IP UPDATE
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Exploring the Latest in Intellectual Property Law
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No More Bites at the Apple: Imminent and Non-Speculative Standing Still Required

by | Nov 18, 2021 |

The US Court of Appeals for the Federal Circuit reiterated that a patent challenger did not have Article III appellate standing to obtain review of a final Patent Trial & Appeal Board (PTAB) ruling because the underlying district court proceedings had been dismissed with prejudice after the parties reached a settlement and license agreement. Apple Inc. v. Qualcomm Inc., Case Nos. 20-1683; -1763; -1764; -1827 (Fed. Cir. Nov. 10, 2021) (Prost, J.) (Newman, J., dissenting).

This is the second dispute between Apple and Qualcomm to reach the Federal Circuit. In the first appeal (Apple I), the Court found that Apple did not have standing to maintain an appeal from the PTAB because the parties had entered into a settlement agreement.

As in the earlier case, here Qualcomm asserted patent infringement in district court, and Apple filed petitions for inter partes review of the patent claims that Qualcomm asserted Apple had infringed. The PTAB instituted on four petitions. While the inter partes review proceedings were pending, the parties settled the district court litigation, whereby Apple received a license in exchange for royalty payments to Qualcomm. The parties filed a joint motion to dismiss Qualcomm’s district court action with prejudice, which the district court granted. Ultimately, the PTAB found that Apple failed to prove that the challenged claims were unpatentable. Apple appealed.

As in Apple I, Qualcomm moved to dismiss the appeal for lack of standing. Apple responded by arguing that “[a]lthough Apple continues to disagree with [Apple I], in light of that decision and the . . . order denying Apple’s petition for rehearing en banc, Apple believes that the present appeal can be resolved on the briefs without the need for oral argument.” The parties filed a joint motion to vacate oral argument, but the Federal Circuit instead held a consolidated oral argument. Apple reiterated its disagreement with the Court’s ruling in Apple I but admitted that the operative facts in this appeal were “the same.” The Court found that other than the specific difference of the patents in issue themselves, the operative facts were the same and the alleged failure of proof as to certain patent claims (regarding whether the petitioner had established them to be unpatentable) were the same. The Court further found that any specific patent differences were irrelevant since the settlement and license agreements in each case covered the patents in issue in that case.

Apple raised a “nuance” not “specifically addressed” in Apple I, namely that Apple I “did not explain why the threat of liability, if Apple ceases the ongoing payment and the agreement is terminated, is not a sufficient injury to support standing.” The Federal Circuit was not convinced that this nuance merited a different treatment because:

  • The Court would need to sit en banc to change Apple I, and panels of the Court are bound by stare decisis.
  • Apple acknowledged that this “nuance” was at the core of its denied en banc petition in Apple I.

Accordingly, [...]

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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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Without More, Mere Automation is Abstract—Not Construing Interchangeable Terms Doesn’t Give Them the Cold Shoulder

by | Aug 19, 2021 |

In the latest development relating to patent eligibility of content-based identifier patents, the US Court of Appeals for the Federal Circuit affirmed decisions finding patent claims ineligible under 35 U.S.C. § 101. PersonalWeb Techs. LLC v. Google LLC, YouTube, LLC, Case No. 20-1543 (Fed. Cir. Aug. 12, 2021) (Prost, J.) (consolidating PersonalWeb Techs. LLC v. Facebook, Inc., Case No. 20-1553, and PersonalWeb Techs. LLC, Level 3 Commc’ns. LLC v. EMC Corp., VMWare, Inc., Case No. 20-1554).

PersonalWeb sued technology companies in the Eastern District of Texas in 2011 over three of its patents. The patents were directed to data-processing systems that assign each data item a substantially unique content-based identifier, generated by hash algorithm, which changes when the content changes and is used to perform data-management functions. Several defendants successfully motioned for transfer to the Northern District of California, where their companies were headquartered and/or their employees responsible for the development of the accused products were based. After claim construction in Texas, the cases were transferred and stayed pending several inter partes reviews before the US Patent Trial & Appeal Board (Board). Previous decisions before the Federal Circuit affirmed the Board’s findings that using hash-based identifiers for data management was disclosed in the prior art, that content-based identifiers in performing file-management functions, such as backing up files, were also known and other independently unpatentable aspects were recited in the claims. After the stay was lifted, the California court granted the defendants’ motion for judgment on the pleadings that the remaining asserted claims were patent ineligible under 35 U.S.C. § 101. PersonalWeb appealed.

