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Coons and Tillis Introduce Two Bills Intended to Change Patent Landscape

by | Jul 13, 2023 |

In late June 2023, Senators Chris Coons (D-DE) and Thom Tillis (R-NC) introduced two bills in Congress that, if enacted, would change the patent adjudication landscape:

The PREVAIL Act is essentially a reintroduction of the previously unsuccessful STRONGER Patents Act of 2019 bill and would change fundamental aspects of how the Board operates. Under current practice, the Board judges who rules on institution and also decides the outcome of an instituted proceeding. Under the PREVAIL Act, institution decisions would be made by a separate set of judges from those that render a decision on a petition’s merits. Through proposed changes to the initiation and estoppel provisions, a patent challenger could bring its attack on patent validity in either the district court or the Board, but not both. And as part of the harmonization of district court and Board proceedings, the PREVAIL Act would adopt the “clear and convincing” standard for Board review and codify existing Board practice of applying the same claim construction standard as district courts apply.

The PREVAIL Act would also change who can bring issues to the Board by imposing standing and revised real-party-in-interest requirements. An IPR petitioner would have to establish standing equivalent to that required for a district court declaratory judgment action. Moreover, anyone who financially contributes to an IPR would be deemed a real party in interest to avoid multiple petitions backed by the same entity. To reduce the multiplicity of proceedings, the PREVAIL Act would establish a presumption against a joinder for time-barred petitions. The PREVAIL Act also includes several provisions directed to the independence and transparency of the Board’s decision-making, including establishing a code of conduct and requiring recordation of the Director’s actions that affect Board proceedings.

Turning to subject matter eligibility, the Patent Eligibility Restoration Act would overrule Supreme Court decisions importing a judicial exception to Section 101 and would codify many of the existing categories of ineligible subject matter, including mathematical formulae; substantially economic, financial, social, cultural and artistic practices (in other words, fundamental human activity); natural processes and products made independent of human activity; and mental processes. The Patent Eligibility Restoration Act specifically would authorize early resolution and limited discovery on Section 101 ineligibility.

Practice Note: Although both acts have been introduced before without much success, Congress’s present focus on technology (such as artificial intelligence) may serve to propel one or both bills forward. Of course, it remains to be seen whether Congress has an appetite for modifying patent law, particularly in the lead-up to an election year.



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Analogous Art Must Be Compared to Challenged Patent

by | May 25, 2023 | ,

The US Court of Appeals for the Federal Circuit reversed a Patent Trial & Appeal Board obviousness decision, finding that a prior art reference relating to automotive engine parts was not analogous art to the challenged patent, which related to injection devices used for drug delivery. Sanofi-Aventis Deutschland GMBH v. Mylan Pharmaceuticals Inc., Case No. 21-1981 (Fed. Cir. May 9, 2023) (Reyna, Mayer, Cunningham, JJ.)

Sanofi-Aventis owns a patent directed to a drug delivery device that can be configured to allow for the setting of different dose sizes. The main independent claim of the patent recites a spring washer element with “at least two fixing elements configured to axially and rotationally fix the spring washer relative to the housing.”

Mylan initiated an inter partes review (IPR) proceeding against the patent, arguing that the challenged claims were obvious based on a combination of three prior art references: Burren, Venezia and de Gennes. Burren described a drug injection device that used a coiled spring, while Venezia described a hypodermic syringe with a spring washer having a tongue that fit into a collar to prevent the washer from rotating relative to the collar. The third prior art reference, de Gennes, disclosed a large spring-washer-like device used in automobile engines to maintain the alignment between the engine and the transmission. Sanofi argued that de Gennes was non-analogous art because it was not in the same field of endeavor as the injection devices described in the patent and was not reasonably pertinent to a problem faced by the inventor of the challenged patent.

The Board adopted Mylan’s definition of the problem to be solved, which was “axially fixing two components relative towards each other.” Under this broad definition, the Board found that de Gennes was reasonably pertinent to the challenged patent and that claims were obvious in view of Burren in combination with Venezia and de Gennes. Sanofi appealed.

