Tag: Intellectual property

Federal Circuit Issues First Reversal & Remand of an Inter Partes Review in Microsoft Corporation v. Proxyconn, Inc. Addressing Claim Construction and Amendment Standards

The Federal Circuit issued its first reversal and remand of a final decision in an inter partes review issued by the Patent Trial and Appeal Board (“PTAB”). In Microsoft Corporation v. Proxyconn, Inc., No. 14-1543, a panel composed of Chief Judge Prost, Judge Lourie, and Judge Gilstrap (sitting by designation) held that the PTAB’s constructions of the phrases “two other computers,” “sender/computer,” and “receiver/computer” were unreasonably broad, and remanded for further proceedings consistent with its opinion. The Court’s decision marks the first ever reversal of an inter partes review decision by the PTAB, after 18 straight affirmances. Of the 18, fifteen have been affirmances without opinion issued under Federal Circuit Rule 36.

In brief, the Court upheld the PTAB’s use of the broadest reasonable interpretation (“BRI”) standard, but explained that the standard does not justify giving claims an unreasonably broad or legally incorrect interpretation. The Court then examined the statute and regulations governing amendment practice and concluded that the PTAB’s interpretation was not plainly erroneous or inconsistent with them. Last, in reference to the PTAB’s case-by-case interpretation of the same statute and regulations, the Court explained that while “[a] fluid, case-based interpretation by the PTO of its own regulations risks leaving interested members of the public in a state of uncertainty, without ascertainable standards and adequate notice to comply . . . we cannot say that the PTO has abused its discretion in choosing adjudication over rulemaking.”

In the underlying proceedings before the PTAB, Microsoft challenged Proxyconn’s patent directed to a system for increasing access speed in a packet-switched network. The PTAB concluded that all of the challenged claims, with the exception of one, were unpatentable. Both parties appealed. In addition to contesting the merits, Proxyconn challenged the PTAB’s used of the BRI standard, as well as the PTAB’s denial of Proxyconn’s motion to amend. We discuss each aspect in more detail below.

Broadest Reasonable Interpretation

With respect to BRI generally, the Court stated that it was bound by the panel decision in In re Cuozzo – the first appeal of an inter partes review decided earlier this year, which blessed the Office’s adoption of the hundred year old standard for use in inter partes review. In re Cuozzo is pending a decision on Cuozzo’s request for rehearing en banc, and several amici have submitted briefs expressing concern about the outcome. But practitioners troubled by the Office’s adoption and application of BRI can take some consolation. In this case, the panel rejected the PTAB’s construction as “unreasonably broad,” relying on precedent that constrains the Office’s application of the BRI to interpretations that are legally correct under the canons set forth in Phillips v. AWH Corp. Indeed, the panel dropped a footnote stating that its construction would have come out the same under the Phillips standard.

On the merits, the Court reviewed the Board’s claim constructions de novo. The Court carefully analyzed the technical merits and set forth a detailed interpretation of the claim terms appealed by both parties. This suggests that a meritorious claim construction dispute appealed to the Federal Circuit is likely to receive the same careful consideration and attention to detail that appellants have come to expect from the Court. It also shows that “unreasonably broad” claim interpretations that are inconsistent with settled principles of claim construction are reversible on appeal.

Proxyconn’s Motion to Amend

This appeal also presented the question of whether the PTAB impermissibly relied on the requirements it set forth in Idle Free Systems, Inc. v. Bergstrom, Inc., in denying Proxyconn’s motion to amend. In this case, the panel was not troubled by the PTAB’s reliance on its own decisions, like Idle Free, to promulgate standards for motions to amend. The Court agreed with the Office that the regulation itself “is not an exhaustive list of grounds upon which the Board can deny a motion to amend.” The Court also agreed that it is permissible for the Office to use adjudicative decisions like Idle Free, rather than traditional notice and comment rule-making, to set forth all the conditions that a patentee must meet in order to satisfy its burden of amendment. In that regard, the Court recognized that:

Some question the wisdom of the PTO’s approach. Since IPRs were created, they have rapidly become a popular vehicle for challenging the validity of issued patents. Patentees who wish to make use of the statutorily provided amendment process deserve certainty and clarity in the requirements that they are expected to meet. A fluid, case-based interpretation by the PTO of its own regulations risks leaving interested members of the public in a state of uncertainty, without ascertainable standards and adequate notice to comply. Despite such concerns, we recognize that ‘the choice between rulemaking and adjudication lies in the first instance within the [agency’s] discretion.’ . . . [W]e cannot say that the PTO has abused its discretion in choosing adjudication over rulemaking.

Slip. Op. at 24 (internal citations omitted).

The Court ultimately concluded that the PTAB reasonably interpreted the amendment rules as requiring the patentee to show that its substitute claims are patentable over the prior art of record. But the Court also stressed that “this case does not call on us to decide whether every requirement announced by the Board in Idle Free constitutes a permissible interpretation of the PTO’s regulations.” Slip. Op. at 25, n.4. It noted that the Idle Free decision itself was not before the Court, and expressly declined to address the other requirements that the Board relied upon—highlighting in particular Idle Free’s requirement that the patentee show patentable distinction over all “prior art known to the patent owner.” Idle Free, 2013 WL 5947697, at *4.

