IP UPDATE
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Exploring the latest in intellectual property law
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Common Sense: Nonparties Not Precluded by Ex Parte Reexamination Termination

by | Jun 8, 2023 |

In a precedential decision, the US Patent & Trademark Office (PTO) Trademark Trial & Appeal Board denied a motion for judgment based on either claim or issue preclusion, and in the alternative for a show cause order, in a challenger’s petition. Common Sense Press Inc. d/b/a Pocket Jacks Comics v. Ethan Van Sciver and Antonio J. Malpica, Cancellation No. 92075375, 2023 BL 171365 (TTAB May 19, 2023) (Wellington, Pologeorgis, English, ATJs).

Common Sense Press filed a petition to cancel the registration for the mark “Comics Gate” for comics. In its petition, Common Sense asserted claims of nonuse, abandonment and fraud. The Respondents denied the allegations in the petition and also raised unclean hands by petitioner as a defense.

Common Sense also requested reexamination of the “Comics Gate” mark, which the PTO Director instituted on May 9, 2022. The cancellation proceeding was suspended pending the outcome of the reexamination. The Respondents were instructed to submit evidence to establish use of their mark for comics as of the August 13, 2020, deadline for filing a statement of use, as required under Section 1(d) of the Lanham Act.

The Respondents’ Section 1(d) statement showed that the “Comics Gate” mark was used in connection with comics sales in interest commerce and that such comics were provided via interest trade channels during the relevant period. In view of the Respondents’ evidence, the PTO Director determined that use had been demonstrated for comics and terminated the reexamination.

With the Notice of Termination in hand, the Respondents requested that the Board enter judgment in their favor in the cancelation proceeding as to nonuse and abandonment based on issue preclusion or, in the alternative, issue a show cause order to Common Sense as to why judgment should not be entered against them.

The Board denied the Respondents’ request, reasoning that termination of a reexamination proceeding does not preclude future nonuse challenges. Nor does such a reexamination termination decision have preclusive effect on a petitioner seeking cancellation, even if the petitioner requested the terminated reexamination. Citing due process concerns, the Board explained that the termination of an ex parte reexamination proceeding in which the petitioner necessarily does not participate may not serve as a basis for preventing the petitioner from raising even identical challenges in another action. The Board further noted that while the applicable statute “contains explicit estoppel provisions that bar the filing of future expungement or reexamination proceedings as to the identical goods or services once a proceeding of the same kind has been instituted . . . neither the statute nor regulations set forth a limitation on any party’s ability to petition to cancel a registration just because it is or has been the subject of a reexamination or expungement proceeding.” Thus, the Board concluded there is no basis to issue a show-cause order to a litigant who never appeared in a prior action.

Practice Note: This case serves as a reminder of the metes and bounds of an ex parte reexamination or expungement proceeding. Although [...]

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PTO Proposes Trademark Fee Increases

by | May 25, 2023 |

On May 8, 2023, the US Patent & Trademark Office (PTO) announced proposed trademark fee increases. The proposed fee increases are the result of lower revenue than previously forecasted and higher-than-expected inflation. Aggregate PTO operating costs are projected to exceed aggregate fee revenue beginning this fiscal year.

To encourage efficient application filing behaviors, enhance the quality of incoming applications and improve processing efficiencies, the PTO proposed a new single basic application filing fee with additional premium application surcharge fees based on the following actions an applicant can take (or avoid) when filing:

  • Submitting incomplete applications (other than applications denied a filing date for failure to satisfy the requirements under 37 CFR § 2.21)
  • Providing custom descriptions of goods and services in the free-form field instead of using the preapproved drop-down fields containing acceptable identifications of goods and services from the Trademark Next Generation ID Manual
  • Providing excessively long identifications of goods or services when using the free-form field.

The PTO proposes a 12% fee increase per class for applications (paper submission) and a 40% fee increase per class for a basic application (formerly TEAS Plus). Proposed fee increases for intent-to-use (ITU) filings include 100% per class for an amendment to allege use (AAU), 50% per class for an AAU (paper submission), 50% per class for a statement of use (SOU) and 25% per class for an SOU (paper submission). The fee for a fourth and subsequent request for a six-month extension per class for filing an SOU would increase 100% and 56% per class for an SOU (paper submission).

Proposed fee increases for renewals include 17% per class for § 9 registration renewals, 10% per class (paper submission) and 17% for renewals filed at the World Intellectual Property Organization (WIPO).

