IP UPDATE
Exploring the latest in intellectual property law
IP UPDATE
Exploring the latest in intellectual property law
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PTO Requests Comments on Revisions to AIA Trial Proceedings

by | Apr 27, 2023 | ,

On April 21, 2023, the US Patent & Trademark Office (PTO) announced that it is seeking public input on proposed modifications to the rules of practice for inter partes reviews (IPRs) and post grant reviews (PGRs) before the Patent Trial & Appeal Board to better align the practices with the PTO’s mission to promote and protect innovation and investment in the same and to provide a less expensive alternative to district court litigation to resolve certain patentability issues while also protecting against patentee harassment.

The PTO is considering promulgating rules that the Director—and, by delegation, the Board—will use to do the following:

  • Exercise the Director’s discretion to institute IPRs and PGRs
  • Provide a procedure for separate briefing on discretionary denial that will allow parties to address relevant issues for discretionary denial without encroaching on the page limit to address the merits of a case
  • Give petitioners the ability to pay additional fees for a higher word-count limit
  • Clarify that all settlement agreements, including pre-institution settlement agreements, are required to be filed with the Board.

To create clear, predictable rules where possible, as opposed to balancing tests that decrease certainty, the PTO is considering changes that would provide for discretionary denials of petitions in the following categories, subject to certain conditions and circumstances as discussed further in the Official Notice:

  • Petitions filed by certain for-profit entities
  • Petitions challenging under-resourced patent owner patents where the patentee has brought or is attempting to bring products to market
  • Petitions challenging patent claims previously subject to a final adjudication upholding the patent claims against patentability challenges in district court or in post-grant proceedings before the PTO
  • Serial petitions
  • Petitions raising previously addressed prior art or arguments
  • Parallel petitions
  • Petitions challenging patents subject to ongoing parallel litigation in district court.

The PTO also seeks comments on proposed threshold definitions that apply to one or more of these categories of petitions subject to discretionary denials. Those definitions set forth the criteria used to determine the following:

  • What constitutes a “substantial relationship” between entities sufficient to trigger or avoid discretionary denial
  • When claim sets are deemed to have “substantial overlap” with challenged claims
  • What constitutes “compelling merits” sufficient to trigger an exception to discretionary denial.

For example, one proposal with respect to the “substantial relationship” is a requirement that a patent owner and petitioner disclose anyone with an ownership interest in the patent owner or petitioner, any government funding related to the patent, any third-party litigation funding support, and any stake any party has in the outcome of the America Invents Act (AIA) proceeding or any parallel proceedings on the challenged claims.

Additional changes being considered by the PTO include the following:

  • Absent exceptional circumstances, requiring petitioners to file a stipulation that neither they nor their privy or real parties in interest have filed prior post-grant proceedings (PGRs, IPRs, covered business methods or ex parte reexaminations) on the challenged claims
  • If petitioners’ post-grant proceeding is instituted, requiring that [...]

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First Amendment Punches Out Alleged Lanham Act Violation

by | Nov 29, 2022 |

Addressing the balance between trademark rights under the Lanham Act and the First Amendment right to protected expression, the US Court of Appeals for the Ninth Circuit affirmed a district court judgment finding that the defendant’s use of the term “Punchbowl” was not a Lanham Act violation because it was expressive and not misleading as to its source. Punchbowl, Inc. v. AJ Press, LLC, Case No. 21-55881 (9th Cir. Nov. 14, 2022) (Ownes, Bress, Fitzwater, JJ.)

Punchbowl is an online communications company that provides “online events and celebration invitations and greeting cards” as part of its subscription-based service. Punchbowl has used the mark Punchbowl® since 2006 and the mark was registered with the US Patent & Trademark Office in 2013. Punchbowl describes itself as “The Gold Standard in Online Invitations & Greeting Cards,” and uses the logo of a punch bowl ladle:

Punchbowl filed suit claiming that AJ Press infringed on Punchbowl’s mark through its subscription-based online news publication Punchbowl News. Punchbowl News covers “insider” political topics and reports on events in Washington, DC, and derives its name from the use of the term “punchbowl” by the Secret Service to refer to the US Capitol building. As such, the Punchbowl News logo comprises of an overturned image of the US Capitol filled with purple punch and the slogan “Power. People. Politics.”

AJ Press argued that its use of the term “Punchbowl” was protected under the First Amendment and did not violate the Lanham Act. The district court granted summary judgment to AJ Press, concluding that its use of the name “Punchbowl” did not give rise to liability because it constituted protected expression and was not explicitly misleading as to its source. Punchbowl appealed.

