Supreme Court - Thyrv, Inc. v. Click-to-Call Technologies, LP - No Appeal from PTAB's One Year Time Bar Decision on IPR

In Thyrv, Inc. v. Click-to-Call Technologies, LP, the Supreme Court held that a Patent Trial and Appeal Board (PTAB) determination on whether a petition is filed timely for inter partes review (IPR) is not appealable.

As background, an IPR permits a petitioner to request the review the validity of claims in view of written prior art. To institute the review, PTAB must find that the petitioner is likely to succeed with respect to at least one claim and the petition was timely filed (within one year of service of an infringement complaint).

In other words, the Supreme Court states 35 USC § 314(a) permits the patent owner no appeal to the Federal Circuit from an incorrect PTAB decision that a petition was timely filed as required in 35 USC § 315(b). Note in this case the infringement complaint (dismissed without prejudice) was filed 12 years before the IPR petition!

Thus, a patent owner must make every effort to win on the merits of the institution decision and the untimeliness of the petition before PTAB. On the other hand, if the IPR is instituted, the patent owner can still appeal a final decision of invalidity to the Federal Circuit.

Copyright © 2020 Robert Moll. All rights reserved.

Supreme Court - Federal Government Can't Challenge Patent Validity in US Patent Office

In Return Mail v. U.S. Postal Service, the Supreme Court held the Federal Government cannot file petitions for inter partes review, post grant review, and covered business methods at the Patent Trial & Appeal Board (PTAB) under the American Invents Acts because the AIA statute does not define the term "person," a presumption arises a federal agency is not a "person" and the U.S. Postal Service failed to rebut that presumption.

Justice Breyer, joined by justices Ginsberg and Kagan, unsuccessfully argued legislative history, among other things, demonstrated Congress intends "person" to include Federal Agencies.

Due to the low volume of Government petitions for AIA trials (less than 20 petitions in 8 years) I don't expect this decision to impact many in the future, but it is favorable to patent owners given the invalidation risk at PTAB.

Copyright © 2019 Robert Moll. All rights reserved.

Supreme Court - Helsinn Healthcare S.A. v. Teva Pharmaceutical USA, Inc. - Secret Commercial Sales of Invention Can Bar Patent

In Helsinn Healthcare v. Teva Pharmaceutical, the United States Supreme Court held that a commercial sale to a third party who is required to keep the invention confidential may place the invention "on sale" under the American Invents Act.

Justice Thomas speaking for a unanimous Court stated that the "America Invents Act (AIA) bars a person from receiving a patent on an invention that was 'in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.' 35 U. S. C. §102(a)(1). This case requires us to decide whether the sale of an invention to a third party who is contractually obligated to keep the invention confidential places the invention 'on sale' within the meaning of §102(a)."

"More than 20 years ago, this Court determined that an invention was 'on sale' within the meaning of an earlier version of §102(a) when it was 'the subject of a commercial offer for sale' and 'ready for patenting.' Pfaff v. Wells Electronics, Inc., 525 U. S. 55, 67 (1998). We did not further require that the sale make the details of the invention available to the public. In light of this earlier construction, we determine that the reenactment of the phrase 'on sale' in the AIA did not alter this meaning. Accordingly, a commercial sale to a third party who is required to keep the invention confidential may place the invention 'on sale' under the AIA."

For additional commentary see Professor Ronald Mann's Opinion analysis: Justices affirm ruling that secret sales of invention bar later patent and my post America Invents Act - On Sale Bar, 35 USC 102.

Copyright © 2019 Robert Moll. All rights reserved.

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.

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.

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.

Supreme Court - WesternGeco LLC v. ION Geophysical Corp. - International Damages

On January 12, 2018, the U.S. Supreme Court granted a petition for certiorari in WesternGeco LLC v. ION Geophysical Corp.

The issue to be considered is whether the Federal Circuit erred in holding that lost profits arising from prohibited combinations occurring outside of the United States are categorically unavailable in cases in which patent infringement is proven under 35 U.S.C. § 271(f).

