Source: https://www.patentdocs.org/2019/12/
Timestamp: 2020-08-11 19:53:24
Document Index: 449098886

Matched Legal Cases: ['§ 101', '§ 101', '§ 101', '§ 101', '§ 271', '§ 112', '§ 103', '§ 112', '§ 271', '§ 271', '§ 295', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§112', '§ 145', '§ 145', '§ 145', '§ 141', '§ 145', '§ 145', '§ 145', '§ 145', '§ 145', '§ 145', '§ 145', '§ 145', '§ 145', '§ 145', '§ 145', '§ 141', '§ 145', '§ 285', '§ 145', '§ 141', '§ 145']

Patent Docs: December 2019
USPTO Makes Ex Parte Hannun An Informative PTAB Decision
Over five and a half years on from the Supreme Court's Alice vs. CLS Bank ruling, patentees, patent professionals, judges, and USPTO personnel are still wrestling with what it means for an invention to be eligible for patenting. This is especially true for software-related innovations. Despite the software-driven digital economy accounting for approximately 7% of the U.S. gross domestic product, software inventions can have a rough path to allowance and are likely to have their eligibility challenged post-issuance. The disconnect between software being one of the main sources of innovation in the last decade and its least-favored-nation status in patent law is largely due to Alice and its progeny.
In Alice, the 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 involves 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 elements or combinations of elements that are well-understood, routine, and conventional will not lift the claim over the § 101 hurdle. While this inquiry is generally carried out as a matter of law, factual issues can come into play when determining whether something is well-understood, routine, and conventional.
How to apply this test in practice has been anything but clear. In response to complaints from applicants, patentees, and numerous other parties, the USPTO published its 2019 Revised Patent Subject Matter Eligibility Guidance in January and an update thereto in October.
Notably, the Guidance breaks the first part of the Alice test into two sub-steps. In the former, one determines whether the claim recites a judicial exception, such as an abstract idea. In the latter, one determines further "whether the recited judicial exception is integrated into a practical application of that exception." To focus the analysis, the Guidance indicates that all abstract ideas should fall into one of three categories: mathematical concepts, certain methods of organizing human activity, and mental processes. Think of these as the "Three M's" -- math, money, and mental steps.
In order to put its version of the Alice test into practice, the USPTO has been publishing a series of informative PTAB § 101 decisions. We discussed four of these as well as a fifth earlier in the year. Recently, a sixth, Ex Parte Hannun, has been added to the list.
The applicant's claimed invention is described as being directed to:
[S]tate-of-the-art speech recognition systems developed using end-to-end deep learning. In embodiments, the model architecture is significantly simpler than traditional speech systems, which rely on laboriously engineered processing pipelines; these traditional systems also tend to perform poorly when used in noisy environments. In contrast, embodiments of the system do not need hand-designed components to model background noise, reverberation, or speaker variation, but instead directly learn a function that is robust to such effects. A phoneme dictionary, nor even the concept of a "phoneme," is needed. Embodiments include a well-optimized recurrent neural network (RNN) training system that can use multiple GPUs, as well as a set of novel data synthesis techniques that allows for a large amount of varied data for training to be efficiently obtained. Embodiments of the system can also handle challenging noisy environments better than widely used, state-of-the-art commercial speech systems.
The PTAB deemed claim 11 representative. It recites:
A computer-implemented method for transcribing speech comprising:
receiving an input audio from a user;
normalizing the input audio to make a total power of the input audio consistent with a set of training samples used to train a trained neural network model;
generating a jitter set of audio files from the normalized input audio by translating the normalized input audio by one or more time values;
for each audio file from the jitter set of audio files, which includes the normalized input audio:
generating a set of spectrogram frames for each audio file;
inputting the audio file along with a context of spectrogram frames into a trained neural network;
obtaining predicted character probabilities outputs from the trained neural network; and
decoding a transcription of the input audio using the predicted character probabilities outputs from the trained neural network constrained by a language model that interprets a string of characters from the predicted character probabilities outputs as a word or words.
The Examiner's Rejection
During prosecution, the Examiner rejected claim 11 and claims depending therefrom under § 101 as being directed to patent-ineligible subject matter. Particularly, the Examiner viewed claim 11 as "using the predicted character probabilities (mathematical formula) to decode a transcription of the input audio into words or text data." The Examiner found that this was "similar to the court case Gottschalk v. Benson because the predicted character probabilities (mathematical formula or relationship) is used to convert or transcribe audio data into text data (words)." Thus, the Examiner concluded that the claim was directed to an invention falling into the mathematical concepts category.
The Examiner also characterized the claim as merely "normalizing the input audio data (manipulating data)," and "generating spectrogram frames based on each audio file (generating information sets based on prior information sets)," "using a mathematical formula to convert audio data into text data (Decoding)." The Examiner asserted that this implied that the claim was also abstract under the "certain methods of organizing human activity" and "mental process" categories because a "human can listen to an audio file and transcribe the audio data into text data which can all be done mentally."
Moreover, the Examiner found that the claim also fails under the second step of Alice. To that point, the Examiner wrote that the claimed invention "[d]oes not amount to significantly more since it is just decoding a transcription using a mathematical formula or relationship."
The PTAB's Decision
Applying the Revised Guidance, the PTAB began with the inquiry of whether the claim recites a judicial exception. Notably, the PTAB disagreed with the Examiner's contention that the claims involve either a mental process or a method of organizing human activity. The PTAB stated:
While transcription generally can be performed by a human, the claims here are directed to a specific implementation including the steps of normalizing an input file, generating a jitter set of audio files, generating a set of spectrogram frames, obtaining predicted character probabilities from a trained neural network and decoding a transcription of the input audio using the predicted character probability outputs. These are not steps that can practically be performed mentally. Nor do we see how the claimed invention recites organizing human activity.
The PTAB also concluded that the claims do not recite a mathematical concept, pointing out that while the specification discloses an algorithm, the claims do not recite the algorithm. Thus, under the Revised Guidance, no mathematical concept is recited. In particular, the PTAB referenced the USPTO's eligibility example 38, which explains that even if some claim limitations are based on mathematical concepts, the claim is not abstract unless at least one of those concepts are recited therein.
The PTAB went on to note that even if the claims were considered to recite one of the aforementioned categories of abstract ideas, the claims still "are not directed to an abstract idea because the alleged judicial exception is integrated into a practical application." Relying on statements made by the applicant, the PTAB observed that "the claims of the current application include specific features that were specifically designed to achieve an improved technological result" and "provide improvements to that technical field." As evidence of this, the PTAB looked to the specification, which describes a trained neural network used with a language model that "achieves higher performance than traditional methods on hard speech recognition tasks while also being much simpler."
Based on this analysis, the PTAB concluded that "the Examiner erred in determining that the claims are directed to an abstract idea."
Turning to the second part of Alice, the PTAB took further issue with the Examiner's reasoning. Particularly, the PTAB noted that "the Examiner concludes the claims do not include any additional elements that amounts to significantly more than a judicial exception but fails to provide sufficient factual support." Under Berkheimer v. HP, such a conclusory rationale for contending that a claim does not amount to significantly more cannot stand.
Thus, the PTAB reversed the Examiner's rejections of claim 11 and all of its dependent claims.
This case is of note because it is one of the first in which the PTAB has confirmed that a machine learning invention can be non-abstract. While the USPTO's example 39 has suggested that one can claim a machine learning procedure without reciting any of the underlying mathematics, a mental process, or a method of organizing human activity, this decision affirms that is the case. The PTAB also seemed persuaded, based on statements made in the specification, that the claimed invention entails an improvement over previous techniques used to address the problem domain.
Ex Parte Hannun (PTAB 2019)
Panel: Administrative Patent Judges Kumar, McKeown, and Shiang
Decision on Appeal by Administrative Patent Judge McKeown
Posted at 11:01 PM in Patent Trial and Appeal Board, Patentable Subject Matter | Permalink | Comments (2)
The case involved infringement under 35 U.S.C. § 271(e)(2) of Orange Book-listed U.S. Patent Nos. 9,265,760 and 9,339,499, which claimed extended release hydrocodone formulations for treating patients with hepatic impairment, who were known in the prior art to be at greater risk for opioid overdose; Persion's drug product was marketed as Zohydro ER. Claims 1 and 12 of the '760 patent are representative:
administering to the patient having mild or moderate hepatic impairment a starting dose of an oral dosage unit having hydrocodone bitartrate as the only active ingredient, wherein the dosage unit comprises an extended release formulation of hydrocodone bitartrate, and wherein the starting dose is not adjusted relative to a patient without hepatic impairment.
