Source: https://www.patentdocs.org/district_court/
Timestamp: 2019-04-19 11:02:29+00:00

Document:
Last week, in Novartis Pharmaceuticals Corp. v. Par Pharmaceutical Inc., District Judge Richard G. Andrews of the U.S. District Court for the District of Delaware granted a Motion for Estoppel under 35 U.S.C. § 315(e)(2) filed by Novartis Pharmaceuticals Corp. Defendant Par Pharmaceutical Inc. had taken no position on the estoppel issue.
The dispute between the parties began when Novartis filed three suits against Par (as well as related suits against Breckenridge Pharmaceutical, Inc. and West-Ward Pharmaceutical Corp.), with the parties agreeing that the validity of the patent at issue, U.S. Patent No. 5,665,772, would be tried only once. Defendants challenged the validity of claims 1-3, 7, and 10 of the '772 patent, arguing that the claims were obvious in view of 27 references.
While litigation was pending, Par challenged claims 1-3 and 8-10 of the '772 patent in an inter partes review proceeding. After the U.S. Patent and Trademark Office Patent Trial and Appeal Board instituted Par's IPR, the other Defendants filed four additional IPR petitions challenging the '772 patent, along with motions to join Par's IPR. The Board instituted two of the four additional IPRs and joined them with Par's IPR. The Board declined to institute and join IPRs challenging claim 7 of the '772 patent because claim 7 had been omitted from Par's IPR.
In March 2017, the District Court determined that the asserted claims of the '772 patent were invalid for obviousness-type double patenting, but did not address Defendants' obviousness defenses or counterclaims, and the District Court's decision was appealed. The Federal Circuit reversed the District Court's finding of obviousness-type double patenting in Novartis Pharmaceuticals Corp. v. Breckenridge Pharmaceutical Inc., 909 F.3d 1355, 1367 (Fed. Cir. 2018). Prior to the Federal Circuit's reversal, the Board issued a final written decision in Par's IPR upholding the patentability of claims 1-3 and 8-10 of the '772 patent.
Following the Board decision and appeal, the District Court asked the parties to file a status report summarizing the issues that still needed to be addressed in litigation. Novartis suggested that 35 U.S.C. § 315(e)(2) would possibly estop Defendants' obviousness defenses and counterclaims based on the Board's final written decision, and the District Court issued an order requesting briefing from Novartis on estoppel and from Defendants on obviousness. Following that order, the suits involving Breckenridge and West-Ward were dismissed by joint stipulation, and Novartis filed its Motion for Estoppel under 35 U.S.C. § 315(e)(2). In addition to taking no position on the estoppel issue, Par also declined to file a brief on obviousness, stating that it believed that a decision could be rendered based on the briefing and testimony already submitted to the Court.
The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a) . . . may not assert in either a civil action arising in whole or in part under section 1338 of title 28 . . . that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter parties review.
[T]he general purpose of the statute as well as the statutory language indicate that the most plausible interpretation is that any prior art that the IPR petitioner could have raised in the proceeding is estopped if there is a final written decision from the PTAB that the challenged claims are valid.
In addition, the Court pointed out that "one of the policy objectives behind the introduction of IPR proceedings was an intention to conserve judicial resources," adding that "[a]llowing an IPR petitioner to have two bites at the apple by holding back certain obviousness combinations runs counter to both the clear language and purpose behind § 315." Despite Breckenridge's argument that IPR estoppel should not apply after a district court has held trial, the Court indicated that it did "not think the application of IPR estoppel is dependent on the order in which certain events occur," and stated that "[t]he plain language of the statute does not indicate that Congress intended for there to be a time limitation upon the estoppel effect of a final written decision of an IPR."
On the issue of whether estoppel should apply to the 27 references put forward by Defendants at trial, Novartis argued that the 27 references all "could reasonably have been raised" in the IPR proceeding because they were used in the September 2016 trial which occurred before the reply due date in the IPR. The District Court therefore determined that Defendants were precluded from pursuing a § 103 invalidity argument as to claims 1-3 and 8-10 of the '772 patent. However, because no IPR was instituted as to claim 7 of the '772 patent, the Court determined that IPR estoppel did not apply for this claim. Nevertheless, Novartis had withdrawn its infringement contention as to claim 7 and had agreed to provide Par with a covenant not to sue on that claim. The Court therefore granted Novartis' Motion for Estoppel with respect to claims 1-3 and 8-10 of the '772 patent.
In a suit by Plaintiff Symantec Corp. ("Symantec") against Defendant Zscaler, Inc. ("Zscaler"), Symantec alleged that Zscaler's cloud-based security products infringe seven of Symantec's patents. Zscaler moved to dismiss infringement claims for four of the patents, U.S. Patent Nos. 6,285,658 (the '658 patent), 7,587,488 (the '488 patent), 8,316,446 (the '446 patent), and 8,316,429 (the '429 patent), on grounds that the claims of the patents are directed to patent-ineligible subject matter under 35 U.S.C. § 101. Earlier this month, Judge Jon S. Tigar of the U.S. District Court for the Northern District of California granted the motion in part, denied the motion in part as moot, and held the remainder of the motion in abeyance pending briefing on Symantec's assertion of assignor estoppel.
The '658 patent claims relate to a system for managing network bandwidth based on data contained in packets flowing in various Open Systems Interconnection (OSI) protocol layers (e.g., network layer, transport layer, and application layer). The '488 patent claims relate to filtering and dynamically rating Internet content. The '446 patent claims relate to a system for blocking unwanted software downloads. And the '429 patent claims relate to extracting and categorizing encrypted Internet communications between clients and hosts servers without having to decrypt network traffic between those clients and host servers.
During pendency of the motion to dismiss, the parties stipulated to dismiss the infringement claims with respect to the '658 patent with prejudice, and thus the Court denied the motion with respect to the '658 patent as moot. The Court also holds the motion in abeyance with respect to the '446 and '429 patents until the parties' cross-motions for partial summary judgement on the basis of assignor estoppel are resolved. Additionally, the Court noted that it would not consider the motion with respect to the '429 patent because the PTAB recently instituted inter partes review of the asserted claims of that patent.
dynamically determining a content category rating for the selected Internet-content identifier, wherein determining a content category rating comprises dynamically combining a rating for the selected Internet-content identifier with at least one of a rating for an Internet-content identifier identified within the portion of content for the selected Internet-content identifier and an Internet-content identifier for a portion of content that identifies the selected Internet-content identifier.
The background of the '488 patent suggests that existing approaches for Internet content filtering suffer from accuracy issues and other problems. For example, a rating of a given website coming from a single rating source might be inaccurate. The patent also notes that existing approaches primarily used blocked lists of content categories, and so website operators who did not want their websites blocked would circumvent filters by varying their URLs or by including non-blocked content. The patent thus purports to dynamically filter Internet content by dynamically combining multiple different ratings of that content. As an example, the patent describes how content raters can employ a variety of different classifiers, each configured to "rate content based on different criteria and/or algorithms," and thus, at a high level, the claimed invention can filter Internet content by using a combination of such ratings.
With respect to step one of the Alice test, Zscaler argued that the claims are abstract because they merely describe filtering Internet content. The Court agreed, citing primarily to the Federal Circuit's decision in BASCOM, in which the Federal Circuit upheld a district court's determination that "claims were directed to the abstract idea of 'filtering content' because 'content provided on the Internet is not fundamentally different from content observed, read, and interacted with through other mediums like books, magazines, television, or movies.'" The Court also reiterated that filtering content has long been viewed as a well-known manner of organizing human behavior. As to the claimed concept of dynamically combining ratings for Internet content, the Court stated that the dynamic nature of the recited functions did not save the claims from abstraction, and that "organizing existing information into a new form or employing mathematical algorithms to manipulate information and generate additional information" is not patent-eligible.
[T]he patent may not even describe an improvement. The specification admits that the prior art included "automated and/or server-based approaches to Internet content filtering" which "constant[ly] updat[ed]" the applicable "list of content categories and . . . approved and non-approved sites" [citation omitted]. The patent is silent as to any differences between dynamic rating and automatic rating. . . . Nor does the patent explain how dynamic, non-list-based rating accomplishes more than automatic, continually updated filtering.