Sanofi argued that the Board erred in determining that de Gennes was analogous art. The Federal Circuit explained that in evaluating whether a reference is analogous, a patent challenger must compare the reference to the challenged patent. Applying this test, the Court found that substantial evidence did not support the conclusion that de Gennes was analogous to the challenged patent. Although Mylan had mapped de Gennes to certain elements of the challenged claims, there was no evidence that de Gennes—an automobile-related patent—was analogous to the challenged patent—a drug delivery device. The Court also found that statements that de Gennes and the challenged patent were “both interested in solving the same issue . . . [of] accommodating various cartridge lengths” were insufficient to show that de Gennes was analogous to the challenged patent.



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Hanging Patentability on Written Description Cannot Be Truss-ted

by | May 4, 2023 |

The US Court of Appeals for the Federal Circuit upheld a Patent Trial & Appeal Board finding that the claims of a patent for a truss hanger were invalid for lack of written description because they claimed an undisclosed range despite the predictable nature of the technology. Columbia Insurance Company v. Simpson Strong-Tie Company Inc., Case Nos. 21-2145; -2157 (Fed. Cir. Mar. 31, 2023) (Prost, Hughes, JJ.) (Moore, C.J., dissenting) (non-precedential).

Truss hangers secure support beams to wall frames in buildings. These hangers normally accommodate layers of fire-resistant sheathing by cutting out the sheathing that overlaps with the hanger, but this can reduce fire resistance. Columbia owns a patent claiming a truss hanger that extends through the sheathing and does not decrease fire resistance. The extension for the sheathing, illustrated below, must be “sized large enough to permit two layers of ⅝ inch thick sheathing to be received between the rear edge plane and the back flange plane, but too small to permit three layers of ⅝ inch thick sheathing to be received.”

Simpson petitioned for a post-grant review of the patent at the Board. That proceeding resulted in a mixed decision. The Board found in favor of Simpson that certain original claims and certain substitute claims of the patent were unpatentable for lack of written description and that certain claims were obvious over the prior art. However, it found in favor of Columbia with regard to one claim. Both parties appealed.

The Federal Circuit affirmed the Board’s findings regarding written description. The claimed extension portion covered a range of extension sizes between the upper limit (three layers of five-eighths-inch-thick sheathing) and lower limit (two layers of five-eighths-inch-thick sheathing). The Court affirmed the Board’s finding that nothing in the specification covered the claimed upper limit. Columbia argued that a skilled artisan would read the claims to cover exactly two layers of five-eighths-inch-thick sheathing, but the Court found that this claim construction argument was forfeited because it was raised for the first time on appeal and, even if it weren’t, it was incorrect because it was akin to rewriting the claims.

The Federal Circuit also affirmed the Board’s finding that certain claims were obvious, concluding that the Board’s determination was supported by substantial evidence. The Court rejected Columbia’s argument that the Board’s claim construction violated the Administrative Procedure Act because the construction adopted by the Board was similar enough to Simpson’s proposed construction and not raised sua sponte.

Finally, the Federal Circuit affirmed the Board’s finding that the claim on which Simpson appealed was not indefinite because the term “large enough to permit the drywall to be received” informs a skilled artisan with reasonable certainty that the scope of this claim includes any extension portion sized larger than the smallest commonly known sheathing size. The Court also found that the claim was not obvious because the Board correctly interpreted the claim language [...]

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PTO Proposes Patent Fee Increases

by | May 4, 2023 |

The US Patent & Trademark Office (PTO) announced proposed patent fee increases. Patent fees would increase by about 5% across the board because of inflation.

Certain fees would be increased by substantially more than the 5% inflationary increase to reduce subsidization from other fee sources. For example, the overall design patent fees would increase by 48%, based on a 27% increase in filing, search and examination fees and a 76% issue fee increase. The PTO also proposes a 100% increase in the excess claim fee for each claim over 20, and a 25% increase in the fee for each independent claim over three. Because the costs of reviewing patent term extensions is complex, the PTO proposes fee increases of 196% to 468%. The PTO also proposes a fee of $500 for filing an After Final Consideration Pilot (AFCP) 2.0 request, and new fees for filing an information disclosure statement (IDS) that causes the number of applicant-provided citations to exceed 50, 100 or 200 citations, respectively.

