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Exploring the Latest in Intellectual Property Law
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PTO on AI Inventorship: Will the Real Natural Human Inventors Please Stand Up?

by | Feb 22, 2024 |

On February 13, 2024, the US Patent & Trademark Office (PTO) issued a notice with examination guidance and request for comment regarding inventorship in applications involving artificial intelligence (AI)-assisted inventions. The guidance reinforces the patentability of AI-assisted inventions and sets forth preliminary guidelines for determining inventorship with a focus on human contributions in this process.

The PTO released the guidance in response to President Biden’s Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (October 30, 2023). The executive order mandated that the PTO, within 120 days, present “guidance to USPTO patent examiners and applicants addressing inventorship and the use of AI, including generative AI, in the inventive process, including illustrative examples in which AI systems play different roles in inventive processes and how, in each example, inventorship issues ought to be analyzed.”

As in any inventorship determination for non-AI-generated inventions, “AI-assisted inventions must name the natural person(s) who significantly contributed to the invention as the inventor or joint inventor, even if an AI system may have been instrumental in the creation of the claimed invention.” As is the case for all inventions, the threshold question for inventorship in AI-assisted inventions is who made a “significant contribution” to the conception of at least one claim of the patent. For this evaluation, the Pannu factors (Federal Circuit 1998, Pannu v. Iolab Corp.) for inventorship should be considered.

With specific reference to AI-assisted inventions, the notice provides a non-exhaustive list of principles based on the Pannu factors for AI inventorship determinations:

  • Use of AI systems is not a barrier to inventorship. Use of an AI system does not negate a natural person making a significant contribution to an AI-assisted invention. To be an inventor, a natural person must have significantly contributed to each claim in a patent application or patent.
  • Recognizing a problem or obtaining a solution may be insufficient. The mere recognition of a problem or having a general goal or plan to pursue or obtain a solution from the AI input does not rise to the level of conception. The way in which a person constructs a prompt in view of the problem for eliciting a particular solution may be important for qualifying that person as an inventor.
  • Reduction to practice alone is insufficient. Reducing an invention to practice alone does not constitute a “significant contribution,” nor does the mere recognition and appreciation of the AI system output rise to the level of inventorship, especially where the output would be apparent to those of ordinary skill. By contrast, a significant contribution may exist where a person makes a significant contribution to the output or conducts a successful experiment from the output to create an invention.
  • Developing an essential building block of an AI system may be sufficient. A person developing an essential building block of an AI system to address a specific problem, where the building block is instrumental in eliciting a solution from the output, may be a proper inventor.
  • “Intellectual domination” over [...]

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Inventorship Hosed Clean: Contribution, Corroboration and Collaboration Prove Joint Invention

by | Jun 22, 2023 |

The US Court of Appeals for the Federal Circuit affirmed a decision to correct inventorship, finding that the alleged joint inventor’s contribution to a claimed invention was significant and adequately corroborated by evidence. Blue Gentian, LLC v. Tristar Products, Inc., Case Nos. 21-2316; -2317 (Fed. Cir. June 9, 2023) (Prost, Chen, Stark, JJ.)

Blue Gentian owns utility and design patents directed to an expandable hose. Prior to filing the first patent application, Michael Berardi (the sole inventor of the asserted patents and Blue Gentian’s principal) met with non-party Gary Ragner to discuss investing in Ragner’s expandable hose. Berardi had no experience designing hoses at the time of the meeting. Berardi testified that he came up with the idea of his hose after watching a demonstration video of Ragner’s hose but before the meeting. At the meeting, Ragner disclosed a prototype and documents relating to his hose and discussed the inner components of the hose. Berardi built his first prototype a day after the meeting and filed his first patent application three months later. Blue Gentian subsequently filed suit against Tristar for infringement of its expandable hose patents. Tristar counterclaimed to correct inventorship of the patents, alleging that Ragner should have been named a co-inventor.

A court may order a correction of inventorship when it determines that an inventor has been erroneously omitted from a patent. The inventors listed on an issued patent, however, are presumed to be the only true inventors. Thus, a party must prove incorrect inventorship by clear and convincing evidence. An alleged joint inventor’s testimony standing alone is insufficient to establish inventorship by clear and convincing evidence; the testimony must be corroborated by evidence. A joint inventor must contribute significantly to the invention’s conception or reduction to practice, and the contribution must involve some collaboration with the other inventor.

