MVS Filewrapper® Blog: Alternative Patent Reform Legislation Proposed in Senate

Post by Dan Lorentzen

 

Even though the America Invents Act is just over 3 years old, patent reform legislation has arisen on several occasions over the past years.  The most visible legislative efforts have involved the "Innovation Act" proposed by Senator Goodlatte in 2013, and again in 2015.  The version of the Innovation Act introduced in 2013 stalled out in the Senate, but has been re-introduced in the House with a larger number of co-sponsors.   A new, alternative bill has now been proposed in the Senate.

 

Senator Chris Coons (D-Del.), along with co-sponsors Dick Durbin (D-Ill.) and Mazie Hirono (D-Hawaii), has now proposed the "Support Technology & Research for Our Nation’s Growth (STRONG) Patents Act of 2015."  The bill was introduced as S.632 on March 3, 2015 as "[a] bill to strengthen the position of the United States as the world's leading innovator by amending title 35, United States Code, to protect the property rights of the inventors that grow the country's economy." 

 

This new legislation addresses many of the same issues as the Innovation Act in the House, but in some cases does so in markedly different ways.  Included in the provisions are proposed amendments to the Title 35 that would bring claim construction in inter partes review (IPR) and post-grant review (PGR) proceedings at the PTAB in line with litigation in district court.  In particular, the bill would dictate that claim construction in an IPR and PGR proceeding be conducted using the "ordinary and customary meaning" standard instead of the broadest reasonable interpretation (BRI) standard currently applied.  In addition, the bill would require the PTAB in an IPR and PGR proceeding to consider any previous construction of the claims or claim terms at issue performed by a court, provided the patent owner was a party to the prior civil action.  In addition, the bill would import into IRP and PGR proceedings the presumption of validity applied in litigation. 

 

The bill also includes, among other provisions, the elimination of Form 18 for pleading in patent infringement cases in federal court, retention of fees collected by the USPTO, and inclusion of universities and other institutes of higher learning for micro entity status.  In addition, the bill would change the standard for a finding of willful infringement to a preponderance of the evidence.  Finally, the bill would create a cause of action under the Federal Trade Commission Act for sending a demand letter in bad faith.

 

A number of notable organizations have expressed their support for the STRONG Patents Act, including the Association of American Universities, the Association of Public Land Grant Universities, and the Biotechnology Industry Organization (BIO). 

 

The Filewrapper® blog will continue to follow developments for both the STRONG Patents Act and the Innovation Act.  The full text of the STRONG Patents Act is available here.

MVS Filewrapper® Blog: Claim Preambles as Limitations– the Saga Continues

Post by Dan Lorentzen

 

The preamble of a patent claim normally recites some purpose or objective, but is generally not considered to limit the scope of the claim unless it "breaths life and meaning into the claim."  There are a number of ways that the preamble can take on patentable weight, including by serving as the antecedent basis for a limitation in the body of the claim. 

 

In Pacing Tech v. Garmin, the Federal Circuit added a new wrinkle to the analysis of whether a preamble can serve as a claim limitation.  Pacing Techs. sued Garmin asserting infringement of U.S. Patent No. 8,101,843.  The independent claim at issue recites a preamble of "[a] repetitive motion pacing system for pacing a user."  The body of the independent claim does not further incorporate the "repetitive motion pacing system," although the term "user" is repeated.  Further, a separate, dependent claim does recite "the repetitive motion pacing system." 

 

The Federal Circuit determined that the repetition of the term "user" and recitation of the "repetitive motion pacing system" in a separate claim were sufficient to render the preamble of the independent claim a limitation.  As a result, the court determined that practicing the independent claim was deemed to require repetitive motion pacing, and Garmin's accused product did not infringe the asserted claims. 

 

The decision increases the circumstances under which a claim preamble can be considered limiting.  As a result, it may become easier to limit the scope of a claim based on the stated intended purpose or object contained in the preamble. 

 

The full opinion is available here.

MVS Filewrapper® Blog: Federal Circuit Upholds First IPR Decision

Post by Dan Lorentzen

 

The America Invents Act (AIA) included provisions establishing new "trial" procedures at the USPTO Patent Trial and Appeal Board (PTAB) for testing the validity of issued patents.  One such procedure, Inter Partes Review (IPR), has quickly become a common alternative or addition to traditional patent litigation since it was implemented in September of 2012. However, a number of issues relating to the operation and review of the new USPTO trial procedures have remained unresolved.