To offset the loss of future maintenance fee payments, the PTO proposes fees of $1,500 for continuing applications filed more than three years from the earliest benefit date and $3,000 for continuing applications filed more than seven years from the earliest benefit date.

Other proposed fee increases are intended to expedite the patent examination process. For example, the PTO proposes a 25% increase in the fee for a second request for continued examination (RCE) and an 80% increase for a third or subsequent RCE. The fee for a terminal disclaimer filed after the first action on the merits and before a final rejection would increase by 194%. After a final rejection or notice of allowance, the fee would increase by 371%. On or after a notice of appeal, the increase would be 547%, and the proposed increase for filing a terminal disclaimer in an issued patent would be 724%.

The PTO further proposes increasing Patent Trial & Appeal Board America Invents Act (AIA) trial fees by 25%. The PTO also proposes new fees for inter partes review (IPR) and post grant review (PGR) petitions that exceed the word count limits. For example, the PTO proposes a 50% higher fee for petitions that exceed the word count limit by up to 50%, and a 100% higher fee for those that exceed the limit by up to 100%.

A public hearing is scheduled for May 18, 2023. Those wishing to present oral testimony at the hearing must submit a written request by May 11, 2023. Written comments on the proposed fees will be accepted until May 25, 2023.

The PTO anticipates that the fee changes will be implemented around January 2025.

More details, including a complete list of the proposed fee increases, can be found on the PTO website.



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Branding Function Patent Yet Another 1[01] to Bite the Dust

by | Apr 20, 2023 |

Addressing the patentability of claims directed to digital image branding functions, the US Court of Appeals for the Federal Circuit affirmed a district court’s determination that claims across three related patents were invalid under 35 U.S.C. § 101 for lacking patent-eligible subject matter. Sanderling Mgmt. Ltd. v. Snap Inc., Case No. 21-2173 (Fed. Cir. Apr. 12, 2023) (Chen, Cunningham, Stark, JJ.)

Sanderling owns three patents, each titled “Dynamic Promotional Layout Management and Distribution Rules.”  The three patents share a common specification and are generally directed to a method using distribution rules to load digital imaging branding functions to users when certain conditions are met. The specification explains that a distribution rule is “a rule used in determining how to target a group of end users, for instance, a rule that determines that only a group of end users having certain characteristics and/or match a certain requirement.”

Sanderling asserted each of the three patents against Snap in the Northern District of Illinois. Snap moved to transfer venue to the Central District of California and to dismiss the case under Fed. R. Civ. P. 12(b)(6) for failure to state a claim based on the allegation that the asserted patents’ claimed ineligible subject matter under § 101. After the case was transferred, the Central District of California found the claims patent ineligible and granted Snap’s motion to dismiss. Sanderling appealed.

The Federal Circuit reviewed the decision by engaging in the two-step Alice framework for subject matter eligibility. Under step one, the Court determined that the claims were directed to the abstract idea of providing information—in this case, a processing function—based on meeting a condition (e.g., matching a GPS location indication with a geographic location). The Court explained that for computer-related inventions, the relevant question is whether the claims are directed to an improvement to computer functionality or to an abstract idea. The Court found that the claims in issue were not directed to an improvement in computer functionality, but instead to the use of computers as a tool—specifically, a tool to identify when a condition is met and then to distribute information based on satisfaction of that condition.

Even if directed to an abstract idea, patent claims may still be eligible under step two of the Alice framework if there are additional features that constitute an inventive concept. The Federal Circuit, however, found that the claims failed this step also. The Court explained that if a claim’s only inventive concept is the application of an abstract idea using conventional and well-understood techniques, the claim has not been transformed into a patent-eligible application of an abstract idea. The distribution rule of the asserted claims was just that: the application of the abstract idea using common computer components. Accordingly, the Court affirmed the district court’s decision that the patent claims were invalid under § 101.

Practice Note: On appeal, Sanderling argued that the district court erred at step one of the Alice analyses by failing to construe certain claim terms that were allegedly crucial to the determination. [...]

