Monday, December 10, 2018

AIPLA/IPO/ABA-IPL Joint Principles Paper on Section 101

AIPLA/IPO/ABA-IPL Joint Principles Paper on Section 101 calls for Congress to remedy uncertainty in 35 U.S.C. §101 and return balance to the U.S. patent system.

Copyright © 2018 Robert Moll. All rights reserved.

CNBC - Apple recovers losses after Chinese court bans sale of most iPhones

The CNBC article Apple recovers losses after Chinese court bans sale of most iPhones tells us Qualcomm was able to get an injunction that bans sale of iPhones in China. A few infringed Qualcomm patents can apparently shut down significant iPhone sales in China. Even if the injunctive relief is overturned this sounds disruptive.

Copyright © 2018 Robert Moll. All rights reserved.

Saturday, December 8, 2018

Bloomberg Law - Justice Department Exits Joint Patent Policy with PTO

If you own or deal with standard essential patents (SEP), you may want to read the Bloomberg Law article Justice Department Exits Joint Patent Policy with PTO:

"The Department of Justice has withdrawn from a joint policy with the Patent and Trademark Office on standard-essential patents.

The 2013 agreement, in which the two agencies said it should be difficult for patent owners to block sales or imports of products based on their use of patents in industry standards, no longer reflects the department’s policy on anticompetitive behavior, Assistant U.S. Attorney General Makan Delrahim said in a Dec. 7 speech in Palo Alto, Calif.

Delrahim, the department’s antitrust chief, said his division will work with the PTO to replace the policy."

Copyright © 2018 Robert Moll. All rights reserved.

Friday, December 7, 2018

WIPO - World Intellectual Property Indicators 2018 - Global IP Activity

WIPO recently published the World Intellectual Property Indicators 2018. It is detailed 231-page  look at global IP (e.g., patent and trademark) activity:

From the Foreword:

"Against the backdrop of solid economic growth worldwide, global intellectual property (IP) filing activity set new records in 2017. Patent filings around the world reached 3.17 million, representing a 5.8% growth on 2016 figures. Trademark filing activity totaled 12.39 million, up 26.8% on 2016. Industrial design filing activity exceeded 1.24 million. China remained the main driver of global growth in IP filings. From already high levels, patent filings in China grew by 14.2% and trademark filing activity in China by 55.2%. These high growth rates propelled China’s shares of global patent filings and trademarks filing activity to reach 43.6% and 46.3%, respectively. Japan (+24.2%) and the United States of America (+12.6%) also saw strong growth in trademark filing activity. However, both of those countries recorded almost no growth in patent filings. The Republic of Korea saw a decline in filing activity for patents and trademarks for the second consecutive year. Other notable trends include large increases in trademark filing activity in the Islamic Republic of Iran (+87.9%), the United Kingdom (+24.1%) and Canada (+19.5%). With regard to industrial design filing activity, the United Kingdom (+92.1%), Spain (+23.5%) and Switzerland (+17.9%) saw double-digit growth in 2017."

Copyright © 2018 Robert Moll. All rights reserved.

Thursday, December 6, 2018

Supreme Court - Helsinn Healthcare S.A. v. Teva Pharmaceutical USA, Inc. - Hearing Transcript

The United States Supreme Court held a hearing in Helsinn Healthcare v. Teva Pharmaceutical this week.

The issue: "Whether, under the Leahy-Smith America Invents Act, an inventor’s sale of an invention to a third party that is obligated to keep the invention confidential qualifies as prior art for purposes of determining the patentability of the invention."

For additional details see the hearing transcript and Professor Ronald Mann's argument analysis and America Invents Act - On Sale Bar, 35 USC 102

Copyright © 2018 Robert Moll. All rights reserved.

Wednesday, December 5, 2018

USPTO - Trademark Manual of Examining Procedure (TMEP)

This Fall the USPTO announced publication of the latest Trademark Manual of Examining Procedure (TMEP):

"This revision clarifies USPTO trademark policies and practices and includes relevant Trademark Trial and Appeal Board and court decisions reported before Sept. 15.

This revision supersedes prior versions of the TMEP, examination guides, or any other statement of USPTO policy to the extent that there is any conflict.

For a complete list of changes, see the Change Summary."

Copyright © 2018 Robert Moll. All rights reserved.

Tuesday, December 4, 2018

PTAB - Hearsay & Authentication Webinar - December 6, 2018

The USPTO announced a webinar on hearsay and authentication practice before Patent Trial and Appeal Board (PTAB):

"We are hosting a Boardside Chat webinar this Thursday, Dec. 6 from noon to 1 p.m. ET about hearsay and authentication before the board. Lead Judge Michael Zecher along with Judge Tom Giannetti and Judge Grace Obermann will present.

The webinar is free and open to all. There will be a Q&A session at the end of the presentation, so please send questions in advance or during the webinar to

More information, including the webinar access information, is available on the PTAB "Boardside Chat" webinar series webpage of the USPTO website."

Copyright © 2018 Robert Moll. All rights reserved.

Monday, December 3, 2018

United States Courts - The Patent Process: An Overview for Jurors

In 2013, the United States Courts published a video on YouTube: The Patent Process: An Overview for Jurors to help jurors. It is a nice introduction on US patents in plain English.

Copyright © 2018 Robert Moll. All rights reserved.

