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: Patent Exhaustion does not Apply to Related—but Distinct—Inventions

Post by Dan Lorentzen

 

The doctrine of "patent exhaustion" (also referred to as "first sale doctrine") is a judicially created limit on the exclusive rights of a patent holder.  Under the exhaustion doctrine, once a patent owner licenses or authorized a first production or sale of their invention, they cannot claim any damages arising from downstream sale or use arising from that authorized first production or sale.  The recent decision by the Federal Circuit in Helferich Patent Licensing v. New York Times has limited the exhaustion doctrine by holding that a first sale does not preclude a patent owner from enforcing their rights in a related, but distinct, invention.

           

Helferich owns U.S. Patent Nos. 7,280,838; 7,499,716; 7,835,757; 8,107,601; 8,116,741; 8,134,450; and 7,155,241, which relate to systems and methods for handling information and providing it to wireless devices, such as mobile-phone handsets, as well as handsets and methods of using them.  Helferich sued a number of defendants, including the New York Times, for infringement of the claims dealing with the systems and methods.  The defendants asserted patent exhaustion as a defense, claiming that by granting handset manufacturers licenses based on the handset claims of the patents at issue, and conferring broad authority to sell the handsets, Helferich had exhausted its ability to enforce its patents not only against acquirers of the handsets but also against the defendant content providers who use presumptively distinct inventions to manage content and deliver it to handset users.  The District Court granted summary judgment of non-infringement to the defendants based on this application of the exhaustion doctrine.

 

On appeal, the Federal Circuit reversed, concluding that patent exhaustion is not so broad as to cover distinct inventions, even if those inventions are specifically designed to be used with the licensed product and are essential to the licensed products utility.  The court deemed the application urged by the defendants to be an unwarranted expansion of the exhaustion doctrine.  The decision underscores the importance of understanding the scope of license agreements, as well as the scope of a potential licensee's patent portfolio. 

 

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: Unauthorized Planting does not Constitute Public Use

Post by Dan Lorentzen

 

The Federal Circuit Court of Appeals has issued a decision in Delano Farms Company v. California Table Grape Commission, holding that the actions of two individuals who obtained samples of the two patented plant varieties in an unauthorized manner and planted them in their own fields did not constitute invalidating public use of the plant varieties.

 

The case involves two varieties of grapes, which are covered by plant patents owned by the USDA.  The USDA licensed the varieties to the California Grape Commission.  Delano Farms filed suit alleging that the patents were invalid because the varieties were in public use for more than one year before applications for the varieties were filed.  The United States District Court for the Eastern District of California initially ruled that sovereign immunity barred action against the USDA, and that the case could not go forward without the USDA as a party.  The Federal Circuit overturned the decision and remanded to the District Court.  

 

On remand, the plaintiffs asserted that the claimed varieties were planted and cultivated more than a year before the filing date of the patent applications, which constituted a prior public use under 35 U.S.C. § 102(b) (pre-AIA), thereby invalidating the patents.   The plaintiffs had obtained access to and grew the varieties in 2002, without permission and before the varieties were available to anyone else.  They did not, however, sell or distribute the varieties or their fruit.  The District Court concluded that this activity did not rise to the level use required to invalidate the patents under § 102(b), and ruled for the defendants.  The plaintiffs again appealed to the Federal Circuit.

 

On appeal, the plaintiffs pointed to a number of actions—cultivation of the varieties, one plaintiff providing plant material to another, and disclosure (but not provision) of the varieties to a business partner—were sufficient to constitute a public use.  The plaintiffs pointed to a number of cases, including the Federal Circuit's 2013 decision in Dey, L.P. v. Sunovion Pharm., Inc., to support their argument that because the plaintiffs made no affirmative efforts to conceal the varieties or keep them secret, their planting constituted public use.  The Federal Circuit held that despite the plaintiffs exchanging of the varieties among themselves and disclosing them to a business partner, all of the actions were taken with the expectation of secrecy.  Further, the court held that the plantings themselves could not constitute public use because, even though they were visible to the public, the varieties could not be identified by the public simply by viewing the vines, and as a result, the public could not be put in possession of the varieties' features. 

