Director of the United States Patent and Trademark Office, Andrei Iancu has been traveling all over the country giving speeches. He has also appeared multiple times on Capitol Hill. He has told the House Judiciary Committee that it is unclear what is patent eligible. Iancu has told me in an interview that the current state of §101 weakens innovation. Iancu has told industry audiences that people have a right to know what is patent eligible. Iancu introduced new Standard Operating Procedures at the PTAB and then proclaimed at the annual AIPLA meeting that it is a new day at the PTAB. Iancu has said that the boundaries of the patent grant should not depend on the tribunal where one is litigating. Iancu has also called §101 a morass, saying that the way out of the 101 morass is to strictly follow what is really quite limited guidance from the Supreme Court. And Iancu has called the patent troll narrative Orwellian doublespeak.
While any one of these moments may not rise to a single pivotal moment for 2018, collectively they rather clearly demonstrate that the USPTO has a new sheriff in town. A sheriff not afraid to be a champion for innovators seeking patents, and not just innovators who use the technologies patented by others. This represents a significant departure from the previous regime at the Office, and is a breath of fresh air that has inventors and innovators of all sizes hopeful and optimistic for the first time in years.
The Federal Circuit found IPR to be more like an agency action than a litigation where private parties initiate because “[t]he Director bears the political responsibility of determining which cases should proceed.” While that sounds logical, it is not correct. While the statute gives the Director the authority and responsibility to determine whether to institute IPRs, that statutory responsibility and authority has always been delegated to the Administrative Patent Judges of the PTAB. Thus, the Director plays no role whatsoever in deciding what cases to institute, and in fact has never taken any action to exercise discretion to step in and end harassing filings.
The second rationale provided by the Federal Circuit relates to the fact that the PTAB may continue to decide petitions even if the patent owner does not participate. The PTAB explains this power because they have power over the patent. Sadly, the Federal Circuit made the same error the PTAB made, which I previously pointed out here.
If the PTAB is really exercising jurisdiction over the challenged patent and not the patent owner that by definition means the PTAB exercises only quasi in rem jurisdiction, not in personam jurisdiction, or even in rem jurisdiction as the panel incorrectly suggested. The importance of this is that in Shaffer v. Heitner, 433 U.S. 186 (1977), the Supreme Court extended the notions of fundamental fairness expressed in International Shoe v. Washington, 326 U.S. 310, (1945) relating to in personam jurisdiction to the exercise of in rem jurisdiction.The Supreme Court in Shaffer went further to recognize the obvious: “[A]n adverse judgment in rem directly affects the property owner by divesting him of his rights in the property before the court.” Shaffer, 433 U.S. at 206. Thus, there is no distinction between in rem proceedings and proceedings over the property owner. Thus, the PTAB decision and Federal Circuit decision were based on legal fiction.
After the August 2018 meeting of the Patent Public Advisory Committee (PPAC), I wrote: “[I]f Director Iancu can truly get the USPTO to operate as one agency on the same page that would be a tremendous legacy.” On September 20, 2018, the USPTO announced the substantial revision of Standard Operating Procedures (“SOPs”) for the paneling of matters before the PTAB (SOP1) and precedential and informative decisions (SOP2). The revisions deliver upon the repeated promises of USPTO Director Andrei Iancu to increase transparency, predictability, and reliability across the USPTO. These new SOPs update the procedures based upon feedback the Office received from stakeholders, courts, legislators, and six years of experience with AIA trial proceedings.
Revised SOP1 puts an end to the practice of expanding PTAB panels without notice to the parties or the public.
Revised SOP2 creates a Precedential Opinion Panel (POP), typically comprising the Director, the Commissioner for Patents, and the Chief Judge of the PTAB. The POP will serve two primary functions: (1) it may be convened to rehear matters in pending trials and appeals, for example on issues of exceptional importance; and (2) it may assist the Director in determining whether a decision previously issued by the PTAB should be designated as precedential or informative. It is expected that the POP and the procedures described in revised SOP2 will, in most cases, replace the prior practice of expanded paneling under SOP1, with a process that is more transparent and predictable. It is also expected that revised SOP2 will result in more decisions being designated as precedential.
Director Iancu, and his successors, now have the power to truly create uniform, all-Office policy that will not only need to be followed by patent examiners, but must also be followed by the PTAB.
For the last time, can’t you people read a chart? The US is NOT tied for the 12th place with Italy, the US has the same ranking as Italy, but Italy is ranked 11th simply because “I” comes before “U” in the alphabet. Actually, with 10 countries tied for second place, the US ranks in the 3rd gradation.
Berkheimer absolutely deserves to take up two spots on this top ten list for 2018. It was a monumental decision, but one that strictly did not need to be adopted by the Patent Office.
2). The examiner will continue to dig in and say “Routine, well understood, and conventional” even though no one on Earth does this process?