Sunday, December 2, 2018

Farre-Mensa et al. - What is a Patent Worth? Evidence from the U.S. Patent "Lottery"

Because of the expense of patenting in the United States, it can be a challenge for a startup to determine whether or not to seek patent protection. Some argue it's waste of money because even if a patent is obtained a startup cannot afford to enforce patent rights. My response is if the startup IPOs, it can afford it, and if the startup is acquired, the acquiring company typically has more resources.
Whether enforcement makes economic sense is another topic.

Some go the other way arguing in favor of patenting as a way to increase investor interest. For example, here's an article supporting that view: Farre-Mensa et al., What is a Patent Worth? Evidence from the U.S. Patent "Lottery". As stated in the abstract: "We provide evidence on the value of patents to startups by leveraging the random assignment of applications to examiners with different propensities to grant patents. Using unique data on all first-time applications filed at the U.S. Patent Office since 2001, we find that startups that win the patent “lottery” by drawing lenient examiners have, on average, 55% higher employment growth and 80% higher sales growth five years later. Patent winners also pursue more, and higher quality, follow-on innovation. Winning a first patent boosts a startup’s subsequent growth and innovation by facilitating access to funding from VCs, banks, and public investors."

Copyright © 2018 Robert Moll. All rights reserved.

Thursday, November 29, 2018

USPTO - Strategic Plan 2018-2022

Today, the United States Patent and Trademark Office (USPTO) published its Strategic Plan:

"The strategic plan sets out the USPTO’s mission-focused strategic goals: to optimize patent quality and timeliness; to optimize trademark quality and timeliness; and, to provide domestic and global leadership to improve intellectual property policy, enforcement, and protection worldwide.

We are confident in attaining the goals set out in this plan and look forward to the continued engagement and feedback from our stakeholders and employees, said Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office Andrei Iancu.

Together we celebrate innovation and entrepreneurship—we are very proud of the men and women who stand behind a well-balanced American intellectual property system. In conjunction with the development of the strategic plan, the USPTO is committed to making execution of the strategic plan an express responsibility of USPTO executives. This includes monitoring implementation of the plan, as well as keeping employees, stakeholders, and the public informed of progress. The USPTO website and the Data Visualization Center are key components of this communications commitment. 

A draft USPTO 2018-2022 Strategic Plan was posted on July 26, 2018, for employee review and feedback followed by a town hall meeting on July 24, 2018. The draft plan was then posted on the USPTO website on Aug. 22, 2018, and comments were solicited from stakeholders, customers, and the general public. Review and comments were also sought from the USPTO’s Patent and Trademark Public Advisory Committees, in addition to the three union bargaining unit presidents. Also, the proposed strategic plan was shared with the Department of Commerce, the Office of Management and Budget, and Congress."

For more information see as follows:

Copyright © 2018 Robert Moll. All rights reserved.

Tuesday, November 27, 2018

USPTO - Director Iancu - The Role of the Courts in Shaping Patent Law & Policy

On November 26, 2018, Director Iancu delivered remarks on The role of the courts in shaping patent law and policy as it relates to the complex topic of patent eligibility under 35 U.S.C. § 101.

Director Iancu refers to Judge Rich's guidance on applying 35 U.S.C. §101: "problems can arise due to the unfortunate … though clear commingling of distinct statutory provisions which are conceptually unrelated, namely, those pertaining to the categories of invention in § 101 which may be patentable, and to the conditions for patentability demanded by the statute …."

As Director Iancu stated "pursuant to the Patent Act of 1952, we should keep invalidity rejections in their own lanes. If something is not novel or is obvious, we should invalidate it under 102 or 103. If something is indefinite, or too broad to be fully enabled or described, we should invalidate it under 112. We have decades of case law from the courts and decades of experience at the PTO examining millions of patent applications, which guide us in our 102, 103 and 112 analyses. People know these standards and know how to apply these well-defined statutory requirements."

Judge Rich co-drafted the modern U.S. patent system in 1952. Much of that Act remains today. We might have been saved confusion and frustration that ensued in combining §§101/102/103 analysis if we simply took Judge Rich's advice. See Judge Giles Rich Wikipedia.

Copyright © 2018 Robert Moll. All rights reserved.

Sunday, November 25, 2018

CAFC - Berkheimer v. HP, Inc. - 35 USC 101 Patent Eligibility & USPTO Memo

In Berkheimer v. HP, Inc., the Federal Circuit clarified step two of the U.S. Supreme Court's Alice test for patent eligibility under 35 U.S.C. § 101. It noted that Mayo requires consideration of the elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent eligible application. It noted that will be satisfied when the claim involves more than performance of well understood, routine, and conventional activities previously known to the industry.

Moreover, the Federal Circuit stated the question of whether a claim element or combination of elements is well-understood, routine and conventional to a skilled artisan in the relevant field is a question of fact and must be proven by clear and convincing evidence.

Note this decision is an important case in determination of patent eligibility under 35 U.S.C. § 101, because it gives patent applicants and patent owners a means to push back on purely subjective opinion that a claim lacks an "inventive concept."

See also the USPTO Memo Changes in Examination Procedure Pertaining to Subject Matter Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v. HP, Inc.).

Copyright © 2018 Robert Moll. All rights reserved.

Friday, November 23, 2018

Supreme Court - Oil States Energy Services, LLC v. Greene's Energy Group, LLC - Inter Partes Review Not Unconstitutional

In Oil States Energy Services, LLC v. Greene's Energy Group, LLC, the Supreme Court considered "whether inter partes review- an adversarial process used by the Patent and Trademark Office (PTO) to analyze the validity of existing patents- violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury."

