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Unified Front: No Forfeiture by Failing to Raise Argument in Request for Rehearing

Addressing forfeiture of issues on appeal and sufficiency of the asserted prior art, the US Court of Appeals for the Federal Circuit upheld a Patent Trial & Appeal Board obviousness finding, explaining that a party does not waive arguments on appeal by failing to include them in a request for rehearing. Voice Tech Corp. v. Unified Patents, LLC, Case No. 22-2163 (Fed. Cir. Aug. 1, 2024) (Lourie, Chen, Cunningham, JJ.)

Unified Patents petitioned for inter partes review (IPR) of a Voice Tech patent that purported to improve upon the prior art by allowing a single mobile device to access and control various native applications and functions on a computer. Unified alleged that the challenged claims were unpatentable as obvious over three prior art references. The Board agreed and found that all of the challenged claims were unpatentable. Voice Tech appealed.

Voice Tech argued that Unified’s petition failed to identify any disclosure in the prior art that taught the “mobile device interface” claim limitation in the challenged claims because Unified’s claim analysis failed to expressly mention a “mobile device interface.” The Board dismissed this argument, finding that Unified properly mapped its analysis of other patent claims to the “mobile device interface” claim recitation and presented a sufficient argument regarding obviousness. The Federal Circuit agreed that one of the prior art references taught a “mobile device interface.” The Court found that the Board did not rely on a new theory not found in the IPR petition, but instead had mapped the “mobile device interface” limitations to the prior art because the petition itself raised the theory.

Voice Tech also argued that the Board had failed to properly interpret certain claim terms. Unified countered that Voice Tech forfeited the claim construction arguments because they were not included in Voice Tech’s request for rehearing to the Board. The Federal Circuit disagreed, finding that a party’s choice to not re-raise an argument in a request for rehearing will not, by itself, forfeit the argument for review on appeal. The Court found that since Voice Tech had raised the claim construction arguments to the Board in its patent owner’s response, it had not forfeited those arguments on appeal.

The Federal Circuit also addressed Unified’s argument that Voice Tech’s proposed claim constructions would not change the outcome of the patentability analysis given the Board’s findings that the prior art disclosed the claim terms. The Court agreed with Unified, finding that it only needed to construe claim terms as necessary to resolve the controversy. The Court found that because Voice Tech’s responsive arguments were conclusory and failed to address how Voice Tech would be prejudiced by the Board’s adopted claim construction, the Federal Circuit did not need to consider Voice Tech’s claim construction arguments.

Finally, the Federal Circuit addressed Voice Tech’s arguments that the Board erred in finding that the prior art taught certain claim limitations and that Unified’s obviousness analysis was based on hindsight bias. The Court upheld the Board’s obviousness determinations as to all challenged claims, [...]

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Private Sale Means Public Fail

The US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board decision that a private sale of a product embodying the claimed invention did not qualify as a “public disclosure” under 35 U.S.C. § 102(b)(2)(B). Sanho Corp. v. Kaijet Technology Int’l Ltd, Inc., Case No. 23-1336 (Fed. Cir. July 31, 2024) (Dyk, Clevenger, Stoll, JJ.)

Sanho owns a patent directed to a port extension apparatus designed to enhance connectivity of end-user devices (such as laptops) with other devices (such as printers). Kaijet petitioned for inter partes review (IPR) challenging certain claims of Sanho’s patent, arguing that the claims were obvious based on a prior art reference. The Board found that the patent claims were invalid because of the prior art reference’s earlier effective filing date. Sanho argued that a prior sale of its HyperDrive device by the inventor of the patent should disqualify the reference as prior art. However, the Board determined that Sanho failed to demonstrate a public disclosure of the HyperDrive sale before the prior art reference’s effective filing date. Thus, the patent was invalidated. Sanho appealed.

The Federal Circuit affirmed, explaining that the America Invents Act (AIA) redefined prior art, shifting from a first-to-invent to a first-inventor-to-file system. Under the AIA, prior art includes patents and applications filed before the patent’s effective filing date subject to exceptions for public disclosures by the inventor. Sanho argued that the HyperDrive sale fell into this exception.

