Tag: patent

Supreme Court Cert: Laches (in Patent Cases) and Copyrightable Subject Matter to Be Reviewed

U_S_-Supreme-Court1Laches

The Supreme Court of the United States granted certiorari to review a patent case on the law of laches. SCA Hygiene Products v. First Quality Baby Products, Case No. 15-927 (Supr. Ct., May 2, 2016).

In its cert petition, SCA argued that the en banc decision of the US Court of Appeals for the Federal Circuit conflicts with the Supreme Court’s decision in Petrella v. Metro-Goldwyn-Mayer (IP Update, Vol. 17, No. 5) that, under the Copyright Act, laches cannot bar damages claims brought within a statutory limitations period, even though the initial violation may have occurred years earlier. SCA also argued that the Federal Circuit observes a presumption in favor of laches that is inconsistent with Supreme Court precedent.

The question presented is: Can the defense of laches bar a claim for patent infringement brought within the Patent Act’s six-year statutory limitations period (35 USC § 286), and if so, to what extent?

In SCA, the Federal Circuit granted en banc review to determine if the Supreme Court’s Petrella decision required a change to the law of laches in patent cases (IP Update, Vol. 18, No. 10). In a 6–5 decision, the Federal Circuit held that in terms of patent infringement actions, Petrella did not require a change in the laches rule set out by the court in 1992 in A.C. Aukerman v. R.L. Chaides Constr. Rather, the en banc Court explained that notwithstanding the provisions of § 286, Congress codified the laches defense in § 282 when it included an unenforceability defense in that statute. Thus, the Court found that laches could bar a damages claim even for acts occurring within the six-year period of § 286.

The Federal Circuit also held, however, that Petrella requires a change in the Aukerman rule that only pre-suit damages may be barred by laches. The Court explained that the availability of injunctive relief or ongoing royalties now depends on an analysis of the circumstances of the delay under the Supreme Court’s 2006 decision in eBay, Inc. v. MercExchange (IP Update, Vol. 9, No. 5).

Copyrightable Subject Matter                

The Supreme Court also granted certiorari in a copyright case arising from the US Court of Appeals for the Sixth Circuit and presenting the issue of copyrightability of cheerleader uniforms. Star Athletica, L.L.C. v. Varsity Brands, Inc., Case No. 15-866 (Supr. Ct., May 2, 2016).

The question presented is: What is the appropriate test to determine when a feature of a useful article is protectable under § 101 of the Copyright Act?

In Star, a split panel of the Sixth Circuit held that the arrangement of colors, stripes, chevrons, zigzags and other designs on a cheerleading uniform are copyrightable, separate from utilitarian aspects of the uniform itself (IP Update, Vol. 18, No. 9). The Court rejected the argument that the pictorial, graphic or sculptural features are simply performing a decorative function (which is itself a “utilitarian aspect of an article”) and are therefore not separable from the utilitarian aspects of the cheerleading uniform. The dissent argued that the case turned on how “function” is defined (i.e., in terms of the decorations in issue), which would determine whether the designs were copyrightable.

Article By Paul Devinsky of McDermott Will & Emery

© 2016 McDermott Will & Emery

Case of First Impression: Federal Circuit Endorses Patent-Agent Privilege

In a case of first impression regarding whether communications between a non-lawyer patent agent and a client are legally privileged, a split panel of the US Court of Appeals for the Federal Circuit held that a patent-agent privilege is warranted on a limited basis where an agent is engaged in the congressionally endorsed, authorized practice of law. In Re Queen’s University at Kingston, PARTEQ Research and Development, Case No. 2015-145 (Fed. Cir., Mar. 7, 2016) (O’Malley, J) (Reyna, J, dissenting).

The opinion followed the plaintiffs’ petition for mandamus. At the district court, the petitioners withheld documents reflecting communications between the plaintiffs’ employees and the non-lawyer patent agents who prosecuted the patents-in-suit based on an alleged patent-agent privilege. The district court overruled objections to the magistrate’s order granting defendants’ motion to compel production over the alleged privilege, but agreed to stay the discovery order pending a writ of mandamus. Applying Federal Circuit law, the Court found that mandamus was warranted to decide the issue of first impression, which had split the lower courts.

The Federal Circuit first recognized that “Rule 501 of the Federal Rules of Evidence authorizes federal courts to define new privileges by interpreting ‘common law principles.’” Finding that the respondents did not argue that a patent-agent privilege was foreclosed by the US Constitution, any federal statute or any rule prescribed by the Supreme Court of the United States, the Court turned to reason and experience, as directed by Rule 501, in order to determine whether recognizing a privilege was now appropriate. The majority concluded that it was, holding that the unique roles of patent agents, the congressional recognition of their authority to act, the Supreme Court’s characterization of their activities as the practice of law, and the current realities of patent litigation warranted an independent patent-agent privilege.

The Federal Circuit relied on the Supreme Court’s prior assertion that the preparation and prosecution of patent applications for others constitutes the practice of law. Further, the majority found that Congress had delegated to the commissioner of patents oversight authority concerning lawyers, agents or other persons representing applicants or other parties before the US Patent and Trademark Office (PTO), and that the commissioner had, in fact, allowed both lawyers and agents to practice before the PTO.

