IP UPDATE
Exploring the Latest in Intellectual Property Law
IP UPDATE
Exploring the Latest in Intellectual Property Law
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PTO to Begin Issuing Electronic Patent Grants

by | Mar 2, 2023 |

On February 28, 2023, the US Patent & Trademark Office (PTO) issued a final rule announcing it would begin issuing electronic patent grants (eGrants) starting April 18, 2023. These eGrants are the official copies of patent grants in an electronic format. During a limited transition period, the PTO will also provide a bound paper version as a ceremonial copy. Once the transition period is over, a bound paper version will be available for a nominal fee. The PTO did not specify when the transition period would end. The Federal Register notice can be found here.

To implement the eGrant, the PTO is removing and reserving 37 CFR 1.315, which states that “[t]he patent will be delivered or mailed upon issuance to the correspondence address of record.” Because patents will be issued electronically, the PTO will no longer physically deliver the patent grant by mailing it to the correspondence address. Instead, the eGrant will issue electronically via the Patent Center.

In addition to the ceremonial paper copy, for a fee, the PTO will still offer certified copies (in accordance with 37 CFR 1.13) and presentation copies. The PTO will no longer accept orders for advance copies of issued patents.

By moving to eGrants, the interval between issue fee payment and patent issuance will be shorter. Thus, applicants will need to be more diligent in filing continuations, divisionals and Quick Path Information Disclosure Statements. For example, Issue Notifications will be available electronically via the Patent Center after the issue fee is paid, usually on the Wednesday or Thursday before the patent issues. The PTO envisions that for those who do not participate in the e-Office action program, a patent may issue electronically before the applicant even receives the mailed Issue Notification.



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DC Circuit to Disputes Ancillary to Patent Matters: “You Can’t Sit with Us”

by | Mar 2, 2023 |

For the first time, the US Court of Appeals for the District of Columbia Circuit addressed whether appeals of discovery orders ancillary to a patent suit are within the exclusive jurisdiction of the US Court of Appeals for the Federal Circuit. The DC Circuit joined its sister circuits and held in the affirmative. Fraunhofer-Gesellschaft Zur Förderung Der Angewandten Forschung E.V. v. Sirius XM Radio Inc., Case No. 22-7001 (DC Cir. Feb. 17, 2023) (Srinivasan, Henderson, JJ., Edwards, Sr. J.)

In February 2017, Fraunhofer-Gesellschaft Zur Förderung commenced a civil action for patent infringement against Sirius XM Radio in the District of Delaware. During discovery, Fraunhofer subpoenaed for deposition Sirius XM’s former Chief of Marketing Officer, My-Chau Nguyen, a resident of Washington, DC.

After Nguyen failed to appear for her deposition, she filed a motion in the US District Court for the District of Columbia to quash the subpoena. Fraunhofer responded with a cross-motion to compel Nguyen’s deposition and a motion for sanctions. The DC district court denied Nguyen’s motion to quash, ordered her to sit for deposition, found her in contempt for failing to appear for deposition in the first instance, and expressed an intent to award sanctions upon Fraunhofer’s submission of documentation reflecting fees and costs. Fraunhofer appealed to the DC Circuit.

The DC Circuit first addressed whether it had jurisdiction to consider Nguyen’s challenge to the district court’s order compelling her deposition in light of the fact that Nguyen’s deposition had already been taken at the time of appeal. The Court held that Nguyen’s challenge was moot because “[n]umerous courts have held that an appeal from enforcement of a subpoena becomes moot once the party has complied with the subpoena.” Therefore, the Court reasoned that it lacked jurisdiction to consider Nguyen’s subpoena challenge because she had already complied with the subpoena at the time of the appeal.