The Supreme Court held that Inter Partes Review (IPR) proceedings (35 U.S.C. 311-319) before the Patent Trial and Appeal Board (PTAB) do not violate Article III or the Seventh Amendment of the Constitution. In short, Justice Thomas for seven of the justices reasoned that "the decision to grant a patent is matter involving public rights" and "inter partes review is simply a reconsideration of that grant ... Congress has permissibly reserved the PTO's authority to conduct that reconsideration."

Many commentators predicted inter partes review (IPR) would be held constitutional. A more tricky prediction is how much the USPTO's new regulations and policies will level the IPR playing field for patent owners in the future.

Copyright © 2018 Robert Moll. All rights reserved.

Wednesday, November 21, 2018

CAFC - Arista Networks, Inc. v. Cisco Systems, Inc. - No Assignor Estoppel in Inter Partes Review

In Arista Networks v. Cisco Systems, the Federal Circuit held that assignor estoppel has no place in inter partes review (IPR).

As background, assignor estoppel prevents a party who assigns a patent to another from later challenging the validity of the assigned patent. Further, assignor estoppel prevents parties in privity with the assignor (e.g., a company founded by the assignor) from challenging validity. An IPR is a proceeding before the Patent Trial and Appeal Board for challenging the validity of any issued US patent.

Cisco had sued its competitor Arista for patent infringement of the claims of U.S. Patent No. 7,340,597 ("the '597 patent"), Method and Apparatus for Securing a Communications Device using a Logging Module, owned by Cisco. Arista petition for an IPR, and after instituting the IPR, the PTAB invalidated certain claims. Cisco argued assignor estoppel should prevent Arista challenging the validity in the IPR, because Dr. Cheriton the Arista co-founder had previously assigned the '597 patent to Cisco.

The Federal Circuit questioned did Congress intend for assignor estoppel to apply in IPR in the following manner:

"Cisco's primary argument in favor of applying assignor estoppel is that assignor estoppel is a well-established common-law doctrine that should be presumed to apply absent a statutory indication to the contrary. With this principle in mind, Cisco particularly takes issue with the Board's reasoning that Congress would have expressly provided for application of equitable defenses if it so desired.

There is some merit to Cisco's argument. In Westinghouse, the Court characterized assignor estoppel as "a rule well settled by 45 years of judicial consideration and conclusion" in the district and circuit courts, reaching back as early as 1880. Westinghouse, 266 U.S. at 349; see also Scott Paper Co. v. Marcalus Mfg. Co., 326 U.S. 249, 260 (1945) (Frankfurter, J., dissenting) ("The principle of fair dealing as between assignor and assignee of a patent whereby the assignor will not be allowed to say that what he sold as a patent was not a patent had been part of the fabric of our law throughout the life of this nation."). But, in Lear, Inc. v. Adkins, the Supreme Court appeared to cast some doubt on the doctrine's continued viability. 395 U.S. 653, 664-66 (1969). And although this court has held that the doctrine survived Lear, we did so recognizing that court decisions post-Lear "reveal[ed] some uncertainty about the continued vitality of the doctrine." Diamond Sci., 848 F.2d at 1223; see also id. ("Although Lear involved the licensing, rather than the assignment, of a patent, the opinion reviewed the history of `patent estoppel' in general, and indicated that the Court's previous decisions had sapped much of the vitality, if not the logic, from the assignment estoppel doctrine as well.").

With this history in mind, we recognize that "Congress is understood to legislate against a background of common-law adjudicatory principles." Astoria Fed. Sav. & Loan Ass'n v. Solimino, 501 U.S. 104, 108 (1991). "Thus, where a common-law principle is well established, . . . the courts may take it as given that Congress has legislated with an expectation that the principle will apply except `when a statutory purpose to the contrary is evident.'" Id. (quoting Isbrandtsen Co. v. Johnson, 343 U.S. 779, 783 (1952)); see also Impression Prods., Inc. v. Lexmark Int'l, Inc., 137 S.Ct. 1523, 1536 (2017). But see United States v. Craft, 535 U.S. 274, 288 (2002) ("The common-law rule was not so well established . . . that we must assume that Congress considered the impact of its enactment on the question now before us."). But even assuming that assignor estoppel could be considered such a well-established common law principle, we nonetheless conclude that, here, "a statutory purpose to the contrary is evident." Astoria, 501 U.S. at 108 (quoting Isbrandtsen, 343 U.S. at 783). In particular, we view § 311(a) as governing the question of whether Congress intended assignor estoppel to apply in the IPR context.13

Section 311(a) states, in relevant part: "(a) In General.—Subject to the provisions of this chapter, a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent. . . ." § 311(a) (emphasis added).

Arista contends that § 311(a) unambiguously leaves no room for assignor estoppel in the IPR context, given that the statute allows any person "who is not the owner of a patent" to file an IPR.14 We agree. Where "the statutory language is plain, we must enforce it according to its terms." King v. Burwell, 135 S.Ct. 2480, 2489 (2015); see also Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 251 (2010). In our view, the plain language of this statutory provision is unambiguous.

Cisco contends that this statute does not directly speak to the question of assignor estoppel in IPRs. Instead, Cisco views § 311(a) as reflecting two principles: first, that an IPR must begin as an adversarial proceeding, rather than as a means for a patent owner to confirm the patentability of certain claims; and second, that there is no Article III-like standing requirement for filing an IPR. In our view, however, the statute, by its terms, does more—it delineates who may file an IPR petition. The plain language of § 311(a) demonstrates that an assignor, who is no longer the owner of a patent, may file an IPR petition as to that patent.

