Undue Process: You Can Ask the PTO to Review a Patent, but if They Blow it, You may be Powerless to Appeal

In JTEKT Corp. v. GKN Automotive Ltd., [2017-1828](August 3, 2018), the Federal Circuit the Federal Circuit dismissed the appeal of a PTAB determination that claims 2 and 3 of U.S. Patent No. were not unpatentable, because Appellee, JTEKT, lacked standing to appeal.

JTEKT filed a petition alleging that claims 1–7 of the ’440 patent were invalid. After the Board instituted as to all challenged claims, GKN disclaimed claims 1, 4, and 5, so the IPR focused on the patentability of claims 2 and 3.

Under the IPR statute, any person or entity may petition the Patent Office to institute an IPR proceeding. 35 U.S.C. § 311(a). There is no requirement that the petitioner have Article III standing, as “[p]arties that initiate [IPRs] need not have a concrete stake in the outcome; indeed, they may lack constitutional standing.” Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2143–44 (2016).  The statute also provides that an unsuccessful petitioner may appeal an adverse final written decision. 35 U.S.C. § 141(c).  However the Federal Circuit has held that the statute does not do away with the Article III standing requirement.  PhigenixConsumer Watchdog, stressed that the “obligation to
establish an injury in fact” for appellants “remains firm.”  In order to demonstrate the requisite injury in an IPR appeal, the appellant/petitioner must show that it is engaged or will likely engage “in an[] activity that would give rise to a possible infringement suit.”

The fact that JTEKT had no product on the market at the present time does not preclude Article III standing, either in IPRs or in declaratory judgment actions.  But where the party relies on potential infringement liability as a basis for injury in fact, but is
not currently engaging in infringing activity, it must establish that it has concrete plans for future activity that creates a substantial risk of future infringement or likely cause the patentee to assert a claim of infringement.  While JTEKT has submitted two declarations in support of its standing, these declarations do not establish that its planned product would create a substantial risk of infringing the claims on appeal.

Because JTEKT has failed to establish an actual injury sufficient to confer Article III standing, we dismiss this appeal.  Assuming the correctness of the Federal Circuit reasoning, this is another demonstration of how ill-conceived the AIA was.  A party can challenge a patent in an IPR or PGR, but no matter how badly the USPTO handles the IPR, that party may not be able to appeal.  Where is the justice in such a scheme?  Should there be estoppel with respect to a decision that cannot be reviewed?  That sounds even more unjust.

Posted in IPR

In Search of the End: Determining the Expiration Date of a Utility Patent

Calculating the expiration date of a U.S. Utility Patent is not particularly difficult, but it can be confusing — so confusing in fact that the U.S. Government occasionally blows it — see U.S. Patent No. 7,604,811, which issued long after it expired.

For patent issuing from applications filed before June 8, 1995, the term is the longer of 17 years from issue, or 20 years form its earliest effective filing date (pursuant to 35 USC 154(a)(2)).  That’s more than 20 years ago — who cares?  Applications filed before June 8, 1995, are still pending.  U.S. Patent No. 10,016,914 on Positive Displacement Molding of Plastic Parts issued on July 10, 2018, and five such patents issued in 2017.  Although rare, it is still a possibility that must be taken into account.

The vast majority are governed by 35 USC 154(a)(2), which provides:

Subject to the payment of fees under this title, such grant shall be for a term beginning on the date on which the patent issues and ending 20 years from the date on which the application for the patent was filed in the United States or, if the application contains a specific reference to an earlier filed application or applications under section 120, 121, or 365(c) of this title, from the date on which the earliest such application was filed.

Simply stated, you take the earliest effective filing for the patent (other than a provisional application filing date or a foreign filing date and add 20 years.  However three adjustments must be considered. First, patent term adjustment (PTA) under 35 USC 154(b) may extend the term because of Patent Office delays in examining and issuing the patent.  Second, patent term extension (PTE) under 35 USC 156 may extend the term because of regulatory delays in clearing the subject matter of the patent.  Third, and finally, the term of the patent is subject to any terminal disclaimers made (to avoid double patenting rejections).  Terminal disclaimers are usually, but not always, indicated on the first page of the patent, but the file wrapper should always be consulted (1) to identify any terminal disclaimers not reflected on the first page, and (2) determine the effect of the terminal disclaimer.