As a reminder, 35 U.S.C. § 271(f) states "Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer."

Copyright © 2018 Robert Moll. All rights reserved.

Supreme Court - Impression Products, Inc. v. Lexmark International, Inc. - Patent Exhaustion

In Impression Products, Inc. v. Lexmark International, Inc., the US Supreme Court held that a patent owner's authorized sale exhausts all patent rights.

As the Court stated when a patent owner chooses to sell an item, that product is no longer within the limits of the monopoly and instead becomes the private, individual property of the purchaser with the rights and benefits that come along with ownership. A patent owner is free to set the price and negotiate contracts with purchasers but may not by virtue of his patent control the use or disposition of the product after ownership passes to the purchaser. The sale terminates all patent rights to that item.

Copyright © 2017 Robert Moll. All rights reserved.

Supreme Court - SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC - Laches

In SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, the US Supreme Court held that laches-- unreasonable delay plus prejudice-- cannot be raised as a defense against a claim for damages brought within the six-year limitations period of 35 USC 286, which provides "no recovery shall be had for any infringement committed more than six years prior to the filing of the complaint or counterclaim for infringement in the action."

Copyright © 2017 Robert Moll. All rights reserved.

Professor Janicke - Patent Venue: Half Christmas Pie, And Half Crow

Professor Janicke's Patent Venue: Half Christmas Pie, And Half Crow gives a nice summary of how patent venue works after the US Supreme Court's decision in TC Heartland LLC v. Kraft Foods Group Brands. 

Copyright © 2017 Robert Moll. All rights reserved.

IP Watchdog: What Mattered in 2017: Industry Insiders Reflect Biggest Moments in IP

IP Watchdog: What Mattered in 2017: Industry Insiders Reflect Biggest Moments in IP does a nice job of using industry experts to highlight the key events in patent law in 2017.

Copyright © 2017 Robert Moll. All rights reserved.

Supreme Court - Oil States Energy Services, LLC v. Greene’s Energy Group, LLC - Oral Arguments Today

Today, the US Supreme Court heard the parties oral arguments: Oil States Energy Services, LLC v. Greene’s Energy Group, LLC.

Copyright © 2017 Robert Moll. All rights reserved.

Professor Epstein - Patent Respect

In Patent Respect, Professor Richard Epstein continues to discuss Oil States Energy Services, LLC v. Greene's Energy Group LLC, which will be heard by the Supreme Court on November 27. Again, some persuasive arguments by a smart professor who is a leading expert on property law for decades. This case considers question of whether inter partes review by the USPTO to analyze the validity of patents violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury. If the Supreme Court rules inter partes review is held unconstitutional in Oil States, it should benefit many small entity patent owners.

Copyright © 2017 Robert Moll. All rights reserved.

Joe Mullin - Supreme Court Won't Hear Apple v. Samsung Round Two

In Supreme Court Won't Hear Apple v. Samsung Round Two, Joe Mullin reports that the US Supreme Court has left in place Apple's damage award of $120 million for Samsung's infringement of US Patent No. 8,074,172 (auto correction), US Patent No. 5946647 (quick links), and US Patent No. 8,046,721 (slide-to-unlock).

For background details on this lengthy battle see the Supreme Court of United States blog: Samsung Electronics, Ltd. v. Apple, Inc. 

Copyright © 2017 Robert Moll. All rights reserved.

Professor Richard Epstein - The Supreme Court Tackles Patent Reform

In The Supreme Court Tackles Patent Reform, NYU Professor Richard Epstein discusses the Oil States case currently being reviewed by the U.S. Supreme Court and raises some interesting constitutional arguments against AIA inter partes review (IPR).

Because IPRs have been effective at invalidating U.S. patents based on written prior art, the article is worth reading whether you do or don't like patents. I agree the case could be significant. As Professor Epstein states in the article, "Oil States Energy Services, LLC v. Greene’s Energy Group, LLC is the most important intellectual property case to come before the Supreme Court in many years. It challenges some of the innovative dispute resolution provisions of the 2011 American Invents Act (AIA) the most significant legislative reform of patent law since the Patent Act of 1952. Oil States assumes its vast significance because its outcome will determine, perhaps for decades, the litigation framework for all future patent disputes."

