IP UPDATE
Exploring the latest in intellectual property law
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Exploring the latest in intellectual property law
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Federal Circuit Extends Arthrex to Ex Parte Re-Examination Proceedings

by | Jul 15, 2020 |

The US Court of Appeals for the Federal Circuit vacated and remanded a decision issued by the Patent Trial and Appeal Board (PTAB), holding that its decisions in Arthrex and VirnetX also apply to ex parte examinations at the PTAB. In re: Boloro Global Ltd., Case Nos. 19-2349, -2351, -2353 (Fed. Cir. July 7, 2020) (Dyk, J.).

The issue regarding ex parte appeals started to take shape in October 2019—in the context of an inter partes review (IPR) proceeding—when the Federal Circuit held that the appointment of administrative patent judges (APJs) at the PTAB is unconstitutional. Arthrex v. Smith & Nephew (IP Update, Vol. 22, No. 11). APJs are appointed by the secretary of commerce in consultation with the director of the US Patent and Trademark Office (PTO) pursuant to 35 USC § 6(a). In Arthrex, The Federal Circuit determined that APJs are principal officers and are not constitutionally appointed, because as principal officers they must be appointed by the president with the advice and consent of the Senate.

Having concluded that the appointment of APJs violated the Appointments Clause, the Federal Circuit held that “where the final decision was rendered by a panel of APJs who were not constitutionally appointed,” and “where the parties presented an Appointments Clause challenge on appeal,” the decision below “must be vacated and remanded.” The Court further instructed that, on remand, a new panel of APJs must be designated and a new hearing granted. The Court put a bookend on its holding, ruling that where an Appointment Clause challenge was not raised in an opening brief, the challenge was waived. So PTAB decisions that issued before Arthrex, if timely appealed and subject to an Appointment Clause challenge in the opening brief, could be vacated as unconstitutional and remanded for a new panel of APJs.

In May 2020, the Federal Circuit extended its decision in Arthrex to final decisions issued by APJs in inter partes re-examination proceedings (VirnetX v. Cisco Systems). In VirnetX, the Court discerned no differences between the duties of an APJ in an IPR proceeding as compared to an inter partes examination proceeding, because both proceedings involve third-party challenges to an issued patent and in both proceedings APJs exercise significant authority by issuing final decisions that decide the patentability of the challenged claims, and the PTO director does not have an independent way of reviewing those final determinations.

The present case arose in the context of an appeal from an examiner in ex parte prosecution. Boloro argued that APJs in ex parte appeals also exercise significant authority by virtue of the matters on which they are asked to render judgment, and carry out similar functions when they carry out their function of deciding IPRs. Boloro asserted that although ex parte appeals were not specifically addressed in Arthrex, the PTAB also has the power in ex parte appeals to disqualify counsel, to admit people pro hac vice, and to order appellants to additionally brief any matter that the PTAB considers to [...]

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Supreme Court: “Booking.com” Can Be Registered as Trademark

by | Jul 15, 2020 |

By an 8-1 vote, the Supreme Court rejected a per se rule by the US Patent and Trademark Office (PTO) that a generic word followed by “.com” is necessarily generic and therefore ineligible for trademark protection. U.S. Patent and Trademark Office et al. v. Booking.com BV, Case No. 19-46 (Supr. Ct. June 30, 2020) (Ginsberg, Justice) (Sotomayor, Justice, concurring) (Breyer, Justice, dissenting). In so doing, the Supreme Court found that the proper test for whether “booking.com” is eligible for trademark protection for travel booking services is whether the public perceives “booking.com” as identifying a single source.

Trademarks identify and distinguish the goods and services of a single party, and the Lanham Act establishes a system of trademark registration. Among other requirements for registration, a trademark must be distinctive, as judged along a spectrum of trademark distinctiveness. Distinctive trademarks, in order of most to least strength, include fanciful or made-up words (e.g., KODAK); arbitrary marks that are existing words that have no connection to the underlying goods or services (e.g., CAMEL cigarettes); and then suggestive marks, which require some mental thought to connect them to an attribute of the products or services (e.g., TIDE laundry detergent). Descriptive words are not inherently distinctive (e.g., BEST BUY), but can still be protectable and registerable upon proof of acquired distinctiveness (i.e., secondary meaning) arising from extensive use and advertising by the trademark owner. At the low end of the spectrum of distinctiveness are generic terms, which merely refer to a category or class of goods or services (e.g., wine or art) and are therefore never protectable or registerable as trademarks.