 

Federal Circuit Revises Opinion, But Still Holds Subject Matter Unpatentable

IN SAP AMERICA, INC., v. INVESTPIC, LLC, [2017-2081] (August 2, 2018), the Federal Circuit revised its May 15, 2015, Opinion, as a result of InvestPic’s Motion for Rehearing.  The Federal Circuit still affirmed judgment on the pleadings that all of the claims of U.S. Patent No. 6,349,291, on systems and methods for performing certain
statistical analyses of investment information, but provided additional coverage of the Reexamination claims.

 

Posted in 101

Distribution of Catalogs at a Tradeshow Was Accessible with Reasonable Diligence, and was a Printed Publication under 102(b)

In GoPro, Inc. v. Contour IP Holding LLC, [2017-1894, 2017-1936] (July 27, 2018), the Federal Circuit vacated and remanded the PTAB’s decisions in IPR2015-01078 and IPR2015-01080 that U.S. Patent Nos. 8,890,954 and 8,896,694 relating to action sport video cameras or camcorders that are configured for remote image acquisition control and viewing.

The focus of the appeal was whether a Go Pro catalog, which disclosed a digital camera linked to a wireless viewfinder/controller that allows for a user preview before recording, was prior art.  While the PTAB considered the catalog to be prior art in its decision instituting the IPRs, Contour argued that the catalog was not a printed publication, and the PTAB agreed,  finding that that the GoPro had not shown that its Catalog was disseminated or otherwise made available to the extent that persons interested and ordinarily skilled in the subject matter or art and exercising reasonable diligence could have located it.

The Board found all the evidence presented by GoPro credible, but explained that GoPro did not provide evidence that the dealer show was advertised or announced to the public, such that a person interested and ordinarily skilled in the art from the public would have known about
it.  The Board found that a person of ordinary skill in the art would not be interested in the show where the catalogs were distributed because it was not an academic conference or camera industry conference, but
rather a dealer show for action sports vehicles like motorcycles,  motorbikes, ATVs, snowmobiles, and watercraft.

The Federal Circuit disagreed, saying that the case law regarding accessibility is not as narrow as the Board interpreted it. The Board focused on only one of several factors that are relevant to determining
public accessibility in the context of materials distributed at conferences or meetings, but cited no case where the Federal Circuit held that the the expertise of the target audience was dispositive.

The Federal Circuit said that the fact that the dealer show was focused on action sports vehicles was not preclusive of persons ordinarily skilled in the art from attending to see what POV digital cameras were being advertised and displayed. The Federal Circuit noted that a primary purpose of POV cameras is for use on vehicles in extreme action environments, such as the ones advertised at the show.  The Federal Circuit further noted that the The vendor list provided by Go Pro listed a number of vendors who likely sell, produce and/or have a professional interest in digital video cameras, and that the show was directed to action sports vehicles and accessories (emphasis in original).

The Federal Circuit said that the standard for public accessibility is one of “reasonable diligence” to locate the information by “interested members of the relevant public.”  A dealer show focused on extreme sports vehicles is an obvious forum for POV action sports cameras.  The Federal Circuit concluded that GoPro met its burden to show that its catalog is a printed publication under §102(b).  The Federal Circuit vacated vacate the Board’s decision that claims 1–20 of the
’694 patent and claims 1, 2, and 11–30 of the ’954 patent were not unpatentable and remanded for further proceedings consistent with its opinion.

American Rule Defeats USPTO’s Claim for Attorneys’ Fees in §145 Actions

In Nantkwest, Inc. v. Iancu, [2016-1794] (July 27, 2018), the en banc Federal Circuit affirmed the district court decision that an award of “all expenses” pursuant to 35 U.S.C. §145 did not include the USPTO’s attorneys’ fees in its unsuccessful defense of the rejection of Nantkwest’s application.