 

A three-judge panel of the Federal Circuit has upheld the decision of the PTAB in the very first IPR filed.   The Federal Circuit affirmed all of the PTAB's determinations, finding that the PTAB was not in error in applying the broadest reasonable interpretation (BRI) standard to the claims in the IPR proceeding, the PTAB properly determined obviousness, and the PTAB properly denied the patent owner's motion to amend the claims. 

 

Notably, the Federal Circuit declined to review the decision by the PTAB to institute the IPR.  The patent owner argued that the PTO improperly instituted the IPR on two of the patent claims because it relied on prior art that the party seeking the IPR did not identify in its petition with respect to those two specific claims.  The pertinent portion of the AIA (encoded in 35 U.S.C. § 314) provides that “[t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.”  The patent owner asserted that this provision merely postpones review of the PTO’s authority until after the issuance of a final decision by the Board.  The Federal Circuit, however, concluded that § 314 prohibits review of the decision to institute IPR even after a final decision.  The court did note that mandamus may be available to challenge the institution of an IPR where the PTO has clearly any indisputably exceeded its authority. 

 

Although disagreement remains as to whether the Federal Circuit was correct in its determinations (see, e.g., Judge Newman's dissenting opinion), the decision provides some clarity as to the standards that apply during IPR proceedings at the USPTO.  The full decision is available here.

MVS Filewrapper® Blog: Federal Circuit Emphasizes "Reasonable" in Broadest Reasonable Interpretation

Post by Dan Lorentzen

 

 

During examination, the claims of patent application are given their broadest reasonable interpretation ("BRI") by the patent examiner.  This USPTO standard is intentionally broad—broader than the interpretation applied in litigation—in order to reduce the possibility that the claim, once issued, will be interpreted more broadly than is justified.  A recent Federal Circuit decision, however, has indicated that the "reasonable" element of the standard is still essential.

 

In In re Imes, the application at issue was directed to a device for communicating digital camera image and video information over a network.  Independent claim 1 encompassed such a device having memory for storing digital images, a display for displaying the images, an input device for receiving a request for communication, and a housing that stores a first (wireless cellular) communication module and a second (“low power high-speed”) wireless communication module.  Two other independent claims recited communications modules operable to wirelessly communicate streaming video. 

 

During prosecution, the examiner rejected claim 1 as obvious over a reference that disclosed a first wireless communication module and second module in the form of a removable memory card.  The examiner concluded that the removable memory card met the BRI of the second wireless communication device because it had to be removed in order to communicate the information to a computer—i.e. the metal contacts between the memory card and the computer are not "wire," and therefore communication along the metal contacts to the computer are "wireless."  The examiner rejected the other independent claims as anticipated or obvious over a reference that disclosed a wireless digital camera system that transmits still images over the internet.  The examiner concluded that the BRI of "streaming video" included a continuous process of sending images. The applicant appealed to the Patent Trial and Appeal Board, which affirmed the examiner's rejections.

 

On appeal, the Federal Circuit took issue with the reasonableness of the USPTO's interpretation of the claims.   The court emphasized that the interpretation must be reasonable in view of the specification.  With regards to the "wireless" element, the USPTO's interpretation was not reasonable because the specification defined the term to refer to electromagnetic waves moving through atmospheric space rather than along a wire.  Accordingly, communication through metal contacts—and not atmospheric space—cannot be reasonably interpreted to constitute "wireless" communication.

 

With respect to the "streaming video" element, the court concluded that the USPTO's interpretation was not reasonable because there was no substantial evidence to support the conclusion that sending a series of individual still images is equivalent to streaming video. 

 

The holding in this case can potentially provide some needed clarity to both applicants and examiners as to what is "reasonable" when interpreting claims during patent prosecution.  The full decision is available here. 

MVS Filewrapper® Blog: Teva Decision Clarifies Standard of Review for Claim Construction

Post by Paul S. Mazzola

 

In Markman v. Westview Instruments, Inc., decided in 1996, the Supreme Court held that the construction of a patent should be decided by a judge and treated as a question of law.  Since Markman, the federal district courts have used pretrial hearings, commonly called "Markman hearings," to interpret appropriate meanings of key relevant words in patent claims.  Based on the language of the Markman opinion and perceived instruction contained therein, the United States Court of Appeals for the Federal Circuit has reviewed findings from Markman hearings, including the underlying factual findings, de novo.  The de novo review of all facets of claim construction is in tension with Federal Rule of Civil Procedure 52(a)(6), which states a court of appeals "must not . . . set aside" a district court's "[f]indings of fact" unless they are clearly erroneous."  To resolve the tension, the Supreme Court decided Teva Pharmaceuticals, Inc. v. Sandoz, Inc. on January 20, 2015.

