Professor Sichelman - The Vonage Triology: A Case Study in "Patent Bullying"

University of San Diego Law Professor Ted Sichelman published an interesting article The Vonage Trilogy: A Case Study in "Patent Bullying" on February 18, 2014.

Professor Sichelman tells us "patent bullies are large, established operating companies that threaten or institute costly patent infringement actions of dubious merit against smaller companies, usually in order to suppress competition or garner licensing fees." 

Professor Sichelman states "patent bullies have scarcely been discussed in the academic literature or popular press, especially in recent years."

Professor Sichelman examines Sprint, Verizon and AT&T patent infringement suits against Vonage, a startup providing Internet telephone services. Yes, whatever happened to Vonage? The article says the patent infringement suits sank Vonage. How many startups are hampered not by patent trolls but by the incumbents' patents? We should figure this out, because incumbents patent portfolios may not just capture innovation, but generate a patent thicket for startups seeking to enter the marketplace. Congress should take a look at patent bullying -- is Vonage an isolated instance or an all too frequent occurrence? 

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - Prioritized Examination

USPTO prioritized examination enables an applicant to get a final decision on patentability of an application within 12 months.

Prioritized examination can be made for original applications (Track One) and for a request for continued examination (RCE).

The USPTO fees for prioritized examination are $1,000 for a micro entity, $2,000 for a small entity, and $4,000 for a large entity. Legal fees are typically small, because the request form is easy to complete and more importantly requires no pre-filing search.

Although prioritized examination limits requests to applications with no more than four independent claims and 30 total claims, most US patent applications fit within the limits.

In a backlogged field such as software where delays in initial examination can stretch over years, prioritized examination can result in competitive advantage.

Caveats: if the invention lacks patentability, prioritized examination will rapidly inform of the unhappy news, which may not be consistent with a wish to merely report "I have a patent pending." It also will front-load the prosecution fees.

See USPTO Prioritized Patent Examination Program for the request form, a quick guide, the final rules for prioritized examination, and some FAQs.

Also see the USPTO Notice Changes to Permit Delayed Submission of Certain Requirements for Prioritized Examination.

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - Java 8 May Cause EFS-Web and Private PAIR Authentication Issues

The USPTO has alerted the community that Oracle's first version of Java 8 may cause authentication issues for users of Private PAIR and EFS-Web.  If Java 8 is an issue, the USPTO says revert to Java 7 update 51.

Here's the USPTO notice that arrived late last night:

"Oracle has announced that the first version of Java 8 will be released on Tuesday, March 18, 2014. This version will not be an automatic update, however if you install Java 8 and encounter authentication issues, you will need to revert to Java 7 Update 51.

USPTO technical teams are coordinating closely with Oracle and Entrust for a solution.

Contact the Patent EBC at 1-866-217-9197 (toll-free) or ebc@uspto.gov if you need further assistance."

Copyright © 2014 Robert Moll. All rights reserved.

Federal Circuit - Verderi v. Google - District Court's Claim Construction Error Vacates Non-Infringement Judgment

In Verderi, LLC v. Google, Inc., the Federal Circuit vacated a judgment of non-infringement of four U.S. patents owned by Verderi, LLC because the district court erred in claim construction.

On October 15, 2010, Vederi LLC sued Google alleging Google Street View infringed U.S. Patent No. 7,239,760, U.S. Patent No. 7,577,316, U.S. Patent No. 7,805,025, and U.S. Patent No. 7,813,596 describe methods for creating synthesized images of a geographic area that can be displayed on a computer.

As background, Google Street View produces images and view that are curved or spherical, and never flat because it combines images of a wide range of views recorded by multiple cameras having wide-angle lenses mounted on a moving vehicle. Those photographs are overlapping pictures taken from a single location at approximately the same time. These images are stitched together into a virtual spherical composite image. The resulting image is a two-dimensional representation of a spherical shape.

Claim 1 of the '760 patent is representative of the claims:

1. In a system including an image source and a user terminal having a screen and an input device, a method for enabling visual navigation of  geographic area from the user terminal, the method comprising:

• receiving a first user input specifying a first location in the geographic area;
• retrieving from the image source a first image associated with the first location, the image source providing a plurality of images depicting views of objects in the geographic area, the views being substantially elevations of the objects in the geographic area, wherein the images are associated with image frames acquired by an image recording device moving along a trajectory;
• receiving a second user input specifying a navigation direction relative to the first location in the geographic area;
• determining a second location based on the user specified navigation direction; and
• retrieving from the image source a second image associated with the second location (emphasis added).

In the Markman hearing, Google argued "views being substantially elevations of the objects" in claim 1 required "vertical flat (as opposed to curved or spherical) depictions of front or side views." Verderi stated that it merely meant "front and side views of the objects." The district court stated the patents "did not disclose anything about spherical views" and entered summary judgment in favor of Google.

The Federal Circuit stated when it interprets claims it relies primarily on intrinsic evidence: the claim language, the specification, and the prosecution history and apart from the claims, the specification is the single best guide to the meaning of a claim term. After considering the intrinsic evidence, a court may seek guidance from extrinsic evidence, but should understand it may be less reliable than intrinsic evidence (quotations and citation omitted).

The Federal Circuit noted that the district court erred by not relying the intrinsic evidence: (1) the claims broadly recited "substantially elevations," but the court adopted an architect's strict definition of an elevation view, which read "substantially" out of the claims; (2) Figure 16 of the patents depicted buildings with depth and perspective not just front and side, which is more than an elevation view; and (3) The specification described taking a photo with a fish-eye lens, which produces photos which are not flat and not an elevation. 

After reading the opinion, I think the specification was contrary to Google's "substantially elevations" = "flat images" argument at the Markman hearing so the decision was not surprising. On the other hand, using a relative term such as "substantially" in a claim is not risk free as it may raise an indefiniteness defense.

Copyright © 2014 Robert Moll. All rights reserved.

Supreme Court - Alice Corp. v. CLS Bank - Computer-Implemented Inventions Patent Eligibility, 35 USC 101 - 41 Amicus Briefs

As we approach the oral hearing in Alice Corp. v. CLS Bank, many companies are filing amicus briefs to influence the Supreme Court's views on patent eligibility of computer-implemented inventions. See the ABA Supreme Court Preview: 41 amicus briefs (3 briefs support petitioner, 16 support respondent, and 21 briefs favor neither party).

