IP UPDATE
Exploring the Latest in Intellectual Property Law
IP UPDATE
Exploring the Latest in Intellectual Property Law
Patents
Subscribe to Patents's Posts

USPTO Conducting Patent Eligibility Jurisprudence Study

by | Jul 15, 2021 |

At the request of Senators Thom Tillis (R-NC), Marie Hirono (D-HI), Tom Cotton (R-AR) and Chris Coons (D-DE), the US Patent & Trademark Office (USPTO) is undertaking a study on the current state of patent eligibility jurisprudence in the United States and how the current jurisprudence has impacted investment and innovation, particularly in critical technologies like quantum computing, artificial intelligence, precision medicine, diagnostic methods and pharmaceutical treatments. On July 9, 2021, the USPTO issued a Federal Register Notice seeking public input on these matters to assist in preparing the study. The deadline for submitting written comments is September 7, 2021.

The Federal Register Notice included 13 concerns on which comments were requested:

  1. Explain how the current state of patent eligibility jurisprudence affects the conduct of business in your technology areas, and identify your technology areas.
  2. Explain what impacts you have experienced as a result of the current state of patent eligibility jurisprudence in the United States. Include impacts on as many of the following areas as you can, identifying concrete examples and supporting facts when possible:
    1. patent prosecution strategy and portfolio management;
    2. patent enforcement and litigation;
    3. patent counseling and opinions;
    4. research and development;
    5. employment;
    6. procurement;
    7. marketing;
    8. ability to obtain financing from investors or financial institutions;
    9. investment strategy;
    10. licensing of patents and patent applications;
    11. product development;
    12. sales, including downstream and upstream sales;
    13. innovation and
    14. competition.
  3. Explain how the current state of patent eligibility jurisprudence in the United States impacts particular technological fields, including investment and innovation in any of the following technological areas:
    1. quantum computing;
    2. artificial intelligence;
    3. precision medicine;
    4. diagnostic methods;
    5. pharmaceutical treatments and
    6. other computer-related inventions (e.g., software, business methods, computer security, databases and data structures, computer networking, and graphical user interfaces).
  4. Explain how your experiences with the application of subject matter eligibility requirements in other jurisdictions, including China, Japan, Korea, and Europe, differ from your experiences in the United States.
  5. Identify instances where you have been denied patent protection for an invention in the United States solely on the basis of patent subject matter ineligibility, but obtained protection for the same invention in a foreign jurisdiction, or vice versa. Provide specific examples, such as the technologies and jurisdictions involved, and the reason the invention was held ineligible in the United States or other jurisdiction.
  6. Explain whether the state of patent eligibility jurisprudence in the United States has caused you to modify or shift investment, research and development activities, or jobs from the United States to other jurisdictions, or to the United States from other jurisdictions. Identify the relevant modifications and their associated impacts.
  7. Explain whether the state of patent eligibility jurisprudence in the United States has caused you to change business strategies for protecting your intellectual property (e.g., shifting from patents to trade secrets, or vice versa). Identify the changes and their associated impacts.
  8. Explain whether you have changed your behavior with regard to filing, purchasing, licensing, selling, or maintaining patent applications and patents in the United States as a result of [...]

    Continue Reading


read more

Venue Manipulation Obviates Geographically Bounded Claims in Venue Analysis

by | Jul 8, 2021 |

The US Court of Appeals for the Federal Circuit issued a rare grant of two mandamus petitions directing the US District Court for the Western District of Texas to transfer the underlying patent infringement actions to the US District Court for the Northern District of California pursuant to 28 U.S.C. § 1404(a). In re: Samsung Elecs. Co., Ltd., Case Nos. 21-139, -140 (Fed. Cir. June 30, 2021) (Dyk, J.)

Ikorongo Technology owned four patents directed to functionalities allegedly performed by applications run on the accused mobile products sold by Samsung and LG. Ikorongo Technology assigned to Ikorongo Texas—an entity formed only weeks before—exclusive rights to sue for infringement of those patents within specified parts of the state of Texas, including certain counties in the Western District of Texas, while retaining the rights to the patents in the rest of the United States.

Ten days later, Ikorongo Texas sued Samsung and LG in the Western District of Texas. Although Ikorongo Texas claimed to be unrelated to Ikorongo Technology, the operative complaints indicated that the same five individuals owned both Ikorongo Texas and Ikorongo Technology, and that both entities shared office space in North Carolina.

The day after filing the initial complaints, Ikorongo Texas and Ikorongo Technology filed first amended complaints, this time naming both Ikorongo Technology and Ikorongo Texas as co-plaintiffs, noting that together Ikorongo Texas and Ikorongo Technology owned the entire right, title and interest in the asserted patents, including the right to sue for past, present and future damages throughout the United States and the world.

