RPX - Alice Remains in Narrowed State Post-Berkheimer as Congress Revives Section 101 Reform Debate

RPX's article Alice Remains in Narrowed State Post-Berkheimer as Congress Revives Section 101 Reform Debate is worth reading. 

Here's a brief summary:

"Data on patent eligibility rulings reveal that Alice currently remains in a narrowed state as a result of the Federal Circuit’s 2018 Berkheimer and Aatrix decisions, which limited courts’ ability to grant early Section 101 challenges. The result has been a significant drop in the Alice invalidation rate, which has since become the status quo for defensive eligibility motions in district court, impacting both challenges against patents asserted by NPEs and by operating companies."

Copyright © 2021 Robert Moll. All rights reserved.

Federal Circuit - CosmoKey Solutions GmbH v. Duo Security LLC - Software Patent Eligible

In CosmoKey Solutions GmbH v. Duo Security LLC, the Federal Circuit reversed the district court's decision that a two-factor authentication to software application patent was ineligible under 35 USC § 101. 

Claim 1 of US Patent No. 9,246,903 appears to be a broad claim, yet satisfied the Federal Circuit as eligible:

A method of authenticating a user to a transaction at a terminal, comprising the steps of:

    transmitting a user identification from the terminal to a transaction partner via a first communication channel,

    providing an authentication step in which an authentication device uses a second communication channel for checking an authentication function that is implemented in a mobile device of the user,

    as a criterion for deciding whether the authentication to the transaction shall be granted or denied, having the authentication device check whether a predetermined time relation exists between the transmission of the user identification and a response from the second communication channel,

    ensuring that the authentication function is normally inactive and is activated by the user only preliminarily for the transaction,

    ensuring that said response from the second communication channel includes information that the authentication function is active, and

    thereafter ensuring that the authentication function is automatically deactivated.

The Federal Circuit disagreed with the district court ruling of ineligibility, stating "the claims and written description suggest that the focus of the claimed advance is activation of the authentication function, communication of the activation within a predetermined time, and automatic deactivation of the authentication function, such that the invention provides enhanced security and low complexity with minimal user input."  

The Court noted the claims "recite a specific improvement to authentication that increases security, prevents unauthorized access by a third party, is easily implemented, and can advantageously be carried out with mobile devices of low complexity."  Further, invention solved a problem in computer networks with non-conventional steps as recited in claim 1.

Although the Federal Circuit has held many software patents ineligible, this decision suggests your chance of allowance and validity will increase when the invention is an improvement to computers or networks, and importantly, the claims recite a specific novel solution to a technical problem that is described in the written description. 

Copyright © 2021 Robert Moll. All rights reserved.

Federal Circuit - In re Surgisil - Favorable to Grant of Design Patents

The USPTO grants three types of patents: utility, design, and plant. Utility patents issue for new and useful processes, machines, manufactures, compositions, and improvements thereof. Plant patents issue for new and distinct plants, and design patents issue for new designs of article of manufacture.

When you read about patents, nearly always people talk about utility patents rather than design patents. Yes, utility patents can protect technology advances in software, hardware, products, and drugs, but design patents also have an important role. Thus, if an invention's appearance is new, you should consider seeking a design patent, because it is relatively inexpensive compared to seeking a utility patent, it may support large damage awards, and it can stop copyists.

Further, the Federal Circuit’s recent decision In re Surgisil has made it easier to obtain a design patent. There, the Federal Circuit held that 35 U.S.C. 171 grants design patents for articles of manufacture rather than for shapes in the abstract. It is not as USPTO argued: "appropriate to ignore the identification of the article of manufacture in the claim." The Federal Circuit held prior designs only anticipate (i.e., block issuance) if they are identical in shape to the claimed design and relate to the same article of manufacture. Thus, a drawing stump (used by illustrators) with the same shape did not anticipate a claim for an ornamental design for a lip implant. It's unclear if "related articles of manufacture" will become the ground of an obviousness rejection, but it should help applicants overcome anticipation rejections based on similar shapes for different articles of manufacture.