The question presented: "Whether claims to computer-implemented inventions-including claims to systems and machines, processes, and items of manufacture-are directed to patent-eligible subject matter within the meaning of 35 U.S.C. § 101 as interpreted by this Court?"

For additional information see Donald Chisum's Article - Patents on Computer-Implemented Methods and Systems and U.S. Supreme Court Grants Certiorari in Alice v. CLS Bank.

Copyright © 2014 Robert Moll. All rights reserved.

Juniper Networks v. Palo Alto Network Patent Suit Ends in Mistrial

This week Juniper Networks failed to convince a jury that Palo Alto Network's PA-500, PA-2000, PA-4000 and PA-5000 Series Firewalls infringe US Patent No. 7,779,459, US Patent No. 7,650,634, and US Patent No. 7,302,700.

For details see Juniper Networks not giving up firewall patent fight vs. Palo Alto Networks and Juniper vs. Palo Alto Networks: Firewall court battle set to begin 

Juniper claims Palo Alto firewalls are based on intellectual property (IP) that Juniper obtained when it paid $4 billion for Netscreen in 2004. Juniper claims Palo Alto knew all about this infringement given Nir Zuk now at Palo Alto, developed the firewalls with Yuming Mao, when they worked at Netscreen.

Professor Tanenbaum says firewalls are the I/O police that inspect data packets on computer networks. The data packets are routed to a "digital drawbridge." Data packets meeting requirements are forwarded into the "castle" and those that don't are "unceremoniously dumped in the moat." In short, firewalls keep the "good bits" (e.g., confidential information) inside the network and keep the "bad bits" (e.g., viruses, worms and other digital pests) outside of the network.

Juniper says Mr. Zuk was a key developer of the IP in question, so it's curious he is not a named inventor of the '459 patent or the '700 patent given US law requires naming all inventors, but the articles don't say much more to support an improper inventorship defense. Juniper might argue assignor estoppel bars that invalidity challenge, but Palo Alto should be able to file a petition for inter partes review to sidestep assignor estoppel.

Juniper immediately promised to refile this lawsuit, but what's the likelihood the jury will rule in favor of Juniper after a mistrial? It reminds me of a boxer immediately claiming a punch that landed didn't hurt. The larger the protest, the more it hurt. Not to say we know the mistrial stung Juniper, but its insistence it wants to keep go another round may suggest a bluffing boxer on the way out.

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - Guidance Memorandum on Subject Matter Eligibility of Claims Reciting or Involving Laws of Nature, Natural Phenomena, and Natural Products

On March 4, 2014, the USPTO published a memorandum, Guidances for Determining Subject Matter Eligibility of Claims Reciting Or Involving Laws of Nature, Natural Phenomena, and/or Natural Products.

As stated in the memorandum "the new procedure set forth in the Guidance will assist examiners in determining whether a claim reflects a significant difference from what exists in nature and thus is eligible, or whether a claim is effectively drawn to something that is naturally occurring, like the claims found ineligible by the Supreme Court in Myriad."

As some commentators have pointed out the US Supreme Court is not the origin of the "significant difference test," but as a practical matter I expect many applicants in the chemical and biotech industries will be required to show how the claims are significantly different than the judicial exceptions to persuade examiners that the claims are patent eligible under 35 USC 101.

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - Public Hearings on Proposed Attributable Ownership Rules

The USPTO will hold public hearings to get input on the proposed attributable ownership rules on March 13 and 26, 2014. The USPTO is apparently addressing the criticism regarding the lack of public input and the likely impact of these proposed rules. Losing a valid patent due to someone missing a change in ownership is draconian even if you have the right to petition against that result. It will be interesting to see if the USPTO modifies the rules in response as they appear likely to raise patent prosecution costs and may result in loss of patent rights for what will be in many cases an inadvertent mistake.

Here's the USPTO notice:

"The public is invited to attend the hearings in person or via Webcast. Additionally, the public is invited to give testimony in person at the hearings and/or to submit written comments about the proposed rules. The deadline for requesting to give testimony has been extended to Wednesday, March 12, 2014, and the deadline for submitting written comments has been extended until Thursday, April 24, 2014.

The attributable ownership proposed rules require that the attributable owner, including the ultimate parent entity, be identified during the pendency of a patent application and at specified times during the life of a patent. More details about the attributable ownership proposed rules are available here:

Hearing Thursday, March 13, 2014, from 1 to 4 p.m. (ET)

USPTO Madison Auditorium North, Concourse Level

Madison Building

600 Dulany Street

Alexandria, VA 22314

Webcast Access Information:

Event number: 990 499 952

Event password: 12345"

Event address for attendees:

https://uspto-events.webex.com/uspto-events/onstage/g.php?t=a&d=990499952

Hearing Wednesday, March 26, 2014, from 9 a.m. until noon (PT)

UC Hastings College of the Law

Louis B. Mayer Lounge

198 McAllister Street

San Francisco, CA 94102

LiveStream Access Information:

https://new.livestream.com/uspto/usptopublichearing

Draft agendas are available here:

Alexandria: http://www.uspto.gov/patents/init_events/ao_agenda_alexandria_3-13-2014.pdf
San Francisco: http://www.uspto.gov/patents/init_events/ao_agenda_san_francisco_3-26-2014.pdf"

Copyright © 2014 Robert Moll. All rights reserved.

Stanford Technology Law Review - Design Patents in the Modern World

Design patents have become an important topic in US patent law. Formerly viewed as the "weak sister" of utility patents, the large damage awards in design patent infringement cases such as Apple v. Samsung have a way of changing everybody's mind.