In further support, the majority panel cited both the Supreme Court’s recognition of Congress’s delegation of supervisory authority to the commissioner of patents for lawyers and agents alike, and related legislative history acknowledging the practitioners’ equivalent professional rights before the PTO. The majority found that a client has a reasonable expectation that all communications relating to obtaining legal advice on patentability and legal services in preparing a patent application will be kept privileged, and that denying privilege to agents would frustrate Congress’s intent to provide clients a choice between agent and lawyer. As a result, the majority found that a patent-agent privilege is coextensive with the rights Congress affords to patent agents, and serves the same important public interests as the attorney-client privilege.

The Court also noted that the new privilege’s scope is necessarily limited to communications with non-lawyer patent agents when those agents are acting within their authorized practice of law before the PTO. The Court found that the Code of Federal Regulations (CFR) sets forth the acts permitted by non-lawyer agents and helps to define the scope of communications covered under the privilege. For example, communications are due the privilege if made in furtherance of the performance of tasks specifically set forth in the CFR, or “are reasonably necessary and incident to the preparation and prosecution of patent applications or other proceedings before the [PTO] involving a patent application or patent in which the practitioner is authorized to participate.” The Court stressed that it is the burden of the person asserting the privilege to justify its applicability. The Court also cited examples of non-privileged communications, including those with a patent agent who offers an opinion on the validity of another party’s patent in contemplation of litigation or the sale or purchase of a patent, or on infringement.

In dissent, Judge Reyna argued that the public’s need for open discovery outweighed the need for the privilege. The dissent also argued against the new privilege with the following reasoning:

  • The privilege may adversely affect an agent’s duty of candor.

  • Agent communications are already routinely protected because of lawyer involvement.

  • Patent agents and clients are able to destroy written communications through implementation of document-destruction policies.

  • Determining the scope of the privilege is complicated and uncertain.

  • Congress and the Supreme Court have recognized a difference between agents and lawyers.

  • Evidence suggests that Congress did not intend that agents have a privilege.

  • No state has created an agent-client privilege.

  • The Judicial Conference Advisory Committee has not recommended creating the privilege.

  • Lawyers hold the privilege because of their professional status.

  • The Supreme Court has never held that patent agents practice law; it has merely recognized that the Florida Supreme Court has done so under Florida law.

  • Congress has never believed that patent agents practice law.

The Federal Circuit remanded the issue to the district court to determine whether the patent-agent privilege applied.

Article By John C. Low, PhD
© 2016 McDermott Will & Emery

The Smart Phone Patent Saga Continues: Apple Inc. v. Samsung Electronics Co., Ltd., et al.

In a case involving suits, countersuits and multiple appeals by the two giants of the mobile phone space, the US Court of Appeals for the Federal Circuit reversed a jury’s finding of infringement, voiding the accompanying award to Apple of more than $119 million. Apple Inc. v. Samsung Electronics Co., Ltd., et al., Case Nos. 015-1171, -1195, -1994 (Fed. Cir., Feb. 26, 2016) (Dyk, J).

In this case’s third appeal, the Federal Circuit was asked to deal with “the core infringement and invalidity issues with respect to the asserted patents.” At issue were five patents asserted by Apple against Samsung (four of which a jury found to be infringed) and two patents asserted by Samsung against Apple (one of which the same jury found to be infringed).

After the district court entered judgment on the jury verdict ($120 million to Apple and $160,000 to Samsung), both sides appealed.

The Apple Patents

With regard to the Apple “click structure” patent, the Federal Circuit found that no reasonable jury could have concluded that the accused Samsung devices included the claimed “analyzer server,” and reversed the judgment of infringement. Before trial, neither party sought construction of “analyzer server,” agreeing that it should be given its ordinary meaning. On the last scheduled day of the trial, the Federal Circuit construed this term (in the Motorola case) as “a server routine separate from a client that receives data having structures from the client.” The district court adopted this construction and permitted the parties to recall their expert witnesses to provide testimony under this construction. However, the Federal Circuit concluded that Apple failed to present sufficient testimony that the accused software library programs in the Samsung phones ran separately from the programs they served (i.e., the Browser and Messenger applications), as required by the Federal Circuit’s construction. Accordingly, the Federal Circuit reversed the district court’s denial of judgment as a matter of law (JMOL) of non-infringement.

Apple also asserted its “slide to unlock” patent, whereby a user can slide a moving image across the screen with a finger in order to unlock the phone, and its “auto correct” patent, whereby a phone automatically corrects typing errors. At the district court, Samsung sought JMOL that both of these patents were invalid as obvious. The Federal Circuit agreed.

For the “slide to unlock” patent, Apple did not dispute that the prior art combination disclosed all of the claimed features. Rather, Apple argued that the jury could have reasonably found that one of the references taught away from using the “slider toggle” feature, and that a skilled artisan would not have been motivated to combine these references, since the slide toggle reference describes a wall-mounted touch-screen device, not a mobile phone. The Federal Circuit  disagreed, concluding that “[t]he fact that [the prior art reference] notes that users did not prefer the particular design of the slider toggle is not evidence of teaching away.” The Federal Circuit reasoned that a motivation to use the teachings of a particular prior art reference need not be supported by a finding that the feature is the “preferred, or the most desirable” option.

