IP UPDATE
Exploring the Latest in Intellectual Property Law
IP UPDATE
Exploring the Latest in Intellectual Property Law
Results for "Patent Eligibility"
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2019 IP Law Year in Review: Patents

by | Feb 20, 2020 |

Executive Summary

2019 was another important year in intellectual property law that resulted in hundreds of decisions by the courts and Patent Trial and Appeal Board (PTAB) that may affect your company’s litigation, patent prosecution or business strategy. This special report on patents discusses some of the most important cases from 2019 from the US Supreme Court, the US Court of Appeal for the Federal Circuit and the PTAB.

On January 22, 2019, the Supreme Court addressed in Helsinn Healthcare S.A. v Teva Pharmaceuticals, USA, Inc. the question of whether, under the America Invents Act (AIA), an inventor’s sale of an invention to a third party that is obligated to keep the invention confidential qualifies as prior art for purposes of determining the patentability of the invention. In a unanimous decision authored by Justice Clarence Thomas, the Supreme Court concluded that such a sale qualifies as prior art.

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Data Processing Software Checks Out as Patent Eligible

by | Jan 3, 2020 |

PATENTS / SUBJECT MATTER ELIGIBILITY / ABSTRACT IDEA

Addressing an issue of software subject matter eligibility, the US Court of Appeals for the Federal Circuit reversed the district court’s judgment on the pleadings under 35 USC § 101, finding claims related to error checking patent eligible. Koninklijke KPN N.V. v. Gemalto M2M GMBH et al., Case Nos. 18-1862, -1864, -1865 (Fed. Cir. Nov. 15, 2019) (Chen, J).
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Invoking Generic Need for Claim Construction Won’t Avoid § 101 Dismissal

by | Jul 27, 2023 |

The US Court of Appeals for the Federal Circuit affirmed the dismissal of a patent infringement suit on § 101 grounds, rejecting the patentee’s argument that claim construction or discovery was required before assessing patent eligibility. Trinity Info Media, LLC v. Covalent, Inc., Case No. 22-1308 (Fed. Cir. July 14, 2023) (Stoll, Bryson, Cunningham, JJ.)

Trinity Info Media sued Covalent for infringement of patents related to poll-based networking systems that connect users in real time based on answers to polling questions. Covalent moved to dismiss, arguing that the patent claims were invalid under 35 U.S.C. § 101 because they were directed to patent-ineligible subject matter. In resolving the motion, the district court found that the claims were directed to the abstract idea of “matching users who gave corresponding answers to a question” and did not contain an inventive concept. The district court further found that the purported invention did not improve computer functionality but simply used “generic computer components as tools to perform the functions faster than a human would.” Accordingly, it found the asserted claims invalid under § 101 and granted the motion to dismiss. Trinity appealed.

Trinity argued that the district court erred by granting the motion without first allowing fact discovery and conducting claim construction. The Federal Circuit disagreed, finding that in order to overcome a motion to dismiss on § 101 grounds, “the patentee must propose a specific claim construction or identify specific facts that need development and explain why those circumstances must be resolved before the scope of the claims can be understood for § 101 purposes.” Trinity had identified claim terms to the district court, but never proffered any proposed constructions or explained how construction would affect the § 101 analysis. Because Trinity did not identify specific facts to be discovered or propose any particular claim construction that would alter the § 101 analysis, Trinity’s generic arguments were insufficient to avoid the motion to dismiss.

The Federal Circuit went on to analyze whether the asserted claims were invalid under the two-step framework established by Mayo and Alice. Under this framework, Step 1 evaluates whether the asserted claims are directed to a patent-ineligible concept, such as an abstract idea. Step 2 searches for an “inventive concept” by considering the claims to determine whether any elements “transform the nature of the claim” from ineligible subject matter into a patent-eligible application.

