IP UPDATE
Exploring the latest in intellectual property law
IP UPDATE
Exploring the latest in intellectual property law
Results for "Patent"
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Disgorgement of Profits Appropriate Remedy for Breach of Contract, Trademark Infringement

by | Aug 24, 2023 |

In a trademark infringement and breach of contract case involving real estate companies with a shared name, the US Court of Appeals for the Fourth Circuit affirmed summary judgment in favor of the trademark owner, including almost $43 million in profit disgorgement. Dewberry Engineers v. Dewberry Group, Case Nos. 22-1622; -1845 (4th Cir. Aug. 9, 2023) (Gregory, Thacker, JJ.) (Quattlebaum, J., dissenting).

Dewberry Engineers and Dewberry Group (formerly Dewberry Capital) operate in the same states, and both provide commercial real estate services. Dewberry Engineers started in the mid-1950s as a civil engineering and surveying firm in northern Virginia. Over time, its business expanded to include real estate development services such as architecture and site development. Dewberry Group similarly provides real estate development services through its affiliates, including the Dewberry Hotel in Charleston, South Carolina.

In 2006, Dewberry Group sent Dewberry Engineers a cease-and-desist letter, asserting that Dewberry Group had “senior common law rights” to use “Dewberry” in real estate. In response, Dewberry Engineers sued Dewberry Group for infringing its federally registered DEWBERRY trademark. That litigation ended in 2007 when the parties entered a confidential settlement agreement (CSA). Among other things, the CSA stated that Dewberry Group:

  • Would not challenge Dewberry Engineers’ trademark registrations
  • Could use its “Dewberry Capital” name except in enumerated geographical areas where it instead must use “DCC”
  • Would use no logo other than its “column” logo.

In 2017, Dewberry Group rebranded and attempted to register DEWBERRY GROUP and other marks, which the US Patent & Trademark Office (PTO) repeatedly rejected.

In 2020, Dewberry Engineers filed suit claiming breach of contract and trademark infringement under the Lanham Act and Virginia common law. The district court granted summary judgment to Dewberry Engineers on the contract claim, finding that Dewberry Group had violated the unambiguous CSA by changing its logo, among other offenses. The district court also granted summary judgment to Dewberry Engineers on its trademark infringement claim, finding that Dewberry Engineers’ mark was not only valid, it was incontestable since it had been in continuous use for more than five years. The district court also found that the likelihood-of-confusion factors favored infringement. The district court entered a permanent injunction against Dewberry Group’s use of “Dewberry” and granted Dewberry Engineers its attorneys’ fees and profit disgorgement. Because the court believed the tax information Dewberry Group provided did not show the true “economic reality” of the close relationship between Dewberry Group and its affiliates, the disgorgement calculation also included some of Dewberry Group’s affiliated companies’ profits. Dewberry Group appealed, challenging the summary judgment grant, the permanent injunction and the monetary awards.

The Fourth Circuit began by noting that there was “uncontroverted evidence” that Dewberry Group used the DEWBERRY trademark, used a logo other than its column logo and failed to use “DCC” in restricted areas, all in breach of the undisputedly valid CSA. The Court therefore affirmed the district court’s finding that Dewberry Group breached the CSA.

The Fourth Circuit next addressed the trademark infringement claim. The Court rejected [...]

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Tune to the Right Channel: Disclosure Lacking Fraud Information Isn’t an FCA Qui Tam Bar

by | Aug 17, 2023 |

The US Court of Appeals for the Ninth Circuit reversed a district court’s decision to dismiss a qui tam action brought under the False Claims Act (FCA) after analyzing the public disclosure bar channels. The case required the Ninth Circuit to examine Congress’s 2010 amendments to the FCA public disclosure bar to determine whether the claims were substantially the same as information publicly disclosed in any one of three enumerated channels. Silbersher v. Valeant Pharm. Int’l, Inc., No. 20-16176 (9th Cir. Aug. 3, 2023) (Schroeder, Sanchez, Antoon, JJ.)

The FCA imposes civil liability on anyone who knowingly presents a fraudulent claim for payment to the federal government. The FCA includes a qui tam provision that allows private citizens (or “relators”) to bring fraud claims on behalf of the government. In 2010, Congress’s public disclosure bar precluded qui tam actions if substantially the same allegations or transactions were publicly disclosed in one of three channels:

  1. In a federal criminal, civil or administrative hearing in which the government or its agent is a party
  2. In a congressional, Government Accountability Office (GAO) or other Federal Report hearing, audit or investigation
  3. From the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information.