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Overlapping Ranges in Prior Art Put Burden on Patentee to Show Criticality

by | Apr 20, 2023 |

The US Court of Appeals for the Federal Circuit found that the challenged patents were invalid as anticipated and obvious in a case involving claimed ranges and prior art that included teachings with overlapping ranges. UCB, Inc. v. Actavis Laboratories UT, Inc., Case No. 21-1924 (Fed. Cir. Apr. 12, 2023) (Moore, C.J.; Chen, Stoll, JJ.)

UCB owns two prior art patents (the Mueller patents), one directed to methods for stabilizing rotigotine that covers a drug used in UCB’s Neupro® transdermal patches to treat Parkinson’s disease, and the other directed to the stable dispersions of rotigotine used in Neupro® transdermal patches.

Soon after UCB began marketing its original Neupro® transdermal patch in 2007, it discovered that rotigotine crystallized when the patch was kept at room temperature, which lowered the amount of rotigotine available to cross the skin/blood barrier and enter the patient’s circulation and reduced the product’s effectiveness. UCB recalled Neupro® from the market in the United States. In Europe, it marketed Neupro® only under “cold chain” conditions, which reduced the rotigotine crystallization.

The challenged patent in this case solved the problem of room temperature crystallization using dispersions in which the ratio of rotigotine to the stabilizer polyvinylpyrrolidone (PVP) ranged from “about 9.4 to about 9.6.” The original Neupro® formulation had a rotigotine to PVP ratio of 9:2, and the Mueller patents disclosed a partially overlapping range of 9:1.5 to 9:5, as shown in the following graphic from the Federal Circuit’s opinion:

The reformulated Neupro had a ratio of 9:4 rotigotine to PVP and exhibited stability for up to two years at room temperature.

The district court held that the Mueller patents anticipated all asserted claims because a person of ordinary skill in the art (POSA) would “readily envisage” a combination of 9% rotigotine with 4% to 5% of PVP. The district court also determined that all claims were obvious in light of the Mueller patents and other prior art.

Anticipation/Overlapping Ranges

The Federal Circuit first noted that although the prior art that discloses a point within a claimed range generally anticipates that claim, such was not the case here, and the district court committed legal error treating it thus.

Instead, the Federal Circuit treated this case as one of overlapping ranges. Under that legal rubric, once a patent challenger establishes a prima facie case of anticipation by showing that the claimed range partially overlaps with the cited art, the burden shifts to the patentee to show that the “claimed range is critical to the operability of the claimed invention.” The Court stopped short of ruling that UCB had not met its burden of showing the criticality of the range because it concluded that the two patents in question were obvious in light of the overlap between the claimed ranges and those of the Mueller patents.

Teaching Away

The Federal Circuit affirmed the district court’s rejection of UCB’s arguments that Tang, another prior [...]

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Console Yourself: Patent Owner Bears IPR Estoppel Burden

by | Apr 13, 2023 |

Addressing for the first time the standard and burden of proof for the “reasonably could have raised” requirement for inter partes review (IPR) estoppel to apply, the US Court of Appeals for the Federal Circuit concluded that a patent owner bears the burden of proving that an IPR petitioner is estopped from using invalidity grounds that a skilled searcher conducting a diligent search reasonably could have been expected to discover. Ironburg Inventions Ltd. v. Valve Corp., Case Nos. 21-2296; -2297; 22-1070 (Fed. Cir. Apr. 3, 2023) (Lourie, Stark, JJ.) (Clevenger, J., dissenting).

Ironburg sued Valve for infringing Ironburg’s video game controller patent. Valve responded by filing an IPR petition in 2016. The Patent Trial & Appeal Board partially instituted on three grounds but declined to institute on two other grounds (the Non-Instituted Grounds), as was permitted prior to the Supreme Court’s 2018 decision in SAS Institute Inc. v. Iancu. Valve did not seek remand pursuant to SAS, which would have allowed the Board to consider the Non-Instituted Grounds. In the district court litigation, Valve alleged invalidity based on the Non-Instituted Grounds and grounds Valve learned of from a third party’s IPR filed after Valve filed its IPR (the Non-Petitioned Grounds). Ironburg filed a motion asserting that Valve was estopped, pursuant to 35 U.S.C. § 315(e)(2), from asserting both the Non-Instituted Grounds and the Non-Petitioned Grounds. The district court granted Ironburg’s motion in full, removing all of Valve’s invalidity defenses. After trial, the jury returned a verdict finding that Valve willfully infringed the patent. Valve appealed.