To assess patent eligibility, the Federal Circuit applied the two-step Mayo/Alice framework. Under step one (determining whether the claims at issue are directed to a patent-ineligible concept, such as an abstract idea), the Court considered the focus of the claimed advance over the prior art and found that the claims were directed to an abstract idea. PersonalWeb contended that its claims were directed to “a substantially unique, algorithm-derived, content-based identifier for all data items in a networked computer, which allows a computer within a network containing diverse computing and storage systems to locate and distribute data without knowing either the file system of any device within the network or the conventional name of any data item.” However, the Court adopted the district court’s view, which was that the patents were directed to “(1) using a content-based identifier generated from a ‘hash or message digest function,’ (2) comparing that content-based identifier against something else, [that is,] another content-based identifier or a request for data; and (3) providing access to, denying access to, or deleting data.” Given the focus in Mayo/Alice step one of “whether the claims of the asserted patents fall within the excluded category of abstract ideas,” and citing to parallel examples from precedent cases, the Court concluded that the claims were directed to the use of an algorithm-generated content-based identifier to perform the claimed data-management functions, which include controlling access to data items, retrieving and delivering copies [...]

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If Intrinsic Evidence Provides a Clear Meaning, Just Stop

by | Aug 19, 2021 |

The US Court of Appeals for the Federal Circuit vacated a final written decision of the Patent Trial & Appeal Board (Board) based on its finding that the Board erred in its ultimate claim construction by relying on extrinsic evidence that was inconsistent with the intrinsic evidence. Seabed Geosolutions (US) Inc. v. Magseis FF LLC, Case No. 20-1237 (Fed. Cir. Aug. 11, 2021) (Moore, C.J.)

In April 2018, Seabed Geosolutions petitioned for inter partes review of a patent owned by Magseis directed to “seismometers for use in seismic exploration.” Every claim recited a “geophone internally fixed within” either a “housing” or an “internal compartment” of a seismometer. The Board construed this limitation to require a non-gimbaled geophone based entirely on extrinsic evidence. The Board found that the term “fixed” had a special meaning of “non-gimbaled” at the time of the invention. Based on this finding, the Board determined that Seabed had failed to prove that the challenged claims were unpatentable because the cited prior art did not disclose a non-gimbaled geophone. Seabed appealed.

The Federal Circuit reversed the Board’s claim construction of the term “fixed” because it relied on extrinsic evidence that was inconsistent with the intrinsic evidence and unnecessary to consider given the clarity of the intrinsic evidence. The Court reminded the Board that it “resort[s] to extrinsic evidence to construe claims only if it is consistent with the intrinsic evidence,” and that “[i]f the meaning of a claim term is clear from the intrinsic evidence, there is no reason to resort to extrinsic evidence,” citing prior Federal Circuit decisions.

Contrary to the special meaning found by the Board, the Federal Circuit determined that the term “fixed” carried its ordinary meaning (i.e., attached or fastened). The Court found that the term “specifies the geophone’s relationship with the housing, not the type of geophone.” As an initial matter, the specification was silent as to whether the geophone was gimbaled or not. “That silence does not support reading the claims to exclude gimbaled geophones,” in part because the specification used the term gimbaled when describing other aspects of the invention. Had the applicant intended to limit the claimed geophone, it would have done so.

Furthermore, the specification described the internal mounting of the geophone as a key feature to overcome issues with the then-conventional method of separating the geophone from the seismometer’s other components. The specification reiterated that by internally mounting the geophone, the invention was “self-contained.” The prosecution history also revealed that both the applicant and examiner understood the term to carry its plain and ordinary meaning, equating “internally fixed within” with “disposed, and electrically connected, within.” That equivalence indicates that the term was intended to describe the relationship of the geophone with the seismometer, rather than to limit the type of geophone as contemplated by the Board. Accordingly, the Court found that the intrinsic record was clear, and that the Board’s reliance on extrinsic evidence—much less extrinsic evidence that was inconsistent with the specification itself—was improper and remanded for [...]

