MVS Filewrapper® Blog: USPTO Issues Preliminary Guidance on Patentability Based on Alice Corp.

On June 25, 2014 the USPTO Deputy Commissioner for Patent Examination Policy released a Memorandum to the Patent Examining Corps that provides examiners with preliminary instructions related to subject matter eligibility of claims involving abstract ideas under 35 U.S.C. § 101 in view of the Supreme Court Decision in Alice Corporation Pty. Ltd. v. CLS Bank International.  The memo provides the following guidance with respect to the application of the Mayo framework to the examination of claims involving abstract ideas in light of the Alice decision:

 

(1)  Alice Corp. establishes that the same analysis should be used for all types of judicial exceptions, whereas prior USPTO guidance applied a different analysis to claims with abstract ideas (Bilski guidance in MPEP 2106(II)(B)) than to claims with laws of nature (Mayo guidance in MPEP 2106.01).

 

(2)  Alice Corp. also establishes that the same analysis should be used for all categories of claims (e.g., product and process claims), whereas prior guidance applied a different analysis to product claims involving abstract ideas (relying on tangibility in MPEP 2106(II)(A)) than to process claims (Bilski guidance).

 

The memo then explains that, despite these changes, the basic inquiries and examination procedures as to subject matter eligibility remain the same after the Alice decision. 

 

The instructions also set out a "Two-Part Analysis for Abstract Ideas."  First, the examiner is to determine whether the claim is directed to an abstract idea such as "fundamental economic practices," "certain methods of organizing human activities," "an idea of itself," or "mathematical relationships/formulas."   If the examiner concludes that the claim is directed to an abstract idea, the examiner must then determine "whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to significantly more than the abstract idea itself."  The instructions provide examples of what would qualify and what would not qualify as "significantly more" as referenced in the Alice decision: 

 

Would qualify: Improvement to technology or technical field, improvements to functioning of computer itself, and "meaningful limitations."

 

Would not qualify:  Adding the words "apply it," and requiring no more than a generic computer to perform generic computer functions.

 

The instructions direct examiners to reject claims under 35 U.S.C. § 101 as being directed to non-statutory subject matter if they do not amount to "significantly more" than the abstract idea. 

 

These examination instructions are only initial guidelines, and will be updated and modified as needed after additional consideration of the decision and public feedback.  Accordingly, the USPTO has issued a Request for Comments and Extension of Comment Period on Examination Instruction and Guidance Pertaining to Patent-Eligible Subject Matter that is open through July 31, 2014. 

MVS Filewrapper® Blog: Federal Circuit Weighs in on Stays for Post-Grant Review

The Federal Circuit has issued an opinion in VirtualAgility Inc. v. Salesforce.com, Inc., providing clarification regarding how court should properly determine whether to stay litigation during later-requested post-grant PTO proceedings.  Under the America Invents Act, a district court is permitted, but not required, to grant such a stay.  The statute also provides a list of four factors that the district court is to consider when deciding whether to grant a stay of litigation:

 

(A) whether a stay, or the denial thereof, will simplify the issues in question and streamline the trial;

(B) whether discovery is complete and whether a trial date has been set;

(C) whether a stay, or the denial thereof, would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party; and

(D) whether a stay, or the denial thereof, will reduce the burden of litigation on the parties and on the court.

 

In January 2013 VirtualAgility Inc. ("VA") sued Salesforce.com, Inc. and a group of other businesses for infringement of U.S. Patent No. 8,095,413.  Salesforce then filed a petition with the Patent Trial and Appeal Board (PTAB) for a post-grant review of the patent under the Transitional Program for Covered Business Method Patents (CBM Program), asserting that all of the claims were patent-ineligible.

 

In May of 2013, Salesforce and the other defendants filed a motion to stay district court proceedings in accordance with AIA Section 18(b)(1).  In denying the motion, the District Court took into account the four factors provided by statute.  The District Court conducted its own
review of the file history, and determined that the PTAB would not likely cancel some or all of the claims, despite the he PTAB’s determination that the claims of the ’413 patent are more likely than not invalid.  The district court therefore determined that the first factor, simplification of the issues, was either neutral or slightly against a stay.  The district court also determined that the fourth factor, burden of litigation, had substantial overlap with the first and would only slightly favor a stay.  The court decided the second factor favored a stay because it was early on in the litigation, and the third factor weighed against a stay because VirtualAgility would suffer from lost market share and consumer goodwill, in addition to the fact that "VA would be unduly prejudiced 'because certain witnesses are of an advanced age.'"