35 USC §145 permits a disappointed patent applicant to challenge
the PTAB’s decision in district court. However, applicants who invoke §145 are required by statute to pay “[a]ll the expenses of the proceedings” incurred by the U.S. Patent and Trademark Office in defending the Board’s decision, regardless of the outcome. Historically, the PTO sought recovery of travel and printing expenses, and more recently  expert witnesses fees.  Most recently, the PTO has interpreted §145 as including its attorneys’ fees.

Calling the American Rule a “bedrock principle” of this country’s jurisprudence, the majority of the Federal Circuit held that the American Rule prohibits courts from shifting attorneys’ fees from one party to another absent a “specific and explicit” directive from Congress. Contrary to the panel decision that sided with the PTO, the Federal Circuit affirmed the district court judgement denying the PTO’s request for attorneys fees.

 

Be Careful What You Wish For: Broad Claim Construction Sought by Patent Owner Results in Invalidity for Lack of Enablement

In Trustees of Boston University v Everlight Electronics Co., Ltd., [2016-2576, 2016-2577, 2016-2578, 2016-2579, 2016-2580, 2016-2581, 2016-2582, 2016-2591, 2016-2592, 2016-2593, 2016-2594, 2016-2595] (July 25, 2018), the Federal Circuit reversed the district court’s judgment that U.S. Patent No. 5,686,738 was not invalid, because the ‘738 patent was not enabled as a matter of law.

The claim was directed to a semiconductor device comprising “a non-single crystalline buffer layer” and “a growth layer grown on the buffer layer.”  “Grown on” was construed to mean “formed indirectly or directly above” meaning that the growth layer and the buffer layer do not have to be in direct contact; there can be intervening layers between them.  “[A] non-single crystalline buffer layer” was construed to mean “a layer of material that is not monocrystalline, namely, [1] polycrystalline, [2] amorphous or [3] a mixture of polycrystalline and amorphous.  As a result of these constructions, the claim covered six possible configurations.  The enablement issue concerned one of these permutations — a monocrystalline growth layer formed directly on an amorphous buffer layer.

The district court It concluded that the ’738 patent did not have to enable a device with a monocrystalline growth layer formed directly on an amorphous buffer layer, as long as it enabled a device with a monocrystalline growth layer formed indirectly on an amorphous buffer layer.  The district court questioned whether this particular permutation was taught, but nonetheless found that a reasonable jury could have concluded that Defendants failed to show that claims were not enabled.

A patent’s specification must contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains to make and use the same.  To be enabling, the specification of a patent must teach those skilled in the art how to make and use the full scope of the claimed invention without ‘undue experimentation.  Defendants’ expert testified that it is impossible to epitaxially grow a monocrystalline film directly on an amorphous structure, and Boston University’s expert agreed.  The Federal Circuit further noted that Boston University could not identify any portion of the specification teaching the particular permutation, and relied only on conclusory expert testimony.

While there was testimony that the a crystalline layer could be grown on an amorphous layer, the Federal Circuit instructed that the inquiry is not whether it was, or is, possible to make the full scope of the claimed device.  Instead, the inquiry is whether the patent’s specification taught one of skill in the art how to make such a device without undue experimentation as of the patent’s effective filing date. When viewed in this light, Boston University’s evidence was not probative of enablement.  Simply observing that it could be done—years after the patent’s effective filing date—bears little on the enablement inquiry.

Lastly, Boston University argued that enabling five of the six permutations was sufficient, which the Federal Circuit rejected, noting that precedent makes clear that the specification must enable the full
scope of the claimed invention.  This is not to say that the specification must expressly spell out every possible iteration of every claim.  But any gapfilling is merely supplemental; it cannot substitute for a basic enabling disclosure.

The Federal Circuit noted that Boston University created its own enablement problem — it sought a construction of “a non-single crystalline buffer layer” that included a purely amorphous layer. If it wanted to claim this, the Federal Circuit said, it should have taught it.

The Federal Circuit reversed the district court.