Today, Ms. Anna Sallstrom, Editor in Chief, Stanford Technology Law Review, sent an email that the Stanford Technology Law Review has published the presentations given in Design Patents in the Modern World conference held at Stanford Law School in 2013:

Progress and Competition in Design
by Mark McKenna & Katherine Strandburg

Functionality and Graphical User Interface Design Patents
by Michael Risch

Virtual Designs
by  Jason Du Mont & Mark Janis

(R)evolution in Design Patentable Subject Matter: The Shifting Meaning of “Article of Manufacture”
by Andrew Torrance & William Seymour

A Rational System of Design Patent Remedies
by Mark Lemley

Overlapping Intellectual Property Doctrines: Election of Rights Versus Selection of Remedies
by Laura Heymann

Design Patents: Law Without Design
by Peter Lee & Madhavi Sunder

Moving Beyond the Standard Criticisms of Design Patents
by Sarah Burstein

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - Third Party or Preissuance Submissions

Congress sometimes establishes laws that in theory should be helpful but for a variety of reasons fail to get much use such as the preissuance submission provision of the America Invents Act (AIA).

Preissuance submissions became available about a year and half ago. They allow a third party to submit prior art in a patent application.  

The USPTO received 1,414 preissuance submissions as of January 17, 2014. Note this is a fraction given the USPTO Patent Dashboard states 600,053 applications are in the unexamined backlog as of January 2014. In any event, the largest number of submissions were filed in Technology Center (TC) 1700, which relates to mechanical engineering. Surprisingly, the fewest were filed in TC 2400, which relates to electrical engineering.

The remainder of this article is from the USPTO:

"Figure 1 below shows the distribution of submissions across technology centers.

Figure 1

Proper Preissuance Submissions
Most third-party submissions received as of January 17, 2014, have met the eligibility requirements and been categorized by the Office as proper.  Figure 2 below shows the percentage of proper and improper submissions, and Figure 3 below shows the proper submissions categorized by technology areas.  The most common reasons for non-compliance relate to a failure to meet the timing, concise description of relevance, and signature requirements.  Statistics show, however, that the number of improper submissions is leveling off, and in turn, that the number of proper submissions is rapidly increasing.

Figure 2

Figure 3

Distribution of Documents in Proper Preissuance Submissions
In the total number of proper preissuance submissions received as of January 17, 2014, the public presented 3,339 documents for consideration by the Office.  Figure 4 below shows the submitted documents categorized by type.

Figure 4

Third-Party Submission Usage by Examiners
When the Office receives a compliant preissuance submission in a particular application, the examiner must consider the submission as a matter of course.  For the submissions made as of January 17, 2014, examiners have relied upon the prior art contained in them to make a rejection in 12.50% of the impacted applications.  Figure 5 below depicts all the applications where a rejection issued after a proper submission was received.  Additionally, in the applications where rejections were made based upon the art contained in a preissuance submission, the examiner rejected 50% of the time for obviousness under 35 U.S.C. 103; 18% of the time for anticipation under 35 U.S.C. 102; and the remainder of the time for both obviousness and anticipation.  Figure 6 below features the applications having rejections using third-party submissions broken down by the type of rejection under the statute.  Lastly, with respect to the type of rejection made after receipt of a proper third-party submission, most were First Actions on the Merits followed by Final Rejections.

Figure 5

Figure 6

Crowdsourcing

The public has shown interest in locating potential prior art for submission to the Office by utilizing crowdsourcing Web sites, such as Ask Patents by Stack Exchange.  Indeed, members of the public have been posting requests for prior art in published applications on these sites.  The Office feels confident that the number of proper third-party submissions will continue to increase as users become more familiar with the ability to make such submissions as well as the resources available to locate prior art such as crowdsourcing.  The Office will continue to monitor the number third-party submissions and periodically update statistics on these filings."

The USPTO did a decent job showing what is happening with preissuance submissions, but what is missing is a graph that shows if the rate of filing preissuance submissions is increasing over the last year and a half. Without this it is hard to share the USPTO's confidence submission will increase. I have felt the risk is you give up your prior art in an ex parte environment, which will not allow you to participate, plus alert the application owner that "somebody cares" which may lead to the application owner filing one or more continuations which could cause problems down the road.

See my related post: Third Party Preissuance Submissions of Prior Art

Copyright © 2014 Robert Moll. All rights reserved.

Supreme Court - Award of Attorney Fees, 35 USC 285 - Professor Mann's Article on Octane Fitness and Highmark Hearings

Today, the award of attorneys fees is a hot issue in patent law. 35 USC 285 states that "the court in exceptional cases may award attorney fees to the prevailing party," but courts rarely award attorneys under 35 USC 285. Thus, some corporations are lobbying Congress to redefine that standard to increase the risk of paying "humongous" attorney fees to cut off patent licensing / troll activities.

Redefining the standard may just generate uncertainty and not help long term. Another approach is to wait for the Supreme Court to clarify the standard. Last week the Supreme Court conducted hearings to consider the substantive standard for awarding attorney fees in Octane Fitness and the standard of review for appeals in Highmark.

I started to read through the Supreme Court hearing transcripts this weekend, but found a nice argument recap by Columbia law professor Ronald Mann Justices hard to read in twin disputes about attorney's fees in patent litigation, which can help one navigate where we are going in this area of the law.

Copyright © 2014 Robert Moll. All rights reserved.

PTAB - Administrative Patent Judges Message on Patent Owner's Preliminary Response in an Inter Partes Review

Administrative Patent Judges Sheridan Snedden and Jacqueline Bonilla had the following message on the America Invents Act web page regarding patent owner's preliminary response in an inter partes review proceedings before the Patent Trial and Appeal Board (PTAB):

"Inter partes review (IPR) proceeding provides an opportunity to challenge the patentability of claims in an issued patent for anticipation or obviousness under 35 U.S.C. §§ 102 and 103, respectively, based on prior art patents or printed publications.  An IPR proceeding is conducted before the Patent Trial and Appeal Board and is divided into two stages:  (i) a preliminary stage; and (ii) a trial stage.  The preliminary stage begins with the filing of a petition to institute a trial.  To proceed to the trial stage, a petition must demonstrate that there is a reasonable likelihood that the petitioner would prevail as to at least one of the challenged claims.  A patent owner has a waivable right to file a preliminary response to the petition setting forth reasons why trial should not be instituted.  The preliminary stage ends with a decision from the Board on whether to institute a trial.

A preliminary response provides a patent owner with an opportunity to be heard before the Board decides whether to institute trial.  If the petition does not meet the standard set for instituting a trial, the petition will be denied, regardless of a preliminary response.  That said, a preliminary response may help the Board when deciding whether to institute a trial.  To provide the most benefit, a preliminary response should identify clear procedural and substantive reasons why the petition should be denied.  To follow is a discussion of potential arguments that a patent owner might raise in a preliminary response, if appropriate, to help the Board’s consideration.