The district court, after an evidentiary hearing, entered judgment on the inventorship counterclaim in Tristar’s favor and ordered correction of the patents under 35 U.S.C. § 256. Blue Gentian appealed.

The Federal Circuit found that Ragner conveyed three key elements of the hose to Berardi at the meeting and that these elements were a significant contribution to the conception of at least one claim of each asserted patent. The Court noted that these were the very elements Blue Gentian used to distinguish the invention from the prior art, establishing the element’s significance. The Court also found that Ragner’s testimony about conveying the three elements to Berardi at the meeting was adequately corroborated by both physical and circumstantial evidence. The evidence showed the similarity between Ragner’s disclosed prototype and Berardi’s first prototype, and documentary evidence showed Ragner’s familiarity with the three elements before the meeting. Finally, the Court found sufficient collaboration between Berardi and Ragner based on the information exchanged at the meeting, including Ragner’s prototype, confidential documents and verbal explanations about alternative hose designs.

The Federal Circuit dismissed Blue Gentian’s argument that claim construction was needed before analyzing Ragner’s contribution because Blue Gentian did not identify a dispute [...]

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PTO to Host Listening Session on Role of AI in Innovation

by | Apr 13, 2023 |

As previously reported, the US Patent & Trademark Office (PTO) published a Request for Comments Regarding Artificial Intelligence and Inventorship, seeking input from stakeholders on inventorship issues that may arise as artificial intelligence (AI) and emerging technologies play a greater role in the innovation process. In the wake of the request, the PTO published a Notice announcing that it is hosting a listening session to address the “current state of AI technologies and inventorship issues,” including whether AI should qualify as an inventor and whether the PTO should expand its current guidance.

The listening session will be held at the PTO’s headquarters in Alexandria, Virginia, on April 25, 2023, from 10:30 am to 2:45 pm EDT. Anyone seeking to speak at the listening session must register by 5:00 pm EDT on April 20, 2023. Anyone seeking to attend, either virtually or in person, but not speak at the event must register by April 24, 2023.

Registration information is available here.



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PTO Seeks Comments on Role of Artificial Intelligence in Inventorship

by | Mar 2, 2023 |

The US Patent & Trademark Office (PTO) published a Request for Comments Regarding Artificial Intelligence and Inventorship seeking input from stakeholders on inventorship issues that may arise as artificial intelligence (AI) and emerging technologies play a greater role in the innovation process. The deadline to submit comments is May 15, 2023.

As background, the PTO held its inaugural AI and Emerging Technologies Partnership meeting, during which panelists discussed AI’s increasing role in innovation, in June 2022. Although there appeared to be consensus that AI cannot “conceive” of inventions, some panelists contended that AI is merely a tool like any other tool used in the inventive process, while others pointed to situations in which AI systems can output patentable inventions or contribute at the level of a joint inventor. While the PTO has been exploring the contours of inventorship law with respect to AI-generated inventions, in August 2022, the US Court of Appeals for the Federal Circuit issued its decision in Thaler v. Vidal, finding that inventorship is limited to natural persons. The Court explained, however, that it was not confronted with “the question of whether inventions made by human beings with the assistance of AI are eligible for patent protection.”

Recognizing the uncertainty surrounding the role of AI inventorship in the wake of the Thaler decision, the PTO seeks public comment on several questions, including the following:

1. How is AI, including machine learning, currently being used in the invention creation process?

2. How does the use of an AI system in the invention creation process differ from the use of other technical tools?

3. If an AI system contributes to an invention at the same level as a human who would be considered a joint inventor, is the invention patentable under current patent laws?

4. Do inventions in which an AI system contributed at the same level as a joint inventor raise any significant ownership issues?

5. Is there a need for the PTO to expand its current guidance on inventorship to address situations in which AI significantly contributes to an invention? How should the significance of a contribution be assessed?

6. Should the PTO require applicants to provide an explanation of contributions AI systems made to inventions claimed in patent applications? If so, how should that be implemented, and what level of contributions should be disclosed? Should contributions to inventions made by AI systems be treated differently from contributions made by other (e., non-AI) computer systems?

7. What additional steps, if any, should the PTO take to further incentivize AI-enabled innovation (e.g., innovation in which machine learning or other computational techniques play a significant role in the invention creation process)?

8. What statutory changes, if any, should be considered as to US inventorship law, and what consequences do you foresee for those statutory changes?