What’s Zup? Water Board Patent Obvious; Secondary Considerations Too Weak to Show Otherwise

In Zup, LLC v. Nash Manufacturing, Inc., [2017-1601] (July 25, 2018), the Federal Circuit affirmed the district court’s judgment that claims 1 and 9 of U.S. Patent No. 8,292,681 on a water recreational board and a method of riding such a board were invalid for obviousness.

Zup and Nash had discussions about a potential joint manufacturing venture for the ZUP Board, and when they fell through, and Nash
brought the accused product to market.  Zup sued Nash, and the district court granted Nash’s motion for summary judgment of invalidity.  The parties agreed on the content of the prior art, and level of skill, but disagreed on whether a person of ordinary skill in the art would have been motivated to combine the prior art references in the way claimed in the patent, and whether the district court properly evaluated Zup’s
evidence of secondary considerations.

The Federal Circuit said that a “motivation to combine may be found explicitly or implicitly in market forces; design incentives; the ‘interrelated teachings of multiple patents’; ‘any need or problem
known in the field of endeavor at the time of invention and addressed by the patent’; and the background knowledge, creativity, and common sense of the person of ordinary skill.”  The district court explained that the ’681 patent identified known elements in the prior art that aided in rider stability while engaging a water recreational device and simply combined them in one apparatus and method.  The district court said that one of ordinary skill in the art would have been motivated to combine the various elements from the prior art references, noting that such motivation would have stemmed from a desire to aid in rider stability, to allow a wide variety of users to enjoy the device, and to aid users in maneuvering between positions on a water board — all
motivations that were “a driving force throughout the prior art and have been shared by many inventors in the water recreational device industry.

The Federal Circuit found that the record supported the district court’s analysis.  The Federal Circuit observed that helping riders switch between riding positions had long been a goal of the prior art, citing various portions of the references of record.  The Federal Circuit pointed out that Zup admitted that achieving rider stability is an “age-old motivation in this field,” and found that such stability was enhanced in the prior art through the same components employed in the ’681 patent: tow hooks, handles, foot bindings, and other similar features.

In the face of significant evidence regarding the consistent desire for riders to change positions while riding water recreational boards (and the need to maintain stability while doing so), and given that the elements of the ’681 patent were used in the prior art for this very purpose, the Federal Circuit said there was no genuine dispute as to the existence of a motivation to combine the references.

The Federal Circuit further found that Zup’s minimal evidence of secondary considerations does not create a genuine dispute of fact
sufficient to withstand summary judgment on the question of obviousness.  The Federal Circuit rejected ZUP’s contention that the district court improperly shifted the burden to prove non-obviousness to Zup because Nash introduced no evidence as to secondary
considerations, yet Zup still lost, noting that “any concerns regarding improper burden allocation can be quickly dismissed. The Federal Circuit said that the burden of persuasion remains with the challenger during litigation because every issued patent is entitled to a  presumption of validity. However, while the burden of persuasion remains with the challenger, a patentee bears the burden of production with respect to evidence of secondary considerations of nonobviousness.  The Federal Circuit said that it is clear that the district
court kept the ultimate burden of persuasion on the patent challenger throughout the obviousness analysis. Any argument that the district court improperly shifted the burden is therefore without merit.

On the issue of secondary considerations the Federal Circuit said that where the differences between the prior art and the claimed invention are minimal, it cannot be said that any long-felt need was unsolved.  The Federal Circuit further found that the record evidence indicates that the claimed invention was not the first to achieve the goal of helping users maneuver between positions on a water recreational board.

The Federal Circuit rejected the arguments of copying, noting that Nash’s instructions suggest a configuration that is different from Zup’s product, dispelling any inference of copying.

The Federal Circuit concluded that the weak evidence of secondary
considerations presented here simply cannot overcome the strong showing of obviousness, quoting “a claimed invention represents no more than the predictable use of prior art elements according to
established functions, as here, evidence of secondary indicia are frequently deemed inadequate to establish non-obviousness.”