Petitioner Is Statutorily Barred from Pursuing an IPR

A preliminary response may challenge the standing of a petitioner under 35 U.S.C. 315.

Under 35 U.S.C. 315(a)(1), a patent owner may provide evidence that the petitioner filed a civil action challenging the validity of a claim of the patent, e.g., in a declaratory judgment action in district court, prior to filing the petition.  Such action by the petitioner bars the institution of an IPR under 35 U.S.C. § 315(a)(1).  Board decisions providing guidance on the application of § 315(a)(1) include the following:

• Anova Food, LLC v. Sandau, IPR2013-00114, Paper No. 17 (PTAB) (a civil action for a declaratory judgment dismissed with prejudice filed by a predecessor-in-interest to the petitioner bars an IPR under § 315(a)(1)).
• Cyanotech Corporation v. The Board Of Trustees of the University of Illinois, IPR2013-00401, Paper No. 30 (PTAB) (a civil action involuntarily dismissed without prejudice does not bar an IPR under § 315(a)(1)).
• Clio v. The Procter and Gamble Co., IPR2013-00438, Paper No. 9 (PTAB) (a civil action voluntarily dismissed without prejudice does not bar an IPR under § 315(a)(1)).
• Ariosa Diagnostics v. Isis Innovation Ltd., IPR2012-00022, Paper No. 24 (PTAB) (a civil action for a declaratory judgment of non-infringement is not a civil action challenging the validity of a patent barring an IPR under § 315(a)(1)).

Alternatively, a patent owner may provide evidence that the petitioner is barred from challenging the patent owner’s claims under 35 U.S.C. § 315(b).  As outlined in § 315(b), the Board may not institute an IPR if the petition was filed more than one year after the petitioner, real party in interest, or a privy, was served with an infringement complaint.  Board decisions providing guidance on the application of § 315(b) include the following:

• Macauto U.S.A. v. BOS GmbH & KG, IPR2012-00004, Paper No. 18 (PTAB) (a dismissal without prejudice nullifies the effect of service for purposes of § 315(b)).
• St. Jude Medical, Cardiology Division, Inc. v. Volcano Corp., IPR2013-00258, Paper No. 29 (PTAB) (a counterclaim is a “complaint alleging infringement of the patent” within the meaning of § 315(b)).
• Accord Healthcare v. Eli Lilly and Co., IPR2013-00356, Paper No. 13 (PTAB) (service of a second complaint does not nullify the effect of a first served complaint for purposes of § 315(b)).
• BioDelivery Sciences Int’l, Inc. v. MonoSol RX, LLC, IPR2013-00315, Paper No. 31 (PTAB) (challenged claims amended by a reexamination certificate issued after service of the complaint does not affect the “date on which the petitioner . . . is served with a complaint alleging infringement of the patent” under § 315(b)). 

Highlight Weaknesses in Petitioner’s Case of Unpatentability

The Board may not authorize a trial where the information presented in the petition fails to meet the requisite standard for instituting a trial—that is, fails to establish a reasonable likelihood that the petitioner would prevail with respect to at least one of the challenged claim.  35 U.S.C. § 314(a).  Thus, it is helpful to the Board if a preliminary response explains carefully the weakest parts of petitioner’s unpatentability positions.  For example, the preliminary response may include a detailed discussion or technical analysis relating to:

• How any asserted references are not, in fact, prior art;
• How asserted references lack at least one material limitation in one or more challenged claims; or
• How an asserted reference teaches away from a combination of elements, as advocated by petitioner.  See, e.g., Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., IPR2013-00132, Paper No. 9 (PTAB). 

Petitioner’s Claim Construction is Improper

In an IPR proceeding, the Board construes claim terms according to their broadest reasonable construction in light of the specification of the patent in which they appear.  37 C.F.R. § 42.100(b); Office Patent Trial Practice Guide (“Trial Practice Guide”), 77 Fed. Reg. 48756, 48766 (Aug. 14, 2012).  Using this standard, a preliminary response may help the Board by carefully explaining claim construction positions.  The patent owner may wish to point to the specification, dictionary definitions, as well as logic in relation to the claims as a whole, to support a conclusion that petitioner’s claim construction is, for example, unreasonably broad.  In interpreting claims, however, one must take care to note the fine line between interpreting claims in light of the specification and improperly reading limitations into the claims from the specification.  Absent claim language carrying a clear narrow meaning, the Board will not limit a claim based on the specification unless it expressly disclaims the broader definition.  See, e.g., Ariosa Diagnostics, Inc. v. Verinata Health, Inc., IPR2013-00277, Paper No. 10 (PTAB).

Petition Contains Prior Art or Arguments Were Previously Presented to the Office.

Under 35 U.S.C. § 325(d), a preliminary response may wish to address whether the same or substantially the same prior art and arguments were previously presented to the Office.  Board decisions providing guidance on the application of § 325(d) include the following:

• SAS Institute, Inc. v. Complementsoft, LLC, IPR2013-00581, Paper No. 15 (PTAB) (denying a petition as to grounds based upon substantially the same prior art and arguments as set forth in a prior IPR petition).
• Oracle Corporation v. Clouding IP, LLC, IPR2013-00100, Paper No. 8 (PTAB) (granting a petition where new arguments and supporting evidence were presented that shed a different light on references previously considered during prosecution).