 

In Teva, the factual dispute involved interpretation of the term "molecular weight," the calculation (and resulting value and meaning) of which can be achieved by multiple methods; three were considered by the Court.  Based on three possible meanings of "molecular weight," Sandoz argued the claim was indefinite under 35 U.S.C. §112, paragraph 2, as recently interpreted in Nautilus, Inc. v. Biosig Instruments, Inc.  The dispute required extrinsic evidence in the form of testimony and expert opinion.  With competing extrinsic evidence, the United States District Court for the Southern District of New York found that a skilled artisan at the time of the invention would interpret "molecular weight" as calculated by one of the three possible methods, and particularly the one method consistent with Teva's position.  Therefore, the district court held the claim was not indefinite.

 

The Federal Circuit held to the contrary and invalidated the patent.  Couched in a "de novo review of the district court's indefiniteness holding," the Federal Circuit "conclude[d] that (Teva's expert's) testimony does not save [] claims from indefiniteness."  The court did not provide further analysis regarding the same.  In essence, the Federal Circuit reviewed the underlying factual findings of the district court de novo.

 

The Supreme Court adjudged the Federal Circuit's analysis deficient.  The Court held that the ultimate question of proper construction of the patent remains a question of law subject to de novo review.  The underlying factual disputes, however, like all other factual determinations, remain under the province of FRCP 52(a)(6), subject to review for clear error.  In doing so, the Court analogized a patent to other written instruments, pointed to precedent, and cited practical considerations, most notably, the comparative advantage for the district court judge, who has presided over the entire proceeding, to render a proper finding.  The Court found unconvincing the argument that it would be unduly difficult for appeal courts to separate factual from legal matters.

 

To summarize, the ultimate claim construction is a question of law reviewed de novo; when the district court reviews only evidence intrinsic to the patent (i.e., patent documentation and any prosecution history of the patent), the district court's determination will amount solely to a determination of law reviewed de novo; and when a district court reviews extrinsic evidence, the subsidiary factfinding must be reviewed for clear error.

 

The practical effect of the decision remains to be seen.  Admittedly, in the Teva case, the specific finding of fact of the district court was essentially, if not completely, dispositive of the question of law (i.e., the finding that a skilled artisan would interpret "molecular weight" as calculated by one of the three possible methods rendered the claim definite).  One could envision, however, as contemplated by the Court, numerous examples where the district court's factual finding is much less central to the question of law, thereby permitting the Federal Circuit to adopt the factual finding but reach a different claim construction and/or conclusion of law. See Teva, supra ("In some instances, a factual finding will play only a small rule in a judge's ultimate legal conclusion about the meaning of the patent term.").

 

Therefore, even when the findings of fact are incorporated in toto, the Federal Circuit itself, in reviewing the claim construction de novo, is free to decide how much relative weight to give to the findings of fact versus its own, perhaps competing, analysis of the very same facts.  Thus, if the Federal Circuit disagrees with the district court's claim construction, even if the findings of fact support the same, the Federal Circuit could adopt said findings of fact while giving them little weight in its overall analysis.  Thus, in instances where the underlying factual dispute may be only mildly or moderately impactful of the ultimate question of law (e.g., indefiniteness, allowable subject matter, novelty, obviousness, etc.), the standard of review, for practical purposes, could arguably return to de novo review.

 

From a legal practice standpoint, the decision may prove valuable to filter out weaker appeals.  Prior to the Court's clarification in Teva, a losing litigant, who has already endured significant expense in district court, would be apt to appeal to the Federal Circuit to "relitigate" the claim construction and potentially receive a favorable result.  Now, a practitioner must analyze the likelihood of success at the Federal Circuit in light of the findings of fact of the district court; unless, of course, the litigant has a persuasive argument for clear error of the factual findings.  The net result may be a decrease in appeals based solely on an unfavorable claim construction.

MVS Filewrapper® Blog: New Supreme Court Decision Alters Review of Claim Construction Decisions

Post by Dan Lorentzen

 

The Supreme Court has issues a decision in Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., holding that appellate review of a district court’s decisions relating to subsidiary factual matters made in the course of its patent claim construction must be for  “clear error,” not a de novo standard of review.  Before this decision, all aspects of claim construction were reviewed by the Federal Circuit under the de novo standard, giving no deference to the determinations made by the trial court. 