Valeant owns the “Otterbeck patents” for its drug Apriso’s delayed-release formula. Valeant initiated an infringement action against Lupin, a generic drug manufacturer that attested in an abbreviated new drug application (ANDA) that the Otterbeck patents were invalid because of prior art that described a similar delayed-release formula. Thereafter, Valeant extended its monopoly by applying for and being granted a new patent that claimed a recent discovery that Apriso was effective when taken without food. GeneriCo then challenged the new patent in an inter partes review (IPR) proceeding, arguing that it was obvious that Apriso would be effective without food. GeneriCo presented two medical studies as support. The Patent Trial & Appeal Board agreed and invalidated the claims in the new patent.

Zachary Silbersher, GeneriCo’s IPR lawyer and a relator in another FCA suit in the same court, discovered that Valeant failed to disclose certain information to the US Patent &Trademark Office (PTO) during the IPR proceeding. Specifically, he discovered that three years before applying for the new patent, Valeant applied for another patent where it claimed it made an unexpected finding that taking Apriso’s active ingredient with food made the drug more effective. This claim was the opposite of the claim made in the new application that had been invalidated in the IPR proceeding.

Silbersher brought an FCA case seeking damages from Valeant, alleging that Valeant fraudulently obtained the Otterbeck and new patent to prolong its monopoly and charge an artificially high price for Apriso. The district court dismissed Silbersher’s qui tam action as precluded by the public disclosure bar because the IPR qualified as an “other Federal hearing” under channel two of the bar, as described above. Silbersher appealed.

The Ninth Circuit analyzed whether [...]

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Noncompulsory Counterclaims Don’t Confer Appellate Jurisdiction

by | Aug 17, 2023 | , ,

The US Court of Appeals for the Federal Circuit determined that it does not have appellate jurisdiction to review noncompulsory patent counterclaims in a case otherwise unrelated to the originally asserted patents. Teradata Corp. v. SAP SE, Case No. 22-1286 (Fed. Cir. Aug. 1, 2023) (nonprecedential) (Lourie, Taranto, Hughes, JJ.)

Teradata makes and sells data warehouse systems and services. SAP develops and sells software. The two companies began collaborating while SAP was simultaneously developing its own database (HANA) and component software. SAP eventually informed Teradata that it would stop selling certain Teradata products. Teradata sued SAP, alleging misappropriation of trade secrets on the theory that SAP used Teradata’s proprietary information to create HANA. Teradata also alleged various antitrust violations, arguing that SAP “illegally tied” HANA and HANA’s supporting software. In response, SAP filed counterclaims against Teradata for allegedly infringing SAP patents related to database organization and optimization. On Teradata’s motion, the district court agreed to sever one of the four patent infringement claims but allowed the others to proceed. The district court reasoned that Teradata’s claims and SAP’s counterclaims all arose from “the same transaction or occurrence,” namely SAP’s development of HANA.

The district court granted summary judgment to SAP on Teradata’s antitrust and technical trade secret claims and stayed proceedings on Teradata’s business trade secret claim and to Teradata on SAP’s patent counterclaims. Teradata appealed to the Federal Circuit.

SAP moved to transfer the appeal to the Ninth Circuit. The Federal Circuit denied the motion but instructed the parties to address the jurisdictional issue in the merits brief. 28 U.S.C. § 1295(a)(1) grants the Federal Circuit exclusive appellate jurisdiction over final decisions in which a party claims or asserts a compulsory counterclaim related to patents. As it relates to this case, the issue was whether SAP’s patent infringement counterclaims were “compulsory,” meaning SAP would be unable to later sue on these patent infringement allegations “if it did not press them in this action.”

The Federal Circuit began by looking at Federal Rules of Civil Procedure 13(a), which states that a counterclaim is “compulsory” if it arises from the same transaction or occurrence as a plaintiff’s claim. The Court explained that it uses three tests to determine whether the transaction or occurrence is sufficiently related between the claim and counterclaim:

  1. Whether the legal and factual issues are substantially the same
  2. Whether the evidence will be substantially the same
  3. Whether there is “a logical relationship between the claim and the counterclaim.”