Copyright © 2021 Robert Moll. All rights reserved.

Federal Circuit - Network-1 Technologies, Inc. v. Hewlett Packard - Joining Party Can Challenge Validity On Different Grounds Than Raised in IPR

In Network-1 Technologies, Inc. v. Hewlett Packard, the Federal Circuit held that a party joining an inter partes review (IPR) before Patent Trial and Appeal Board (PTAB) can later challenge patent validity in court as long the challenge is based on different grounds than those raised earlier in the IPR. 

As a reminder, 35 U.S.C. § 315(e) estops a petitioner from challenging patent claims in court on grounds it "raised or reasonable could have raised" after a final decision in an IPR. The Federal Circuit explained a joining party is not estopped from raising grounds different than those when the IPR was instituted. In short, a party is only estopped from challenging in court on the grounds it "raised or reasonably could have raised" in the IPR.

Copyright © 2020 Robert Moll. All rights reserved.

RPX - Infringement Is the Top District Court Issue Appealed to the Federal Circuit

RPX published a nice summary on what US patent issues are appealed to the Federal Circuit:

"RPX data on the Federal Circuit show that infringement is the most common issue appealed from district court patent cases, appearing in over 450 appeals. Claim construction and invalidity (under Sections 102/103/112) are the next two most frequent issues, each of which appears in over 300 appeals. Two other key issues round out the top five: damages/fees/costs (appearing in around 275 appeals) and invalidity under Alice/Section 101 (just over 240 appeals)."

Note the low reversal rates of many issues appealed point to the importance of winning at trial. As Judge Rich might say, "the name of the game is the claim."

For more detail: RPX Infringement Is the Top District Court Issue Appealed to the Federal Circuit

Copyright © 2020 Robert Moll. All rights reserved.

Federal Circuit - Packet Intelligence LLC v. NetScout Systems, Inc. - Claims Patent Eligible under 35 USC 101

In Packet Intelligence LLC v. NetScout Systems, Inc., the Federal Circuit held claims patent eligible under 35 USC § 101.

Athough Packet Intelligence alleged infringement of three US patents, the patent eligibility issue was analyzed using representative claim 19 of US Patent No. 6,954,789:

19.  A packet monitor for examining packets passing through a connection point on a computer network, each packet conforming to one or more protocols, the monitor comprising:

    (a) a packet acquisition device coupled to the connection point and configured to receive packets passing through the connection point;

    (b) an input buffer memory coupled to and configured to accept a packet from the packet acquisition device;

    (c) a parser subsystem coupled to the input buffer memory and including a slicer, the parsing subsystem configured to extract selected portions of the accepted packet and to output a parser record containing the selected portions;

    (d) a memory for storing a database comprising none or more flow-entries for previously encountered conversational flows, each flow-entry identified by identifying information stored in the flow-entry;

    (e) a lookup engine coupled to the output of the parser subsystem and to the flow-entry memory and configured to lookup whether the particular packet whose parser record is output by the parser subsystem has a matching flow-entry, the looking up using at least some of the selected packet portions and determining if the packet is of an existing flow; and

    (f) a flow insertion engine coupled to the flow-entry memory and to the lookup engine and configured to create a flow-entry in the flow-entry database, the flow-entry including identifying information for future packets to be identified with the new flow-entry, the lookup engine configured such that if the packet is of an existing flow, the monitor classifies the packet as belonging to the found existing flow; and if the packet is of a new flow, the flow insertion engine stores a new flow-entry for the new flow in the flow-entry database, including identifying information for future packets to be identified with the new flow-entry, wherein the operation of the parser subsystem depends on one or more of the protocols to which the packet conforms.