At Step 1, the Federal Circuit concluded that the claims were directed to the patent-ineligible abstract idea of “matching based on questioning.” The Court noted that a “telltale sign of abstraction is when the claimed functions are mental processes that can be performed in the human mind or using a pencil and paper” (citing Personal-Web), finding that the “human mind could review people’s answers to questions and identify matches based on those answers.” Further, the trivial variations appearing in some claims (e.g., using a handheld device, reviewing matches by swiping and matching based on gender) did not change the focus of the asserted claims. The Court explained that for software inventions, Step 1 [...]

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Tag, You’re It: Sanctions Award Must Reflect Violative Conduct

by | Dec 22, 2022 |

The US Court of Appeals for the Federal Circuit determined that an accused infringer was entitled to a new trial relating to validity issues but still faced sanctions for its continuous disregard of its discovery obligations. ADASA Inc. v. Avery Dennison Corp., Case No. 22-1092 (Fed. Cir. Dec. 16, 2022) (Moore, Hughes, Stark, JJ.)

ADASA owns a patent relating to methods and systems for commissioning radio-frequency identification (RFID) transponders. ADASA sued Avery Dennison for patent infringement, alleging that its manufacture and sale of certain RFID tags infringed ADASA’s patent. Both parties sought summary judgment following discovery. Avery Dennison asserted that the patent was ineligible for patent protection under 35 U.S.C. § 101, and ADASA argued that the asserted claims were not anticipated or obvious based on the book RFID for Dummies. The district court granted ADASA’s motion on validity and denied Avery Dennison’s motion for patent ineligibility. Prior to trial, ADASA moved in limine to exclude Avery Dennison’s damages expert’s testimony related to certain licenses, and the district court granted the motion.

At trial, ADASA entered licenses into evidence as part of its damages case and alleged that they reflected lump-sum agreements to practice the asserted patent. The district court declined to include a jury instruction on lump-sum damages and a lump-sum option on the verdict form, observing that Avery Dennison’s expert had not offered a lump-sum damages opinion and concluding that the licenses alone were insufficient for the jury to award lump-sum damages. The jury returned an infringement verdict and awarded ADASA a running royalty of $0.0045 per infringing RFID tag, which resulted in an award of $26.6 million.

In its post-trial motions, Avery Dennison moved for a new trial, arguing it was reversible error for the district court to exclude its damages expert’s testimony and to decline to provide a jury instruction for a lump-sum damages award. Before the district court ruled on its motion, Avery Dennison revealed to ADASA that it had discovered additional previously undisclosed RFID tags in its databases. A subsequent investigation determined that the number of undisclosed tags was more than two billion. Avery Dennison agreed to pay an additional $9.5 million in damages, which corresponded to the royalty rate determined by the jury. ADASA subsequently moved for sanctions. The district court award $20 million in sanctions after finding that Avery Dennison had engaged in protracted discovery failures and a continuous disregard for the seriousness of the litigation and its expected obligations. The sanctions award corresponded to a $0.0025 per-tag rate applied to both the adjudicated and late-disclosed tags. Avery Dennison appealed.

Avery Dennison challenged the district court’s summary judgment rulings, its denial of a new trial and its imposition of sanctions. The Federal Circuit affirmed the district court’s patent eligibility determination, finding that the patent “is directed to a specific, hardware-based RFID serial number data structure designed to enable technological improvements to the commissioning process,” which “is not a mere mental process,” and concluded that the claim was directed to patent-eligible subject matter.

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The Name of the Game Is the Claims, Even if Specification Is Shared

by | Oct 20, 2022 |

Once again addressing the application of Alice, the US Court of Appeals for the Federal Circuit partially reversed a district court’s dismissal of several patents as subject matter ineligible for error in analyzing their claims together because of a shared specification despite different claim features. Weisner v. Google LLC, Case No. 021-2228 (Fed. Cir. Oct. 13, 2022) (Reyna, Hughes, Stoll, JJ.) (Hughes, J., dissenting in part)

