Source: https://patentlyo.com/patent/2017/11
Timestamp: 2019-01-22 19:05:54
Document Index: 188776288

Matched Legal Cases: ['§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 1292', '§ 1292']

November | 2017 | Patently-O
79% of what: Note here that the data set only includes office actions that contain at least one rejection. Thus, for 2017 we could say that, 79% of actions with a rejection include an obviousness rejection. A second big caveat is that the data set only includes applications that have been laid-open; and they had OCR scanning or other data problems with about 10% of the rejections and those have been excluded from the data set.
[Dataset][USPTO Whitepaper]
PPAC Annual Report
November 29, 2017 PatentDennis Crouch
The Patent Public Advisory Committee (PPAC) has released its 2017 annual report with a set of important recommendations for the Director:
USPTO should remain independent of Department of Commerce, including control of HR and IT;
USPTO should be given further fee-setting authority beyond the AIA’s 2018 sunset date;
USPTO should continue to modernize its legacy IT systems
Congressional legislation should support the Telework and Hoteling program at the PTO;
PTAB should “remain vigilant in ensuring fair and transparent processes and proceedings in order to render wellgrounded decisions;”
Current mid-level rank of USPTO IP Attachés should be increased by one level, which would give USPTO IP Attachés greater access to senior host government officials and Ambassadors.
In addition to these recommendations, the PPAC also offered several Kudos to the PTO for:
Reducing first-action pendency average from 28 months (2011) to 16 months (2017);
Reducing overall total application pendency average from 34 months (2011) to 24 months (2017);
Improvement in its quality initiatives, including the Quality Metrics Program, Clarity and Correctness Data Capture Program and the Clarity of the Record Pilot as well as in its on-going efforts to enhance patent quality.
[PPAC-2017_Annual_Report]
Federal Circuit: Unquantified Infringement == No Infringement
November 28, 2017 PatentDennis Crouch
Life Techs. Corp. v. Promega Corp. (Fed. Cir. 2017)
US Sales: The decision similarly affirmed of the district court’s JNOV that “that Promega failed to prove its infringement case under 35 U.S.C. § 271(a).” A major problem with this conclusion is – as the court explains: “that the record contains evidence of admitted infringement by Life under § 271(a).” In its original decision in the case, the Federal Circuit wrote explained:
At trial, LifeTech admitted that some of the sales of its accused genetic testing kits in the United States were “technically an infringement” of Promega’s patents.LifeTech also admitted that Promega was “entitled to be compensated for [LifeTech’s] infringement.” Promega presented evidence to the jury showing sales of LifeTech’s accused kits in the United States. Based on LifeTech’s own admissions, which are supported by evidence in the record, we conclude that LifeTech’s kits made, used, or sold in the United States infringe the Tautz patent under 35 U.S.C. § 271(a).
On remand here, the Federal Circuit has taken a different position — by noting that the exact quantity of US infringement is unknown: “some unquantified number of Life’s kits infringed under § 271(a).”
At trial, Promega had presented world-wide sales numbers – that included both infringing USA kits and the UK kits (component-export elements) in a way that both the district court and now the appellate panel argue waived its right to obtain particularized damages under 271(a) – and as such “any reinstatement of our prior decision on § 271(a) infringement would be moot.”
The Senate Judiciary Committee has announced its confirmation hearing for PTO Director Nominee Andrei Iancu – Wednesday, 29 November, at 10:00 a.m. [Webcast]
I invited Prof. Dmitry Karshtedt to provide this discussion of today’s oral arguments in Oil States. Note, Prof. Karshtedt filed an amicus brief in the case supporting the petitioner. Read the transcript here. – DC
By Prof. Dmitry Karshtedt
This morning’s argument in Oil States v. Greene’s Energy saw a highly engaged bench. The wide-ranging argument covered everything from the expected topics of the public-private right divide and the significance of the Privy Council’s adjudications of patent rights to perhaps more surprising angles involving government takings and even disputes between travelers and airlines over lost bags.
Some of the main themes of the argument:
Does the PTAB in the IPR exercise judicial power at all?
How, if at all, are IPRs are different from reexams?
