Posts in USPTO

In the wake of fraudulent IP applications from foreign nations—namely China—the United States has recently enacted or called for policies that require foreign entities to complete more thorough IP applications. For instance, in August, we heard about the new USPTO rule requiring all foreign trademark applicants and registrants to be represented by a licensed U.S. attorney when filing. According to the USPTO website, this is intended to “increase USPTO customer compliance with U.S. trademark law and USPTO regulations, improve the accuracy of trademark submissions to the USPTO and safeguard the integrity of the U.S. trademark register.” And then just last week, news broke that the USPTO had issued new instructions requiring trademark examiners to ask applicants for proof of legal residence in the United States to enforce this new rule (note: these instructions have since been rolled back). The reasoning behind these legislations, or proposed legislations, seems to be that by making the IP application process more involved and more challenging, the USPTO will limit the number of foreign IP applications received—and therefore the number of fraudulent applications received. This will undoubtedly work, but is it the right approach?

This week in Other Barks & Bites: the Federal Circuit issued precedential decisions regarding secondary considerations of non-obviousness, limits to design patents and collateral estoppel of antitrust claims in patent cases; the CASE Act moved out of the House Judiciary Committee towards a floor vote; AIPLA reported increasing prices for trade secret and pharmaceutical patent lawsuits; the PTAB designated a pair of precedential decisions that limit IPR institutions; the DOJ identified two foreign nationals in GE Aviation trade secret case; LeBron James and Ohio State University lost their respective trademark bids; USPTO Director Iancu talked about balancing innovation and preventing hold-up in the SEP context; Google agreed to a $1 billion fine over European tax evasion; and the UKIPO reported lower patent application filing levels for 2018.

On the afternoon of Wednesday, September 11, the Senate Judiciary Committee’s Subcommittee on Intellectual Property convened a hearing titled Innovation in America: How Congress Can Make Our Patent System STRONGER. The hearing focused on the STRONGER Patents Act, a piece of legislation that has been reintroduced into both houses of Congress, the Senate portion of which has been co-sponsored by the Senate IP Subcommittee’s Ranking Member, Senator Chris Coons (D-DE), fellow Subcommittee members Mazie Hirono (D-HI) and Dick Durbin (D-IL), Judiciary Committee member John Kennedy (R-LA) and Senators Tom Cotton (R-AR) and Kevin Cramer (R-ND). Sources at IPWatchdog’s Patent Masters Symposium this week said that the bill still faces many obstacles to passage. However, according to Senator Coons’ Office, the bill has wide bipartisan support in the House as well. The panel for the hearing was evenly split between supporters and detractors of the proposed law, and most of the discussion focused on the injunctive relief and inter partes review (IPR) provisions of the bill.

In the past 10 months, the issue of proving negative claim limitations has cropped up on appeals to the Federal Circuit. At least three panels of the Federal Circuit have addressed the issue, to one degree or another. Each panel has contributed, to some extent, to an understanding of the law. In dealing with the issue, each panel cited no precedent for doing so. Curiously, all three decisions were designated as nonprecedential. The negative claim limitations issue is one that is almost certain to recur. Perhaps the next time the issue comes up, the decision ought to be precedential, and therefore, binding.

In his luncheon keynote address to attendees of IPWatchdog’s Patent Master’s Symposium: “Standard Essential Patents: Striking a Balance Between Competition and Innovation” on Tuesday, former Federal Circuit Chief Judge Randall Rader drove home a point made by multiple speakers during the event that the concept of “patent hold-up”—in which innovator companies use SEPs to hold up implementer companies from getting products to market via anti-competitive practices—is “one of the largest misnomers in our discipline.” Earlier in the day, David Kappos, former Director of the USPTO, explained that— although he signed off on the Joint Policy Statement, that it was thoughtfully and heavily negotiated and edited, and that he felt at the time that it was a good document and a compromised agreement—he stepped back after Delrahim’s announcement last year and has now reconsidered his view. “I was defending the IP system given everything we knew at the time,” Kappos said. “I didn’t think the guidelines were anti-innovation; I thought they were balanced. But in stepping back, I realized—between 2013 and 2019 we’ve learned a lot. Multiple empirical studies have shown us that the phenomena on which we based the guidelines— hold-up and royalty stacking — aren’t occurring. There is no evidence of our predictions.”

