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European UPC All Set for Set Up as Protocol Enters into Force

by and | Jan 27, 2022 | ,

On January 18, 2022, after recently joining the protocol on a European Unified Patent Court (UPC) on provisional application (PPA) as the decisive 13th EU Member State, Austria deposited its instrument of accession to the PPA. Thus, the countdown to the grand opening of the UPC has now started. (The actual opening may take place in late 2022 or—more likely—in early 2023.)

Austria’s deposition marked the beginning of the Provisional Application Phase as of January 19, 2022, which will last at least eight months and includes preparatory work, particularly recruiting 90 legal and technical judges and administrative staff, testing the file management system, setting up the IT system, hosting inaugural meetings of the governing bodies and confirming the UPC’s budget. As Alexander Ramsay, chairman of the UPC Preparatory Committee, said in a press release issued January 19, 2022, the Provisional Application Phase will start with the inaugural meetings of the Administrative Committee, Advisory Committee and Budget Committee. In addition, following the United Kingdom’s withdrawal from the project, the Preparatory Committee must decide where to locate the UPC’s central division for pharmaceutical and chemical cases as the seat of this division was initially set to be in London.

As soon as the UPC member states are confident that preparations have progressed to the point where the UPC is functional, Germany will deposit its ratification of the UPC Agreement. Germany’s deposition will set the date for the start of the UPC’s operations and trigger the countdown to the UPC Agreement’s entry into force, which will be on the first day of the fourth month after the deposit. At that point, unitary patents (or European patents with unitary effect) will be available at the European Patent Office (EPO).

Once the Provisional Application Phase ends, a transitional period of seven years is triggered for European patent (EP) applicants and holders to decide whether they want to opt out of UPC jurisdiction and continue to pursue national patent litigation. Within this transitional period, EP applicants can opt in if their application is granted or even after the EP is granted—if no legal action has commenced before a national court.

The UPC will thus have competence for already existing EPs (if not opted out) and for the newly introduced unitary patents granted by the EPO. Both invalidity and infringement proceedings will be conducted before the UPC, which will consist of regional, national and central divisions as well as an Appeals Court and a Mediation Centre.

In a statement shared January 19, 2022, the EU Internal Market Commissioner Thierry Breton welcomed the start of the Provisional Application Phase, stressing the cost benefits of unitary patents: “For instance, a Unitary Patent covering a territory of potentially up to 25 Member States will cost less than €5,000 in renewal fees over 10 years, instead of the current level of around €29,000. The Unitary Patent will also reduce the gap between the cost of patent protection in Europe compared with the [...]

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PTO Outlines New Process to Impose Sanctions for Improper Trademark Practices

by | Jan 13, 2022 |

As part of its initiative to “protect the integrity of the U.S. trademark register,” the US Patent and Trademark Office (PTO) issued a Federal Register notice outlining a new administrative process to address fraudulent or improper trademark submissions.

Under this new process, the commissioner for trademarks can investigate and sanction actions that appear to violate the Trademark Rules of Practice or the PTO website terms of use. The commissioner may initiate an investigation based on information received from examining attorneys or data analytics personnel or via external sources such as letters of protest, the tmscams@uspto.gov mailbox, law enforcement and media reports.

Applications will be removed from examination pending an investigation, and a suspension letter will be issued. All documents associated with this process will be posted in the electronic record, which is available to the public via the Trademark Status and Document Retrieval (TSDR) database.

If the investigation does not result in an administrative order, the application will be removed from suspension and assigned (or reassigned) to the examining attorney for consideration. If, however, the PTO identifies conduct that suggests a potential violation of the PTO rules or the PTO website terms of use, it will issue an order to show cause why sanctions should not be imposed on the relevant parties (e.g., applicants, registrants or any involved third parties). The order will set a response deadline and identify the violation, the relevant application(s) and/or registration(s) and the proposed sanction. Appropriate sanctions may include, for example, terminating the relevant application(s), striking a submission, prohibiting a party from appearing before the PTO in trademark matters or deactivating certain USPTO.gov accounts.

If the PTO issues a sanction order terminating a pending application, the TSDR records will reflect that order in the application prosecution history. Where the order includes the sanction of termination involving a registration that issued before the administrative process was initiated, the PTO will not terminate the registration, but the online TSDR records will be updated to note that the registration was subject to sanctions and such entries may affect the validity of that registration.

The notice also states that “additional actions” may be taken if a sanctioned actor repeatedly violates the PTO rules or the PTO website terms of use.