12. A method of treating pain in a patient having mild or moderate hepatic impairment, the method comprising:
administering to the patient having mild or moderate hepatic impairment an oral dos- age unit having hydrocodone bitartrate as the only active ingredient, wherein the dos- age unit comprises an extended release formulation of hydrocodone bitartrate,
(1) does not increase average hydrocodone AUC0-inf in subjects suffering from mild hepatic impairment relative to subjects not suffering from renal or hepatic impairment in an amount of more than 14%;
(2) does not increase average hydrocodone AUC0-inf in subjects suffering from moderate hepatic impairment relative to subjects not suffering from renal or hepatic impairment in an amount of more than 30%;
(3) does not increase average hydrocodone Cmax subjects suffering from mild hepatic impairment relative to subjects not suffering from renal or hepatic impairment in an amount of more than 9%; and
(4) does not increase average hydrocodone Cmax in subjects suffering from moderate hepatic impairment relative to subjects not suffering from renal or hepatic impairment in an amount of more than 14%.
Defendant Alvogen asserted an obviousness defense over two prior art patent references: U.S. Patent Publication No. 2006/0240105 (Devane), that disclosed the Zohydro ER formulation itself and an in vivo study in which the formulation is used to treat pain; and U.S. Patent Publication No. 2010/0010030 (Jain), which disclosed Vicodin CR, a mixture of hydrocodone and acetaminophen, and that pharmacokinetic parameters for hydrocodone "were similar in normal subjects and subjects with mild and moderate hepatic impairment." The District Court also considered the contents of the Vicodin and Lortab labels (Lortab is a related hydrocodone prior art formulation).
The District Court held that Alvogen's ANDA formulation would infringe Persion's asserted patent claims but that these claims were invalid as obvious over the combination of Devane and Jain and the Vicodin and Lortab labels; the Federal Circuit's opinion provided a succinct synopsis of the District Court's reasoning:
Specifically, the district court found that in light of the teachings of Jain and the Vicodin and Lortab labels, a person of ordinary skill in the art would have been motivated to administer the extended-release hydrocodone bitartrate formulation disclosed in Devane to patients with mild or moderate hepatic impairment at an unadjusted dose and would have had a reasonable expectation of success in so doing. The district court further found that the pharmacokinetic limitations in the pharmacokinetic claims are "inherent in any obviousness combination that contains the Devane formulation" because the recited pharmacokinetic parameters were "necessarily present" in the Zohydro ER formulation described in both Devane and the asserted patents. Finally, the district court found that the objective factors of unexpected results, long-felt but unmet need, and failure of others did not weigh in favor of finding nonobviousness.
The District Court also held that Persion's asserted claims (which were broader in scope than the Zohydro ER formulation) did not satisfy the written description requirement of 35 U.S.C. § 112(a), because the specification common to the two asserted patents only specifically described Zohydro ER.
The Federal Circuit affirmed, in an opinion by Judge Reyna, joined by Judges O'Malley and Chen. The opinion was based on the Federal Circuit finding no clear error in the District Court's factual bases for its obviousness determination, as required under Supreme Court precedent (the opinion specifically citing Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 123 (1969), quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948)).
On appeal, Persion raised four grounds of asserted error. First, Persion argued that the District Court improperly relied on inherency to determine that Devane disclosure inherently disclosed the pharmacokinetic limitations recited in claim 12 and related asserted claims. Persion also argued that it was improper for the District Court to rely on pharmacokinetic profiles from drugs that were not extended-release single-active-ingredient hydrocodone formulations, and from patients without hepatic impairment in reaching its obviousness conclusion. Persion also contended that the District Court did not properly consider its evidence of the objective indicia factors of non-obviousness. Finally, Persion contended that the District Court's holding of obviousness and inadequate written description was inconsistent with each other.
(The opinion notes, in a footnote, that Persion argued many of these points as legal issues, but the panel believes that they are based on factual determinations by the District Court, which has the more deferential "clear error" standard of review.)
With regard to inherency, the opinion cites Supreme Court precedent for the proposition that "[i]t is not invention to perceive that the product which others had discovered had qualities they failed to detect," specifically Gen. Elec. Co. v. Jewel Incandescent Lamp Co., 326 U.S. 242, 249 (1945). The panel further cited multiple instances of the Court's own (and CCPA) precedent, for the principle that merely discovering a new property of a prior art compound is not sufficient to defeat obviousness, including Santarus, Inc. v. Par Pharm., Inc., 694 F.3d 1344, 1354 (Fed. Cir. 2012); In re Kao, 639 F.3d 1057, 1070 (Fed. Cir. 2011); In re Kubin, 561 F.3d 1351, 1357 (Fed. Cir. 2009); and In re Wiseman, 596 F.2d 1019, 1023 (C.C.P.A. 1979). On the other hand, the opinion notes that inherency is "carefully circumscribed" in the obviousness context, to require that an inherent property is consistently present and is not a matter of probabilities. To Persion's generic challenge to the District Court's use of inherency to support its obviousness determination the panel stated:
To the extent Persion contends that inherency can only satisfy a claim limitation when all other limitations are taught in a single reference, that position is contrary to our prior recognition that "inherency may supply a missing claim limitation in an obviousness analysis" where the limitation at issue is "the natural result of the combination of prior art elements." PAR Pharm., Inc. v. TWI Pharm., Inc., 773 F.3d 1186, 1194-95 (Fed. Cir. 2014) (emphasis added, internal quotations omitted).
Further, Persion argued that "Devane does not teach administering its hydrocodone-only formulation to patients with mild or moderate hepatic impairment" and that this deficiency negates inherency (an argument more fitting for rebutting invalidity for lack of novelty), and the opinion response was as follows:
The district court found that a person of ordinary skill in the art would have been motivated, with reasonable expectation of success, to administer an unadjusted dose of the Devane formulation to hepatically impaired patients. There was also no dispute that the Devane formulation, which was identical to the Zohydro ER formulation described in the patents in suit, necessarily exhibited the claimed parameters under these conditions [italics added].
The panel also rejected Persion's arguments directed to various aspects of the pharmacokinetic evidence and claims, which were what was inherent in the prior art Zohydro ER formulation. The District Court's consideration of evidence for FDA requirements for combination products was also not error, according to the panel, because the FDA standard is more rigorous than the obviousness standard, and the art (Jain) supported the conclusion that single drug formulations (or at least not combinations with acetaminophen) were preferred for patients with hepatic injury. Jain also provided evidence that the panel held the District Court properly considered in concluding that the reference suggested no difference in pharmacokinetics of hydrocodone between normal and hepatically impaired individuals. Not surprisingly, the panel also found no clear error in the District Court relying on expert testimony regarding the relevance of pharmacokinetic comparisons between normal and hepatically impaired individuals. And the panel found ample evidence related the existence of motivation to combine the teachings of these references by one of ordinary skill in the art. The opinion states:
In sum, after reviewing the entire evidentiary record, we are not left with any conviction that the district court has made a mistake. See Zenith, 395 U.S. at 123. We therefore reject Persion's challenge to the district court's factual findings, which are not clearly erroneous.
Regarding the District Court's treatment of the objective indicia, the opinion stated:
[T]he substance of the court's analysis makes clear that it properly considered the totality of the obviousness evidence in reaching its conclusion and did not treat the objective indicia as a mere "afterthought" relegated to "rebut[ting]" a prima facie case. Leo Pharm. Prods., Ltd. v. Rea, 726 F.3d 1346, 1357–58 (Fed. Cir. 2013); In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litigation, 676 F.3d 1063, 1075 (Fed. Cir. 2012).
The Federal Circuit did not reach the District Court's decision on the written description issue, but noted that the decisions were not inconsistent based on the differences in scope that the District Court considered in invalidating the asserted claims on § 103 and § 112 grounds.