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If You Can’t Build it, They Won’t Come: No Obviousness Based on Fanciful Engine Design

by | Apr 29, 2021 |

Reaffirming that a person of ordinary skill in the art must have been able to actually create a disclosure at the time of invention in order for it to serve as an obviousness reference, the US Court of Appeals for the Federal Circuit reversed a decision by the Patent Trial & Appeal Board (the Board) in an inter partes review (IPR), concluding that a patent covering certain turbofan engine technology was not rendered obvious by a prior art publication that could not be realized into practice. Raytheon Techs. Corp. v. General Electric Co., Case No. 20-1755 (Fed. Cir. Apr. 16, 2021) (Chen, J.)

The issue on appeal was relatively straightforward. In an IPR, GE challenged as obvious a Raytheon patent that covered a specific design of geared gas turbine engine that provided for a “power density” higher than previously invented turbine engines. The patent defined “power density” as a “sea-level-takeoff thrust” divided by the engine turbine volume. During the IPR, GE relied on a 1987 NASA technical memorandum as art and argued that the reference, which envisioned superior performance characteristics based on an advanced engine that was made entirely of composite materials, rendered the challenged claims obvious. The parties did not dispute that this engine was unattainable in 1987, and may still be impossible today, because the envisioned composite materials do not yet (and may never) exist. The memorandum disclosed several performance factors, but not power density, sea-level-takeoff thrust or turbine volume. Nonetheless, GE argued, and the Board agreed, that the memorandum disclosed performance parameters that would have permitted an ordinarily skilled artisan to derive power densities that would have fallen within the range claimed in Raytheon’s patent.

On appeal, the Federal Circuit agreed with Raytheon, concluding that the imaginary engine of the NASA memorandum could not serve as an invalidating reference. In reversing the Board, the Federal Circuit reiterated two bedrock principles of obviousness law:

  • An obviousness reference must be enabled by the knowledge of an ordinarily skilled artisan at the time of the invention (but need not be self-enabling).
  • An invention cannot be rendered obvious by a non-self-enabling reference if no other prior art evidence or reference enables the non-self-enabling reference.

In addition, when a reference’s enablement is challenged, the party offering the reference bears a burden to establish that the reference, itself or in combination with other contemporaneous knowledge, was enabled.

Applying these principles here, the Federal Circuit determined that GE had not met its burden to show that the memorandum was indeed enabled. The Board, wrongly in the Court’s view, focused solely on whether an ordinarily skilled artisan was taught the parameters to ascertain a power density, rather than whether the prior art disclosed a turbofan engine possessing the requisite power density. Finding no evidence in the record to conclude that “a skilled artisan could have made the claimed turbofan engine with the recited power density,” the Court reversed.

Practice Note: Although this case does not break new obviousness ground, it reinforces the general [...]

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No Second Bite at the Apple: Injury Must Be Imminent and Non-Speculative to Support Standing

by | Apr 15, 2021 |

The US Court of Appeals for the Federal Circuit ruled that a party did not have Article III appellate standing to obtain review of a final ruling of the Patent Trial & Appeal Board because the underlying district court proceedings had been dismissed with prejudice after a settlement and license agreement were reached. Apple Inc. v. Qualcomm Inc., Case Nos. 20-1561; -1642 (Fed. Cir. Apr. 7, 2021) (Moore, J.)

After Qualcomm sued Apple in district court, Apple filed petitions for inter partes review (IPR) of the asserted patent claims. The Board instituted on both petitions but found that Apple did not prove the challenged claims were obvious. Apple appealed the Board’s final written decisions finding non-obviousness.

While the IPR proceedings were pending, the parties settled their litigation worldwide. The settlement included a license to Apple and payment of royalties to Qualcomm. The parties filed a joint motion to dismiss Qualcomm’s district court action with prejudice, which the district court granted.

At the Federal Circuit, Qualcomm argued that Apple waived any argument to establish its appellate standing by failing to address or submit supporting evidence in its opening brief. However, the Federal Circuit exercised its discretion to reach the issue of standing, explaining that the issue of standing was fully briefed, there was no prejudice to Qualcomm, and the question of standing impacted these and other appeals. Qualcomm sought leave to file a sur-reply addressing Apple’s evidence and arguments on standing, and agreed that if its motions to file a sur-reply were granted, it would not suffer any prejudice, and that evaluating the evidence may resolve standing in other pending cases. The Court granted Qualcomm leave to file a sur-reply.