The proposed fee increase for a Letter of Protest (LOP) would be 400%, and a petition to the director would increase 60% and 43% (paper submission). Petitions to revive an application would increase 67%, and petitions to revive (paper submission) would increase 40%.

Proposed fee increases for declarations of use include 33% per class for § 8 declarations and § 71 declarations, and 23% for paper submission. Section 15 declarations of incontestability would increase 25% per class and 17% per class (paper submission).

A hybrid public hearing is scheduled for June 5, 2023. Those wishing to present oral testimonies at the hearing must submit a written request by May 26, 2023. Written comments on the proposed fees will be accepted until June 12, 2023. The PTO anticipates that the fee changes will be implemented around November 2024.

For further details, including a complete list of the proposed fee increases, see the latest trademark fee setting information on the PTO website.



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What’s Shakin’ Bacon? Not Inventorship—Contribution to Invention Can’t Be “Insignificant”

by | May 11, 2023 |

The US Court of Appeals for the Federal Circuit reversed a district court decision and found that an asserted inventor not named in the application was not a joint inventor because in the context of the entire invention his contribution was too insignificant to constitute joint inventorship. HIP, Inc. v. Hormel Foods Corp., Case No. 22-1696 (Fed. Cir. May 2, 2023) (Lourie, Clevenger, Taranto, JJ.)

Hormel owns a patent directed to precooking bacon and meat pieces. The patent claims a two-step method that involves a preheating step using a microwave oven, infrared oven or hot air, and then a higher-temperature cooking step. Prior to filing its patent application, Hormel and HIP entered into a joint agreement to develop an oven for the two-step cooking process. Hormel evaluated an HIP oven and learned, among other things, that preheating the bacon via a microwave oven prevented condensation from washing away the salt and flavor. HIP’s David Howard suggested an infrared oven (already known in the art) as a possibility for use in the preheating step. Hormel subsequently filed a patent application that did not name Howard as a joint inventor. HIP sued Hormel alleging that Howard was a joint inventor. The district court found that Howard was a joint inventor based solely on his alleged contribution of infrared preheating. Hormel appealed.

The inventors listed on an issued patent are presumed to be the only true inventors. Thus, a party must prove a claim to correct inventorship by clear and convincing evidence. A joint inventor must do the following:

  • Contribute in a significant manner to the conception or reduction to practice of the invention
  • Make a contribution to the claimed invention that is not insignificant in quality when that contribution is measured against the dimension of the full invention
  • Do more than explain well-known concepts or the current state of the art.

The Federal Circuit found that Howard’s alleged contribution of using an infrared oven for preheating the bacon was insignificant in quality when measured against the full invention, which it found to be clearly focused on preheating with a microwave oven. Preheating with an infrared oven was briefly mentioned in passing as an alternative to a microwave oven in the patent’s specification and in a single dependent claim. In contrast to using an infrared oven, the patent claims, specification and figures all prominently featured using a microwave oven for the preheating step. All the independent claims required or allowed using a microwave oven for the preheating step. The specification also repeatedly referred to preheating with a microwave oven, including in the background of the invention and the summary of the invention sections. Further, the examples and corresponding figures included procedures using a microwave oven to preheat, but no mention of using an infrared oven to preheat. Accordingly, the Court found that Howard’s infrared oven suggestion was insignificant in light of the full invention.

The Federal Circuit did not address the other requirements for joint inventorship, reasoning that since all three [...]

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PTO Reduces Small and Micro-Entity Fees

by | Mar 30, 2023 |

The US Patent & Trademark Office (PTO) issued a final rule reducing certain patent fees for small and micro-entities on March 22, 2023. The Federal Register notice can be found here. Small entity filing fee discounts are increased to 60% (from 50%) and micro-entity filing fee discounts are increased to 80% (from 75%). The fee reductions apply to PTO fees for filing, searching, examining, issuing, appealing and maintaining patent applications and patents.

The fee reductions were mandated by the Consolidated Appropriations Act, 2023 (the Act), which included the Unleashing American Innovators Act of 2022. The Act was signed into law by President Biden on December 29, 2022. The new PTO fee schedule can be found here.



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No One Likes a Sore Winner: IPR Prevailing Party Can’t Appeal

by | Mar 23, 2023 |

Reaffirming precedent, the US Court of Appeals for the Federal Circuit reiterated the rule that the prevailing party in an inter partes review (IPR) cannot appeal a Patent Trial & Appeal Board decision. Termax Co. v. Illinois Tool Works, Inc., Case Nos. 23-1252; -1254 (Fed. Cir. Mar. 8, 2023) (Dyk, Reyna, Chen, JJ.)