Sholem Weisner sued Google for infringement of four related patents describing ways to “digitally record a person’s physical activities” and use the digital record. The patents’ common specification described how individuals and businesses can sign up for a system to exchange information (e.g., “a URL or an electronic business card”), and as they encounter people or businesses that they want recorded in their “leg history,” the URLs or business cards are recorded along with the time and place of the encounters. Google moved to dismiss the suit under Fed. R. Civ. P. 12(b)(6), arguing that the patent claims were directed to ineligible subject matter under 35 U.S.C. § 101, and that Weisner had failed to meet the minimum threshold for plausibly pleading his claim of patent infringement under the Twombly and Iqbal standards (Twiqbal). The district court agreed and granted dismissal under Twiqbal. After holding a hearing on patent ineligibility, the district court also granted dismissal under § 101 but granted Weisner leave to amend his complaint. In his amended complaint, Weisner added infringement allegations, allegations related to patent eligibility and an “Invention Background and System Details Explained” section. Google again moved to dismiss the amended complaint based on both § 101 and Twiqbal, which the district court granted. Weisner timely appealed.

The Federal Circuit applied the Alice two-step analysis to determine whether the claims at issue were directed to a patent-ineligible concept, such as an abstract idea, and if they were, whether the elements of each claim, both individually and as an ordered combination, transformed the nature of the claim into a patent-eligible application. As discussed in the Supreme Court cases Alice and Mayo, the second step is “a search for an ‘inventive concept’—i.e., an element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.’”

There were four asserted patents in issue. For the first two patents, Weisner attempted to argue that the claims improved “the functioning of the computer itself” or “an existing technology process” by “[1] automatically recording physical interactions and [2] limiting what is recorded to only specific types of interactions that are pre-approved and agreed to by an individual member and a vendor member.” However, the Federal Circuit was unconvinced that this was the type of improvement found in Enfish to bring claims into the realm of inventiveness. Instead, the Court agreed with the district court that, consistent with past precedent, this was no different than travel logs, diaries, journals or calendars used to keep records of a person’s location, and that [...]

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Standard Computer Equipment Can Support Inventive Concept under Alice Step 2

by | Oct 6, 2022 |

The US Court of Appeals for the Federal Circuit overturned a district court dismissal of a patent case for errors in analyzing the claims’ patent eligibility under Alice. The Court found that regardless of whether the claimed invention was abstract under step 1, the invention claimed specific improvements rendering it patent eligible under step 2. Cooperative Entertainment, Inc. v. Kollective Technology, Inc., Case No. 21-2167 (Fed. Cir. Sept. 28, 2022) (Moore, C.J.; Lourie, Stark, JJ.)

Cooperative Entertainment sued Kollective Technology for infringement of several claims of Cooperative’s patent directed to structuring a peer-to-peer (P2P) dynamic network for distributing large files. After Kollective filed a motion to dismiss under Fed. R. Civ. P. 12(b)(6) arguing that all of the patent claims were ineligible under 35 U.S.C. § 101, Cooperative filed an amended complaint. Kollective refiled its motion to dismiss, and the district court granted the motion, holding the challenged claims ineligible under § 101. Cooperative appealed.

The patent relates to systems and methods of structuring a P2P dynamic network for distributing large files, specifically videos and video games. The patent specification explains that in prior art systems, video streaming was controlled by content distribution networks (CDNs), with content “distributed directly from the CDN server originating the content.” In contrast, the challenged claims recite methods and systems for a network in which content distribution occurs “outside controlled networks and/or [CDNs]” (emphasis added), and therefore outside a “static network of controlled systems.” Dynamic P2P networks comprising “peer nodes,” which consume the same content contemporaneously, transmit content directly to each other instead of receiving content from the CDN. The claimed P2P networks use “content segmentation” to segment a video file into smaller clips and distribute it piecemeal. Viewers can obtain individual segments as needed, preferably from other viewers. The disclosed segmentation techniques include “CDN address resolution, trace route to CDN and the P2P server manager, dynamic feedback from peers reporting traffic rates between individual peer and its neighbors, round-robin, other server side scheduling/resource allocation techniques, and combinations thereof” (emphasis in original).