This week in Other Barks & Bites: the Chinese government announces stricter punitive measures in its IP system; the Federal Circuit says state sovereignty principles do not allow the University of Texas to bring suit in an otherwise improper venue; Congressional leadership asks Google to expand copyright protections under its Content ID tool; Google and Facebook to face antitrust probes from state AGs; George Mason University to create an Innovation Law Clinic; Ariana Grande files a copyright and trademark infringement suit against Forever 21; the Hudson Institute publishes a report on China’s 5G developments; and South Korea’s government has reportedly been collecting copyright payments for use of North Korean TV broadcasts.

An inter partes review (IPR) petitioner appeals the final written decision of the Patent Trial and Appeal Board (PTAB) as to claims upheld but is found to have no standing, as there is no present indication that the challenger would face a patent infringement suit in future. Under these circumstances, would the IPR statutory estoppel provision, 35 U.S.C. § 315(e), prevent the petitioner from asserting the challenges it brought against the upheld claims if the patent owner were to assert those claims against the petitioner in future? Note that under these circumstances, if estopped, the petitioner would have sought judicial review, but the merits of the challenges would not have been reviewed by an Article III court. This was one of the questions before the Federal Circuit in Avx Corporation v. Presidio Components, Inc. 2018-1106 (Fed. Cir. May 13, 2019) (“Avx Corp.”). Although the court declined to answer the question, as there were no adversarial presentations on this question, it clarified that the operation of estoppel was not a foregone conclusion under these facts, which, the court indicated, may fall under one of the exceptions to issue preclusion.

In the most recent development in a case between energy drink brand Monster Energy Company and maker of automotive tools Integrated Supply Network, LLC (ISN), the U.S. District Court for the Central District of California on July 2 denied Monster’s request for a permanent injunction against ISN. Monster appealed on July 3 to the U.S. Court of Appeals for the Ninth Circuit and ISN cross-appealed on July 12. The district court found that Monster did not offer evidence demonstrating that ISN’s infringement had actually caused a loss of control over its business reputation leading to irreparable harm and loss of prospective customers. Additionally, the court reasoned that evidence regarding consumer confusion does not necessarily demonstrate irreparable harm. Even where ISN had not ceased infringing activity, Monster still had not proven irreparable harm as required to justify a permanent injunction, said the court.

A recent study by Patexia analyzing the win/loss record of 784 law firms representing patent owners in inter partes review (IPR) proceedings at the Patent Trial and Appeal Board (PTAB) found that Carmichael IP had the highest win percentage. The study counted all decisions rendered in the past five years for firms that handled a significant number of IPRs before the Board. Carmichael IP ranked #1 out of the 784 qualifying law firms in the Patexia survey and Carmichael himself ranked third out of 5,000 individual attorneys.

The most effective way to protect an inventive business method is with a patent on a technical invention. Ever since the U.S. Supreme Court’s 2014 Alice decision, the U.S. courts and the U.S. Patent and Trademark Office (USPTO) have consistently held that you can’t patent a business method by itself. The Alice decision overturned several related business method patents as being nothing more than an attempt to patent a fundamental economic process. Lower court decisions have since affirmed that “no matter how groundbreaking, innovative or even brilliant” a business method might be, you still can’t patent it. The only way to use patents, therefore, to protect business method inventions, is to patent the technological inventions required to make the business methods work. These inventions will be patentable since they will “improve the functioning of the computer itself.” See Buysafe, Inc., v. Google, Inc. 765 F.3d 1350 (2014) citing Association for Molecular Pathology v. Myriad Genetics, Inc., ___ U.S. ___, 133 S.Ct. 2107, 2116, 186 L.Ed.2d 124 (2013).