 

The decision was authored by Justice Breyer, joined by Chief Justice Roberts and Justices Scalia, Kennedy, Ginsburg, Sotomayor and Kagan joined.  Justices Thomas and Alito dissented. 

 

A more detailed analysis of the decision will be forthcoming.  The full decision can be found here.

 

MVS Filewrapper® Blog: Is the Supreme Court Re-Aiming Markman?

Post by Alex Christian

The 1996 United States Supreme Court decision in Markman v. Westview Instruments established a landmark change for claim construction in patent infringement cases.  That case established that the meaning of the claim language of a patent is a matter of law for a judge to decide, and not a matter of fact that should be determined by the jury. Since the decision, what is now known as a "Claim Construction Hearing" or a "Markman hearing" is now common place in patent infringement cases.  Nearly two decades after the Markman decision, the Supreme Court has taken a case with the potential to dramatically alter this aspect of patent litigation.

The Markman hearing has become one of—if not the single—most important events in a patent infringement case.  In a Markman hearing, the Court is required to interpret any claims at issue in the case brought forth by the parties.  This usually includes extensive briefing, expert reports, expert testimony, and oral arguments before the Court. Markman hearings are so important and so influential that often the party who prevails in the Markman hearing will go to be the successful party—whether by trial or by settlement—in the case.

On October 15, 2014, the Supreme Court heard arguments on the case of Teva Pharmaceuticals v. Sandoz.  The case is centered on the question of what appellate rules should apply to claim construction decisions.  Currently, there is tension between the Federal Circuit case law and the Federal Rules of Civil Procedure regarding the way in which a district court's factual findings relating to claim construction are treated on appeal. The specific issue presented to the Supreme Court is:   

Whether a district court's factual finding in support of its construction of a patent claim term may be reviewed de novo, as the Federal Circuit requires (and as the panel explicitly did in this case) or only for clear error, as Federal Rule of Civil Procedure 52(a) requires.

Among the issues addressed during oral arguments, a significant amount of the debate dealt with the framework through which to view patent claims: similar to statues, which receive a de novo review; or like contracts, for which the district courts are given deference for underlying conclusions. You can find the transcript to the oral arguments here.

This particular case highlights the complexities Markman hearings have introduced into patent litigation, and the potentially tenuous ground upon which patent litigation has settled in the last several decades.  Perhaps the most complex issue that could be raised by the Supreme Court's eventual decision in this case, is that Markman hearings are considered by some as a violation of a plaintiff patent-owner's 7th Amendment right to a jury trial.

For additional background on the Markman decision, see Ed Sease's article, "Markman Misses the Mark, Miserably" available here.

MVS Filewrapper® Blog: Federal Circuit Schedules Oral Hearing in First Appeal of Inter Partes Review

Post by Jonathan Kennedy

The Federal Circuit has scheduled oral arguments for the first appeal of an inter partes review ("IPR") decision by the Patent Trial and Appeal Board ("PTAB").  Oral arguments have been scheduled for November 3, 2014.  The appeal involves a number of interesting issues.  First, it arises from the first IPR filed with the PTAB—Garmin USA, Inc. v. Cuozzo Speed Technologies, LLC (IPR2012-00001).  In that IPR, the PTAB invalidated three claims (claims 10, 14, and 17) of U.S. Patent No. 6,778,074.  Second, pursuant to a settlement agreement, Garmin agreed not to take part in any appeal.  Instead, once Cuozzo appealed the PTAB's decision, the Patent Office intervened under 35 USC § 143 to oppose Cuozzo's appeal, effectively taking Garmin's place. 

 

Cuozzo appealed four issues from the PTAB decision, relating both to procedural and substantive matters:  (1) "Whether the PTAB lacked authority to institute IPR for claims 10 and 14 on grounds of unpatentability not identified in the Petition"; (2) "Whether the B[roadest] R[easonable] I[nterpretation] standard applies to IPR, and whether the PTAB erred by construing the term 'integrally attached'"; (3) "Whether, if the PTAB had jurisdiction over claim 10, it erred in cancelling claim 10 as invalid under 35 U.S.C. § 103"; and (4) "Whether the PTAB erred in denying Cuozzo's motion to amend the claims." 

 

The petition for IPR originally filed by Garmin alleged forty-three different grounds of invalidity based on a number of patents.  The PTAB rejected forty-one of those grounds and chose to institute the IPR based on two grounds of invalidity alleged by Garmin against dependent claim 17.  However, when instituting the IPR the PTAB applied those same two grounds of invalidity against claims 10 and 14, even though Garmin had not asserted those grounds against claims 10 or 14.  In its final decision, the PTAB cancelled claims 10, 14, and 17 based on the two grounds Garmin had raised against claim 17.  Whether the PTAB can expand the scope of its review by applying grounds of invalidity against claims in a manner not raised by the Petitioner is a significant question and clarity from the Federal Circuit is greatly anticipated. 

