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The Name of the Game Is the Claims, Even if Specification Is Shared

by McDermott Will & Emery | Oct 20, 2022 | Patents

Once again addressing the application of Alice, the US Court of Appeals for the Federal Circuit partially reversed a district court’s dismissal of several patents as subject matter ineligible for error in analyzing their claims together because of a shared specification despite different claim features. Weisner v. Google LLC, Case No. 021-2228 (Fed. Cir. Oct. 13, 2022) (Reyna, Hughes, Stoll, JJ.) (Hughes, J., dissenting in part)

Sholem Weisner sued Google for infringement of four related patents describing ways to “digitally record a person’s physical activities” and use the digital record. The patents’ common specification described how individuals and businesses can sign up for a system to exchange information (e.g., “a URL or an electronic business card”), and as they encounter people or businesses that they want recorded in their “leg history,” the URLs or business cards are recorded along with the time and place of the encounters. Google moved to dismiss the suit under Fed. R. Civ. P. 12(b)(6), arguing that the patent claims were directed to ineligible subject matter under 35 U.S.C. § 101, and that Weisner had failed to meet the minimum threshold for plausibly pleading his claim of patent infringement under the Twombly and Iqbal standards (Twiqbal). The district court agreed and granted dismissal under Twiqbal. After holding a hearing on patent ineligibility, the district court also granted dismissal under § 101 but granted Weisner leave to amend his complaint. In his amended complaint, Weisner added infringement allegations, allegations related to patent eligibility and an “Invention Background and System Details Explained” section. Google again moved to dismiss the amended complaint based on both § 101 and Twiqbal, which the district court granted. Weisner timely appealed.

The Federal Circuit applied the Alice two-step analysis to determine whether the claims at issue were directed to a patent-ineligible concept, such as an abstract idea, and if they were, whether the elements of each claim, both individually and as an ordered combination, transformed the nature of the claim into a patent-eligible application. As discussed in the Supreme Court cases Alice and Mayo, the second step is “a search for an ‘inventive concept’—i.e., an element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.’”

There were four asserted patents in issue. For the first two patents, Weisner attempted to argue that the claims improved “the functioning of the computer itself” or “an existing technology process” by “[1] automatically recording physical interactions and [2] limiting what is recorded to only specific types of interactions that are pre-approved and agreed to by an individual member and a vendor member.” However, the Federal Circuit was unconvinced that this was the type of improvement found in Enfish to bring claims into the realm of inventiveness. Instead, the Court agreed with the district court that, consistent with past precedent, this was no different than travel logs, diaries, journals or calendars used to keep records of a person’s location, and that [...]

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PTO Requests Comments on Initiatives to Expand Board Opportunities, Registration to Practice Criteria

by Amol Parikh | Oct 20, 2022 | Patents

In a pair of notices, the US Patent & Trademark Office (PTO) announced on October 18, 2022, that it is seeking public input on proposed initiatives directed at expanding opportunities to appear before the Patent Trial & Appeal Board, (Board) and expanding admission criteria for registration to practice in patent cases before the PTO. PTO Director Kathi Vidal explained that “[t]hese proposals are part of our broader initiatives to improve quality and participation.”

Regarding the expansion of opportunities to appear before the Board, the PTO requested comments on the following six questions:

Are there any changes to Board rules or procedures that the PTO or the Board should make to increase opportunities to appear and/or serve as counsel and/or the lead counsel in America Invents Act (AIA) proceedings?
1. If “yes” to question 1 as to the lead counsel, should the rules require that a non-registered practitioner have prior experience in AIA proceedings and/or have completed training before being designated as the lead counsel? What level of experience and/or type of training should be required?
Should any rule or procedure revised by the PTO that permits a non-registered practitioner to be designated as the lead counsel in an AIA proceeding also require that any such non-registered practitioner be accompanied by a registered practitioner as backup counsel? If not, are there any circumstances or events that might occur during an AIA proceeding (g., the contemplated or actual filing of a motion to amend) that might warrant requiring a registered practitioner to then appear as backup counsel?
Would a rule requiring that the lead counsel or backup counsel in an AIA proceeding be a registered practitioner have a significant impact on the cost of such a proceeding? If so, what would the impact be and would the impact be justified?
Should any of the changes discussed above, if adopted, be implemented as a pilot program?
Are there additional training and/or development programs the PTO should offer to increase opportunities for less experienced practitioners to appear as counsel and/or serve as the lead counsel in AIA proceedings?
Are there any changes to the Legal Experience and Advancement Program (LEAP) that the PTO should make to increase opportunities to appear and/or serve as the lead counsel in AIA proceedings?