The Federal Circuit stated in analyzing patent eligibility, we consider the claim as a whole and read it in light of the specification. The Federal Circuit observed patent-eligibility of computer and network technology often turns on whether claims recite a specific improvement in computer capability or an abstract idea for which computers are merely invoked as a tool.

The Federal Circuit stated that claim 19 was not directed to an abstract idea. Instead, it met a unique challenge to computer networks by describing how to identify disjointed connection flows in a network environment. In other words, the specification presented a new technological solution to a technological problem.

Copyright © 2020 Robert Moll. All rights reserved.

Federal Circuit - Uniloc 2017 LLC v. Hulu LLC - PTAB May Review Proposed Substitute Claims for Patent Eligibility in IPR

In Uniloc 2017 LLC v. Hulu, LLC, the Federal Circuit affirmed PTAB's determination that the patent owner's substitute claims proposed in a motion to amend were patent ineligible under 35 U.S.C. § 101 in an inter partes review (IPR).

As a reminder, IPR only permits challenges of US patent claims based on prior literature under 35 U.S.C. § 102 and 35 U.S.C. § 103. However, the Federal Circuit is now making a distinction with issued and substitute claims proposed in an IPR and states that PTAB may review substitute claims proposed by the patent owner for patent eligibility.

The dissent stated: "the majority breathes life into a dead patent and uses the zombie it has created as a means to dramatically expand the scope of inter partes review (“IPR”) proceedings. Because the Patent Trial and Appeal Board (“Board”) is estopped from issuing substitute claims in place of the invalidated claims of U.S. Patent No. 8,566,960 ("'960 patent") and because, even if the Board could issue such claims, it would be improper for it to consider 35 U.S.C. § 101."

Copyright © 2020 Robert Moll. All rights reserved.

Federal Circuit - Extensive Revisions to Rules and Forms

The Federal Circuit published Revisions to the Rules of Practice and the filing forms that must be respectively followed and used for cases pending on or after July 1, 2020.

Copyright © 2020 Robert Moll. All rights reserved.

Federal Circuit - Facebook v. Windy City Innovations LLC - No Same-Party Joinder In Inter Partes Review

In Facebook v. Windy City Innovations LLC, the Federal Circuit held that 35 U.S.C. § 315(c) does not authorize same-party joinder, and does not authorize joinder of new issues (e.g., for cancellation), including issues that would otherwise be time-barred under 35 U.S.C. § 315(b) from inter partes review (IPR).

Unless Federal courts require infringement contentions well within one year of the service of an infringement complaint, this seems to increase legal fees for effective IPR petitions and increase the value of US patents with diverse claims.

See Bloomberg Law Patent Challengers Reassess Strategies After Ruling Bars Tactic.

Copyright © 2020 Robert Moll. All rights reserved.

Federal Circuit - Anneal v Almirall - Reverses Attorney Fee Award for Work on Inter Partes Review

In Anneal v Almirall, the Federal Circuit held that a court cannot award attorney fees under 35 U.S.C. § 285 for work incurred on an inter partes review (IPR) and on appeal from IPR decision, because 35 U.S.C. § 285 is limited to "judicial proceedings."

Copyright © 2020 Robert Moll. All rights reserved.

Federal Circuit - Munchkin v. Luv n’ Care - Reverses Attorney Fee Award

In Munchkin, Inc. v. Luv n’ Care Ltd. the Federal Circuit reversed a district court's award of attorney’s fees to defendant Luv n’ Care, because the court had abused its discretion in determining the case "exceptional."

The Federal Circuit noted Munchkin's attorney fee motion failed to present facts and the analysis required to establish "Munchkin’s patent, trademark, and trade dress infringement claims were so substantively meritless to render the case exceptional."

See 35 U.S.C. § 285 and 15 U.S.C.§ 1117(a) which require an "exceptional case" to award attorney fees to a prevailing party in patent and trademark cases.

Copyright © 2020 Robert Moll. All rights reserved.