Practical Takeaways

Microsoft v. Proxyconn demonstrates the Court’s willingness to give appellants a meaningful review of PTAB decisions despite its track record of issuing summary affirmances. This applies particularly to claim construction appeals, which in most cases will be afforded de novo review – subject to Teva.4 This case also clarifies that remands to the PTAB are possible, though it remains unclear how the PTAB will deal with that remand. Those concerned about the PTAB’s use of the BRI should take heart that its application must still be both reasonable and legally correct. The Court acknowledged the uncertainty parties face when the Office uses adjudication rather than rulemaking to set standards and practices in these new proceedings. However, the Court’s willingness to analyze the PTAB’s application of Idle Free suggests that such decisions themselves are reviewable and should be appealed if their interpretation is improper.

ARTICLE BY Jon E. Wright & Pauline M. Pelletier of Sterne, Kessler, Goldstein & Fox P.L.L.C.
© 2015 Sterne Kessler

Ariosa Diagnostics, Inc. v. Sequenom, Inc. – Another Diagnostic Patent Meets its End

On Friday, June 12, 2015, the Federal Circuit issued its decision in Ariosa Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. 2015) finding that the claims of U.S. Patent No. 6,258,540 (the ‘540 patent) did not meet the patent-eligibility requirements of 35 U.S.C. §101.

The ‘540 patent

The ‘540 patent claims certain methods of using cell-free fetal DNA (cffDNA). In 1996, the inventors, Doctors Dennis Lo and James Wainscoat, discovered cffDNA in material plasma and serum. Traditionally, this portion of maternal blood samples was discarded by researchers as medical waste. As a result, the inventors developed a method for detecting a small fraction of paternally inherited cffDNA in maternal plasma or serum to determine certain fetal characteristics, such as gender. The method was commercialized by Sequenom as the MaterniT21 test. An advantage provided by the test is that it created an alternative for prenatal diagnosis of fetal DNA that avoided the risks of widely-used techniques that took samples from the fetus or placenta.

In addition to claiming methods of using cffDNA, the ‘540 patent also provides for making a diagnosis of certain fetal characteristics based on the detection of paternally inherited cffDNA. According to the specification, a pregnant woman carrying a fetus with certain genetic defects has more cffDNA in her blood than a woman with a normal fetus.

Claims 1, 24 and 25 of the ‘540 patent recite:

1. A method for detecting a paternally inherited nucleic acid of fetal origin performed on a maternal serum or plasma sample from a pregnant female, which method comprises:

amplifying a paternally inherited nucleic acid from the serum or plasma sample, and

detecting the presence of a paternally inherited nucleic acid of fetal origin in the sample.

24. A method for detecting a paternally inherited nucleic acid on a maternal blood sample, which method comprises:

removing all or substantially all nucleated and a nucleated cell populationS from the blood sample,

amplifying a paternally inherited nucleic acid from the remaining fluid and subjecting the amplified nucleic acid to a test for the paternally inherited fetal nucleic acid.

25. A method for performing a prenatal diagnosis on a maternal blood sample, which method comprises:

obtaining a non-cellular fraction of the blood sample,

amplifying a paternally inherited nucleic acid from the non-cellular fraction,

and performing nucleic acid analysis on the amplified nucleic acid to detect paternally inherited fetal nucleic acid.

The remaining claims describe how the method of detection occurs or how it can be used. For example, claim 2, which depends from claim 1, recites amplification by polymerase chain reaction (PCR). Claim 4, which also depends from claim 1, recites detection by a sequence specific probe.

District Court Proceedings

Ariosa Diagnostics, Inc. (Ariosa) and Natera, Inc. (Natera) make and sell alternative non-invasive tests that compete with Sequenom’s MaterniT21 test. Specifically, Ariosa sells the Harmony Test, a non-invasive test used for prenatal diagnosis of certain fetal characteristics, and Natera sells the Non-Invasive Paternity Test, which is used to confirm the paternity or non-paternity of a gestating fetus from genetic information in fetal DNA available in the blood of a pregnant female.

In response to letters threatening claims of infringement, from December 2011 through early 2012, Ariosa and Natera each filed separate declaratory judgment actions against Sequenom alleging non-infringement of the ‘540 patent. Sequenom counterclaimed alleging infringement. Sequenom filed a motion seeking an preliminary injunction to enjoin Ariosa from selling the Harmony Prenatal test. In July 2012, the district court denied the motion finding that there was a substantial question over whether the subject matter of the asserted claims was directed to eligible subject matter. Sequenom appealed to the Federal Circuit.

In August 2013, the Federal Circuit vacated and remanded the case, holding that the district court erred in certain respects not relevant to this appeal. Additionally, the Court did not offer any opinion regarding the subject matter eligibility of the asserted claims.

After remand, the parties filed cross motions for summary judgment regarding invalidity under 35 U.S.C. §101. The district court found that the ‘540 patent was directed to the natural phenomenon of paternally inherited cffDNA and that the claims did not add enough to the natural phenomenon to make the claims patent eligible under §101. According to the district court, at the time of the filing of the ‘540 patent in 1997, the steps of amplifying and detecting were well-understood, routine, or conventional. Thus, the district court concluded that the ‘540 patent was not directed to patentable subject matter finding that the only “inventive concept of the processes of the ‘540 patent is to apply those well-understood, routine processes to paternally inherited cffDNA, a natural phenomenon”. Additionally, the district court also found that the claimed processes posed a risk of preempting a natural phenomenon. Sequenom appealed.