What about the patentees’ settled expectations? Do they justify some form of heightened judicial review before an issued patent in existence for some time can be taken away?
Are Due Process issues fundamentally tied to the Article III question raised in this case, or should “power” and “process” be distinguished?
Can the PTAB adjudicate infringement?
Do Federal Circuit appeals represent constitutionally adequate Article III supervision of the PTAB?
Allyson Ho, Oil States’ counsel, lead with the argument that Inter Partes Reviews (IPRs) embody an unconstitutional transfer of judicial power to decide claims of private right between private parties without party consent or adequate Article III supervision. Justice Ginsburg asked almost immediately whether IPRs merely allow for correction of the PTO’s own errors. Ms. Ho then made an important strategic decision in conceding that, while ex parte and inter partes reexams (though a closer case) present permissible, examination-like error-correcting proceedings, IPRs differ from those earlier mechanisms because they more closely resemble an adjudication of a private-party dispute in which the PTO acts as an arbiter. Justice Kagan and Chief Justice Roberts questioned whether there is really a salient difference between IPRs and reexaminations, as the latter too allow for a process by which a third party informs the PTO that particular prior art may render an issued patent unpatentable after all. Ms. Ho, in response, stressed the high degree of third party involvement and the trial-like nature of the proceedings. In addition, she argued that in case of settlement, the PTAB generally does not complete the IPR.
The argument then moved toward the role of Congress in creating the patent right. Surely, suggested Justice Kennedy, Congress can validly limit the patent term and perhaps even shorten the patent term after issuance, so why not IPR? The response appeared to be that a grant of a patent cannot be conditioned on giving up structural rights, harkening to the discussion of the unconstitutional conditions doctrine in the petitioner’s reply brief. Even though Congress can create rights, there is a constitutional limits on how those rights can be restricted. The Chief Justice then mentioned the law of takings, suggesting that the government can take actions that devalue the right, with the Fifth Amendment sometimes entitling the aggrieved rights-holder to compensation.
The discussion then moved on to topics that have been particularly well-aired in party and amicus briefs. First, Justice Ginsburg continued to press the error correction point, pointing out that IPRs are relatively narrow in scope in that only issues of novelty and non-obviousness with specific types of prior art can be resolved in those proceedings. Ms. Ho responded that, be that as it may, 80% of IPRs also involve concurrent district court litigation, with infringement actions getting dismissed when PTAB invalidates the patent at issue. Second, Justice Gorsuch brought up the McCormick Harvesting case and its possible constitutional basis, a point which Ms. Ho embraced, but Justice Kagan then suggested that McCormick, rather, was resolved on statutory grounds. There was no further discussion of McCormick.
Ms. Ho then returned to the line between IPRs and reexams, and the earlier point that the former are really about deciding a cause between parties in a trial-like proceeding. Justice Breyer, at this point, suggested that, even if this were so, non-Article III tribunals do this all the time anyhow, as when resolving disputes between travelers and airlines over lost luggage. In addition, Justice Breyer suggested, doesn’t the Patent Act’s phrase “subject to the provisions of this title” puts patentees on notice that post-issuance non-Article III patentability determinations are possible? A point was repeated that IPRs are about an agency figuring out whether it made a mistake, with third party-input, as frequently happens in many administrative proceeding. Moreover, Ms. Ho was questioned as to how much third-party participation is needed to make a process unconstitutional. She returned to the idea of significant third party-control.
Justice Gorsuch then brought up the point that, if patents are private rights, no non-Article III adjudication of any sort is permissible. A question then arose whether analysis would change if the IPRs existed since 1790, the year that the first Patent Act was passed, and the discussion then moved to the Privy Council. Justice Kagan observed that the role of the Privy Council in adjudging patentability over time waned but was not eliminated. Before reserving time for rebuttal, Ms. Ho made the point that the patent laws were closely intertwined with the common law from the time of the Statute of Monopolies.