The Federal Circuit also concluded that no reasonable jury could find that the reference is not analogous art since it concerned user interfaces for touch-screen devices, noting that the asserted patent and the reference both disclose essentially the same structure: a touch-screen device with software that allows the user to slide his or her finger across the screen to change interface states.

The Federal Circuit also dismissed Apple’s secondary considerations argument, noting that although Apple identified the unsolved problem as the lack of an “intuitive” method of unlocking a touch-screen portable device, it provided no evidence showing that the asserted need was recognized in the industry. With respect to industry praise, the Court noted that evidence of approval by Apple fans—who may or may not have been skilled in the art—is not legally sufficient.

With respect to copying, the Federal Circuit noted the only evidence of copying went to an unlock mechanism using a fixed starting and ending point for the slide—a feature disclosed in the prior art. Finally, with respect to commercial success, the Federal Circuit reasoned that Apple’s evidence was not sufficient to show a “nexus” between the patented feature and the commercial success of the iPhone. Accordingly, the evidence of secondary considerations was insufficient as a matter of law to overcome the prima facie obviousness case.

Apple also asserted its “universal search” patent that permits a user to search for results from both the phone and the internet based on a single search term. On appeal, the issue was whether the search feature on the Samsung phones “locates” information on the internet. The district court found that Samsung devices do not search the internet, but rather blend data previously retrieved from a Google server and a local database. Apple argued that the plain meaning of the claim covered search information previously downloaded from the internet, a construction the  district court denied. The Federal Circuit agreed with the district court’s denial.

The Samsung Patents

Samsung asserted a patent directed to capturing, compressing and transmitting videos. In its claim construction order, the district court construed “means for transmission”—a means-plus-function claim limitation—to require software in addition to hardware. Samsung argued that the district court erred in its construction because the specification did not “require any software for transmission, and including such software [in addition to hardware] as necessary structure was error.” The Federal Circuit agreed with the district court that the term “transmission” implies communication from one unit to another, and the specification explains that software is necessary to enable such communication. The Federal Circuit noted that software is necessary because hardware alone does nothing without software instructions telling it what to do, and affirmed the district court’s construction of the term and the judgment of non-infringement.

As for Samsung’s patent directed to a camera system for compressing, decompressing and organizing digital files, the jury found that Apple had infringed, and the district court denied Apple’s post-trial motion for JMOL of non-infringement. Apple argued that no reasonable jury could have found that the Apple products met the “compressor” and “decompressor” limitations of the claim because these limitations require components that compress or decompress both still images and videos, and its products use separate and distinct components to compress and decompress still images and videos. The Federal Circuit rejected this argument, finding that Samsung presented testimony that identified a single Apple design chip with circuitry that performs compressing/decompressing methods for both images and videos.

Practice Note: Assuming this decision resolves the utility patent fight, the only remaining battle shifts to the Supreme Court of the United States, which has now agreed to hear Samsung’s appeal on the issue of damages in connection with design patent infringement. See CertAlert in this issue of IP Update.

Article By

Nitin Gambhir
McDermott Will & Emery
© 2016 McDermott Will & Emery

Superman Breyer v. Batman Lourie Battle in Sequenom Petition for Cert.

This is an amplification of my last post on the Sequenom petition for cert. in Sequenom v. Ariosa. I have been arguing for some years that the patent world will never be at rest where diagnostic claims are concerned until the patent eligibility of a simple “If A, then B” claim is addressed by the Fed. Cir. and/or the Supreme Court.

This is the type of claim criticized by Justices Breyer, Souter and Stevens in the “Metabolite Labs dissent” of 2006, when the Court declined to decide the patent-eligibility of a method of detecting a deficiency of cobalamin or folate by assaying a body fluid for an elevated level of homocysteine and correlating the elevated level with a cobalamin or homocysteine deficiency.” Justice Breyer just called the claim a law of nature with a mental step.

Fast forward to 2012 and the Mayo decision (132 S.Ct. 1289), and the Supreme Court invalidated an awkwardly drafted claim that I will re-write here as a method of medical treatment claim:

A method of treating an immunoregulatory disorder by administering a [known drug] so that the metabolite levels of said drug in the blood are between 1 and 10 um/l. (I made up the concentrations, but they represent, on the low side, minimal acceptable efficacy and, on the high side, unacceptable side effects. This is what the Court viewed as a natural phenomenon or correlation).

The Alice decision led the Court to the “Mayo Rule,” that a claim reciting a natural law, phenomenon or abstract idea had to be inspected to see if, in combination with the additional steps, it contained a further inventive concept that would render the claim patent-eligible under s. 101. Little guidance has been provided by the courts or the PTO as to how this rule should be applied in the case of life science claims, particularly to diagnostic claims. (Dicta in Mayo suggested that the Court did not view the claim as directed to a diagnostic method.)

Enter Arisoa. The Fed. Cir. held that the Mayo Rule rendered all the appealed claims patent-ineligible as directed to a natural phenomenon combined with well-known laboratory techniques. And, in fact, most of the appealed claims are broad. Here is claim 1 of US 6,258,540:

  1. A method for detecting a paternally inherited[cffDNA] …which method comprises amplifying a paternally inherited nucleic acid of fetal origin from a serum or plasma sample [from a pregnant female] and detecting the presence of cffDNA in the sample.

