Posts Tagged: "covered business method"

The Patent Trial and Appeal Board (PTAB) recently issued its first-ever preliminary guidance on motions to amend claims filed by patent owner Sanofi and, although the substituted claims haven’t escaped an obviousness challenge from Mylan, patent owners might be able to use that guidance as a roadmap for their own motions to amend claims. In other PTAB decisions between October 1 and 16, USAA escaped covered business method (CBM) reviews based on the technological invention exclusion, NHK Spring factors led the PTAB to deny two inter partes reviews (IPRs) petitioned against TRUSTID patents, oral hearings were held in Apple’s IPRs against Qualcomm, despite the patent settlement agreement between the two firms, and NuCurrent failed to avoid Samsung IPRs after arguing issue preclusion based on district court litigation of a forum selection clause in a contract between the two companies.

The Federal Circuit recently reversed the District of Minnesota’s denial of summary judgment and held claims related to paper check processing invalid under 35 U.S.C. § 101. Despite the claims being directed to processing “physical” checks, the Court held that “the abstract idea exception does not turn solely on whether the claimed invention comprises physical versus mental steps.”  The Court also reasserted that novelty and/or non-obviousness does not obviate ineligibility under Section 101. See Solutran, Inc. v. Elavon, Inc., Nos. 2019-1345, 2019-1460, 2019 U.S. App. LEXIS 22516 (Fed. Cir. July 30, 2019) (Before Chen, Hughes, and Stoll, Circuit Judges) (Opinion for the Court, Chen, Circuit Judge).

Yesterday, the U.S. Supreme Court ruled in Return Mail, Inc. v. United States Postal Service that the U.S. government doesn’t qualify as a “person” for the purposes of petitioning the Patent Trial and Appeal Board (PTAB) to institute inter partes review (IPR) proceedings under the America Invents Act (AIA). The majority opinion was authored by Justice Sonia Sotomayor and joined by Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito, Neil Gorsuch and Brett Kavanaugh, while Justice Stephen Breyer dissented, joined by Justices Ruth Bader Ginsburg and Elena Kagan. While most in the patent community felt the decision was predictable considering the Supreme Court’s precedent on the topic, some saw the dissent’s point or expressed surprise at the narrowness of the holding and the disparate treatment by the court of the IPR process compared with other administrative procedures. The Return Mail case was argued at the Supreme Court by Beth Brinkmann, co-chair of Covington’s Appellate and Supreme Court Litigation Group, who said, “The Court’s decision confirms that federal agencies do not get an extra chance to challenge privately held patents under the AIA.” Brinkman’s colleague, Richard Rainey, who co-led the Supreme Court team and handled the case before the Federal Circuit, added: “This is a significant victory for Return Mail and for all technology companies and patent holders that may find themselves in the government’s crosshairs. By excluding federal agencies from AIA review proceedings, the Court’s decision limits the government’s ability to bring duplicative challenges to the validity of privately-owned patents.” Here’s what some others in the patent community had to say.

The PTAB not only assented to Mirror Imaging’s suggestion that a five-page brief be entered in advance of the hearing but added that parties may submit one brief for each of the four CBM review proceedings which were petitioned by Fidelity… This could be a pivotal moment in the history of the PTAB specifically, and the USPTO more generally. If Director Iancu can achieve the goal of having the Patent Office speak with one voice, with patent examiners and the PTAB all following the same law and guidance, he will have achieved a united Patent Office that has been elusive, but desperately needed.

In early October, the Patent Trial and Appeal Board (PTAB) instituted a series of covered business method (CBM) reviews on patents owned by American stock exchange Nasdaq. The CBM reviews were petitioned by trading platform provider Miami International Holdings (MIAX) and challenge the validity of patents which Nasdaq has asserted against MIAX in U.S. district court.

Earlier today the USPTO announced proposed rulemaking that would change the prior policy of using the Broadest Reasonable Interpretation (BRI) standard for construing unexpired and proposed amended patent claims in PTAB proceedings under the America Invents Act and instead use the Phillips claim construction standard.. The new standard proposed by the USPTO is the same as the standard applied in Article III federal courts and International Trade Commission (ITC) proceedings, a change critics of the PTAB process have urged for many years in order to bring uniformity to post grant challenges across forums… The USPTO is also proposing to amend the rules for PTAB trials to add that the USPTO will consider any prior claim construction determination concerning a term of the claim in a civil action, or an ITC proceeding, that is timely made of record in an Inter Partes Review (IPR), Post Grant Review (PGR), or Covered Business Method (CBM) proceeding.