Professor Lemley - Without Preamble

Professor Mark Lemley's article Without Preamble (2019-2020) relates to the topic of claim construction, which can determine the outcome of patent litigation.

As background, a US patent claim has three parts: (1) a preamble, which states what the invention is or its environment, (2) a transitional term (e.g., comprising), and (3) a body that lists the steps of a method or the structure of a system. Generally, courts hold a preamble is a claim limitation "if it gives life, meaning and vitality" to the claim or recites essential structure or steps. Yes, it's a case by case determination. Perhaps a more practical test is whether the preamble is referenced repeatedly in the body. If so, the preamble is a claim limitation, i.e., for purpose of determining validity and infringement. See Mueller, Patent Law (2020).

Turning to Professor Lemley's Abstract:

"The Federal Circuit is ignoring a significant share of the words of patent claims. That's a bad idea as a matter of policy. It is virtually impossible to tell when the court is going to do it. And it’s inconsistent with the idea that the claims define the scope of the invention, and with how the Supreme Court thinks about claim construction and its closest analogies, statutory interpretation and construing contracts.

The culprit is a labyrinthine set of rules the Federal Circuit uses to decide whether or not to include the 'preamble' to a patent claim as a part of the claim. The words of the preamble, which can sometimes amount to more than half of the whole claim, might or might not be treated as part of the invention depending on a complex of factors, including whether the claim reads as a complete sentence without it, whether the same words are used in both the preamble and the body of the claim, whether the body of the claim includes the magic word 'said,' whether the preamble merely claims a use, benefit, or environment for the claim, and whether the preamble 'is necessary to breathe life and meaning into the claim.'

In Part I I discuss the bizarre body of law around patent claim preambles and how the law got to its current confused state. In Part II I suggest that the rule serves no useful purpose, and that if and when the Supreme Court gets such a case it should and will sweep the rule away. Patent applicants should be drafting patents with that fact in mind, and the rest of us should be interpreting claims with one eye on the fact that this is a doctrine whose days are numbered."

In short, this article asks courts drop the case by case determination test we use today on whether the preamble is a part of the claim just as much as the body of the claim. Saying the preamble always counts as proposed removes uncertainty, but means more patent claims will be held to not infringe. Further, this helps defendants rather than patent owners since a non-infringement defense is preferred to proving invalidity in court.

Copyright © 2020 Robert Moll. All rights reserved.

National Law Review - To promote Innovation, Congress Should Lessen Restrictions on Injunctive Relief for Patent Owners

In a National Law Review article: To promote Innovation, Congress Should Lessen Restrictions on Injunctive Relief for Patent Owners, Paul Michel, retired Chief Judge of the US Court of Appeals of the Federal Circuit, tackles the issue of injunctive relief for valid and infringed US patents.

Read the article for the argument, but here are a few of his observations:

"For much of our country’s history, permanent injunctions were the norm once patent infringement and validity were proven at trial by the patent owner. And getting an injunction depended on facts, not the patent owner’s business model – for example, whether they manufactured or licensed their invention. The practice was stable for all of that time – until recently."

"In 2006, in the Supreme Court’s eBay Inc. v. MercExchange, L.L.C. decision, the Court upended this settled practice, ruling that injunctions should not be automatically issued in patent cases and clarifying that courts must apply a four-part test to determine whether an injunction should be granted."

"For some years after, the pattern of injunction grants changed little. But eventually, it shifted greatly, as lower courts began to make injunction determinations based primarily on the patent owner’s identity. Those who manufacture products continued to get injunctions, while those who chose to license their patents instead, no longer did."

Copyright © 2020 Robert Moll. All rights reserved.

Federal Circuit - Uniloc v. LG - Software Claims Not Patent Ineligible

In Uniloc v. LG, the Federal Circuit held the claims were not patent ineligible under 35 U.S.C. § 101.