Symantec also attempted to argue that the claimed system's alleged scalability made it inventive, but the Court was not convinced by this either. The specification describes that multiple content-rating machines could be simultaneously connected to the claimed system, thus allowing for scalability (e.g., by adjusting the quantity of raters based on demand). Still, the Court asserted that the specification does not describe this kind of scalability as an improvement over the prior art, and thus concluded that "it cannot serve as the inventive concept."
Ultimately, neither the claims nor the specification of the '488 patent conveyed improvements over the prior art to a degree sufficient for patent-eligibility.
Last month, in Ni-Q, LLC v. Prolacta Bioscience, Inc., District Judge Michael H. Simon of the U.S. District Court for the District of Oregon granted a motion for summary judgment filed by Plaintiff Ni-Q, LLC that the asserted claims of U.S. Patent No. 8,628,921, which is assigned to Defendant Prolacta Bioscience, Inc. ("Prolacta"), are invalid under 35 U.S.C. § 101 for failure to claim patent-eligible subject matter. The District Court also determined on summary judgment that Ni-Q did not infringe the asserted claims of the '921 patent, even if those claims had been found valid. We previously reported on this case in 2017 when the District Court denied Ni-Q's motion for judgment on the pleadings under Rule 12(c) of the Federal Rules of Civil Procedure that the claims of the '921 patent were invalid under 35 U.S.C. § 101 for failure to claim patent-eligible subject matter.
Ni-Q had initiated the dispute between the parties by filing a complaint for declaratory judgment of noninfringement and invalidity of the '921 patent, as well as alleging a violation of the Oregon Unlawful Trade Practices Act. Prolacta responded by filing a counterclaim against Ni-Q for money damages and injunctive relief, asserting that Ni-Q had infringed claims 1, 2, and 9 of the '921 patent.
(d) processing the donated mammary fluid whose identity marker profile has been matched with a reference identity marker profile, wherein the processed donated mammary fluid comprises a human protein constituent of 11-20 mg/mL; a human fat constituent of 35-55 mg/mL; and a human carbohydrate constituent of 70-120 mg/mL.
Prolacta receives human milk from donors and processes it to make fortifier and other products for use in feeding premature and other medically fragile infants. Ni-Q is also engaged in the procurement, production, and sale of human milk-based products for use in feeding premature infants.
In construing the claims, the parties stipulated and the District Court adopted that the term "wherein a match" means "a determination that the marker(s) in the biological sample and donated fluid or milk are the same and that there are no additional unmatched marker(s)." The District Court also construed the term "processing" to mean: "One or more of the following: filtering, heat-treating, separating into cream and skim, adding cream to the skim, or pasteurizing." Following the District Court's construction of the claims, Ni-Q filed a motion for partial summary judgment, arguing that in view of the Court's claim construction, claims 1, 2, 4, 6-9, and 11 of the '921 patent were invalid under 35 U.S.C. § 101 for being directed to patent-eligible subject matter, and that it did not infringe the claims of the '921 patent because it did not perform all of the steps of the asserted claims.
With respect to the issue of validity, Ni-Q argued that the asserted claims were invalid under 35 U.S.C. § 101 because they are directed to a patent-ineligible natural law with no inventive concept to transform the natural law into patent-eligible subject matter. More specifically, Ni-Q argued that the presence of identity markers such as DNA and proteins in a woman's tissue or milk is natural, and the nutritional levels required by the patent occur naturally. Prolacta responded by asserting that the claims are directed to producing safer milk that is standardized with optimal nutritional values, contending that the claimed method recites steps for selecting for processing safe milk from health-screened donors and manufacturing a nutrient-enhanced human milk product.
With respect to the first step of Alice/Mayo framework, the District Court agreed with Ni-Q that "the asserted claims are directed to the laws of nature," and that "[t]he presence of identity markers such as DNA in a woman's mammary fluid and other biological tissue is natural." The Court explained that "[a]lthough the patent describes the human action of testing the original reference sample and the mammary fluid sample and comparing them, that does not convert the claim to patent-eligible subject matter," adding that "[t]he relationship of the markers in the samples exists naturally." The Court determined that "Claim 1 merely describes the natural law that two different biological samples from the same individual contain the same identity markers and thus can be tested and compared."
Claim 1 is a broad claim that is not limited to a particular application of natural law. It is not limited to commercial human breast milk production, to certain processing that alter the makeup of the breast milk, or to testing breast milk donors for viruses, bacteria, drugs, or other health issues and then ensuring that later-donated milk matches the originally-screened donor. Indeed, it purports to cover any use where: (1) a donor has donated a reference sample and mammary fluid that are tested for a match; (2) if there is a match, the donated mammary fluid is processed using any of the five types of processing; and (3) after processing, the mammary fluid contains the identified nutrient ranges. Because these nutrient ranges are found naturally in breast milk, the claim's covered use could include, for example, researchers who are testing the efficacy of DNA comparisons between breast milk and other biological samples and in so doing heat-treat or pasteurize the milk.
With respect to the second step of the Alice/Mayo analytic framework, Ni-Q argued that Prolacta's comparison of DNA to match the reference sample to the donated mammary fluid was not new or inventive, and that because processing can include pasteurization, that is also not a new or innovative step. Prolacta responded that three aspects of the claims are new or inventive: (1) applying DNA analysis to mammary fluid; (2) selecting mammary fluid for processing based on a matching processing that ensured the donated fluid was from a specific subject, thereby eliminating the risk of communicable diseases in donated milk; and (3) requiring the recited nutrient ranges.
The District Court rejected Prolacta's second and third arguments, stating that "the elimination of health concerns and communicable diseases in processed milk is not contained in any of the asserted claims (and therefore cannot provide an inventive concept) and the required nutrient ranges may not require any processing other than pasteurization of donated milk, which is not new or inventive." The Court also took issue with Prolacta's first argument, noting that "nothing in the claims requires screening of the donor," and therefore, that Prolacta's "new application" -- i.e., the genetic link between screened donors and donated milk and excluding milk containing DNA from unknown and unscreened donors –- "is not the application in the claims." The Court also noted that the claims "do not require the matching be through maternal DNA," and that "[a]ny identity marker will suffice." The Court therefore concluded that "the claims add no new or inventive concept not already known in the art," and that "[c]onsidering the steps 'as an ordered combination adds nothing to the laws of nature that is not already present when the steps are considered separately,'" quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 79 (2012). Thus, the Court found the claims to also "fail at step two" of the Alice/Mayo framework.
Turning to the issue of infringement, Ni-Q asserted that it does not perform the "wherein a match" step of the asserted claims and therefore did not literally infringe the '921 patent or infringe the '921 patent under the doctrine of equivalents. In particular, Ni-Q asserted that in view of the District Court's claim construction, the "wherein a match" step requires a determination that there are no additional unmatched markers between the biological sample and the donated fluid or milk, and that it never determined that there were no additional unmatched markers. The Court again agreed with Ni-Q, finding that "the '921 Patent requires a determination that the milk processed had no additional unmatched markers," and determining that "because Ni-Q processed the milk and did not make that determination before processing, Ni-Q did not infringe the patent" (emphasis in opinion). The District Court also concluded that Ni-Q did not infringe the '921 patent under the doctrine of equivalents because "[t]he purpose of the second step of the 'wherein a match' requirement—making sure there are 'no unmatched markers'—is to prevent contamination from unscreened donors," and "Ni-Q does nothing equivalent to that step to prevent contamination from other donors."
The District Court therefore granted Ni-Q's motion for summary judgement, finding that there were no genuine issues of material fact, the asserted claims of the '921 patent are invalid under 35 U.S.C. § 101, and that Ni-Q did not infringe the asserted claims even if they were valid.
In the U.S. District Court for the District of Delaware, a patent directed to electronic gift card distribution was found to be directed to patent-ineligible subject matter.
Coqui filed related patent infringement actions claiming infringement of U.S. Patent No. 7,580,864, entitled "Method for Circulating an Electronic Gift Certificate in Online and Offline System," which claims a method of circulating electronic gift certificates and managing sales of electronic gift certificates according to requests made through wired and wireless networks.