That’s it. In an earlier post, I noted that only claim 21 recites that a diagnostic test is carried out of the amplified cffDNA. The final step of this claim reads: “providing a [prenatal] diagnosis based on the presence and/or quantity and/or sequence of the foetal nucleic acid.”

The Federal Circuit opinion below noted that this claim was on appeal but did not mention it again in its opinion. But, in Sequenom’s petition it is the only claim that is reproduced in full. Sequenom states that “Claim 21 situates [the steps of amplification and detection of cffDNA] within a larger diagnostic method that up-ended conventional practice.”

Sequenon knew both that a claim to cffDNA in maternal blood was unpatentable as a natural phenomenon. The isolated and purified cffDNA obtained after amplification and detection is a patent-ineligible natural product thanks to Myriad. So Sequenom’s decided that its best approach was to argue that the isolation and detection steps where not conventional because they had never previously been used to isolate and detect the target biomarker, cffDNA. So the Question posed to the Supreme Court might have been: “Is a method directed to isolating a biomarker from a patient sample where it had not been known by the art to occur, patent-eligible under s. 101?” But that is not exactly how Sequenom saw it in its petition, when it wrote that the Question Presented is:

“Whether a novel method is patent-eligible where; (1) a researcher is the first to discover a natural phenomenon; (2) that unique knowledge motivates him to apply a new combination of known techniques to that discovery, and (3) he hereby achieves a previously impossible result without preempting other uses of that discovery.”

The “Question” is more difficult to interpret than many claims, and raises more questions than it answers. Why does the method have to be novel to meet the requirements of s. 101? What is the “natural phenomenon”? But these are minor quibbles that Judge Breyer seems to have answered to his own satisfaction. In other words, any diagnostic test will be based on the discovery of a natural phenomenon. In this case it is not the correlation between cffDNA and any pathological state, it is the existence of cffDNA in maternal blood. Remember, only claim 21 recites carrying out a diagnostic assay based on the cffDNA, but the claim does not recite the condition that is detected.

To continue, the “unique knowledge” [of cff DNA in maternal blood] motivates researcher to apply a new combination of known techniques to that discovery. But the only conceivable difference between the known techniques used to amplify and detect cffDNA and the known techniques to measure elevated homocysteine, does not lie in the analytic techniques but in the marker that is being detected or measured. In other words, the known techniques are in “new combination” because of the marker to which they are applied.

The last factor in the Sequenom Question requires the researcher to achieve a previously impossible result without preempting other uses of the discovery. This can be no more than an tautological attempt to save the claims that do not recite carrying out a diagnostic test. But what is the impossibility that has been overcome? The previously impossible result can only be a blood test that can yield information about the state of the fetus. And all practitioners soon learn the danger of labeling the results of an invention as previously impossible.

But doesn’t any new diagnostic test achieve a result that is “impossible” before it was discovered? To come full circle, it was surely “impossible” to predict the likelihood of a man’s developing prostate cancer before the PSA assay was discovered – e.g., before it was discovered that PSA was a fairly reliable biomarker for imminent or present prostate cancer. (And there were other uses for the homocysteine assay as well – at least in 2006, lack of preemption would not have saved that claim from Justice Breyer.)

Until the recognition of the significance of a natural correlation by a researcher is given weight as an “unconventional step” per se, the relentless degradation of patent claims for both diagnostic methods and methods of medical treatment [remember my Mayo claim, above] will continue. That’s why Judges Lourie and Moore are my current superheroes, since, in their Ariosa concurrence, they wrote that “the patent’s claims merely ‘rely on or operate by, but do not recite [claim?] a natural phenomenon…and that barring such inventions under s. 101 would mean that ‘nothing in the physical universe would be patent eligible.’” Sequenom wants the Supreme Court to reverse on the basis that the Fed. Cir. is applying the Mayo Rule too broadly. I don’t think they are wrong. I just don’t like the condition of the horse they rode in on.

Article By Warren Woessner of Schwegman, Lundberg & Woessner, P.A.
© 2016 Schwegman, Lundberg & Woessner, P.A. All Rights Reserved.

Amazon to Control Delivery by Drone?

People are talking about and news organizations are covering Amazon’s announced plans to deliver goods by drone in the not-too-distant future.  However, fewer are talking about or covering Amazon’s effort to be the only company that can autonomously deliver goods by drone.  On March 25, 2014, Amazon filed a United States patent application directed to aspects of a drone delivery system.  Pursuant to current patent law, the application was published on October 1, 2015, roughly 18 months after the application was filed.  While the application is still pending and not yet an issued patent, it provides an interesting look at the scope of protection Amazon is seeking for its drone delivery system.

Under current proposed FAA regulations, drones cannot be flown outside of the line of sight of the operator.  A much greater range will be needed for an effective drone delivery network.  Amazon is proposing to send its drones as far as 15 miles from a regional fulfillment center.  The drones would take off vertically from a warehouse floor, fly at low altitude over a suburban landscape and then descend into the backyards of their destination points.  There they would lay the package on the lawn before lifting off to return to the warehouse for another run.  The success of such a system will depend upon receiving FAA approval.  FAA approval of such a system is likely to be contingent upon demonstrating that the system can be operated without causing a hazard.  In other words, the drones will need to be equipped  with “sense and avoid” technology that prevents them from crashing into things.