Traditionally, the likelihood of confusion test is used for claims brought under the Lanham Act. When artistic expression is at issue, however, that test fails to account for the full weight of the public’s interest in free expression. If the product involved is an expressive work, courts generally apply a gateway test, grounded in background First Amendment concerns, to determine whether the Lanham Act applies. One approach was set forth in the Second Circuit’s 1989 decision in Rogers v. Grimaldi to determine whether First Amendment concerns were strong enough to outweigh the need to protect a mark. The Rogers test requires the defendant to first “make a threshold legal showing that its allegedly infringing use is part of an expressive work protected by the First Amendment.” Once this threshold is satisfied, the Lanham Act will not apply unless the plaintiff can establish that “the defendant’s use of the mark (1) is not artistically relevant to the work or (2) explicitly misleads consumers as to the source or the content of the work.”

The Ninth [...]

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The Board Is Back in Town: Arthrex Can’t Save Untimely Motions to Terminate

by | Sep 29, 2022 |

The US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board (Board) unpatentability finding and denial of a motion to terminate, finding that the Board had already issued final written decisions that were not vacated at the time the Board denied the parties’ motion to terminate. Polaris Innovations Ltd. v. Derrick Brent, Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of The United States Patent and Trademark Office, Case No. 19-1483 (Fed. Cir. Sept. 15, 2022) (Prost, Chen, Stoll, JJ.)

Polaris owns two unrelated patents directed to computer memory. The first patent relates to improved control component configuration, and the second patent relates to a shared-resource system in which logical controls are used to manage resource requests. In 2016, Polaris filed a complaint accusing NVIDIA of infringing both patents. NVIDIA responded by filing petitions for inter partes review (IPR) against each patent. In 2017, the Board issued its final written decisions, finding the challenged claims of both patents unpatentable. Polaris appealed.

The Federal Circuit vacated the Board’s decision in view of Arthrex, Inc. v. Smith & Nephew, Inc. (Arthrex I). On remand, the Board administratively suspended the IPR proceedings pending potential Supreme Court review of Arthrex I. During the administrative suspension, Polaris and NVIDIA filed a joint motion to terminate the proceedings. While those motions were pending, the Supreme Court vacated Arthrex I, substituting an alternative remedy for violation of the Appointments Clause in United States v. Arthrex, Inc. (Arthrex II). In view of Arthrex II, the Supreme Court vacated the Federal Circuit’s vacatur of the Board’s final written decision, thus reinstating those decisions.

On remand to the Board, Polaris argued that the Board should grant Polaris’s then-pending motion to terminate. The Chief Administrative Law Judge responded that termination was not appropriate because the Supreme Court’s decision meant that the “final written decision in each of these cases is not vacated, and it is not necessary for the Board to issue a new final written decision in either of these cases.” Polaris filed a request for Director rehearing. The Director denied rehearing. Polaris appealed.

Polaris argued that the Board erred by failing to grant the joint motions to terminate filed in both proceedings before the Board on remand. Relying on 35 U.S.C. § 317, the Federal Circuit explained that motions to terminate should be granted “unless the Office has decided the merits of the proceeding before the request for termination is filed.” The Court found that the Board had already decided the merits of the cases in final written decisions that were not vacated at the time the Board made its decision denying Polaris’s motions to terminate. The Court therefore affirmed the Board’s decision that termination was inappropriate.

Polaris also raised two claim construction arguments. Polaris argued that the Board misconstrued the term “memory chip” in the IPR involving one of the challenged patents and misconstrued the term “resource tag buffer” in the IPR involving the [...]

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New WDTX Order Shakes Up Initial Judge Assignments

by | Jul 28, 2022 |

A recent order from Chief Judge Garcia of the US District Court for the Western District of Texas (WDTX) changes how judges are initially assigned to cases filed in its Waco Division. As of July 25, 2022, patent cases filed in the Waco Division shall be randomly assigned to one of 12 judges. The list includes at least one judge from each of the district’s seven divisions. The order states that the new practice is due to “consideration of the volume of new patent cases assigned to the Waco Division, and in an effort to equitably distribute those cases.”

It’s no secret that the Waco Division has been a magnet for patent lawsuits in the last four years. The only judge in Waco—Judge Alan D. Albright—has presided over more than 2,500 patent cases since September 2018. Those 2,500 patent cases account for about 17% of all patent cases filed nationally in district courts in that timeframe. Plaintiffs’ preference to file in Waco is due in part to Judge Albright’s knowledge of patent cases, his interest in patent cases and his promulgation of local patent rules aiming for a predictable and quick path to trial.

Although Waco cases may now initially be assigned to other judges, whether they choose to keep the assignments remains to be seen. The recent order contains a footnote stating that its previous order for assigning judges “remains in full force and effect.” That previous order allows judges to reassign any case “by mutual consent.” (See Item XVIII(a).) Thus, judges may self-select out of these cases. A large criminal docket is one example of why a judge might self-select out of a patent case.

Even if another judge is assigned and decides to keep a Waco patent case, it remains to be seen whether they will adopt Judge Albright’s local patent rules. Judge Albright has put extensive efforts into the local rules, including procedures related to discovery disputes, pre-Markman discovery, Markman hearings, infringement and invalidity contentions, US Patent & Trademark Office inter partes review effects and more. His cases have averaged about eight months to a Markman hearing and about 24 months to trial. Other judges may decide to make use of that framework to save time and effort or to avoid inconsistencies within the division.