Regarding expanding the admission requirements to practice in patent matters before the PTO, comments on the following five topics were requested:

The General Requirements Bulletin (GRB) lists three categories of scientific and technical qualifications typically used for eligibility for admission to the registration examination: (1) Category A, for specified bachelor’s, master’s and PhD degrees; (2) Category B, for other bachelor’s, master’s and PhD degrees with technical and scientific training; and (3) Category C, for individuals who rely on practical engineering or scientific experience and have passed the Fundamentals of Engineering test. The PTO is seeking comments as to acceptable degrees and whether it should add Category B degrees on a predetermined timeframe (g., every three years).
Should the PTO accept [...]

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EU Unified Patent Court Announces Intent to Launch on April 1, 2023

by Dr. Henrik Holzapfel and Paul Devinsky | Oct 20, 2022 | EU Update, Patents

The EU Unified Patent Court (UPC) announced a launch date of April 1, 2023, however, the announced date should be regarded as a statement of intent for it could change. The launch timing has been the subject of various delays and setbacks, several due to unresolved legal issues. The UPC has also published an almost final list of judges. German Federal Court of Justice Judge Klaus Grabinski, who played a key role in drafting the UPC Rules of Procedure, will head the UPC. The majority of UPC judges will only be engaged with their UPC activities part-time (about 50% or 20% of their total work commitment).

The UPC judges are set to receive special training starting in March 2023, only one month prior to the announced launch date of the UPC, leading many to doubt that the April 1 date will be met. Once the new court is operational, owners of European patents will be able to litigate patent disputes across most EU Member States in a single proceeding, eliminating the need to proceed on a country-by-country basis.

Assuming the announced launch date is maintained, the “sunrise period” before the UPC becomes fully operational will commence on January 1, 2023. This sunrise period will last for three months, during which patent owners that do not wish for their existing European patents to be subject to UPC jurisdiction may opt out of such jurisdiction by filing a formal notification to that effect. The European Patent Office has also announced that during the sunrise period, European patent applicants whose applications are ready for grant will, if they wish, be able to delay the formal grant of the application until the UPC becomes operational so that unitary patent protection can be obtained.

The UPC has issued an implementation roadmap for events leading up to the entry into force of the UPC Agreement, with the court opening its doors and starting to receive cases as of April 1, 2023.

When Are Compulsory Copyright Licenses Compulsory?

by Kavya Rallabhandi | Oct 20, 2022 | Copyrights

The US Court of Appeals for the Second Circuit partially affirmed a district court’s summary judgment order holding that audiovisual recordings of live concerts do not fall within the scope of the Copyright Act’s compulsory license provision while purchasers of audio-only recordings obtain a compulsory license in the copyright of the work fixed by their predecessors/sellers. ABKCO Music, Inc. et al. v. Sagan et al., Case No. 20-3816 (2d Cir. Oct. 6, 2022) (Jacobs, Wesley, Menashi, JJ.)

In 2002, William Sagan purchased, through Norton, a collection of audio and audiovisual live concert recordings from Bill Graham Archives. All three parties are named defendants in this case. The agreement conveyed all intellectual property that the Archives held (from a transaction with Sagan) and included a disclaimer stating that record company and artist approval was required to exploit the recordings. The defendants’ subsequent purchases of other recordings contained similar limited assurance language regarding intellectual property rights. In 2006, the defendants made the entire collection publicly available online for a streaming and downloading fee. A year later, the defendants began using a third-party licensing agent to obtain compulsory licenses under 17 USC § 115 and negotiated licenses from plaintiff music publishers in the audio and audiovisual live concert recordings.