Illinois Tool Works (ITW) asserted that Termax had infringed a patent directed to an automobile fastener. Termax challenged the asserted patent by filing a petition for IPR. The petition was granted, and ultimately the Board agreed with Termax that all the challenged claims of ITW were unpatentable. Both parties appealed.

ITW moved to voluntarily dismiss its own appeal and to dismiss Termax’s cross-appeal. Termax opposed, arguing that the Board erred in its construction of certain claim limitations that have also been incorporated into a new ITW patent.

The Federal Circuit dismissed both appeals. Citing what it called a “familiar rule,” the Court stated that the winner in a lower court or other tribunal cannot ordinarily seek relief in the appellate court. The Court was not persuaded by Termax’s argument that the Board erred in its construction of certain claim limitations, noting that Termax sought to appeal the constructions in the hopes that a Federal Circuit decision in its favor would “collaterally estop Illinois Tool Works from asserting those newly issued claims.” However, the Court refused to hear the appeal prematurely, stating that if ITW asserts the claims of its new patent against Termax in the future, Termax can address the issue at that time.

Practice Note: While an IPR can be a powerful tool for accused infringers, it is not without future risks.



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A Maze-Like Path and Laundry List Don’t Provide Written Description

by | Mar 16, 2023 |

The US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board (Board) decision that there was insufficient written description in the asserted priority applications to support a genus claim because of a lack of ipsis verbis disclosure and insufficient blaze marks. The Court concluded that the priority applications did not support an early priority date. Regents of the University of Minnesota v. Gilead Sciences, Inc., Case No. 21-2168 (Fed. Cir. March 6, 2023) (Lourie, Dyk, Stoll, JJ.)

Gilead filed a petition for inter partes review (IPR) challenging Minnesota’s patent directed to phosphoramidate prodrugs preventing virus reproduction or cancerous tumor growth. Gilead’s US Food & Drug Administration-approved drug, sofosbuvir, is marketed by Gilead to treat chronic hepatitis C infections and falls within claim 1 of the patent.

The 2014 application that issued as the challenged patent claimed priority to four applications. In the IPR, Gilead argued that the claims were anticipated by a Gilead-owned patent publication (Sofia). The publications used in the decision are as follows:

NP3 and NP2 have the same disclosure. NP2 and P1 contain similar disclosures, which the Board called NP2-P1. The broader claim in NP2-P1 has a relationship of genus to the narrower subgenus claims in the patent at issue. There was no dispute that Sofia disclosed every limitation of each challenged claim. The Board held that NP2-P1 failed to provide a sufficient written description to support the asserted priority date of the challenged claims, which were therefore found to be anticipated by Sofia. Minnesota appealed.

Minnesota argued the following to the Federal Circuit:

  • The Board erred in holding that the NP2-P1 applications have insufficient written description.
  • The Board ran afoul of Administrative Procedure Act (APA) requirements.
  • Minnesota is a sovereign state entity immune from IPR.

35 U.S.C. § 120 sets forth requirements for a patent application to benefit from a filing date of an earlier application. Minnesota asserted that the NP2-P1 priority applications literally described or provided blaze marks to the challenged subgenus claims. The Federal Circuit disagreed, explaining that written description for a genus claim of chemical compounds raises “particular issues,” requiring a description of the outer limits of the genus and either a representative number of members or structural features common to the members of the genus. The Court found that the asserted priority applications (NP2-P1) did not provide such description and the challenged claims were not entitled to the filing dates of those applications.

The Federal Circuit found that the asserted priority applications did not provide ipsis verbis disclosure of the challenged subgenus claim. The Court quoted an oft-noted saying associated with Yogi Berra, a catcher for the New York Yankees some 50 years ago, about a notable failure to provide direction: “when one comes to a fork in the road, take it.” The Court also cited its 1996 decision in [...]

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Compelling Clarity: PTO Director Explains Compelling Merits Test

by | Mar 9, 2023 |

US Patent & Trademark Office (PTO) Director Katherine K. Vidal issued a precedential opinion clarifying the standard under which the Patent Trial & Appeal Board (Board) can institute on an inter partes review (IPR) petition despite the Fintiv factors militating toward denial. CommScope Techs. LLC v. Dali Wireless, Inc., IPR2022-01242 (PTO Feb. 27, 2023) (Vidal, Dir.) (precedential).