Comments on the notice are due by January 20, 2022.

Practice Note: This is just one of the many ways the PTO is trying to address fraudulent filings. The PTO recently issued sanctions where it found evidence of fraudulent applications and violations of the PTO Rules of Professional Conduct.



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Silence May Be Sufficient Written Description Disclosure for Negative Limitation

by | Jan 13, 2022 |

Addressing the issue of written description in a Hatch-Waxman litigation, the US Court of Appeals for the Federal Circuit affirmed the district court’s finding that the patent adequately described the claimed daily dose and no-loading dose negative limitation. Novartis Pharms. v. Accord Healthcare Inc., Case No. 21-1070 (Fed. Cir. Jan. 3, 2022) (Linn, O’Malley, JJ.) (Moore, CJ, dissenting).

Novartis’s Gilenya is a 0.5 mg daily dose of fingolimod hydrochloride medication used to treat relapsing remitting multiple sclerosis (RRMS). HEC filed an abbreviated new drug application (ANDA) seeking approval to market a generic version of Gilenya. Novartis sued, alleging that HEC’s ANDA infringed a patent directed to methods of treating RRMS with fingolimod or a fingolimod salt at a daily dosage of 0.5 mg without an immediately preceding loading dose.

The specification described the results of an Experimental Autoimmune Encephalomyelitis (EAE) experiment induced in Lewis rats showing that fingolimod hydrochloride inhibited disease relapse when administered daily at a dose of 0.3 mg/kg or administered orally at 0.3 mg/kg every second or third day or once a week, and a prophetic human clinical trial in which RRMS patients would receive 0.5, 1.25 or 2.5 mg of fingolimod hydrochloride per day for two to six months. The specification did not mention a loading dose associated with either the EAE experiment or the prophetic trial. It was undisputed that loading doses were well known in the prior art and used in some medications for the treatment of multiple sclerosis.

The district court found that HEC had not shown that the patent was invalid for insufficient written description for the claimed 0.5 mg daily dose or the no-loading dose negative limitation. The district court also found sufficient written description in the EAE experiment and/or prophetic trial and credited the testimony of two of Novartis’s expert witnesses. HEC appealed.

The Federal Circuit affirmed the district court’s decision. Turning first to the daily dose limitation, the majority held that the prophetic trial described daily dosages of 0.5, 1.25 or 2.5 mg and found no clear error by the district court in crediting expert testimony converting the lowest daily rat dose described in the EAE experiment to arrive at the claimed 0.5 mg daily human dose. Reciting Ariad, the Court explained that a “disclosure need not recite the claimed invention in haec verba” and further, that “[b]laze marks” are not necessary where the claimed species is expressly described in the specification, as the 0.5 mg daily dose was here.

Turning to the no-loading dose negative limitation, the majority disagreed with HEC’s arguments that there was no written description because the specification contained zero recitation of a loading dose or its potential benefits or disadvantages, and because the district court inconsistently found that a prior art abstract (Kappos 2006) did not anticipate the claims because it was silent as to loading doses. The Court explained that there is no “new and heightened standard for negative claim limitations.” The majority acknowledged that silence alone is insufficient disclosure but emphasized that [...]

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Rounding Error: Intrinsic Evidence Informs Plain and Ordinary Meaning

by | Dec 16, 2021 |

Vacating a stipulated infringement judgment based on an incorrect claim construction, the US Court of Appeals for the Federal Circuit explained that it is improper to isolate claim language from the intrinsic evidence when determining the plain and ordinary meaning of a disputed term. AstraZeneca AB v. Mylan Pharms. Inc., Case No. 21-1729 (Fed. Cir. Dec. 8, 2021) (Stoll, J.) (Taranto, J., dissenting).

AstraZeneca sued Mylan Pharmaceuticals for infringement of three patents listed in the US Food and Drug Administration’s (FDA) orange book covering the Symbicort® pressurized metered-dose inhaler for the treatment of asthma and COPD. 3M submitted an abbreviated new drug application (ANDA) to the FDA to manufacture and sell a generic version of the Symbicort® inhaler and certain interests to the ANDA were later transferred to Mylan. After receiving a Paragraph IV letter from Mylan, AstraZeneca filed an infringement suit.

Shortly before trial, the district court held a claim construction hearing to determine the meaning of “0.001%,” the claimed concentration of PVP (one of the active ingredients). The district court construed the term based on its “plain and ordinary meaning, that is, expressed with one significant digit.” Based on this definition, Mylan stipulated to infringement and the district court entered judgment. The district court held a bench trial on invalidity, ultimately determining that Mylan did not prove that the claims were invalid as obvious. Mylan appealed the stipulated judgment stemming from the claim construction determination and the judgment of no invalidity.