The '864 patent describes that a gift certificate database and a gift certificate service server manage sales of the electronic gift certificates according to requests by a communication terminal through wired and wireless networks. A user provides a purchase request from a communication terminal, and the server determines if proper funds were supplied for the gift certificate. If so, the purchased electronic gift certificate is provided to the user and stored in the gift certificate database. A user can buy a desired product at an online shopping mall through a terminal such as a subscriber's computer, and perform an online settlement with the user's electronic gift certificate. Here, the electronic gift certificate circulation system can authenticate the user by using a telephone number of the subscriber's communication terminal and an electronic gift certificate password through the online shopping mall, and then settle the corresponding electronic gift certificate.
wherein the electronic gift certificate is a multimedia message including barcode data, wherein the network server is responsive to use of the electronic gift certificate occasioned by displaying the barcode data on the communication terminal, and wherein the electronic gift certificate information stored by the gift certificate database includes at least one of a gifting history of the gift certificates or a usage history of the gift certificates.
The '864 patent describes that by unifying an electronic gift certificate management system and a mobile communication system into a single system, the invention simplifies an electronic gift certificate circulation system and allows the electronic gift certificates to be quickly and accurately purchased, gifted, and used.
Defendants filed motions to dismiss for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). According to Defendants, Coqui's complaint fails to state a claim because the patents-in-suit are ineligible for patent protection under 35 U.S.C. § 101.
The Court followed the two-step framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.
In step 1, the Court determined whether the claims at issue are directed to a patent-ineligible concept. Applying the first step of the framework to the asserted claims, the Court concluded that the claims are directed to the abstract idea of selling, gifting, and using electronic gift certificates over a network, which is a longstanding commercial practice.
Coqui argued that claims of the '864 patent represent patent eligible material unique to the Internet directed to a concrete method of purchasing and using an electronic gift card-in the form of a barcode received via a MMS message and displayed on a display device with Internet access-as well as tracking the usage and gifting history of the particular electronic gift card. In addition, Coqui argued that the additional security provided by the patented method's authentication of gift certificate membership and usage histories is not an established commercial practice defeating Defendants' abstract idea allegation.
However, the Court found that the claims of the '864 patent relate to the abstract idea of selling, gifting, and using an electronic gift certificate. The preamble of claim 1 identifies a gift certificate service system for managing sales, gifting, and usage of electronic gift certificates according to a request by a user's communication terminal through a wired network, wireless network, or both. Claim 1 subsequently lists the following elements: (1) a gift certificate service server; (2) a database; and (3) a network server. Each of the subsequent claim 1 limitations refer back to either managing the purchase, gifting and usage operations or the gifting or usage history of electronic gift certificates.
The Court noted that a gift certificate is defined in the '864 patent as a bill that has an exchangeable value so that a user may give it to a shop to make a purchase or get a discount on a desired product. Applying the Internet and computer components to the commercial practice of electronic gift certificates does not preclude a finding that the '864 patent is abstract.
The Court highlighted that the claims of the '864 patent do not improve the functioning of a computer or any of the other components involved in the method. Instead, the asserted claims add conventional computer components to well-known business practices.
The Court found that the '864 patent's alleged security benefits do not confer patent eligibility because the authentication of a gift certificate transaction could be performed by a human with a pen and paper. The preferred embodiment of the '864 patent describes a database that stores a gifting history and usage history as well as a history of gift certificates bought by the client to authenticate that the client's gifting or usage of the electronic gift certificate is fair. Such authentication could be performed using a pen and paper; therefore, the Court found that the '864 patent is directed to an abstract idea despite the added security benefits that might result from using a computer to perform authentication.
In addition, authenticating and verifying the balance of the electronic gift certificate was found to be abstract because it relates to the "organizing of human activity."
Because the '864 patent was found to be directed to the abstract idea of selling, gifting, and using electronic gift certificates, the Court turned to the inventive concept analysis in step 2.
The '864 patent claims implement the longstanding commercial practice of selling, gifting, and using gift certificates by using a generic computer and networking components in conventional ways.
Coqui argued that the '864 Patent offers a useful, non-conventional and non-generic arrangement of components and functionality, namely, an inventive configuration of components that solve problems associated with conventional gift certificate circulation like the requirement of being physically present to purchase a gift certificate and additional settlement processes.
But the computer components described in the '864 patent are generic and function in conventional ways. The communication terminal is used as a "mobile user interface." The service server is used for "managing purchase, gifting, and usage operations." The database is used "for storing electronic gift certificate information." The network server is used for "transmitting . . . gift certificate information . . . to the communication terminal." These components, as described in the '864 patent, operate in their typical capacities in conventional ways and do not embody an inventive concept. The '864 patent does not specify precise devices that must be used in the method or provide any explanation about how the software solves a technological problem.
Coqui also did not explain or argue that the arrangement of the components or some type of configuration unique to the '864 patent improves the functionality of a generic computer or solves a technical problem.
The Court noted that the application of barcodes, MMS messages, and devices with Internet access to a system comprising generic computing components for circulating electronic gift certificates is not an inventive concept.
The Court discounted the idea that the '864 patent improves the electronic gift certificate process by facilitating the purchase, usage, and gifting of certificates without requiring the customer to be physically present in the store as not being an inventive concept because it was found that the claims at issue here do not solve a technological problem. Instead, the claims provide a conventional technological environment (i.e., computers and the Internet) in which to carry out the abstract idea of using electronic gift certificates.
Because the claims were found to be directed to an abstract idea without an inventive concept, the Court recommended to grant defendants' motions to dismiss pursuant to Rule 12(b)(6).
After reflecting upon the events of the past twelve months, Patent Docs presents its 12th annual list of top patent stories. For 2018, we identified fifteen stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants. Yesterday, we counted down stories #15 to #11, and today we count down stories #10 to #6 as we work our way towards the top five stories of 2018. As with our other lists (2017, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look. As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know. In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2018" on January 16, 2019 from 10:00 am to 11:15 am (CT). Details regarding the webinar, which will focus on a handful of the most important stories on this year's list, can be found here.
This emperor clearly has no clothes; we need not wait for our children to tell us this. The legitimate expectations of the innovation community, as well as basic notions of fairness and due process, compel us to address this § 101 conundrum.
In July, the Federal Circuit handed down an en banc decision in NantKwest, Inc. v. Iancu, regarding the question of whether under 35 U.S.C. § 145 an applicant must pay the U.S. Patent and Trademark Office's attorneys' fees as part of the "expenses" the statute mandates, regardless of whether the applicant won or lost the case. The District Court had rejected the Office's argument that it was entitled to recover attorneys' fees (and other expenses), and a divided panel of the Federal Circuit reversed the District Court's decision and ordered payment of the Office's fees. The Federal Circuit chose to review the panel's decision sua sponte, and the en banc Federal Circuit affirmed the District Court's decision, over a spirited dissent, holding that the Office was not entitled to its attorneys' fees in appeals under § 145.
In October, the Supreme Court granted certiorari in Return Mail, Inc. v. U.S. Postal Service, in order to answer the question whether the government can bring post-grant review proceedings under the Leahy-Smith America Invents Act (AIA). Specifically, the Supreme Court agreed to review whether the government is a "person" under the AIA, as is required to file a petition seeking the institution of AIA review proceedings. The case began with Return Mail seeking to license its '548 patent, which claims methods, computer programs, and systems for processing undeliverable or returned mail, to the Postal Service. Instead of licensing the '548 patent, however, the Postal Service filed a petition for ex parte reexamination with the U.S. Patent and Trademark Office. The USPTO instituted the reexamination proceeding, but eventually confirmed the validity of the patent. Return Mail then filed a complaint against the Postal Service in the Court of Federal Claims. While that action was pending, the Postal Service filed a petition seeking the institution of covered business method (CBM) review of the '548 patent. Return Mail opposed the institution of the CBM review​ on both substantive and procedural grounds, including that the Postal Service lacked standing to file a CBM petition. Both the PTAB and a majority of the Federal Circuit panel hearing the appeal found that the Postal Service satisfied the requirement that it be a "person." The Supreme Court granted certiorari on the issue of whether the government is a "person" in the context of the AIA's CBM proceeding. Thus, by the middle of next year, we should know whether government agencies are "persons," permitted to bring AIA proceedings.