Mr. Christopher Kise, arguing for Greene’s Energy, argued that IPRs simply reexamine the propriety of the original patent grant, which is not a judicial function. The action is not to extinguish the patent but simply to decide that it should not issue. In addition, argued Mr. Kise, even if the Court had to get to the public-private right distinction, it should readily conclude that patents are public rights that can be adjudicated outside Article III tribunals. At this point, an interesting question came from Justice Breyer – what about settled expectations of the patentee after some time from issuance goes by? What about investments and reliance interests? The implication seemed to be that, while of course patents can always be invalidated by courts, perhaps heightened judicial review is needed to take patents away after some time in their existence.
The Chief Justice then raised the point of Due Process and PTAB panel-stacking, and whether Congress’ power to take away patents can allow patent validity to become a pure policy tool of the executive branch. Mr. Kise contended that Due Process problems, if any, should be considered on a case-by-case basis. Justice Sotomayor brought up the point of judicial review of PTAB determinations at the Federal Circuit, to which Justice Gorsuch responded that the PTAB is not an adjunct of the district courts and can issue self-executing judgments. He also brought up the issue of vested rights in land grands. To that, Mr. Kise responded that land is core property interest in the way that patents are not, because the latter depend on the federal statute and exist for an instrumental purpose of promoting the progress of useful arts. He also contended that process issues should be separated from power issues.
As Malcolm Stewart began arguing for the government, the Chief Justice framed the point of “bitter versus the sweet” – whether the government can condition the grant of a patent on anything it likes, including stacking of the deck in PTAB proceedings. Mr. Stewart responded that, even if there were a Due Process problem, Due Process does not require Article III, as public employee tenure protection cases show. He also mentioned that expanded panels are not unlike en banc panels in the federal circuit courts, and exist principally to correct panels that diverged from precedents. Justice Breyer then brought up the issue that the IPR statute is applied retroactively to the patent at issue in this case. Mr. Stewart’s response was that patents could be reexamined since 1980 and could be invalidated in certain proceedings before then, and they could always be invalidated by courts.
Returning to the public-private rights debate, Chief Justice Roberts discussed the Schor test and whether the multi-factor analysis of Schor is conducive to investment backed-expectations. Mr. Stewart contended that, whatever the test, PTAB adjudicates private rights because liability for past money damages are not involved. The question then came up whether the PTAB can adjudicate infringement, to which Mr. Stewart responded that probably not because money damages are involved. Justice Gorsuch then asked whether the PTAB can perhaps declare non-infringement, to which Mr. Stewart responded that there is no tradition of the PTO’s making that determination. Justice Gorsuch asked about the PTO’s tradition of cancelling patents, and Mr. Stewart’s response was that the issue is really about deciding patentability, which the PTO has been doing since 1836.
In rebuttal, Ms. Ho reiterated her point that Congress cannot condition a grant of a patent on taking away litigants’ structural rights and reinforced the point that appeals are not a sufficient form of Article III supervision. She ended with the point that, again, IPRs resolve disputes between two private parties.
Three Supreme Court Petitions: Teaching Away, Eligibility, Affirmed Without Opinion
Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co., Ltd., Supreme Court Docket No. No. 17-751.
Whether inter partes review … violates the Constitution by extinguishing private party rights through a non-Article III forum without a jury. (Copy of Oil States Question)
Nidec Petition.
USPTO’s chief information officer – John B. Owens – has left the agency to join the government contractor CGI Federal. Owens departure coincides with the governmental shift where the Department of Commerce is increasingly taking-over the “enterprise services” within the USPTO as part of the “shared services initiative.” As part of this plan, USPTO user fees are being directed to the commerce department to handle IT and information services activities. Several members of congress have questioned this approach. And, an interesting feature of the 2018 Republican House Proposed Budget is shrink the Department of Commerce – currently “rife with waste, abuse, and duplication,” and “Establish the U.S. Patent and Trademark Office as an independent agency.”
BASF v. Johnson Matthey (Fed. Cir. 2017)
BASF’s catalytic conversion system patent claims includes the functional limitations that the system is “effective for catalyzing”/”effective to catalyze” NH3 oxidation.
In the infringement litigation, the district court sided with the accused infringer – holding that the functional language was unduly indefinite – rendering the claim invalid under 35 U.S.C. 112 as interpreted by Nautilus. On appeal, the Federal Circuit has reversed — finding that the record lacks “evidence that would support” the indefiniteness finding.