This conclusion is consistent with Congress's express incorporation of equitable doctrines in other related contexts. For example, a statute governing International Trade Commission investigations states that "[a]ll legal and equitable defenses may be presented in all cases." 19 U.S.C. § 1337(c); cf. 15 U.S.C. § 1069 (providing in the Lanham Act context that "[i]n all inter partes proceedings equitable principles of laches, estoppel, and acquiescence, where applicable may be considered and applied"). And although such express inclusion of equitable defenses in other contexts is not dispositive of the issue presented in this case, it is further evidence of congressional intent.

Finally, Cisco contends that allowing assignor estoppel in other forums, such as in the ITC and in district court, while not allowing it in the IPR context creates an inconsistency that invites forum shopping. We, however, do not view this as an inconsistency, but rather as an intentional congressional choice. Such a discrepancy between forums—one that follows from the language of the respective statutes—is consistent with the overarching goals of the IPR process that extend beyond the particular parties in a given patent dispute. See Cuozzo, 136 S. Ct. at 2144 ("[I]nter partes review helps protect the public's `paramount interest in seeing that patent monopolies . . . are kept within their legitimate scope.'" (quoting Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 816 (1945))). Moreover, any policy choices regarding forum shopping are better left to Congress than to this court. Cf. SAS Inst., 138 S. Ct. at 1358 ("Policy arguments are properly addressed to Congress, not this Court."); Click-to-Call Techs., LP v. Ingenio, Inc., 899 F.3d 1321, 1350 (Fed. Cir. 2018) (Taranto, J., concurring) ("If there turns out to be a problem in the statute's application according to its plain meaning, it is up to Congress to address the problem.").

In sum, we conclude that § 311(a), by allowing "a person who is not the owner of a patent" to file an IPR, unambiguously dictates that assignor estoppel has no place in IPR proceedings."

Copyright © 2018 Robert Moll. All rights reserved.

Sunday, November 18, 2018

US Supreme Court - WesternGeco LLC v. ION Geophysical Corp. - Damages for Patent Infringing Exports

In WesternGeco LLC v. ION Geophysical Corp., the US Supreme Court held that "under the Patent Act, a company can be liable for patent infringement if it ships components of a patented invention overseas to be assembled there." See 35 U. S. C. §271(f)(2). The Court stated under 35 U.S.C. §284  "a patent owner who proves infringement under this provision is entitled to recover damages" and held the patent owner should recover its lost foreign profits ($90 Million).

Copyright © 2018 Robert Moll. All rights reserved.

Saturday, November 3, 2018

IP Watchdog - Director Andrei Iancu lauds risk takers, calls patent troll narrative "Orwellian doublespeak"

The article Director Andrei Iancu lauds risk takers, calls patent troll narrative "Orwellian doublespeak" is encouraging if you are tired of the patent troll narrative. Things appear to be shifting in favor of patent owners at the USPTO.

Copyright © 2018 Robert Moll. All rights reserved.

Wednesday, October 24, 2018

USPTO - Final rule changing claim construction standard for interpreting claims in AIA trial proceeding

The USPTO has changed the claim construction standard to better reflect the difficulty patent owners have experienced in amending claims in AIA trials. It recently "published a final rule changing the claim construction standard applied during inter partes review (IPR), post-grant review (PGR), and the transitional program for covered business method patents (CBM) proceedings before the PTAB.

The final rule replaces the “broadest reasonable interpretation” standard with the federal court claim construction standard that is used to construe a claim in a civil action under 35 U.S.C. § 282(b). This is the same claim construction standard articulated in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc), and its progeny.

Additionally, under the final rule, when construing a claim term in an IPR, PGR, or CBM, the PTAB will take into consideration any prior claim construction determination that has been made in a civil action, or a proceeding before the International Trade Commission (ITC), if that prior claim construction is timely made of record in that IPR, PGR, or CBM.

The USPTO received a total of 374 comments from individuals, corporations, associations, law firms, and law professors in response to its May 9, 2018, Notice of Proposed Rulemaking (NPRM). A significant majority of comments supported the proposed change. As noted in the rule package, the change will lead, among other things, to greater consistency and harmonization with the federal courts and the ITC and lead to greater certainty and predictability in the patent system. The final rule adopts the proposed rule language set forth in the NPRM, with a few changes for clarification purposes.

Several comments questioned the proposed “retroactive” application of the rule. In response to these comments, the final rule will not be retroactively applied and instead will apply only to IPR, PGR, and CBM petitions filed on or after the effective date of the final rule, which is Nov. 13, 2018."

If you are interested in the background and details of this change to claim construction, see the Federal Register Final Rules.

Copyright © 2018 Robert Moll. All rights reserved.

Thursday, September 27, 2018

USPTO - Director Iancu Remarks -- 35 USC 101 Patent Eligibility

At a recent IPO annual meeting, Director Iancu delivered remarks on how we should view patent eligibility under 35 USC 101:

"I’ll focus my remarks on a specific proposal for Section 101—patentable subject matter.

As many of you know, we recently issued to our examiners two new guidance memos on Section 101: the first dealing with the "conventionality” step in the Mayo/Alice framework, and the second on “methods of treatment” claims. Our data shows that these two memos have already improved the 101 analysis during examination.

But significantly more work needs to be done, especially on the “abstract idea” exception.