Taken together, these tests essentially ask if there is substantial overlap between what the plaintiff and the defendant must establish to succeed on the claim and counterclaim, respectively.

The Federal Circuit found that the first two tests clearly weighed against SAP’s counterclaim being compulsory. While an understanding of the accused products and alleged trade secrets would be necessary for both the claim and the counterclaim, “same-field overlap” is not enough to make the issues or necessary evidence “substantially the same.”

As to the third test, the Federal Circuit found [...]

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Should This Be an Alice Two-Step or a Section 112 Enablement Waltz?

by | Aug 10, 2023 |

The US Court of Appeals for the Federal Circuit affirmed the dismissal of a lawsuit for lack of subject matter eligibility under 35 U.S.C. § 101 based on an Alice two-step analysis, with Judge Newman filing a sharp dissent focused on “the current law of § 101.” Realtime Data LLC v. Array Networks Inc., Case No. 2021-2251 (Fed. Cir. Aug. 2, 2023) (non-precedential) (Reyna, Taranto, JJ.) (Newman, J., dissenting).

From November 2017 through December 2018, Realtime brought suits against multiple defendant corporations asserting infringement of multiple Realtime patents related to methods and systems for digital data compression. In 2019, some defendants moved to dismiss for failure to state a claim, arguing that the asserted patent claims were patent ineligible under § 101. In an oral ruling from the bench, the district court granted the motion to dismiss. On appeal, the Federal Circuit found that the district court had provided too cursory a ruling to allow for meaningful appellate review, and therefore vacated and remanded for the district court to provide a more detailed § 101 analysis.

On remand in 2021, the district court issued a written opinion working through the two-step analysis laid down by the Supreme Court in Alice. Step 1 evaluates whether the asserted claims are directed to a patent-ineligible concept, such as an abstract idea, and 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, which must amount to more than “well-understood, routine, or conventional activities.” The district court found the patents invalid under § 101 and granted the motions to dismiss Realtime’s complaints but gave Realtime the opportunity to file amended complaints. After Realtime did so, the defendants renewed their motions to dismiss. The district court again dismissed Realtime’s complaints based on § 101. In ruling so, the district court first found that there were no material differences between Realtime’s prior and amended complaints with respect to the § 101 analysis. Next, the court incorporated by reference its prior ruling’s legal analysis, reaffirmed its finding that the claims were invalid under § 101 and granted dismissal, this time without granting Realtime leave to file amended complaints. Realtime appealed.

This time the Federal Circuit affirmed the district court’s dismissal. In affirming, the Federal Circuit worked through the Alice two-step inquiry and agreed with the district court on each step. At Step 1, the Court agreed that “none of the claims at issue specifies any particular technique to carry out the compression of data” but instead were all “data manipulation claims that are recited at a high level of result-oriented generality and that lack sufficient recitation of how the purported inventions accomplish the results” (quoting Koninklijke). At Step 2, the Court agreed that the asserted patents “simply apply an abstract idea on generic computers with generic techniques,” thus failing to cross over into eligible subject matter. Accordingly, the Court held that the claims were directed to patent-ineligible subject matter and affirmed dismissal under § 101.

Judge [...]

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Don’t Ruin Today’s CNS with Yesterday’s Problems

by | Aug 10, 2023 |

The US Court of Appeals for the Fifth Circuit reversed a district court’s trademark invalidity finding based on lack of subject matter jurisdiction because a covenant not to sue (CNS) issued by the trademark owner precluded any reasonably expected future injury that the alleged infringer might incur. Nursery Decals & More, Inc. v. Neat Print, Inc., Case No. 22-10065 (5th Cir. Aug. 1, 2023) (Haynes, Engelhardt, JJ.; deGravelles, Dist. J., sitting by designation) (per curiam).

Neat Print and Nursery Decals sold novelty t-shirts on online marketplaces. In 2018, Neat Print notified one of the online marketplaces that Nursery Decals’ products allegedly infringed Neat Print’s trademarks. In response, the online marketplace sent Nursery Decals a final warning threatening a site ban for any future violations. Nursery Decals complied with the warning and also preemptively pulled its products from other online marketplaces.