This opinion follows the Director’s Interim Procedure for Discretionary Denials memorandum (Guidance Memo) and her opinion in OpenSky Indus. v. VLSI Tech. In the guidance memo, the Director explained that when there is “compelling evidence of unpatentability,” the Board may decline to exercise its discretion to deny IPR institution.

In this case, Dali Wireless sued CommScope in the district court, alleging infringement of its patent. CommScope filed a petition to institute an IPR proceeding against the asserted patent. The Board granted the petition and instituted an IPR proceeding while the district court litigation was ongoing.

In granting the petition, the Board acknowledged that it would normally perform a Fintiv analysis to determine whether it should deny the petition in light of the parallel district court proceeding. However, considering the Guidance Memo and the “compelling invalidity challenge” presented by the petitioner, the Board skipped the Fintiv analysis and instituted on the petition. The Director instituted sua sponte review.

Recognizing some ambiguity in both OpenSky and the guidance memo, the Director made her decision precedential to clarify:

My Guidance Memo states that “the PTAB will not deny institution based on Fintiv if there is compelling evidence of unpatentability.” Although I now recognize that this instruction could be read to allow for a compelling merits determination as a substitute for a Fintiv analysis, that was not my intent. By that instruction, I intended for PTAB panels to only consider compelling merits if they first determined that Fintiv factors 1–5 favored a discretionary denial . . . . In circumstances where . . . the Board’s analysis of Fintiv factors 1–5 favors denial of institution; the Board shall then assess compelling merits. In doing so, the Board must provide reasoning sufficient to allow the parties to challenge that finding and sufficient to allow for review of the Board’s decision.

A determination of whether the petition presents a compelling merits case for invalidity requires a merits case that meets a higher standard than the “reasonable likelihood” test required by 35 U.S.C. § 314(a).

The Director found that the Board’s decision was deficient in both parts of the analysis. The Board did not perform any analysis of the Fintiv factors but instead went straight to a determination of whether the petition presented a compelling invalidity challenge. In connection with that determination, the Board failed to provide any reasoning that explained why it found the merits case presented in the petition compelling.

Finding that the Board’s reasoning was conclusory, the Director vacated the Board’s decision to institute IPR review and remanded for further proceedings consistent with her decision.

Practice Note: Less [...]

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PTO Introduces Trademark Decisions and Proceedings Search Tool

by | Mar 2, 2023 |

On February 17, 2023, the US Patent & Trademark Office (PTO) announced the launch of the new Trademark Decisions and Proceedings Search Tool. This tool allows users to filter and search expungement and reexamination proceedings, administrative orders and sanctions, and precedential director decisions. Under the Expungement and Reexamination Proceedings tab, users can find all petitions filed by third parties requesting expungement or reexamination, as well as director-initiated proceedings and reexaminations. The Administrative Orders and Sanctions tab includes administrative and sanctions orders issued under the authority of the PTO Director against parties found to violate PTO trademark rules of practice or terms of use for PTO websites and filing systems.  Decisions on petitions to the PTO Director will be added to the search tool later in 2023.

The Trademark Decisions and Proceedings Search Tool can be found here.



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You Can’t Skirt around Obviousness by Arguing Expectation of Success Must Be Absolute

by | Feb 16, 2023 |

Affirming an obviousness decision by the Patent Trial & Appeal Board (Board), the US Court of Appeals for the Federal Circuit explained that the expectation of success need only be reasonable and not absolute. Transtex Inc. v. Vidal, Case No. 20-1140 (Fed. Cir. Feb. 3, 2023) (Prost, Reyna JJ.) (Schall, J. dissenting).

Transtex makes aerodynamic trailer skirts, which improve fuel efficiency by reducing air drag. Transtex sued WABCO in the US District Court for the Eastern District of Michigan, alleging that WABCO’s trailer skirts infringed several Transtex patents. WABCO responded by filing two inter partes review (IPR) petitions, one of which was against a patent with claims directed to “resilient” trailer skirts and the “resilient” struts used to attach them to a trailer.