 

Garmin's petition did not set forth any proposed claim constructions.  Despite this, in instituting the IPR—without any input from either party—the PTAB chose to construe the claim term "integrally attached" based on the broadest reasonable interpretation standard.  In its brief, Cuozzo argues this standard is improper for PTAB and only appropriate during examination and reexamination.  Instead, Cuozzo argues that the PTAB should be held to the standards set forth in the Federal Circuit's Phillips' decision.  The PTAB's construction of the term was pivotal in the other decisions in the IPR.  For example, the PTAB denied Cuozzo's motion to amend claims during the IPR under 35 USC § 316(d) based on the construction of the term "integrally attached."  Clarification regarding the claim construction standard that applies to the PTAB will be critical moving forward.

MVS Filewrapper® Blog: Internet Discussion Systems as Prior Art

The Federal Circuit's recent decision in Suffolk Technologies, LLC, v. AOL Inc., and Google Inc., adds another item to the list of "printed publications" that may preclude patenting of a claimed invention:  posts on internet newsgroups. 

 

In June 2012 Suffolk Technologies, LLC sued Google Inc. for infringement of U.S. Patent No. 6,081,835 ("the '835 patent"), related to "methods and systems for controlling a server that supplies files to computers rendering web pages."  Google argued that a newsgroup post—made nine months before the priority date of the '835 patent by a college student in response to a question posed in a discussion of common gateway interface—anticipated the claims at issue. 

The district court agreed with Google and granted summary judgment of invalidity.

 

Suffolk appealed the district court's decision, arguing that the court improperly construed the claim term "generating said supplied field," and that the newsgroup post should not be considered a printed publication under 35 U.S.C. § 102.  The Federal Circuit affirmed the district court on both counts.

 

Suffolk argued that the district court erred by deciding that the newsgroup post was prior art, deciding that the post was accurate and reliable, omitting the testimony of their validity expert, and ultimately granting summary judgment.  Suffolk asserted that the post was not made publically accessible because locating it would be too difficult, and the audience was mostly "beginners" and therefore not those of ordinary skill in the art.  Suffold also asserted that, if presented to a jury, a "'second-hand reproduction of an old Usenet post'" would be discredited and that the testimony of their validity expert was crucial to the decision, and as a result summary judgment was inappropriate.  The Federal Circuit was unpersuaded by any of Suffolk's arguments.

 

Of particular note, while the post in question was non-indexed and non-searchable, the Federal Circuit held that is was nonetheless sufficiently publically accessible to be considered a printed publication because someone interested in the topic could easily locate a list of posts in the newsgroup based on its hierarchical organization.  Further, the court held that the post in question was sufficiently disseminated because dialogue with the intended audience was the entire purpose of the newsgroup posting; the post elicited a number of responses; and many more people may have viewed the post.

 

While the decision deals with printed publications and public disclosure under pre-AIA § 102, the analysis is unlikely to be any different under the AIA. 

 

The full decision is available here.

 

MVS Filewrapper® Blog: Competing Without Practicing—Preliminary Injunctions for Patent Infringement

In Trebo Manufacturing, Inc., v. Firefly Equipment, LLC, the Federal Circuit held that a plaintiff seeking a preliminary injunction for patent  infringement does not need to practice the patent at issue in order to receive an injunction, so long as it sells a competing product.  Trebro brought suit alleging that FireFly's sod harvester product infringed its U.S. Patent No. 8,336,638, and seeking a preliminary injunction to stop the infringement.  The United States District Court for the District of Montana denied Trebro's request for a preliminary injunction, finding insufficient likelihood of success on the merits of the patent infringement claims and no irreparable harm to Trebro. 

 

On appeal, the Federal Circuit vacated, finding that the district court erred in its claim construction, and that it therefore abused its discretion in finding no likelihood of success on the merits.  In addition, the Federal Circuit held that "the fact that Trebro does not presently practice the patent does not detract from its likely irreparable harm."  Because Trebro and FireFly compete in the same tiny, niche market, there is a strong probability of irreparable harm, and "a party that does not practice the asserted patent may still receive an injunction when it sells a competing product."

More Entries

BlogCFC was created by Raymond Camden. This blog is running version 5.8.001.