The Federal Circuit dismissed Sanho’s argument that the phrase “publicly disclosed” in § 102(b)(2)(B) should encompass all types of disclosures described in § 102(a)(1), including private sales. The crux of the issue was whether placing an invention “on sale” was tantamount to a “public disclosure” under § 102(b)(2)(B). The statute states that a disclosure is not prior art if the subject matter was publicly disclosed by the inventor before the effective filing date of the prior art. Sanho argued that “publicly disclosed” includes any disclosure, even private sales. The Court disagreed, explaining that the statute’s use of “publicly” implies a narrower scope than just “disclosed.” The Court noted that the purpose of this exception is to protect inventors who make their inventions available to the public before another’s patent filing.

The Federal Circuit also relied on legislative history in support of the conclusion that “public disclosure” in § 102(b)(2)(B) means the invention must be made available to the public. Sanho argued that as long as there are no confidentiality requirements, all disclosures, even private sales, should constitute public disclosures. Again, the Court rejected that argument, noting that the statute differentiates between “publicly disclosed” and general “disclosures,” implying different meanings.

The Federal Circuit determined that § 102(b)(2)(B) protects inventors who publicly disclose their inventions from subsequent disclosures by others, ensuring that prior public disclosure by the inventor prevents a third party’s disclosure from becoming prior art. This provision aims to encourage inventors to share their innovations with the public.

Practice Note: For a disclosure to qualify as “public” under the [...]

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PTAB MTA Pilot Program to the Rescue

On review of a final written decision from the Patent Trial & Appeal Board in an inter partes review (IPR), the US Court of Appeals for the Federal Circuit found that all challenged claims were obvious but left open the possibility of the patent owner amending the claims under the Motion to Amend (MTA) Pilot Program. ZyXEL Communications Corp. v. UNM Rainforest Innovations, Case Nos. 22-2220; -2250 (Fed. Cir. July 22, 2024) (Dyk, Prost, Stark, JJ.)

ZyXEL Communications petitioned for IPR challenging claims 1 – 4, 6, 7 and 8 of a patent owned by UNM Rainforest Innovation (UNMRI). The patent relates to methods for constructing frame structures in communication systems using orthogonal frequency-division multiple access (OFDMA) technologies. The patent describes a method for constructing a frame structure with two sections, each of which is configured for a different communication system, where the second communication system is used to support high mobility users (i.e., faster moving users).

Before the Board, ZyXEL argued that claims 1 – 4, 6 and 7 were unpatentable in light of two prior art references (Talukdar and Li), and that claim 8 was unpatentable in light of Talukdar and another prior art reference (Nystrom). During the Board proceedings, UNMRI filed a contingent motion to amend if any of the challenged claims were found to be unpatentable. As part of its motion, UNMRI requested preliminary guidance from the Board pursuant to the Board’s MTA Pilot Program. In its opposition to UNMRI’s motion to amend, ZyXEL argued that UNMRI’s amended claims lacked written description support, and in its preliminary guidance, the Board agreed. UNMRI attempted to file a revised motion to amend, but the Board rejected the revised motion and instead permitted UNMRI to file a reply in support of its original motion. It also allowed ZyXEL to file a sur-reply. The Board determined that claims 1 – 4, 6 and 7 were unpatentable, but that claim 8 was not. The Board also granted UNMRI’s motion to amend and determined that the new claims were nonobvious over the prior art of record. Both sides appealed.

With respect to the Board’s decision on the obviousness of claims 1 – 4, 6 and 7, the Federal Circuit found that substantial evidence supported the ruling. UNMRI’s primary argument was that a person of skill in the art (POSA) would not have been motivated to combine Talukdar and Li, but the Court credited the Board’s reliance on ZyXEL’s expert, who demonstrated sufficient motivation to combine the two references.

The Federal Circuit reversed the Board’s finding that claim 8 had not been shown to be obvious, however. The Court noted that while the Nystrom reference may not explicitly state the benefit of the missing limitations, “a prior art reference does not need to explicitly articulate or express why its teachings are beneficial so long as its teachings are beneficial and a POSA would recognize that their application was beneficial.”

Regarding UNMRI’s motion to amend, ZyXEL argued that the Board erred in granting the [...]

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Is Pleading “Generic” Enough to Plead Inducement?