Section 115 of the Copyright Act requires persons seeking to make and distribute phonorecords of a previously published musical work to obtain a compulsory license by providing notice to the copyright owner before distribution and paying government-prescribed royalties. (§ 115(a)(1), (b), (c).) The Copyright Act defines phonorecords as “[m]aterial objects in which sounds, other than those accompanying a motion picture or other audiovisual work, are fixed.” (§ 101.) Section 115’s substantive requirements for duplications of audio/sound recordings fixed by another include requirements that the sound be fixed lawfully, and that duplication be authorized by the copyright owner. (§ 115(a)(1).)

In 2015, the music publishers sued defendants for copyright infringement of 197 musical works posted online without valid compulsory licenses. The music publishers alleged that the defendants did not obtain compulsory licenses for audiovisual works as required by § 115 and that the defendants failed to comply with § 115 substantive compulsory licensing requirements for audio-only works. Defendants argued implied license and equitable estoppel as affirmative defenses. The publishers sought damages and a permanent injunction pursuant to the Copyright Act.

The district court, on summary judgment, ruled that the defendants had no valid license authorizing the reproduction and distribution of the musical works in either audio or audiovisual format, that the defendants had neither an implied license nor any basis for estoppel, and that Sagan (a principal in several of the defendant streaming services) was liable for direct infringement. The district court denied the publishers’ request for an injunction but granted the publishers an award of attorneys’ fees. The defendants appealed from the summary judgment order and the order granting fees and costs. The plaintiffs cross-appealed denial of an injunction.

The Second Circuit affirmed the district court’s holding that the defendants infringed each musical work [...]

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Long Live the Kingpin: No Abandonment Based on Nonuse During Drug Sanctions Period

by Amol Parikh | Oct 13, 2022 | Trademarks

In a precedential decision, the Trademark Trial & Appeal Board (Board) dismissed an opposition, finding that the trademark applicant’s long period of nonuse due to government sanctions was excusable nonuse and not abandonment. ARSA Distributing, Inc. v. Salud Natural Mexicana S.A. de C.V., Opposition No. 91240240, 91243700 (TTAB Sept. 28, 2022) (Taylor, Greenbaum, English, ATJ)

Salud sought a trademark registration of the standard character mark EUCALIN for “pharmaceutical products, namely, vitamin supplements, nutritional supplement made with a syrup with jelly base, honey base, and with a mixture of plants with propolis base, and herbal remedies in the nature of herbal supplements,” and the composite mark set forth below for “herbal supplements; nutritional supplements; vitamin supplements.”

ARSA opposed the registration, alleging prior common law use of the mark EUCALIN for “dietary and nutritional supplements.” ARSA argued that its sales and advertising of its EUCALIN product from 2008 to October 6, 2015, and October 9, 2017, established that ARSA had used its EUCALIN mark long before the constructive use filing dates of Salud’s application. Thus, ARSA had priority of use of the EUCALIN mark on nutritional and dietary supplements.

In response, Salud asserted it had priority in the EUCALIN mark based on use since 1999. Salud argued that between 1999 and October 2008, ARSA was Salud’s US distributor and, therefore, all goodwill for any EUCALIN-labeled product went to Salud as the supplier of the goods and products.

ARSA asserted that there was no distribution agreement between the parties, but even if Salud “could have reasonably claimed rights based on some alleged distribution agreement before 2008,” Salud “has long since abandoned any rights it would have had.” ARSA asserted that Salud was legally banned from conducting business in the United States between October 2, 2008, and May 2015 because it was declared a Specially Designated Narcotics Trafficker (SDNT). ARSA argued that Salud failed to produce any evidence establishing that it had concrete plans or intent to resume use between 2008 and 2015.

The Board found that there was no clear manufacturing-distribution agreement between the parties, and therefore there was a rebuttable presumption that the manufacturer (Salud) owned the mark. The Board explained that the following six factors are considered in determining which party has superior rights:

Which party created and first affixed the mark to the product
Which party’s name appeared with the trademark on packaging and promotional materials
Which party maintained the quality and uniformity of the product, including technical changes
Which party the consuming public believes stands behind the product (g., the party to which customers direct complaints and contact for correction of defective products)
Which party paid for advertising
What a party represents to others about the source or origin of the product.