First, Mylan challenged the district court’s claim construction of “0.001%.” AstraZeneca argued that the district court improperly construed the term to encompass a range from 0.0005% to 0.0014%. Mylan contended that, in view of the specification and the prosecution history, the term was to be defined precisely at 0.001% with only “minor variations” allowed. The Federal Circuit agreed, finding that Mylan’s proposed construction was more properly aligned with the patent’s description as further informed by the prosecution history.

The Federal Circuit stated that the proper construction of 0.001% only allowed minor variations from 0.00095% to 0.00104%. There was no dispute that the term 0.001% would ordinarily encompass the range of 0.0005% to 0.0014%. AstraZeneca argued that this “ordinary meaning” would control absent lexicography or disclaimer. The Court disagreed, finding that it would improperly isolate the term from the claim language, specification and patent prosecution history. The Court explained that the “ordinary meaning” is not the ordinary meaning in the abstract but is instead the “meaning to the ordinary artisan after reading the entire patent,” and therefore the claims must be read in view of both the written description and the prosecution history. The Court’s rationale for narrower construction was based on the intrinsic record reflecting that the written description and prosecution history showed that very minor differences in PVP concentration would impact stability.

The Federal Circuit found that the written description explained that stability was one of the most important factors and that even very minor differences in PVP concentration could impact stability. The written description also [...]

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Obvious to Try Requires Reasonable Expectation of Success Tethered to Claimed Invention

by | Dec 16, 2021 |

Addressing obviousness in the context of method of treatment claims using particular drug dosages, the US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board (Board) final written decision holding that Teva failed to prove obviousness because it failed to show a reasonable expectation of success. Teva Pharms., LLC v. Corcept Therapeutics, Inc., Case No. 21-1360 (Fed. Cir. Dec. 7, 2021) (Moore, C.J.)

Corcept filed a New Drug Application (NDA) for Korlym, a 300 mg mifepristone tablet administered to certain patients with Cushing’s syndrome. The US Food and Drug Administration (FDA) approved Corcept’s application but required a drug-drug interaction clinical trial to determine drug safety when co-administered with strong CYP3A inhibitors such as ketoconazole (Lee memorandum). Corcept conducted the drug-drug interaction study and received a patent relating to methods of treating Cushing’s syndrome by co-administering mifepristone and a strong CYP3A inhibitor based on the data from the Lee memorandum.

Teva sought post-grant review of the patent after Corcept asserted it against Teva in district court. Teva argued that the patent would have been obvious in view of Korlym’s label and the Lee memorandum and submitted a supporting expert declaration. The Board held that Teva failed to prove that a skilled artisan would have had a reasonable expectation of success for safe co-administration of more than 300 mg of mifepristone with a strong CYP3A inhibitor, and thus failed to prove that the patent was obvious. Teva appealed, arguing that the Board erroneously required precise predictability rather than reasonable expectation of success in achieving the claimed invention, and that the Board did not apply Federal Circuit prior art range precedents.

The Federal Circuit affirmed the Board’s decision. Turning first to reasonable expectation of success, the Court explained that the analysis must be tied to the scope of the claimed invention. Because the patent required safe administration of a specific amount of mifepristone, the Board did not err in requiring Teva to show a reasonable expectation of success for a specific mifepristone dosage. Applying this correct standard, the Court found that the evidence supported that a skilled artisan would have had no expectation as to whether co-administering dosages of mifepristone above the 300 mg/day threshold set forth in the Korlym label would be successful. The Federal Circuit also agreed with the Board that Teva’s expert testimony supported a finding of no expectation of success in achieving the claimed invention based on inconsistent testimony before and after institution.

Turning next to the applicability of Federal Circuit prior art range precedents, the Federal Circuit found that Teva had failed to prove that the general working conditions disclosed in the prior art encompassed the claimed invention. Substantial evidence supported the Board’s finding that there was no overlap in ranges because the prior art (Korlym label and industry publications) capped the range of co-administration dosages at 300 mg/day. The Court also noted that Teva’s reliance on mifepristone monotherapy dosages to create an overlap in the claimed ranges failed because the patent claims [...]