Application of inherency to obviousness determinations here was facilitated by the description in the prior art of Persion's extended release formulation, and the patentee's reliance on the pharmacokinetic properties of this formulation to distinguish their claimed method from how these drugs were administered (and to whom) in the prior art. It was those very properties that were inherent and thus could not be used to distinguish the prior art on the obviousness question. Also, the negative limitation, "and wherein the starting dose is not adjusted relative to a patient without hepatic impairment," was directly related to the absence of any in vivo difference between effectiveness or toxicity (i.e., risk of overdose) between patients with hepatic impairment and those with normal liver function. Under these facts, and in view of the deferential standard of review the Court must give to a district court's factual determinations, Federal Circuit affirmance of the District Court's decision was not particularly remarkable.
Panel: Circuit Judges O'Malley, Reyna, and Chen
Posted at 10:38 PM in Federal Circuit, Obviousness, Written Description | Permalink | Comments (2)
CG Technology Development, LLC v. Fanduel, Inc. (Fed. Cir. 2019)
Federal Circuit Upholds Invalidity of Video Game Patent Despite Board's Incorrect Claim Construction
CG Technology Development, LLC (CG Tech) appealed the Patent Trial and Appeal Board's Final Written Decision holding that the claims of U.S. Patent RE39,818 would have been obvious. The Federal Circuit found that even though the disputed limitations in the claims were improperly construed, the claims were nevertheless invalid under the proper construction.
Initially, FanDuel, Inc., DraftKings, Inc., and bwin.party Digital Entertainment, PLC (collectively, Appellees) petitioned for inter partes review of U.S. Patent No. RE39,818. The '818 patent describes a video game system with personalized wireless controllers that allow for custom operation of an interactive video system based on a user's personal data. Although the specific language in each claim varies, each of the challenged claims recites a limitation authorizing or allowing a user to play a specific game based on the age of the user. For example, claim 1 reads:
a processor unit for executing game instructions and displaying video images on a display screen, the processor includes a receiver for receiving wireless identification and control signal transmissions; and
a personalized portable control comprising:
a plurality of control switches for generating game control signals;
a non-volatile memory for storing personalized identification information corresponding to a user of the controller, the personalized identification information comprises a user age, and historical game performance data; and
a transmitter for wireless transmitting of the personalized identification and game control signals to the processor unit, wherein the processor unit authorizes game execution based on the user age, further the processor unit comprises a transmitting for transmitting the historical game performance data to the portable controller.
Appellees petitioned for inter partes review on the basis that the challenged claims would have been obvious in view of several combinations of references, each of which relied in part on the disclosure in U.S. Patent No. 5,816,918 to Kelly.
Kelly describes that a player can choose to play a non-tournament (i.e., prize credit) game or to participate in a tournament. Players can also be required to meet certain conditions before participating in certain games or tournaments. The operator may designate further characteristics of tournaments, such as participation based on predefined characteristics, age, or other characteristics.
The Board construed the "authorize play based on age" limitations to mean "a control that either prohibits or adjusts operation of a video game based on the user's age" and found that Kelly discloses the "authorize play based on age" limitations.
On appeal, what a reference teaches is a question of fact reviewed for substantial evidence.
CG Tech argued that the Board erred in including "or adjusts" in its construction of the claim term "authorize play based on age". Rather than challenge CG Tech's position as to the propriety of the language "or adjusts" in the Board's claim construction, Appellees instead argued that the inclusion of "or adjusts" had no impact on the Board's analysis. Appellees argued that the Board's finding that Kelly discloses the "authorize play based on age" limitations was based on the unchallenged part of the Board's construction because it found Kelly "prohibit[s] operation of a game" based on age.
The Federal Circuit agreed with CG Tech that the Board erred in construing the "authorize play based on age" limitations. The Board's construction was found to fail to distinguish the two embodiments described in the claims and the specification: authorizing and adjusting. "Authorize" indicates only prohibiting (or not prohibiting) the player from playing the game, a concept distinct from "adjusting" the game. The claims also distinguish between "authorizing" game execution based on user age and "adjusting" the game.
The specification similarly distinguishes between authorizing and adjusting game play. The specification describes a controller that ensures "amusement games designed for a specific age group [are] not operated by an inappropriate user" such that a "video game can be prohibited based on the user age." But it separately explains that "educational video 'games' can be adjusted to the age of the user." The intrinsic record thus supports the conclusion that the "authorize play based on age" limitations do not include adjustment and therefore are properly construed as requiring "a control that prohibits operation of a video game based on the user's age."
Although the Board incorrectly construed the "authorize play based on age" limitations, its findings regarding Kelly were limited to Kelly's disclosure of "prohibiting" game play based on age. The incorrect claim construction was therefore found to be harmless error since substantial evidence supported the Board's finding.
The Board found that Kelly discloses that meeting a predefined prerequisite is used in some embodiments to prohibit operation of a game for failure to meet the established prerequisite and further found it "discloses using the age of the game player as a prerequisite to playing a particular game." The Board thus found Kelly discloses "a control that prohibits operation of a video game based on the user's age."
Though the disclosures in Kelly are in separate portions of the specification, they nonetheless support the Board's finding that a person of ordinary skill in the art would understand that Kelly discloses prohibiting credit game and tournament play based on age. Thus, because substantial evidence supported the Board's finding that Kelly teaches these limitations under the proper construction, the Federal Circuit affirmed the Board's decision.
Panel: Chief Judge Prost and Circuit Judges Clevenger and Moore
Posted at 11:27 PM in Federal Circuit, Obviousness | Permalink | Comments (0)
CRISPR Interference Update
All interferences have filings that are either kept confidential or are entirely procedural in nature. While there is little substantive to discuss, acknowledging them serves the purpose of keeping track of the proceedings; the following papers have been filed in Interference No 106,115 between Senior Party The Broad Institute, Harvard University, and the Massachusetts Institute of Technology, and Junior Party the University of California, Berkeley, the University of Vienna, and Emmanuelle Charpentier (collectively, "CVC") over patents and applications that disclose and claim eukaryotic cell-embodiments of CRISPR technology:
CVC Protective Order Entered -- December 9, 2019
Broad Notice of Filing Priority Statement -- December 12, 2019
CVC Notice of Filing Priority Statement -- December 12, 2019
Deposition Notice Randall Peterson Ph.D. -- December 12, 2019
Broad Priority Statement Filing -- December 12, 2019
CVC Priority Statement Filing -- December 12, 2019
Broad Notice of Priority Statement Service -- December 13, 2019
CVC Notice of Priority Statement Service -- December 13, 2019
CVC Fourth Updated Notice of Related Proceedings -- December 23, 2019
Dr. Peterson's deposition was scheduled to take place on December 17th and 18th, pursuant to the schedule set forth by the Board's Order (see "CRISPR Housekeeping").
Finally, for now, on December 23rd, CVC provided an updated Notice of Related Proceedings, informing the Board and the Broad of the following newly granted patents (as well as additional pending applications), none of which are involved in this interference:
10,301,651 (USSN 14/685,504); 10,227,611 (USSN 14/042,782); 10,407,697 (USSN 15/435,233); 10,385,360 (USSN 15/925,544); 10,421,980 (USSN 16/033,002); 10,415,061 (USSN 16/033,005); 10,308,961 (USSN 16/033,016); 10,358,658 (USSN 16/201,836); 10,337,029 (USSN 16/201,848); 10,351,878 (USSN 16/201,855); 10,400,253 (USSN 16/276,343); 10,428,352 (USSN 16/276,348); 10,443,076 (USSN 16/276,356); 10,487,341 (USSN 16/277,090); 10,519,467 (USSN 15/803,424); 10,526,619 (USSN 16/380,758); and 10,513,712 (USSN 16/382,093); allowance of USSN 16/380,781; allowance of USSN 16/382,096; allowance of USSN 16/382,097; and allowance of USSN 16/382,100.
Posted at 11:23 PM in Miscellaneous, Patent Trial and Appeal Board | Permalink | Comments (0)
Season's Greetings from Patent Docs
The authors and contributors of Patent Docs wish their readers and families a Happy Holidays! Publication of Patent Docs will resume on December 26th.