The PTO refused registration for “Booking.com,” citing policy developed from a 132-year-old Supreme Court case which held that the addition of “Company” to a generic word does not render the resulting name (i.e., Generic Company) distinctive.  See Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U. S. 598 (1888). After the Trademark Trial and Appeal Board (TTAB) affirmed the refusal of registration, Booking.com appealed to the US District Court for the Eastern District of Virginia, which reversed the refusal of registration, finding that “‘Booking.com’—unlike ‘booking’—is not generic. The district court found that the consuming public primarily understands that BOOKING.COM does not refer to a genus, rather it is descriptive of services involving ‘booking’ available at that domain name.”  The US Court of Appeals for the Fourth Circuit affirmed the judgment of the Virginia federal court (IP Update, Vol. 22, No. 3), and the PTO sought certiorari from the Supreme Court.

The Supreme Court granted certiorari (IP Update, Vol. 22, No. 11), and Justice Ruth Bader Ginsberg delivered the opinion of the Court, with which six other justices joined. Justice Sotomayor filed a short concurring opinion, and Justice Breyer dissented. The question under review by the Court was “whether the addition by an online business of a generic top-level domain (.com) to an otherwise generic term can create a protectable trademark.

Both parties in Booking.com agreed that “booking” is generic for the kind of travel [...]

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Reliance on Common Sense Permitted in Obviousness Analysis

by | Jul 9, 2020 | ,

The US Court of Appeals for the Federal Circuit affirmed a final written decision from the Patent Trial and Appeal Board (PTAB) finding patent claims directed to aircraft lavatories obvious based on prior art because a skilled artisan would have used common sense to incorporate a missing limitation into the prior art. B/E Aerospace, Inc. v. C&D Zodiac, Inc., Case Nos. 19-1935, -1936 (Fed. Cir. June 26, 2020) (Reyna, J.).

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“Seams” Like Activity Giving Rise to Infringement Risk Supports Appellate Jurisdiction

by | Jul 8, 2020 | ,

Adding to its body of jurisprudence on standing to challenge an adverse final written opinion in inter partes review (IPR) proceedings, the US Court of Appeals for the Federal Circuit found a petitioner had constitutional standing to appeal where it showed it engaged in activity that would give rise to a possible infringement suit. Adidas AG v. Nike, Inc., Case Nos. 19-1787; -1788 (Fed. Cir. June 25, 2020) (Newman, J.).

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German Competition Authority Files Amicus Brief in SEP Litigation

by | Jul 1, 2020 |

In 2019, Nokia filed a series of patent infringement complaints against Daimler before several German courts. Nokia alleged that connected cars made by Daimler infringed Nokia’s patents. Nokia considered the relevant patents as essential for certain wireless communication standards. Nokia v. Daimler, Case No. 2 O 34/19 (Mannheim District Court). On 18 June 2020, the litigation took a surprising turn: The German competition authority, the Federal Cartel Office (FCO), filed an amicus curiae brief with the relevant patent infringement courts (FCO docket no. P-66/20). (more…)



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Announcement: USPTO COVID-19 Prioritized Examination Program

by | Jun 23, 2020 |

The United States Patent and Trademark Office (USPTO) has announced a new prioritized examination program to expedite the examination of applications for marks used to identify qualifying COVID-19 medical products and services. Applications that qualify for the program will immediately be assigned to an examining attorney for review, which expedites examination by approximately two months. The USPTO will not charge additional fees for applications that qualify for the program because it considers the COVID-19 outbreak to be an “extraordinary situation” for trademark applicants.

To qualify for prioritized examination, the trademark or service mark application must cover a product that is subject to the United States Food and Drug Administration (FDA) approval for use in the prevention and/or treatment of COVID-19, or a medical service (including medical research) for the prevention and/or treatment of COVID-19.