Hopefully, by then the Director’s new “practical application” guidelines should be out, which like everything else, will support my application.
Will see. I still do not trust this patent process as far as I can throw it. In fact, my street smart friends are raising the question of conflict of interest. Government saves a ton of money with process, government entity denies patent, etc. etc. etc. You get the drift. My response to them: Blank stare.
Benny@1: If there was a 2018 Top Ten Stupid IPW Comments list, your comment would rank in the top one or two.
@Gene: I think there is a big misconception about the ability and competence of foreign workers in foreign outsourcing, especially for very complex work like IP legal work.
I think the threat of foreign outsourcing for U.S. IP work is really overblown.
Perhaps this is a topic of interest for a future ipwatchdog article?
My own experience with outsourcing to India is consistent with the report you cite.
As for the threat being overblown, I don’t know that I agree. I do think that smart U.S. companies have been insourcing work back from India because of substandard (to be polite) quality. But it seems to me that many large entities only care about cost on a spreadsheet. That is precisely why SMEs have always been able to grow and challenge established industry elites. With the patent system being so aligned against SMEs over the past decade quality has suffered and spreadsheet micromanagement of the U.S. economy has flourished.
Thoughts anyone? That could make a very interesting article that would wrap together a few hot button topics.
I’m not sure where you received your degree, but obviously they didn’t teach you anything about basic mathematical hierarchies and rankings. A tragedy.
Singapore was in 1st place, there was a 9-way tie for second place. With the U.S. and Italy having the same score that means there was a two-way tie for 12th place. I don’t care whether you like it, or whether you approve, but that is correct. So do yourself a favor and stop ranting about something you are so obviously wrong about.
I guess we are all saying the same thing. The American patent system is of a third rate quality. It really is no consolation to conclude that we are not worse than the Italian patent system, but at least of the same quality. You may also have to pity the Italians, who now have to admit that their patent system is of the same quality as the American one.
1) As much as I am one to correct Benny and his oft-errant views, I find myself more in his camp when it comes to that bantering about of the “12th place” designation.
Whether or not the numbers are exact (12th, tied for 11th, in a “third set”, etc.) — to me — is not the important matter. The more important matter is that the metrics of that device (the metrics being used to show “12th” or whatever) are rather weak and should be taken with a rather generous grain of salt. Perhaps if there were a more ardent measure, one more strongly reflective of reality, I would be more concerned. But that measure — as for as I can tell — is simply not all that great a measure. I cannot get worked up over it. Yes, as a general notion, the fact that some measures show our great system slipping is to be noted (and other more visceral effects are constantly noted); but the “oh no, we are not in the top ten” laments are more than a little overblown because of the context of that particular “top ten” count.
That being said, I think that everyone connected with patent law (and being honest about the state of US patent law protection), would easily agree that we have now LONG been going in the opposite direction from the direction we should be going. In this matter, Iancu is correct in that we NEED to change the narrative about patents, as the propaganda of “patents are bad” has so saturated the discussion pieces, that generally people associate a falling rank as perhaps a “good thing.” It always amazes me (especially in the arena of software innovation) that those MOST benefitting from weaker patent protections are most definitely NOT the individual workers who may be drinking the Kool-Aid of the Slash-dots and Tech-dirts, but are instead the large (typically multi-national) conglomerates who would rather compete on non-innovation terms.
2) Outsourcing of IP work. This appears to be generated only in the comments, and does come up time to time. I am here to remind all that such outsourcing PRIOR to any actual submission of an application to the patent office is an extremely bad idea that may not only negate the potential patent coverage one may eventually earn, but may also place those doing the outsourcing in violation of US export laws. The BIS controls and export laws have not changed since more than a decade ago the firm that I was with actively investigated the option of outsourcing patent prep. The decision to NOT pursue that avenue at that time has seen no change on the ground that would move the decision from a negative one to a positive (and not even a neutral) one.
Italians believe they are tied for 11th place with the US . Apparently the lawyers here are not too hot with statistics. That said, I agree with Anon that the metrics aren’t overly scientific.
The really sad thing is of course that the American Patent System was truly the Gold Standard, the shining light as an important economic instrument to entice smart people to do inventions and start new businesses based on these inventions, a virtually unstoppable economic engine, the envy of the world. The Great Exhibition in 1851 in London seemed to cement the UK as the world leader in industrial innovation. It became clear in 1874 during the Centennial Exhibition in Philadelphia that the USA was taken over as the industrial world power. It was well recognized that the innovative power of inventors protected by valuable patents had unleashed this new industrial giant.
Companies from Germany who exhibited in Philadelphia returned to their country, embarrassed by the low quality and lack of innovation in their own products compared to what was being produced in the USA.