Stay tuned for updates as this new assignment practice unfolds and more patent cases are assigned.



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Arthrex, Still Without Director Review, Gets Constitutional Review from Patent Commissioner

by | Jun 2, 2022 |

A panel of the US Court of Appeals for the Federal Circuit considered whether the Patent Commissioner, on assuming the role of the US Patent & Trademark Office (PTO) Director, can constitutionally evaluate the rehearing of Patent Trial & Appeal Board (Board) inter partes review (IPR) decisions. The panel concluded that neither Appointments Clause jurisprudence nor the Federal Vacancies Reform Act (FVRA) impeded the Commissioner from exercising the PTO Director’s authority. Arthrex, Inc. v. Smith & Nephew, Inc. et al., Case No. 18-2140 (Fed. Cir., May 27, 2022) (Moore, C.J.; Reyna, Chen, JJ.)

Approximately one year ago, Arthrex succeeded in the Supreme Court of the United States on its argument that the Appointments Clause of the Constitution was violated unless a presidentially appointed and Senate-confirmed officer (such as the PTO Director) could review the Board’s final IPR decisions. (United States v. Arthrex, Inc.) The case returned to the PTO on remand. At the time, the position of PTO Director was vacant, and there was no acting director. Pursuant to the FVRA, the Commissioner of Patents (a position filled by the Secretary of Commerce) exercised the PTO Director’s authority to review Board decisions and ultimately rejected Arthrex’s challenge to the Board’s unpatentability determination. Arthrex appealed.

Arthrex contended that the Commissioner could not constitutionally exercise the PTO Director’s IPR review authority without running afoul of the Appointments Clause, that the FVRA barred the Commissioner’s exercise of authority and that the Commissioner violated separation of powers. Arthrex also challenged the ruling on the merits. None of these challenges were successful.

First, the Federal Circuit concluded that Arthrex reinforced long-settled Supreme Court precedent that an inferior officer could exercise a principal officer’s authority constitutionally on a temporary basis without violating the Appointments Clause. Here, the Court concluded that the Commissioner’s exercise of the PTO Director’s IPR review authority until a new director was installed presented no problem.

Second, the FVRA provides a statutory framework for the exercise of a principal officer’s duties under certain circumstances, which, if the law applied, would not have allowed the Commissioner to review IPR decisions. However, the Federal Circuit explained that the FVRA narrowly governs only those duties of an officer that are statutorily non-delegable (i.e., which US Congress has required to be exercised personally by the officer). According to the Court, such provisions did not apply here because nothing demonstrated that the PTO Director’s newly created authority to review IPR decisions was non-delegable.

Third, the Federal Circuit rejected Arthrex’s argument that the Commissioner’s service as the PTO Director violated the line of precedent that limits Congress’ ability to circumscribe the president’s removal authority for superior officers. Arthrex contended that the Commissioner, a non-superior officer, could be removed only for “misconduct or nonsatisfactory performance” and therefore could not fill the role of the PTO Director. The panel disagreed, explaining that the president could name an acting director “with the stroke of a pen,” and so the limits on removing the Commissioner from his role as Commissioner [...]

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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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Exercise of Institution Discretion During Parallel AIA and District Court Challenges

by | Apr 15, 2020 |

The Patent and Trial Appeal Board (PTAB) Precedential Opinion Panel (POP) refused to revisit an earlier PTAB panel decision, reiterating that it remains within the discretion of a PTAB panel to deny institution on a patent challenge because of a pending trial in federal district court. Sand Revolution II, LLC v. Continental Intermodal Group – Trucking LLC, Case No. IPR2019-01393, Paper 18 (PTAB Apr. 6, 2020) (Iancu, Dir.; Hirshfeld, Comm’r; Boalick, CAPJ, sitting as POP); Sand Revolution II, LLC v. Continental Intermodal Group – Trucking LLC, Case No. IPR2019-01393, Paper 19 (PTAB Apr. 7, 2020).

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Administrative Patent Judges – You’re Fired (At Will and Without Cause)

by | Apr 2, 2020 |

The en banc US Court of Appeals for the Federal Circuit declined to review its October 2019 panel decision holding the appointment of administrative patent judges (APJs) at the US Patent and Trademark Office (PTO) unconstitutional because APJs are appointed as if they are “inferior officers” but vested with authority that is reserved for Senate-confirmed “principal officers” under the Constitution’s Appointments Clause. Arthrex, Inc. v. Smith & Nephew, Inc., Case No. 18-2140 (Fed. Cir. Mar. 23, 2020) (per curiam) (Moore, J., joined by O’Malley, Reyna and Chen, JJ., concurring) (Dyk, J., joined by Newman, Wallach and Hughes, JJ., dissenting).

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