Petition Fails To Identify All Real Parties-in-Interest

Under 35 U.S.C. § 312(a)(2) and 37 CFR § 42.8, an IPR petition must identify all real parties-in-interest or privies.  A preliminary response may help the Board by pointing out how the petition fails to identify all real parties-in-interest.  The Trial Practice Guide provides guidance regarding factors to consider in determining whether a party is a real party-in-interest.  Whether a non-party is a “real party-in-interest” or “privy” is a “highly fact-dependent question” that takes into account how courts have used the phrases generally to “describe relationships and considerations sufficient to justify applying conventional principles of estoppel and preclusion.”  Trial Practice Guide, 77 Fed. Reg. at 48759.  One consideration is whether a non-party exercises, or could have exercised, control over a petitioner’s participation in an IPR proceeding.  Id. at 48759-60, 48695.  Other considerations may include whether a non-party, in conjunction with control, funds and directs the proceeding.  Id. at 48760.  Board decisions providing guidance on real party-in-interest or privy include the following:

• Butamax™  Advanced Biofuels LLC v. Gevo, Inc., IPR2013-00214, Paper No. 11 (PTAB)(“‘common interest among litigation defendants seeking to invalidate or defend against enforcement of a patent . . . does not translate ipso facto into each defendant being a real party in interest where a request for reexamination is filed by only one of the defendants in the litigation’”) (citations omitted). 
• Chimei Innolux Corporation v. Semiconductor Energy Laboratory Co., Ltd., IPR2013-00068, Paper No. 7 (PTAB) (patent owner failed to provide persuasive evidence that each co-defendant in a related litigation exercised control and provided funding of the IPR petition).

Supporting Evidence for the Preliminary Response

The preliminary response may cite evidence supporting the patent owner’s contentions.  Such evidence may include previously existing declarations, trial testimony, deposition testimony, and expert reports.  A preliminary response may not, however, present new testimonial evidence (i.e., testimonial evidence prepared specifically for the purpose of the IPR proceeding) without authorization from the Board.  Additionally, flooding the Board with evidence in a preliminary response is not helpful.  Rather, a preliminary response should aid the Board in navigating evidence of record cleanly and quickly."

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - America Invents Act - First-Inventor-to-File Public Forum on March 17, 2014

Tonight, I want to pass on an invitation to a USPTO public forum to discuss the first-inventor-to-file provisions of the America Invents Act on March 17, 2014:

"The United States Patent and Trademark Office (USPTO) will host a public forum to discuss the first-inventor-to-file (FITF) provisions of the America Invents Act (AIA) on the first anniversary of the FITF implementation. The forum will be held on Monday, March 17, 2014, at the USPTO headquarters, Madison Auditorium, in Alexandria, Virginia from 12:30 to 5 pm ET.  Members of the public are invited to attend in person or via webcast (access information below).

The forum is intended to bring stakeholders together with USPTO subject matter experts to discuss the FITF provisions.  It will begin with a thirty-minute informal meet-and-greet session, allowing participants to chat with the experts, followed by an informational program covering the following topics:

• Review of FITF filings made to date
• Explanation of whether/when an application will be examined under the FITF statutory framework
• Overview of the FITF statutory framework and tips on responding to prior art rejections
• Tour of the AIA (FITF) website
• Q&A panel discussion

Pre-registration is not required; seating is first-come, first-served.  CLE is not available."

Webcast access instructions:

• Event number: 996 792 614
• Event password: 12345
• Event address:  https://uspto-events.webex.com/uspto-events/onstage/g.php?t=a&d=996792614

Copyright © 2014 Robert Moll. All rights reserved.

Federal Circuit - Elcommerce.com v. SAP - Evidence Required to Support Indefiniteness, 35 USC 112

In Elcommerce.com v. SAP, the Federal Circuit vacated a district court's holding system claims of US Patent No. 6,947,903, owned by Elcommerce, invalid for indefiniteness under 35 USC 112, because the defendant SAP (1) misinformed the district court the Federal Circuit does not require evidence on the knowledge of the technology by persons of skill in the field; and (2) declined to provide evidence of how such persons would view the description of "structure, materials, or acts" in the specification for performance of the functions recited in means-plus-function elements.

Claim 37 is representative of all of the system claims:

• means for extracting, at each supply chain site, the supply-related data to be monitored, wherein the data is maintained in plural formats located among the supply chain sites, at least one of the supply chain sites corresponding to an independent entity in the supply chain, being independent of another supply chain site;
• means for translating the data to a common format;
• means for uploading and collecting, from each supply chain site, the extracted data to a data collection site;
• means for formatting, at the data collection site, a portion of the collected data, retrieved from at
• least one of the supply chain sites other than the site of the user, into one of a plurality of views, responsive to criteria selected by a user associated with a supply chain site, for presentation to the user, the portion of formatted data being dependent on access rights granted to the user’s supply chain site . . . .

The '903 patent col. 15 ll. 32–48 (emphases added).

SAP argued at the Markman hearing that such "means plus-function terms in the '903 patent do not have supporting 'structure or acts' in the specification, and argued that since such support is absent, SAP could satisfy its burden on indefiniteness without expert testimony or other evidence of the existing knowledge in the field of the invention. SAP urged that Federal Circuit precedent does 'not require' such evidence."

Elcommerce in turn argued "that determination of the adequacy of the supporting structure or acts is made from the viewpoint of persons of skill in the field of the invention, and that evidence of how such persons would view the description should be presented to the court."

During the Markman hearing the district court asked for such evidence:

'THE COURT: Well, what evidence is there of what a person of ordinary skill in the art would understand the structure as defined in the patent to be, what evidence is there of that?

SAP: Your Honor, we haven’t submitted a declaration or separate evidence from somebody of ordinary skill in the art who says, I read the patent and I don’t see any structure. We’re actually not required to do that and, under the case law, the Federal Circuit’s case law, as well as other cases interpreting it, that's not a requirement. We can simply point to the absence of structure and, if it's not there, it's not there."

SAP persisted that the Federal Circuit "does 'not require' evidence of how a person of ordinary skill would understand the patent. The record shows the judge’s concern with this decisional approach to complex technology:

THE COURT: How am I to determine what one of ordinary skill in the art would think?

SAP: Well, your Honor, that’s what I’m here to do is to try to convince you that all those things Mr. Benson pointed to, it’s not structure. He’s simply pointing to phrases in the patent that repeat the function and simply repeating the function and drawing a box around it doesn’t convert it into structure."

This court's inquiry continued at the Markman hearing. "SAP presented only attorney argument concerning the structure and acts set forth in the patent, and Elcommerce stressed that SAP bears the burden of proving invalidity of duly granted claims:

ELCOMMERCE: So, when SAP comes up here, they have to show you that one of ordinary skill in the art would not understand things like the DTE or the DCS or whatever structure we point to, would not be understood by one of ordinary skill in the art to perform the particular function. And they have presented zero evidence about how one of ordinary skill in the art would view what we've shown.

THE COURT: But, how do I determine what is understood by one skilled in the art?