Federal Circuit Decision

The Federal Circuit began its decision by setting forth the two-prong patent-eligibility test (citing Mayo Collaborative Services v. Prometheus Laboratories, Inc. (March 2012)). The first prong is to determine whether the claims at issue are directed to a patent-ineligible concept. If answered in the affirmative, the second prong is to determine whether the elements of each claim, both individually and as an ordered combination, recite additional elements that transform the nature of the claim into a patent-eligible invention that amounts to significantly more than the ineligible concept itself.

Regarding the first prong, the Federal Circuit noted that the claims of the ‘540 patent were method claims, which generally constitute eligible subject matter. However, upon further inspection, the Court further noted that the claims were directed to a multistep method that began with cffDNA taken from a maternal plasma or serum sample. cffDNA was naturally occurring and circulated freely in the blood stream of a pregnant woman. As a result, the existence of cffDNA in maternal blood was a natural phenomena. The Court further noted that the method ended with paternally inherited cffDNA, which was also a natural phenomena. Therefore, because the method began and ended with a natural phenomenon, the Federal Circuit held that the claims were directed to naturally occurring matter. The Court stated that the specification supported its conclusion. For example, column 1, lines 50-51 states: “[i]t has now been discovered that foetal DNA is detectable in maternal serum or plasma samples”, column 13, line 11-13 states: “[t]hese observations indicate that maternal plasma/serum DNA may be a useful source of material for the non-invasive prenatal diagnosis of certain genetic disorders,” and column 16, lines 12-14 states: “[t]he most important observation in this study is the very high concentration of foetal DNA in maternal plasma and serum”.

Regarding the second prong, the Federal Circuit concluded that the practice of the method claims did not result in an inventive concept that transformed the natural phenomena of cffDNA into a patentable invention. Specifically, the Court stated that for process claims that encompass natural phenomenon, the process steps must recite additional features that are new and useful. According to the Court:

“The method at issue here amounts to a general instruction to doctors to apply routine, conventional techniques when seeking to detect cffDNA. Because the method steps were well-understood, conventional and routine, the method of detecting paternally inherited cffDNA is not new and useful. The only subject matter new and useful as of the date of the application was the discovery of the presence of cffDNA in maternal plasma or serum.”

With respect to the preparation and amplification steps, the Court noted that the specification confirmed that in 1997 that these steps were well-understood, routine, conventional activities performed by doctors. Additionally, Sequenom’s expert testified that PCR and other methodologies for amplifying DNA were well known in 1997. The Court further found that the detecting steps were also similarly well-understood, routine and conventional.

Regarding the dependent claims, the Court found that these claims were broad examples of how to detect cffDNA in maternal plasma. The Court noted that these claims were focused on the use of the natural phenomenon in combination with well-understood, routine and conventional activity.

The Court concluded stating

“Thus in this case, appending routine conventional steps to a natural phenomenon, specified at a high level of generality, is not enough to supply an inventive concept. Where claims of a method patent are directed to an application that starts and ends with a naturally occurring phenomenon, the patent fails to disclose patent eligible subject matter if the methods themselves are conventional, routine and well understood applications in the art.”

Regarding preemption, Sequenom argued that there were numerous other uses of cffDNA aside from those claimed in the ‘540 patent and as a result, the ‘540 patent did not preempt all uses of cffDNA. The Federal Circuit disagreed. The Court noted that while preemption might signal patent ineligible subject matter, the absence of complete preemption did not demonstrate patent eligibility. Specifically, in this case, the Court noted that Sequenom’s attempts to limit the breadth of the breadth of the claims by showing alternative uses of cffDNA outside the scope of the claims did not change the conclusion that the claims were directed to patent ineligible subject matter.

At the end of the opinion, the Court addressed Sequenom’s arguments that before the ‘540 patent that “no one” was using plasma or serum of pregnant mothers to amplify and detect paternally-inherited cffDNA. Moreover, Sequenom noted that the 1997 Lancet publication of the inventors had been cited over a thousand times and that the claimed method utilized the man-made tools of biotechnology in a new way that revolutionized prenatal care. The Court agreed but noted, citing to Ass’n for Molecular Pathology v. Myriad Genetics, Inc. (June 2013), that just because a discovery is groundbreaking, innovative or brilliant does not by itself satisfy §101. The Court stated:

“While Drs. Lo and Wainscoat’s discovery regarding cffDNA may have been a significant contribution to the medical field, that alone does not make it patentable. We do not disagree that detecting cffDNA in maternal plasma or serum that before was discarded as waste material is a positive and valuable contribution to science. But even such valuable and contributions can fall short of statutory patentable subject matter, as it does here”.

ARTICLE BY Lisa L. Mueller of Michael Best & Friedrich LLP

© MICHAEL BEST & FRIEDRICH LLP

Unprecedented Move: Vox Populi Extends Sunrise Deadline for “.sucks” Domain Registration

In a move that is being interpreted as possible overreaching, Vox Populi, operator of the .sucks domain name, extended the period for registering .sucks during the “sunrise period” without notice. The new deadline to register the .sucks domain name is June 19. Not only is it $2,000 or more to register each .sucks domain name, there is also an annual renewal fee of $2,000.

There is online speculation that Vox’s extension is motivated by a relatively large surge in last minute registrations before the original deadline of May 29. This might indicate that Vox is extending the sunrise period for the purpose of taking additional profits from the registration of this already high priced gTLD.