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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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Challenging Inventorship on Summary Judgment? Put a Cap on It

by | Jan 5, 2023 |

The US Court of Appeals for the Federal Circuit, citing a dispute as to material facts, held that a factfinder could reasonably conclude that an alleged joint inventor failed to sufficiently contribute to inventing the claimed technologies and thus reversed a district court order granting summary judgment of invalidity based on failure to join an inventor. Plastipak Packaging, Inc. v. Premium Waters, Inc., Case No. 21-2244 (Fed. Cir. Dec. 19, 2022) (Newman, Stoll, Stark, JJ.)

Plastipak sued Premium Waters, asserting 12 patents directed in part to the neck portions of lightweight plastic containers and preforms. These neck portions include a dispensing opening, a tamper-evident formation (TEF) that indicates if the container has been opened and a support flange/ring to facilitate manufacturing handling:

The patents list Richard Darr and Edward Morgan as inventors. Premium Waters countered that the patents should have included a third co-inventor, Alessandro Falzoni, an employee of another company with whom Darr and Morgan had collaborated on a project involving a design that included a neck portion, a specialty closure and a discontinuous TEF. Premium Waters moved for summary judgment of invalidity on the theory that the failure to include Falzoni as a joint inventor rendered the patent invalid, contending that Falzoni contributed the following to the invention:

  • A discontinuous (as opposed to continuous) TEF that is claimed by five of the asserted patents
  • A neck portion with only 0.580 inches or less separating its dispensing opening from its support flange/ring’s lower surface (the X dimension, as shown in the diagram above) that is claimed by the other asserted patents.

Plastipak contended that the asserted inventors were the sole inventors and that discontinuous TEFs (Falzoni’s alleged contribution) were merely state-of-the-art.

In granting the motion for summary judgment, the district court observed that Falzoni was “at least” a joint inventor because he had disclosed to one of the named inventors a neck finish measuring less than 0.580 inches with a discontinuous TEF in the form of an image of a 3D model that “constituted clear and convincing evidence of Falzoni’s disclosure, leaving ‘no doubt’ that the image ‘contributed significantly to the conception of a complete neck finish.’”

That model’s support ring lacked a lower surface, however, and Plastipak argued that without a lower surface the 3D model’s X dimension was undeterminable.

Plastipak also argued that Falzoni’s email circulating the 3D model stated that “[t]he area below the neck support ring has been left undefined” and seemingly invited the named inventor (Darr) to finalize it. Darr did so and, on the same day, emailed Falzoni a schematic depicting a support ring with a lower surface and a 0.591-inch X dimension.

Falzoni testified that while he calculated that the model had a ~0.563-inch X dimension, that calculation was based on “a reasonable indication” of where the support ring’s lower surface should be, and that the absence of an [...]

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Employment Agreement Assignment Provisions Don’t Reach Post-Employment Inventions

by | May 6, 2021 |

The US Court of Appeals for the Federal Circuit rejected a biotechnology company’s argument that assignment provisions in its employment agreements granted ownership rights in post-employment inventions. Bio-Rad Laboratories, Inc. v. Int’l Trade Comm’n, Case No. 20-1785 (Fed. Cir. Apr. 29, 2021) (Taranto, J.)

10X filed an International Trade Commission (ITC) complaint against Bio-Rad, alleging that Bio-Rad’s microfluidic systems infringed 10X’s gene sequencing patents. Bio-Rad raised an affirmative defense alleging that it co-owned the asserted patents because two of the named inventors, formerly employed by Bio-Rad and its predecessor QuantaLife before forming 10X, conceived the ideas embodied in the patents while they were still employed by Bio-Rad. The two inventors had executed employment agreements, including provisions requiring disclosure and assignment of intellectual property created during their employment with Bio-Rad. The two inventors left Bio-Rad and formed 10X several months before the earliest conception date of the asserted patents.

The ITC administrative law judge rejected Bio-Rad’s co-ownership defense, concluding that Bio-Rad had not shown the inventive concept of the asserted patents was conceived before the inventors left Bio-Rad. The administrative law judge also found that Bio-Rad infringed 10X’s patents and that 10X satisfied the technical domestic industry requirement by practicing the asserted patents. The ITC affirmed the administrative law judge’s determinations and also found that the asserted claims were not invalid for indefiniteness. Bio-Rad appealed.

Bio-Rad argued, among other things, that the ITC erred in not finding co-ownership of the asserted patents based on the assignment provisions. Bio-Rad also contended that during their employment at Bio-Rad, the two inventors had conceived the ideas that contributed to the inventions reflected in the 10X patents, and the invention assignment provisions of their employment agreement required assignment of their interest to Bio-Rad.