The US Court of Appeals for the Federal Circuit held that a branded pharmaceutical manufacturer properly pled a theory of inducement by alleging that the generic competitor promoted its product as “generic” to the branded product and referred to the branded product’s sales for patented uses. Amarin Pharma Inc. v. Hikma Pharmaceuticals USA Inc., Case No. 23-1169 (Fed. Cir. June 25, 2024) (Moore, Lourie, Albright, JJ.)

Amarin Pharmaceuticals sells the drug Vascepa, which the US Food and Drug Administration (FDA) approved for two uses:

  1. To treat severe hypertriglyceridemia.
  2. As an adjunct therapy to reduce certain cardiovascular risks.

In 2016, Hikma submitted an abbreviated new drug application (ANDA) to market a generic version of Vascepa, which at the time was only approved for treatment of severe hypertriglyceridemia. Hikma and Amarin then litigated patents covering Vascepa under the Hatch-Waxman Act, with Hikma invalidating the patent claims covering the severe hypertriglyceridemia indication. After Amarin obtained approval for its second indication, Hikma submitted to the FDA a “section viii carve out” (i.e., prescribing information that purposedly did not include the second indication). The FDA approved Hikma’s product, which was sold with a “skinny label.” After Hikma’s ANDA was approved, Hikma issued a series of press releases that referred to its product as a “generic” version of Vascepa, even though the product was not approved for the cardiovascular risk indication. The press releases also referred to Vascepa’s annual sales as approximately $1.1 billion – the amount of Vascepa scales for all uses – as well as its usage information.

Amarin sued Hikma again for patent infringement, this time claiming that Hikma induced infringement of patents covering the cardiovascular risk indication. The district court overruled the magistrate judge’s recommendation and concluded that Amarin’s complaint did not plead a plausible case of induced infringement. Amarin appealed.

The Federal Circuit reversed. First, it explained its view that the case was a “run-of-the-mill” inducement infringement case, rather than one governed by the Hatch-Waxman Act framework. Emphasizing the deferential plausibility standard applicable at the pleadings stage, the Court held that, combined with allegations that Hikma’s label included warnings that would promote infringement, Amarin’s averments about Hikma’s press releases were sufficient at this stage to plausibly claim that Hikma induced infringement of the cardiovascular risk limitation by its references to the branded product.

The Federal Circuit also rejected Hikma’s claim that a ruling in Amarin’s favor would “effectively eviscerate section viii carve-outs.” The Court explained that its ruling was an ordinary application of induced infringement that promotes scrutiny of generic companies’ communications for clarity and consistency.

Practice Note: This case continues the trend of inducement cases that has received renewed interest after GlaxoSmithKline v. Teva Pharmaceuticals. Branded pharmaceutical manufacturers may be emboldened to sue after launch based on theories of inducement where section viii carveouts were employed.




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Rum Wars: Lanham Act Doesn’t Preclude Judicial Review of PTO Renewal Decisions

The US Court of Appeals for the Fourth Circuit reversed and remanded a district court’s ruling, holding that the Lanham Act does not foreclose an Administrative Procedure Act (APA) action for judicial review of the US Patent & Trademark Office’s (PTO) compliance with statutes and regulations governing trademark registration renewal. Bacardi & Co. Ltd. v. USPTO, Case No. 22-1659 (4th Cir. June 13, 2024) (Rushing, Richardson, Motz, JJ.)

The Arechabala family exported rum to the United States using the registered HAVANA CLUB trademark until the Cuban government expropriated Arechabala’s assets without compensation and let the HAVANA CLUB trademark expire. Empresa Cubana Exportadora de Alimentos y Productos Varios (Cubaexport) then registered HAVANA CLUB as a trademark in the US for itself. Bacardi & Company Limited and Bacardi USA, Inc. (collectively, Bacardi) obtained an interest in the HAVANA CLUB mark from the Arechabala family, filed a US trademark application for HAVANA CLUB and petitioned the PTO to cancel Cubaexport’s registration. Upon the PTO’s denial of Bacardi’s trademark application and cancellation petition, Bacardi filed a civil action challenging these administrative rulings.