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PTO Publishes Regulations to Implement Trademark Modernization Act

by | Dec 2, 2021 |

The US Patent and Trademark Office (PTO) recently published its final rules implementing provisions of the Trademark Modernization Act of 2020 (TMA). Most changes are effective as of December 18, 2021, but certain changes (i.e., adjustments to the office action response period) won’t go into effect until December 1, 2022. The new regulations are summarized below.

Ex Parte Proceedings

The TMA created two new ex parte proceedings by which any third party (including the PTO director) can seek to challenge registrations for nonuse: Reexamination and expungement.

One of the TMA’s underlying legislative aims was to clean up the “clutter[ed]” register by removing registrations for marks not properly in use in commerce. These new proceedings offer efficient and less expensive alternatives to a cancellation proceeding before the Trademark Trial and Appeal Board (Board).

Reexamination

Any party (or the PTO director) can file a reexamination action to cancel some or all of the goods or services covered by a use-based registration if the trademark was not in use in commerce in connection with those goods or services before (1) the application filing date when the application was based on Section 1(a) (Use in Commerce), or (2) if the application was filed based on Section 1(b) (Intent to Use), the date the amendment to allege use was filed, or the deadline by which the applicant needed to file a statement of use, whichever is later. A reexamination proceeding must be initiated within the first five years of registration.

Expungement

Similarly, an expungement action can be brought by any party (including the PTO director) seeking to cancel some or all of the goods and/or services from a registration based on the registrant never having used the trademark in commerce in connection with the relevant goods/services. An expungement proceeding must be initiated between the third and 10th year of registration. However, until December 27, 2023, an expungement action can be requested for any registration that is at least three years old, regardless of how long it has been registered.

Requirements for Ex Parte Petitions

The final rules detail the requirements for a petition for expungement or reexamination:

  • A $400 fee
  • The US trademark registration number of the registration being challenged
  • The basis for the petition
  • The name and contact information of the petitioner
  • The name and contact information of the designated attorney, if any
  • A list of the goods and services that are subject to challenge
  • A verified statement of the facts, which should include details of the reasonable investigation of nonuse and a “concise factual statement of the relevant basis for the petition”
  • Copies of the supporting evidence with an itemized index.

A reasonable investigation of nonuse will vary depending on the nature of the goods and/or services but “should focus on the mark disclosed in the registration and the identified goods and/or services, keeping in mind their scope and applicable trade channels.” Also, “[a]s a general matter, a single search using an internet search engine likely would not be [...]

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Federal Circuit Clarifies Venue in Hatch-Waxman Case

by | Nov 18, 2021 |

Addressing venue in the context of a Hatch-Waxman case, the US Court of Appeals for the Federal Circuit explained that sending a paragraph IV notice letter to a company in the district is insufficient to establish venue. Celgene Corp. v. Mylan Pharmaceuticals Inc., Case No. 21-1154 (Fed. Cir. Nov. 5, 2021) (Prost, J.) The Court affirmed a district court finding that venue was improper since the defendant had not committed any acts of infringement and did not have a regular and established place of business in the district.

Celgene owns patents related to a multiple-myeloma drug that it markets and sells under the brand name Pomalyst. Mylan Pharmaceuticals Inc. (MPI) submitted abbreviated new drug applications (ANDAs) to the US Food & Drug Administration in order to bring a generic version of Pomalyst to market. Celgene filed suit in New Jersey against MPI and its related companies, Mylan Inc. and Mylan N.V. While Celgene is headquartered in New Jersey, MPI is based in West Virginia, Mylan, Inc. is based in Pennsylvania and Mylan N.V. is based in the Netherlands and Pennsylvania. The district court dismissed the case for improper venue (MPI and Mylan, Inc.) and for failure to state a claim (Mylan N.V.). Celgene appealed.

Citing Valeant v. Mylan, the Federal Circuit reiterated that venue for Hatch-Waxman cases must be predicated on past acts of infringement, and “it is the submission of the ANDA, and only the submission, that constitutes an act of infringement in this context.” Celgene argued that because MPI sent a paragraph IV notice letter from West Virginia to Celgene’s headquarters in New Jersey, acts of infringement occurred in New Jersey. Celgene also argued that since the notice letter was mandatory and the ANDA had to be amended to include proof of delivery, the delivery of the letter was “sufficiently related to the ANDA submission.” The Court disagreed, explaining that venue in Hatch-Waxman cases is focused on the submission of the ANDA itself, including acts involved in the preparation of an ANDA submission. The Court noted these acts must be part of the ANDA submission and that Celgene’s “related to” standard was impermissibly broad. The Court found that since the submission of the ANDA did not take place in New Jersey, venue there was improper.