Interestingly, in the history of the entire CBM program, only three petitions have ended with final written decisions upholding all claims as valid. That’s 1 percent of all CBM petitions ultimately resulting in a final decision in favor of the patent owner… If Congress enacts legislation to mix the CBM program with IPRs and PGRs, which Rep. Issa seemed to contemplate during the hearing, then you just get the worst of both worlds: an environment in which any person could challenge any patent on the widest number of statutory grounds, and it all happens outside of the federal judiciary without a jury trial.

Given the PTAB’s ability to make decisions precedential, Ruschke’s argument about how important and meaningful it is to have expanded panels to ensure uniformity misses the mark. The PTAB does not designate many cases as precedential (another problem for a different day), but it is possible for a three-judge panel decision to be made precedential. In fact, there have been a number of cases that have been pronounced as precedential by the PTAB where the decision was made by a three-judge panel. That being the case, why is it necessary for any expanded panels unless PTAB leadership is trying to influence Administrative Patent Judges despite the lack of a precedential designation? And doesn’t such an attempt to influence call into question the decisional independence of APJs?

On Tuesday, January 23rd, the Court of Appeals for the Federal Circuit issued a ruling in Google LLC v. Network-1 Technologies, Inc. which affirmed a finding by the Patent Trial and Appeal Board (PTAB) that a patent covering a method of identifying media linked over the Internet was valid. The Federal Circuit disagreed with Google that the PTAB erred in its claim construction during the validity trial, leaving in place a patent that has been asserted by Network-1 against Google’s major online media platform YouTube.

As we mark the close of yet another year, we’re provided with a perfect opportunity to look back on the previous twelve months and see what has transpired. No one could call it a good year for patent owners (except those with the largest pockets, of course) starting with the United States’ 10th-place ranking among national patent systems in the U.S. Chamber of Commerce’s IP Index, and it didn’t appear as though any weaknesses in uncertain patentability across the U.S. technological landscape were addressed in a positive manner this year. It’s inevitable that the ball will drop on New Year’s Eve and calendars everywhere will turn from 2017 to 2018. Whether the U.S. federal government will be able to stop the death knell sounding doom for our nation’s patent system, however, is still anyone’s guess and it seems far from likely.

This experiment in patent validity review an executive agency by the Patent Trial and Appeal Board, an Article I tribunal in the PTO, has been unsuccessful…The chief constraints of the public rights doctrine involve consent and due process by an Article I tribunal and review of tribunal determinations by an Article III court. None of these features are present in the PTAB review of issued patents. In fact, the PTAB has shown a massive number of institutional abuses of IPRs that have undermined its legitimacy and negated its determinations… Ultimately, it will be shown that PTAB has vastly worse patent validity review results than federal district courts because of a blatant disregard for due process. As a consequence of these observations, it should be clear that the PTO is susceptible to political influences by the powerful technology lobby’s false narrative of poor quality patents that resulted in creation of a sanctimonious mechanism for patent validity review to constrain competition from market entrants, with an effect to promote technology incumbent profits.

I want to believe Congress ultimately sought to strengthen the U.S. patent system with the AIA by providing a mechanism to more easily remove a small percentage of granted patents that were being inappropriately used in litigation. Specifically, patents that were being asserted with claim constructions not contemplated when the patent was examined. After all, Congress had been heavily lobbied with the narrative that NPE’s had been stretching patents well beyond the four corners of the granted patent and hurting the integrity of the patent system.

The PTO has increased the number of Board decisions as being precedential (so as to serve as a binding authority) by 36% within the last two years. With respect to the increase in precedential decisions: while a 36% increase is substantial, that translates into only an additional 10 precedential decisions – 2 ex parte appeals and 8 IPRs. The current total number of precedential decisions is 38, broken down into 27 ex parte appeals, 2 interferences, 8 IPRs and 1 CBM. Compare these numbers to the number of ex parte appeals and AIA petitions received in 2017 alone (10165 ex parte appeals, 1853 IPR petitions, 54 CBM petitions, and 40 post-grant review petitions).

Hiring senior associates to be Administrative Patent Judges was a mistake, hiring so many senior associates from the same firm was an even bigger mistake. Making it clear that their job was to kill patents at all costs was inexcusable. Interpreting the rules at every turn to be disadvantageous to patent owners is un-American, violates fundamental notions of fairness of procedure, and tilts the balance so heavily toward challengers that it has become more feared by patent owners than any government agency or body. In short, the PTAB has destroyed the U.S. patent system and the value of U.S. patents. In my opinion, the only solution for the very serious transgressions of the PTAB is to disband this runaway tribunal.