Two years later, Cubaexport was required to renew its HAVANA CLUB trademark registration under Section 8 of the Lanham Act. Because of a trade embargo, Cubaexport sought a specific license from the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) to pay the renewal fee, but OFAC denied the request. OFAC’s denial resulted in the PTO denying renewal of Cubaexport’s HAVANA CLUB registration. Cubaexport petitioned OFAC and the PTO to reverse their decisions. Ten years later, once OFAC issued a special license to Cubaexport, the PTO permitted Cubaexport to renew its HAVANA CLUB trademark registration.

Bacardi sued the PTO under the APA, claiming that the PTO Director violated Section 9 of the Lanham Act and the PTO’s own regulations by purporting to renew a trademark registration 10 years after it expired. The district court ruled that the Lanham Act precluded judicial review under the APA and thereby dismissed Bacardi’s lawsuit for lack of subject matter jurisdiction. Bacardi appealed.

The Fourth Circuit reversed, finding that “[n]othing in the Lanham Act expressly precludes judicial review of the PTO’s trademark registration renewal decisions.” In fact, Section 21 of the Lanham Act specifically authorizes, rather than forecloses, parties dissatisfied with certain decisions of the Director or the Trademark Trial & Appeal Board to appeal to the US Court of Appeals for the Federal Circuit or institute a civil action in federal district court. Section 21 of the Lanham Act also does not limit proceedings under sections or statutes such as the APA, and the Lanham Act is silent as to whether a third party may seek judicial review of the PTO’s decision to grant a renewal application.

Having found nothing in the Lanham Act that expressly precludes judicial review of PTO registration renewal decisions or fairly implies congressional intent to do so, the Fourth Circuit concluded that the APA’s mechanism for judicial review remains available.




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PTO Reopens Comment Period for AI Inventorship Guidance

The US Patent & Trademark Office (PTO) reopened and extended until June 20, 2024, the period for public comment on the guidance regarding inventorship in applications involving artificial intelligence (AI) assisted inventions. The guidance was published on February 13, 2024, at 89 FR 10043. The PTO will also treat as timely any comments received between May 13, 2024, and the notice’s June 6, 2024, publication date.

Comments on the inventorship guidance must be submitted via the Federal Rulemaking Portal.

For more information, see our previous report on the February 13 PTO notice and related examination guidance.




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How Close Are They? PTO Looking for “Significant Relationship” Between Sequential IPR Petitioners

Addressing the issue of whether to discretionally deny a petition for inter partes review (IPR) under the General Plastics factors when there is no “significant relationship” between the petitioners, the Director of the US Patent & Trademark Office (PTO) vacated the Patent Trial & Appeal Board’s decision denying institution. Videndum Prod. Sol., Inc. v. Rotolight Ltd., IPR2023-01218 (PTO-Ofc. of Dir., Apr. 19, 2024) (Vidal, PTO Dir.)

Videndum filed a petition requesting IPR challenging claims of a patent owned by Rotolight. In its Patent Owner’s Response, Rotolight argued to the Board that it should exercise its discretion to deny institution under 35 U.S.C. § 314(a), citing the Board’s 2017 precedential decision in General Plastic. Prior to Videndum’s petition, the Board instituted review of the same patent at the request of another party. However, one month prior to oral argument in that proceeding, the parties to that IPR proceeding jointly moved to terminate the proceeding on the basis of a settlement. The Board granted the parties’ joint petition.

In the present case, a split Board denied Videndum’s petition for institution, reasoning that Videndum’s petition was a “follow on” of the prior proceeding, and citied General Plastic even while conceding that the “Petitioner’s reliance on [the] earlier-filed petition …, even ‘as a menu and roadmap’” is not sufficient “to create ‘a significant relationship’ that favors denial under the first General Plastic factor.” The dissent agreed on that point but argued that the “General Plastic factors as whole weigh against exercising discretion to deny institution.”

Videndum requested Director review of the Board’s denial of institution based on an abuse of discretion argument. The Director granted review.

The Director found error with the Board’s application of the General Plastic factors in situations where the second-in-time petition is not by the same party that filed the first petition or by a party having a “significant relationship” with the first filer.

The General Plastic factors generally deal with how the Board should analyze whether to institute a subsequent petition on the same patent. Factor one explicitly asks whether the two petitioners are the same. However, the application of the General Plastic factors “is not limited solely to instances when multiple petitions are filed by the same petitioner.” But, when the factors are applied to different petitioners, they have been applied to petitioners who have a “significant relationship” with each other.