Amazon’s pending patent application, Pub. No. US 2015/0277440 A1, contains claims that are broadly directed to a propeller driven automated mobile vehicle having a laser based rangefinder configured to determine a distance to an object, to a distance determining system for an automated mobile vehicle having a distance determining element positioned to emit a laser signal that reflects off a reflective exterior surface of a motor, and to an automated mobile vehicle having a plurality of motors where the alignment axis of at least two of the motors are not parallel and each motor has a distance determining element.  These claims have not yet been examined by the Patent Office.  Upon examination, the scope of the claims will likely have to be narrowed to distinguish them from prior art.  However, it seems clear that Amazon is interested in pursuing broad protection for “drones” having a distance determining element, which is likely to be a necessary component of any “sense and avoid” technology.  Thus, the potential exists that Amazon will obtain patent protection broadly covering drone delivery systems.

The way the Amazon patent application is written, it seeks to avoid the need for human involvement to ensure that vehicles do not collide with other drones, manned aircraft, or other objects or structures on the ground.  It also discusses a system for automatically sensing and avoiding objects.  Thus, the “automated mobile vehicles” of the application and recited in the claims appear to be directed to autonomous drones.  However, at this stage it is not yet clear whether the claims in any patent that issues will be limited to autonomous drones, but might also cover remotely-piloted drones.  It remains to be seen whether the examination process will push Amazon into limiting the claims to autonomous operation.

The Amazon patent application also discusses the distance determining elements being used to detect the presence of objects and to then cause the automated mobile vehicle to alter its path to avoid the object.  Thus, the distance determining elements seem to be used not only for unloading positioning, but also for sense and avoid in flight.  While in a remotely piloted context, a sense and avoid system may not need to actually determine distances to other objects.  The remote pilot could rely on visual displays of the surrounding environment of the drone to avoid collisions.  However, in an autonomous operation, it is difficult to envision any sense and avoid system that would not need to know at least the distance from the drone to surrounding objects to function.  Amazon appears to be using this need to know such distances in the autonomous context to preempt the field.  In other words, a patent covering any autonomous drone that determines distance to surrounding objects might preclude any other drones from being able to have a functioning sense and avoid capability.

The broadest claims in the Amazon patent application just recite a “distance determining element.”  In a narrower claim, the application specifies “the distance determining element is at least one of an ultrasonic ranging module, a laser rangefinder, a radar distance measurement module, stadiametric based rangefinder, a parallax based rangefinder, a coincidence based rangefinder, a Lidar based rangefinder, Sonar based rangefinder, or a time-of-flight based rangefinder.”  Thus, at this stage, Amazon is trying to cover all of the named techniques, any combination of those techniques, as well as anything else that could broadly be considered a distance determining element.

As noted, the Amazon patent application is still just pending and has yet to be examined.  Amazon may have other patent applications pending that have not yet been published, and therefore are not yet open to review by the public.  FAA regulations are also still developing.  Thus, much remains to be determined even as it relates to Amazon itself.  Other entities may also be working on drone delivery systems and/or have pending patent applications that have not yet been published.  Domino’s Pizza is said to have tested delivering pizzas by drone.  Skype’s co-founders have set up Starship Technologies to develop a ground-based drone that would be able to deliver groceries to customer’s homes.  It will be very interesting to see how the intellectual property protection for drone delivery systems plays out.

Article By Thomas J. Daly of Lewis Roca Rothgerber LLP

©2015 All Rights Reserved. Lewis Roca Rothgerber LLP

Top Patent Law Stories In 2015

There was a lot of IP action in 2015 – much involving the Fed. Cir. and Supreme Court’s resolution of cases in progress in 2014. In no particular order, I pick:

top patent stories of 20151.  Ariosa v Sequenom. This Fed. Cir. decision that a method for isolating “cffDNA” from maternal blood is no more than a natural phenomenon was a big step backwards for the development of patent law in the area of “precision medicine” and clouds the future patent-eligibility of both natural products and methods of diagnosis and treatment. It is a pick to click with the Supreme Court. (There was also a PTO “July 2015 Update” of the December 2014 s. 101 Guidelines that really did not clarify anything.)

2.  Biosimilars Hit the Shelves. In April, the FDA finalized its biosimilars guidance and Sandoz soon launched the first biosimilar, a generic version of Neuprogen.

3.  Nautilus v Biosig. The Supreme Court redefined the “indefiniteness standard” of s. 112(2) so that a claim term must be reasonably certain to the POSA, not simply amenable to construction. In Dow v. Nova, this new standard compelled invalidation of the claims-in-suit.

4.  The Rise of the PTAB. While it seems clear that the Fed. Cir. does not want to review every decision made by the PTAB in IPR, it released important decisions relating to its authority. In re Cuozzo, the court preserved the application of the PTO’s broadest reasonable claim construction rule in IPRs. In Merck v. Gnossis, the court affirmed that it would review PTAB decisions under the deferential “substantial evidence” standard, and not review PTAB decisions for proper application of the preponderance of the evidence standard.