The Federal Circuit also found that neither MPI nor Mylan, Inc. had a regular and established place of business in New Jersey. Celgene argued both had a regular and established place of business based on places associated with Mylan employees as well as Mylan affiliates. In rejecting these arguments, the Court noted that the employees Celgene pointed to were working remotely from home, and that the employee’s home numbers were contained in business communications. However, the Court noted that there was no indication that the defendants owned, leased or rented the employees’ homes; participated in the selection of the homes; stored inventory there or took any other actions to suggest that they had an intention to maintain a place of [...]

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Federal Circuit Makes Clear: Prior Failures in the Art May Demonstrate Non-Obviousness

by | Nov 11, 2021 |

Addressing the issue of obviousness of a patent directed toward a method of killing antibiotic-resistant bacteria using only visible light with no photosensitizer, the US Court of Appeals for the Federal Circuit reversed the Patent Trial & Appeal Board’s (PTAB) decision, finding no obviousness where the asserted prior art did not disclose a successful method that did not use a photosensitizer. University of Strathclyde v. Clear-Vu Lighting, LLC, Case No. 20-2243 (Fed. Cir. Nov. 4, 2021) (Stoll, J.) The Court held that the PTAB erroneously found a reasonable expectation of success where “[t]he only support for such a finding [was] pure conjecture coupled with hindsight reliance on the teachings in the [asserted] patent.”

Gram-positive bacteria, such as Methicillin-resistant Staphylococcus aureus (MRSA), are known to negatively affect health but effective methods of killing (or inactivating) such bacteria have been elusive. Photoinactivation is a way to kill antibiotic-resistant bacteria, and previous methods involved applying a photosensitizing agent to the infection and then activating the agent using light. Through experimentation, scientists at the University of Strathclyde discovered that application of visible (blue) light of wavelengths in the range of 400 – 420 nm was effective at inactivating bacteria such as MRSA without using a photosensitizing agent. The challenged patent claimed this method of using a photosensitizer for inactivating MRSA and other Gram-positive bacteria.

After Clear-Vu Lighting petitioned for inter partes review, the PTAB found the patent invalid as obvious in view of prior art disclosing methods of photoactivation using visible light. The university appealed.

The Federal Circuit reversed, finding that the prior art did not disclose all claim elements and there was no reasonable expectation of success in reaching the claimed invention by combining the prior art.

The Federal Circuit first addressed the PTAB finding that the prior art disclosed all claim limitations, finding that neither of the asserted prior art references taught or suggested “inactivation” of the bacteria without using a photosensitizer—as required by the claims. The Court noted that it “fail[ed] to see why a skilled artisan would opt to entirely omit a photosensitizer when combining [the] references,” finding it “particularly relevant” that one of the references actually “disclosed such a photosensitizer-free embodiment and was wholly unsuccessful in achieving inactivation.”

The PTAB also found that, based on a prior art teaching that “blue light may” inactivate “other bacterial cells that produce porphyrins,” a skilled artisan would have expected that MRSA could be inactivated by blue light without a photosensitizer due to the presence of porphyrins. In defense of the PTAB’s findings, Clear-Vu argued that support for the reasonable expectation of success could be found in the challenged patent itself. Citing its 2012 decision in Otsuka Pharm. v. Sandoz, the Federal Circuit harshly criticized this position, reiterating that the inventor’s own path to the invention is not the proper lens through which to find obviousness; “that is hindsight.”

The Federal Circuit explained that “not only is there a complete lack of evidence in the record that any bacteria were inactivated after exposure [...]

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PTO’s Financial Benefits from IPR Don’t Render PTAB Unconstitutional

by | Oct 21, 2021 |

A split panel of the US Court of Appeals for the Federal Circuit concluded that the structure and functions of the Patent Trial & Appeal Board (PTAB) survived yet another constitutional challenge, this time based on the PTAB’s fee and compensation structure, lack of director review over the institution decision and applicability of the Takings Clause. Mobility WorkX, LLC v. Unified Patents LLC, Case No. 20-1441 (Fed. Cir.) (Dyk, J.) (Newman, J., dissenting).

With the dust barely settled after the Supreme Court’s ruling in US v. Arthrex, Inc. that the PTAB’s rendering of final written decisions without director review violated the Appointments Clause, this case presented a whole new slate of potential deficiencies with the PTAB. Although none of these deficiencies were initially raised with the PTAB, the Court exercised its discretion to nonetheless consider the challenges based on publicly available records that it could judicially notice.