As background, Uniloc sued LG for infringement of U.S. Patent No. 6,993,049 ('the 049 patent) and LG moved to dismiss the complaint under FRCP 12(b)(6) arguing the claims of the '049 patent are ineligible under 35 U.S.C. § 101.

Section 101 provides that whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof may obtain a patent, but the Supreme Court has held that "abstract ideas are not patent eligible." Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014).

In Alice, the Supreme Court stated two-steps for determining patent eligibility. A court: (1) determines whether the claims are directed to an abstract idea; and (2) if so, considers the claim elements individually and as an ordered combination to determine whether the additional elements transform the claim into a patent-eligible application.

In cases relating to software, step one often turns on whether the claims focus on specific improvements in computer or network capabilities or instead focus on a process or system that is an abstract idea for which computers are invoked merely as a tool.

The Federal Circuit reminded it has "routinely held software claims patent eligible under Alice step one when directed to improvements in the functioning of computers or network platforms itself."  The Federal Circuit then buttressed this statement by summarizing some of its patent eligibility decisions: DDR Holdings v. Hotels.com, Enfish v. Microsoft, Visual Memory v. NVIDIA, Ancora v. HTC, Data Engine v. Google, Core Wireless v. LG.

The Federal Circuit then held the claims are directed to a patent-eligible improvement to computer functionality, namely the reduction of latency experience in parked secondary stations in communications systems.

The Federal Circuit explained:

"The claims at issue do not merely recite generalized steps to be performed on a computer using conventional computer activity. Instead, they are directed to 'adding to each inquiry message prior to transmission an additional data field for polling at least one secondary station.' See, e.g., ’049 patent at Claim 2. And this change in the manner of transmitting data results in reduced response time by peripheral devices which are part of the claimed system.

As the patent explains, for secondary stations joining a piconet in the prior art systems, “it could take half a minute or more from the time a user moves a mouse to a cursor moving on a screen.” Id. at 2:10–12. Because polling was “suspended during this cycle, for up to 10.24 seconds at a time,” parked secondary stations in prior art systems could experience similar delays after each period of inactivity. Id. at 2:13–16. The claimed addition of a data field for polling to the inquiry message significantly reduces the response time, enabling secondary stations to respond a fraction of a second later. See, e.g., ’049 patent at 5:36–41. Even LG concedes that this reduction in latency 'is the very reason for polling during the inquiry process in the first place.' Appellees’ Br. 54 (citing, e.g., J.A. 1375–77, 1394). To the extent LG argues that the claims themselves must expressly mention the reduced latency achieved by the claimed system, LG is in error.

Claims need not articulate the advantages of the claimed combinations to be eligible. We conclude that the claims at issue are not directed to the abstract idea of performing additional polling in wireless communication systems or performing additional polling using inquiry messages. These claims are directed to a specific asserted improvement to the functionality of the communication system itself.

The claimed invention’s compatibility with conventional communication systems does not render it abstract. Nor does the fact that the improvement is not defined by reference to “physical” components."

As a patent attorney, Uniloc and its predecessors define a significant patent eligibility space for claims directed to "computer and network specific improvements."

Copyright © 2020 Robert Moll. All rights reserved.

Federal Circuit - Hologic v. Minerva Surgical - Assignor Estoppel Does not Bar PTAB Invalidity Decision

In Hologic v. Minerva Surgical, the Federal Circuit held assignor estoppel barred the assignor from asserting invalidity of a patent in district court, but not the assignor relying on the Federal Circuit's affirmance of PTAB invalidating claims of another patent in an inter partes review (IPR).

See further details in the opinion. One detail caught my eye as a patent attorney, Judge Stoll questioning if it is time to revisit assignor estoppel en banc (entire panel) on the construction of the America Invents Act (AIA) due to the illogical regime being perpetuated.