5.  Obviousness Post-KSR. With the Supreme Court’s rejection of the teaching-suggestion-motivation by the art requirement, the Fed. Cir. has been developing the legal standards around obviousness questions derived from decisions that the Supreme Court left intact. These include a greater reliance on evaluating whether or not the art “teaches away” from the claimed invention, and evidence tending to show that hindsight was employed by the lower court or the Board. Closer evaluations of secondary considerations such as commercial success, failure of others, long-felt need, etc. are appearing in recent decisions. For example, see Judge Newman’s dissent in Merck v. Gnossis, Appeal no. 2014-1779 (Fed. Cir. 2015); see also Shire v. Anneal.

6.  Teva v. Sandoz Reverses Cybor. Fed. Cir. can still review questions of law de novo, but must give deference to the lower court’s findings of fact.

7.  Kimbel v. Marvel. In this “Spiderman” decision, the S. Ct. upheld the viability of Brulotte v. Thys: “No royalties for you” patentee/licensee, after the patents have expired. Impact: not huge, since patentees have been designing work-arounds for years.

8.  The Gradual but Steady Demise of Invalidations Based on Inequitable Conduct. Even though the decisions on appeals post-Therasense affirmed findings of IC about half the time, there were no important decisions involving IC in 2015. Either it is being pled less or being dismissed earlier in the proceedings. The Fed. Cir. earlier had upheld the invalidation of an Apotex patent, and Apotex has petitioned for cert., calling the Therasense decision just one more rigid Fed. Cir. rule, but I don’t think the Supreme Court will bite.

9.  The Gaggle of Decisions on Divided Infringement. This includes Akami v. Limelight (direct infringement can involve multiple actors if one “mastermind” controls their actions), Commil v. Cisco (belief in invalidity does not negate intent to induce infringement), Life Techs. Corp. v. Promega (self-active inducement under 271(f)(1)) and others that never quite captured my interest.

10.  The Trans-Pacific Partnership. According to Republicans, one more thing that President Obama got wrong.

So Happy New Year to All! 2016 Promises to be equally interesting – as in the old Chinese curse – “May You Live in Interesting Times.”

Article By Warren Woessner of Schwegman, Lundberg & Woessner, P.A.
patents4Life blog

© 2015 Schwegman, Lundberg & Woessner, P.A. All Rights Reserved.

Delicious Look At Cookie Press Patent

I like to bake cookies, and this time of year gives me the perfect excuse to bake a lot of cookies. One of my favorite recipes uses a cookie press, which made me curious about cookie press patents. There are only a few granted U.S. patents with “Cookie Press” in the title, but U.S. Patent 6,708,853 seems to claim technology that I put to good use every December.

The Cookie Press Patent

U.S. Patent 6,708,853 names Hugh Melling asthe inventor and is assigned to Wilton Industries, Inc. Claim 1 recites:

1. An apparatus for dispensing a food substance comprising: a) a housing; b) a barrel connected to the housing and adapted to receive the food substance; c) a plunger slidably positioned within the barrel; d) a rod having teeth thereon and connected to the plunger; e) an advancing mechanism movably positioned within the housing and including: i) an escapement body; ii) a driver slidably positioned within the escapement body; iii) a spring engaging the driver and the escapement body so that the driver is biased toward said rod so that the driver engages a tooth of said rod; f) a lever pivotally attached to the housing and engaging said advancing mechanism so that when said lever is pressed towards said barrel, the driver moves said rod so that said plunger is advanced to dispense the food substance from the barrel.

According to the description in the specification, the spring may be a feature that distinguishes this cookie press over prior art cookie presses.The spring is located in the “escapement assembly 50″ but is not identified in Figure 3, reproduced below.

Cookie Press Patent Figure

As explained in the patent “a disc 20 is positioned at the bottom of the cookie barrel. The disc 20 includes openings 21 arranged in a variety of patterns to form a template for dispensing cookie dough. A bottom cap 16 with an opening 17 therethrough secures the disc 20 to the bottom of the cookie barrel. … [C]ookie dough is dispensed through the openings 21 of the disc 20 when the lever 22 of FIGS. 1 and 2 is manipulated.” This makes it easy to make fancy-looking cookies like these:

holiday cookies

Happy Holidays!

Article By Courtenay C. Brinckerhoff of Foley & Lardner LLP
© 2015 Foley & Lardner LLP

Smartphone Wars – Supreme Court Awakens: Samsung Files Petition for Certiorari in New Hope to Harmonize Design Patent Law

On Monday, in the latest episode of the smartphone wars, Samsung filed a petition for certiorari with the Supreme Court.

Smartphone Wars

Samsung is appealing a Federal Circuit decision that upheld a $399 million judgment against Samsung for infringing three of Apple’s design patents. Samsung argues that the decision, if left unchecked by the Supreme Court, could dramatically increase the value of design patents. While the Supreme Court is the ultimate power in patent jurisprudence, it was a long time ago that it last considered a design patent case; more than 120 years ago according to Samsung. Samsung’s petition presents two fundamental questions concerning design patents:

1. Where a design patent includes unprotected non-ornamental features, should a district court be required to limit that patent to its protected ornamental scope?