Here, both the parties and the Board agreed that there is not a “significant relationship” between the two petitioners. As the Director noted, the PTO has never extended the General Plastic factors “to any cases in which the first and second petitioners do not have a significant relationship.” The Director found the Board’s unprecedented extension of the General Plastics factors to be “improper[],” vacated the Board’s decision, and remanded the case with an instruction to the Board majority to “address the merits of the Petition.”

Practice Note: Patent owners fighting institution of an IPR by a subsequent petitioner should allege facts emphasizing the relationship between the two [...]

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It May Be a Hairy Situation, but Detailed Declaration Sufficient Evidence of Prior Use

The US Court of Appeals for the Federal Circuit affirmed the Patent Trial & Appeal Board’s refusal to register a mark, finding that an unchallenged, detailed declaration by the opposing company’s director sufficed as substantial evidence of prior use. Jalmar Araujo v. Framboise Holdings, Inc., Case No. 23-1142 (Fed. Cir. Apr. 30, 2024) (Lourie, Linn, Stoll, JJ.)

On December 3, 2019, Jalmar Araujo filed an application to register #TODECACHO as a standard character mark for hair combs. Framboise Holdings filed an opposition on the grounds that Araujo’s mark would likely cause confusion with its #TODECACHO design mark (below).

Framboise Holdings alleged that it owned the mark based on its prior use of it in connection with various hair products since March 24, 2017. Framboise also filed its own application for registration of its design mark on April 14, 2020, claiming the same date of first use.

On October 18, 2021, the final day on which Framboise could submit its case in chief to the Board, it moved for a seven-day extension. Four days after filing the motion, it served Araujo with the declaration of Framboise Director Adrian Extrakt. Although it was the testimony of a single interested party, the Board found Extrakt’s declaration alone to be convincing evidence of prior use. His declaration provided a list of products and dates of first use, as well as examples of the mark displayed on products in stores. After the Board sustained the opposition, Araujo appealed.

Araujo argued that the Board abused its discretion in granting Framboise an extension of the trial period, and that the Board’s finding that Framboise established prior use of the #TODECACHO design mark was not supported by substantial evidence. The Federal Circuit disagreed.

The Federal Circuit concluded that the Board had not abused its discretion in granting Framboise an extension because it identified and applied the correct good cause standard and “reasonably found good cause to grant the extension.” The Court also found that the Board was correct in finding that Extrakt’s declaration alone was sufficient evidence to support a priority date of March 24, 2017, based on evidence of the design mark’s use in connection with various hair products. The Court noted that the declaration did not simply consist of “naked general assertions of prior use,” but contained evidence. Araujo neither deposed Extrakt nor offered any evidence to dispute his claims. Hence, Extrakt’s declaration sufficed to meet the applicable preponderance of the evidence standard.

Practice Note: Oral or written testimony, even when offered by an interested party, can establish priority of use in a trademark proceeding if it is sufficiently detailed, is supported by exhibits and is convincing.




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Hot Mess? Second Circuit Douses Injunction Based on Weak Mark

The US Court of Appeals for the Second Circuit reversed a district court’s grant of preliminary injunction for abuse of discretion based on an erroneous evaluation of the strength of the “inherently descriptive” marks at issue. City of New York v. Henriquez, Case No. 23-325 (2d Cir. Apr. 16, 2024) (Livingston, CJ; Walker, Carney, JJ.)

Juan Henriquez is a first responder with the Fire Department of New York (FDNY). Henriquez began organizing what he called “medical special operations conferences” (MSOCs) around the United States. In New York, he partnered with the FDNY. Six years into organizing with the FDNY, the relationship soured. Henriquez then applied to register “Medical Special Operations Conference” as a trademark. The US Patent & Trademark Office (PTO) rejected his application on the basis that the mark was merely descriptive. Henriquez amended his application under § 2(f) of the Lanham Act, which allows registration of descriptive marks that have been used on a “substantially exclusive and continuous basis” for at least five years. The PTO agreed to register his mark.

The FDNY and the City of New York brought suit, seeking to cancel Henriquez’s trademark. Henriquez counterclaimed for trademark infringement of his registered “Medical Special Operations Conference” mark and the related unregistered mark “MSOC”. The district court granted Henriquez a preliminary injunction and barred the FDNY from using “medical,” “special” and “operations” in its branding. The FDNY appealed.