 

The Federal Circuit specifically did not address the issue of whether use of an invention by one who has misappropriated that invention (or obtained it through other improper means) can ever qualify as an invalidating public use. 

MVS Filewrapper® Blog: Shifting Pre-Trial Strategy in the Wake of Alice and Ultramercial

Post by Paul S. Mazzola

 

Four recent Supreme Court cases involving patentable subject matter under 35 U.S.C. § 101 (Bilski v. Kappos, Mayo Collaborative Services v. Prometheus Laboratories, Inc., Ass'n for Molecular Pathology v. Myriad Genetics, Inc., and Alice Corp. v. CLS Bank International ) have had the practical effect of heightening the standard for patentability.  However, these cases may also be altering the way patent cases are handled in their early stages.

 

The Federal Circuit recently decided the case of Ultramercial, Inc. v. Hulu, LLC for a third time.  The case was originally filed in the Central District of California in 2009. Initially, the district court granted the defendant's pre-answer motion to dismiss under Rule 12(b)(6), finding the patent at issue did not claim patent-eligible subject matter.  In the first appeal, the Federal Circuit reversed the district court, and the Supreme Court vacated the decision of the Federal Circuit for further consideration in light of Mayo. On remand, the Federal Circuit again reversed the district court, finding it was improper to dismiss the suit by granting a Rule 12(b)(6) motion.  To that end, the court made several compelling statements regarding the interplay between such motions and the § 101 analysis.  The court stated, "[I]t will be rare that a patent infringement suit can be dismissed at the pleading stage for lack of patentable subject matter."  The court reasoned that issued patents are presumed to be valid, and "the analysis under § 101, while ultimately a legal determination, is rife with underlying factual issues." Adding that claim construction should be required if there are factual disputes, the court succinctly stated, "Rule 12(b)(6) dismissal for lack of eligible subject matter will be the exception, not the rule."

 

After a second petition for certiorari was filed with the Supreme Court, the Court decided Alice.  The holding in Alice—that an abstract idea is not patent eligible subject matter if "merely requires generic computer implementation"—was squarely relevant to the patent at issue in Ultramericial, leading the Supreme Court to again vacate the decision of the Federal Circuit for further consideration in light of Alice.

 

In applying Alice to the patent at issue in Ultramericial, the Federal Circuit held that the claims do not recite patent-eligible subject matter under § 101, but affirmed the motion to dismiss under Rule 12(b)(6).  In doing so, the court deviated sharply from the decisive language from its previous decision, but dedicated no discussion to reconcile why a motion to dismiss is the appropriate mechanism to dispose of a suit involving an issued patent in an infringement suit presumably "rife with underlying factual issues."  However, the concurring opinion of Judge Mayer was almost entirely devoted to this issue.  "First, whether claims meet the demands of 35 U.S.C. § 101 is a threshold question, one that must be addressed at the outset of litigation.  Second, no presumption of eligibility attends to the section 101 inquiry."  Describing section 101 as a "gateway" and a "sentinel" akin to establishing jurisdiction, Judge Mayer forwarded three benefits of resolving any issue of patentable subject matter at the outset of litigation: conserving judicial resources, thwarting vexatious infringement suits, and protecting the public. In addressing the district court opinion, Judge Mayer stated, "No formal claim construction was required because . . . no 'reasonable construction would bring the claims within patentable subject matter.'"  Regarding the presumption of validity for issued patents requiring clear and convincing evidence to the contrary, Judge Mayer noted "the PTO has for many years applied an insufficiently rigorous subject matter eligibility standard." Thus, Judge Mayer found, "[T]he district court properly invoked section 101 to dismiss Ultramercial's infringement suit on the pleadings."