Apple argued that it had appellate standing based on its ongoing payment obligations that conditioned certain rights in the license agreement, the threat that Apple would be sued for infringing the two patents-at-issue after the expiration of the license agreement, and the estoppel effects of 35 USC § 315 on future challenges to the validity of the asserted patents. The Federal Circuit disagreed.

LICENSE RIGHTS

Distinguishing the 2007 Supreme Court case MedImmune v. Genentech (where standing was found based on license agreement payment obligations after analyzing evidence for injury in fact or redressability), the Federal Circuit explained that Apple did not allege that the validity of the patents-at-issue would affect its contract rights and ongoing royalty obligations. The license agreement between the parties involves tens of thousands of patents. Apple did not argue or present evidence that the validity of any single patent (including the two patents-at-issue) would affect its ongoing payment obligations, or identify any related contractual dispute that could be resolved through determining the patents-at-issue’s validity. Accordingly, the Court concluded that Apple failed to establish Art. III standing under MedImmune.

THREAT OF POST-LICENSE SUITS

Apple’s second argument was based on the possibility that Qualcomm might sue Apple for infringing the patents-at-issue after the license expired. The Federal Circuit found the mere possibility of any such suit [...]

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Joined Parties Have Rights Too

by | Jul 22, 2020 | ,

In vacating an unpatentability decision by the Patent Trial and Appeal Board (Board), the US Court of Appeals for the Federal Circuit found that the rights of a joined party to an inter partes review (IPR) proceeding applies to the entirety of the proceedings and includes the right of appeal. Fitbit, Inc. v. Valencell, Inc., Case No. 19-1048 (Fed. Cir. July 8, 2020) (Newman, J.).

Apple petitioned the Board for IPR of certain claims of a patent owned by Valencell. The Board granted the petition in part, instituting review of certain claims and denying review of other claims. After institution of the Apple IPR, Fitbit filed an IPR petition for the instituted claims and moved for joinder with Apple’s IPR. The Board granted Fitbit’s petition, granted the motion for joinder and terminated Fitbit’s separate proceeding.

After the Apple/Fitbit IPR hearing, but before any Final Written Decision was issued, the Supreme Court decided SAS Institute v. Iancu (IP Update, Vol. 21, No. 5), holding that the America Invents Act requires that all patent claims challenged in an IPR petition must be reviewed by the Board if the petition is granted. Accordingly, the Board re-instituted the Apple/Fitbit IPR to add the previously denied patent claims. The Board’s Final Written Decision found the originally instituted claims unpatentable, but the newly instituted claims not unpatentable. After the decision, Apple withdrew from the proceeding. Fitbit appealed the decision as to newly instituted claims that had been found not unpatentable.

On appeal, Valencell challenged Fitbit’s right to appeal as to the newly instituted claims. 35 U.S.C. § 319 provides that “[a]ny party to the inter partes review shall have the right to be a party to the appeal.” Valencell argued that Fitbit does not have the status of “party” for purposes of appeal because Fitbit did not request review of the newly instituted claims in its initial IPR petition, did not request leave to amend its initial petition after the Supreme Court’s decision in SAS Institute and did not submit a separate brief with respect to the non-instituted claims after the joined IPR was re-instituted. Valencell also argued that because the Board stated that Fitbit would have “limited participation, if at all, and required Fitbit to seek authorization from the Board before filing any papers,” Fitbit was not a full participant in the joined IPR.

Fitbit responded that Valencell did not object to Fitbit’s joinder and did not object to or seek to qualify Fitbit’s continued participation after the Board re-instituted the joined IPR to include the new claims, so there was only one IPR. Fitbit also cited the Board’s statement in granting its joinder motion that the “[d]ecision addressing the status of each challenged claim in this proceeding applies to all parties.” Fitbit acknowledged that it did not seek to file a separate brief after the new claims were added to the IPR, but claimed no separate brief was needed to present the issues.

The Federal Circuit agreed with Fitbit, finding that the circumstances [...]