Samsung and LG separately moved under 28 U.S.C. § 1404(a) to transfer the suits to the Northern District of California, arguing that “three of the five accused third-party applications were developed in Northern California, where those third parties conduct significant business activities and no application was developed or researched in Western Texas.” Samsung and LG also argued that potential witnesses and sources of proof were located in the Northern District of California.

The district court first concluded that Samsung and LG failed to establish § 1404(a)’s threshold requirement that the complaints “might have been brought” in the Northern District of California. Because Ikorongo Texas’s rights under the asserted patents were limited to the state of Texas and could not have been infringed in the Northern District of California, the district court held that venue over the entirety of the actions was improper under § 1400(b), which governs venue in patent infringement cases. Alternatively, the district court analyzed the traditional public- and private-interest factors, finding that defendants had not met their burden to show cause for transfer. Samsung filed for mandamus to the Federal Circuit.

The Federal Circuit found that the district court erroneously disregarded Ikorongo Technology and Ikorongo Texas’s attempts to manipulate venue when analyzing venue under § 1404(b). While no act of infringement of Ikorongo Texas’s geographically bounded rights took place in the Northern District of California, the Federal Circuit determined that “the presence of Ikorongo Texas is plainly recent, ephemeral, and [...]

Continue Reading



read more

Unsigned, Sealed, Delivered: PTO Eliminates Handwritten Signatures for Certain OED Correspondence and Credit Card Payments

by | Jul 8, 2021 |

The US Patent & Trademark Office (PTO) eliminated the requirement for original handwritten signatures on certain correspondence with the Office of Enrollment and Discipline (OED) and on certain payments made to the PTO by credit card. The handwritten signature requirements of 37 CFR § 1.4(e) were deleted effective July 2, 2021.

37 CFR § 1.4(e)(1) previously required correspondence related to registration to practice before the PTO in patent cases, enrollment and disciplinary investigations, and disciplinary proceedings to be submitted with an original handwritten signature personally signed in permanent dark ink or its equivalent. 37 CFR § 1.4(e)(2) required the same for payments by credit cards where the payment was not made via the electronic filing system. Elimination of the entirety of § 1.4(e) allows the use of facsimile transmissions and S-signatures in enrollment and disciplinary matters before the OED, and for payments by credit card.



read more

Don’t Let Prophetic Examples Work Against You

by | Jul 8, 2021 |

On July 1, 2021, the US Patent & Trademark Office (PTO) issued a notice reminding patent applicants that when their applications contain both prophetic and working examples, they must make a clear distinction between the two.

Prophetic examples illustrate reasonably expected results or anticipated results. They stem from experiments that have not been actually performed and are instead hypothetical simulations. In contrast, working examples result from experiments that were actually performed. In order to aid in distinguishing between the two example types within a patent application, prophetic examples should be written only in the future or present tense—not in the past tense. Prophetic examples cannot be used to meet the written description and enablement requirements for a patent application.

The PTO’s recent notice underscores the importance of the applicant’s duty to clearly distinguish between prophetic and working examples: “[k]nowingly asserting in a patent application that a certain result ‘was run’ or an experiment ‘was conducted’ when, in fact, the experiment was not conducted or the result was not obtained is fraud.”



read more

Diehr Alice, Yu are Superimposing Novelty onto Patent Eligibility. Love, Newman.

by | Jun 24, 2021 |

The US Court of Appeals for the Federal Circuit affirmed the district court’s grant of a Rule 12(b)(6) motion to dismiss on the basis that, under the two-step Alice analysis, the patent claims—directed to a digital camera—were directed to ineligible subject matter under 35 U.S.C. § 101. Yu, et al. v. Apple Inc., et al., Case Nos. 20-1760; -1803 (Fed. Cir. June 11, 2021) (Prost, J.) (Newman, J., dissenting)

The patent claim under consideration recited an “improved digital camera” that has two lenses, two image sensors, an analog-to-digital converter, a memory and a digital image processor for “producing a resultant digital image from said first digital image enhanced with said second digital image.” Yu conceded that “the idea and practice of using multiple pictures to enhance each other has been known by photographers for over a century” and that the components recited in the claim “are themselves generic and conventional.”