Nursery Decals sued Neat Print in the Northern District of Texas. Most of Nursery Decals’ claims were directed to invalidating Neat Print’s trademarks or obtaining a noninfringement judgment. Nursery Decal also included three claims seeking damages. One was a federal claim for fraud on the US Patent & Trademark Office (PTO). The other two claims were Texas law claims based on tortious interference with an existing business relationship and a prospective business relationship. The district court ultimately granted summary judgment on all of the trademark-related claims, ordering the PTO to cancel all of the disputed trademarks.

Prior to the district court’s summary judgment grant, Neat Print tried to avoid summary judgment by filing a CNS along with a motion to dismiss for lack of subject matter jurisdiction. The district court denied the motion to dismiss, concluding that the CNS did not moot the case. The district court explained that Neat Print’s CNS did not address Nursery Decals’ past and potential future injuries (i.e., Nursery Decals’ damages claims). The district court also found that Neat Print’s CNS did not meet the high standard set forth in the Supreme Court’s 2013 decision in Already, reasoning that Neat Print’s CNS left the door open for future take-down notices based on the disputed trademarks.

Neat Print amended its CNS to address take-down notices. It then filed a motion to reconsider its motion to dismiss in light of the modified CNS. The district court orally denied the motion at the pretrial conference and ordered that the case proceed to trial. The jury ultimately found no liability on both claims. After the trial, the district court issued a written opinion explaining that it rejected Neat Print’s motion for reconsideration because Nursery Decals had a legally cognizable injury that supported subject matter jurisdiction. While Neat Print had defeated all of Nursery Decals’ damages claims, Neat Print appealed the district court’s judgment with respect to the trademark claims, arguing that the district court failed to properly evaluate subject matter jurisdiction on a claim-by-claim basis in view of Neat Print’s CNS.

The Fifth Circuit agreed with Neat Print, finding that the district court committed two errors. First, the district [...]

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Holy Pulmonary Hypertension, Batman: Method of Treatment Not Constrained by Safety and Efficacy

by | Aug 3, 2023 |

The US Court of Appeals for the Federal Circuit affirmed a district court’s holding that the asserted method of treatment patent was valid and infringed because safety and efficacy are not patent concerns. The Federal Circuit also affirmed the district court’s holding that certain claims of the product-by-process patent were invalid because the claimed product was in the prior art, regardless of the process by which it was made. United Therapeutics Corporation v. Liquidia Technologies, Inc., Case Nos. 22-2217; 23-1021 (Fed. Cir. July 24, 2023) (Lourie, Dyk, Stoll, JJ.)

United Therapeutics is the maker of Tyvaso®, a treprostinil formulation approved for treating pulmonary hypertension. United Therapeutics asserted two patents covering Tyvaso® against Liquidia’s § 505(b)(2) new drug application (NDA) on Yutrepia™. One patent was a method of treatment patent claiming to treat pulmonary hypertension by administering a “therapeutically effective” dose of a treprostinil formulation, and the other was a product-by-process patent claiming a treprostinil composition with lowered levels of impurities made by a specific salt formation process.

The district court found that United Therapeutics showed that a single administration of treprostinil improves a patient’s hemodynamics, establishing that administration of Liquidia’s Yutrepia, comprising treprostinil, would directly infringe the method of treatment claims. The district court also concluded that even though Yutrepia’s label did not provide hemodynamic data, the label’s instructions would inevitably lead to the administration of a therapeutically effective single event dose. The court thus concluded that Liquidia would induce infringement of the method of treatment claims.

The district court further found that the asserted claims were not invalid for lack of enablement or written description. The court reasoned that a skilled artisan would not need to engage in undue experimentation to practice the full scope of the claimed treatment of pulmonary hypertension, despite potential safety concerns in treating certain patients, since the claims did not require safety and efficacy. The court found that the claims were not invalid for lack of written description, finding that a skilled artisan would, based on the specification, understand that treprostinil would effectively vasodilate the pulmonary vasculature, improve hemodynamics and treat a patient’s elevated pulmonary blood pressure.

Liquidia appealed on five issues: claim construction of the term “treating pulmonary hypertension,” enablement, written description, induced infringement and infringement of the product by process claims. United Therapeutics cross-appealed on anticipation of the product by process claims and non-infringement of those claims.