In April, the Supreme Court reversed the judgment of the Federal Circuit in SAS Institute Inc. v. Iancu, with Justice Gorsuch (joined by the Chief Justice and Justices Kennedy, Thomas, and Alito) providing a textual explication of the inter partes review (IPR) statute in deciding that the U.S. Patent and Trademark Office was compelled to render a Final Written Decision (FWD) on all claims challenged by a petitioner in its IPR petition. This decision overruled the Patent Office's practice that the Director (through the Patent Trial and Appeal Board) could institute an IPR on less than all challenged claims and then limit the FWD to only the instituted claims. Just two days after the Supreme Court's decision, the U.S. Patent and Trademark Office issued Guidance regarding how the PTAB will apply the Court's mandate in SAS Institute. In particular, the Office noted that for all pending and future-filed petitions, the Board will institute on all challenged claims so long as the petitioner has shown a reasonable likelihood of invalidating at least one of the claims, and for cases where the Board has engaged the parties in partial institution proceedings, the Board "may" issue an order "supplementing the institution decision to institute on all challenges raised in the petition."
The issue is specifically related to the question of whether the AIA changed the application of the on-sale bar. In December, the Supreme Court heard oral argument in this case. The Supreme Court's decision will likely land this case on our Top Stories list again next year.
U.S. District Court Judge Susan Illston stuck again on Christmas Eve, giving the biotech patent community a rhetorical lump of coal in their stocking by invalidating on summary judgment claims directed to methods for isolating cell-free fetal DNA from maternal DNA on the grounds that they are not patent-eligible under 35 U.S.C. § 101. The author of the Ariosa v. Sequenom decision a few years ago, Judge Illston has rarely seen a patent she likes (or is not willing to invalidate), and the Supreme Court and Federal Circuit's recent § 101 jurisprudence has given district court judges the judicial discretion to invalidate patents based on their subjective determination of their eligibility.
(c) analyzing a genetic locus in the fraction of DNA produced in (b).
(c) analyzing DNA fragments in the fraction of DNA produced in (b).
Both patents were subjected to rejection under § 101 and allowed upon application of U.S. Patent and Trademark Office Guidance for applying Supreme Court and Federal Circuit law to the question of subject matter eligibility relating to natural phenomena and laws of nature.
The Court, as has become district courts' wont, rendered summary judgment without a Markman hearing construing the claims, and in its opinion characterized the claimed methods for both patents as being directed to prenatal detection, fairly based on steps (c) in each patent's claims.
After setting forth the legal standards the District Court addressed the two prongs of the Alice/Mayo analysis for patent eligibility: whether the claims were "directed to" ineligible subject matter and whether they recite an inventive concept. Regarding the first, "directed to" prong, the opinion says that these claims are analogous to the claims invalidated under Federal Circuit precedent in Genetic Techs Ltd. v. Merial and, of course, Ariosa v. Sequenom. The opinion recites without contradiction Ariosa's contention that "the claimed method begins with a sample of cell-free DNA and ends with an analysis of it," which is not exactly true; in these claims the claim starts with a sample of cell-free maternal blood plasma containing cell-free fetal DNA and ends with an isolate of cell-free fetal DNA. The opinion cites a declaration, and prosecution history challenging changes in purity with change in structure. "Changing the ratio of two natural products in a mixture and analyzing one of those products does not impact whether an invention is directed towards a natural phenomenon," according to the Court's opinion. Further, the opinion states that "[b]oth patents claim results from a test of naturally occurring fetal DNA and do not transform the naturally occurring product into something new." Finally with regard to this prong, the Court rejected Illumina's assertion of the Federal Circuit's Rapid Litigation Management Ltd. v. Cellzdirect, Inc. decision, based on the distinction that frozen liver cells, the subject matter of the claims in Cellzdirect, do not occur in nature.
Regarding inventive concept, the Court relied on the recent Federal Circuit decision in Roche Molecular Systems v. Cepheid to distinguish the Cellzdirect precedent. The Court found the claims not inventive, because the method steps (extraction, size production, selective removal), taken in the abstract, are routine, conventional, and well understood. In doing so, the Court rejected the argument that applying these methods to previously unknown cell-free fetal DNA in maternal blood is not "routine, conventional, and well-understood," with some no doubt unintended irony relying on the statement from Diamond v. Diehr that "[t]he novelty of any element or steps in a process, or even the process itself, is of no relevance in determining whether the subject matter of a claim falls within the §101 categories of possibly patentable subject matter." Of course, that statement is not entirely apposite to the situation before the Court, and was made before Justice Breyer and a unanimous Court endorsed mixing novelty and obviousness considerations into the subject matter eligibility calculus in Mayo.
There was a time when patent practitioners could take some solace that the Federal Circuit would apprehend the threats to innovation that decisions such as this one pose and would act to limit their scope if not apply appropriate correction. That time, of course, is long past and it can only be hoped that recent chinks in the Federal Circuit's subject matter eligibility façade suggest members of the Court are receptive to reconsidering how Supreme Court subject matter eligibility decisions have been interpreted. This remains, of course, a hot potato issue, and whether whatever panel of the Court hears the case hews to either the Court's Cellzdirect or its Cepheid precedent is frankly a matter of chance. That biotech patenting has reached this point, particularly in view of the importance of innovation for the U.S. economy and its citizens' well-being, is disheartening. As the kids would say on social media, SMH.
Earlier this month, in Gensetix, Inc. v. Baylor College of Medicine, District Judge Andrew S. Hanen of the U.S. District Court for the Southern District of Texas issued an Order granting a Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(1) filed by Involuntary Plaintiff The Board of Regents of the University of Texas ("UT"), as well as related portions of a Supplemental Reply in Support of a Motion to Dismiss Gensetix's First Amended Complaint filed by Defendant Baylor College of Medicine ("BCM") and a Motion to Dismiss Gensetix's First Amended Complaint filed by Defendant Diakonos Research, Ltd. ("Diakonos"). The District Court also declined to exercise supplemental jurisdiction over Gensetix's state law claims and therefore dismissed the case.
The dispute between the parties arose when Plaintiff Gensetix, Inc. filed suit against Defendants BCM, Diakonos, and Dr. William K. Decker, asserting that Defendants infringed U.S. Patent Nos. 8,728,806 and 9,333,248, which Gensetix exclusively licensed from UT. The '806 and '248 patents are directed to methods of modifying a patient's immune system to kill cancer cells. Dr. Decker developed the claimed methods during his tenure at The University of Texas MD Anderson Cancer Center. In its complaint, Gensetix asserted that although Dr. Decker retained no rights in the asserted patents, he continued to practice the claimed methods after moving to BCM. In its complaint, Gensetix named UT as an involuntary plaintiff. UT responded by filing a Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(1), asserting immunity from suit under the Eleventh Amendment as an arm of the State of Texas, and contending that such immunity deprived the District Court of subject matter jurisdiction. Gensetix countered that Eleventh Amendment sovereign immunity did not apply in this case because no claims were asserted against UT.