2. Where a design patent is applied to only a component of a product, should an award of infringer’s profits be limited to those profits attributable to the component?

With respect to the first question – whether a district court should be required to limit the protection of a design patent to only ornamental features – Samsung argues that the Federal Circuit’s decision conflicts with both Section 171 of the Patent Act and with the Supreme Court’s precedent requiring judicial construction of patent claims.

According to Samsung, the Federal Circuit refusal “to cabin design patents to their protected ornamental scope” conflicts with Section 171 and allows infringement to be “found based on the use of nonornamental attributes.” Thus, argues Samsung, the Federal Circuit broadened the protectable scope of design patents, which are limited to “any new, original and ornamental design for an article of manufacture,” under section 171. Samsung argues the Federal Circuit’s ruling also creates tension with other areas of intellectual property law that routinely enforce limitations to protectable scope, such as copyright doctrine of “filtration” and trademark law’s doctrine of functionality.

Samsung also maintains that the ruling is contrary to Supreme Court precedents in the analogous context of utility patents, which recognize that district courts have a duty to construe patent claims and eliminate unprotected features. In Samsung’s view, similar to a Markman hearing, a district court should instruct a jury to identify non-ornamental features of a design patent and exclude them from the infringement analysis.

Turning to the second question – whether damages should be limited to the profits attributable to the infringing component – Samsung argues that the Federal Circuit’s decision conflicts with Section 289 of the Patent Act and the basic principles of causation and equity.

Samsung urges that “the Federal Circuit’s holding as a matter of law that an infringer of a design patent is liable for all of the profits it made from its entire product, no matter how little the design contributed to the product’s value or sales” be corrected. Samsung argues that the Federal Circuit’s conclusion that the article of manufacture is the entire smartphone, and not specific subcomponents, is wrong based on a natural reading and purpose of Section 289 of the Patent Act, contemporary extrinsic evidence regarding the definition of “articles of manufacture,” and non-controlling case law (see note below).

According to Samsung, the Federal Circuit’s “interpretation of Section 289 also flies in the face of well-settled tort principles of causation” and “ignores that disgorgement of the defendant’s profits is a classic equitable remedy for which the accepted measure of recovery generally is ‘the net profit attributable to the underlying wrong.’” “The cardinal principle of damages in Anglo-American law is that of compensation for the injury caused to plaintiff by defendant’s breach of duty,” This is the backdrop in which Section 289 was adopted. “Where disgorgement is available in patent cases, it has [] been ‘given in accordance with the principles governing equity jurisdiction, not to inflict punishment but to prevent an unjust enrichment by allowing injured complainants to claim ‘that which … is theirs, and nothing beyond this.’”

Samsung claims that certiorari should be granted because the Federal Circuit’s decision dramatically increases the value of design patents relative to other forms of intellectual property. Without correction, design patents will have whatever scope juries choose to give them, and a design-patent holder will be entitled to the infringer’s profits on the entire product even if the patented design applies only to a part of the product, and contributes to only a minor faction of the overall value. The Federal Circuit’s decision allows design patent owners to obtain the infringer’s total profits – a remedy not available under utility-patent law. Samsung contends that such leverage “poses a real danger for companies everywhere,” that it will lead to an “explosion of design patent assertions and lawsuits.”

Will the Supreme Court agree with Samsung that the Federal Circuit has caused a great disturbance in design patent jurisprudence? Difficult to see. Always in motion is the future.

Bush & Lane Piano Co. v. Becker Bros., 222 F. 902, 904 (2d Cir. 1915), (allowed an award of infringer’s profits from the patented design of a piano case but not from the sale of the entire piano, holding that “recovery should be confined to the subject of the patent.”); Young v. Grand Rapids Refrigerator Co., 268 F. 966 (6th Cir. 1920), (Affirmed the denial of all profits from the sale of refrigerators where the infringed patent related only to the design of the refrigerator’s door latch, explaining that it was not even “seriously contended” that the patentee could recover all profits from sales of refrigerators containing that latch.)

Article By, Patrick T. Driscoll, James Wodarski, Michael T. Renaud & Michael C. Newman of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
©1994-2015 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.

Samsung Electronics Co. Ltd. and Samsung Electronics America, Inc. v. E-Watch, Inc: Decision Denying Institution IPR2015-00612

Takeaway: The Board does not have the authority to determine whether an application was abandoned or improperly revived when determining whether a challenged claim is entitlted to claim priority to a an earlier-filed application.  

In its Decision, the Board denied institution and determined that Petitioner had not demonstrated a reasonable likelihood of prevailing in showing the unpatentability of any of the challenged claims (claims 1-15) of the ’871 Patent. The ’871 Patent relates to “image capture and transmission systems and is specifically directed to an image capture, compression, and transmission system for use in connection with land line and wireless telephone systems.”