Displaying Data is an Even More Abstract Idea Than Patent Eligibility

In Interval Licensing LLC v. AOL, Inc., [2016-2502, 2016-2505, 2016-2506, 2016-2507] (July 20, 2018), the Federal Circuit affirmed the district court’s determination that claims 15-18 were directed to an abstract idea: the presentation of two sets of information, in a nonoverlapping way, on a display screen.

The Federal CIrcuit said that considered as a whole, the claims fail under § 101’s abstract idea exception because they lack any arguable
technical advance over conventional computer and network technology for performing the recited functions of acquiring and displaying information.  The Federal Circuit pointed out that the specification describes the claimed instructions as routine and conventional.

In this case, Interval Licensing contends that the claimed “attention manager” provides a technological improvement to a computer system. The Federal Circuit disagreed, noting that the focus of the claims here is directed to “providing information to a person without interfering with the person’s primary activity,” i.e., the result-centric construction of the claimed “attention manager.”  The Federal Circuit said that standing alone, the act of providing someone an additional set of information without disrupting the ongoing provision of an initial set of information is
an abstract idea, noting the use of a breaking news ticker across the bottom of the screen.  The Federal Circuit said that it has held that information is intangible, and that collecting, analyzing, and
displaying that information, without more, is likewise an abstract idea.  The Federal Circuit said that recitation, as in this case, of the collection, organization, and display of two sets of information on a generic
display device is abstract absent a “specific improvement to the way computers or other technologies operate, remained abstract.

The Federal Circuit also rejected the argument that the claims are not abstract in view of the claimed display instructions, pointing out that the the claimed instructions do not identify how the function is performed.  The Federal Circuit said that acquiring and organizing information, as broadly recited by some of the instructions
limitations, is an abstract idea, not an improvement in how computers and networks carry out their basic functions.

The Federal Circuit also rejected the argument that acquisition of specific information desired by the user represented an inventive concept, noting that offering a user the ability to select information to be displayed is one of the “most basic functions of a computer.”

Having have considered all of Interval Licensing’s arguments and finding them unpersuasive, the Federal Circuit affirmed the determination that 15–18 of the ’652 patent were directed to patent ineligible subject matter.

Posted in 101

Tribal Immunity Does Not Save Allegan’s Patents from IPR

In Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc., [2018-1638, 2018-1639, 2018-1640, 2018-1641, 2018-1642, 2018-1643] (July 20, 2018), the Federal Circuit affirmed the PTAB’s denial of the Tribe’s motion to terminate on the basis of sovereign immunity.

In an attempt to shelter its patents from IPR attack, Allegan assigned them to the Saint Regis Mohawk Tribe, who Allergan hoped could assert sovereign immunity to post grant challenges.

The Tribe argued that tribal sovereign immunity applies in IPR under FMC, because like the proceeding in FMC, an IPR is a contested, adjudicatory proceeding between private parties in which the petitioner, not the USPTO, defines the contours of the proceeding. Mylan argued that sovereign immunity does not apply to IPR proceedings because they are more like a traditional agency action — the Board is not adjudicating claims between parties but instead is reconsidering a grant of a government franchise. Mylan further argued that even if the Tribe
could otherwise assert sovereign immunity, its use here is an impermissible attempt to “market an exception” from the law and non-Indian companies have no legitimate interest in renting tribal immunity to circumvent the law.  Finally, Mylan argued that the assignment to the Tribe was a sham, and the Tribe waived sovereign immunity by suing on the patents.

The Federal Circuit said that an IPR is neither clearly a judicial proceeding instituted by a private party nor clearly an enforcement action brought by the federal government, noting that in Oil States the Supreme Court said IPR is “simply a reconsideration of” the
PTO’s original grant of a public franchise.