ELCOMMERCE: You’d probably have to get somebody up in the box, that’s the witness box, raise their right hand and testify one way or another. That’s probably, that’s the only way that I know of doing this. To come in and just have a lawyer argue it, is not enough. This is to be determined in view of one of ordinary skill in the art. They have not submitted any declarations of any experts. They haven’t submitted declarations of one of ordinary skill in the art."

The Federal Circuit concluded:

"The district court rightly was concerned about what a person of skill in the art might make of the lengthy written description and flow-charts and the multiple claimed functions. The judge repeatedly asked for evidence of what such a person would understand in this particular setting. Instead of evidence, SAP submitted only attorney argument. The district court accepted SAP’s position that no external evidence was 'required' and could be relied upon to show how a person of ordinary skill would understand the descriptive text and flowcharts and diagrams in the patent. However, the adequacy of a particular description is a case-specific conclusion, not an all-purpose rule of law. Findings as to what is known, what is understood, and what is sufficient, must be based on evidence.

Without evidence, ordinarily neither the district court nor this court can decide whether, for a specific function, the description in the specification is adequate from the viewpoint of a person of ordinary skill in the field of the invention. We do not of course hold that expert testimony will always be needed for every situation; but we do hold that there is no Federal Circuit or other prohibition on such expertise. See Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993). The district court persistently asked for evidence and was given none. Without more SAP cannot overcome the presumption of patent validity.

We conclude that the district court erred in granting summary judgment without a proper evidentiary basis for its conclusion. The burden was on SAP to prove its case, and in the absence of evidence provided by technical experts who meet the Daubert criteria there is a failure of proof. Attorney argument is not evidence. We vacate the district court’s rulings on the system claims, and remand for application of appropriate evidentiary standards and judicial procedures."

Copyright © 2014 Robert Moll. All rights reserved.

Professor Lemley - Does "Public Use" Mean the Same Thing It Did Last Year?

Prior to the America Invents Act's effective date of March 16, 2013, 35 USC 102 states an inventor loses patent rights if the invention is in "public use" more than one year before the filing date. The purpose is to prevent too much delay (i.e., more than one year) in filing a US patent application while the invention is being commercially used.

In Does 'Public Use' Mean the Same Thing it Did Last Year?, Stanford Law Professor Mark Lemley makes a compelling argument that the AIA did not change the meaning of "public use" nor eliminate the rule of Metallizing Engineering v. Kenyon Bearing & Auto Parts.

The Metallizing case held that a secret commercial use is not prior art that bars a third party from obtaining a US patent, but does start the one-year grace period for the commercial user seeking the US patent. The PTO Examination Guidelines stating otherwise doesn't seem to squarely address how the AIA impacts Metallizing.

Professor Lemley appears to be right on the statutory interpretation of 35 USC 102 under the AIA despite other opinions in the USPTO Examination Guidelines (See America Invents Act - One Sale Bar, 35 USC 102), Bob Armitage, a principal AIA drafter, and Senator Kyl's staffer Joe Matal.

If Professor Lemley turns out to be wrong, the US patent system has handed out an incentive to commercially use inventions as trade secrets indefinitely until filing a patent application.

Copyright © 2014 Robert Moll. All rights reserved.

Federal Circuit - Lighting Ballast v. Philips - District Court Patent Claim Construction Entitled to No Deference on Appeal

In Lighting Ballast Control LLC v. Philips Electronics N.A. Corp., an en banc Federal Circuit held that claim construction is a question of law reviewed de novo (i.e., anew) on appeal.

Claim construction is often a pivotal event in patent litigation since it often determines if (1) a patent claim is infringed; and/or (2) the claim is valid. The Lighting Ballast case focuses on the standard of appellant review of trial court's claim construction established in Cybor v. FAS Technologies, which gives no deference to a trial court's claim construction.

Because of the Federal Circuit's high reversal rates of district court's claim construction, since the Cybor case was decided 15 years ago, some argued it was time for the Federal Circuit to reconsider its view. The Federal Circuit agreed and invited amicus curiae participation on the following questions:

(1) Should this court overrule Cybor?

(2) Should this court afford deference to any aspect of a district court’s claim construction?

(3) If so, which aspects should be afforded deference?

The Federal Circuit states the 21 amici briefs stated three general views:

The Federal Circuit states the first view "favored by Lighting Ballast is that the Cybor decision is incorrect and should be entirely discarded. Lighting Ballast argues that this court in Cybor misapplied the Supreme Court’s decision in Markman II, in that the Court had focused only on whether questions of patent claim construction are subject to jury trial, or whether this issue should be decided solely by a judge. These proponents state that the Court in Markman II, in deciding;the judge-jury question, did not change the traditional distinction between fact and law, recognized that there are factual aspects of claim construction, and did not address the standard of appellate review."

The Federal Circuit states the second view "favored by some amici curiae including the United States, may be viewed as a fusion or hybrid of de novo review and deferential review. These proponents acknowledge that the Court in Markman II described patents as “legal instruments” and stated that interpretation of patent claims is a “purely legal” matter, 517 U.S. at 391, but argue that the correct appellate approach is for the factual aspects of claim construction to be reviewed on the clearly erroneous standard, while the final conclusion receives review as a matter of law. Some of these amici suggest a solution whereby the standard of review would depend on whether the district court’s claim construction drew solely from the record of the patent and its prosecution history (called "intrinsic evidence"), or whether external information or witness testimony was presented in the district court (that is, "extrinsic evidence")."

The Federal Circuit said the third view "supported by some amici curiae, is that Cybor is both reasonable and correct in view of the Court’s rulings in Markman II. These proponents stress the Court’s statements that claim construction is a 'purely legal' matter, 517 U.S. at 391, and that 'the interpretation of a so-called patent claim . . . is a matter of law,' id. at 372. They argue that de novo review of the scope and meaning of patent claims conforms to the rule that applies in all areas of law, that “interpreting a set of legal words . . . in order to determine their basic intent' is a 'purely legal matter.' Buford v. United States, 532 U.S.59, 65 (2001). They state that sufficient reason has not been shown to change this established and effective precedent in patent cases."