The Board concluded that, on the balance, the factors favor Salud. The Board explained that the first, second, third and sixth factors favored Salud because it created the mark and product, maintained quality control over [...]

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Remote Employees Support Patent Venue

by Katherine Pappas | Oct 13, 2022 | Patents

In a per curiam opinion, the US Court of Appeals for the Federal Circuit denied a petition for a writ of mandamus seeking to direct the district court to dismiss or transfer the underlying case based on improper venue. In doing so, the Court pointed to remote workers residing in the district to find satisfaction in the venue statute. In re Monolithic Power Systems, Inc., Case No. 22-153 (Fed. Cir. Sept. 30, 2022) (Lourie, Chen, Stark, JJ.) (per curiam) (Lourie, J., dissenting)

Bel Power brought suit in the Western District of Texas alleging that Monolithic infringed Bel Power’s patents by selling power modules used in electronic devices. Monolithic had four remote employees working from home in the district. Monolithic moved to dismiss or transfer to the Northern District of California, arguing that because it was a Delaware corporation without property in the district, venue was not proper under § 1400(b). The district court denied both requests, finding that Monolithic maintained a business presence in the district as contemplated by § 1400(b) by soliciting employment in the district and providing employees with equipment used at or distributed from their homes as part of their employment responsibilities.

In denying the motion to transfer, the district court found that Monolithic had not established that the Northern District of California was clearly more convenient. Monolithic filed for mandamus seeking to overturn either ruling.

The Federal Circuit denied relief. With regard to venue, the Court reasoned that “the district court’s ruling does not involve the type of broad, fundamental, and recurring legal question or usurpation of judicial power that might warrant immediate mandamus review.” Instead, the Court credited the factual findings regarding the amount of equipment Monolithic provided to one of its employees in the district for “the sole purpose” of allowing him “to conduct testing and validation as part of his job,” and ruled that post-judgment appeal would be an adequate alternative means for attaining relief. On the issue of transfer (reviewed under regional circuit law), the Court denied for failure to establish a clear abuse of discretion, noting that this “is not a case in which there is only one correct outcome.”

Judge Lourie dissented, arguing that “[m]ost basically, Monolithic lacks a regular and established place of business in the Western District of Texas, as the statute requires in order for it to be sued there.” In his view, “we should not stand back and let the requirements of the statute be eroded by the details of what an employee stores in his or her home.” He noted that judicial efficiency counsels against allowing cases to be tried in venues not permitted by the statute only to be retried in a proper venue. Judge Lourie reasoned that the circumstances relied on by the district court, including job advertisement and storage of product and equipment in the venue, were not meaningfully different from those of Celgene v. Mylan Pharms (Fed. Cir, 2021), where venue was deemed improper. He noted that “[t]he [...]

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For Inherent Anticipation, How Many Is Too Many?

by Alexandra Cavazos, PhD | Oct 13, 2022 | Patents

The US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board (Board) decision that prior art disclosing a class of 957 salts could not inherently anticipate claims to a salt within the class because a skilled artisan could not “at once envisage” every class member. Mylan Pharms. Inc. v. Merck Sharp & Dohme Corp., Case No. 21-2121 (Fed. Cir. Sept. 29, 2022) (Lourie, Reyna, Stoll, JJ.)

In the underlying inter partes review, Mylan alleged that Merck’s patent claims to sitagliptin dihydrogen phosphate (DHP) with 1:1 stoichiometry were anticipated by two similar Merck publications (collectively, Edmondson). Edmondson listed 33 enzyme inhibitors (including sitagliptin) and eight preferred acids for forming salts with the inhibitors. Mylan argued that the 1:1 stoichiometry between sitagliptin and DHP (which was required by the claims) was the only possible result when sitagliptin and phosphate were reacted.

In response, Merck experts declared that Edmondson did not expressly disclose any 1:1 sitagliptin DHP salts. They also declared that non-1:1 sitagliptin phosphate salts existed and had been created using conventional protocols, and that Edmondson encompassed approximately 957 predicted salts of DP-IV inhibitors.