The USPTO started accepting petitions to advance the initial examination of applications for qualifying COVID-19-related marks beginning June 16, 2020.

Read the full announcement here.



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Munchkin Is Luv-n This Win

by | Jun 17, 2020 | ,

Reversing an award of attorney’s fees, the US Court of Appeals for the Federal Circuit found that a district court abused its discretion in making an exceptional-case determination where patent and trademark infringement claims were reasonable. Munchkin, Inc. v. Luv N-Care, LTD., Admar International, Inc., Case No. 19-1454 (Fed. Cir. June 8, 2020) (Chen, J.).

Munchkin sued LNC for trademark infringement, unfair competition, trade dress infringement and patent infringement based on LNC’s no-spill drinking cups. LNC filed a petition for inter partes review (IPR) with the Patent Trial and Appeal Board (PTAB). While the IPR was pending, Munchkin voluntarily dismissed all of its non-patent claims with prejudice. The PTAB subsequently found Munchkin’s patent was unpatentable. After the PTAB’s finding, Munchkin dismissed its patent infringement claim.

LNC filed a motion for attorney’s fees under 35 U.S.C. § 285 and 15 U.S.C. § 1117(a), arguing that the trademark and trade dress infringement claims were substantively weak and that Munchkin should have been aware of the weakness of the patent’s validity. The district court agreed that the case was exceptional and granted LNC’s motion. Munchkin appealed.

The Patent Act and Lanham Act allow courts to award reasonable attorney’s fees to the prevailing party, but only in exceptional cases. The Federal Circuit reviewed the district court’s award for abuse of discretion under the Ninth Circuit standard for attorney’s fees as set forth in Octane Fitness LLC v. ICON Health & Fitness, Inc. (IP Update, Vol. 17, No. 5). The Supreme Court in Octane Fitness held that an exceptional case is “one that stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated.”

The Federal Circuit noted that the district court’s exceptional-case determination rested on issues that were not fully litigated before the court. Addressing the patent infringement claim, the Court first found that the district court’s claim construction ruling favored Munchkin, creating a serious hurdle for LNC’s invalidity challenge. However, to find the case exceptional, the district court dismissed its own Markman construction as merely a non-final interim order. The Court found that was not the right question, and instead, the relevant question was whether Munchkin’s validity position was reasonable—not whether there is a possibility of reconsideration of the claim construction.

LNC argued that Munchkin was unreasonable in maintaining its patent infringement lawsuit once the PTAB instituted the IPR because, based on the statistics, it was more likely than not that the patent would be found invalid. The Federal Circuit disagreed, stating clearly that IPR statistics combined with the merits outcome is not enough. What is required is a “fact-dependent, case-by-case” analysis. The Federal Circuit found nothing unreasonable about Munchkin’s patent infringement claim.

Addressing the trademark claims, the Federal Circuit determined that Munchkin cannot be faulted for litigating a claim it was granted permission to pursue. Since the district court allowed Munchkin to amend its complaint, finding no grounds for prejudice, bad faith [...]

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Fee Shifting Under § 285 Does Not Apply to Conduct Solely Arising in IPR

by | Jun 10, 2020 | ,

Considering for the first time whether fee shifting of § 285 applies to exceptional conduct arising solely from an inter partes review (IPR) proceeding, the US Court of Appeals for the Federal Circuit held that § 285 does not authorize an award of fees based on conduct at the United States Patent and Trademark Office (USPTO) during the course of an IPR proceeding. Amneal Pharma. LLC v. Almirall, LLC, Case No. 2020-1106 (Fed. Cir. June 4, 2020) (Dyk, J.).