In deciding whether the Eleventh Amendment deprived the District Court of subject matter jurisdiction, the Court noted that the issue in the case was more accurately whether the Eleventh Amendment prevented UT from being joined as an involuntary plaintiff in a patent suit. Gensetix argued that the Eleventh Amendment did not bar this type of joinder, citing Independent Wireless Telegraph Co. v. Radio Corporation of America, 269 U.S. 459 (1926), for the proposition that "if there is no other way of securing justice to the exclusive licensee," the licensee may join the licensor "as a coplaintiff without his consent." Gensetix also cited Regents of the University of California v. Eli Lilly & Co., 119 F.3d 1559 (Fed. Cir. 1997), for the proposition that "the Eleventh Amendment applies to suits 'against' a state, not suits by a state," arguing that where a suit does not involve any actual claims against the state, the state is not in the position of a defendant. The District Court, however, indicated that "Independent Wireless and Regents are readily distinguishable from the case at hand," noting that "[t]he Court in Independent Wireless did not contemplate the coercive joinder of a sovereign" because the patent owner was a private company and could not assert the Eleventh Amendment, and pointing out that in Regents, "UC had agreed to participate in the suit in the first place." Thus, the District Court concluded that "Independent Wireless and Regents are not as instructive as Plaintiff contends." Instead, the Court agreed with UT and the Defendants that sovereign immunity was applicable to the coercive joinder analysis in this case, and found that joinder of UT as an involuntary plaintiff was barred by the Eleventh Amendment. The Court noted that "[a]lthough there are currently no claims against UT, requiring joinder would, in effect, force UT to pursue claims against its will," and because "UT did not waive its immunity, initiate this suit, or agree to participate in this litigation . . . the Eleventh Amendment prohibits involuntary joinder."
UT retained the right to publish general findings, use licensed subject matter for research, teaching, or other academic purposes, and transfer rights to other research institutions for non-commercial research use. UT may practice and license the patent for non-commercial use; accordingly, while there are some limits on UT's right to license the patent, it still retains the right to do so. Thus, Gensetix's right to license the patent is not truly "exclusive."
While Gensetix has the right to practice, it does not have the unfettered right to exclude others. The right to practice is not substantial enough to allow Gensetix to bring suit in its name alone. Accordingly, Gensetix does not have standing to sue for infringement of the '806 and '248 patents without joining UT as a party [citations omitted].
[W]here the substantial rights holder—here, UT—refuses to sue to protect its own patent, it is not proper for the Court to step in and effectuate a rescue. While the result may be harsh, it is an inherent risk for anyone who chooses to contract with a sovereign entity.
The District Court concluded by declining to exercise supplemental jurisdiction over Gensetix's state law claims, finding that that "judicial economy, convenience and fairness to litigants" would not be served by keeping the remaining causes of action in federal court. The Court therefore determined that the Eleventh Amendment barred UT's joinder as an involuntary plaintiff; granted UT's Motion to Dismiss, the related portion of BCM's Supplemental Reply in Support of its Motion to Dismiss, and the related portion of Diakonos' Motion to Dismiss; and dismissed the case.
We wrote about this case six months ago, regarding InvestPic's appeal to the Federal Circuit over having its patent invalided under 35 U.S.C. § 101 in the Northern District of Texas. InvestPic did not get the outcome it was looking for. Here, the case is back in the District Court to consider SAP's motion for recovery of attorney's fees. As we will see, InvestPic ended up not only with its patent invalidated, but also owing a large chunk of money to SAP.
SAP was originally granted attorney's fees in 2017, after the District Court ruled, on the pleadings, that InvestPic's U.S. Patent No. 6,349,291 was invalid under § 101. As noted above, InvestPic appealed and lost.
A district court may find that a patent case is exceptional and award attorney fees to a prevailing party. 35 U.S.C. § 285. A case is exceptional if it stands out from other cases with respect to the substantive strength of a party's litigating position considering both the governing law and the facts of the case or if the case stands out in the unreasonable manner in which the case was litigated.
Notably, district courts have discretion when determining whether a case is exceptional and are to consider the totality of the circumstances rather than any bright-line rule.
Regarding InvestPic's litigation position, the District Court observed that the patent was duly issued by the USPTO and therefore presumed valid. The District Court read into Judge Mayer's concurrence in the Ultramercial v. Hulu case to note that this presumption of validity might not apply to a patent that is challenged under § 101. But it went on to state that "a patent owner should be entitled to rely on the fact that the claims were reviewed and approved by the USPTO and should be allowed to attempt to enforce his or her patent whether this is done by demand for licensing or by enforcement of patent rights in a court." Thus, in the District Court's view, just because claims were found lacking under § 101 does not automatically make a case exceptional.
But in this case, "Investpic was specifically warned by the USPTO, in an opinion issued in connection with a post grant review, that it looked very unlikely that these claims were directed toward patentable subject matter and very likely that the claims were invalid." Despite the fact that the USPTO did not actually address the § 101 issue and only invited InvestPic to submit the patent for such a review, the District Court concluded that this "created a serious cloud on the . . . claims."
Thus, the District Court concluded that the USPTO's warning, in combination with InvestPic's not taking any action on it and continuing to assert the patent, resulted in a weak litigating position.
Regarding the manner in which InvestPic litigated the patent, the District Court took a dim view toward the owners of InvestPic using a front company to engage with SAP salespeople and to learn about the allegedly infringing products. Notably, "[the owners] held themselves out to be only employees of Regulus and failed to disclose their relationship with InvestPic and their interest in the outcome of this lawsuit." This, according to the District Court, amounted to conducting "self help discovery under a pretense," and also rose to the level of unreasonable litigation conduct.
Accordingly, the District Court granted SAP's motion for attorney's fees.
This proceeding, however, was put on hold by the Federal Circuit appeal. Now back in the District Court, an order granting much of what SAP requested was issued on December 4, 2018.
SAP requested a total of $939,306.61, which did not include any time from attorneys and staff that worked less than 10 hours on the case. But this amount included time that SAP's attorney spent on a petition for covered business method review which was never filed. The District Court declined to award fees for the petition.
Also, the District Court found that the rates charged by SAP's attorneys ("$745.00 – $1,175.00 per hour for partners to $405.00 – $650.00 per hour for associates") were excessive. In particular, the majority of the partner's rates were above the 90th percentile for Texas, and the District Court found no evidence to justify the rates being so high. Accordingly, the District Court reduced all partner rates by 35% and all associate rates by 15%. Based on these adjustments, the total amount actually awarded was $679,420.46.
Focusing just on the patent-eligibility issues for the moment, here we have a successful attempt to obtain attorney's fees based on a supposedly weak litigating position under § 101. Sure, InvestPic's owners engaged in shady practices. That may have been enough to award attorney's fees alone.
But the District Court's reliance on a USPTO warning (not an actual USPTO decision or rejection, but just a warning) may be extreme. Since Alice v. CLS Bank, just about any patent involving software or a business method can have its validity challenged under § 101. Further, the USPTO is not a final or a consistent arbiter of what is or is not patent-eligible. If anything, the USPTO applies the law in a markedly erratic fashion, with much discretion granted to the personal opinions of primary examiners and PTAB judges. Thus, relying on an unofficial or provisional observation of the USPTO to find a case exceptional is a rather unusual step.
To further drive home this point, not even the federal courts have been able to crack the § 101 egg. It is well-known that multiple federal judges have commented on the record that Alice was hard to apply in practice. Judge Wu of the United States District Court for the Central District of California criticized Alice for setting forth an "I know it when I see it" test. Judge Pfaelzer, a colleague of Judge Wu, wrote that the Supreme Court's patent-eligibility cases "often confuse more than they clarify [and] appear to contradict each other on important issues." More recently, the Federal Circuit's Judge Plager, wrote that the post-Alice §101 inquiry "renders it near impossible to know with any certainty whether the invention is or is not patent eligible." And these are just a few examples of judicial confusion. There are more.
Just a few months ago, the Federal Circuit ruled 2-1 that § 101 jurisprudence was too murky to be used as the basis of an attorney's fees award. While the facts between that case and this one differ, the law does not.
Plaintiff CyWee Group Ltd. ("CyWee") sued Defendants Samsung Electronics Co., Ltd. and Samsung Electronics America, Inc. (collectively, "Samsung"), asserting various claims of U.S. Patent No. 8,441,438 (the '438 patent) and U.S. Patent No. 8,552,978 (the '978 patent) (a child of the '438 patent). Samsung responded with a motion for summary judgment of invalidity of all asserted claims under 35 U.S.C. § 101. Last week, Circuit Judge William C. Bryson (sitting by designation in the Eastern District of Texas) denied the motion.