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Stick to Your Guns: PTAB Should Rarely Issue New Grounds of Unpatentability

by | Jul 15, 2020 |

The Patent Trial and Appeal Board (PTAB) Precedential Opinion Panel (POP) issued a precedential opinion in an inter partes review (IPR) to resolve two questions:

  • May the PTAB raise a ground of unpatentability not developed by the petitioner?
  • If it does so, must the PTAB provide the parties notice and an opportunity to respond to the new ground of unpatentability?

Hunting Titan, Inc. v. DynaEnergetics Europe GmbH, Case No. IPR2018-00600 (USPTO July 6, 2020) (Boalick, CAPJ) (granting request for POP rehearing). The POP held that while the PTAB may raise new grounds of unpatentability, it should refrain from doing so except in rare instances. If it does raise new grounds of unpatentability, the PTAB must provide the parties notice and an opportunity to respond to the new grounds.

Titan filed a petition requesting IPR of a patent owned by DynaEnergetics directed to a perforating gun assembly for wellbore tools. One of the grounds alleged anticipation by a prior art reference (Schacherer). The PTAB instituted review, and DynaEnergetics timely moved to amend the claims. Opposing the motion to amend, Titan argued that the substitute claims were obvious over various prior art references, including the Schacherer reference. Titan did not argue anticipation as to the substitute claims. In its final written decision, the PTAB held that the amended claims were unpatentable because they were anticipated by Schacherer. DynaEnergetics moved for reconsideration and POP review.

The POP granted review to provide precedential guidance on new grounds of unpatentability. Citing to the recent US Court of Appeals for the Federal Circuit decision in Nike, Inc. v. Adidas AG, the POP determined that the PTAB may raise new grounds of unpatentability in certain cases, but those cases should be exceedingly rare. The POP reasoned that the adversarial nature of an IPR proceeding puts the competing parties in a better position to identify and argue the strongest grounds. The POP rejected the notion that the PTAB should independently examine the patentability of every proposed substitute claim, as if it were a reexamination proceeding, by culling through the prior art to determine if better unpatentability arguments could have been presented. Only in rare cases that are no longer adversarial, such as when a petitioner does not oppose a motion to amend or when a petitioner ceases to participate in an instituted IPR that proceeds to a final judgment, would it be reasonable for the PTAB to consider new grounds of unpatentability. Although the POP did not articulate every exceptional scenario, it suggested that when the record “readily and persuasively” establishes that substitute claims are unpatentable, it would be reasonable for the PTAB to rely on a new ground of unpatentability. Titan’s IPR was not an exceptional case, so the POP reversed the panel’s decision as to the substitute claims.

The POP also explained that the parties must be given notice and an opportunity to respond to any new grounds the PTAB may raise. With respect to substitute claims, notice cannot come from the grounds [...]

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Prior Art-Based Invalidity Analysis May Be Possible for Indefinite Claim

by | May 27, 2020 |

Addressing a decision by the US Patent and Trademark Office’s Patent Trial and Appeal Board (Board) declining to find certain claims unpatentable because they contained means-plus-function elements without any corresponding disclosed structure, the US Court of Appeals for the Federal Circuit affirmed the Board’s decision except as to one challenged claim where the means-plus-function element was recited as an alternative to a non-means-plus-function element. Cochlear Bone Anchored Solutions AB v. Oticon Medical, AB, Case Nos. 19-1105, -1106 (Fed. Cir. May 15, 2020) (Taranto, J.).

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Stated Purpose More Decisive than Definition in Construing Claims

by | Mar 25, 2020 |

The US Court of Appeals for the Federal Circuit reversed a Patent Trial and Appeal Board (PTAB) obviousness decision, finding the decision was infected by an erroneous claim construction that failed to consider the purpose of the claimed invention. Kaken Pharmaceutical Co., LTD v. Iancu, Case No. 18-2232 (Fed. Cir. Mar. 13 2020)(Taranto, J.).

Kaken owns a patent claiming a method for topically treating fungal infections in nails. Fungal infections of the nail plate and nail bed are notoriously difficult to treat because topical treatments cannot penetrate the thick keratin in the nail plate. The patent describes an effective topical treatment with an antifungal, KP-103, having good permeability, retention capacity and activity in the nail plate. The patent specification notes that topical treatments known in the prior art were largely ineffective at penetrating the nail plate and treating onychomycosis.

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