The Board held that Edmondson did not expressly anticipate because it did not literally disclose the 1:1 sitagliptin DHP salt and Mylan could not attempt to fill in the missing claim limitation by arguing that a person of ordinary skill in the art (POSA) could “at once envisage” the “950+” salts. Merck’s evidence convinced the Board that non-1:1 sitagliptin phosphate salts “do exist and can form.”

Mylan tried to circumvent Merck’s antedation of Edmondson by asserting that it disclosed hydrates of 1:1 sitagliptin DHP, which Merck had not synthesized until months after Edmondson was published. The Board rejected this argument, noting that Edmondson only generically referred to hydrates. Since Mylan had not contested Merck’s common ownership of Edmondson’s subject matter, § 103(c)(1) applied and Edmondson became unavailable as an obviousness reference. The remaining claims to specific enantiomers and hydrates of sitagliptin DHP were deemed nonobvious because Mylan had not presented sufficient evidence to show motivation to make or reasonable expectation of success.

On appeal, the Federal Circuit found that substantial evidence supported the Board’s determinations with respect to explicit and inherent anticipation and obviousness. Mylan’s own expert had admitted that nothing in Edmondson directed a POSA to sitagliptin or to any phosphate salt. Edmondson’s disclosure of 957 potential salts was “a far cry” from the facts in the 1962 Court of Customs and Patents Appeals case In re Peterson, where a reference disclosing only 20 compounds was deemed inherently anticipatory. The Federal Circuit rejected Mylan’s antedation argument, noting that if Edmondson did not explicitly disclose 1:1 sitagliptin DHP, it could not disclose any hydrates of that compound either.

Finally, the Federal Circuit agreed with the Board that the claims to specific enantiomers or hydrates of sitagliptin DHP were nonobvious because Mylan had not shown any expected benefit to making the specific enantiomers claimed, the literature and experts for both sides reported many downsides [...]

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Cloudy Skies: PTO Director Finds Abuse and Sanctionable Conduct

by Alexander Piala, PhD | Oct 13, 2022 | Patents

The US Patent & Trademark Office (PTO) Director issued a precedential opinion finding that filing an inter partes review (IPR) solely to extract payment in a settlement—without the intent to prosecute the IPR to completion—is a sanctionable abuse of process. OpenSky Indus., LLC v. VLSI Tech. LLC, IPR2021-01064 (Oct. 4, 2022) (Vidal, Dir.)

In 2019, VLSI asserted two patents against Intel. In response, Intel filed two IPRs against the allegedly infringed patents, but both IPRs were discretionally denied by the Patent Trial & Appeal Board (Board) based on the advanced stage of the underlying litigation and overlapping issues. The suit proceeded, and a jury awarded VLSI more than $600 million in damages in 2021.

OpenSky Industries was founded two months after the judgment. OpenSky filed a “copycat” IPR petition based on Intel’s previous petitions (including refiling the declarations of Intel’s expert without his knowledge) targeting VLSI’s two allegedly infringed patents. The Board instituted over VLSI’s argument, noting that patentability issues were raised that had not been resolved in the district court case. Initially, OpenSky attempted to settle the IPRs with VLSI, but VLSI refused. OpenSky then reached out to Intel, offering to let Intel collaborate if it agreed to pay a success fee. Intel refused and later filed its own IPR petition and joinder motion. After Intel’s refusal, OpenSky pivoted back to VLSI, offering to “refuse[] to pay [the] expert for time at deposition so [the] expert does not appear at deposition” in return for payment. VLSI reported the scheme to the Board.

Intel was joined as a party to the OpenSky IPR proceeding in June 2022 based on its later-filed petition. Once Intel joined, OpenSky threatened to forego both deposing VLSI’s expert and filing its reply brief unless Intel paid it for its “prior work in the IPR” plus “additional remuneration.” Intel refused. While OpenSky did notice VLSI’s expert, it declined to file a Petitioner Reply brief, forcing Intel to draft the reply. Later, at VLSI’s request (OpenSky missed the request date), oral argument in the proceeding took place before the Board. OpenSky did not meaningfully participate.