The claims of the asserted patents generally involve using a particular combination of sensors of a "3D pointing device" to gather raw data points representative of a position of the device, and then inputting those data points into a mathematical formula to determine an orientation of the device in a spatial reference frame. As an example, a 3D pointing device can be a mouse or other controller used to play video games such that, when a user moves the device, a pointer on the screen moves along with the orientation of the device.
a processing and transmitting module, comprising a data transmitting unit electrically connected to the six-axis motion sensor module for transmitting said first and second signal sets thereof and a computing processor for receiving and calculating said first and second signal sets from the data transmitting unit, communicating with the six-axis motion sensor module to calculate a resulting deviation comprising resultant angles in said spatial pointer reference frame by utilizing a comparison to compare the first signal set with the second signal set whereby said resultant angles in the spatial pointer reference frame of the resulting deviation of the six-axis motion sensor module of the 3D pointing device are obtained under said dynamic environments, wherein the comparison utilized by the processing and transmitting module further comprises an update program to obtain an updated state based on a previous state associated with said first signal set and a measured state associated with said second signal set; wherein the measured state includes a measurement of said second signal set and a predicted measurement obtained based on the first signal set without using any derivatives of the first signal set.
calculating and converting the updated state of the six axis motion sensor module to said resulting deviation comprising said resultant angles in said spatial pointer reference frame of the 3D pointing device.
using the orientation output and the rotation output to generate a transformed output associated with a fixed reference frame associated with a display device, wherein the orientation output and the rotation output is generated by a nine-axis motion sensor module; obtaining one or more resultant deviation including a plurality of deviation angles using a plurality of measured magnetisms Mx, My, Mz and a plurality of predicted magnetism Mx′, My′ and Mz′ for the second signal set.
Samsung contended that these claims are directed to a mathematical formula and thus patent-ineligible. In doing so, Samsung attempted to analogize these claims to those in Parker v. Flook and Digitech, and to distinguish these claims to those in Thales Visionix. In Flook, the Supreme Court found that claims for merely providing an equation into which selected temperature values were inserted were patent-ineligible. In Digitech, the Federal Circuit found that claims "recit[ing] a process of taking two data sets and combining them into a single data set" were directed to an abstract idea and thus patent-ineligible. And in Thales, the Federal Circuit found that the claims at issue, despite involving a mathematical equation, were "directed to systems and methods that use inertial sensors in a non-conventional manner to reduce errors in measuring the relative position and orientation of a moving object on a moving reference frame" and were thus patent-eligible.
Mathematical formulas, operations, or algorithms are at the heart of countless inventions; the application of mathematical principles has been the key to advancements in any number of fields. Just considering fields akin to the orientation - sensing devices and methods at issue in this case, mathematical algorithms are at the heart of such inventions as driverless vehicles, drone navigation, and the remote orientation of satellites and scientific instrumentation in space. The mathematical processes used in the operation of such devices have consequences in the physical world that make those devices precisely the kinds of inventions that the patent system was designed to protect and encourage. Moreover, improvements in such devices are patentable even when the improvements in the devices are the product of improvements in the sophistication of the algorithms that drive the product's performance. For example, autonomous emergency braking systems in automobiles have evolved through the use of more and more sophisticated algorithms, even when the brakes themselves and the sensors used to detect collisions may not have evolved significantly. An improved system for autonomous emergency braking could hardly be deemed unpatentable if it used an algorithm that was more sophisticated than its predecessors, even though the mechanical components were themselves known in the art.
The Court also stressed that mathematical equations involved in claims should be viewed in conjunction with all other claim elements.
With this in mind, the Court found that the '438 patent and '978 patent claims "entail more than simply performing a calculation or organizing information through mathematical correlations, as in Flook and Digitech." In particular, the Court highlighted the 3D pointing device and the computations performed by the processing/transmitting module based on the signal sets from the six-axis motion sensor module from the apparatus claims of the '438 patent, concluding that those claims are "directed to a particular device that performs a specific, useful function in the physical world" and "recite tangible, physical results from the receipt and assessment of information." As for the method claims recited in both patents, the Court concluded that the claims "do not simply describe a mathematical calculation" and are rather "directed to a means of using the inputs from six-axis and nine-axis sensors to track the orientation status of the 3D pointing device and correct errors associated with conventional motion detectors."
Lastly, the Court specifically addressed Samsung's argument that, unlike the inertial sensors in Thales, the present claims involve sensors being used in a conventional manner and are thus patent-ineligible. The Court refuted this argument, stating that the Thales Court did not view the unconventional use of the inertial sensors to be critical to the patentability of the subject matter. Rather, the Court asserted that the Thales court viewed this unconventional use merely as "additional evidence that the claims were not directed to an abstraction in the form of a pure mathematical formula, but instead to a new and useful technique that simply relied heavily on an algorithm for its effectiveness."
Thus, the Court found the claims of both the '438 patent and the '978 patent to be patent-eligible.
In the U.S. District Court for the District of Delaware, Plaintiff (Blackbird) sued Defendant (Niantic) alleging infringement of U.S. Patent No. 9,802,127. Niantic filed the present motion to dismiss the case for failure to state a claim under Rule 12(b)(6), on the basis that the asserted patent claims are invalid under 35 U.S.C. § 101.
The Court followed the two-step approach set forth by Alice to evaluate the section 101 challenge, and ultimately found the claims satisfied step 1 (leaving step 2 unnecessary), and thus, the motion was denied.
The '127 patent is directed to a video game in which user determined location information (e.g. GPS, Google Maps, an entered address or the like) is acquired, and the determined location information of a physical location is mapped to a video game environment so that the user of the video game experiences objects from the user's physical location while playing the video game.
The '127 patent describes an example in which if a user is playing a car racing game, he or she is able to race through the streets of his or her local neighborhood in the game. This is achieved by first obtaining user determined location information relating to a user's location. In a particular example, the user is able to load information relating to the user's current physical location. This may be accomplished by taking a GPS reading of the user's current physical location and a certain radius around the user location or by the user entering an address. Other sources of user determined location information relating to the users physical location, such as Google Maps, may also be used to acquire a set of user determined location information to be mapped into the video game. Once acquired, the information is mapped into the game. In this example, if the user is at a residence at 1 Sarah Lane in Maynard, MA, user determined location information relating to Sarah Lane and the town of Maynard, MA is acquired (via GPS, Google Map®, Google Earth® and the like). The user determined location information is mapped into the video game such that the user can race around the streets of Maynard, MA. In the game, the user can leave the residence at 1 Sarah Lane, turn onto Route 117 and race to downtown Maynard. Upon entering the downtown area the user is able to race around the town, passing local points of interest such as Clock Tower Place, local fast food places (e.g., McDonalds®), past local stores (e.g., The Outdoor Store®) and onto Route 62. By allowing the user to experience his or her desired location in the video game, an entirely new and entertaining form of game playing is achieved.
storing at least said second position indicator in said memory when said video game is not executing.
In the motion to dismiss, the Defendant argued that the '127 patent claims are directed to the abstract idea of "receiving, processing, and displaying or storing location information." The Defendant analogized the asserted claims to the method claim in Concaten, Inc. v. Ameritrack Fleet Solutions, LLC, which was found invalid under § 101. The Concaten claim provided steps for relaying weather and road data to and from snowplows, comprising: (1) "receiving" information on a snowplow's physical location, and the weather and road conditions in that area; (2) "processing" the information to provide a map and determine an instruction for the snowplow operator; and (3) "providing" the map and instruction to the operator. The claim further required that the map be "visually displayed, by a touch screen monitor," and that specific conditions be included in the instruction.
The Defendant argued that the '127 patent claims are directed to an abstract concept because they merely describe the idea of receiving, processing, and displaying location information in the context of a video game virtual environment using generic computer components, and are therefore, invalid for the same reasons as noted in Concaten.
The Court, however, found that the Defendant was oversimplifying the claims. Under the Alice framework, courts must be wary of describing the claims at such a high level of abstraction and untethered from the language of the claims lest the exceptions to § 101 swallow the rule.
The Court found the Concaten claim distinguishable from the '127 patent claims. The Court explained that the Defendant forced the analogy by essentially reading out the '127 patent's "mapping" limitation, which requires taking camera images of a real physical space where the user is located, and integrating those images as a video into a virtual video game environment.