Posted at 06:07 PM in Miscellaneous | Permalink | Comments (2)
Representative Danny K. Davis Introduces ''Inventor Rights Act"
After preliminary sections extolling the contribution of inventors to American innovation and economic advancement, and noting the negative effects on inventor rights by Supreme Court cases including eBay Inc. v. MercExchange, LLC, TC Heartland LLC v. Kraft Foods Group Brands LLC, and PTAB proceedings under the provisions of the Leahy-Smith America Invents Act (AIA), and calling out the practice of "efficient infringement," the bill proposes amending Section 100 of the Patent Act to include a new section (k):
(k) The term 'inventor-owned patent' means a patent with respect to which the inventor of the invention claimed by the patent or an entity controlled by that inventor—
(1) is the patentee; and
(2) holds all substantial rights.
For such "inventor-owned patents," the bill proposes a new Section 330, entitled Inventor protections, which include:
(a) Not subjecting such patents to reexamination or review [presumably including post-grant review, inter partes review, or covered business method patent review], or [more broadly], to otherwise make a determination about the validity of an inventor-owned patent" without consent of the inventor-owner;
(b) permitting venue either:
(1) in accordance with section 1400(b) of title 28;
(2) where the defendant has agreed or consented to be sued in the instant action;
(3) where an inventor named on the patent in suit conducted research or development that led to the application for the patent in suit;
(4) where a party has a regular and established physical facility that such party controls and operates, not primarily for the purpose of creating venue, and has—
(A) engaged in management of significant research and development of an invention claimed in a patent in suit prior to the effective filing date of the patent;
(B) manufactured a tangible good that is alleged to embody an invention claimed in a patent in suit; or
(C) implemented a manufacturing process for a tangible good in which the process is alleged to embody an invention claimed in a patent in suit; or
(5) in the case of a foreign defendant that does not meet the requirements of section 1400(b) of title 28, in accordance with section 1391(c)(3) of such title.
Further, under proposed Section 330(c) the bill creates a presumption that after a finding of infringement the inventor-owner will suffer irreparable harm unless the court grants an injunction, and provides for rebutting the presumption only upon a showing by clear and convincing evidence that the patentee would not be irreparably harmed.
The bill further provides in Section 330(d) that an inventor-owner can elect, "at any time before final judgment is entered by the court," to obtain recovery under this Section, which will include: (1) profit disgorgement, which will include all infringer's revenues relating to the infringing article, with the infringer bearing the burden of showing any "elements of cost or production" claimed to reduce this amount; (2) interests and costs; (3) treble damages for willful infringement; and (4) attorneys fees in the amount that exceeds 10% of the amounts set forth in subparagraph (1)-(3).
The University of Illinois/Chicago is in Rep. Davis's congressional district but he has not sponsored much patent-related legislation before. One possible consequence of this bill should it pass (which is unlikely) is that patents will remain "owned" by (i.e., assigned) to the named inventors, even in corporate settings, with their corporate masters holding licenses (likely exclusive licenses) to get the benefit of the bill's provisions while retaining traditional control of the patented invention. Care will need to be taken to avoid situations where the scope of the license is so restrictive to amount to an assignment, thus frustrating the purpose (see "St Regis Mohawk Tribe v. Mylan Pharmaceuticals").
According to a press release posted on Rep. Davis's website, "[t]he Inventor Rights Act provides narrowly targeted relief only to inventors that own and control their own patents. This bill does not apply to large corporations, drug companies, or typical non-practicing entities." The bill will be taken up in due course by the House, presumably in the next session beginning in early 2020.
Posted at 11:21 PM in Patent Legislation | Permalink | Comments (5)
Syngenta Crop Protection, LLC v. Willowood, LLC (Fed. Cir. 2019)
The Federal Circuit had the opportunity to interpret the extent to which the provisions of 35 U.S.C. § 271(g) require the practice of the patented method that produces a product whose importation imposes infringement liability under the statute to be practiced by a single entity (it does not) in rendering its decision recently in Syngenta Crop Protection, LLC v. Willowood, LLC.
The case involved accused infringement of U.S. Patent Nos. 5,602,076 (expired February 11, 2014); 5,633,256 (expired February 11, 2014); 5,847,138 (expired December 8, 2015); and 8,124,761 (will not expire until April 15, 2029), directed to fungicides, pesticides, plant growth regulators, comprising pyrimidinyloxy-phenyl acrylates and derivatives, and in particular azoxystrobin. The '076 and '256 patents are directed to compounds, while the '138 and '761 patents are directed to methods for producing these compounds.
Syngenta brought suit for patent infringement and copyright infringement against the Willowood defendants for importation of fungicide formulations comprising azoxystrobin; the copyright infringement assertions were made with regard to Syngenta's label related to "directions for use, storage, and disposal, as well as first-aid instructions and environmental, physical, and chemical hazard warnings." Importantly for the issues in this case, one defendant, Willowood China, produced the accused infringing fungicide in Hong Kong and sold it to Willowood USA, its American affiliate. Willowood USA and another defendant, Willowood LLC then contracted to have third parties formulate the azoxystrobin fungicide and thereafter marketed and sold the product in the U.S. Syngenta alleged infringement of claims 1–4 and 12–14 of the '076 patent, claims 1–3, 5, and 7 of the '256 patent, claims 6 and 12–14 of the '138 patent, and claims 1, 3–5, and 9–10 of the '761 patent. Both parties filed summary judgment motions, upon which the District Court ruled as follows. First, the District Court granted Syngenta's summary judgment motion that Willowood literally infringed claims of the '076 and '256 patents, and that Willowood induced infringement by the LLC affiliate. The District Court denied Syngenta's summary judgment motion that Willowood China literally infringed the '076 and '256 patents, based on the existence of a genuine issues of material fact regarding whether sale occurred in the U.S. or China. The District Court also denied summary judgment of the '138 patent, on the grounds that infringement under 35 U.S.C. § 271(g) required that all steps of a claimed process must be performed by a single infringer (facts regarding this were in dispute). Finally, the District Court denied Syngenta's summary judgment motion regarding infringement of the '761 patent, due to disputed facts on the details of the synthetic methods used by Willowood China. But the District Court granted Syngenta's motion shifting the burden of proof on this issue to Willowood under 35 U.S.C. § 295.
Willowood's summary judgment motion involved Syngenta's copyright claims. The District Court granted this motion based on the provisions of the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA"), which precludes label copyright, inter alia, because "much of its labels' text comprises instructions and warnings mandated by FIFRA and EPA regulations, and only limited means of expressing such information exist, extending copyright protection to Syngenta's labels 'would make subsequent labeling practically impossible,'" citing SmithKline Beecham Consumer Healthcare, L.P. v. Watson Pharm. Inc., 211 F.3d 21, 23 (2d Cir. 2000). The United States filed a "statement of interest" supporting Willowood's position.
At trial, the jury entered a verdict that Syngenta did not establish that Willowood China had imported or sold azoxystrobin into the U.S. The jury awarded damages ($76,000) for infringing activity prior to expiration of the '076 and '256 patents by Willowood USA and Willowood LLC. The jury also entered a specific verdict of non-infringement of the '138 patent, based on its determination that Syngenta did not prove that Willowood China performed both steps of the claimed process. Finally, the jury entered a verdict that, under the burden-shifting provisions of the District Court's decision regarding the '761 patent, Willowood had not shown that it did did not synthesize azoxystrobin according to the claimed method and awarded damages ($900,000) for this infringement. This appeal followed, by Willowood on the jury's infringement verdicts and Syngenta on the District Court's grant of summary judgment on its copyright claims.
The Federal Circuit affirmed-in-part, reversed-in-part, vacated-in-part, and remanded, in an opinion by Judge Reyna, joined by Judges Taranto and Stoll. The panel vacated the District Court's grant of summary judgment regarding Syngenta's copyright claims, finding that the District Court had not properly determined whether the provisions of FIFRA conflicted with the Copyright Act, because FIFRA "does not, on its face, require a me-too registrant to copy the label of a registered product" and a conflict will exist only to the extent that Syngenta's label is protected by copyright and is necessary for "expedited approval of Willowood's generic pesticide product." Because the District Court did not reach the merits of Syngenta's copyright claims, the Federal Circuit remanded for the District Court to make this determination. Nevertheless, the Court provided guidance regarding how the purportedly competing goals of FIFRA and the Copyright Act should be resolved:
On remand, the district court should first discern whether the Copyright Act, as interpreted under existing copyright doctrines, would prohibit Willowood's use of any portion of Syngenta's label. The district court should, for instance, consider whether the fair-use doctrine or limits on copyrightable subject matter, such as the merger doctrine, would eliminate infringement. Only if the district court concludes that the Copyright Act would in fact prohibit Willowood's conduct in a manner in- consistent with the purposes of FIFRA should it revisit the question of whether and to what extent FIFRA precludes Syngenta's copyright claims for any part of its pesticide labels.