The Federal Circuit applied the two-step Alice framework: (1) determining whether the claim is “directed to” a “patent-ineligible concept,” such as an abstract idea, and if it is, (2) examining “the elements of the claim to determine whether it contains an ‘inventive concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-eligible application.” Step 2 examines whether the claim elements, individually and as an ordered combination, contain an inventive concept that more than merely implements an abstract idea using “well-understood, routine, [and] conventional activities previously known to the industry.”

Under Alice step 1, the district court had held that the “focus of the [] patent” is the abstract idea of “the preparation and transmission of content to peers through a computer network.” The Federal Circuit disagreed, concluding that regardless of whether the invention could be reduced to an abstract concept, under step 2 the claims contained several alleged inventive concepts that the specification touted as specific improvements in the distribution of data [...]

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Recapture Rule Applies to Subject Matter Surrendered to Overcome § 101 Rejection

by | Aug 18, 2022 |

Affirming a Patent Trial & Appeal Board (Board) decision, the US Court of Appeals for the Federal Circuit held, for the first time, that the rule prohibiting recapture of subject matter surrendered during prosecution applies to subject matter surrendered to overcome a § 101 patent eligibility rejection. In re McDonald, Case No. 21-1697 (Fed. Cir. Aug. 10, 2022) (Newman, Stoll, Cunningham, JJ.)

During prosecution of a parent patent application relating to displaying search results, the inventor, John McDonald, added a “processor” limitation to certain claims to overcome a § 101 rejection. McDonald subsequently filed a continuation application, which was eventually issued. McDonald then filed a reissue application seeking to broaden the claims of the continuation patent by striking all of the originally added “processor” claim language. With the reissue application, he included a declaration that the processor language was unnecessary to the patentability and operability of the relevant claims. The examiner rejected the claims as obvious, and McDonald appealed. On appeal, the Board affirmed the obviousness rejection and also rejected the reissue claims as being based on a defective declaration lacking a correctable error. The Board found that McDonald was impermissibly attempting to recapture surrendered subject matter. McDonald appealed.

Exercising de novo review, the Federal Circuit first recounted more than a century of caselaw relating to patent reissue and recapture. The Court explained that a patent may be reissued if the inventor erroneously claimed less than they had a right to claim in the original patent, but that the recapture rule bars a patentee from regaining that which was surrendered during prosecution. The Court then turned to its three-step recapture analysis in which it considers the following:

  1. Whether, and in what aspect, the reissue claims are broader than the patent claims
  2. If broader, whether those broader aspects of the reissue claim relate to the surrendered subject matter
  3. If they do, whether the surrendered subject matter has crept into the reissue claim.

Applying this test, the Court concluded that McDonald sought to broaden his claims and that the surrendered subject matter crept into those broadened claims. The Court also held that McDonald did not meet the reissue statute’s “error” requirement, finding that his actions were deliberate as opposed to inadvertent or by mistake.

The Federal Circuit then addressed McDonald’s arguments that the recapture rule does not apply to subject matter surrendered to overcome a § 101 rejection. The Court conceded that its previous decisions centered on prior art rejections under § 102 and § 103 but found that the public’s reliance interest on a patent’s public record must also apply to subject matter surrendered under § 101. The Court also reiterated that it “reviews a patent family’s entire prosecution history when applying both the rule against recapture and prosecution history estoppel.” The Court thus affirmed the Board’s decision barring McDonald from reclaiming subject matter previously surrendered during prosecution.



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3D Chess at the Federal Circuit: Can’t Walk Back Arguments in Prior Appeal or Prosecution History

by | Sep 9, 2021 |

In the second appeal to the US Court of Appeals for the Federal Circuit, the preamble term “three-dimensional spreadsheet” was found to be a limitation in the context of claims directed to organizing and presenting information in electronic spreadsheets based on prosecution disclaimer and arguments made in the first appeal. Data Engine Techs, LLC v. Google LLC, (DET II), Case No. 21-1050 (Fed. Cir. Aug. 26, 2021) (Stoll, J.)