First, regarding the construction of “treating pulmonary hypertension,” the Federal Circuit affirmed that the term encompassed all recognized groups of pulmonary hypertension but noted that the claim language “treating pulmonary hypertension” did not import any additional efficacy limitations or safety limitations, even those in a group that would not benefit from the treatment. The Court declined to read any safety or efficacy requirements into the claims, explaining that absent incorporation into the claims, the safety and efficacy of a claimed treatment are the purview of the US Food & Drug Administration (FDA), not patent law.

Regarding enablement and written description, Liquidia argued that the method [...]

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RIP for POP: PTO Updates Interim Director Review Procedures

by | Aug 3, 2023 |

On July 24, 2023, the US Patent & Trademark Office (PTO) announced that a revised interim Director Review (DR) process and Appeals Review Panel (ARP) process will replace the Precedential Opinion Panel Process. Updates to the interim DR process include the following:

  • Expanding the process to permit parties to request DR of Patent Trial & Appeal Board decisions on institution in America Invents Act (AIA) proceedings
  • Providing updated guidance as to what types of issues the Director will consider in DR, as well as additional guidance on several topics, such as the initiation of DR at the sole discretion of the Director (sua sponte DR), remands to Board for further proceedings and the Director’s sanction authority
  • Providing the Director with the option to delegate review to a new independent panel called the Delegated Rehearing Panel (DRP)
  • Creating a new ARP, which may be convened by the Director sua sponte to review Board ex parte, reexamination or reissue appeal decisions.

Under the interim DR process, a party to a Board decision may now request DR of a Board decision, whether to institute trial, a final written decision or a decision granting a request for rehearing.

After a DR request is received and processed, the request will then be routed to an Advisory Committee that the Director has established to assist with the process. The Advisory Committee comprises 11 members and includes representatives from various PTO business units who serve at the discretion of the Director. A quorum of seven members is needed for the committee to meet. The Advisory Committee may include members from the following business units:

  • Office of the Under Secretary (not including the Director or Deputy Director)
  • The Board (not including members of the panel for each case under review)
  • Office of the Commissioner for Patents (not including the Commissioner for Patents or any persons involved in the examination of the challenged patent)
  • Office of the General Counsel
  • Office of Policy and International Affairs.

The Director will review each request for DR; the underlying decision, including the associated arguments and evidence; and the recommendation of the Advisory Committee. The Director will then determine whether to grant or deny review or delegate a decision to a Delegated Rehearing Panel (DRP). The DRP will be selected from among the Chief Judge, Deputy Chief Judge, Vice Chief Judges and Senior Lead Judges of the Board, excluding judges who served on the original panel for the case under review or otherwise have a conflict with the case. An appellant can request a rehearing of a DRP decision or appeal the decision to the US Court of Appeals for the Federal Circuit.

An ARP that consists of the Director, the Commissioner for Patents and the Chief Judge of the Board has now been created. The panel may be convened by the Director sua sponte to review ex parte, reexamination or reissue appeal decisions. Requests for ARP review will not be considered. ARP decisions are appealable to the Federal Circuit. An appellant may not [...]

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No Need for Unnecessary RPI Determinations

by | Jul 27, 2023 |

The US Patent & Trademark Office Director partially vacated the Patent Trial & Appeal Board’s real-party-in-interest (RPI) determination because that determination was not necessary to resolve the underlying proceeding. Unified Patents, LLC v. MemoryWeb, LLC, IPR2021-01413, Paper 76 (PTAB May 22, 2023) (Vidal, Dir.)

Unified Patents filed a petition requesting inter partes review (IPR) of a patent owned by MemoryWeb. In its petition, Unified certified that it was the only RPI. Prior to institution, both parties briefed whether Unified should have identified two third parties as RPIs under 35 U.S.C. § 312(a)(2). In its institution decision, the Board declined to determine whether the third parties were RPIs because there was no allegation in the proceeding of a time bar or estoppel based on there being an unnamed RPI, and therefore the proceedings would not have created a time bar or estoppel under 35 U.S.C. § 315 even if the third parties were included as RPIs.

After institution, MemoryWeb continued to argue that the Board should terminate the proceeding because of Unified’s alleged failure to name the third parties as RPIs while also arguing that in the alternative, the Board should find the two third parties estopped from challenging the validity of the claims at issue in two different IPRs covering the same patent. The Board then issued an order identifying the third parties as RPIs, explaining that it was now appropriate to determine whether the two third parties were RPIs “[b]ecause the issue of Section 315(e) estoppel has been put before us [as relevant to the subsequent IPR challenges filed by the third parties], and we now have a complete factual record available to fully address the RPI question, and to avoid unnecessary prejudice to Patent Owner.” The Board also explained that it was now necessary to determine whether the third parties were RPIs in the case at hand to determine whether they would be estopped in a subsequent proceeding.