The Board reviewed the only asserted ground of unpatentability – that claims 1-15 of the ’871 Patent are anticipated by Monroe. The Board discussed whether Monroe is prior art. Monroe was published on July 15, 1999. The ’871 Patent issued from an application filed on January 3, 2003, which is a divisional of an application filed on January 12, 1998. Petitioner argued that the claims of the ’871 Patent are not entitled to the filing date of the 1998 “parent” application because of a lack of co-dependency between the parent and the divisional/child application. The Board stated that if Petitioner had argued that the parent application does not support the subject matter of the challenged claims in the divisional patent, then Patent Owner would have had to show that the challenged claims are entitled to an earlier filing date. However, Petitioner instead challenged co-pendency, which the Board noted was an attack on a petition decision in 2003 by the PTO reviving the parent divisional application when the child application was filed. Petitioner argued that the parent application was “purposefully” abandoned and should not have been revived.

The Board noted that Petitioner has not identified proper jurisdiction of the Board to review the 2003 decision or to ignore that decision and make its own determination about whether the parent application should have been revived. The Board stated it has the power to determine whether a patent owner can antedate a reference but that the status of an application as abandoned or revived is procedural and the Board does not have the ability to review such an action. Therefore, the Board found that Petitioner had not shown that Monroe constitutes prior art.

Samsung Electronics Co. Ltd. and Samsung Electronics America, Inc. v. E-Watch, Inc., IPR2015-00612
Paper 8: Decision Denying Institution
Dated: July 8, 2015
Before: Jameson Lee, Gregg I. Anderson, Matthew R. Clements
Written by: Clements
Related Proceedings: IR2015-00541; IPR2014-00439; IPR2014-00987; IPR2015-00402; IPR2015-00404; IPR2015-00406; IPR2015-00411; IPR2015-00412; IPR2015-00413; IPR2015-00610

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Is the SCOTUS Rule of Reason Unreasonable?

“Not too hard, not too soft,” says the Supreme Court in FTC v. Actavis, 133 S. Ct. 2223 (2013).  The majority tries to reach middle ground by rejecting both the FTC’s argument that any reverse payment in settlement of a patent claim is presumptively unlawful and Actavis’ argument that any settlement within the scope of the patent is permissible, but is the court’s new “rule of reason” approach really “just right?” Let’s see how this plays out in a simple scenario using a product whose success everyone loves to hate—the Snuggie.

Meet Peter.  He has a pug with whom he likes to spend his evenings, wrapped up in a Snuggie, watching movies and sharing popcorn.  Peter was quite dismayed, though, to see his poor little pug shivering and cold without a Snuggie of his own.  So, Peter invented the Puggie.  He used special fibers formulated specifically to maintain heat while resisting odors because no one likes a smelly dog blanket.  Peter even obtained a patent on his Puggie and began producing more to sell around his neighborhood, the Franklin Terrace Community.  Once word spread of Peter’s success, however, several of Peter’s neighbors began producing competing products—the Pug Pelt, the Schnauzzie, and so on–which boasted the same odor-resistant properties as Peter’s Puggie.

Outraged, Peter publicly accused his competitors of patent infringement and demanded that they stop producing their “piddly dog pelts.” But they refused, claiming their fibers were different.  Knowing how costly an extensive fiber dispute could be, Peter offered his competitors $1,000 to stop producing their competing pelts for a period of two years.  The other pelt producers agreed, took the money, and stopped production immediately.  The Franklin Terrace Community, however, was not pleased.  Peter had not only run off the competition, but he had also bumped the Puggie price up afterward, making a killing during the chilly winter as the sole pelt producer.  Community members petitioned the homeowners’ board for some guidance on whether Peter’s payment constituted an unfair trade practice.  Peter opposed the petition and claimed that he had the right to pay whatever amount he deemed fit to protect his patent.

The board found the community’s argument that any “reverse settlement” payment by a patent holder is presumptively unlawful to be too harsh.  Peter’s assertion, however, that any payment is immune from attack so long as it remains within the scope of the patent was believed to be too soft.  Peter complained that the money and time he would have to commit to an extensive patent lawsuit over his odor-resistant fibers would put him out of business, but the board believed that his willingness to drop a grand to keep his competitors at bay was a much more accurate representation of Peter’s confidence in his patent.  Specifically, the board found Peter’s payment of $1,000 to be a “strong indicator of power.”  In an effort to come up with a more “middle of the road” approach, the board created the “rule of reason” to determine the legality of reverse settlement payments.  No real guidance was provided, though, on how to apply the new rule—just not too hard, not too soft.

Without any elaboration on how this new “rule of reason” is to be applied in antitrust lawsuits, did the board cause more confusion than clarity?  And, how large must a reverse settlement payment be to stand as an “indicator of power” and “lack of confidence” in the patent?  If Peter’s patent was iron-clad and his competitors were infringing, should he have had the right to pay any amount he deemed fit to protect his patent, or was $1,000 too much for some piddly pooch pelts?  Does this unfairly prohibit Peter from settling litigation that he may see as too costly or damaging?  Or, does the need to protect consumers from the Puggie monopoly Peter created outweigh Peter’s patent rights?

It is hard to say exactly what effect the Supreme Court’s “rule of reason” decision in FTC v. Actavis will have on future antitrust litigation.  We are likely to see an increase in the number of antitrust suits that are tried as opposed to settled. What do you make of this amorphous, middle-of-the-road approach?

ARTICLE BY Annie Dike of IMS ExpertServices
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