The Federal Circuit stated its own viewpoint:

"The question that this court has now reconsidered is whether we should continue to review claim construction as a whole and de novo on the record, or whether we should change to a different system that at best would require us to identify any factual aspects and how the trial judge decided them, and review any found or inferred facts not for correctness but on a deferential standard, with or without also giving deferential review to the ultimate determination of the meaning of the claims. We conclude that such changed procedure is not superior to the existing posture of plenary review of claim construction. Over these fifteen years this court has applied Cybor to diverse subject matter, and the body of precedent has grown large. Deferential review does not promise either improved consistency or increased clarity. We have been offered no argument of public policy, or changed circumstances, or unworkability or intolerability, or any other justification for changing the Cybor methodology and abandoning de novo review of clam construction. The proponents of overruling Cybor have not met the demanding standards of the doctrine of stare decisis. They have not shown that Cybor is inconsistent with any law or precedent, or that greater deference will produce any greater public or private benefit. We conclude that there is neither 'grave necessity' nor 'special justification' for departing from Cybor."

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - Prior Art Used in Examination of Software-Related Patent Applications – Request for Comments Due March 14, 2014

On December 5, 2013, the USPTO held a software partnership meeting focusing on prior art used in examination of software-related patent applications. See Software Partnership and the Prior Art Federal Register Notice.

This is an important topic, because prior art tells us whether an invention is patentable. Under the America Invents Act (AIA), prior art has an intricate definition, but can be viewed as technology in the same field as the invention or reasonably pertinent to the problem addressed by the invention. When does this technology qualify as prior art? Under AIA, it's technology (short of inventor disclosures) prior to the filing date of any US patent application that cannot claim an effective filing date before March 16, 2013.

As a follow up on January 6, 2014, the USPTO published a Federal Register Notice that sets forth the following questions about prior art for public comment due March 14, 2014:

(1) What specific databases, Web sites, tools and other resources do you find useful in searching for software-related inventions? Please indicate the strengths and limitations of each resource.

(2) What are your concerns regarding the manner in which USPTO examiners formulate and implement search strategies to identify prior art for software related inventions? How should these concerns be addressed?

It will be interesting to see what tools and techniques people share in the public comments in response to question (1). Of course, it is cost effective to search using online databases and Google using keywords, images, and/or classification of the prior art in the US. If one wants to spend more, the search can be extended into other major patent countries or regions such as the Europe, and Japan as well as PCT applications.

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - Examination Guidance and Training Materials

The USPTO has published resources (PDF and Powerpoint slides) that should prove helpful to both applicants and examiners in working through Office actions.

For details see Examination Guidance and Training Materials that discusses:

• Guidelines for determining compliance with 35 USC 112, including identifying limitations that invoke 35 USC 112(f), means-plus-function limitations
• Evaluating subject matter eligibility under 35 USC 101
• Rules of Practice Before the BPAI in Ex Parte Appeals (also useful for PTAB)
• Examination Guidelines in view of KSR Int'l. Co. v. Teleflex Inc. (Obviousness)
• Best Practices in Compact Prosecution
• Interview Practice

Copyright © 2014 Robert Moll. All rights reserved.

Professor Feldman - Patent Trolling: Why Bio & Pharmaceuticals Are at Risk

In the study, Patent Trolling: Why Bio & Pharmaceuticals Are At Risk, Professor Feldman and Harvard Fellow Dr. Nicholson Price discuss patent trolls- also referred to as non-practicing entities, patent assertion entities, and patent monetizers- moving into the biotech, pharmaceutical, and life science industries.

The authors state highlights include:

"With the Association of University Technology Managers revisiting its policy against selling to NPEs, the authors considered whether universities could provide an extensive pool of ammunition for NPEs to launch against current products.

To supplement increasing anecdotal evidence that patent trolling is moving into bio and pharma, the authors examined the life science holdings of five major universities.We skimmed the patent holdings for four of the of five university systems with the highest number of patents issued in fiscal year 2011: the University of California system, the University of Texas system, MIT, and CalTech. We added as a wild-card the University of Southern Florida, the school among the top 10 in 2011 patent grants which had the lowest ratio of license revenues to research expenditures.

The study identified dozens of patents that could be deployed against current bio and pharm industries, following the patterns that NPEs have used against other industries. These include patents on drug formulas, methods of treatments, research methods, dosage forms, and others.

In deciding whether to undertake the study, the authors agonized over whether the potential for harm outweighed the potential benefit. After all, if reform efforts are not undertaken, the work could simply provide a handy road map for those who would follow.

Life sciences trolling is predictable and in its infancy, however. The study is intended to sound a warning bell."

Even if you are not the biotech or life science industries, the study gives insight into patent troll strategies.

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - Deputy Director Michelle Lee's Speech to AIPLA on January 30, 2014

On January 30, 2014, USPTO Deputy Director Michelle Lee delivered a state of the agency speech to a gathering at the 2014 Mid-Winter meeting of the American Intellectual Property Law Association (AIPLA), which is the largest organization of patent attorneys. I just read the speech, which is impressive and gives the USPTO's plans.

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - US Residents Filing A Design Application under Hague Agreement?

Can US residents file an international application for a design patent?

When I first reviewed this question, I checked to see if the PCT allows for design patent applications. The PCT permits filing a single application in English that starts the process of seeking protection of the invention in many countries. Although not strictly a patent application, a PCT gives applicants an 18-month extension past the convention year to consider whether the cost of foreign filing is justified while keeping the benefit of the priority filing date.

However, the PCT does not permit filing a design application. Instead, an international design application must be filed under the Hague Agreement Concerning International Registration of Industrial Designs, 35 USC 381- 390, Title I of the Patent Law Treaty that President Obama signed into law on December 18, 2012.

It may appear a US resident can file a Hague application in the USPTO today, because 35 USC 382 states any person who is a national of the United States, has a domicile, a habitual residence, or a real and effective industrial or commercial establishment, may file an international design application in the USPTO.

However, a USPTO staff member informed he expects legislative processes to delay the ability for US residents to file Hague application until late 2014. First, the Senate must consent to a complete package of laws, since it's a Treaty. Although 35 USC 381-390 is law, the USPTO proposed rules are still open to public comments. The USPTO must review the comments and make any revisions to the proposed rules to produce the final rules. After this Senate consent requires Senate Foreign Relations Committee recommendation and 2/3 or more of Senators to vote in favor of the complete package.

