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: Updates to the Innovation Act

Post by Jill Link

 

 

The Filewrapper® Blog has previously reported on the Innovation Act as passed by the U.S. House of Representatives on December 5, 2013 (H.R. 3309) and the companion bill subsequently failing to pass in the senate (S. 1720). Last week a bipartisan bill was introduced by House Judiciary Committee Chairman Bob Goodlatte (R-Virginia) and again referred to as the "Innovation Act" (H.R. 9). The bill is now co-sponsored by Representatives Peter DeFazio (D-Oregon), Darrell Issa (R-California), Anna Eshoo (D- California), and Lamar Smith (R-Texas). To be clear, this is the same legislation passed in 2013 by the House of Representatives and now brought during the inauguration of the 114th U.S. Congress.

The Innovation Act is primarily focused on addressing perceived increases in abusive patent litigation by non-practicing entities (often referred to as “patent trolls”). Supporters of the bill state their intention of curbing patent litigation which only seeks to obtain settlement payments from defendants in an effort to pay the millions of dollars it can cost to proceed through a patent infringement trial.  The bill outlines heightened pleading standards, including requiring a patent plaintiff to name the owner of the patent and whether there is any financial harm as a result of the alleged patent infringement. In addition, the bill provides for a fee-shifting provision that requires courts (with some exceptions) to award the prevailing parties reasonable attorneys' fees and other expenses when the court concludes the action was a frivolous lawsuit or claim. 

The Innovation Act also requires a court to make early decisions regarding patent validity in an effort to avoid a patent case being litigated when claims may ultimately be found to be invalid. For example, there would be required delays in the discovery process until after claim construction is determined. In addition, the Judicial Conference would be required to set forth rules aimed to decrease costs associated with discovery (which often creates a barrier to small businesses and other entrepreneurs pursuing patent litigation).

There is also a voluntary process for small businesses to postpone patent lawsuits while larger sellers complete similar patent lawsuits against the same plaintiff. Similarly, the act allows a manufacturer to intervene in a lawsuit against its customers and have the action stayed for the customer if both the customer and manufacturer agree. 

MVS and the Filewrapper® Blog will continue to bring updates on the progress of the House and Senate as the Innovation Act is again considered in 2015.

 

 

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: USPTO Issues Examples of Abstract Ideas and Claim Eligibility

Post by Luke T. Mohrhauser

 

 

A threshold requirement for obtaining a patent is that the subject matter must meet eligibility requirements. Recent changes from the Supreme Court have impacted the types of patent eligible inventions as they relate to abstract ideas. In response to these changes the USPTO recently issued a set of Examples of claims including abstract ideas that both satisfy and do not satisfy the recently issued 2014 Interim Eligibility Guidance.

 

            For reference, the Guidance provides a two-step approach for determining subject matter eligibility, where Step 1 determines whether the claim is directed to a process, machine, manufacture, or composition of matter. Step 2 is a two-part analysis where an examiner first determines whether the claim is directed to a law of nature, a natural phenomenon, or an abstract idea (judicial exceptions). If no, the claim is eligible and examination should continue for patentability. If yes, the analysis proceeds to Step 2B to analyze whether the claim as a whole amounts to significantly more than the exception. At Step 2B, an examiner is to determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim as a whole amounts to significantly more than the judicial exception. This includes an analysis of the remainder of claim elements and how they add any inventive step to the claim.

 

            The Examples go through the analysis of explaining each part of the two-step approach to show how the claims all meet Step 1, but vary with regard to Step 2. There is a good presentation of the analysis of both Steps 2A and 2B, and how the various claim examples relate to Supreme Court precedent. For example, in claims where it is determined that the limitations are directed towards an abstract idea, the explanation of how any additional elements add enough of an inventive step to overcome the abstract idea can be very helpful.

 

            The Examples issued by the Patent Office include four claim sets that were deemed patent eligible, and four that were found ineligible.

 

 

Patent Eligible

 

            Examples of claims that were or would be patent eligible include the following:

 

1.      A method and computer medium for isolating and removing malicious code from electronic messages. The claims were not directed towards an abstract idea because they included a concept inextricably tied to computer technology and distinct from the types of concepts found by the courts to be abstract.

 

2.      E-Commerce Outsourcing System/Generating a Composite Web Page.  The claim was found not be directed towards an abstract idea because it does not merely recite the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet. Instead, the claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.