What is a trademark owner to do?

  • Some businesses are defensively registering .sucks then “parking” the domain name to prevent others from using it.

  • Other trademark owners plan to proactively “own” .sucks as a way to receive and curate criticism. This is seen as a way to allow consumers to vet issues and allow companies to manage legitimate issues.

  • Some trademark owners have decided to not register the domain name.

The decision that is right for individual businesses should take into account a variety of factors uniquely associated with the business and its anticipated future use of the Internet for communicating criticism about goods and/or services.

Vox is promoting the registration of this domain name as being consumer friendly providing a “voice” for the people. Vox retained Ralph Nader and Dr. Martin Luther King (via vintage film clip) as two of their celebrity spokes people to promote .sucks as a “protest word.”

There has been significant controversy regarding the launch of the new domain name .sucks. Foremost is Vox’s pricing strategy. Vox Populi (Voice of the People) is offering the domain name to trademark owners for $2,000 for each registration during the “sunrise period.” The sunrise period is an initial brief period of time, usually about two months, during which a trademark owner has priority to register their trademark with the new gTLD. As an example: “chicagocubs.sucks” could be registered by the Chicago Cubs as the trademark owner during the sunrise period for $2,000. Most new domain names (.coffee, .wedding, .football, .media, etc.) can be registered during their sunrise period for $100 – $200. However, if the Cubs decide to not register .sucks, a party qualifying for a “Consumer Advocate Subsidized” registration (as determined by Vox) can register “chicagocubs.sucks” after the sunrise period for only $9.95.

Many trademark owners are questioning whether Vox’s pricing strategy is an impermissible windfall or free speech. Some parties have already brought this matter to the U.S. Federal Trade Commission (FTC) and the Competition Bureau Canada for consideration. Although no final decision has been reached by either agency, FTC Chairwoman Edith Ramirez provided a preliminary response pointedly reminding Internet Corporation for Assigned Names and Numbers (ICANN), acting on behalf of the concerned parties, that the FTC weighed in on these and similar issues years ago prior to the launch of the new gTLD program. While Chairwoman Ramirez cannot comment on the existence of pending investigations she left the door open for monitoring the actions of registries and taking action in appropriate cases “if we have reason to believe an entity has engaged in deceptive or unfair practices in violation of [the] consumer protection authority.” Chairwoman Ramirez urged ICANN to address these issues internally since the dramatic growth of gTLDs brought on by ICANN’s program cannot be “feasibly addressed on a case-by-case basis” by the FTC.

Over the first 30 years of the publically accessible Internet approximately 220 gTLDs, including country codes were made available. Between 2011 and 2014 ICANN initiated a program to create new gTLDs. The stated goal of these new gTLDs was to be inclusive of new interest groups, non-Latin script languages and to anticipate the expansion of the Internet. This initiative was wildly successful with 1,930 applications being received by ICANN. After significant review of the applications approximately 1,370 new gTLDs were scheduled for launch. As of May 1, 2015, the launch of these new gTLDs is approximately one quarter completed with approximately 1,000 new gTLDs still to launch.

ARTICLE BY Intellectual Property Department of Barnes & Thornburg LLP
© 2015 BARNES & THORNBURG LLP

Allvoice Decision Provides Roadmap For Software-based Inventions

In a refreshing break from Alice/Mayo abstract idea based 35 U.S.C. § 101 rejections, the Federal Circuit released a decision invalidating certain claims of U.S. Patent No. 5,799,273 as not being directed to one of the four statutory categories of inventions (see Allvoice Developments US, LLC, v. Microsoft Corp., CAFC 2014-1258, decided May 22, 2015) The matter was on appeal, by Allvoice, from a district court decision invalidating claims 60-68 as non-statutory subject matter. The decision also affirms a non-infringement decision by the district court, while interesting that that portion of the decision is not the focus of this post.

The claims of the ‘273 Patent at issue were directed towards a speech-recognition “interface,” see claim 60 reproduced below. Both the CAFC and the district court interpreted, probably correctly, the claimed interface as software without any tangible form (e.g., not interpreted as instructions on a computer-readable medium or as part of a tangible system).

60.  A universal speech-recognition interface that enables operative coupling of a speech-recognition engine to at least any one of a plurality of different computer-related applications, the universal speech-recognition interface comprising:

input means for receiving speech-recognition data including recognised words;

output means for outputting the recognised words into at least any one of the plurality of different computer-related applications to allow processing of the recognised words as input text; and

audio playback means for playing audio data associated with the recognised words. ’273 Patent, col. 29 ll. 22–34.

Allvoice essentially reinforces the Court’s interpretation by asserting that the claimed speech-recognition interfaces are described in the specification as “interface applications,” and thus the claims are limited to software. Allvoice attempts to clarify their position by further asserting that the claims should be interpreted as reciting “software instructions,” and further asserting that the instructions must necessarily be in a machine readable, physical state, in order to exist. It is interesting to consider whether the decision in this case might have been different if Allvoice had been able to argue an interpretation of the “means” elements as including hardware components of a system. Unfortunately, such an interpretation was either not supported by the specification, or not pursued for other reasons by the litigation team.