In the opinion on page 30:

"In Arista, we held that the judge-made doctrine of assignor estoppel does not apply in the context of an inter partes review. In other words, an assignor who sold his patent rights may file a petition for IPR challenging the validity of that patent. Arista Networks, Inc. v. Cisco System, Inc. At the same time, we continue to bar assignors from challenging in district court the validity of the patents they assigned. See, e.g., Mentor Graphics Corp.v. EVE-USA, Inc. 

Our precedent thus presents an odd situation where an assignor can circumvent the doctrine of assignor estoppel by attacking the validity of a patent claim in the Patent Office, but cannot do the same in district court. Do the principles underlying assignor estoppel—unfairness in allowing one
who profited from the sale of the patent to attack it—apply in district court but not in Patent Office proceedings?

Should we change the application of the doctrine in district court, or should we revisit our construction of the America Invents Act and reevaluate our interpretation of the statute as prohibiting the doctrine of assignor estoppel? Given the odd circumstance created in this case, I suggest that it is time for this court to consider en banc the doctrine of assignor estoppel as it applies both in district court and in the Patent Office.

We should seek to clarify this odd and seemingly illogical regime in which an assignor cannot present any invalidity defenses in district court but can present a limited set of invalidity grounds in an IPR proceeding. A petitioner in an IPR proceeding may request to cancel as unpatentable one or more claims of a patent, but “only on a ground that could be raised under section 102 or 103 and only on the basis of prior art consisting of patents or printed publications.” 35 U.S.C. § 311(b)."

Copyright © 2020 Robert Moll. All rights reserved.

Federal Circuit - CardioNet, LLC v. InfoBionic, Inc. - Reversal of Patent Ineligibility of Cardiac Monitoring Technology

In CardioNet, LLC v. InfoBionic, Inc., the Federal Circuit reversed a district court decision that held CardioNet’s U.S. Patent No. 7,941,207 (the '207 patent) patent ineligible under 35 U.S.C. § 101 and CardioNet had filed a complaint that failed to state a claim under Federal Rule of Civil Procedure 12(b)(6).

The Federal Circuit concluded the claim 1 and other asserted claims of the ’207 patent related to a patent-eligible improvement to cardiac monitoring technology rather than an abstract idea, and reversed and remanded the case to the district court for further proceedings.

Claim 1 includes broad language that may be subject patent eligibility challenges reciting:

A device, comprising:
    a beat detector to identify a beat-to-beat timing of cardiac activity;
    a ventricular beat detector to identify ventricular beats in the cardiac activity;
    variability determination logic to determine a variability in the beat-to-beat timing of a collection of beats;
    relevance determination logic to identify a relevance of the variability in the beat-to-beat timing to at least one of atrial fibrillation and atrial flutter; and
    an event generator to generate an event when the variability in the beat-to-beat timing is identified as relevant to the at least one of atrial fibrillation and atrial flutter in light of the variability in the beat-to-beat timing caused by ventricular beats identified by the ventricular beat detector.

However, the Federal Circuit stated: "the language of claim 1 indicates that it is directed to a device that detects beat-to-beat timing of cardiac activity, detects premature ventricular beats, and determines the relevance of the beat-to-beat timing to atrial fibrillation or atrial flutter, taking into account the variability in the beat-to-beat timing caused by premature ventricular beats identified by the device’s ventricular beat detector. In our view, the claims 'focus on a specific means or method that improves' cardiac monitoring technology; they are not 'directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery.'"

The patent owner's favorable outcome appears to be based on facts indicating the patent claims related to a technological improvement in cardiac monitoring rather than merely implementing known systems and techniques on a computer. The concurrence brought up the problem of determining whether an invention is long standing (conventional) without reference to prior art in step one of Alice v. CLS Bank.

Copyright © 2020 Robert Moll. All rights reserved.

CAFC - In re Google - Lack of Patent Venue in ED Texas

In re Google the Federal Circuit granted Google's petition for a writ of mandamus to dismiss or transfer Super Interconnect Technologies' (SIT) patent infringement suit from the ED Texas, which is perceived as a pro-patent venue.