35 U.S.C. § 315(e)(2) precludes an IPR petitioner from asserting invalidity during a district court proceeding based on “any ground that the petitioner raised or reasonably could have raised during that [IPR].” The Federal Circuit first addressed the legal standard needed to meet the “reasonably could have raised” requirement for IPR estoppel. The Court found that the “skilled searcher” standard used by several district courts is appropriate, as opposed to a higher “scorched earth” search standard. The “skilled searcher” standard is consistent with the § 315(e)(2) statutory requirement of discovering prior art references that “reasonably could have been raised.”

The Federal Circuit next addressed which party has the burden to prove what prior art references a skilled searcher reasonably would, or would not, have been expected to discover. The district court placed the burden on Valve, the party challenging the patent’s validity, and determined that Valve did not show how difficult it was to find the Non-Petitioned Grounds that Valve did not initially uncover. The Court noted that the third party that did find the Non-Petitioned Grounds may have used a “scorched earth” search, which would make its discovery of the Non-Petitioned Grounds irrelevant to estoppel. The Court concluded that the patent owner has the burden of proving what a skilled searcher reasonably would have found because the patent holder is looking to benefit from estoppel. The Court explained that this conclusion is consistent with the practice of placing the burden on the party asserting [...]

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Disclaiming Claim Scope: Could the Patentee Have Anticipated This?

by | Apr 6, 2023 |

In the most recent decision in the Apple/VirnetX saga, the US Court of Appeals for the Federal Circuit affirmed a remand ruling from the Patent Trial & Appeal Board finding the challenged claims of VirnetX’s patents unpatentable. VirnetX Inc. v. Mangrove Partners Master Fund, Ltd., Case No. 2020-2271 (Fed. Cir. Mar. 30, 2023) (Moore, C.J.; Hughes, Stark, JJ.) (nonprecedential).

VirnetX owns two patents relating to a “secure mechanism for communicating over the internet.” The patents relate to a system in which a DNS module “intercepts . . . and determines whether [a] request is for a secure site.” The system creates a VPN if the proxy determines that the request is for a secure site. If the proxy determines that the request is not for a secure site, it forwards the request to a conventional DNS.

Mangrove, Apple and Black Swamp (collectively, Mangrove) petitioned for inter partes review (IPR) challenging various claims of the patents. The Board found that all the challenged claims were unpatentable as anticipated by Kiuchi or obvious in view of Kiuchi and other references. VirnetX appealed to the Federal Circuit (Mangrove Appeal). In that appeal, the Federal Circuit determined that, contrary to the Board’s finding, when VirnetX distinguished Aventail during reexamination of one of the patents, VirnetX disclaimed “a system in which a client computer communicates with an intermediate server via a singular, point-to-point connection.” As a consequence of the prosecution disclaimer, the Court found that the claims “require[s] direct communication between the client and target computers.” The Court vacated the Board’s decision and remanded the case for the Board to determine further factual questions regarding Kiuchi because “substantial evidence does not support the Board’s finding that the C-HTTP name server of Kiuchi performs the functions of the claimed DNS proxy module.”

Following the Mangrove Appeal, the Board again found that Kiuchi—the only prior art reference at issue in the present appeal—discloses a “secure network” for the transfer of patient information in a hospital setting and teaches a “direct-communication VPN between the client and target.” As a result, the Board concluded that Kiuchi anticipates all the challenged claims. VirnetX again appealed.

The Federal Circuit first addressed the Board’s conclusion that “Kiuchi teaches a direct-communication VPN and is therefore within the scope of the claims of VirnetX’s … patent, and not an indirect-communication VPN, which would have brought Kiuchi within the scope of VirnetX’s disclaimer.” The Court agreed with the Board that “Kiuchi discloses direct communication that satisfies the claimed VPN.” Specifically, “Kiuchi’s user agent does not communicate with the client-side proxy using a singular, point-to-point connection because the user agent addresses the desired endpoint, and the VPN provides the required message routing for the user agent to receive a response from the desired endpoint.” Moreover, the Court reasoned that Kiuchi’s proxy servers forward data packets and that Kiuchi teaches “the ability to address data to a particular computer,” consistent with the scope of the claims.