The Court dismisses Allvoice’s assertions regarding the implied physical form, stating “this Court has recognized, instructions, data, or information alone, absent a tangible medium, is not a manufacture.” (Citing Digitech Image Techs.,758 F.3d at 1349–50 (rejecting a patentee’s attempt to argue that the disputed claims

were subject matter eligible because the claim language did not describe “any tangible embodiment of this information (i.e., in physical memory or other medium) or claim any tangible part of the digital processing system”).) Earlier in the decision, the Court had already determined that the claims were clearly not directed to a process. Thus, because the claims were not directed to a tangible article and were not process claims, the district court’s invalidity holding was upheld.

The good news from this case is that the Court provides a fairly clear roadmap for claiming software-based inventions – software must be claimed as a process (method) or as instructions on a machine-readable medium (tangible manufacture), at least outside of a system claim. While this case does not seem to cover any “new” ground per se, it does clearly reinforce that claims directed to pure software, such as the recited speech-recognition interfaces, and not fashioned as a process or machine-readable medium are not likely to find favor in the courts.

ARTICLE BY Gregory M. Stark of Schwegman, Lundberg & Woessner, P.A.
© 2015 Schwegman, Lundberg & Woessner, P.A. All Rights Reserved.

BMI Wins Summary Judgment of Copyright Infringement After Restaurant Owner Fails to Respond to Requests for Admission

Plaintiff Broadcast Music, Inc. (“BMI”), a music rights management organization that offers licenses to a massive catalogue of popular songs on behalf of copyright owners, brought suit for copyright infringement against the owners of the La Roue Elayne restaurant for unlicensed performance of live cover versions of eight songs in a single evening. This suit was part of a series of suits brought by BMI for copyright infringement against restaurants in Connecticut. The Court granted summary judgment in favor of BMI for copyright infringement, permanently enjoining further copyright infringement and awarding $6,000 in statutory damages and an additional unspecified amount for attorneys’ fees.

Drew Friedman, the only defendant who appeared in the case, had opposed summary judgment on the grounds that a fact issue remained as to whether he had sufficient control over the restaurant and the cover band to support vicarious liability for copyright infringement. Mr. Friedman claimed to have been cut out of the management and control of La Roue Elayne before the night in question. Interestingly, his failure to object or respond to BMI’s Requests For Admission (RFAs) doomed his opposition. Mr. Friedman never responded to RFAs asking him to admit or deny that he hired the offending cover band and that he had the right to supervise persons employed by the restaurant.

In fact, Mr. Friedman’s opposition failed to address the issue of the ignored RFAs and he never moved for leave to provide untimely responses. On that basis, the Court held that the RFAs must be deemed admitted pursuant to Federal Rule of Civil Procedure 36. The Court appeared reluctant to deem the RFAs admitted, but indicated that after a diligent search it failed to find any precedent for a sua sponte withdrawal of a represented party’s response to RFAs where the party failed to even acknowledge the existence of the request.

The case is Broadcast Music, Inc. v. The Hub at Cobb’s Mill, LLC. A copy of the Court’s Order is available here.

ARTICLE BY Anthony Cataldo of Proskauer Rose LLP
© 2015 Proskauer Rose LLP.

Amicus Briefs On Biosimilar Patent Litigation

Foley and Lardner LLP

Amgen has appealed the district court decision denying its motion for a preliminary injunction to keep Sandoz’ biosimilar version of Neupogen® off the market. The appeal is on an expedited briefing schedule at the Federal Circuit, and three amicus briefs have been filed. All of the amicus briefs argue for reversal of at least some of the district court’s decision regarding the biosimilar patent litigation framework of the BPCIA.

The Biotechnology Industry Organization

The Biotechnology Industry Organization filed an amicus brief arguing that the BPCIA should be interpreted as requiring “notice to the reference product sponsor of the initial submission of the biosimilar application” and “notice of potential commercial marketing upon approval.” BIO argues that these procedures must be mandatory in order for the patent dispute resolution provisions of the law to achieve their purpose of “provid[ing] a significant and real opportunity to resolve patent issues prior to the launch of the biosimilar.”

Abbvie Inc.

AbbVie Inc. filed an amicus brief arguing that “the notice-and-exchange provisions are mandatory” and that a biosimilar applicant’s “failure to comply with the statute is unlawful.” According to AbbVie, if the district court decision is upheld “the entire biosimilar litigation process would become a free-for-all, where biosimilar companies would utilize the data and work of innovator companies but refuse to provide basic information about their products … leaving innovators to blindly guess as to which patents they should sue on and when.”

AbbVie also argues that the BPCIA does not preempt Amgen’s state law claims of unfair competition.

Janssen Biotech, Inc.

Janssen Biotech, Inc. filed an amicus brief asking the Federal Circuit to “clarify that the statutory patent dispute resolution procedures are intended to be followed as written, and are not merely optional choices or empty formalities.” Janssen criticizes the district court decision for “transforming [the BPCIA’s patent provisions] from a carefully orchestrated dispute resolution process into a series of strategic options existing for the sole benefit of the biosimilar applicant.”

Janssen also urges the Federal Circuit to decide that the notice of commercial marketing required by the BPCIA may not be provided before a biosimilar product is licensed by the FDA. One argument Janssen makes on this point is that the notice of commercial marketing gives the reference product sponsor the right to seek a preliminary injunction based on alleged patent infringement, but a preliminary injunction cannot be granted unless commercial launch is imminent, and commercial launch is not possible until the biosimilar has been licensed by the FDA.

The Expedited Appeal Schedule 

Amgen filed its opening brief on April 3. Sandoz filed its brief on April 21. Oral arguments are scheduled for June 3.