In TC Heartland decision, the Supreme Court held a patent owner has venue where the defendant resides (state of incorporation) or where the defendant infringes and has "a regular and established place of business." 

SIT’s argument for venue was that Google servers in the district constituted "a regular and established place of business." After the venue issue arose, Google removed its servers, but continued to stream video and ads to residents in the ED Texas using third party internet service providers (ISPs) servers.

The district court denied Google's motion to transfer venue, because the servers constituted "a regular and established place of business." However, the Federal Circuit then granted Google's petition for mandamus to resolve venue due to conflicting district court decisions on what activities constituted "a regular and established place of business."

Applying In re Cray the Federal Circuit held venue was improper in ED Texas, because Google lacked employees and an agent in the district, the ISPs were not agents, and server maintenance was ancillary to Google's business. The concurrence said it agreed with the result, but end users should be also considered. Until they are, it appears servers without employee(s) or agent(s) in a district may not be sufficient to establish "a regular and established business."

Copyright © 2020 Robert Moll. All rights reserved.

Federal Circuit - Koninklijke v. Gemalto - Reverse Grant of Motion that Claims Ineligible under 35 USC 101

In Koninklijke KPN v. Gemalto, the Federal Circuit reversed a court's dismissal of claims as patent ineligible.

KPN sued Gemalto for infringement of US Patent No. 6,212,662 (the '662 patent). Gemalto moved for judgment on the pleadings under FRCP Rule 12(c) asserting claims 1-4 were patent ineligible under 35 USC 101. The district court granted the motion concluding that claims 1-4 recited no more than mere abstract data manipulation operations ineligible under Alice v. CLS Bank and subsequent court decisions.

On appeal, KPN only challenged the district court's ineligibility decision with respect to dependent claims 2-4, which recited:

1.  A device for producing error checking based on original data provided in blocks with each block having plural bits in a particular ordered sequence, comprising:
    a generating device configured to generate check data; and
    a varying device configured to vary original data prior to supplying said original data to the generating device as varied data;
    wherein said varying device includes a per-mutating device configured to perform a permutation of bit position relative to said particular ordered sequence for at least some of the bits in each of said blocks making up said original data without reordering any blocks of original data.

2.  The device according to claim 1, wherein the varying device is further configured to modify the permutation in time.

3.  The device according to claim 2, wherein the varying is further configured to modify the per-mutation based on the original data.

4.  The device according to claim 3, wherein the permutating device includes a table in which subsequent permutations are stored.

As to the appealed claims 2-4, the Federal Circuit reversed, stating:

"Rather than being merely directed to the abstract idea of data manipulation, these claims are directed to an improved check data generating device that enables a data transmission error detection system to detect a specific type of error that prior art systems could not.

In data transmission systems, it is common to generate something called “check data” to check whether data was accurately transmitted over a communications channel. Check data is generated based on the original data and thus serves as a shorthand representation of a particular block of data. By comparing the check data generated at both ends of the communication channel, error detection systems may be able to infer whether errors occurred during transmission. For example, if the check data from both ends match, the system infers that the content of the received data block is the same as what was transmitted and thus concludes that no errors occurred during transport.

But, as the ’662 patent recognizes, matching check data is not always a reliable indicator of accurate data transmissions. According to the patent, certain generating functions coincidentally produce the same check data for a corrupted data block and an uncorrupted data block. When this happens, the check data is functionally defective, because the system will mistakenly believe that there were no errors in the data transmission. The problem of defective check data is aggravated for a particular type of persistent error, i.e., “systematic error,” that repeats across data blocks in the same way.

According to the ’662 patent, prior art error detection systems were unable to reliably detect systematic errors. Once the prior art system generated defective check data for an initial data block with a given systematic error, the system would continue to generate defective check data for subsequent data blocks with the same systematic error, thus allowing these types of errors to persist in the system.