Next, the Court addressed whether it had jurisdiction to assess the merits of Nguyen’s challenge to the district court’s finding of contempt and intent to award sanctions. The Court determined that it did not have subject matter jurisdiction to consider these issues.  The Court explained that because “the underlying litigation between Fraunhofer and Sirius XM in the District of Delaware arises under an Act of Congress relating to patents[,]” Nguyen’s discovery dispute in the DC district court was “ancillary to a patent suit.” The DC Circuit reasoned that only the Federal Circuit is vested with jurisdiction over appeals “arising under . . . any Act of Congress related to patents[.]” (28 U.S.C. § 1295(a)(1).) Holding similarly to other circuits, the Court concluded that because Nguyen’s discovery dispute was ancillary to a patent matter, the ability to decide the merits of her appeal was solely within the province of the Federal Circuit.

The DC Circuit found that it did not have the authority to transfer Nguyen’s challenges to the Federal Circuit, however. The DC Circuit concluded that it was forced to dismiss rather than transfer because “this appeal could not have been brought [...]

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Patenting a Nice Cool Glass of Nicotinamide Riboside? Claims Covering Milk Invalid under § 101

by | Feb 23, 2023 |

The US Court of Appeals for the Federal Circuit found that claims covering a naturally occurring composition were not patent eligible under 35 U.S.C. § 101 merely because one component of the composition had been “isolated.” ChromaDex, Inc. v. Elysium Health, Inc., Case No. 2022-1116 (Fed. Cir. Feb. 13, 2023) (Chen, Prost, Stoll, JJ.)

ChromaDex sued Elysium (a former ChromaDex customer) for infringement of its patent directed to dietary supplements containing nicotinamide riboside (NR). Elysium moved for summary judgment, arguing that the asserted claims were invalid under the § 101 prohibition against patenting natural phenomena. After the district court granted summary judgment, ChromaDex appealed.

The asserted claims were directed to a composition comprising:

  • Isolated NR
  • One or more of tryptophan, nicotinic acid or nicotinamide
  • One of 22 carriers
  • Increased NAD+ biosynthesis after eating.

Both parties conceded that milk satisfies every element of the asserted claims with the exception that its NR is not “isolated.” Both parties also conceded that milk is a naturally occurring material and thus not patent eligible under § 101.

On these facts, the issue presented was whether the claim limitation that the NR must be “isolated” (which does not occur in nature) was sufficient to make the claims patent eligible. The Federal Circuit responded “no.”

The Federal Circuit analyzed the asserted claims under two tests: the “markedly different characteristics” test set out in Chakrabarty, and the Alice two-step test (unsure whether Chakrabarty remains controlling precedent).

Under the Chakrabarty test, a claimed composition is not a natural phenomenon if it has “markedly different characteristics” from what occurs in nature. The Federal Circuit found that ChromaDex’s claimed composition had no markedly different characteristics from natural milk. While ChromaDex argued that isolation potentially allowed for unnaturally high concentrations of NR, the claims did not require such concentrations. The claims included compositions structurally and functionally identical to milk and therefore failed the “markedly different characteristics” Chakrabarty test.

Proceeding to the two-part Alice test, under step 1 the Federal Circuit found that the claims were directed to a product of nature because there were no structural differences between the claimed composition and natural milk. Under step two, the Court found that there was no “inventive step” because the claims were merely directed to increasing NAD+ biosynthesis, which was a natural principle that resulted from drinking milk.

Practice Note: During claim drafting, care should be taken to avoid claims that encompass all structural and functional components of a naturally occurring material.



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PTO Eliminates CLE Certification and Recognition for Patent Practitioners

by | Feb 9, 2023 |

The US Patent & Trademark Office (PTO) announced a final rule amending 37 C.F.R. § 11.11(a)(1) and (a)(3) to eliminate provisions concerning voluntary continuing legal education (CLE) certification for registered patent practitioners and persons granted limited recognition to practice in patent matters before the PTO. The final rule is effective February 27, 2023.

On August 3, 2020, the PTO provided that patent practitioners could voluntarily certify completion of CLE under 37 C.F.R. § 11.11(a)(3). Section 11.11(a)(1) provided that the Office of Enrollment and Discipline (OED) director could publish whether registered patent practitioners (or persons granted limited recognition under 37 C.F.R. § 11.9) certified that they completed the specified amount of CLE in the preceding 24 months. On October 9, 2020, the PTO published proposed CLE guidelines with a request for comments, and on June 10, 2021, the PTO announced that it would proceed with the voluntary CLE certification in spring 2022. After considering public comments, however, the PTO decided on December 16, 2021, to indefinitely delay the implementation of the voluntary CLE certification.