ARTICLE BY

Courtenay C. Brinckerhoff
Foley & Lardner LLP

B&B Hardware, Inc. v. Hargis Industries, Inc.: Trademark Litigation Might Get Simpler

Vedder Price

Trademark litigation includes two similar types of proceedings. First, and most common, issues of trademark infringement and cancellation of a mark may be raised in a trial (i.e., a traditional fight in either State Court or Federal District Court before a judge or jury involving oral testimony). Second, and less common, issues of trademark registration may be raised in a trademark opposition or cancellation proceeding before the Trademark Office. These proceedings are primarily conducted in writing and are governed by administrative rules published in the Federal Register based on the Federal Rules of Civil Procedure. While a trial may result in monetary damages or an injunction preventing a party from using a mark, the Trademark Office merely has the authority to grant or cancel federal trademark registrations.

Since the Trademark Office’s process does not allow for litigants to receive monetary awards, injunctions, or even a determination of infringement, entering the Trademark Office for a cancellation or opposition simplifies the proceedings to focus on a limited number of key issues, such as whether a likelihood of confusion exists between a registered mark and another mark. Along with their limited focus and less formal nature, litigants often found comfort in a the lower costs involved in proceedings before the Trademark Office. Generally, once a trademark registration was cancelled, the owner of the mark that was cancelled would understand that a claim for infringement in court was not likely to succeed and would stop using the mark.

In B&B Hardware, Inc. v. Hargis Industries, Inc., the United States Supreme Court was faced with the question of “[w]hether the Trademark Trial and Appeal Board’s (the “TTAB” or the “Board”) finding of a likelihood of confusion precludes Hargis from relitigating that issue in infringement litigation, in which likelihood of confusion is an element.” The long-standing dispute (almost 20 years) between the parties involved in the decision regarded the trademarks SEALTIGHT and SEALTITE. In 1996, Hargis applied for registration of its mark, SEALTITE. B&B opposed the registration based on an alleged likelihood of confusion of Hargis’s trademark with B&B’s own federally registered mark, SEALTIGHT. After applying the standard multi-factor likelihood of confusion test, the TTAB decided in favor of B&B and held that a likelihood of confusion existed between the marks.

At the same time as the proceedings before the TTAB, B&B sued Hargis for trademark infringement in Federal District Court. After receiving a favorable outcome in the proceeding before the TTAB, B&B argued in District Court that Hargis could not contest the TTAB’s determination that a likelihood of confusion existed due to the preclusive effect of the TTAB’s decision. The District Court disagreed with B&B and allowed the jury to hear the evidence and decide on the issue of confusion. The jury returned a verdict for Hargis, finding that there was no likelihood of confusion between the marks. The parties appealed the verdict, including the issue of the preclusive effect of the TTAB decision. The Eighth Circuit affirmed the decision of the District Court. The parties then petitioned for, and were granted, certiorari on the issue by the U.S. Supreme Court.

The Supreme Court reversed the decision of the Eighth Circuit and remanded the case for further proceedings, holding that as long as the ordinary elements of issue preclusion are met and the usages of the marks are materially the same, a finding that a likelihood of confusion exists by the TTAB should have preclusive effect in District Court proceedings.

The doctrine of “res judicata” or “issue preclusion” states that litigants should not get two bites at the same apple, or two chances to argue over the same issue. Thus, if the Trademark Trial and Appeal Board found overlap (i.e., likelihood of confusion) between two marks (despite using the simplified tools involved in proceedings before the Trademark Office), then a District Court should honor the TTAB’s determination and not force the parties to relitigate the issue.

Prior to this decision, if a case was simultaneously pending in District Court and before the TTAB, the TTAB would readily stay its determination until the litigation in District Court was resolved. Because of this, any time one of the parties to an opposition or cancellation proceeding became agitated, they would file a concurrent action before a District Court. Following the Supreme Court’s decision, it is unclear if the TTAB will continue to grant this courtesy.

Trademark oppositions and cancellations must now be taken very seriously. While the TTAB cannot award damages or find infringement, its decisions could now be used as grounds for finding infringement in District Court. For example, a party who defaults in a cancellation proceeding may well lose the right to defend itself properly in District Court if a subsequent action is filed. Going forward, mark owners with proceedings before the TTAB must consider whether to intentionally abandon a trademark application or registration in order to avoid an adverse decision that could have far-reaching effects.

ARTICLE BY

John E. Munro
Alain Villeneuve
Vedder Price

B&B Hardware, Inc. v. Hargis Industries, Inc.: Trademark Litigation Might Get Simpler

Vedder Price

Trademark litigation includes two similar types of proceedings. First, and most common, issues of trademark infringement and cancellation of a mark may be raised in a trial (i.e., a traditional fight in either State Court or Federal District Court before a judge or jury involving oral testimony). Second, and less common, issues of trademark registration may be raised in a trademark opposition or cancellation proceeding before the Trademark Office. These proceedings are primarily conducted in writing and are governed by administrative rules published in the Federal Register based on the Federal Rules of Civil Procedure. While a trial may result in monetary damages or an injunction preventing a party from using a mark, the Trademark Office merely has the authority to grant or cancel federal trademark registrations.