The Federal Circuit affirmed the ITC. On the co-inventorship issue, the Court adopted the ITC’s conclusion and found that Bio-Rad had no ownership interest in the asserted patents, explaining that the assignment provisions did not apply to ideas developed during employment solely because the ideas ended up contributing to a post-employment patentable invention. The Court found that the language was limited to a grant of actual intellectual property, i.e., subject matter protectable as a patent created during the term of employment with Bio-Rad. The Court reasoned that a person’s work that contributes, even significantly, to a later patentable invention does not create protectable intellectual property until a patentable invention is made, and that therefore, the assignment provisions did not reach the ideas that Bio-Rad alleged were conceived during the inventors’ Bio-Rad employment.

The Court also noted policy reasons for limiting the reach of the assignment provisions, including the difficult compliance issues raised by requiring assignment of rights in post-employment inventions. The Court explained that such provisions might deter a former employee from pursuing work related to their prior work, or deter a potential future employer from hiring that individual to work in an area similar to that in which they had prior experience. The Court also agreed with the ITC’s conclusion that [...]

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US Courts Can Compel Parties to Transfer Ownership of Foreign Patents

by | Dec 17, 2020 |

Addressing a district court decision agreeing to transfer ownership of certain US patents, but declining to do likewise for the related foreign patents, the US Court of Appeals for the Federal Circuit explained that US courts have authority to compel litigants before them to transfer ownership of their patents and held that ownership of the foreign patents should have been transferred as well. SiOnyx LLC v. Hamamatsu Photonics K.K., Case Nos. 19-2359, 20-1217 (Fed. Cir. Dec. 7, 2020) (Lourie, J.).

In 1998, a professor at Harvard discovered a process for creating black silicon with unique properties and launched a company, SiOnyx, to commercialize the invention. SiOnyx eventually met with Hamamatsu, a manufacturer of silicon-based photodetector devices, and entered into a nondisclosure agreement (NDA) to share confidential information to explore a potential joint venture. SiOnyx provided information to Hamamatsu under the NDA, but the joint venture plans never came to fruition, and Hamamatsu allowed the agreement to lapse. A short time later, Hamamatsu began marketing photodetector devices using black silicon and applied for foreign patents covering its products, along with related US patents. SiOnyx sued Hamamatsu for breach of contract, infringement of a SiOnyx patent and for ownership of Hamamatsu’s patents.

The case ultimately went to trial and led to a jury verdict in SiOnyx’s favor on breach of contract and infringement. The jury also found that one of SiOnyx’s employees had contributed to the inventions claimed by Hamamatsu’s patents. Based on that inventorship finding, the district court transferred sole ownership of the US patents to SiOnyx pursuant to an NDA provision retaining intellectual property rights for confidential information shared under the agreement. The district court also treated the ownership transfer as an equitable remedy in view of Hamamatsu’s breach of the agreement. However, the district court declined to transfer ownership of the foreign patents because it questioned its authority to do so. Both parties appealed.

On appeal, the Federal Circuit first disposed of most of the appellate issues as being resolved by the jury verdict. Regarding ownership of the patents, Hamamatsu argued that the jury finding of co-inventorship by SiOnyx’s employee, rather than sole inventorship, implied that Hamamatsu employees also contributed to the invention and thus warranted partial ownership. The Court rejected this argument because it found that Hamamatsu had not shown that its contribution was derived from confidential information shared under the NDA and thus did not trigger any ownership rights under the agreement. The Federal Circuit also reasoned that Hamamatsu’s inventive contribution would not bar the equitable relief imposed by the district court. As for the foreign patents, the Court agreed with SiOnyx that the same grounds that led to transfer of the US patents also warranted transfer of the foreign patents, and reiterated that US courts have authority to compel the parties properly before them to transfer ownership of their patents.



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Making Waves: Post-Employment Contract Assignment Provision Invalid Under California Law

by | Dec 3, 2020 |

The US Court of Appeals for the Federal Circuit invoked “precedents that are relevant but not directly on point” to examine when employment contract provisions may require assignment of inventions conceived post-employment and without use of the former employer’s confidential information, finding that an intellectual property assignment provision in the employer’s predecessor’s employment agreement was void under California law. Whitewater West Industries, Ltd. v. Richard Alleshouse, et al., Case No. 19-1852 (Fed. Cir. Nov. 19, 2020) (Taranto, J.)