In the first appeal (DET I), the Federal Circuit found that DET’s representative claim was “directed to more than a generic or abstract idea as it claims a particular manner of navigating three-dimensional spreadsheets,” improving on electronic spreadsheet functionality and, therefore, directed to patent-eligible subject matter. The Court reversed and remanded. On remand, Google requested that the district court reopen claim construction and construe the preamble term “three-dimensional spreadsheet” in the representative claim.

The district court found the preamble to be limiting and construed “three-dimensional spreadsheet” to mean a “spreadsheet that defines a mathematical relation among cells on different spreadsheet pages, such that cells are arranged in a 3-D grid.” The district court went on to grant Google’s motion for summary judgment of noninfringement as there was no dispute that the accused product (Google Sheets) did not meet the “three-dimensional spreadsheet” limitation under the court’s construction. DET appealed.

Applying de novo review to the claim construction issue presented, the Federal Circuit noted that in DET I, its conclusion that the asserted claims were directed to improvements in three-dimensional spreadsheets ascribed patentable weight to the preamble term “three-dimensional spreadsheet.” The dispute related to whether the claim requires “a mathematical relation among cells on different spreadsheet pages,” as required by the district court’s construction.

The Federal Circuit found that neither the claims themselves nor the specification provided guidance in construing “three-dimensional spreadsheet.” Turning to the prosecution history, the Court noted that during prosecution, the applicants provided an explicit definition of a “true” three-dimensional spreadsheet and distinguished prior art under this definition. Indeed, as the Court noted, its ruling in DET I expressly relied on that definition from the prosecution history in determining that the claims required a three-dimensional spreadsheet that “defines a “three-dimensional spreadsheet” in support of patent eligibility. Thus, the Court concluded that the preamble term was limiting.

In the present appeal, DET contended that the prosecution history passage defining a three-dimensional spreadsheet did not rise to the level of “clear and unmistakable” disclaimer when read in context of the spreadsheet (Lotus 1-2-3) it was distinguishing. The Federal Circuit rejected the argument noting, “DET cannot escape the import of its statements to the Patent Office by suggesting they were not needed to overcome the Examiner’s rejection. Consistent with the public notice function of the prosecution history, the public is entitled to rely on these statements as defining the scope of the claims.” In rejecting DET’s arguments, the Court again cited to the imagery of twisting claims, “like ‘a nose of wax,’ ‘one way to avoid [invalidity] and another to [...]

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Without More, Mere Automation is Abstract—Not Construing Interchangeable Terms Doesn’t Give Them the Cold Shoulder

by | Aug 19, 2021 |

In the latest development relating to patent eligibility of content-based identifier patents, the US Court of Appeals for the Federal Circuit affirmed decisions finding patent claims ineligible under 35 U.S.C. § 101. PersonalWeb Techs. LLC v. Google LLC, YouTube, LLC, Case No. 20-1543 (Fed. Cir. Aug. 12, 2021) (Prost, J.) (consolidating PersonalWeb Techs. LLC v. Facebook, Inc., Case No. 20-1553, and PersonalWeb Techs. LLC, Level 3 Commc’ns. LLC v. EMC Corp., VMWare, Inc., Case No. 20-1554).

PersonalWeb sued technology companies in the Eastern District of Texas in 2011 over three of its patents. The patents were directed to data-processing systems that assign each data item a substantially unique content-based identifier, generated by hash algorithm, which changes when the content changes and is used to perform data-management functions. Several defendants successfully motioned for transfer to the Northern District of California, where their companies were headquartered and/or their employees responsible for the development of the accused products were based. After claim construction in Texas, the cases were transferred and stayed pending several inter partes reviews before the US Patent Trial & Appeal Board (Board). Previous decisions before the Federal Circuit affirmed the Board’s findings that using hash-based identifiers for data management was disclosed in the prior art, that content-based identifiers in performing file-management functions, such as backing up files, were also known and other independently unpatentable aspects were recited in the claims. After the stay was lifted, the California court granted the defendants’ motion for judgment on the pleadings that the remaining asserted claims were patent ineligible under 35 U.S.C. § 101. PersonalWeb appealed.