This week in Other Barks & Bites: the PTAB institutes IPRs despite arguments that the Chinese government was an unnamed real party-in-interest; the Federal Circuit dismisses appeals of PTAB decisions denying institution on three IPRs; USPTO seeks public comments on examination guidance for artificial intelligence inventions, announces a public hearing on proposed trademark fee adjustments, and is facing backlash for seeking proof of citizenship for trademark applications; Tesla avoids a 10% tax on auto sales in China; the Department of Defense gets closer to establishing an IP protection team; former Google engineer Anthony Levandowski is charged with trade secret theft; trademark protection cases in Dubai have risen 63%; the Copyright Royalty Board announces an intent to audit Sirius XM Radio; and Amazon’s Audible faces copyright infringement suit over text captioning feature.

The Federal Circuit recently affirmed in part and reversed in part a district court decision holding that Actavis Laboratories FL, Inc.’s (“Actavis’s”) generic Abbreviated New Drug Application (“ANDA”) product infringed claims of patents owned by Nalpropion Pharmaceuticals (“Nalpropion”) and that the asserted claims were not invalid. The Court found that the district court did not err in finding that Nalpropion’s U.S. Patent No. 8,916,195 (“the ’195 patent”) was not invalid for lack of written description, but that the district court did err in finding that the asserted claims of U.S. Patent Nos. 7,375,111 (“the ’111 patent”) and 7,462,626 (“the ’626 patent”) were not obvious in view of the prior art.

As the summer winds down, it is time again to focus on how to fix the U.S. patent system. In June, the Senate Judiciary’s IP Subcommittee held unprecedented hearings on patent eligibility. They are now back in closed door sessions with selected stakeholders to further consider language to amend Section 101, having received extensive feedback. My testimony in part addressed the unconstitutionality of the U.S. Supreme Court’s cases on patent eligibility, which have created judicial exceptions that arrogantly ignore the plain wording of Congress’ statute (“invention or discovery” in the disjunctive in Sections 100(a), (f) and (g) and Section 101) and its legislative history, and despite the fact that the U.S. Constitution gives Congress the sole power to create patent law. The doctrine of judicially-created non-statutory obviousness-type double patenting is the flip side of the coin of the patent eligibility issues.  A rejection for “non-statutory obviousness-type” double patenting is based on a “judicially-created doctrine” grounded in public policy and which is primarily intended to prevent prolongation of the patent term by prohibiting claims in a second patent not patentably distinct from claims in a first patent. This is problematic for at least the following reasons.

On August 23, the Patent Trial and Appeal Board’s (PTAB’s) Precedential Opinion Panel (POP) issued a decision granting patent owner 360Heros’ request for rehearing of an earlier PTAB decision to institute an inter partes review (IPR) requested by GoPro and also denied institution of that IPR under the one-year time-bar codified in 35 U.S.C. § 315(b). The PTAB agreed with 360Heros that the one-year time-bar began tolling from the filing date of a counterclaim alleging patent infringement that was dismissed by the district court for lack of standing. The POP panel included U.S. Patent and Trademark Office (USPTO) Director Andrei Iancu, Commissioner for Patents Drew Hirshfeld and PTAB Chief Administrative Patent Judge Scott Boalick. The 360Heros decision may offer inventors an escape route from the PTAB death squad. For the first time since the America Invents Act became law, the shoe could be on the other foot.

On August 15, Trading Technologies International, Inc. (TT) petitioned the Federal Circuit again for panel rehearing and rehearing en banc of its recent decision that found TT’s Ladder Tool invention to be subject to the USPTO’s Covered Business Method (CBM) review process and abstract under Section 101. TT argues that the PTAB did not follow the precedent of the Supreme Court or Court of Appeals for the Federal Circuit (CAFC) when reviewing its patent claims. The latest brief relates to U.S. Patent No. 7,725,382 (the ‘382 patent), while TT’s request for rehearing filed July 31 related to U.S. Patent No. 7,693,768.