I am not saying that we have to be number 1 in whatever metrics. But we had an excellent system that worked very well in supporting inventors. It was driven into the ground in a short 12 years. I am not longer sure that the patent system serves any real economic purpose at this time, except protecting the position of existing companies and institutions and fending off unwanted upstart innovators. At this rate, I believe our patent system will eventually become like the EPO, of reasonable quality, but too expensive to serve as the starting engine for entrepreneurs. We are splitting hairs over issues that have little scientific basis and thus cutting off promising inventions to serve as launcher of new companies. Bland, uninspiring, basically useless as an economic tool. We are already at a stage wherein obtaining a patent is treated with mild distaste and not as an important achievement.
Despite some positive signs, we are not better off with our patent system at the end of 2018 than we were at the end of 2017. In fact, I would argue that we are worse off. A trend, I fear, that will continue in 2019.
This is as good a synopsis of the actual long term, strategic view, that I have recently seen.
The language of the statute is “both directive mandatory and comprehensive. The word “any” imposes a nondiscretionary duty. “So §101 resolves the eligibility of “any patent claim challenged by the petitioner / patent applicant / infringing defendant.” Thus, §101 resolves all eligibility challenges.
“Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” means what it says and says what it means.
… and I’ll be using this in any future §101 challenges.
SCOTUS needs to be consistent.
Ternary >>Despite some positive signs, we are not better off with our patent system at the end of 2018 than we were at the end of 2017. In fact, I would argue that we are worse off. A trend, I fear, that will continue in 2019.
Our position right now is that we have director that understands patents. We have hostile district court judges, we have CAFC that was stacked by Obama, we have academia that overwhelming takes money from large corporations and produces hit papers, we have patent value reduction of 80 percent, we have a decrease in the number of patents filed based on inventions made in the USA, we have D’s saying that pharmaceutical patents are the devil with a real chance that someone like Warren could be elected, and we have constant lobbying money to continue to weaken patents.
That is our situation. The only counter balance to this will be the lost of innovation and a recognition that this is related to patents. The hope of this is small. Dreams of a new 101 being passed by Congress are absurd. Never happen. Dreams of any improvement are absurd. The patent system will continue to slide as long as big money is behind it.
My prediction is that patent applications during the next recession will drop 40 percent from inventions made in the US. Remember that the big corporations are going to say this is good and that it will help them recover. Remember that the big corporations are saying that the patents are from criminals that are stealing their money and that they can handel this “innovation” thing.
There are a few people that think differently, but they are washed away by the millions and millions that spent weakening the patent system. Remember too that people like Lemley who admit they have a large financial stake in burning down the patent system are smart. Lemley figured out that he needed that UVA paper so the SCOTUS could cite it to make patents a public right. The problem is they are as smart as we are and have full-time jobs where they are paid to weaken the patent system.
What is going to happen is that we are going to stagnate where the big companies merely take what they can get. We will probably be forced to reform in 20 years as we have fallen way down the ladder to China. It sounds like China is going to make it so their markets are protected from our companies stealing their innovations.
Anyway, I would make large bets that this is the way it will go down.
I wonder about one thing. All this talk is from lawyers point of view more or less divorced from Inventors reality. Same with infringers. They exist in a vacuum created by same lawyers in same artificial reality space free from influence of real life and real struggle of average American (inventor) who so far is playing sheep trying to play in same orchestra. But there is real life element who may be unleashed quite unexpectedly by somebody who simply investing his life and future in to his/her innovation and suddenly is robbed of created by himself opportunity by the same legal fiction participants. Don’t you think that desperate people may use desperate measures to defend themselves in only space they can effectively act (real life) outside of the Legal fictions and huge sums of money. Really the law system in US is close to lawlessness. I was watching recently on BBC player MacMafia how really skilled “negotiator” can enforce business rights. In real vacuum created by the legal fiction no doubt sooner or later some people will start using this type of physical reinforcement quite present in countries neighborhoods of Russia and used as well by some American corporations. Current real enforcement vacuum creates real opportunity for skilled operator with experience from Afghanistan or Chechnya and is only question of time when they start notice the opportunity and will start filling the space. Dysfunction can go only so far without welcoming new undesired players.
The US patent system (like everywhere else in the world) is really a business to business tool. Independent inventors are a minority in the system, and easily swept aside, unless you are dealing with a small player like a specialist importer who is importing an infringing product – in those cases a simple warning usually suffices, and they switch to a different supplier.
The vast majority of talented inventors actually work for businesses and assign their rights to their employers, who in turn generally do pay generous salaries to valuable employees.
The inference does not flow from the evidence. It depends on how many engineers “in India” are there, and 5% of 10 million is still 500,000, a sizable number of engineers that made the cut. And there is the euro-centric bias in this post. I have worked with a number of high school grads in the US who are given managerial positions simply because the companies were owned by Anglo Saxons and they wanted their own kind to “manage” doctorate-degree-holding Indians & Chinese, to “control” the technology. Also, there is a presumption that the only work to “outsource” is coding, and that there is a common metric by which coding is evaluated. That is absolutely false.

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