Next, the Federal Circuit addressed the Board’s [...]

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PTO Adds Green Energy Category to Patents for Humanity Program

by | Mar 16, 2023 |

On March 6, 2023, the US Patent & Trademark Office (PTO) introduced a new green energy category to its Patents for Humanity Program. This new award category provides business incentives for patent applicants, holders and licensees whose inventions address the challenges of climate change through green energy innovations, including wind, solar, hydrogen, hydropower, geothermal and biofuels technologies. The green energy category joins five other categories of inventions in the Patents for Humanity Program: medicine, nutrition, sanitation, household energy and living standards.

The Patents for Humanity green energy category joins other recent PTO initiatives designed to address climate change, including a joint work-sharing program with the National Oceanic and Atmospheric Administration, expedited examination procedures under the Climate Change Mitigation Pilot Program, and a partnership with the World Intellectual Property Organization’s WIPO GREEN program.

The Patents for Humanity Award is the top award for applicants best representing the Patents for Humanity principles. Award recipients receive public recognition at an awards ceremony sponsored by the PTO. They also receive a certificate to accelerate any of the following matters before the PTO: a patent application, an ex parte reexam or an ex parte appeal to the Patent Trial & Appeal Board. Winners may transfer their acceleration certificates to third parties.

The PTO is now accepting applications for the Patents for Humanity green energy category. For more information about how to apply, visit Patents for Humanity: Green Energy. The deadline for submitting applications is June 1, 2023.



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Claim Duality: Multiple Dependent Claims Can Be Both Patentable and Unpatentable

by | Mar 9, 2023 |

Addressing, for the first time, the issue of patentability of multiple dependent claims under 35 U.S.C. § 112, fifth paragraph, the Director of the US Patent & Trademark Office (PTO) granted rehearing and modified the Patent Trial & Appeal Board’s (Board) Final Written Decision after finding that the patentability of a multiple dependent claim should be considered separately as to each of the claims from which it depends. Nested Bean, Inc. v. Big Beings US Pty. Ltd. et al., IPR2020-01234 (PTO Feb. 24, 2023) (Vidal, Dir.) (precedential).

Nested filed a petition for inter partes review challenging claims 1 through 18 of a patent owned by Big Beings. Claims 1 and 2 were independent, and claims 3 to 16 were multiple dependent claims, which depended directly from either claim 1 or 2. The Board granted institution and ultimately issued a Final Written Decision finding that Nested did not establish that claims 1, 17 and 18 were unpatentable, but that Nested had established that claims 2 through 16 were unpatentable.

Big Beings filed a Request for Director review, noting that each of claims 3 to 16 were multiple dependent claims that depended from both claims 1 and 2. Big Beings argued that because the Board found that Nested failed to show that claim 1 was unpatentable, the Board should have also found that Nested failed to show that claims 3 through 16, as depending from claim 1, were unpatentable. The Director granted review.

35 U.S.C. § 112, fifth paragraph, states, in relevant part, “[a] multiple dependent claim shall be construed to incorporate by reference all the limitations of the particular claim in relation to which it is being considered.” Big Beings argued that the statute requires the Board to separately consider the patentability of alternative dependencies of a multiple dependent claim. Nested responded by arguing that the statute should be read so that if any version of a multiple dependent claim is found unpatentable over the prior art, then all versions of the claim should be found unpatentable.

The Director found that this was an issue of first impression. Relying on 37 C.F.R. § 1.75(c) and 35 U.S.C. § 282, the Director concluded that “a multiple dependent claim is the equivalent of several single dependent claims. Thus, in the same way that the unpatentability of multiple single dependent claims would each rise or fall separately, so too should the dependent claims covered by a multiple dependent claim.” The Director also noted that the Federal Circuit in Dow Chemical and Dayco Products explained that “not addressing claim validity on an individual basis is an error and contravenes 35 U.S.C. 282[.]” The PTO Director concluded, quoting the Manual of Patent Examining Procedure (MPEP), that “a multiple dependent claim must be considered in the same manner as a plurality of single dependent claims.”



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