I know that IPO committees have been hard at work on a legislative fix to Section 101. Indeed, IPO and AIPLA have joined forces recently and proposed new statutory language. Should Congress be interested in moving forward with hearings or legislation, the USPTO would be very happy to help. As we all know, however, any legislative effort takes a long time, and the result is uncertain.

In the meantime, the USPTO cannot wait. We have thousands of examiners who struggle with these issues on a daily basis. Our examiners need additional guidance now. And so do patent applicants, patent owners, and the public. Whether through legislation or otherwise, there is a growing consensus that the issue must be promptly addressed.

In fact, several Federal Circuit judges have recently filed concurrences or dissents explaining the uncertain nature of the law and calling for change.

In order to “work its way out of what so many in the innovation field consider are §101 problems,” Judge Lourie—in an opinion joined by Judge Newman—appealed to a higher authority. “Resolution of patent-eligibility issues requires higher intervention, hopefully with ideas reflective of the best thinking that can be brought to bear on the subject.”

Judge Plager, in another case, noted that “the state of the law is such as to give little confidence that the outcome is necessarily correct.” He explained that, given current §101 jurisprudence, it is “near impossible to know with any certainty whether the invention is or is not patent eligible.” And he concluded that we currently have an “incoherent body of doctrine.”

And Judge Linn explained that the abstract idea test is “indeterminate and often leads to arbitrary results.”

I agree with all these sentiments.

Judge Giles Rich, an icon of patent law with an unparalleled understanding of—and impact on—our system, stated, in 1979, the crux of the problem with respect to §101 jurisprudence. He said at the time that problems can arise due to the “unfortunate … though clear commingling of distinct statutory provisions which are conceptually unrelated, namely, those pertaining to the categories of invention in §101 which may be patentable, and to the conditions for patentability demanded by the statute…”

This was almost 40 years ago! How perceptive and prescient Judge Rich was.

Let me put this in my own words: How can a claim be novel enough to pass 102 and nonobvious enough to pass 103, yet lack an “inventive concept” and therefore fail 101? Or, how can a claim be concrete enough so that one of skill in the art can make it without undue experimentation, and pass 112, yet abstract enough to fail 101? How can something concrete be abstract?

These problems confound the most sophisticated practitioners in our patent system. People simply don’t know how to draw these distinctions. If something is not inventive, then invalidate it under 102 or 103. If something is indefinite, or too broad to be fully enabled or described, then invalidate it under 112.

We have decades of case law from the courts and millions of examinations at the PTO which guide us in our 102, 103, and 112 analyses. People know these standards and how to apply these well-defined statutory requirements.

The genius of the 1952 Patent Act, of which Judge Rich is widely viewed as a principal author, was that it categorized the bases for patentability. Our recent §101 case law mushes them all up again. As Judge Rich said, this “may lead to distorted legal conclusions.” And it has. And it must end.

So I propose that we go back and heed Judge Rich’s direction, and keep rejections in their own distinct lanes—as directed, in fact, by the 1952 Act. Let’s stop commingling the categories of invention on one hand, with the conditions for patentability on the other. Section 101 is about subject matter. It is meant to address categories of matter that are not ever eligible on their own, no matter how inventive or well-claimed they are.

Here is a hint: If the claims can be fixed by slightly different claiming, by narrower claiming, or by more definite claiming, this is likely a “conditions” problem—not a subject matter problem. A pure discovery of nature, like gravity for example, is not eligible no matter how new, how brilliant, and how carefully the claims are written. This is an example of a subject matter issue. The category itself is problematic.

Alright, but what are these problematic categories? I ask because I believe that we must define the categories for these exceptions clearly, lest—in Justice Clarence Thomas’s words—we “swallow all of patent law.” Because—again quoting Justice Thomas—“at some level, ‘all inventions…embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.’” Clearly, though, not all inventions are subject to a judicial exception. So what is the specific subject matter that is problematic and we must exclude? We must be clear, lest we perpetuate the current state. People should know up front. If nothing else, for the sake of a predictable ecosystem, let’s be transparent.

And in particular, the issue needing most attention is, what precisely is the meaning of the “abstract idea” exception? Section 101 itself lists four categories: process, machine, manufacture, and composition of matter. The judicial exceptions should likewise be clearly categorized. As Judge Rich explained, when we deal with §101, “the sole question…is whether the invention falls into a named category, not whether it is patentable...”

So at the USPTO we are contemplating revised guidance to help categorize the exceptions—and indeed to name them—and instruct examiners on how to apply them.

More specifically, the contemplated guidance would do two primary things: First, it would categorize the exceptions based on a synthesis of the case law to date. And second, if a claim does recite a categorized exception, we would instruct examiners to decide if it is “directed to” that exception by determining whether such exception is integrated into a practical application. These two clarifications would help drive more predictability back into the analysis while remaining true to the case law that gave rise to these judicial exceptions in the first place.

So first, what exactly should be captured by the judicial exceptions to §101? In essence, and because we no longer want to mush subject matter with the conditions of patentability, the exceptions should capture only those claims that the Supreme Court has said remain outside the categories of patent protection, despite being novel, nonobvious, and well-disclosed. And what are the categories of inventions that the court told us that we should not patent even where the applicant demonstrates full compliance with Sections 102, 103 and 112? The Supreme Court gave us the answer: the “basic tools of scientific and technological work.”