Unified filed a request for Director review of the Board’s RPI determination. Unified argued that the panel erred by issuing a non-binding advisory opinion on RPI that prejudiced the third parties by prejudging the RPI issue without their participation and where the decision could bind them in their later-filed proceedings. Unified also cited the Board’s precedential decision in SharkNinja v. iRobot, arguing that the Board should not resolve an RPI issue when it would not create a time bar or estoppel under 35 U.S.C. § 315 in the proceeding.

The Director concluded that the Board can and should determine the RPIs or real parties in privity in a proceeding where that determination may impact the underlying proceeding, including (but not limited to) a time bar under 35 U.S.C. § 315(b) or estoppel under 35 U.S.C. § 315(e) that might apply. However, the Director determined that such was not the situation here since determining the RPI issue was not necessary to resolve the proceeding. The Director, therefore, vacated the Board’s RPI determinations.



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No Snipe Hunting: AIA Adherence Means No Interference (Proceedings)

by | Jul 27, 2023 | ,

The US Court of Appeals for the Federal Circuit concluded that patents and applications that have only ever contained claims with an effective filing date after March 16, 2013—i.e., pure America Invents Act (AIA) patents—may not be subjected to an interference proceeding by the US Patent & Trademark Office (PTO) Director. SNIPR Techs. Ltd. v. Rockefeller Univ., Case No. 2022-1260 (Fed. Cir. July 14, 2023) (Chen, Wallach, Hughes, JJ.)

SNIPR Technologies owns a family of five patents directed to methods of selectively killing bacteria using clustered regulatory interspaced short palindromic repeats (CRISPR) gene editing. SNIPR was involved in an interference proceeding with Rockefeller University, which filed a patent application for technology also directed to selectively killing bacteria. The SNIPR patents claimed priority to a Patent Cooperation Treaty application filed on May 3, 2016, thus placing the SNIPR patents squarely within the scope of the AIA. The Rockefeller application claimed priority to, among other things, a US provisional application filed on February 7, 2013, making the Rockefeller application a pure pre-AIA application. The Patent Trial & Appeal Board initially declared an interference between claims 20 to 33 of the Rockefeller application and all claims of the SNIPR patents. The Board ultimately identified Rockefeller as the senior party and canceled all of SNIPR’s claims. SNIPR appealed.

The issue before the Federal Circuit was whether the Board had the authority to cancel SNIPR’s pure AIA claims for lack of invention priority under pre-AIA § 102(g), and more broadly, whether pure AIA patents may, as a matter of law, be part of an interference proceeding.

First, the Federal Circuit examined the plain language of AIA § 3(n) and the statutory purpose and history of the AIA. The Court reasoned that “AIA § 3(n) makes clear that [unless Congress provides otherwise,] only pure pre-AIA and mixed patents may be part of an interference.” As the Court stated, AIA § 3(n)(1) does not permit the AIA’s amendments to apply retroactively and the AIA repealed the statutory grant of power to hear interferences (pre-AIA § 135), instead providing for derivation proceedings.

Next, the Federal Circuit addressed Rockefeller’s and the Director’s arguments that the statutory language of pre-AIA § 135(a) authorizes the Director to declare an interference for “any unexpired patent”—including unexpired pure AIA patents. Unpersuaded, the Court concluded that pre-AIA § 135(a), read in conjunction with the AIA, excludes pure AIA patents for the following reasons:

  • The AIA replaced interference proceedings with derivation proceedings.
  • The AIA deleted all other references to interferences.
  • The AIA repealed the first-to-invent system of patentability, rendering interference proceedings superfluous.
  • Permitting interferences for pure AIA patents would subject AIA patents to interferences “for over twenty years after the AIA’s effective date,” which would be contrary to the purpose of the AIA—to implement the first-to-file system of patentability.

Moreover, such a statutory construction would belie AIA § 3(n)(2), which expressly allows for interferences for mixed patents (i.e., patents and applications that contain, or contained at any time, at least one claim with [...]

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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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