The ’662 patent solves this problem by varying the way check data is generated by varying the permutation applied to different data blocks. Varying the permutation for each data block reduces the chances that the same systematic error will produce the same defective check data across different data blocks. Claims 2–4 thus replace the prior art check data generator with an improved, dynamic check data generator that enables increased detection of systematic errors that recur across a series of transmitted data blocks.

As with other claims we have found to be patent eligible in prior cases, the appealed claims represent a nonabstract improvement in the functionality of an existing technological process and not simply an abstract idea of manipulating data. Accordingly, we reverse the district court’s grant of Appellees’ Rule 12(c) motion that claims 2–4 are ineligible on the pleadings."

Copyright © 2019 Robert Moll. All rights reserved.

Federal Circuit - Intellectual Ventures v. Trend Micro - Attorney Fees Awards, 35 USC § 285

In Intellectual Ventures v. Trend Micro, the Federal Circuit remanded a case to the district court to reconsider Trend Micro's attorney fees award under the proper legal standard.

Under 35 USC § 285, a court may award attorney fees to the prevailing party in "an exceptional case." An exceptional case stands out from others with respect to the (1) strength of a party’s litigating position (considering the law and facts) or (2) unreasonable manner in which the case was litigated.

Intellectual Ventures (IV) sued Trend Micro and Symantec for infringement of US patents, including US Patent No. 6,460,050, related to filtering data files (e.g., email messages).

The Symantec action proceeded first. During the claim construction and throughout pretrial IV's expert opined the "characteristic" of documents in claims should be interpreted as including "bulk email." After the court adopted the expert's opinion, the expert changed his opinion after he talked to IV's attorneys.

After the Symantec trial was complete, Trend Micro moved for clarification on claim construction and the IV attorney argued the expert's opinion had not changed. Trend Micro then moved for attorney fees due to the expert's changed opinion. The district court granted attorney fees of $444,051. It didn't appreciate the expert's last minute change and the attorney arguing nothing had changed.

The Federal Circuit vacated the attorney award stating the court must determine whether the case overall is exceptional not whether an isolated action is exceptional. Notably, the district court granted attorney fees, but conceded IV's case was not overall unreasonable. The district court relied on the circumstances surrounding the changed expert's opinion alone.

I agree that isolated mistakes must be viewed within the totality of the circumstances. Experts may change opinions and attorneys misstate their position, but the court must consider whether the overall case and manner of litigation is reasonable before granting attorney fees. Otherwise, it encourages parties to seek attorney fees for isolated acts that are "exceptional" with respect to the overall case.

Copyright © 2019 Robert Moll. All rights reserved.

Supreme Court - Applicant Not Obligated to Pay USPTO under 35 USC §145

If an applicant cannot convince the USPTO (i.e., PTAB) to grant a US patent, it can appeal the adverse decision to the Federal Circuit (35 USC §141) or file a lawsuit against the USPTO director in the US district court for the Eastern District of Virginia (35 USC §145). However, because a §145 lawsuit permits discovery, experts reports, and motions, it can be very expensive for both parties.

In Peter v. NantKwest, the US Supreme Court held that an applicant is not obligated to pay the USPTO legal personnel (e.g., attorneys and paralegals) under §145.

See the opinion for all the reasons for this holding, but some of the reasons were (1) the term “expenses” alone has never authorized an award of attorney fees to overcome the American Rule (each litigant pays his own attorney fees), (2) the term “all” in §145 cannot transform “expenses” to reach an outlay it wouldn't otherwise include, and (3) Congress has distinguished “expenses” and “attorney’s fees” in the past. Finally, history didn’t seem to help the USPTO as it was the first request for attorney fees in the 170-year history of §145.

Not a case likely to reach many, but it may help applicants faced with an adverse PTAB decision when the benefit outweighs the increased cost of your attorney fees for the lawsuit over an appeal to the Federal Circuit.

Copyright © 2019 Robert Moll. All rights reserved.