 

The Defendants appealed the denial of the motion to stay to the Federal Circuit, which reversed the district court and concluded that the balance of the factors favored a stay pending the outcome of the CBM review.  The court held that the district court's review the PTAB's determination that the claims of the ’413 patent are more likely than not invalid was an error as a matter of law because under the statutory scheme district courts have no role in reviewing the PTAB’s determinations regarding the patentability of claims that are subject to CBM proceedings.  

 

The Federal Circuit agreed with the district court's determination that the second factor weighed in favor of a stay, but disagreed with the district court's determination that the third factor weighed heavily against a stay.  In concluding that the undue prejudice factor weighed only slightly against a stay, the Federal Circuit held that the district court erred in failing to take into account the fact that VA did not move for a preliminary injunction, and that if VA needed injunctive relief as soon as possible it would have pursued a preliminary injunction, or filed suit earlier. 

 

Ultimately, with three factors heavily favoring a stay and one slightly against a stay, the Federal Circuit Court of Appeals reversed district court and remanded the case with instructions to grant the motion to stay the litigation pending CBM review at the PTO.

 

The full opinion is available here.

MVS Filewrapper® Blog: PTO Interference Decisions do not Preclude Invalidity Defenses in Court

The Federal Circuit has issued a decision in AbbVie v. Janssen Biotech and Centocor Biologics, which relates to patents that broadly cover antibodies which can neutralize activity of human interleukin 12 (IL-12) and have useful application in the treatment of autoimmune disorders. The patent owner, AbbVie, sued Janssen and Centocor for infringement of the patents at issue.  At trial, the jury found that all of the asserted claims were invalid on the grounds of lack of written lack of description, enablement, and obviousness.  AbbVie appealed the district court's decision. 

 

On appeal, AbbVie asserted that the denial of its summary judgment was improper, because the district court erroneously held that Centocor was not collaterally estopped from raising invalidity defenses in the infringement action after the interference proceeding at the Patent and Trademark Office.  Collateral estoppel or issue preclusion can be invoked when the issue sought to be precluded was involved in an earlier matter, has actually been litigated, the issue was determined by final and binding judgment, and the determination of the issue was essential to the judgment. The court here reasoned that the proceedings and judgment from the Patent and Trial Appeal Board was not final as an action for interference was still pending at the district court level. Also, §146 of the Patent statute provides in relevant part that "[a]ny party to an interference dissatisfied with the decision of the [Board] on the interference, may have remedy by civil action, if commenced within such time after decision, not less than sixty days. . . ." Further, there is language in the statute which allows the district court to make a de novo review of findings of fact in situations where new evidence is presented following the Board's review. Because procedures are provided in the patent statute that allows for additional judicial remedies if a party to an interference action is not satisfied, the court held that Centocor was not collaterally estopped in this case from raising invalidity defenses in the infringement action.  However, the Federal Circuit's discussion also left open the possibility that collateral estoppel may have applied had Centocor appealed under §141 instead of bringing a civil action. 

 

The Court also discussed the written description requirement and acknowledged that in light of Ariad this requirement is separate from the concept of enablement. While AbbVie classified its claims as a set of human antibodies, they did not disclose any structural features to indicate a commonality within the genus.  The Federal Circuit found the claims to be invalid in view of Ariad's holding that "merely drawing a fence around a perceived genus is not a description of the genus" and the fact that the jury heard substantial evidence that AbbVie's patents described only one type of structurally similar antibodies which are not representative of the full variety of scope of the genus.  The court also emphasized the inherent vulnerability of patents to invalidity challenges based on lack of written description, where the areas of technology are unpredictable and difficult to prove a correlation between function and structures found within the genus. 

 

The court ultimately affirmed the district court's judgments in both the infringement action and the interference action. 

 

The full opinion can be found here.

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