Until that day, US residents may still file a Hague application in a country (i.e., Hague contracting state outside the US) if the applicant has a "real and effective industrial or commercial establishment" in the country. What's a real and effective industrial or commercial establishment is determined by that country's laws. It may not require applicant have its principal place of business in that country, but the more business activity in a country the more likely the Hague application will be valid. Thus, operation of a warehouse may not suffice, while a manufacturing factory might. A third party distributor or a subsidiary might not suffice, while applicant's sales office might. As was explained to me, "the establishment must be operated by the applicant, rather than merely with the applicant’s consent or approval" and not a "sham establishment." Finally, a Hague application on this basis would typically require engaging a foreign associate knowledgeable with the specific requirements of that country.

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - How to Reduce the Backlog of Applications and Increase the Quality of US Patents - PTO Interviews

People frequently question the backlog of applications in the USPTO. Somehow hiring more examiners has not significantly reduced it. File an application and wait for at least a year or two for examination. It is particularly bad in the tech and software fields. Another question is how to improve patent quality or ensure only good patents issue? The last question is for smarter people to resolve, but if we want to reduce backlog and improve patent quality, I think we must focus on the quality of initial examination.

One way to increase the quality of initial examination is within each applicant's control. Instead of filing a written reply to an Office action, consider sending an email to the examiner with a detailed written proposal along with a request for an interview. You may find this sets the stage for a mutual understanding on how to claim an invention with respect to the prior art. Don't file a formal amendment until you understand the examiner.

I also think interviews should be the default and examiners should initiate more interviews. Call any of us and say, "I think I see how to place this application in condition for allowance." Most of us would welcome that call. On the other hand, examiners should not refuse a request to interview after a final Office action. One reason some appeal is they are frustrated with a revolving door of prior art rejections that appear to be fueled by some examiner's desire to get another RCE on the docket.

Until we address how we conduct initial examination, the backlog may not go away. It applicants' responsibility to efficiently prosecute cases and part of this is doing a good job at interviews. The USPTO web page Interview Practice has additional guidance on how to conduct PTO interviews.

Copyright © 2014 Robert Moll. All rights reserved.

PTAB - Cyrus Morton - Do the new patent office trials really make patent litigation cheaper? - A Comment

In IP: Do the new patent office trials really make patent litigation cheaper? Mr. Cyrus Morton tells us patent litigation is famously expensive, but then argues that because you can lose at various stages in patent office trials and end up in court, they are on average probably not much more cost effective.

Does the data support his views? The AIPLA Report of the Economic Survey stated in 2013 (1) when $1-25 million is at risk the median patent infringement suit cost is $1.4 million through discovery and $2.6 million including all costs; and (2) when more than $25 million is at risk the median patent infringement suit cost is $3.5 million through discovery and $5.5 million including all costs.

How about the cost of going to trial before the Patent Trial and Appeal Board (PTAB)? The inter partes review is recent so the AIPLA Economic Survey has not published any data. However, for inter partes reexamination, which is the closest procedure to inter partes review IPR, the AIPLA Report of the Economic Survey states in 2013 the median costs are (1) $50K for filing of a request, (2) $70K including the first patent owner response, (3) $100K including all patent owner responses, (4) $130K including an appeal to the Board, and (5) $250K including an appeal to federal court.

However, it is important to note IPR has fundamental differences with inter partes reexamination, which would raise its costs. IPR is more trial-like, has limited discovery and motion practice, and a hearing, unlike inter partes reexamination which has a prosecution style after the request is granted.

Although the AIPLA does not break out how much is at risk in the inter partes reexamination, if we triple the $250K total of inter partes reexamination to give us a rough comparison it still looks favorable to patent litigation, e.g., $750K vs. $2.6 million. Thus, if you get into a patent dispute, it is smart to consider filing a request for ex partes reexamination (the lowest cost option) and/or filing a petition for inter partes review and in either case requesting a stay of any pending patent litigation.

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - Written Description Requirement for Design Applications

The USPTO is hosting a roundtable and soliciting public comments on how the written description requirement should be applied to design applications on March 5, 2014.

As background at the Design Patent Conference Design Day 2013: Designs in the New Digital Age on April 23, 2013, an attendee asked whether an originally disclosed design provides an adequate written description where a new or amended claim is presented or where a claim is made for an earlier effective filing date under 35 U.S.C. 120.

More specifically, the USPTO is considering how the written description requirement under 35 U.S.C. 112(a) is applied to design applications where only a subset of elements of the original disclosure are shown using solid lines in an amendment or continuation application."

See the USPTO Request for Comments and Notice of Roundtable Event on the Written Description Requirement for Design Applications.

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - Proposed Rules Require Many Identifications of Attributable Owner To Avoid Abandonment of Application and Loss of US Patent?

On January 24, 2014, the USPTO notified that it proposes to change the rules to identify the attributable owner on filing of an application (or soon after), whenever ownership of the application changes, when the issue fee and maintenance fees are paid, and when a patent is involved in supplemental examination, ex parte reexamination, and a trial before the Patent and Trial Board (PTAB).

A theme for all these requirements is it will increase transparency and reduce patent litigation abuse, but it is unclear how identifying the attributable owner multiple times during pendency of the application is necessary. Maybe it gives big tech a way to track and monitor third party patents.

It will increase the cost of prosecuting applications and maintaining patents and even result in abandonment of an application or lapse of U.S. patent whenever someone fails to identify the attributable owner to the USPTO within a non-extendable three months. Congress is the legislative body that has a process for ensuring we discuss whether the benefit of this ownership rules outweigh the cost of subjecting owners to loss of US patent rights.

The proposed rule also raises a question if these rules exceed the USPTO law making authority.

Under the proposed rules someone can lose a US patent even if it is not the subject of any licensing or litigation activity simply if they fail to update their ownership records within three month. If a patent is the subject of litigation, ownership must be stated in the complaint. To say you can petition if you have delayed in updating the records is insufficient, because the USPTO may decline to grant the petition. I wouldn't be surprised to see articulate comments opposing this proposal.

See the USPTO notice on the proposed rules: Changes to Require Identification of Attributable Owner.

Copyright © 2014 Robert Moll. All rights reserved.