Applying the Supreme Court’s two-step Alice v. CLS Bank test for determining patent eligible subject matter, the Federal Circuit determined at step one that the claim was “directed to the abstract idea of taking two pictures . . . and using one picture to enhance the other in some way.” At step two, the Court held that the claim failed to otherwise define a patent eligible invention because the digital camera “is recited at a high level of generality and merely invokes well-understood, routine, conventional components to apply the abstract idea of [using one picture to enhance the other in some way].” The Court rejected Yu’s attempts to use portions of the patent’s specification to support eligibility, explaining that the eligibility analysis is limited to the literal recitations of the asserted claims.

Then, along came Judge Pauline Newman. With a chainsaw.

In dissent, Judge Newman argued that the majority was improperly enlarging the § 101 analysis to include other “substantive requirements of patentability.” Judge Newman emphasized (twice) that the claim literally recited an electromechanical camera, not an abstract idea. In her view, the camera recited in the claim met the requirements of § 101 as a new and useful machine, without regard to whether the claimed camera also met the novelty requirements of §§ 102 and 103. Referring to the Supreme Court’s 1981 holding in Diamond v. Diehr, Judge Newman wrote that “[i]n contravention of [Diehr‘s] explicit distinction between Section 101 and Section 102, the majority now holds that the [claimed] camera is an abstract idea because the camera’s components were well-known and conventional and perform only their basic functions.” Judge Newman further proclaimed that “the principle that the majority today invokes was long ago discarded.”

Judge Newman also admonished the majority for the destabilizing effects that similar holdings have already had on US patent policy. She noted that “[i]n the current state of Section 101 jurisprudence, inconsistency and unpredictability of adjudication have destabilized technologic development in important fields of commerce,” and that “[t]he fresh uncertainties engendered by the majority’s revision of Section 101 are contrary to the statute and [...]

Continue Reading



read more

Federal Circuit Lacks Appellate Jurisdiction over Standalone Walker Process Claims

by and | Jun 24, 2021 | ,

The US Court of Appeals for the Federal Circuit ordered the transfer of a case asserting standalone Walker Process antitrust claims involving an unenforceable patent to the regional circuit, in this case the US Court of Appeals for the Fifth Circuit. Chandler v. Phoenix Services LLC, Case No. 20-1848 (Fed Cir. June 10, 2021) (Hughes, J.) The case originated in the US District Court for the Northern District of Texas, over which the Fifth Circuit has appellate jurisdiction. The decision to transfer was based on a subject matter jurisdiction analysis for Walker Process claims. The Federal Circuit reiterated that its precedent does not mandate exclusive Federal Circuit jurisdiction over all Walker Process cases.

In 2006, Phoenix Services and Mark Fisher (collectively, Phoenix) acquired a company called Heat On-The-Fly and its patent to protect a purported proprietary fracking process. Heat-On-The-Fly, and later Phoenix, sought to enforce the patent against numerous parties. During the patent application process, however, Heat On-The-Fly had failed to disclose numerous public uses of the fracking process prior to the application filing. In 2018, in an unrelated case, Energy Heating, LLC v. Heat On-The-Fly, the Federal Circuit, held that “failure to disclose prior uses of the fracking process rendered the . . . patent unenforceable due to inequitable conduct.” The plaintiffs in the case at hand, Ronald Chandler, Chandler MFG., Newco Enterprises and Supertherm Heating Services (collectively, Chandler), alleged that Phoenix’s continued enforcement of the patent violated Walker Process pursuant to § 2 of the Sherman Act.

Walker Process monopolization claims originate from a 1965 Supreme Court decision that recognized an antitrust cause of action under the Sherman and Clayton Acts when a party fraudulently obtains a patent for the purpose of attempted monopolization. Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp. To succeed on a Walker Process claim, a plaintiff must satisfy two elements:

  • The plaintiff must show that the defendant obtained the patent through knowing and willful fraud on the US Patent & Trademark Office and enforced that patent with knowledge of its fraudulent procurement.
  • The plaintiff must be able to satisfy all other elements for a Sherman Act monopolization claim.

Pursuant to 28 U.S.C. § 1295(a)(1), the Federal Circuit retains jurisdiction over any civil case arising under any act of Congress relating to patents. In this instance, the Federal Circuit stated that Walker Process antitrust claims may relate to patents “in the colloquial use of the term,” but under 1988 Supreme Court precedent, Christianson v. Colt Indus., the Federal Circuit’s jurisdiction only extends to cases where the cause of action is created under federal patent law, or where the plaintiff’s right to relief “necessarily depends on resolution of a substantial question of federal patent law.”

Here, the Federal Circuit relied on its own 2018 precedent where it analyzed subject matter jurisdiction for Walker Process claims. Xitronix Corp v. KLA-Tencor Corp. (Xitronix I). Xitronix I involved alleged fraud by the defendants to obtain a patent. The Court acknowledged [...]