After further consideration of the public comments, the PTO published an interim final rule (IFR) on November 14, 2022, eliminating voluntary CLE certification and recognition provisions from the rules governing practice in patent matters before the PTO. The IFR provided an opportunity for stakeholders to submit comments by December 14, 2022. The PTO did not receive any comments and therefore adopted the IFR without change. For more information about the rule change, see the Federal Register notice.

The PTO may reconsider CLE reporting for patent practitioners in the future.

Because CLE certification was voluntary, its elimination is not expected to have a significant impact on patent practitioners.



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KSR Does Not Extend to Design Patents (Yet)

by | Feb 9, 2023 |

Addressing the standard for obviousness of design patents, the US Court of Appeals for the Federal Circuit, in a per curiam opinion, upheld the Patent Trial & Appeal Board’s finding that a challenged design patent was not obvious over the pre-KSR design patent obviousness test or anticipated. LKQ Corporation v. GM Global Technology Operations, Case No. 21-2348 (Fed. Cir. Jan. 20, 2023) (per curiam) (Lourie, J., concurring) (Stark, J., concurring).

GM owns a design patent for the fender of a vehicle. LKQ Corp. previously held a license to the patent from GM, but negotiations to renew the license failed. Because LKQ continued to manufacture the fender after the expiration of the license, GM sent LKQ notice that it was infringing the patent. In response, LKQ petitioned for an inter partes review against GM, alleging that the patent was obvious and/or anticipated.

The Board found that LKQ had not presented enough evidence to prove that the patent was obvious or anticipated. For purposes of evaluating the obviousness of the design over prior art, the Board defined ordinary observers as “retail consumers who purchase replacement fenders and commercial replacement part buyers.” The Board concluded that, from the perspective of the ordinary observer, there were multiple differences between the patented design and the key reference, a prior art design patent. LKQ appealed.

LKQ argued that the Board erred in finding that there was no anticipation and in applying the obviousness tests of In re Rosen (C.C.P.A. 1982) and Durling v. Spectrum Furniture (Fed. Cir. 1996) because the Supreme Court of the United States overruled those tests in KSR International v. Telflex (2007).

The Federal Circuit upheld the Board’s definition of the ordinary observer. The Court found that retail purchasers of the entire vehicle would not be included in the ordinary observer group because purchasers of the product embodying the design are interested in the part itself, not the vehicle as a whole. The Court went on to uphold the Board’s application of the ordinary observer obviousness test, agreeing that the patented design created different overall impressions from the prior art for purposes of both obviousness and anticipation.

The Federal Circuit then addressed whether KSR overruled the Durling and Rosen tests for obviousness of design patents. The Court found that LKQ properly preserved the argument for appeal by asserting it in its opening brief to the Board. The Court then found that it was unclear whether the Supreme Court overruled Durling and Rosen, and therefore the Court was bound to apply the existing law. In applying the Durling and Rosen tests, the Court found that LKQ had failed to identify “the correct visual impression created by the patented design as a whole” because the prior art patent lacked certain key design features of the patented design. Thus, the Court affirmed the Board’s finding that the patent was not obvious.

Judge Lourie provided an additional opinion and addressed LKQ’s argument that KSR overruled Rosen. Lourie stated that because KSR did not involve design patents, which [...]

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2023 IP Outlook: What to Watch in Patent, Trademark and Copyright Law

by , , , , , , , , , , , , , and | Feb 7, 2023 | , , , , ,

Coming out of 2022, developments around the globe are shaping the intellectual property (IP) landscape in the new year. We are seeing cases at the intersection of IP law and NFTs, the opening of the Unified Patent Court in Europe, and decisions from the Supreme Court of the United States and the Court of Appeals for the Federal Circuit affecting innovators and brand owners.

McDermott’s 2023 IP Outlook examines the top trends and decisions in IP law from the past year and shares what you and your business should look out for in the year ahead.