WABCO argued that the challenged claims of the patent were obvious over a combination of the Layfield and Rinard references. WABCO submitted expert declarations stating that a person of ordinary skill in the art would have recognized that Layfield’s rigid struts could benefit from being constructed of resilient, more flexible material. Accordingly, a skilled artisan would have been motivated to look to other, similar types of trailer components that are also flexible—like that disclosed in Rinard—to improve upon Layfield’s rigid struts. WABCO successfully relied on much of the same expert testimony to argue that a skilled artisan would also have enjoyed a reasonable expectation of success in combining the more rigid struts of Layfield with the compressible materials taught in Rinard because Rinard taught the utility of having compressible “air scoops” at the tail end of a trailer, which would compress downwards when the trailer contacted a loading dock.

The Board agreed with WABCO and found the challenged claims obvious. According to the Board, Layfield taught all of the claim limitations except for a “resilient strut” that could flex both toward the center of the trailer and away from the center of the trailer and then regain its shape while Rinard taught the benefits of using compressible air scoops made out of a resilient material as part of a trailer skirt system. The Board also concluded that a skilled artisan would have been motivated to combine Layfield with Rinard and would have had a reasonable expectation of success, given the predictable nature of the field. Transtex appealed.

The Federal Circuit affirmed, finding that substantial evidence in the form of expert testimony supported the Board’s finding that although Layfield taught a more rigid strut instead of a resilient strut as claimed, a skilled artisan would have been motivated to combine Layfield’s strut with the resilient materials disclosed in Rinard and would have enjoyed a reasonable expectation of success when doing so. The Court concluded that this was a case where the evidence of motivation to combine, which “everyone agrees meets the substantial evidence threshold,” significantly overlapped with the evidence relating to a reasonable expectation of success, so it was correct to conclude that a skilled artisan would have reasonably expected the resiliency benefit that motivated them to combine [...]

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Bursting the Bubble on Prosecution Delays

by | Jan 26, 2023 |

Addressing a case where a patent owner filed hundreds of applications as part of a strategy to maintain extraordinarily lengthy patent coverage, the US Court of Appeals for the Federal Circuit affirmed a district court’s determination that the patent owner had engaged in a calculated and unreasonable scheme to delay patent issuance. Personalized Media Comms., LLC v. Apple Inc., Case No. 21-2275 (Fed. Cir. Jan. 7, 2023) (Reyna, Chen, JJ.) (Stark, J., dissenting).

The Uruguay Round Agreements Act and General Agreement on Tariff and Trade (GATT) amended the US patent term to 20 years from the effective filing date, instead of 17 years from the issue date. GATT took effect on June 8, 1995. In the months leading up to GATT’s enactment, some would-be patentees seeded patent applications with tremendous disclosures to anchor future applications and obtain the longer pre-GATT term. Practitioners referred to this time period as the GATT bubble. Personalized Media Communications (PMC) submitted 328 GATT bubble applications, from which PMC sought somewhere between 6,000 and 20,000 patent claims. The term of these patents would be 17 years from their issue date instead of 20 years from their priority date.

PMC asserted that Apple’s FairPlay digital rights management software infringed a patent covering a decryption method and won a jury verdict of $330 million. After the verdict, the district court held a bench trial and ultimately found that the patent was unenforceable because of prosecution laches, a doctrine that bars the assertion of patents where the patentee caused unreasonable delay in obtaining the patent, to the detriment of the accused infringer. PMC appealed.

The Federal Circuit affirmed. First, it examined whether the district court had properly concluded that PMC unreasonably delayed. Based on a wide swath of record evidence, all three panel members—Judges Reyna, Chen and Stark—agreed that, like the patentee in Hyatt v. Hirschfeld, PMC had engaged in an intentional scheme to delay patent issuance and extend its monopoly. PMC tried to distinguish its case from Hyatt by arguing that it had developed, with the US Patent & Trademark Office, a consolidation procedure to prioritize review of certain applications. The Court concluded that the structure of the agreement still unreasonably drew out resolution of PMC’s applications, however. The Court also approved of the district court’s reasoning based on the number of applications filed and the introduction of new (albeit narrowing) elements to the claims 16 years after the priority date.

Turning to prejudice, the Federal Circuit concluded that the district court did not act improperly in determining that the delay and improper conduct continued to harm Apple up through the filing of suit in 2015. The Court found that the patent had issued based on a pending claim that PMC did not disclose during PMC-Apple license negotiations and which PMC could quickly get granted and assert against Apple.

Judge Stark dissented, stating that he would conclude that the prejudice Apple faced did not happen during the period in which PMC unreasonably delayed issuance. Judge [...]

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