The opinion then turned to the requirements for showing infringement under § 271(g). In what the opinion characterized as an issue of first impression, the Federal Circuit reversed the District Court's finding that infringement required that "all steps of a patented process be performed by or at the direction or control of a single entity." Agreeing with Syngenta and several amici, the panel held that this requirement was not mandated by the plain meaning of the statutory language. Specifically, the Court stated:
The resolution of this issue turns on the nature of the infringing acts covered by § 271(g). Section 271(g) provides in relevant part that "[w]hoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer." 35 U.S.C. § 271(g) (2012). This language makes clear that the acts that give rise to liability under § 271(g) are the importation, offer for sale, sale, or use within this country of a product that was made by a process patented in the United States. Id. Nothing in this statutory language suggests that liability arises from practicing the patented process abroad. Rather, the focus is only on acts with respect to products resulting from the patented process. Thus, because the statutory language as a whole is clear that practicing a patented process abroad cannot create liability under § 271(g), whether that process is practiced by a single entity is immaterial to the infringement analysis under that section.
The panel found support for this conclusion by comparison with the language of 35 U.S.C. § 271(a), where the "whoever, without authority" language has been interpreted to impose the single-entity requirement, citing Limelight Networks, Inc. v. Akamai Techs., Inc., 572 U.S. 915, 921–22 (2014). The opinion also relied on the statutory language of § 271(f), where the statutory language includes the requirement that what is induced is combination of components of a claimed article "in a manner that would infringe the patent if such combination occurred within the United States" (emphasis added). The panel stated that "[i]f Congress intended to limit liability under § 271(g) to instances where the patented process was practiced in a manner that would infringe the patent if such practice occurred within the United States—such as it did by requiring a single entity to perform the entire process under § 271(a)—it "kn[ew] precisely how to do so" (which, with regard to § 271(g) Congress clearly did not. And the timing of enactment of the two statutes (§ 271(g) being enacted after § 271(f)) was also significant for the panel's opinion:
"Where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion," citing Rodriguez v. United States, 480 U.S. 522, 525 (1987) (quoting Russello v. United States, 464 U.S. 16, 23 (1983)).
The panel also relied for its reasoning that the infringing act implicated in § 271(g) was not practice of the claimed method abroad but importation of the product of the patented process. The opinion also found support for its interpretation in the legislative history. Finally, the opinion cited the increased evidentiary burden Willowood's interpretation of the statute would impose on patentees, where manufacture occurs abroad.
Accordingly, the Federal Circuit reversed the District Court's judgment that Willowood USA (whose importation of the accused infringing azoxystrobin was undisputed) did not infringe the '138 patent under § 271(g) and vacated (as not being considered by the District Court) Willowood LLC's infringement liability and remanded. Otherwise, the panel affirmed the District Court in all other respects.
Panel: Circuit Judges Reyna, Taranto, and Stoll
Amgen Inc. v. Hospira, Inc. (Fed. Cir. 2019)
The Federal Circuit has grappled with, divisively in some instances, the extent to which the safe harbor provisions of 35 U.S.C. § 271(e)(1) extend to activities not strictly for obtaining regulatory approval, such as post-approval quality testing and "stockpiling" product used for commercial purposes. For example, in Classen Immunotherapies, Inc. v. Biogen IDEC, then-Chief Judge Rader joined by Judge Newman held that "routine" post-approval submissions are outside the safe harbor (over a vigorous dissent by Judge Moore), whereas in the following case, Momenta Pharm. v. Amphastar Pharm., the roles were reversed, with Judge Moore finding herself in the majority (with Judge Dyk), and then-Chief Judge Rader filing a dissent. Yesterday, the Federal Circuit revisited these issues in its decision in Amgen Inc. v. Hospira, Inc.
The case arose over Amgen's complaint that Hospira infringed its U.S. Patent Nos. 5,865,298 and 5,756,349 relating to cells and methods of preparing erythropoietin (EPO). The jury found that Hospira had not carried its burden of showing either patent to be invalid by clear and convincing evidence; and that Hospira infringed claims 24 and 27 of the '298 patent but had not infringed claims 1-7 of the '349 patent:
1. Vertebrate cells which can be propagated in vitro and which are capable upon growth in culture of producing erythropoietin in the medium of their growth in excess of 100 U of erythropoietin per 106cells in 48 hours as determined by radioimmunoassay, said cells comprising non-human DNA sequences which control transcription of DNA encoding human erythropoietin.
2. Vertebrate cells according to claim 1 capable of producing in excess of 500 U erythropoietin per 106cells in 48 hours.
3. Vertebrate cells according to claim 1 capable of producing in excess of 1000 U erythropoietin per 106cells in 48 hours.
4. Vertebrate cells which can be propagated in vitro which comprise transcription control DNA sequences, other than human erythropoietin transcription control sequences, for production of human erythropoietin, and which upon growth in culture are capable of producing in the medium of their growth in excess of 100 U of erythropoietin per 106cells in 48 hours as determined by radioimmunoassay.
5. Vertebrate cells according to claim 4 capable of producing in excess of 500 U erythropoietin per 106cells in 48 hours.
6. Vertebrate cells according to claim 4 capable of producing in excess of 1000 U erythropoietin per 106cells in 48 hours.
The jury entered a verdict that Hospira infringed claim 27 of the '298 patent but that Amgen had not shown that Hospira infringed the claims of the '349 patent. The District Court also assessed damages in the amount of $70 million, inclusive of pre- and post-judgment interest.
Both parties moved for Judgment as a Matter of Law (JMOL). Hospira contended that the jury instructions were "legally erroneous and prejudicial," inter alia, because "ulterior motives and intent are irrelevant to [entitlement to] the Safe Harbor." Specifically, Hospira argued that the instructions did not clarify the use of the terms "use" and "make" as relevant to whether an activity was entitled to the safe harbor provisions of the statute. According to Hospira, the jury was asked to determine whether "manufacture" of the accused infringing article (biosimilar erythropoietin, bEPO) fell under the safe harbor when the only burden Hospira rightfully was obliged to meet was whether "use" of the allegedly infringing bEPO was "reasonably related to obtaining FDA approval." The Court disagreed, stating that "Hospira's potentially infringing 'use' of Amgen' s patented invention is Hospira's manufacture of the EPO drug substance referred to in its BLA (i.e., Hospira's performance of the steps of Amgen's method claims), not Hospira's subsequent use of the EPO drug substance (i.e., Hospira's subsequent use of the product obtained by practicing Amgen's method claims)." Thus, the safe harbor is available to Hospira only if manufacture of its bEPO was "reasonably related to obtaining FDA approval." Hospira's subsequent use of the bEPO is "probative in determining whether Hospira's manufacture of its EPO drug substance was reasonably related to obtaining FDA approval, [but] it is the manufacture itself (not Hospira's subsequent uses of EPO drug substance) that is the potentially infringing act which must be evaluated for safe harbor protection."
In addition, Hospira argued that it was unduly prejudicial for the Court not to instruct the jury that "intent is irrelevant to evaluating safe harbor protection." The Court interpreted Hospira's position to be that "intent is entirely irrelevant to the safe harbor analysis" but with that the judge expressly disagreed as being unsupported by the cited case law. Specifically, the Memorandum Opinion interprets Abtox, Inc. v. Exitron Corp., 122 F.3d 1019 (Fed. Cir. 1997), to mean that a party can use the benefit of the safe harbor "to use its data from the tests for more than FDA approval" and "does not look to the underlying purposes or attendant consequences of the activity (e.g., tests led to the sale of the patent), as long as the use is reasonably related to FDA approval" but "did not state that intent was irrelevant in determining whether an activity is reasonably related to obtaining FDA approval." On the contrary, the District Court held that "evidence of intent can be a relevant factor in determining whether an activity is reasonably related to obtaining FDA approval, and that these cases stand for the proposition that evidence of commercial intent is not determinative of the safe harbor inquiry." "[O]nce it is determined that 'the activity is reasonably related to obtaining FDA approval,' . . . intent or alternative uses are irrelevant to its qualification to invoke the section 271(e) shield," according to the District Court. And further:
The District Court denied both parties' motions for JMOL and this appeal followed.