To assess patent eligibility, the Federal Circuit applied the two-step Mayo/Alice framework. Under step one (determining whether the claims at issue are directed to a patent-ineligible concept, such as an abstract idea), the Court considered the focus of the claimed advance over the prior art and found that the claims were directed to an abstract idea. PersonalWeb contended that its claims were directed to “a substantially unique, algorithm-derived, content-based identifier for all data items in a networked computer, which allows a computer within a network containing diverse computing and storage systems to locate and distribute data without knowing either the file system of any device within the network or the conventional name of any data item.” However, the Court adopted the district court’s view, which was that the patents were directed to “(1) using a content-based identifier generated from a ‘hash or message digest function,’ (2) comparing that content-based identifier against something else, [that is,] another content-based identifier or a request for data; and (3) providing access to, denying access to, or deleting data.” Given the focus in Mayo/Alice step one of “whether the claims of the asserted patents fall within the excluded category of abstract ideas,” and citing to parallel examples from precedent cases, the Court concluded that the claims were directed to the use of an algorithm-generated content-based identifier to perform the claimed data-management functions, which include controlling access to data items, retrieving and delivering copies [...]

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Check Step One: It’s Not Ova until the Court Compares Claims

by | Aug 13, 2020 |

The US Court of Appeals for the Federal Circuit reversed a district court’s decision finding a patent directed to a method of sorting particles using flow cytometry technology ineligible under 35 U.S.C. § 101. The Federal Circuit also vacated the district court’s conclusion that the patent owner was precluded from asserting certain patents based on claim preclusion. XY, LLC v. Trans Ova Genetics, LC, Case No. 19-1789 (Fed. Cir. July 31, 2020) (Stoll, J.).

XY, Beckman Coulter and Inguran (collectively, XY) sued Trans Ova in 2016 for infringement of seven patents relating to technology for sex selection of non-human mammals. Trans Ova filed a motion for judgment on the pleadings, arguing that the asserted claims of one of the patents are ineligible under 35 U.S.C. § 101. Applying the Supreme Court’s two-step Alice framework for determining patent eligibility, the district court determined that the claims are ineligible under § 101. At Alice step one, the district court found that the patent’s sole independent claim was directed to the abstract idea of a “mathematical equation that permits rotating multi-dimensional data.” At Alice step two, the district court found that the asserted claims lacked an inventive concept because XY admitted that each claim element was known in the art.

Trans Ova also filed a motion to dismiss, arguing that the district court should hold XY’s infringement allegations barred by claim preclusion. The argument was based on XY’s 2012 lawsuit against Trans Ova on infringement of different patents directed to similar technology (which was pending on appeal when the 2016 case was filed). The district court granted Trans Ova’s motion to dismiss infringement allegations of three patents cited in the 2016 suit, and stayed proceedings on XY’s remaining causes of action pending the outcome of the 2016 suit’s appeal. XY appealed the district court’s dismissal decision.

On appeal, the Federal Circuit found that the district court erred in finding that the claims are directed to a mathematical equation under Alice step one. The Court concluded that the asserted claims are directed to a patent-eligible improvement of a method of sorting particles using flow cytometry technology, not to an abstract idea. XY’s claim described detailed improvements to a physical technique, a step-by-step method for a laboratory process, which is patent eligible.

As to the issue of claim preclusion, the parties’ only dispute was whether the district court properly concluded that XY’s 2012 and 2016 lawsuits present the same cause of action. A cause of action is defined based on the transactional facts from which it arises, which in a patent case include both the asserted patents and the accused activity. Claim preclusion will be triggered by different patents only if the scope of the asserted patent claims in the two suits is essentially the same.

XY argued that the district court erred by failing to compare the currently asserted patent claims to the previously asserted patent claims to determine whether the causes of action in the two lawsuits are essentially the same. The Federal Circuit [...]

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