And what are these “basic tools?” I believe that the Supreme Court has also told us that, at least through their examples. For example, they certainly include pure discoveries of nature, such as gravity, electromagnetism, DNA, etc.—all natural and before human intervention. So, no matter how brilliant the discovery of a certain DNA sequence in nature might have been, the court said we should not issue a patent in the absence of more. The Myriadcase is a recent example.

Also, fundamental mathematics like calculus, geometry, or arithmetic per se. That is, no matter how novel and well-described Newton’s calculus may have been, it is still not patentable by itself. It can be thought of as abstract no matter what. Perhaps “inherently” ineligible, some might say. The Bensoncase is an example.

Some basic “methods of organizing human activity,” such as fundamental economic practices like market hedging and escrow transactions, have also been excluded by the Supreme Court in Bilski and Alice.

And the court has also warned against pure mental processes such as forming a judgment or observation. Again, by itself, something performed solely in the human mind can be thought of as abstract no matter how it is claimed.

The Supreme Court has been interpreting this statute for the past 200 years or so, and throughout that time has given only a limited number of examples of these “basic tools of scientific and technological work”—and arguably they can all generally fit into the categories I just mentioned. So let’s turn now and ask in a bit more detail, what do the various exceptions articulated by the Supreme Court really encompass? There is less difficulty with understanding the categories for laws of nature and natural phenomena.

Folks can arguably identify things like gravity or DNA in a claim. Abstract ideas, on the other hand, have proven more challenging to define. But a thorough review of the relevant case law helps us draw more clear lines. At the USPTO we have undertaken just such a review and have studied every relevant case in detail.

And so, the proposed PTO guidance would synthesize “abstract ideas” as falling into the following three categories:

Mathematical concepts like mathematical relationships, formulas, and calculations

Certain methods of organizing human interactions, such as fundamental economic practices commercial and legal interactions; managing relationships or interactions between people; and advertising, marketing, and sales activities

Mental processes, which are concepts performed in the human mind, such as forming an observation, evaluation, judgment, or opinion.

Under the first step of the proposed guidance, we would first look to see if the claims are within the four statutory categories: process, machine, manufacture, or composition of matter. This is not new—we always do this. If statutory, we would then check to see if the claims recite matter within one of the judicial exceptions, categorized as I just mentioned. This is the new approach.

If the claims at issue do not recite subject matter falling into one of these categories, then the 101 analysis is essentially concluded and the claim is eligible. This alone would resolve a significant number of cases currently confounding our system. If an examiner does not find matter within the disallowed categories, he or she can move on.

Now, on the other hand, if the claims do recite subject matter in one of the excluded categories, the Supreme Court has instructed that we need to do more analysis. Specifically, the court instructed us that in such cases we need to decide whether the claims are “directed to” those categories.

To that end, we must first understand what the line is that the court wants us to draw to decide whether the claim is “directed to” an excluded category or not. The proposed new guidance would explain that Supreme Court jurisprudence taken together effectively allows claims that include otherwise excluded matter as long as that matter is integrated into a practical application. The line, in other words, delineates mere principles, on one hand, from practical applications of such principles, on the other.

For example, in Le Roy v. Tathem, the court said in 1853 that “a new property discovered in matter, when practically applied in the construction of a useful article of commerce or manufacture, is patentable.” Then 128 years later, in Diamond v. Diehr, the court repeated that “an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.” And recently, in Mayo, the court explained that “applications of such concepts to a new and useful end … remain eligible for patent protection.”

And so, if the claim integrates the exception into a practical application, then the claim is not “directed to” the prohibited matter. In such cases, the claim passes 101 and the eligibility analysis would conclude. Otherwise, we would move to step 2 of Alice, for example as explained in the office’s Berkheimermemo from earlier this year.

It is important to note that the first step of our analysis does not include questions about “conventionality,” which are addressed in Alice Step 2. That is, it does not matter if the “integration” steps are arguably “conventional”; as long as the integration is into a practical application, then the 101 analysis is concluded. This helps to ensure that there is a meaningful dividing line between 101 and 102/103 analysis.  A fully “conventional” yet patent-eligible claim may still be unpatentable as obvious. But it is better to address such a claim with obviousness law that has been developed over 65 years of practice.

The analysis also does not deny claims as ineligible merely because they are broad or functionally-stated or result-oriented. I understand the concern with certain types of broad, functionally defined claims that do not have sufficient support in the specification. But for these cases, USPTO examiners know, and will receive further guidance and training on, how to apply well-defined Section 112 principles.

Put another way, the examination does not conclude merely because we overcome Section 101; we must still examine for patentability under sections 102, 103 and 112. And so for claims that pass 101 because they do not articulate matter in a defined category, or that integrate the matter into a practical application, we can rest assured that other sections of the code should still prevent a patent if the claim is not inventive or is merely on a non-enabled or undescribed or indefinite idea.

In sum, the proposed guidance for Section 101, which addresses step 1 of Alice, would explain that eligibility rejections are to be applied only to claims that recite subject matter within the defined categories of judicial exceptions. And even then, a rejection would only be applied if the claim does not integrate the recited exception into a practical application. This provides significantly more clarity for the great bulk of cases.

Sure, there will be a number of cases that would still be difficult to resolve when we ask whether a claim is within one of the excluded categories, or whether it is a practical application of it. But for the vast majority of cases in the big middle, I suspect that the proposed approach would be significantly simpler.

And we are certainly in need for some simplification.

For many claims right now, we have an option to reject or invalidate, for violations of patentability conditions, under either:

A patentability condition such as 102, 103 or 112, or Section 101 subject matter.