The Federal Circuit affirmed the jury verdicts and decisions of the District Court with respect to Hospira's appeal and Amgen's cross-appeal, in a decision by Judge Moore joined by Judges Bryson and Chen. The Federal Circuit first held that the District Court correctly construed the claims so that the limitation "a mixture of two or more erythropoietin isoforms of claim 1" did not require mixing of two separately prepared and independently isolated EPO isoforms. This construction was contrary to Hospira's expert testimony, but the District Court and the Federal Circuit disagreed. According to the opinion, "[n]othing in the claim language or the specification suggests that it would be proper to limit claim 27 in the manner Hospira proposes," based in part on disclosure in the '298 patent specification that the claimed mixtures of EPO isoforms could be produced by "isolating selected erythropoietin isoforms simultaneously" (emphasis in opinion). The Federal Circuit concluded that "[t]he specification clearly contemplates the preparation of mixtures of isoforms in more than one way."
The opinion also affirmed based on substantial evidence the jury's finding that Hospira's EPO preparations infringed claim 27 of the '298 patent based on expert testimony and portions of Hospira's aBLA. The Federal Circuit also affirmed the jury's decision that claim 27 was not anticipated by a prior art reference because it did not disclose "a composition with a predetermined in vivo activity" but just that the EPO produced according to the reference was "biologically active."
Regarding the effect of the statutory safe harbor, the opinion rejected Hospira's objections to the jury instructions, particularly the final sentence:
You must evaluate each of the accused activities separately to determine whether the Safe Harbor applies. If you find that an accused activity was reasonably related to the development and submission of information to the FDA for the purpose of obtaining FDA approval, then Hospira has proved its Safe Harbor defense as to that activity. If Hospira has proved that the manufacture of a particular batch was reasonably related to developing and submitting information to the FDA in order to obtain FDA approval, Hospira's additional underlying purposes for the manufacture and use of that batch do not remove that batch from the Safe Harbor defense.
Hospira's objection was that "the jury instructions and verdict form improperly focused the jury on the reasons why each batch of EPO was manufactured, not how each batch was used or whether that use was reasonably related to the development and submission of information to support Hospira's BLA." The opinion rejected this argument, stating "[t]he jury instructions properly articulated the legal principles underlying the Safe Harbor inquiry. Section 271(e)(1)'s exemption from infringement 'extends to all uses of patented inventions that are reasonably related to the development and submission of any information under the FDCA,'" citing Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193, 202 (2005). The relevant question was whether each of Hospira's acts of manufacturing EPO falling within the scope of claim 27 of the '298 patent "was for uses reasonably related to submitting information to the FDA" and this was the question properly put to the jury by these instructions.
Turning to the merits, the Federal Circuit affirmed the jury's decision that fourteen batches of Hospira's EPO were not protected under the safe harbor. The other seven batches were clearly made for purposes related to obtaining FDA approval (two batches for qualifying Hospira's process and another five for mandatory pre-approval inspections). The opinion found substantial evidence that Hospira planned to use the other batches "[to] serve as commercial inventory to support single dose vial launch stock" and that "[w]hen it resubmitted its application in late 2015 after litigation began, Hospira changed the designation of certain batches from "commercial inventory" to "[continued process verification (CPV)]." Accordingly the Federal Circuit affirmed the jury's determination that these fourteen batches were not protected by the § 271(e)(1) safe harbor.
Nor did the panel find reversible error in the damages awarded to Amgen, which fell between the amounts asserted by Amgen's and Hospira's experts.
Finally, the Federal Circuit affirmed the District Court's denial of Amgen's JMOL on the ground that Amgen had not shown by substantial evidence that Hospira's cells produced EPO in amounts recited in the '349 patent claims.
Panel: Circuit Judges Moore, Bryson, and Chen
Posted at 11:59 PM in Federal Circuit, Infringement - Literal or DOE | Permalink | Comments (0)
Posted at 11:59 PM in Miscellaneous, Patent Trial and Appeal Board | Permalink | Comments (0)
As previously discussed, Senior Party The Broad Institute (joined by Harvard University and MIT) on October 14th filed Substantive Motion No 2 (to substitute the count) in the current interference over CRISPR technology (No. 106,115).
Count 1 of the interference as declared is:
The distinction the Broad made in its Motion is between embodiments of CRISPR methods that are limited to "single-molecule guide RNA" (aka "fused" or "covalently linked" species), versus embodiments that encompass single-molecule and "dual molecule" species (wherein the in the latter versions the "targeter-RNA" and "activator-RNA" as recited in the proposed Count are not covalently linked). The Broad argued that this Count should be adopted by the Board because it "properly describes the full scope of the interfering subject matter between the parties because both parties have involved claims that are generic, non-limited RNA claims." The brief also argued that proposed Count 2 "sets the correct scope of admissible proofs [i.e., their own] for the breakthrough invention described by the generic claims at issue in these proceedings—the successful adaption of CRISPR-Cas9 systems for use in eukaryotic environments," which The Broad contended current Court 1 (in either alternative) does not.
Early last month (November 7th), Junior Party the University of California, Berkeley; the University of Vienna; and Emmanuelle Charpentier; collectively, "CVC") filed its Responsive Motion (Contingent) to the Broad's motion no. 2, to be awarded priority to its earlier applications for the subject matter of proposed new Count 2. (Careful readers with appreciate that in many ways this brief is substantially identical to CVC's Substantive Motion No. 1 filed to be accorded benefit to the same priority applications for the current Count.) As required by the rather formulaic procedural rules of interferences, the brief is structured to address (and rebut) Senior Party's argument; the argument (simply stated) is that CVC is entitled to priority to the following priority applications: USSN 61/652,086, filed May 25, 2012 (P1); USSN 61/716,256, filed October 19, 2012 (P2): USSN 61/757,640, filed January 28, 2013 (P3); USSN 13/842,859, filed March 15, 2013; USSN 14/685,504, filed April 13, 2015; or USSN 15/138,604, filed April 26, 2016.
Mirroring the Broad's motion, CVC sets forth in detail the disclosure in its earlier priority applications for at least one embodiment falling within the scope of proposed Count 2. And as the Broad did in its motion, the brief hagiograhically recites the "ground-breaking" nature of their work, stating that the earliest priority document (P1) disclosed "the minimal components required to generate a functional CRISPR-Cas9 DNA-cleavage complex—Cas9, crRNA, and tracrRNA." In addition, and addressing the Broad's argument that CVC's disclosure (and this interference) were directed to single-molecule embodiments of CRISPR, CVC argues that on the contrary this priority document "disclosed, for the first time, that complexes of Cas9 and a double- or single-molecule DNA-targeting RNA . . . are useful for targeted DNA cleavage and described numerous applications of this gene-editing technology, including modifying target DNA in eukaryotic cells" and that "[t]he CVC inventors immediately understood that the CRISPR-Cas9 DNA-cleavage complex could be used in a variety of different cellular and noncellular settings." The brief recites (prophetic) Example 1 in the P1 specification, asserting that the failure of the P1 specification to show actual reduction to practice is not required to satisfy the requirement for entitlement benefit. CVC also cautions the Board against any attempt by the Broad to "erroneously to link the issues in this motion to the PTAB's termination of Interference No. 106,048 due to no interference-in-fact," stating that "the legal and factual issues raised here are fundamentally different from those decided in the prior '048 proceeding" based on the PTAB's own prior statements of the grounds for its no interference-in-fact determination. Rather, according to CVC:
[A person of ordinary skill in the art] reading P1 in light of the state of the art at the time of filing would have understood that the application describes and enables at least one embodiment within the scope of Proposed Count 2. Moreover, post-filing-date publications report successfully practicing CVC's claimed invention in eukaryotes using the very methods and components that P1 describes. The Board should therefore accord CVC the benefit of P1's May 25, 2012 filing date with respect to Proposed Count 2.