The FDNY raised two issues on appeal: did the district court abuse its discretion by enjoining the FDNY’s use of the marks, and alternatively, did the district court grant an “overbroad” injunction?

The Second Circuit agreed with the FDNY on the first injunction issue and therefore did not reach the second.

The Second Circuit requires analysis of the eight “likelihood of confusion” factors under Polaroid when considering a preliminary injunction. While no one factor is dispositive, the strength of a mark “is especially important,” and therefore the Court is “reluctant to affirm any preliminary injunction founded upon an erroneous strength analysis.”

The Second Circuit found three “missteps” that led the district court to commit legal error by improperly categorizing Henriquez’s two marks as “at least strongly suggestive,” when in fact the marks were inherently descriptive.

First, the Second Circuit explained that the district court did not properly consider Henriquez’s past concessions about his marks. Henriquez registered his mark under § 2(f) of the Lanham Act – conceding descriptiveness. Henriquez also argued to the district court that both of his marks were valid based on secondary meaning, which is only necessary for descriptive marks. Because “[w]hat parties say about their marks matters,” the district court was wrong to ignore admissions of descriptiveness.

Second, the Second Circuit found that the district court did not properly consider the PTO’s characterization of the marks as descriptive. Courts should “accord great weight to the PTO’s conclusions” and only decline to follow those conclusions “for compelling reasons.” The Court noted that the PTO initially rejected Henriquez’s application and only granted registration under § 2(f), which [...]

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Clean Up on Aisle PTAB: Clarification of Discretionary Denial Practice

The US Patent & Trademark Office (PTO) issued a Notice of Proposed Rulemaking (NPRM) for inter partes review (IPR) and post-grant review (PGR) proceedings before the Patent Trial & Appeal Board, seeking to codify existing precedent and guidance regarding the Board’s discretionary considerations in denying IPR or PGR petitions. 89 Fed. Reg. 28693 (Apr. 19, 2024).

The NPRM follows a 2020 request for comments and an April 2023 Advance Notice of Proposed Rulemaking (ANPR) that the PTO had hoped to finalize in terms of rulemaking by fall 2023. However, proposals in the ANPR hit a snag following criticism from Congress and more than 14,500 comments from stakeholders and the public, including charges that the PTO Director was overstepping her authority.

The newly proposed rules address:

  • Briefing on motions for discretionary denial
  • Factors for discretionary denial
  • Termination and settlement agreements

Briefing on Motions for Discretionary Denial

A significant aspect of the proposal provides for a separate briefing schedule between a patent owner’s preliminary response (POPR) and a request for discretionary denial, which must be filed no later than one month prior to the deadline for the POPR for briefing on its merits. Under the proposal, the discretionary denial arguments would be excluded from the preliminary response unless otherwise authorized by the Board and are intended to avoid encroaching on the wordcount limits for briefing on the merits. Under the proposed briefing process, there would be a 10-page limit for a patent owner’s request for discretionary denial and for the petitioner opposition, and a five-page limit for the patent owner’s sur-reply.

Factors for Discretionary Denial

The proposed rules address denial of institution for “parallel petitions” or “serial petitions” to provide a framework for considering whether previously presented art or arguments provide grounds for denial. The proposed rules also address treatment of joinder petitions, particularly in relation to already instituted petitions. Parallel petitions are defined in the proposed rule as two or more petitions by the same petitioner challenging the same patent that are filed on or before the filing of a POPR to any of the petitions or on or before the due date for filing a POPR to the first petition. Serial petitions are defined as challenged claims of the same patent overlapping with those in a previously filed petition for IPR, PGR or covered business method patent review.

According to the proposed rules, a parallel petition would not be instituted without a good cause showing of why more than one petition is necessary. Factors for a good cause showing include:

  • A petitioner’s ranking of desired petitions for consideration
  • An explanation of differences and materiality between the petitions
  • The number of challenged patent claims, including those asserted by the patent owner in district court litigation
  • A priority date dispute
  • Alternative claim constructions requiring different prior art references on mutually exclusive grounds
  • Knowledge of asserted claims at the time of filing a petition
  • Complexity of the technology

Similar considerations would also apply to joinder petitions.

[...]

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