The Latest in SEP Licensing

Amol Parikh

The uncertainty surrounding standard essential patent (SEP) licensing persisted in 2022 and shows little sign of clearing in 2023. SEPs must be licensed to technology implementers on fair, reasonable and nondiscriminatory (FRAND) terms. Because there is no formal definition of FRAND terms, however, legal decisions involving FRAND have historically been determined by courts and non-governmental standard-setting organizations (SSOs). Disputes are frequent—especially between patent owners and technology implementers—and are becoming even more so as advanced wireless technologies such as 5G and WiFi 6 proliferate. Read more.

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Improper Inventorship in US Patent Litigations

Mandy H. Kim | Cecilia Choy, Ph.D.

Inventorship issues can have serious implications in patent litigation, leading to invalidation or unenforceability of the patent at issue, as seen in several notable 2022 cases. In the coming year, patent owners should take steps to minimize risks related to improper inventorship challenges. Read more.

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Patent Decisions Affecting Pharma and Biotech Companies

Douglas H. Carsten | Anisa Noorassa

The past year brought many developments in the life sciences patent legal space. Three decisions in particular hold potential ramifications for drug makers and patent holders in 2023. This year, the Supreme Court of the United States is also expected to consider standards patents claiming a genus must meet to withstand a validity challenge under Section 112—a ruling that could have a significant impact on patent holders in the biotech industry. Read more. 

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Trends in the Western District of Texas

Syed K. Fareed | Alexander Piala, Ph.D. | Christian Tatum

Over the past year, two developments infiltrated the Western District of Texas (WDTX) which may decrease the success of venue transfers and keep case volume steady in 2023. These developments could also give plaintiffs more control over where litigation takes place, including more control over having a case tried before Judge Alan Albright in the Waco Division of the WDTX.
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ANDA Filing Alone Insufficient for Induced Infringement of Method Patent

by | Jan 5, 2023 |

The US Court of Appeals for the Federal Circuit upheld a district court’s findings of invalidity and noninfringement in a Hatch-Waxman case involving two sets of method patents directed to modulating dosages of pirfenidone, a drug used to treat idiopathic pulmonary fibrosis (IPF). The Court found that the first set of patents were obvious over the prior art and standard medical practice, while the second set were not directly infringed in light of actual physician prescription practice. Genentech, Inc. v. Sandoz Inc., Case No. 22-1595 (Fed. Cir. Dec. 22, 2022) (Newman, Lourie, Prost, JJ.) (Newman, J., dissenting).

Sandoz submitted two abbreviated new drug applications (ANDAs) for approval to market a generic version of pirfenidone, which Genentech sells under the brand name Esbriet®. Genentech sued Sandoz under the Hatch-Waxman Act, asserting that Sandoz’s generic version would induce infringement of two sets of patents: one directed to modifying dosages of pirfenidone in patients with abnormal liver biomarkers (LFT patents), and the other directed to avoiding adverse interactions in patients also taking fluvoxamine (DDI patents).

The LFT patents are directed to methods of administering pirfenidone to a patient who has exhibited Grade 2 abnormalities in liver function biomarkers alanine transaminase (ALT) and/or aspartate transaminase (AST) in response to pirfenidone. The LFT patents generally recite the following administration options:

  • Temporarily reducing the dose before returning to the full dose
  • Maintaining the full dose
  • Reducing the dose
  • Temporarily discontinuing pirfenidone before returning to the full dose
  • Temporarily discontinuing pirfenidone before returning to a reduced dose.

Sandoz’s proposed label included a “Dosage Modification due to Elevated Liver Enzymes” section, which stated that if a patient exhibits grade 2 elevations of ALT and/or AST, “[t]he full daily dosage may be maintained, if clinically appropriate, or reduced or interrupted (e.g., until liver chemistry tests are within normal limits) with subsequent re-titration to the full dosage as tolerated.” Genentech argued that these instructions constituted induced infringement of the LFT patents. The district court disagreed and held that the LFT patents were obvious over the prior art and standard medical practice and that the defendant would not induce infringement because the labels “merely described” the infringing uses but did not recommend them.