Since the Trademark Office’s process does not allow for litigants to receive monetary awards, injunctions, or even a determination of infringement, entering the Trademark Office for a cancellation or opposition simplifies the proceedings to focus on a limited number of key issues, such as whether a likelihood of confusion exists between a registered mark and another mark. Along with their limited focus and less formal nature, litigants often found comfort in a the lower costs involved in proceedings before the Trademark Office. Generally, once a trademark registration was cancelled, the owner of the mark that was cancelled would understand that a claim for infringement in court was not likely to succeed and would stop using the mark.

In B&B Hardware, Inc. v. Hargis Industries, Inc., the United States Supreme Court was faced with the question of “[w]hether the Trademark Trial and Appeal Board’s (the “TTAB” or the “Board”) finding of a likelihood of confusion precludes Hargis from relitigating that issue in infringement litigation, in which likelihood of confusion is an element.” The long-standing dispute (almost 20 years) between the parties involved in the decision regarded the trademarks SEALTIGHT and SEALTITE. In 1996, Hargis applied for registration of its mark, SEALTITE. B&B opposed the registration based on an alleged likelihood of confusion of Hargis’s trademark with B&B’s own federally registered mark, SEALTIGHT. After applying the standard multi-factor likelihood of confusion test, the TTAB decided in favor of B&B and held that a likelihood of confusion existed between the marks.

At the same time as the proceedings before the TTAB, B&B sued Hargis for trademark infringement in Federal District Court. After receiving a favorable outcome in the proceeding before the TTAB, B&B argued in District Court that Hargis could not contest the TTAB’s determination that a likelihood of confusion existed due to the preclusive effect of the TTAB’s decision. The District Court disagreed with B&B and allowed the jury to hear the evidence and decide on the issue of confusion. The jury returned a verdict for Hargis, finding that there was no likelihood of confusion between the marks. The parties appealed the verdict, including the issue of the preclusive effect of the TTAB decision. The Eighth Circuit affirmed the decision of the District Court. The parties then petitioned for, and were granted, certiorari on the issue by the U.S. Supreme Court.

The Supreme Court reversed the decision of the Eighth Circuit and remanded the case for further proceedings, holding that as long as the ordinary elements of issue preclusion are met and the usages of the marks are materially the same, a finding that a likelihood of confusion exists by the TTAB should have preclusive effect in District Court proceedings.

The doctrine of “res judicata” or “issue preclusion” states that litigants should not get two bites at the same apple, or two chances to argue over the same issue. Thus, if the Trademark Trial and Appeal Board found overlap (i.e., likelihood of confusion) between two marks (despite using the simplified tools involved in proceedings before the Trademark Office), then a District Court should honor the TTAB’s determination and not force the parties to relitigate the issue.

Prior to this decision, if a case was simultaneously pending in District Court and before the TTAB, the TTAB would readily stay its determination until the litigation in District Court was resolved. Because of this, any time one of the parties to an opposition or cancellation proceeding became agitated, they would file a concurrent action before a District Court. Following the Supreme Court’s decision, it is unclear if the TTAB will continue to grant this courtesy.

Trademark oppositions and cancellations must now be taken very seriously. While the TTAB cannot award damages or find infringement, its decisions could now be used as grounds for finding infringement in District Court. For example, a party who defaults in a cancellation proceeding may well lose the right to defend itself properly in District Court if a subsequent action is filed. Going forward, mark owners with proceedings before the TTAB must consider whether to intentionally abandon a trademark application or registration in order to avoid an adverse decision that could have far-reaching effects.

ARTICLE BY

John E. Munro
Alain Villeneuve
Vedder Price

Understanding Post-AIA Power of Attorney Procedures –America Invents Act

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Applicants identified upon a U.S. patent application’s filing can impact the ownership rights to the patent application throughout prosecution.  Prior to implementation of relevant aspects of the America Invents Act (AIA) on September 16, 2012, patent application Applicants could only be Inventors.  Conversely, applications filed on or after September 16, 2012 can have Inventors or Assignees as Applicants.  The choice of Applicant – Inventors or Assignees – upon filing in post-AIA applications affects how Power of Attorney can be properly established before the U.S. Patent and Trademark Office (USPTO).

Pre-AIA patent applications filed before September 16, 2012 can have Power of Attorney granted by Inventors or Assignees under Rule 32, provided that the requirements of Rule 3.73 are satisfied.  In contrast, post-AIA applications filed on or after September 16, 2012 can be filed with Inventors or Assignees as the Applicant, with Rule 32 requiring a Power of Attorney to be signed by either the “Applicant” or “Patent Owner.”  However, an Assignee only becomes the patent owner after the application issues as a patent.  Thus, in order to take over prosecution in a post-AIA application, the Assignee must either initially be listed as or later formally established to be the Applicant for Power of Attorney to be granted on behalf of the Assignee.

In circumstances where a post-AIA application’s Applicant is identified upon filing as the Assignee, the Assignee may execute a Power of Attorney, and it can be filed without the need to file any separate papers to satisfy Rule 3.71 or Rule 3.73.

When a post-AIA patent application is filed without listing the Assignee as the Applicant (i.e., because the Inventors are listed as the Applicant) or when the Assignee changes during the course of prosecution, Rule 3.71 or Rule 3.73 must be satisfied for the Assignee to establish a Power of Attorney before the USPTO.  Namely, a statement under Rule 3.73(c) and a Power of Attorney must be filed.  However, the Assignee must first be identified as an Applicant.  Currently there are two ways for an Assignee to become an Applicant when not so listed upon initial application filing.  First, an Applicant can be added to the existing list of Applicants.  Alternately, all Inventors can be removed as the Applicant and be replaced with the Assignee as the Applicant.