 

Given the apparent shift by the Federal Circuit toward resolving issues of patent-eligible subject matter at the pleadings stage, defendants of infringement suits involving uncertain subject matter eligibility are more likely to use a motion to dismiss to try to avoid costly discovery and claim construction.  The opportunity for an alleged infringer to undercut an infringement suit at the pleadings phase may also impact litigation strategy, including whether such a motion should be pursued in conjunction with other mechanisms such as post-grant proceedings before the Patent Trial and Appeal Board.

 

 

 

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: Legitimate Advocacy and Genuine Misrepresentation of Material Facts

The Federal Circuit has issued a decision in Apotex Inc. v. UCB, Inc., upholding a district court's finding that Apotex's U.S. Patent No. 6,767,556 ("the '556 patent") is unenforceable due to inequitable conduct. 

 

Dr. Sherman, founder and chairman of Apotex, wrote the '556 patent application and is its sole inventor.  The '556 is based on Canadian application filed on April 5, 2000.  The ’556 patent is generally directed to a process for manufacturing tablets of moexipril tablets—an angiotensin-converting enzyme (“ACE”) inhibitor used to treat hypertension. The ’556 patent discloses a process of making moexipril tablets consisting mostly of moexipril magnesium obtained by reacting moexipril or its acid addition salts with an alkaline magnesium compound to improve stability and prevent degradation of the normally instable moexipril hydrochloride.

 

Two existing drugs— Univasc and Uniretic—were both cited as prior art in the prosecution of the '556 patent, and were also asserted to infringe the '556 patent after issuance.  During prosecution, Dr. Sherman, through his patent attorney, asserted that the prior drugs did not render the invention of the '556 patent obvious because the process for making them simply combined components, rather than reacting them.  However, evidence presented at trial indicated that Dr. Sherman suspected that the existing drugs were made by the process recited in his application at the time the application was filed, and later conducted experiments to confirm that the components in those existing drugs were reacted, rather than simply combined as he represented to the PTO.  The court also found that Dr. Sherman has misled or failed to inform a declarant, Dr. Lipp, regarding the true nature of the existing drugs in relation to the claimed invention, resulting in a declaration by Dr. Lipp that perpetuated Dr. Sherman's mischaracterizations of those existing drugs.  In addition, the court determined that Dr. Sherman withheld relevant prior art from the PTO.  The district court held the combined misrepresentations and withholdings were material to the prosecution of the '556 patent, and that Dr. Sherman intended to deceive the PTO based on his overall pattern of misconduct, and therefore the '556 patent was unenforceable due to inequitable misconduct. 

 

On appeal, Dr. Sherman argued that the conduct before the PTO was merely advocating a particular interpretation of the prior art.  However, the Federal Circuit determined that his statements were not mere advocacy for a preferred interpretation; his statements were factual in nature and contrary to the true information he had in his possession.  The court clarified that there is no duty to disclose suspicions or beliefs regarding the prior art, and that there is nothing wrong with advocating, in good faith, a reasonable interpretation of the teachings of the prior art.  However, affirmatively and knowingly misrepresenting material facts regarding the prior art goes beyond failing to disclose a personal belief or alternative interpretations of the prior art, and enters the realm of inequitable conduct, which may result in an unenforceable patent.

 

The full opinion is available here.  

 

MVS Filewrapper® Blog: Critical Versus Optional, but Desireable Claim Elements

On August 6, 2014, the Federal Circuit Court of Appeals issued its opinion in ScriptPro, LLC v. Innovation Associates, Inc. In 2006, the Petitioner ScriptPro, LLC sued Innovation Associates, Inc. for infringement of claims 1, 2, 4, and 8 of U.S. Patent No. 6,910,601 ("the '601 patent").  The '601 patent describes a "collating unit" that uses sensors to automatically dispense and organize prescriptions according to individual patients.  Shortly after the lawsuit was filed, Innovation Associates filed an Inter Partes Reexamination with the USPTO, and the district court stayed the proceedings pending the result of the re-exam.  In January of 2011, the USPTO concluded its reexamination of the claims of the '601 patent, confirming claims 1, 2, 4, and 8. 