Copyright © 2017 Robert Moll. All rights reserved.

US Supreme Court - Life Technologies v. Promega - Supplying a Single Component Abroad Doesn't Infringe US Patent Under 35 USC 271(f)(1)

In Life Technologies Corp. v. Promega Corp., the U.S. Supreme Court held supplying a single component abroad for manufacture of a product with multiple components does not infringe a U.S. patent under 35 U.S.C. 271(f)(1). This reverses the Federal Circuit decision, and disagrees with the qualitative argument that a single component can be a "substantial portion" of the components supplied resulting in infringement.

For details and an insightful analysis by Professor John Duffy see SCOTUS Blog.

Copyright © 2017 Robert Moll. All rights reserved.

US Supreme Court - Apple v. Samsung - Reverses Apple's Award of $399M for Infringement of Apple's Design Patents

In Samsung Electronics Co. Ltd. v. Apple Inc., the US Supreme Court reversed the Federal Circuit's $399 million award to Apple for Samsung's infringement of Apple's design patents.

As background a design patent is limited to "any new, original and ornamental design for an article of manufacture." 35 USC 171. A design patent seeks to protect appearance. When infringement occurs a design patent holder may elect infringer's profits as a remedy. This is sought when profits exceed a reasonable royalty. US patent law states one who "applies the patented design ... to any article of manufacture ... shall be liable to the owner to the extent of his total profit ... but the owner shall not twice recover the profit made from the infringement." 35 USC 289.

Before the Federal Circuit Samsung had argued Apple's design patent applied to the case, while Apple argued it applied to the entire phone. The Federal Circuit agreed the "article of manufacture” was the entire phone, which, of course, includes hardware and software having considerable value.

Based on Samsung's petition for certiorari the Supreme Court agreed to consider the question: Where a design patent is applied to only a component of a product, should an award of infringer's profits be limited to those profits attributable to the component?

Before the Supreme Court Samsung argued the Federal Circuit held a district court need not exclude unprotected functional features from a design patent's protected ornamental scope and a design-patent holder is entitled to an infringer's entire profits from sales of any product found to contain a patented design without regard to the design's contribution to that product's value or sales, resulting in an award in profits far beyond the value of any inventive contribution.

The Supreme Court was persuaded and held Apple’s patented design applied to the case rather than the entire phone and more broadly stated the "article of manufacturer" may mean not the end product (i.e., phone) sold to consumers but a component of the end product.

The Supreme Court's decision to reverse an award based on Samsung's profit on its entire phone makes sense because to hold otherwise ignores the value of the hardware/software. What's missing in this decision, however, is guidance on how to determine the value of the case. I think the court should determine that value in light of the fact people give importance to how a smartphone looks, which of course is why more than Apple chose to go with the patented design.

Also see my related post: Supreme Court - Apple v. Samsung - SCOTUS Blog - Justices cautious about resolving Samsung-Apple dispute over design of cell phones.

Copyright © 2016 Robert Moll. All rights reserved.

Supreme Court - Apple v. Samsung - SCOTUS Blog - Justices cautious about resolving Samsung-Apple dispute over design of cell phones

Professor Ronald Mann's blog post Justices cautious about resolving Samsung-Apple dispute over design of cell phones indicates the Supreme Court was unsettled at the oral hearing on the legal standard to apply to the $400 million damages awarded for Samsung's infringement of Apple's design patents.

The case turns on the proper interpretation of 35 USC 289 stating: "whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design ... to any article of manufacture for the purpose of sale, or (2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit ...."

As Professor Mann stated: "The issue is whether the 'article of manufacture' to which the infringing design feature has been applied is the cell phone itself (as the court of appeals concluded) or some difficult-to-specify subsidiary portion of the phone, perhaps the case or exterior."