Continue Reading



read more

What You Say Can and Will be Used Against You – Prosecution History and Prior Infringement Arguments

by | Jun 10, 2021 |

Noting patent owner’s prior litigation statements, the US Court of Appeals for the Federal Circuit upheld a district court ruling that a clear and unmistakable disclaimer in the prosecution history affected claim construction of an asserted patent. SpeedTrack, Inc. v. Amazon.com, Inc., Case No. 20-1573 (Fed. Cir. June 3, 2021) (Prost, J.)

In 2009, SpeedTrack filed suit against various online retailers alleging infringement of its patent directed to a method for accessing files in a filing system leveraging “category descriptions” to aid in organizing the files. The patent describes associating category descriptions with files using a “file information directory.” A “search filter” then searches the files using their associated category descriptions. A limitation that “the category descriptions hav[e] no predefined hierarchical relationship with such list or each other” was added during prosecution to overcome a prior art reference that leveraged hierarchical field-and-value relationships.

The district court initially adopted a proposed claim construction that lacked any reference to a field-and-value relationship, noting that the construction “account[ed] for the disclaimers made during prosecution.” Following a motion by SpeedTrack, the court concluded there was still a fundamental dispute about the scope of the claim term. After further analyzing SpeedTrack’s prosecution history, the court concluded that the history “demonstrate[d] clear and unambiguous disavowal of category descriptions based on hierarchical field-and-value systems” and issued a second claim construction order explicitly disclaiming “predefined hierarchical field-and-value relationships” from the scope of “category descriptions.” SpeedTrack subsequently stipulated to noninfringement under the second claim construction and appealed.

On appeal, the Federal Circuit stressed that prosecution-history disclaimer can arise from both claim amendments and arguments. Here, the prosecution history showed that the applicants “repeatedly highlighted predefined hierarchical field-and-value relationships” as a difference between the prior art and the patent claims in no uncertain terms. That SpeedTrack distinguished the prior art on other grounds did not moot its disclaimer statements.

The Federal Circuit also noted that SpeedTrack argued in litigation against another defendant that the purpose of the amendment was to distinguish the category descriptions from attributes that “have a ‘hierarchical’ relationship between fields and their values.” While the Court agreed with SpeedTrack that such litigation statements were not a disclaimer on their own (since they were not the inventors’ prosecution statements), these litigation statements further supported not accepting SpeedTrack’s arguments. The Court reminded SpeedTrack that it has cautioned (in Aylus and Southwall) that “the doctrine of prosecution disclaimer ensures that claims are not ‘construed one way in order to obtain their allowance and in a different way against accused infringers.’”

After assessing SpeedTrack’s prior statements, the Federal Circuit considered whether the disclaimer was clear and unmistakable. The Court concluded it was. In rejecting SpeedTrack’s argument that prior decisions not expressly finding disclaimer supported that prosecution statements were not clear and unambiguous, the Court noted the construction had not been fully considered in those judgments. Similarly, the Court rejected the notion that the district court’s issuance of a second claim construction order showed there was no clear and [...]

Continue Reading



read more

Submarine Sunk: Patent Prosecution Laches Pops GATT Bubble

by | Jun 10, 2021 |

Addressing for the first time whether the US Patent & Trademark Office (PTO) can assert prosecution laches as a defense in a civil action brought under 35 U.S.C. §145, the US Court of Appeals for the Federal Circuit held that the PTO could assert prosecution laches as a defense against four patent applications in a case where the plaintiff delayed presenting the claims for these applications over a period of at least 10 years. Hyatt v. Hirshfeld, Case Nos. 2018-2390; -2391; -2392; 2019-1038; -1039; -1049; -1070 (Fed. Cir. June 1, 2021) (Reyna, J.)

Gilbert Hyatt is well known for having built a prolific patent application portfolio based on nearly 400 initial filings made just before the United States changed from an issuance-based patent exclusivity system to a filing-based patent exclusivity system under the Uruguay Round of the General Agreement on Tariffs and Trade (GATT). By 2003, those 400 initial filings had exploded into 45,000 independent claims. Hyatt’s applications were so labor intensive that the PTO developed a separate examining unit specifically dedicated to their review. Many of these applications have been rejected.

After the PTO finally rejected four of Hyatt’s computer software patent applications, in 2005 Hyatt filed a § 145 action in the district court. Throughout the litigation, the PTO argued that Hyatt had routinely delayed prosecuting his patent applications and never complied with his verbal agreement with the PTO to streamline each application to apply for only one invention. Ultimately, after a five-day bench trial, the district court found that the PTO failed to prove it had taken sufficient action to advance prosecution of Hyatt’s applications. The PTO appealed.