The Court explained that such mapping ensures that the claimed method does not merely take steps routinely performed by humans and apply them on a computer because "mapping" as described in the claims could not be performed by humans. Further, unlike the abstract optimization step done by unexplained "processing" step in Concaten, the mapping step here is tethered to specific instructions on which images are to be mapped (camera images from the user's physical location), where those images are to be mapped (the video game virtual environment), and how those images are to be displayed (as a video wherein the user experiences both real and virtual objects within the video game virtual environment).
The Court noted that Defendant argued that claim 1 includes an insufficient level of detail as the claims fail to explain how the image data is displayed as a video and how the images are allegedly combined, but such an enablement argument is beyond the scope of § 101.
The Court further rejected Defendant's arguments regarding the idea that the "wherein" clause in the mapping limitation merely described an outcome and thus was an aspirational and result-focused claim lacking specificity. Again, the Court found that claim 1 provides specific instructions on how the mapping is done. The Court cited McRO, and found the '127 patent claims, like the claims in McRO, to be directed to a specific means or method that improves the relevant technology. Namely, the claimed technology allegedly solves the problem in the existing art of being confined to a predetermined and merely virtual location in a video game by incorporating a user's physical location as part of the game environment. This is done by the specific means of first taking camera images of the user's physical location, and then mapping those images as a video into the virtual game environment.
Also, the Court found that the asserted claims, like in McRO, are directed to the creation of something physical, here, the display of camera images depicting the user's location overlaid with the virtual images from the video game for viewing by human eyes.
As a result, the Court found that the '127 patent claims are not directed to ineligible subject matter under Alice step one, and Alice step two was not needed. Thus, the motion to dismiss was denied.
Here, the Court found that the claim included sufficient detail to avoid being considered a result-oriented claim. Although the "mapping" limitation is awkwardly worded (and appears to have some antecedent basis issues), it does include descriptive or non-generic terms to avoid the abstract characterization.
Plaintiff Guada Technologies, LLC ("Guada") sued Defendant Vice Media, LLC ("Vice Media"), alleging infringement at least claim 1 of U.S. Patent No. 7,231,379 ("the '379 patent"). Vice Media then filed a motion to dismiss. Last week, Judge Richard G. Andrews of the U.S. District Court for the District of Delaware ruled that the claims are directed to an abstract idea under 35 U.S.C. § 101, but that a factual issue remains as to whether the claims provide an inventive concept.
The '379 patent, entitled "Navigation in a hierarchical structured transaction processing system," relates at a high level to navigating through a hierarchical network of "choices" (e.g., transactions, or operations where information is accessed) to accomplish a goal. In such a network, choices are arranged as nodes in a graph structure. As an illustrative example, Figure 3 of the '379 patent is shown below, which is in the context of airline reservations.
In this example, the high-level choice to make a reservation is shown in the graph at the top of a hierarchy of nodes. As shown, for instance, the choices to reserve a domestic flight or an international flight are distinct nodes in the graph that branch from the reservation node. Other choices (i.e., flight classes) are then shown as nodes branching from the domestic flight and international flight nodes.
The background of the patent notes that it can be difficult to efficiently navigate through a graph of choices to reach a goal, particularly when there are many choices involved in doing so. In addition, the patent notes the disadvantages in how existing graphs and associated systems often require direct path traversal through a hierarchy. That is, such systems do not allow a user to jump from one node to another unless the two nodes are connected as part of the same path through the graph. The patent thus aims to provide more efficient navigation through a series of choices in a network of nodes by using keywords to allow a user to jump from one node to a non-connected node. In the context of this invention, a "keyword" for a choice is the most important word and serves as a shorthand way of referring to a node. As a simple example, if the node for a choice to make a reservation is "Would you like to make a reservation?", the keyword could be "reservation" (or "Reservations," as shown in Figure 3).
jumping to the at least one node.
Plaintiff argues that the claims here provide "implementation details," which are not "purely functional," but rather amount to computer improvement. First, argues Plaintiff, the "receiving an input" claim limitation "requires a specific user . . . who provides the input, provides the location where the input is received . . . , and what the input is . . . ." Second, argues Plaintiff, the "identifying at least one node . . . associated with the at least one keyword" limitation requires "nodes associated with keywords." Plaintiff argues that "nodes" in "the ordinary setup of a hierarchically arranged decision network" are "not associated with keywords." Third, argues Plaintiff, the "jumping" limitation "requires the system to directly traverse from one node/vertex to another node/vertex that is not directly connected."
In response, Vice Media cited CyberSource, noting that the claimed "nodes" and "interconnections" are not tangible objects and that the steps of each method claim can be performed mentally or with pen and paper. Even the concept of a hierarchical arrangement of nodes, Vice Media argued, is an abstract idea from mathematical graph theory.
The Court agreed with Vice Media, stating that the '379 patent provides no information as to how the "implementation details" allegedly provided by the claims improve computer functionality or even a computerized data set. Rather, the claims related to a "generic automation of a once-manual method." The Court also noted that keywords do not necessarily invoke computer functionality. For at least these reasons, the Court deemed all seven claims of the '379 patent to be directed to an abstract idea.
Guada also argued that claim construction issues precluded a grant of the motion to dismiss and proposed its own constructions to remedy those issues, but neither rendered the claims non-abstract. First, Guada argued that limitations in the preamble of each independent claim refer to "a computerized system of multiple nodes interconnected in a hierarchically arranged decisional network in which a user provides inputs or responses at each node to navigate through adjacent nodes in the hierarchical arrangement." But the Court stated that the construction at best places the claim into a more specific technological environment. Guada also provided specific constructions for the "jumping" limitations -- most notably of which being that the jumping limitation is an action required by the system, not the user. But the Court stated that this merely amounts to automating "the mental process of jumping from one node to another."
In its Alice prong two contentions, Guada argued that the claims recite two alleged inventive concepts. First, Guada argued that that "jumping" limitation is inventive because navigation in prior art hierarchical networks was not done the way that the patent purports. Second, Guada argued that using keywords to jump from node to node is inventive. Vice Media argued in response that both of these concepts were well-known at the time the patent was filed (November 2002), but provided no citation in support and thus did not provide the clear and convincing evidence of ineligibility required by Berkheimer.
As a result, the Court denied Vice Media's motion to dismiss and solidified this decision as another example of the increased difficulty in invalidating patents post-Berkheimer. Vice Media will have to improve its contentions and actually provide evidence at the summary judgment stage.
Machine learning is more than just a buzzword. It represents a fundamental shift in how problems are solved across industries and lines of business. In the near future, a machine learning library may become a standard part of all operating systems, just like TCP/IP and database technologies have in the past.
For the majority of the existence of computers, programmers wrote functions that were designed to take some input and produce a desired output. Or, if i represents the input and o represents the output, the goal of the programmer was to develop a function f such that o=f(i).
Machine learning inverts this paradigm to some extent. A data set (which in practice usually needs to be quite extensive) of mappings between inputs and their respective outputs is obtained. This data set is fed into a machine learning algorithm (e.g., a neural network, decision tree, support vector machine, etc.) which trains a model to "learn" a function that produces the mappings with a reasonably high accuracy. In other words, if you give the computer a large enough set of inputs and outputs, it finds f for you. And this function may even be able to produce the correct output for input that it has not seen during training.
The programmer (who has now earned the snazzy title of "data scientist") prepares the mappings, selects and tunes the machine learning algorithm, and evaluates the resulting model's performance. Once the model is sufficiently accurate on test data, it can be deployed for production use.
The number of patent application filings related to artificial intelligence (of which machine learning is the hottest subset) has been growing dramatically in the past several years, especially in the U.S. But so has the legal uncertainty of certain types of software and business method inventions due to the Supreme Court's rulings in Bilski v. Kappos, Mayo Collaborative Services v. Prometheus Labs., Inc., and Alice Corp. v. CLS Bank Int'l. So a natural question to ask is what does the patent-eligibility landscape look like for machine learning inventions? Not unlike all questions regarding patent-eligibility, there are no easy answers.