The Federal Circuit previously decided the article of manufacture is Samsung's phone, but all at the Supreme court hearing seem to agree it's too much to conclude "the article of manufacture" for calculating profits is the entire phone. We have the infringement of design patents that show the exterior screen and case. Should that infringement include the value of thousand of features in the software/hardware inside? I don't think so but it is also important to consider what drove the sale. I think just talking about how much physical structure is shown in the design patent misses this. Whatever way you come out, I think design patent damages is important to fairly resolve in an environment where injunctive relief is not awarded even when a competitor appears to have applied design patent to its product.

Copyright © 2016 Robert Moll. All rights reserved.

Stanford Technology Law Review - Octane Fitness: The Shifting of Patent Attorneys' Fees Moves Into High Gear

Scott Flanz's article Octane Fitness: The Shifting of Patent Attorneys' Fees Moves Into High Gear published in the Stanford Technology Law Review is worth reading.

Here is the abstract:

"In 2014, the United States Supreme Court decided Octane Fitness. LLC v. ICON Health Fitness, LLC, significantly altering the standard for granting attorneys' fees shifting at the close of a patent litigation. Combine with precedent announced on the same day in Highmark Inc. v. Allcare Health Management Systems, scholars have opined that under the new regime, the standard for proving entitlement to attorneys’ fees in patent litigations will be considerably relaxed. Despite the widespread acceptance of the viewpoint, few empirical analyses—if any—have objectively confirmed it.

This paper provides a first glimpse into whether the Supreme Court’s decision in Octane changed the attorneys’ fees standard in practice. By investigating the rate at which courts have granted attorneys’ fees motions before and after Octane, broken down by whether the movant was a patentee or accused infringer, the technology of the patent asserted, the circuit and district where the suit was decided, and what factors were considered by each court in its opinion, this research confirms that Octane’s reinterpretation of § 285 has had observable effects. In particular, this study finds a statistically significant increase in the rate of attorneys’ fee shifting after Octane, particularly for motions filed by accused infringers and in motions concerning electronics and software patents. The results of this study shed light on meaningful and recent changes to the patent litigation incentive structure and will be helpful in predicting future changes to the patent litigation landscape."

Copyright © 2016 Robert Moll. All rights reserved.

Supreme Court - Halo Electronics, Inc. v. Pulse Electronics, Inc.- Test for Enhanced Damages

If a district court holds you infringe a patent, just how much are you liable to pay?

35 USC 284 provides a court shall award damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court. But a court may increase the damages up to three times the amount found or assessed.

Sounds simple but it has been difficult to get enhanced damages since the In re Seagate decision held that a patent owner must show by clear and convincing evidence: (1) the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent; and (2) the risk of infringement was known or so obvious that it should have been known to the accused infringer.

Part of the reason enhanced damages were rarely awarded is the Federal Circuit required clear and convincing evidence. Another was the Federal Circuit stated objective recklessness would not be found if the infringer raises a substantial question as to the validity or non-infringement during the litigation even when the defendant was unaware of the defense while infringing. It could be argued Seagate encouraged "efficient infringement" based on the idea if and when the patent owner comes after me us we will hire smart lawyers to come up with a reasonable defense to avoid payment of more than a reasonable royalty.

In Halo Electronics, Inc. v. Pulse Electronics, Inc., the Supreme Court rejected the Seagate test entirely stating the substantive requirement for “objective recklessness” and the “clear and convincing” burden of proof were inconsistent with 35 USC 284. But again left general guidance at best. When can you expect to get more than a reasonable royalty? I would say when the court sees the defendant is not just an infringer but a "pirate." You know the kind of guy everyone hates more than a patent troll. As the Supreme Court stated awards of enhanced damages under the Patent Act over the past 180 years establish that they are not to be meted out in a typical infringement case, but are instead designed as a 'punitive' or 'vindictive' sanction for egregious infringement behavior. The sort of conduct warranting enhanced damages has been variously described in our cases as willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, indeed—characteristic of a pirate. So District courts enjoy more flexibility than the Seagate test permitted but still enhanced damages will be generally appropriate under §284 only in egregious cases.

Copyright © 2016 Robert Moll. All rights reserved.