The Patent Act (section 112) requires “one or more claims particularly pointing out and distinctly claiming” the invention. This provision serves as the basis for doctrine of (in)definiteness. In Nautilus (2014), the Supreme Court held that the claims as drafted must define the scope of the invention (from the perspective of PHOSITA) with “reasonable certainty.” Reasonable certainty is a traditional high evidentiary burden used in several areas of practice — including lost-profit calculations — and is thought to be parallel with the “clear and convincing” evidence standard (i.e., just below “beyond a reasonable doubt.”). Despite the seeming high standard placed on patentees by Nautilus, the Federal Circuit has continued to give patentees the benefit of the doubt in indefiniteness cases (with the one exception being 112(f) cases). This case is no exception.
Effective To: The claims here are not limited to particular materials or level of effectiveness, but rather only those that fit within the broad “effective to catalyze” language. The district court identified this as problematic:
Each claim fails to limit the “material composition A” … to any specific materials. Rather than explicitly defining the material compositions, the claims utilize functional language, specifically “effective,” to purportedly define them. In other words, the claims recite a performance property the composition must display, rather than its actual composition. Moreover, none of the claims recite a minimum level of function needed to meet this “effective” limitation nor a particular measurement method to determine whether a composition is “effective” enough to fall within the claims.
[FN: The court additionally notes that “a practically limitless number of materials” exist that would “catalyze SCR of NOx, even within the normal operating conditions of an exhaust after treatment system,” indicating that the claims, as written, fail to sufficiently identify the material compositions.]
Without such information, a person of ordinary skill in the art could not determine which materials are within the “material composition A” or “material composition B” limitation, and which are not.
On appeal, the Federal Circuit rejected the lower court’s analysis – first repeating again that functional claim limitations are perfectly legitimate. According to the appellate court, the basic problem with the district court’s analysis was that it identified the broad claims but then failed to actually consider whether the claims provide “reasonable certainty” to PHOSITA as to the claim scope.
What is needed is a context-specific inquiry into whether particular functional language actually provides the required reasonable certainty. . . . [T]he inference of indefiniteness simply from the scope finding is legally incorrect: “breadth is not indefiniteness.” (Quoting SKB v. Apotex (Fed. Cir. 2005)).
After rejecting the district court’s analysis, the appellate panel went-on to hold that – as a matter of law – the claim is definite. Drawing its own conclusions as to what PHOSITA would think of these claims.
At the point of Novelty: An interesting bit of the opinion harkens back to the Supreme Court’s 1946 Halliburton decision – holding that functional claim language is particularly problematic when done at the point of novelty. Here, the court does not cite Halliburton but does note that the “asserted advance over the prior art” is the particular layered arrangement of the device, not “the choices of materials to perform each of the required catalytic processes.” Rather, those materials were expected to be ones already well known in the industry.
Here, of course, the Federal Circuit is not suggesting that Halliburton is good law, but the court does implicitly conclude that there are important distinctions in the indefiniteness analysis when considering terms directed to well-known versus novel features.
[USTR NAFTA Objectives]
Ensure standards of protection and enforcement that keep pace with technological developments, and in particular ensure that rights holders have the legal and technological means to control the use of their works through the Internet and other global communication media, and to prevent the unauthorized use of their works.
Prevent or eliminate government involvement in the violation of intellectual property rights, including cyber theft and piracy.
Secure fair, equitable, and nondiscriminatory market access opportunities for United States persons that rely upon intellectual property protection.
November 20, 2017 PatentDennis Crouch
It would, perhaps, be desirable if all cases of this sort [i.e., patent cases] could be referred to a commission of intelligent experts and practical men to report their opinion thereon, with their reasons, for the final action of the court. … Neither courts nor ordinary juries are perfectly adapted to the investigation of mechanical and scientific questions. .