Judge Rich was again perceptive, when he noted 40 years ago that “To provide the option of making such a rejection under either 101 or [a condition for patentability] is confusing and therefore bad law.” Just as Judge Rich warned, we have gotten ourselves into a rut when it comes to Section 101 analysis. With the proposed new guidance, the USPTO is trying to navigate our examiners out of that rut given the current statute and judicial precedent.

And I hope other authorities will join in helping us get out of the rut, at least by keeping rejections in their lane and by clearly categorizing the subject matter of any exception. Please note that if we are to issue such revised new guidance, it would take some time to finalize. During that time, I welcome your comments and thoughts on this and any other proposal.

In the end, we all have the same goal in mind. Born of our Constitution and steeped in an inspiring history of world-changing innovation, the American patent system is a crown jewel, a gold standard. Working together, we can ensure increased clarity in the patent system, and thus ensure that the United States will continue to lead the world in innovation and technological development."

Copyright © 2018 Robert Moll. All rights reserved.

Friday, August 31, 2018

Supreme Court - SAS Institute Inc. v. Iancu - PTAB Must Decide the Patentability of All The Challenged Claims

Congress created inter partes review (IPR), 35 USC 311-319, to allow a party to challenge the validity of a patent under 35 USC 102 and 103 based on prior art patents and/or publications at relatively low cost in the US Patent Office.

If the party can prove a reasonable likelihood of success of showing the invalidity of at least one claim, the USPTO should institute an IPR.

All patents are eligible for an IPR challenge, but if the patent's earliest effective filing date is on or after March 16, 2013, the IPR must be filed later of the nine month period following issuance of the patent and termination of any post-grant review.

In SAS Institute Inc. v. Iancu, the US Supreme Court addressed a practice of the USPTO to institute an IPR on part of the challenged claims. In SAS, the Supreme held when the USPTO institutes an inter partes review to consider the validity of an issued patent the USPTO must decide the patentability of all the challenged claims. In other words, if PTAB institutes an IPR, it can’t just review the claims that meet the threshold for institution, but must review all of the challenged claims.

My comment is SAS forces careful selection of the patent claims to be challenged, because a written decision that a challenged claim is patentable, may raise an estoppel against further challenge of the claim on the same grounds or grounds that could have been reasonably raised.

Copyright © 2018 Robert Moll. All rights reserved.

Monday, August 13, 2018

USPTO - PTAB Study on Motions to Amend in AIA Trials

In recent years it has been very challenging for a patent owner to amend claims during an America Invents Act (AIA) trial. The USPTO published a study that suggests this is still the case. Here's the results from a PTAB Motion Study that tracks and analyzes motions to amend filed in AIA trials up to the end of March 2018:
  • "Of the 3,203 trials that have gone to completion or settled, patent owners sought to amend the claims in 305 trials.
  • Of the 305 trials with motions to amend, the PTAB ultimately decided the merits of the motions in 189 trials. In the remaining 116 completed trials, the motions to amend were rendered moot because the PTAB did not find the original claims unpatentable, were not decided because the trial terminated prior to a final written decision, or were an amendment that only sought to cancel claims.
  • Of the 189 motions to amend that the PTAB decided, the PTAB granted or granted-in-part 18 motions. For 160 of the 182 motions denied or denied-in-part, the PTAB determined that proposed amended claims did not satisfy at least one statutory requirement of patentability akin to an examiner rejecting a proposed amended claim because it is anticipated, obvious, not adequately described in the written description, indefinite, or directed to non-statutory subject matter or found that the patent owner failed to satisfy the statutory requirements for a motion to amend under 35 U.S.C. 316(d). For the remaining 22 motions, the PTAB denied on procedural grounds related to the regulatory requirements for a motion to amend.
  • As of the midpoint of FY 2018, patent owners had filed more motions to amend than in recent fiscal years."
For more details see the Motion to Amend Study Update under the PTAB Statistics.

Copyright © 2018 Robert Moll. All rights reserved.

Friday, August 10, 2018

USPTO - Update AIA Patent Trial Practice Guide (August 2018)

In August 2012, the USPTO published Office Patent Trial Practice Guide (the Guide) for 37 C.F.R. Part 42 (Part 42 is currently on pages 416-447). The Guide was intended to give guidance to parties participating in inter partes review, post-grant review, covered business methods, and derivation under the America Invent Act (AIA) that had just passed.

In August 2018, the USPTO published Trial Practice Guide Update (August 2018) to update the Guide on topics such as expert testimony, motion practice, institution of trial, reply to patent owner response, reply to motion to amend, challenging admissibility, motions to exclude and strike, and oral hearings.

Copyright © 2018 Robert Moll. All rights reserved.

Wednesday, August 1, 2018

Wired - Despite Pledging Openness, Companies Rush to Patent AI Tech

If you are considering patenting artificial intelligence (AI) software, you are not alone. See Wired Despite Pledging Openness, Companies Rush to Patent AI Tech.

My comment on the article. I don't think a company's decision to patent AI is inconsistent with maintaining openness of its AI platforms. A company may disclose a platform so others can build on it yet reasonably expect IP protection of other advances that distinguish them from competitors. In software we look to trade secret, patenting, and copyright for legal protection. If a company elects to rely on trade secret, it prevents others from being aware of that information. So again how would clamping down on AI patents and pushing companies toward trade secret, help advance AI research? I don't think the article addresses my question, but it might inform some that AI patenting has increased greatly in the USPTO.