But first, let's dig in to the nuances of the case law. In Alice, the Supreme Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under 35 U.S.C. § 101. One must first decide whether the claim at hand is directed to a judicially-excluded law of nature, a natural phenomenon, or an abstract idea. If so, then one must further decide whether any element or combination of elements in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exclusion. But generic computer implementation of an otherwise abstract process does not qualify as "significantly more," nor will elements that are well-understood, routine, and conventional lift the claim over the § 101 hurdle.
The Federal Circuit has not been a paragon of consistency across its § 101 cases. For instance, Electric Power Group v. Alstom S.A. has been interpreted as holding that claims directed to no more than gathering, processing, and outputting data are ineligible. On the other hand, in Enfish LLC v. Microsoft Corp., the Court found that a database arrangement that provided improvements over traditional relational databases met the § 101 requirements. Likewise, in McRO, Inc. v. Bandai Namco Games America Inc., claims to software displaying lip synchronization and facial expressions of animated characters were eligible because they used a rule-based approach that was different from manual animation techniques.
Clearly, it is advantageous for claims related to machine learning inventions to be more than Electric Power Group's gathering, processing, and outputting of data. But, at its core, that is what machine learning is all about. Training a model takes in data, crunches it, and produces a program as output. Using a model also involves taking input data, running it through the model, and obtaining output data as a result. Thus, a naïve approach to claiming machine learning procedures may lead to § 101 difficulties.
To date, the Federal Circuit has not considered the patent-eligibility of machine learning claims. The closest opportunity the Court had was in 2014's I/P Engine, Inc. v. AOL, Inc. But in that case the claims were directed to non-specific ways of conducting a search for one user based on relevant search results found for other users. While the patentee pointed out that its specification described use of a neural network to carry out the invention, the Court (in a footnote) dismissed this disclosure since the claims were not limited to such techniques.
In the district courts, there is relatively little to report. Most relevant decisions to date, such as Kaavo Inc. v. Amazon.com, Inc. (D. Del. 2018), eResearchTechnology, Inc. v. CRF, Inc. (W.D. Penn 2016), and Neochloris, Inc. v. Emerson Process Mgmt. LLLP (N.D. Ill. 2015) are similar to I/P Engine in that the claims and/or the specification do not explicitly detail specific aspects of machine learning.
In Blue Spike, LLC v. Google Inc. (N.D. Cal. 2015), the claims were similarly non-specific to machine learning. The patentee argued against the abstractness of inventions mirroring human perception and analysis on a computer, cautioning that a restrictive approach could render future breakthroughs in artificial intelligence technology unpatentable. The Court remained focused on the breadth of the claims, stating that "[t]he mere fact that the claims may cover a computer implementation that surpasses in scope or complexity what a human mind is capable of accomplishing is irrelevant where the claims are not limited to such complex activities, but also encompass more basic approaches."
One case that provides a more substantive discussion is PurePredictive, Inc. v. H2O.AI, Inc. (N.D. Cal. 2017), and therefore is worthy of our attention. PurePredictive sued H2O.AI, alleging infringement of U.S. Patent No. 8,880,446. H2O.AI filed a motion to dismiss on the grounds that the claims of the '446 patent were invalid under § 101.
The invention at was described in the '446 patent as "an apparatus, system, method, and computer program product to generate a predictive ensemble in an automated manner . . . regardless of the particular field or application, with little or no input from a user or expert." In this context, an "ensemble" is a set of machine learning models that can be operated in series or in parallel, with the goal of doing so being to provide better results than the output of any one individual model.
forming the predictive ensemble comprising a subset of multiple learned functions from the plurality of learned functions, the subset of multiple learned functions selected and combined based on the evaluation metadata the predictive ensemble comprising a rule set synthesized from the evaluation metadata to direct different subsets of the workload data through different learned functions of the multiple learned functions based on the evaluation metadata.
The Court summarized the claim as consisting of three steps: "First, it receives data and generates 'learned functions,' or, for example, regressions from that data[, then] it evaluates the effectiveness of those learned functions at making accurate predictions based on the test data[, and then] it selects the most effective learned functions and creates a rule set for additional data input."
The Court applied the Alice test starting with part one. H2O.AI took the position that the patent was "an attempt to monopolize the use of basic mathematical manipulations without reference to any specific implementation, application, purpose, or use." PurePredictive disagreed, stating that the invention solved "a specific problem in and [made] improvements to computer-related technology," and argued that the claims were analogous to those of Enfish and McRO.
The Court leaned heavily on FairWarning IP, LLC v. Iatric Systems, Inc. as the most relevant precedent. Similar to Electric Power Group, FairWarning involved claims that (in the view of the Federal Circuit) amounted to no more than "collecting and analyzing information to detect misuse and notifying a user when misuse is detected" and did not improve a technological process.
In light of this holding, the Court stated that "[t]he method of the predictive analytics factory is directed towards collecting and analyzing information." Particularly, "[t]he first step, generating learned functions or regressions from data—the basic mathematical process of, for example, regression modeling, or running data through an algorithm—is not a patentable concept." Further, the next two steps were "mathematical processes that not only could be performed by humans but also go to the general abstract concept of predictive analytics rather than any specific application."
PurePredictive argued that it would be impossible for a human to carry out the claimed invention. But the Court found that this point held little weight, noting that "just because a computer can make calculations more quickly than a human does not render a method patent eligible." The Court also stated that "[t]he patent specification's description of this process as a 'brute force, trial-and-error approach,' reinforces that this process is merely the running of data through a machine." Regarding Enfish and McRO, the Court concluded that the claimed invention did not improve the functionality of computers or computer-related technology, and instead just used computers as a tool.
Moving on to part two of Alice, PurePredictive attempted to make analogies between its claims and those found to provide "significantly more" in DDR Holdings, LLC v. Hotels.com, L.P. and BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility LLC. Particularly, it contended that the claimed ensemble technique "do[es] not need extensive tuning and customization" and is "applicable regardless of the particular field or application." But the Court disagreed because, unlike DDR Holdings, the claims address a broad scope of problems rather than being focused on solving a specific technical problem. Furthermore, unlike BASCOM, the claims did not describe a specific physical architecture and instead was focused on software modules.
As a consequence, the claims failed both parts of the Alice test, were ruled ineligible under § 101, and therefore held invalid.
While this case is a useful data point, it reinforces the old saying that "bad facts make bad law." The claims are indeed quite broad and not directed to solving a specific problem or making a particular technical improvement. Prior to Alice and its progeny, this was unlikely to trigger issues under § 101, but now it does more often than not.
Still, it should surprise no one that machine learning claims are treated like any other type of software claim in the § 101 analysis. While one could posit that the whole point of machine learning is to train a computer to do something that a human can't do (or is impractical for a human to do) in a way that a reasonable person would not do it, that is not enough to avoid Alice pitfalls. Machine learning claims can potentially be even more vulnerable to § 101 challenges when the claims recite only data manipulation and do not provide a well-defined technological need or advantage.
Therefore, like other types of software inventions, those involving machine learning should be focused. Some example claiming strategies involve reciting specific types of data associations, detailing the training phase and/or the structure of the model, and placing the model within the context of a larger system. Until we hear more from the district courts -- and hopefully from the Federal Circuit as well -- moving forward with these best practices is the recommended approach.

References: v. 
 § 315
 v. 
 § 315
 § 315
 § 315
 § 103
 § 101
 v. 
 § 101
 § 101
 § 101
 § 101
 v. 
 § 101
 § 101
 § 101
 v. 
 § 145
 § 145
 v. 
 v. 
 § 101
 v. 
 § 101
 § 101
 v. 
 v. 
 v. 
 v. 
 v. 
 §101
 v. 
 v. 
 v. 
 § 101
 § 101
 § 285
 v. 
 § 101
 § 101
 § 101
 § 101
 v. 
 § 101
 § 101
 §101
 § 101
 § 101
 v. 
 § 101
 v. 
 § 101
 § 101
 § 101
 § 101
 v. 
 v. 
 v. 
 § 101
 § 101
 § 101
 v. 
 v. 
 § 101
 v. 
 § 101
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 101
 v. 
 v. 
 v. 
 § 101
 § 101
 § 101
 § 101