Almirall owns certain Orange Book-listed patent rights to medication used to treat acne. Its competitor, Amneal, planned to market a generic version of the acne medication. Before seeking approval to do so, Amneal filed an IPR petition challenging the validity of certain claims of Almirall’s patents. Amneal then filed an Abbreviated New Drug Application (ANDA), identifying Almirall’s patents in the Paragraph IV certification. Almirall subsequently filed a district court action against Amneal for infringement. Shortly after the district court action was filed, the parties entered into settlement negotiations, during which Almirall offered Amneal a covenant-not-to-sue, provided that Almirall drop its pending IPR. The parties were unable to reach agreement at that time, and the IPR culminated in the Patent Trial and Appeal Board (PTAB)’s final written decision, finding the challenged claims not unpatentable. Amneal appealed the PTAB’s final determination. Shortly after the appeal was filed, the parties reached an agreement and jointly moved to dismiss the appeal. Almirall also moved for fees under § 285 for Amneal’s allegedly unreasonable conduct in maintaining its IPR, even after Amneal offered it a covenant-not-to-sue.

Comparing IPRs to interference proceedings, the Federal Circuit looked to a decision of its predecessor, the Court of Customs and Patent Appeals, which determined that § 285 did not extend to appeals of administrative proceedings at the USPTO, and IPRs were no different. Stopping short of proclaiming a categorical rule that § 285 applies only to conduct in district court proceedings, the Court explained that at most, § 285 speaks to awarding fees that were incurred during, in close relation to, or as a direct result of district court proceedings. In the circumstance here, where the alleged exceptional conduct was solely before the USPTO and an appeal of the USPTO decision—not a district court’s decision—an award under § 285 was not appropriate. In addition, the Court noted that the USPTO has its own procedures for sanctioning exceptional conduct under 37 C.F.R. § 42.12, where the PTAB may award “compensatory expenses, including attorney’s fees,” among other sanctions.



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USPTO Proposes New Rules for Post-Grant Proceedings

by | Jun 5, 2020 |

The United States Patent and Trademark Office (USPTO) proposed changes to the rules of practice for instituting review on all challenged claims or none in inter partes review (IPR), post-grant review (PGR) and the transitional program for covered business method patents (CBM) proceedings before the Patent Trial and Appeal Board (PTAB) in accordance with the 2018 Supreme Court decision in SAS Institute Inc. v. Iancu, IP Update, Vol. 21, No. 5 (SAS). Additionally, the USPTO proposed changes to the rules to conform to the current standard practice of providing sur-replies to principal briefs and providing that a Patent Owner response and reply may respond to a decision on institution. The USPTO further proposed a change to eliminate the presumption that a genuine issue of material fact created by the Patent Owner’s testimonial evidence filed with a preliminary response will be viewed in the light most favorable to the petitioner for purposes of deciding whether to institute a review.

In SAS, the Supreme Court held that a decision to institute an IPR under 35 U.S.C. § 314 may not institute on fewer than all claims challenged in a petition. The Court held that the PTAB only has the discretion to institute on all of the claims challenged in the petition or to deny the petition. Previously, the PTAB exercised discretion to institute an IPR, PGR or CBM on all or some of the challenged claims and on all or some of the grounds of unpatentability asserted in a petition.

In light of SAS, the USPTO now proposes to amend the rules pertaining to instituting any post-grant proceeding (IPR, PGR or CBM) to require institution on all challenged claims (and all of the grounds) presented in a petition or on none. In addition, in all pending proceedings, the PTAB would either institute review on all of the challenged claims and grounds of unpatentability presented in the petition or deny the petition.

The second proposed change would amend the rules pertaining to briefing regarding sur-replies to principal briefs and to provide that a reply may respond to a decision on institution. The amended rules would permit (1) replies and Patent Owner responses to address issues discussed in the institution decision and (2) sur-replies to principal briefs (i.e., to a reply to a Patent Owner response or to a reply to an opposition to a motion to amend). However, the sur-reply may not be accompanied by new evidence other than deposition transcripts of the cross-examination of any reply witness. Sur-replies may only respond to arguments made in reply briefs, comment on reply declaration testimony or point to cross-examination testimony. A sur-reply also may address the institution decision if necessary to respond to the petitioner’s reply.

Finally, the USPTO proposes to amend the rules to eliminate the presumption in favor of the petitioner for a genuine issue of material fact created by testimonial evidence submitted with a

Patent Owner’s preliminary response when deciding whether to institute an IPR, PGR or CBM review. As with all other evidentiary questions at the institution phase, the [...]

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