What follows is a succinct statement of the Precise Relief Requests (pursuant to PTAB rules) and support in the P1 specification for this relief, recited in the alternative with the other priority documents recited in CVC's request for relief. The standard, undisputed by the parties, is that to be accorded benefit of priority a prior application must show constructive reduction to practice (CRTP) regarding at least one embodiment falling within the scope of the count, citing Falkner v. Inglis, 448 F.3d 1357, 1362 (Fed. Cir. 2006). After setting out the legal grounds for CRTP, the brief then applies these rubrics to the disclosure in P1 for subject matter falling within the scope of Count 2 (which CVC argues satisfies these requirements). Along the way, the brief also suggests that "Broad will doubtlessly rely on cherry-picked quotes about whether or not the inventors or experts knew CRISPR would work in eukaryotic cells before testing it," rejecting these anticipated arguments on the ground that CTRP is grounded on what is disclosed in the specification. The relevant P1 disclosure for CVC is that CRISPR is functional "when removed from its natural prokaryotic cellular milieu, which is highly relevant here because it establishes CVC's possession of the necessary and sufficient components for a functional CRISPR-Cas9 DNA-cleavage complex regardless of its environment" (emphasis in brief).
The argument is illustrated by Figures from the P1 application:
And explicit disclosure compared with the elements of proposed Count 2.
The brief then sets forth specific disclosure related to the elements of Count 2 (also provided in Appendix 3 entitled "Exemplary Evidence of Constructive Reduction to Practice of Proposed Count 2 in the P1 '068 Application"), and CVC further asserts that "[t]he inventors fully grasped the broad utility of such a method as aptly illustrated by the many types of 'target cells of interest' suitable for the methods described in P1, including a variety of eukaryotic cells (elements [1]-[2]) such as a fish, human, and fruit fly cell," noting that "[t]hese features are not merely recited in P1, but diagrammed, discussed, and specifically exemplified showing the inventors' possession" based on express disclosure cited with particularity in the brief (including specifically the prophetic use of CRISPR in fish cells). CVC presents explicit argument relating to what the skilled worker would understand CVC possessed and would be able to accomplish without undue experimentation with regard to the CRTP requirement for being accorded benefit. Finally in this regard, the brief asserts that post-filing evidence (much of it by third parties) further supports a conclusion of constructive reduction to practice in the P1 disclosure:
Within a year of CVC publishing that Cas9 and a [single guide RNA] such as chimera A (or a double-molecule RNA) formed a functional DNA-cleavage complex (Ex. 3202), other researchers used materially the same components and methods disclosed in P1 to practice the fish cell embodiment—objectively confirming that P1 enables practicing the method of E4. While the studies described below published after P1's May 25, 2012 filing
date, post-priority date evidence "may show, for example, that practicing the invention did not require undue experimentation," citing Amgen, Inc. v. Sanofi, 872 F.3d 1367, 1379 (Fed. Cir. 2017); see also, In re Wands, 858 F.2d 731, 739 (Fed. Cir. 1988); In re Hogan, 559 F.2d 595, 605 (Fed. Cir. 1977).
CVC supports its allegations of what the skilled person would understand from the disclosure in the P1 specification by declaration testimony an expert, Dr. Peterson (who eventually will be subject to cross-examination by the Broad in this interference). Specifically, Dr. Peterson attests extensively to the applicability of CRISPR as set forth in P1 to use in human cells, which CVC asserts is also shown by third-party success in applying CRISPR to human cells, and fruit fly cells. Thus, CVC asserts "[i]n sum, the great weight of evidence compels a finding that P1 describes and enables each of the fish (E4), human (E5), and fruit fly (E6) cell methods, any one of which, on its own provides a CRTP of Proposed Count 2."
The brief then turns on the distinction between what was required for the Broad to prevail (as it did) in the earlier interference and in this one:
Broad's previously asserted arguments wrongly impose a reasonable expectation of success standard (obviousness) on §112, first paragraph, which contains no such standard. Obviousness "turns on . . . whether the claimed invention would have been obvious in view of the prior art." Allergan, Inc. v. Sandoz, Inc., 796 F.3d 1293, 1310 (Fed. Cir. 2015) (emphasis in original). "In contrast, the enablement inquiry turns on whether the skilled artisan, after reading the specification, would be able to make and use the claimed invention without undue experimentation." Id. (emphasis in original). Similarly, "[t]he standard for satisfying the written description requirement is whether the disclosure 'allow(s) one skilled in the art to visualize or recognize the identity of the subject matter purportedly described.'" Alcon, 745 F.3d at 1190 (emphasis added; citation omitted); see also, Ariad, 598 F.3d at 1351. Any argument to the contrary erroneously conflates obviousness with written description and enablement.
Finally, the brief argues in the alternative that the other applications CVC asserts for priority contain the P1 disclosure relied upon for priority in this brief, and thus for the same reasons (set forth in brief for each reference) CVC is entitled to priority to these applications, based on the "continuous chain" of priority in these CVC applications.
Posted at 11:29 PM in Miscellaneous, Patent Trial and Appeal Board | Permalink | Comments (0)
Supreme Court Rejects USPTO's Attempt to Recover Attorney's Fees in All District Court "Appeals" from PTAB Decisions
In Peter v. NantKwest, Inc., decided by the U.S. Supreme Court earlier today, the Court considered whether the U.S. Patent and Trademark Office could compel an aggrieved applicant to pay its attorney's fees in a § 145 review, regardless of who wins or loses. The Court unanimously rejected the USPTO's arguments. In doing so, the Court bolstered the "American Rule" on attorney's fees and preserved § 145 proceedings as a financially viable option for review of adverse Patent Trial and Appeal Board ("PTAB") decisions. The decision expressly considered only patent reviews, but it also applies to analogous reviews of trademark decisions. Thus, it has impact on cases far more broadly than just § 145 proceedings.
A patent applicant dissatisfied with a PTAB decision[1] has two options for review of that decision. First, the applicant can appeal the decision to the U.S. Court of Appeals for the Federal Circuit under 35 U.S.C. § 141. In such cases -- which are the vast majority of reviews of PTAB decisions -- the Federal Circuit considers only the record before the PTAB and reviews that record deferentially for administrative correctness. Second, the applicant can also file a civil action in the U.S. District Court for the Eastern District of Virginia under 35 U.S.C. § 145 and introduce new evidence for consideration de novo. One downside of the second route, however, is that "[a]ll of the expenses of the proceeding shall be paid by the applicant." In NantKwest, Inc. v. Lee, which later became Peter v. NantKwest, the USPTO argued for the first time that those expenses included the salaries of the USPTO attorneys and paralegals trying the case, regardless of the outcome of the case.
The Supreme Court's starting point in considering the USPTO's argument was the "American Rule" on attorney's fees: "Each litigant pays his own attorney's fees, win or lose, unless a statute or contract provides otherwise." The USPTO argued that the American Rule didn't apply to § 145 proceedings because fee-shifting statutes usually reward only prevailing parties, and § 145 doesn't require the USPTO to be a prevailing party in order to recover expenses. But the Court noted that there are exceptions to the prevailing party requirement, such as cases brought under the National Childhood Vaccine Injury Act; those exceptions are—and are required to be—extremely clear in order to create an exception to the American Rule.
Here, the Court found § 145 provides no such clarity. The word "expenses" itself is ambiguous as to whether it would include attorney's fees. Next, the phrase "expenses of the proceeding" is similar to the term of art "expensæ litis" (Latin for expenses of the litigation), which traditionally has excluded attorney's fees. And the word "all" preceding "expenses of the proceeding" does not broaden the type of expenses recoverable, just the extent to which appropriate expenses are recoverable. Thus, the American Rule applies, and the USPTO cannot recover its attorney's fees as expenses as a matter of right under § 145.
To the extent that there was any question remaining as to whether the USPTO's attorney's fees were expenses under § 145, the Court considered both statutory usage of the term "expenses" in other contexts and the USPTO's history of conduct in § 145 actions. The terms "expenses" and "attorney's fees" appear in tandem numerous times in statutes, suggesting that the former does not always include the latter. When expenses are defined as including attorney's fees, however, the definition is clear (in a way that it is not under § 145). Perhaps most damning to the USPTO's case, however, was its own course of conduct. For over 170 years, until the NantKwest case, the USPTO never argued that expenses under § 145 included attorney's fees. Thus, neither the Patent Act nor other statutes provided a basis to vary from the American Rule. The USPTO cannot recover its attorney's fees as a matter of right as expenses in a § 145 proceeding.