While all this was unfolding, the Director sua sponte initiated an investigation to determine “[w]hat actions the Director . . . should take when faced with evidence of an abuse of process or conduct that otherwise thwarts . . . the goals of the Office and/or the AIA.” To begin the investigation, the Director sent discovery requests to each of the three parties. VLSI and Intel complied. OpenSky, by comparison, either incompletely complied with or directly refused each request. Based on those evasions, the Director sanctioned OpenSky for discovery misconduct, applying adverse inferences against OpenSky on each request.

Discovery sanctions in place, the Director moved to the central question: Did OpenSky abuse the IPR process? The Director answered yes.

First, the Director found that OpenSky’s conduct violated its duty of candor and good faith to the Board. In its negotiations with VLSI, OpenSky offered to deliberately sabotage its own petition to hinder Intel. In its negotiations with Intel, OpenSky did [...]

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PTO Requests Comments on Initiatives to Ensure Patent Robustness, Reliability

by Amol Parikh | Oct 13, 2022 | Patents

The US Patent & Trademark Office (PTO) is seeking public input and guidance on proposed initiatives directed at bolstering the robustness and reliability of patents. The request for comments was spurred in part by US President Joe Biden’s July 9, 2021, executive order on Promoting Competition in the American Economy, and a June 8, 2022, letter from Senators Leahy, Blumenthal, Klobuchar, Cornyn, Collins and Braun raising concerns about patent thickets.

The PTO identified four broad topics and initiatives that it is considering:

Prior Art Searching
Support for Patent Claims
Request for Continued Examination (RCE) Practice
Restriction, Divisional, Rejoinder and Non-Statutory Double Patenting Practice.

The PTO seeks comments on 11 main questions and several sub-questions. The first five questions are directed to the PTO initiatives while questions six through 11 address concerns raised by the senators.

PTO Initiatives

How should the PTO facilitate an applicant’s submission of prior art that is not accessible in the Patents End-to-End Search system (e.g., “on sale” or prior public use)?

How, if at all, should the PTO change claim support requirements and/or continuation practice?

How, if at all, should the PTO change RCE practice?

How, if at all, should the PTO limit or change restriction, divisional, rejoinder and/or non-statutory double patenting practice?

Provide any other input on any of the proposals listed under the PTO initiatives.

Senator Inquiries

How would eliminating terminal disclaimers, thus prohibiting patents that are obvious variants of one another, affect patent prosecution strategies and overall patent quality?

Should patents that are tied together by a terminal disclaimer because of an obviousness-type double patenting rejection stand or fall together if their validity is subsequently challenged?

Should the PTO require a second look by a team of patent quality specialists before issuing a continuation patent on a first office action?

Should there be heightened examination requirements for continuation patents?

Should the PTO implement a rule change that requires any continuation application to be filed within a set timeframe of the ultimate parent application?

If filing fees were increased to cover the actual cost of obtaining a patent, would this increase patent quality? And if the fees for continuation applications were increased, would applicants be less likely to file continuations for obvious variants?

Among the proposals under consideration are whether to require applicants to identify corresponding support in the original disclosure for each claim in a continuation application, whether applications should be reassigned to a different examiner after a set number of RCEs are filed, whether the PTO should adopt the unity of invention standard, and whether divisionals should be filed within a set time period.

Click here for further details on the PTO initiatives.

Comments must be received by January 3, 2023, to ensure consideration.

Webinar Series | McDermott IP Focus

by McDermott Will & Emery | Oct 11, 2022 | Uncategorized

McDermott Will & Emery is committed to providing insightful commentary on IP developments from around the world to our Japanese clients. In light of that effort, we launched a monthly webinar series: McDermott IP Focus. During these sessions, we will explore global developments in the IP space, including disputes, transactions and procurement, with a significant focus on what Japanese companies need to know during this post-pandemic era.

Over the course of the series, we will feature a variety of speakers from McDermott’s offices around the world. We hope you can join us!

Click here for session details and to register.