 

The district court resumed proceedings and Innovation Associates moved for summary judgment, arguing that the claims were invalid under section 112 on the grounds that the patent's specification did not describe the subject matter of the asserted claims.  The claims at issue did not require the use of sensors.  However, the district court agreed with Innovation Associates that the specification of the '601 patent implied that the use of "sensors" is critical to the functionality of the machine. Specifically, the court held, "no reasonable jury could find that the inventors were in possession of a collating unit that operated without sensors." Accordingly, the district court granted Innovation Associate's motion for summary judgment of invalidity for failure to satisfy the written description requirements of § 112. 

 

On appeal, the Federal Circuit reviewed de novo the language of the specification and—after pointing to several places in the specification suggesting the sensor may or may not be used—found that the wording of the specifications made the sensors an "optional, though desirable," feature of the invention.  The Court also pointed to the original claims as filed and noted "[w]hen a specification is ambiguous about which of several features are stand-alone inventions, the original claims can help resolve the ambiguity, though even original claims may be insufficient as descriptions or be insufficiently supported by the rest of the specification."  The Federal Circuit reversed the grant of summary judgment holding that, ScriptPro could establish that a person of skill in the art would be able to tell from description of the specification that "the inventor[s] actually invented the invention claimed."  The Court concluded that, although the machine would be more efficient with the sensors, it could be fully functional without them and, therefore, the written description was sufficient.

MVS Filewrapper® Blog: Federal Circuit Invalidates Patent Claims As Non-Patentable Subject Matter

The U.S. Court of Appeals for the Federal Circuit's recent decision in Digitech Image Technologies v. Electronics for Imaging, Inc., upheld a decision that patent claims directed to a collection of numerical data that lacks a physical component or manifestation as well as an abstract idea of organizing data through mathematical correlations are invalid.

 The plaintiff, Digitech Image Technologies, filed infringement suits against 32 defendants in the U.S. District Court for the Central District of California, asserting claims of U.S. Patent No. 6,128,415 ("the '415 patent"). The '415 patent disclosed an "improved device profile" that describes spatial and color properties of a device within a digital image processing system and "includes both chromatic characteristic information and spatial characteristic information." The district court concluded that the "device profile" claims were directed to a collection of numerical data that lacks a physical component or physical manifestation and that a "device profile" is nothing more than information, thus not falling into one of the categories of eligible subject matter under 35 U.S.C § 101. Furthermore, the district court concluded that the asserted method claims for generating a device profile encompass the abstract idea of organizing data through mathematical correlations were also ineligible under § 101.

On appeal, Digitech asserted that the district court erred in its findings that both the "device profile" and method claims were invalid. With regard to the "device profile" claims, the Court of Appeals stated that for under § 101, for all categories except process claims, the eligible subject matter must exist in some physical or tangible form. Here the "device profile" is comprised of two sets of data that describe a device dependent transformation—one set of data for color information and the other set of data for spatial information. Though Digitech argued that the "device profile" is hardware or software within a digital image processing system, the Court of Appeals concluded that the claims' only description of the device profile relates to the two sets of data and that data in its non-physical form simply does not fall under § 101.

Additionally, the Federal Circuit concluded that the '415 patent's method claims were drawn to an abstract idea because it describes a process of organizing information through mathematical correlations and is not tied to a specific structure or machine. The Court reasoned that without additional limitations, the employment of a mathematical algorithm to manipulate existing information in order to generate additional information is not eligible for patent protection.  Specifically, the claim stated a process of combining two data sets into the "device profile" and was "so abstract and sweeping" as to cover any and all uses of a "device profile."

 The full opinion is available here: http://www.cafc.uscourts.gov/images/stories/opinions-orders/13-1600.Opinion.7-9-2014.1.PDF

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