 

3.      Methods and systems for halftoning a gray scale image. In the three claims provided in the Example, it is stated that they include mathematical steps that would constitute an abstract idea. However, the additional analysis of Step 2B above leads to a finding that taking all the additional claim elements individually, and in combination, the claim as a whole amounts to significantly more than the abstract idea of generating a blue noise mask, and therefore, the claims contain patent eligible subject matter.

 

4.      A method and system for calculating an absolute position of a GPS receiver and an absolute time of reception of satellite signals. The claims include calculating steps, and therefore, include mathematical equations that would make them abstract ideas. However, the additional limitations of the claim placed upon the application of the claimed mathematical operations show that the claim is not directed to performing mathematical operations on a computer alone. Rather, the combination of elements impose meaningful limits in that the mathematical operations are applied to improve an existing technology (global positioning) by improving the signal-acquisition sensitivity of the receiver to extend the usefulness of the technology into weak-signal environments and providing the location information for display on the mobile device, which indicates that the claims include patent eligible subject matter.

 

Patent Ineligible

 

            Examples of claims that were or would be patent ineligible include the following:

 

1.      Method of generating a device profile by generating first and second data and combining the same. While the claim met Step 1 of the analysis, it was found to be a mere gathering and combination that employed mathematical relationships, thus making it an abstract idea. The claim did not include any additional steps beyond the abstract generating and combining and thus, failed Step 2, making the claim ineligible.

 

2.      Computer system for electronically managing a game of Bingo. The claim included a computer and a program run on the computer. The program included steps that could be performed mentally, making the claim an abstract idea. The mere inclusion of a computer with a CPU did not add enough of an inventive step under Step 2B to overcome the abstract idea, and the claim was found to include ineligible subject matter.

 

3.      Methods for conducting reliable transactions in an e-commerce environment. The claim included steps of creating a contractual relationship, which is an abstract idea. Analyzing the claim as whole for an inventive concept, the claim limitations in addition to the abstract idea include a computer application running on a computer and the computer network. This is simply a generic recitation of a computer and a computer network performing their basic functions. Therefore, the claim is not patent eligible.

 

4.      A method for distribution of products over the Internet via a facilitator. The claim describes the concept of using advertising as an exchange or currency. This concept is similar to the concepts involving human activity relating to commercial practices (e.g., hedging in Bilski) that have been found by the courts to be abstract ideas. When viewed either as individual limitations or as an ordered combination, the claim as a whole does not add significantly more to the abstract idea of using advertising as an exchange or currency (The answer in Step 2B is no). The claim is not patent eligible.

 

These Examples should help both Applicants and Examiners navigate the new patent eligibility landscape under the Supreme Court's recent holdings on 35 U.S.C. § 101. 

 

 

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: 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: Update on "Patent Troll" Legislation in the Wake of the 2014 Elections

Post by Luke Holst

In December of 2013, the U.S. House of Representatives passed H.R. 3309, the "Innovation Act," ostensibly to address the problem of abusive patent litigation, sometimes referred to as patent trolling.  While H.R. 3309 passed with bipartisan support by an overwhelming margin of 325-91 votes, its companion bill failed to clear the Senate.  Failure of the Senate bill is attributable to removal of controversial fee-shifting language from H.R. 3309 by Judiciary Committee Chairman Patrick Leahy, D-Vt. The fee-shifting provisions required losing parties in patent litigation to pay their opponent's legal fees—a situation critics argued would discourage the filing of meritorious patent suits by small businesses.  After votes on the Senate counterpart bill stalled repeatedly, Senator Leahy withdrew the bill from the Senate Judiciary Committee's agenda last May.

 

In the wake of the 2014 midterm elections, Republicans have vowed to take up the legislation again early in 2015.  House Judiciary Committee Chairman Bob Goodlatte, R-Va., recently stated that a new version of the Innovation Act, and two companion bills addressing trade secret protections, should be reintroduced in the U.S. House of Representatives in January and pass with bipartisan majorities.  The trade secrets legislation looks to create private civil trade secret misappropriation lawsuits under the federal Economic Espionage Act, which currently only allows prosecutors to bring criminal cases.  On the Senate side, Senator Charles Grassley, R-Ia., is expected to replace Leahy as Chairman of the Judiciary Committee as the Republicans take over the Senate majority in January.  Senator Grassley has signaled his intention to make patent reform a priority in the new Congress and believes patent reform can be accomplished early next year.  In addition, the White House has signaled its support for legislation curbing abusive patent litigation, signaling that this may be an issue for which meaningful legislative action could be seen during the 2015 term.

 

 

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