Richard Alleshouse began working for Wave Loch in 2007 as an engineer in the field of large-scale sheet-wave water attractions, which are surf and wave simulators sometimes seen on cruise ships and in water parks. Alleshouse’s many duties for the company included the inspection, assessment and improvement of the company’s wave rides; the development of new rides; and product management of the company’s branded FlowRider sheet wave attraction.

After almost five years with the company, Alleshouse consulted with a lawyer, Yong Yeh, regarding the scope of his employment agreement with Wave Loch, which included intellectual property assignment terms that survived termination of the employment agreement. Following that consultation, Alleshouse and Yeh discussed the idea of starting their own company to design sheet-wave attractions. In August 2012, Alleshouse resigned from Wave Loch, and in October 2012, Alleshouse and Yeh filed provisional patent applications that resulted in three different US patents describing and claiming certain “water attractions involving a flowing body of water on a surface” and “nozzle shapes and configurations which create a flowing body of water over a surface.”

In 2017, Whitewater West Industries, the successor to Wave Loch, sued Alleshouse, Yeh and their new company, Pacific Surf Design, in federal district court in California, asserting claims for breach of contract and correction of inventorship. In particular, Whitewater sought an assignment of the three patents under the terms of Alleshouse’s employment contract with Wave Loch, and claimed that Yeh was improperly listed as an inventor on each of the three patents. The district court ruled for Whitewater and found that the intellectual property assignment provision in Alleshouse’s employment agreement was valid and thus breached due to the failure to assign the patent rights at issue. Alleshouse appealed.

Alleshouse challenged the employment agreement’s intellectual property assignment provision as invalid under California Labor Code § 16600, which prohibits any contract provision that restrains a person from a lawful profession, trade or business, and under § 2870(a), which prohibits requiring an employee to assign over any invention that an employee developed entirely on her own time without using the employer’s equipment, supplies, facilities or trade secret information (with certain enumerated exceptions for employee inventions related to the employer’s business or the employee’s work for the business). The parties agreed on two factual points that were important to the Federal Circuit’s analysis on appeal: that the inventions at issue were not conceived until after Alleshouse left his job at Wave Loch, and that Alleshouse did not use any trade secret or confidential information belonging to Wave [...]

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Summary Judgment Foreclosed when There Is More than One Possible Inference from Evidence

by | Nov 19, 2020 |

Reversing a summary judgment ruling that barred a correction of inventorship claim, the US Court of Appeals for the Federal Circuit, found issues of material fact foreclosed summary judgment and warned that where an issue is a “quintessentially fact-laden one” such as equitable issue involving possible equitable estoppel on inventorship, summary judgement is likely not appropriate.. Ferring B.V. et al. v. Allergan, Inc. et al., Case No. 20-1098 (Fed. Cir. Nov. 10, 2020) (O’Malley, J.)

From 1998 to 2002, Dr. Seymour Fein worked as a consultant for Ferring Pharmaceuticals to develop a drug that helps regulate the body’s retention of water. That work apparently did not include any obligation by Fein to assign any inventions. As a result, both Ferring and Fein ultimately filed dueling patent applications directed to aspects of the drug and its use. In correspondence that took place while patent prosecution was pending, Fein indicated to Ferring that his application would be directed to a low dose administration route for the drug. Ferring responded that it believed that aspect (i.e., the low dose route) to be disclosed by prior art. Both sides eventually obtained patents, and Fein assigned his patents to Allergan.

In 2012, Ferring filed a state court action for correction of inventorship, seeking to add its researchers to Fein’s patents. Allergan counterclaimed with its own inventorship claim seeking to add Fein to Ferring’s patents, and also asserted an equitable estoppel defense based on the above-noted correspondence between the parties that occurred during patent prosecution. Allergan then moved for summary judgment on its equitable estoppel defense, which was granted. The judge subsequently held a bench trial and rejected Allergan’s inventorship claim. Ferring appealed the summary judgment decision.

On appeal, the Federal Circuit rejected Ferring’s argument that the trial court should not have considered any conduct that preceded issuance of the patents for purposes of equitable estoppel. However, the Federal Circuit held that the trial court’s summary judgment decision had improperly resolved issues of material fact regarding that pre-issuance conduct. According to the Federal Circuit, the pre-issuance discussions did not lead to only one possible inference, but rather were subject to interpretation because the claim scope discussed (low dose administration) did not necessarily match the claim scope ultimately granted. As a result, the Federal Circuit vacated the summary judgment decision and remanded to the district court.



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