Ultimately, several factors convinced the Federal Circuit that IPR is more like an agency enforcement action than a civil suit brought by a private party, and and thus tribal immunity is not implicated. First, although the Director’s discretion in how he conducts IPR is significantly constrained, he possesses broad discretion in deciding whether
to institute review.  Although this is only one decision, it embraces the entirety of the proceeding. If the Director decides to institute, review occurs. If the Director decides not to institute, for whatever reason, there is no review. In making this decision, the Director has complete discretion to decide not to institute review. The Director bears the political responsibility of determining which cases should proceed. While he has the authority not to institute review on the merits of the petition, he could deny review for other reasons such as administrative
efficiency or based on a party’s status as a sovereign.  Therefore, if IPR proceeds on patents owned by a tribe, it is because a politically accountable, federal official has authorized the institution of
that proceeding.  In this way, IPR is more like cases in which an agency chooses whether to institute a proceeding on information supplied by a private party. According to FMC, immunity would not apply in such a proceeding.

The Federal Circuit added that the role of the parties in IPR suggests immunity does not apply in these proceedings. Once an IPR has been initiated, the Board may choose to continue review even if the petitioner chooses not to participate, which reinforces the view that IPR is an act by the agency in reconsidering its own grant of a public franchise.

The Federal Circuit also pointed out that although there are certain
similarities with the FRCP, the differences are substantial.  Further a patent owner can seek to amend its patent claims during the proceedings, an option not available in civil litigation.

Finally, while the USPTO has the authority to conduct reexamination proceedings that are more inquisitorial and less adjudicatory than IPR, this does not mean that IPR is thus necessarily a proceeding in which Congress contemplated tribal immunity to apply.  The mere existence of more inquisitorial proceedings in which immunity does not apply does not mean that immunity applies in a different type of proceeding
before the same agency.

Because it concluded that tribal sovereign immunity cannot be asserted in IPR, the Federal Circuit did not reach the parties’ other arguments.

District Court Improperly Imported Limitations into the Claims

In Blackbird Tech LLC v. ELB Electronics, Inc., [2017-1703] (July 16, 2018), the Federal Circuit vacated judgment of noninfringement of claim 12 of U.S. Patent No. 7,086,747 because of the district court error in construing “attachment surface” and remanded.

The ‘747 patent was directed to an energy efficient lighting apparatus, and in one embodiment in particular, retrofitting an existing light
fixture with a more energy efficient lighting apparatus.  The claim required a balast cover comprising “a housing having an attachment surface and an illumination surface.”  The claim further required a fastening mechanism for securing the attachment surface of the lighting apparatus to the illumination surface.  The district court construed “attachment surface” as “layer of the housing that is secured to
the ballast cover.” The parties disputed the meaning of “attachment surface,” specifically whether the attachment surface must be secured to the ballast cover.

The Federal Circuit rejected the district court’s construction, noting that the “plain language” of the claim does not require the attachment surface to be secured to the ballast cover.  The Federal Circuit noted that while the claim expressly recites a fastening mechanism for securing the attachment surface to the illumination surface. It does not refer to any other fastening mechanism. It does not require the attachment surface be secured to anything other than the illumination surface.

The Federal Circuit said that the district court nevertheless read in a second fastening mechanism—this one to secure the attachment surface to the ballast cover.  While an embodiment disclosed in the specification included this second fastening mechanism, the Federal Circuit did not not agree that this fastener limitation should be imported into the claim.

The Federal Circuit noted that there was no suggestion in the specification or prosecution history that this fastener is important in any way that would merit reading it into the claims.  The specification does not refer to the disclosed fastener as the “present invention” or “an essential element” or uses any other language that would cause the
ordinarily skilled artisan to believe that this fastening mechanism is an important component of the invention or that it is critical to the invention for any reason.

The Federal Circuit said that the most important reason not to import the limitation into the claim was that the limitation was expressly eliminated during prosecution — albeit to resolve 112 issues.  The Federal Circuit rejected the defendants’ argument that the amendment was ambiguous because no explanation was given for the amendment as “legally irrelevant to how a skilled artisan reading this history would understand the claim scope.”  As a factual matter, no skilled artisan would understand this claim to require a fastening mechanism connecting the ballast cover to the attachment surface when that very limitation was expressly removed from the claim to secure patentability
with the examiner’s blessing and agreement.

The Federal Circuit concluded that the district court erred in construing “attachment surface,” and because the court’s entry of judgment of noninfringement was based on its erroneous construction, vacated the entry of judgment and remand for further proceedings.