Copyright © 2018 Robert Moll. All rights reserved.

Saturday, June 30, 2018

NY Times - Apple and Samsung End Smartphone Patent War

In Apple and Samsung End Smartphone Patent War, the NY Times argues the patent war that began in 2011 was a waste because the technology is outdated and became largely a fight about money rather than an exclusion of infringing Samsung phones.

This article doesn't make sense to me. Successful tech companies management would not engage in patent litigation unless it was economically rational. So should we jump in after the fact and speculate they after careful consideration wasted time and money? One way to consider if it is wasteful is to take the value of infringing a patent multiplied by the probability of a successful defense. If that product is greater than the cost of defense, the defendant should litigate as a matter of economics. This appears to be Samsung's approach. I am not sure how they conclude hundreds of millions were spent on defense even after seven years of patent litigation. On the other hand, if you own patents like Apple and are a marketplace leader, you would be rational to enforce the patents against others copying or infringing to catch up. Otherwise you encourage many others to free ride off your R&D.

Samsung had seven years of patent litigation and setbacks and victories that should have been opportunities to settle the cases. Yet Samsung didn't and managed to whittle down the damage awards. However, a jury ordered Samsung to pay Apple $539 million for patent infringement in May. This is a large value for infringing the patents, the defense had failed, and shortly after Samsung settles. Santa Clara University law professor Brian Love claims the litigation "didn't really accomplish anything" because "at the end of the day, no products went off the market." I have trouble accepting this "didn't really accomplish anything" given the likelihood substantial money was transferred to Apple in settlement after the $539 million award. Finally, the Apple and Samsung phones contain the patented technologies the article says is long outdated. Again, nothing in the article to support this claim.

Rutgers law professor Michael Carrier saying "the case is likely to serve as a lesson that 'the courtroom is not always the place to try to get ahead" sounds right but to me Apple was not trying to get ahead; Samsung was trying to catch up and decided to infringe/copy patented features and Apple said not so fast and sued after failing to reach a settlement.

Professor Carrier's statement "there’s always the trade-off between litigation and innovation, and in the time these companies spent in the courtroom, they weren’t innovating." This lost time idea might make more sense for a small company but appears inapplicable to Samsung and Apple given that large tech companies largely insulate key innovators from the litigation. Moreover, reasonable litigation of patent rights should protect the incentive to innovate.

Copyright © 2018 Robert Moll. All rights reserved.

Thursday, June 28, 2018

USPTO - Proposes Changes to the Claim Construction in Trial Proceedings Before the Patent Trial and Appeal Board

The USPTO is proposing changes favorable to patent owners with regard to claim construction in the following Patent Office proceedings: (1) inter partes review (IPR), (2) post-grant review (PGR), and (3) the transitional program for covered business method patents (CBM) proceedings before the Patent Trial and Appeal Board (PTAB).

As stated in the regulatory notice: the USPTO "proposes to replace the broadest reasonable interpretation (“BRI”) standard for construing unexpired patent claims and proposed claims in these trial proceedings with a standard that is the same as the standard applied in federal district courts and International Trade Commission (“ITC”) proceedings. The Office also proposes to amend the rules to add that the Office will consider any prior claim construction determination concerning a term of the involved claim in a civil action, or an ITC proceeding, that is timely made of record in an IPR, PGR, or CBM proceeding."

If this change is implemented, it should be more difficult for a challenger to invalidate patent claims in certain cases, which may be reasonable given patent owners are rarely afforded the opportunity to amend claims in Patent Office proceedings to date.

See the USPTO Notice of Proposed Rule Making.

Also see U.S. Supreme Court's prior decision in Cuozzo Speed Technologies v. Lee that affirmed PTAB's use of the broadest reasonable interpretation of the claims in inter partes review.

Copyright © 2018 Robert Moll. All rights reserved.

Monday, June 11, 2018

IP Watchdog - Iancu: People have a right to know what is patent eligible

Today, Gene Quinn posted an article: Iancu: People have a right to know what is patent eligible that should encourage those dealing with the current law of patent eligibility under 35 U.S.C. 101.

"Director Iancu would go through the list of things we collectively understand are not patent eligible, such as isolated DNA, gravity and the like.

'Let’s be transparent,' Iancu said. 'Let’s make a list.'

'What is it that we want to exclude from patenting, people should know up front,' Iancu said forcefully.

'We must be careful to not overread the Supreme Court’s exclusions,' Iancu said before quoting the Supreme Court recognizing that their tests could if applied expansively swallow all of patent law.

'Why not simplify,' Iancu asked."

I like where our USPTO Director Iancu is going, but think if and when Congress, the courts, and the USPTO put together an "exclusion list" we would then hear much disputing on whether a given invention is "on" or "off" the list.

Congress and the Supreme Court need to reconsider whether or not 35 U.S.C. 101 should  have vaguely defined judge made exclusions to patent eligibility. It does not track the language of the statute and look how much uncertainty it has generated. I don't think everything man thinks up should get patent protection. However, we can exclude what shouldn't receive patent protection by comparing a claimed invention to prior technology, and by applying the substantial body of case law set forth in 35 U.S.C. 102 and 35 U.S.C. 103. Otherwise, we may continue to watch the courts stretch the language of 35 U.S.C. 101 under Alice/Mayo test to encompass novelty under 35 U.SC. 102 and non-obviousness under 35 U.S.C. 103.

Copyright © 2018 Robert Moll. All rights reserved.