Resolving the threshold issue on appeal of whether prosecution laches is even available to the PTO in a § 145 action, the Federal Circuit explained that the right to assert laches as an affirmative defense flows naturally from the PTO’s rights to reject applications based on laches and defend such rejections on appeal in the Federal Circuit on the same grounds. Any other conclusion, the Court recognized, would create incongruence and undermine the PTO’s authority. Such a defense is available even if raised for the first time in the district court, as “§145 actions open the door to new evidence.”

The Court found significant errors in the district court’s application of prosecution laches law. First, the Federal Circuit held that the district court too narrowly focused on the PTO’s specific conduct without considering the totality of the circumstances, including delays caused by Hyatt’s sweeping amendments and prosecution of other patent applications, as well as the relative costs and burdens of examining Hyatt’s gargantuan application portfolio. The Court was particularly critical regarding the district court’s assignment of blame to the PTO in its attempts to manage the unwieldy task before it.

After reviewing the evidence presented by the PTO, the Federal Circuit found that the PTO had amassed significant evidence of Hyatt’s delay of prosecution of his applications—i.e., “patterns of prosecution conduct [that] created a perfect storm that overwhelmed the [...]

Continue Reading



read more

IP Ownership Considerations in Multi-jurisdictional Software Development Agreements

by and | Jun 10, 2021 | , , , ,

As a result of the healthcare sector’s growing dependence on software, health IT companies are increasingly taking advantage of globalisation to engage contractors in low wage jurisdictions to develop their user-facing software applications. This can trigger unforeseen legal risks owing to the differing laws across jurisdictions related to the ownership and transfer of intellectual property (IP) rights.

At the most extreme end, best practices in some jurisdictions are unenforceable or even impermissible in others. In view of these issues, it is strongly recommended that a company looking to take advantage of cross-border contracting for critical development eorts should carefully consider the choice of law provisions in their agreements, and engage with local counsel to ensure proper vesting of intellectual property rights.

An inability to demonstrate proper ownership of such rights can be a substantial obstacle for later financings or in corporate activities. Depending on the jurisdictions involved, a contracting company may need to concern itself with at least three types of IP in the software that is developed on its behalf: copyrights, moral or author’s rights, and patents.

Click here to read the full article in our latest edition of International News.



read more

Navigating the Interplay Between the ITC, PTAB and District Courts

by | Jun 3, 2021 |

Recent changes in intellectual property law in the US International Trade Commission (ITC), the Patent Trial and Appeal Board (PTAB) and federal US District Courts have had major impacts on litigation strategy and business operations. Within these venues, key changes often run parallel to each other, and understanding and maximizing the interplay between them is critical to formulizing an IP strategy. A panel of McDermott attorneys, including Charlie McMahon, Amol Parikh, Jay Reiziss and Jiaxiao Zhang, recently hosted a webinar exploring these issues in collaboration with IAM and Lexology. Click here to watch their discussion of the complexities of these related developments as well as innovative and practical insights to help you navigate them.

KEY TAKEAWAYS

  • The rate at which the PTAB institutes petitions for Inter Partes Review (IPR) has been steadily declining, with a newer low expected this year. The falling institution rate over the last several years is attributable in part to discretionary denial under § 314(a).
  • Until 2020, there was still uncertainty behind the contours of how the PTAB’s discretionary denial would be applied when there was a co-pending district court or ITC proceeding. Last year, the PTAB designated as precedential its decision in Apple v. Fintiv, setting forth factors intended to guide the discretionary decision to institute when there are parallel proceedings.
  • Post-Fintiv, it looks less likely that litigants will be able to simultaneously pursue district court litigation and a PTAB proceeding. One of the benefits of the PTAB is the lower burden of proof to demonstrate that a patent is unpatentable. Removing this tool from the litigation toolbox could have a profound impact on defensive strategy.
  • It is still unclear how the PTAB’s Finitiv decision will apply to ITC investigations. Fitness technology companies, among others, have since asked the PTAB’s Precedential Opinion Panel (POP) to determine whether Fintiv should apply to parallel ITC investigations.
  • There have also been additional developments at the ITC related to the use of licensing to satisfy the domestic industry requirement. The pending Advancing America’s Interests Act (AAIA) would significantly change how complainants can rely upon licensing activities to establish a domestic industry.

 



read more

BLOG EDITORS

Paul Devinsky

Amol Parikh

Jodi Benassi

STAY CONNECTED

Subscribe

TOPICS

ARCHIVES