Although § 145 proceedings are quite rare, the Court's decision is important in preserving them as an option under any circumstances. Applicants often appeal under § 141 not only because the record may be complete, but also because it is quicker and less costly. The cost distinction would be even more extreme if the applicant had to pay the USPTO's attorney's fees, which could have easily doubled the cost of "expenses" due under the law. The financial difference would have, as a practical matter, made § 145 review financially unfeasible.
For the Court, preserving the American Rule was also a key concern. There are circumstances in which the American Rule does not apply in patent cases but those situations almost always arise under 35 U.S.C. § 285, which clearly allows for an award of attorney's fees.[2] To allow attorney's fees to be collected under § 145, where the entitlement to fees is far less clear, would lower the bar for the recovery of fees under other statutes as well. The ultimate effect would be a watering down of the American Rule, and a resulting increase in collateral litigation over attorney's fees.
Finally, the Trademark Act has procedures for review parallel to §§ 141 and 145. In fact, a trademark case decided under the statute parallel to § 145, Shammas v. Focarino, 784 F.3d 219 (4th Cir. 2015), served as the strongest, most analogous precedent for the Federal Circuit's panel decision below awarding the USPTO attorney's fees automatically. Today's Supreme Court decision undermines the reasoning of the Shammas case, and therefore should apply with full force to district court review of Trademark Trial and Appeal Board decisions as well.
Opinion by Justice Sotomayor, joined by Chief Justice Roberts and Justices Thomas, Ginsburg, Breyer, Alito, Kagan, Gorsuch, and Kavanaugh
[1] The procedures identified here, and the holding in the NantKwest case, apply only to the review of prosecution decisions, not post-grant proceedings such as inter partes review.
[2] Section 285 provides: "The court in exceptional cases may award reasonable attorney fees to the prevailing party." Attorney’s fees are also sometimes awarded under Rule 11 of the Federal Rules of Civil Procedure, which has a similarly clear provision on the award of fees, or the Court’s inherent sanctions power.
Posted at 11:27 PM in Damages, Supreme Court | Permalink | Comments (1)
On October 14th, Junior Party the University of California, Berkeley; the University of Vienna; and Emmanuelle Charpentier; collectively, "CVC") filed its Substantive Motion No. 1 to be awarded priority benefit to their earlier priority applications: USSN 61/652,086, filed May 25, 2012 (P1); USSN 61/716,256, filed October 19, 2012 (P2); USSN 61/757,640, filed January 28, 2013 (P3); USSN 13/842,859, filed March 15, 2013; USSN 14/685,504, filed April 13, 2015; or USSN 15/138,604, filed April 26, 2016, in Interference No. 106,115 against Senior Party the Broad Institute, Harvard University, and the Massachusetts Institute of Technology.
CVC sets forth in detail the disclosure in its earlier priority applications for at least one embodiment falling within the scope of Count 1 of this interference. The brief recites the "ground-breaking" nature of their work, stating that the earliest priority document (P1) disclosed "the minimal components required to generate a functional CRISPR-Cas9 DNA-cleavage complex—Cas9, crRNA, and tracrRNA." In addition, CVC argues that this priority document "disclosed, for the first time, that complexes of Cas9 and a double- or single-molecule DNA-targeting RNA . . . are useful for targeted DNA cleavage and described numerous applications of this gene-editing technology, including modifying target DNA in eukaryotic cells," noting the many accolades bestowed upon CVC's inventors by the scientific community. CVC further argues that "[t]he CVC inventors immediately understood that the CRISPR-Cas9 DNA-cleavage complex could be used in a variety of different cellular and noncellular settings." The brief recites (prophetic) Example 1 in the P1 specification, and the (albeit prophetic) application of CRISPR technology to fish, human, and fruit fly cells.
The brief is careful to note that any failure of the P1 specification to show actual reduction to practice is not required to satisfy the requirement for entitlement benefit. CVC also cautions the Board against any attempt by the Broad to "erroneously to link the issues in this motion to the PTAB's termination of Interference No. 106,048 due to no interference-in-fact," stating that "the legal and factual issues raised here are fundamentally different from those decided in the prior '048 proceeding" based on the PTAB's own prior statements of the grounds for its no interference-in-fact determination. Rather, according to CVC:
[A person of ordinary skill in the art] reading P1 in light of the state of the art at the time of filing would have understood that the application describes and enables at least one embodiment within the scope of the count. Moreover, post-filing-date publications report successfully practicing CVC's claimed invention in eukaryotes using the very methods and components that P1 describes. The Board should therefore accord CVC the benefit of its first provisional application.
What follows is a succinct statement of the Precise Relief Requests (pursuant to PTAB rules) and support in the P1 specification for this relief, recited in the alternative with the other priority documents recited in CVC's request for relief. The standard, undisputed by the parties, is that to be accorded benefit of priority a prior application must show constructive reduction to practice (CRTP) regarding at least one embodiment falling within the scope of the count, citing Falkner v. Inglis, 448 F.3d 1357, 1362 (Fed. Cir. 2006). After setting out the legal grounds for CRTP, the brief then applies these rubrics to the disclosure in P1 for subject matter falling within the scope of the interference Count (which CVC argues satisfies these requirements). Along the way the brief also suggests that "Broad will doubtlessly rely on cherry-picked quotes about whether or not the inventors or experts knew CRISPR would work in eukaryotic cells before testing it," rejecting these anticipated arguments on the ground that CTRP is grounded on what is disclosed in the specification citing Ariad Pharms., Inc. v. Eli Lilly and Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010) (en banc); Frazer v. Schlegel, F.3d 1283, 1288 (Fed. Cir. 2007); and Centrak, Inc. v. Sonitor Tech., Inc., 915 F.3d 1360, 1369 (Fed. Cir. 2019). The relevant P1 disclosure for CVC is that CRISPR is functional "when removed from its natural prokaryotic cellular milieu, which is highly relevant here because it establishes CVC's possession of the necessary and sufficient components for a functional CRISPR-Cas9 DNA-cleavage complex regardless of its environment" (emphasis in brief).
And explicit disclosure compared with the elements of the interference Count:
The brief then sets forth specific disclosure related to the elements of the Count (also provided in Appendix 3 entitled "Exemplary Evidence of Constructive Reduction to Practice of Count 1 in the P1 '068 Application"), and CVC further asserts that "[t]he inventors fully grasped the broad utility of such a method as aptly illustrated by the many types of 'target cells of interest' suitable for the methods described in P1, including a variety of eukaryotic cells (elements [1]-[2]) such as a fish, human, and fruit fly cell," noting that "[t]hese features are not merely recited in P1, but diagrammed, discussed, and specifically exemplified showing the inventors' possession" based on express disclosure cited with particularity in the brief (including specifically the prophetic use of CRISPR in fish cells). CVC presents explicit argument relating to what the skilled worker would understand CVC possessed and would be able to accomplish without undue experimentation with regard to the CRTP requirement for being accorded benefit. Finally, in this regard, the brief asserts that post-filing evidence (much of it by third parties) further supports a conclusion of constructive reduction to practice in the P1 disclosure:
Within a year of CVC publishing that Cas9 and a [single guide RNA] such as chimera A (or a double-molecule RNA) formed a functional DNA-cleavage complex (Ex. 3202), other researchers used materially the same components and methods disclosed in P1 to practice the fish cell embodiment—objectively confirming that P1 enables making and using the fish cell of E1. While the studies described below published after P1's May 25, 2012 filing date, post-priority date evidence "may show, for example, that practicing the invention did not require undue experimentation," citing Amgen, Inc. v. Sanofi, 872 F.3d 1367, 1379 (Fed. Cir. 2017); In re Wands, 858 F.2d 731, 739 (Fed. Cir. 1988); In re Hogan, 559 F.2d 595, 605 (Fed. Cir. 1977).
CVC supports its allegations of what the skilled person would understand from the disclosure in the P1 specification by declaration testimony an expert, Dr. Peterson (who eventually will be subject to cross-examination by the Broad in this interference). Specifically, Dr. Peterson attests extensively to the applicability of CRISPR as set forth in P1 to use in human cells, which CVC asserts is also shown by third-party success in applying CRISPR to human cells, and fruit fly cells. Thus, CVC asserts "[i]n sum, the great weight of evidence compels a finding that P1 describes and enables each of the fish (E1), human (E2), and fruit fly (E3) cell methods, any one of which, on its own provides a CRTP of Count 1."