The DDI patents are directed to methods for avoiding adverse interactions between pirfenidone and fluvoxamine and generally involve the steps of discontinuing fluvoxamine or modifying the dose of pirfenidone and continuing fluvoxamine. Sandoz’s proposed label warned of the adverse interactions between pirfenidone and fluvoxamine and stated that fluvoxamine should be discontinued prior to administering pirfenidone or the dose of pirfenidone should be reduced. Genentech similarly argued that these instructions constituted induced infringement of its DDI patents, but the district court held that there was insufficient evidence for infringement because Genentech had not shown that a patient would actually be prescribed both pirfenidone and fluvoxamine in practice.

Genentech appealed the district court’s holdings with respect to both the LFT and DDI patents.

LFT Patents

The Federal Circuit first observed that “varying doses in response to the occurrence [...]

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Delayed Disclaimer: Patent Owner Arguments Made during IPR Not a Claim Limiting Disclaimer in That Proceeding

by | Nov 29, 2022 |

Repeating a conclusion from an earlier non-precedential opinion in VirnetX, the US Court of Appeals for the Federal Circuit held that the Patent Trial & Appeal Board (Board) need not accept a patent owner’s arguments as a disclaimer in the very same inter partes review (IPR) proceeding in which those arguments are made. CUPP Computing AS v. Trend Micro Inc., Case Nos. 2020-2262, 2020-2263, 2020-2264, at *11 (Fed. Cir. Nov. 16, 2022) (Dyk, Taranto, Stark, JJ.)

CUPP Computing is the owner of three related patents each entitled “systems and methods for providing security services during power management mode.” After CUPP sued Trend Micro for patent infringement, Trend Micro filed petitions for IPR against all three patents, asserting that several claims of CUPP’s patents were obvious over two prior art references. The Board instituted all three IPR and found all challenged claims unpatentable as obvious. CUPP appealed.

The Federal Circuit affirmed the Board’s conclusions. The principal issue concerned CUPP’s argument that the Board erred in claim construction. In CUPP’s view, all of the evidence required the claimed “security system processor” be remote from a “mobile device processor.” The Court rejected CUPP’s arguments. Starting with the claims, the Court found that they simply required that the two processors be different. Although some claims required the security system to send a wake signal to or communicate with the mobile device, that language did not support CUPP’s remoteness construction. As the Court explained, just as an individual can send a note to oneself via email, a unit of the mobile device can send signals to and communicate with the same device. Indeed, some of the claims teach communication via an internal port of the mobile device, which was consistent with a preferred embodiment disclosed in the specification in which the two processors could be within the same mobile device.

The Federal Circuit then addressed CUPP’s disclaimer arguments. The Court agreed with the Board that CUPP’s statements made during the original prosecution were far from clear and unmistakable, being susceptible to several reasonable interpretations that are contrary to CUPP’s construction. The Court also agreed with the Board that CUPP’s arguments during the Trend Micro IPRs do not qualify as a disclaimer for purposes of claim construction. While a disclaimer made during an IPR proceeding is binding in subsequent proceedings, the “Board is not required to accept a patent owner’s arguments as disclaimer when deciding the merits of those arguments.”

As the Federal Circuit explained, expanding the application of disclaimers to the proceedings in which they are made—as CUPP proposed—is rife with problems. IPR proceedings are more similar to district court litigation than they are to initial examination, and it is well established that disclaimers in litigation are not binding in the proceeding in which they are made. Further, CUPP’s proposal would effectively render IPR claim amendments unnecessary, as patent owners would be free to change the scope of their claims retrospectively without regard to the protections provided by the IPR claim amendment process, such as [...]

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PTO Extends Deadline for Comments on Initiatives to Ensure Patent Robustness, Reliability

by | Nov 3, 2022 |

On November 3, 2022, the US Patent & Trademark Office (PTO) announced that it is extending the deadline for public input on its proposed initiatives aimed at ensuring the robustness and reliability of patent rights from January 3, 2023, to February 1, 2023.

For further details about the extension of the deadline, check out the notice here.



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

by and | Oct 20, 2022 | ,

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.



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