The first challenge, already made in many other cases, was that the Federal Circuit remand for the director to consider a rehearing petition in view of Arthrex. This remedy, already afforded in other post-Arthrex challenges, was a simple grant. Yet, here, Mobility asked for something more, arguing that because the director did not resolve the inter partes review (IPR) within the 12-month statutory period, the director must confirm the claims or dismiss the IPR. The Court declined to rule on this issue, instructing Mobility to raise the issue on remand.

The issue receiving the most attention by the Federal Circuit was Mobility’s claims that the PTAB’s fee structure and bonus payments to administrative patent judges (APJs) based on their workload violated the Due Process Clause. According to Mobility, the APJs have a financial incentive to institute IPRs (i.e., significant fees), which provide a significant benefit to the agency. But the Court concluded that the APJs (even the leadership APJs) have only an attenuated role in budget control and thus have an insignificant interest in the financial health of the US Patent & Trademark Office as a whole. Because Congress holds the purse strings and the more significant budget responsibilities fall on the director and the president, the majority held that little connection existed between institution decisions and the agency’s overall financial health, which was consistent with the Court’s own precedent regarding reexaminations and other circuits’ precedents regarding executive agency fee collection. This attenuated connection differentiated the PTAB’s collected fees from Supreme Court cases that found due process violations based on the structure of certain executive courts presided over by a mayor who also held concomitant budget responsibilities.

Similarly, the Federal Circuit held that the APJs’ incentive to render a certain number of decisions—i.e., APJs receive bonus payments if they earn at least 84 decisional units, and the number of decisions is part of performance evaluation—did not provide an unconstitutional incentive to institute. The majority reasoned that ample alternative means existed for the APJs to earn their bonuses, namely, the ability to volunteer for non-America Invents Act (AIA) decisions (such as [...]

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Authentication Claim Under Alice—A Two-Step Process

by | Oct 14, 2021 |

The US Court of Appeals for the Federal Circuit found patent claims directed to a method of authenticating the identity of a user performing a transaction at a terminal was patent-eligible under 35 U.S.C. § 101 and reversed the district court’s entry of judgment on the pleadings. CosmoKey Solutions GmbH & Co. KG. v. Duo Security LLC, Case No. 20-2043 (Fed. Cir. Oct. 4, 2021) (Stoll, J.) (Reyna, concurring).

CosmoKey sued Duo for patent infringement and Duo moved for judgment on the pleadings, arguing that all claims of the patent at issue are ineligible under 35 U.S.C. § 101. The district court analyzed the claims under the Alice two-step framework. At step one, the court agreed with Duo, finding that the patent claims were directed to the abstract idea of authentication—the verification of identity to permit access to transactions. Relying on Federal Circuit precedent, the court reasoned that “authentication” is an abstract concept. Moving to step two, the court determined that the patent merely teaches generic computer functionality, reasoning that the patent itself admits that “the detection of an authentication function’s activity and the activation by users of an authentication function within a pre-determined time relation were well-understood and routine, conventional activities previously known in the authentication technology field.” After the court granted Duo’s motion for judgment on the pleadings, CosmoKey appealed.

Applying Third Circuit law, the Federal Circuit reversed the lower court’s decision and provided more insight into the “inventive concept” analysis and “two-step” process framework. The Federal Circuit first acknowledged that while it had previously found claims directed to authentication to be abstract, it also found claims directed to specific verification methods that depart from earlier approaches and improve technology eligible under § 101.

The Federal Circuit disagreed with the district court’s broad characterization of the claims under Alice step one, finding instead that the claims and written description suggest that the claims are directed to a more specific authentication function. Nevertheless, the Court noted that it did not need to answer this question because the patent claims satisfy Alice step two. Under step two, the Court focused on the purported technical advance and found that the invention provides a “specific improvement to authentication that increases security, prevents unauthorized access by a third party, is easily implemented, and can advantageously be carried out with mobile devices of low complexity.” The Court explained that the district court erred in its interpretation of certain sections of the specification. Specifically, the court read the specification to describe prior art that shows the steps were routine or conventional. However, the Court pointed out that the last four steps of claim one of the patent solved a technical problem in the field using steps that were not conventional.

Judge Jimmie V. Reyna concurred with the decision but took issue with the Court’s dismissal of analyzing the claims under Alice step one, finding the approach “extraordinary and contrary to Supreme Court precedent.” He noted that step two does not operate independently of step one, [...]

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