A change in an Applicant can be accomplished by filing a supplemental Application Data Sheet (ADS), fulfilling the Rule 3.73(c) requirements including a showing of ownership.  A chain of title can be demonstrated through executed assignment(s) and a statement specifying where documents verifying the chain of title from the original owner to the assignee are recorded in the assignment records of the USPTO by reel and frame number.  After adding the Applicant, Rule 3.71 or Rule 3.73 can be satisfied by filing a statement under Rule 3.73(c) and filing a properly executed Power of Attorney, thereby appointing the designated patent practitioner.

Accordingly, administrative burdens on the USPTO, on Assignees, and on Assignee representatives can generally be reduced by filing post-AIA applications listing the Assignee as the Applicant, should the Assignee be known at the time of filing.

Colleen Witherell also contributed content for this article.

ARTICLE BY

Christina Sperry
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Target Corp. v. Destination Maternity Corp., Final Written Decision IPR2013-00532

Drinker Biddle & Reath LLP a leading law firm with a national footprint

Takeaway: Where neither party provides an interpretation of a term that provides additional clarity, the Board will give the term its plain and ordinary meaning.

In its Final Written Decision, the Board found that Petitioner had shown by a preponderance of the evidence that all challenged claims (claims 1, 2, 5, 6, 10, 11, and 15-17) of the ’531 patent are unpatentable. The ’531 patent “relates to a garment worn during different stages of pregnancy and different stages of postpartum body changes.”

The Board addressed claim construction, stating that claims in an unexpired patent are given their broadest reasonable construction in light of the specification of the patent. The Board first analyzed the term “just beneath the wearer’s breast area.” Patent Owner argued that the term means “beneath the location of the breasts by a very small margin.” However, the term “very small margin” does not provide any further clarity. The Board determined that because neither party offered a construction that provides additional clarity, the plain and ordinary meaning will be given. Also, the Board determined that the term is a term of approximation and that a garment may satisfy claim 1 for one wearer but not another because of differences in the wearers’ body types.

The Board then analyzed the term “different body types” used in claims 2 and 17. Although Patent Owner did not propose constructions for this limitation, its patentability arguments advance an implicit construction of “different body types” that requires an unspecified amount of difference between said body types. The Board determined that the broadest reasonable construction of “different body types” means “two or more body types that are not identical.”

The Board then analyzed the term “an elastic fabric that is contractible elastically to cover an abdomen during different stages of postpartum body changes” from claim 5. Although Patent Owner did not propose constructions for this limitation, the Board determined that its patentability arguments advanced an implicit construction that claim 5 requires a specific, yet unspecified, minimum amount of contractability. However, the specification does not specify any minimum amount of contractability and does not describe or identify any stages of postpartum body changes. Accordingly, the Board determined that the broadest reasonable construction of “during different stages of postpartum body changes” means “during any postpartum body change of any wearer,” which means that the fabric does not have to contract to cover postpartum body changes of every potential wearer or to cover all postpartum body changes of any wearer.

The Board next addressed the asserted grounds of unpatentability. Addressing anticipation based on a JC Penney catalog for fold-over panel jeans, the Board disagreed with Patent Owner’s assertion that the product shown in the catalog did not disclose a panel extending “high enough on the wearer’s body.” The Board found that the JC Penney catalog disclosed a panel substantially covering the belly region and noted that it was the belly region, and not the panel, that the claims require to extend to just beneath the wearer’s breast area. Thus, the Board was persuaded that claim 1 was anticipated by the JC Penney reference. Also, the Board disagreed with Patent Owner’s assertion that Petitioner has failed to prove that the panel of the JCP fold-over panel jeans stretches or expands enough to conform to different body types, because the claims do not require any quantified amount of stretching or expansion and the term “different body types” includes any two or more body types that are not identical. The Board was also not persuaded by Patent Owner’s argument that the panel of the JCP fold-over panel jeans is not described as being contractible as allegedly recited in claim 5. The Board indicated that contraction is always present where there is contraction, and the claims did not require any specific amount of contraction.

With respect to dependent claims 6, 11, 15, and 16, Petitioner asserted obviousness based on the JC Penney catalog applied to claim 1 in view of JC Penney Bootcut jeans. Patent Owner alleged nonobviousness based on the secondary consideration of commercial success. However, Patent Owner failed to link the alleged commercial success of the products to the inventions of claims 6, 11, 15, and 16. Specifically, Patent Owner’s witness conceded that the commercial success of Patent Owner’s products had nothing to do with the unique characteristics of claims 6 and 11, which add limitations directed exclusively to features of the garment lower portion.

Target Corp. v. Destination Maternity Corp., IPR2013-00532
Paper 76: Final Written Decision
Dated: February 12, 2015
Patent: RE43,531 E
Before: Jennifer S. Bisk, Michael J. Fitzpatrick, and Mitchell G. Weatherly
Written by: Fitzpatrick
Related Proceedings: Destination Maternity Corp. v. Target Corp., Case No. 2:12-cv-05680-AB (E.D. Pa.); IPR2013-00531; IPR2014-00508; IPR2013-00530; IPR2013-00533; IPR2014-00509

ARTICLE BY

Carrie A. Beyer
OF
Drinker Biddle & Reath LLP