November 19, 2017 PatentDennis Crouch
Columbia Sportswear v. Serius Innovative (S.D.Cal. 2017)
I previously wrote about Columbia Sportswear design patent verdict and damages award against Serius. The patent – D657,093 – covers a wavy-pattern as part of a heat reflective material. Post trial, the court has now issued an emergency Temporary Restraining Order (TRO) enjoining Serious from initiating a reexamination of the design patent — finding that the reexamination could improperly “avoid the jury’s verdict in this case.”
The key fact: We already have a jury verdict of infringement and, according to the court (and patentee’s motion for TRO), during the lawsuit, the defendant stipulated to the patent’s validity.
On irreparable harm (and element of TRO), the court writes:
Allowing Seirus to collaterally attack the Design Patent at this very late juncture in litigation would undoubtedly cause Columbia undue hardship. A reexamination of the Design Patent could potentially result in its invalidation, which would moot Columbia’s fully-litigated infringement claims.
Finally, the court finds, that the public interest is served by restraining order – since “The public interest is served by enforcing the parties’ stipulation and protecting the validity of the Court’s judgment.”
The TRO was issued the same-day as requested and, although Seirus was apparently same-day notice notice, it did not have the opportunity to respond.
A few notes here: First, I expect that most TRO’s include legal and factual errors that stem from the fact that they are issued in an emergency, usually in an ex parte fashion. The court typically relies upon the statements of counsel requesting TRO — perhaps in a way that should raise additional duties to the court.
Stipulation of Validity?: Normally judges rule that patents are “not proven invalid” rather than actually holding them “valid.” Here, however, the TRO motion refers the judge to the prior “stipulated judgment of validity” and the judge consequently held that Seirus will not be harmed by “complying with its own stipulation of validity.”
Looking back at the docket appears to tell a different story. As I suspected, the prior judgment states that the patent “has not been proved invalid.” However, the jointly-agreed-upon document is titled “JUDGMENT OF VALIDITY OF U.S. PATENT NO. D657,093.” So, the document has some ambiguity, but the distinction here is potentially critical: A not-able-to-prove-invalidity would seemingly not prohibit a reexamination filing since the varying standards of proof logically allow for a patent to be cancelled during reexamination even if it could not have been invalidated in court. Of course, under a slight extension of MedImmune and Lear, it might not even make a difference. (Note here, that MedImmune and Lear both permitted a licensee to challenge).
Here, the patentee argued to the court that the “consent judgment … precludes [Seirus] from initiating a reexamination proceeding on the D’093 Patent.” Unfortunately, the patentee does not cite any authority toward its conclusion other than Flex-Foot, Inc. v. CRP, Inc., 238 F.3d 1362 (Fed. Cir. 2001), but that decision does not reach the reexamination question here and was pre-MedImmune.
The key case I would cite here is In re Baxter Intern., Inc., 678 F.3d 1357 (Fed. Cir. 2012). In that split decision, the Federal Circuit found no problem with an adjudged infringer taking same prior from the district court case (that lost there) and re-using it in a reexamination (and cancelling the claims).
Finally (for this post), the court appears to have inadequately considered the equities and the public interest associated with cancelling an improperly issued patent. As the Supreme Court wrote in MedImmune: “the equities of the licensor do not weigh very heavily when they are balanced against the important public interest in permitting full and free competition in the use of ideas which are in reality a part of the public domain.”
I’m confident that Seirus will challenge the TRO, which (I believe) is subject to immediate appeal to the Federal Circuit under 28 U.S.C. § 1292(a)(1).
3_17-cv-01781-HZ_393_Memo of Points and Authorities
3_17-cv-01781-HZ_393_PRIMARY DOCUMENT
2017.11.16 TRO (Granted)
Update: I noted above my belief that the TRO decision (enjoining the defendant from filing a reexam petition) was immediately appealable based upon 28 U.S.C. § 1292(a)(1)’s statement that orders “granting, continuing, modifying, refusing or dissolving injunctions” create direct appellate jurisdiction. A friend emailed me the non-precedential decision in Hallmark Cards, Inc. v. Grp. One Ltd., 110 F. App’x 99, 100 (Fed. Cir. 2004), holding otherwise. One way to read Hallmark is that a TRO is not appealable if the district court is planning to quickly hold a preliminary injunction hearing – as is the case here.