In what can only fairly be characterized as utterly ridiculous, 5 of the 10 judges on the Federal Circuit to hear CLS Bank v. Alice Corporationen banc would find that claims that satisfy the machine-or-transformation test are not patentable. While I think it is inappropriate to find the systems claims patent ineligible that isn’t what makes the decision utterly ridiculous. The decision is an embarrassment because 5 other judges would have found the systems claims patent eligible. Thus, we have an even split of opinion at the Federal Circuit.
The Federal Circuit decision in CLS Bank v. Alice Corp. is now being horribly mischaracterized in the media, which will now only further complicate the matter in the court of public opinion. This decision offers no precedent whatsoever regarding systems claims because it was a tie. Alice Corporation loses the systems claims not because that is the law of the land announced by the Federal Circuit, but rather because a single district court judge determined that the systems claims were patent ineligible. Had that same district court judge found the systems claims patent eligible then Alice would have prevailed.
In other words, the Federal Circuit is essentially abdicating its authority relative to whether systems claims are patentable to the district courts and presumably also to the Patent Trial and Appeals Board at the United States Patent and Trademark Office. Whatever the district court or PTAB does is just fine. Well, not quite.
In USPTO v. Bilski, U.S. Supreme Court confronted us with a “fuzzy” composite of opinions about the standard for patent-eligibility under 35 U.S.C. § 101. See Through the Fuzzy Bilski Looking Glass: The Meaning of Patent-Eligible under 35 U.S.C. § 101 where I noted five key “takeaways” from those composite opinions, including what to make of Justice Scalia joining the Opinion of the Court except for Part II B-2 and C-2. The Federal Circuit is also not immune from composite opinions that make you scratch your head as to what the final ruling is. See Ariad Pharmaceuticals, Inc. v. Eli Lilly & Company where an en banc ruling by the Federal Circuit on whether there is a separate “written description” requirement under 35 U.S.C. § 112, first paragraph, spawned (in addition to the Opinion of the Court), four additional concurring and dissenting-in-part opinions. In affirming the judgment of the district court “by an equally divided court,” the recently issued Marine Polymer Technologies, Inc. v. Hemcon, Inc. case requires yet some more figuring about another “muddled” Federal Circuit en banc decision.
The “muddle” that became the en banc decision in Marine Polymer revolved around two primary questions: (1) the meaning of the claim term “biocompatible”; and (2) when does “intervening rights” apply to reexamined claims? See CAFC: Intervening Rights for Claims Unamended During Reexam* where I discussed both of these questions in the Federal Circuit panel decision in Marine Polymer. In the en banc decision, and by a 5 “yea” to 5 “nay” vote (with Judges Moore and O’Malley not taking part), the Federal Circuit deadlocked over the district court’s interpretation of “biocompatible” to mean “low variability, high purity, and no detectable biological reactivity as determined by biological reactivity as determined by biocompatibility tests.” In jurisprudential parlance, such a “tie vote” means the district court interpretation prevails by default.
On September 26, 2011, the a three-judge-panel of the United States Court of Appeals for the Federal Circuit issued a ruling in Marine Polymer Technologies, Inc. v. HemCon, Inc., which found intervening rights due to certain patent claims due to the fact that Marine Polymer made arguments about claim language during reexamination, but without actually amending the claims. See Marine Polymer vacated opinion. On January 20, 2012, the full Federal Circuit decided to hear this case en banc and ordered that the original panel decision be vacated and the appeal reinstated. No additional briefing by the parties was requested, but on January 26, 2012, the Federal Circuit issued an Order allowing amicus briefs to be filed on or before February 10, 2012. On February 10, 2012 the Biotechnology Industry Organization and Pharmaceutical Research and Manufacturers of America filed a joint Amici Curiae Brief supporting the appellee and seeking affirmance of the district court decision.
Before getting into the arguments made by the Bio/Pharma brief, let’s go over the now vacated original panel decision to set the table.
CAFC Rules “Intervening Rights” May Be Based on Arguments Even Though Claims Unamended During Reexamination.
I like writing about esoteric patent law topics and the question of “intervening rights” in reexaminations/reissues is one of the more esoteric. See my 1998 JPTOS article entitledIntervening Rights: A Potential Hidden Trap for Reexamined Patent. The case of Marine Polymer Technologies, Inc. v. HemCon, Inc. is one of those rare instances in this esoteric area of patent law where the Federal Circuit announced a new “wrinkle” on when “intervening rights” apply in reexamination. Unfortunately, the rule announced by the majority in Marine Polymer Technologies (“intervening rights” apply to unamended claims based on statements made during reexamination) is squarely in conflict with the express language of 35 U.S.C. § 307(b), as Judge Lourie’s dissent vigorously (and more importantly, correctly) points out.
In CyberSource Corporations v. Retail Decisions, Inc., Judge Dyk (joined by Judges Bryson and Prost) ruled that a method and system for detecting credit card fraud in Internet transactions was patent-ineligible under 35 U.S.C. §101. But in Ultramercial, LLC v. Hulu, LLC, Chief Judge Rader (joined by Judges Lourie and O’Malley) just ruled that a claimed method for monetizing and distributing copyrighted products over the Internet was patent-eligible. In fact, our good Chief Judge has “thrown down the gauntlet” at his Federal Circuit colleagues by stating “breadth and lack of specificity does not render the claimed subject matter impermissibly abstract.” Wow! That “judicial donnybrook” I mentioned in my recent article on the remand decision in Classen Immunotherapies, Inc. v. Biogen IDEC (see CAFC on Patent-Eligibility: A Firestorm of Opinions in Classen ) on what the standard is (or should be) for patent-eligibility under 35 U.S.C. §101 has now broken out.
In Ultramercial, the patentee (Ultramercial) asserted that U.S. Pat. No. 7,346,545 (the ‘545 patent) was infringed by Hulu, LLC (“Hulu”), YouTube, LLC (“YouTube”), and WildTangent, Inc. (“WildTangent”). The ‘545 patent,relates to a method for distributing copyrighted products (e.g., songs, movies, books, etc.) over the Internet for free in exchange for viewing an advertisement with the advertiser paying for the copyrighted content. What is interesting in this case is that Claim 1 of the ‘545 patent that is allegedly infringed by Hulu, YouTube, and WildTangent recites a method having not one, not two, but eleven total steps. (Side note: One might wonder how anyone can infringe an eleven step method.) WildTangent’s motion to dismiss for failure to state a claim was granted by the district court based on the claimed method being patent-ineligible under 35 U.S.C. § 101. (Hulu and YouTube were dismissed from the case apparently for other reasons.)
Back in the “good ol’ days,” the Supreme Court rarely granted review of a Federal Circuit case involving patent law doctrines. One such “rare” instance where the Supreme Court did review (and partially affirmed and partially overturned the Federal Circuit) was the 2002 case of Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co. involving when the doctrine of prosecution history estoppel barred an assertion of patent infringement based on the doctrine of equivalents when there was any amendment that narrowed the patent claim at issue.” See When Patent Doctrines Collide: Supreme Court Rules Claim Amendments Do Not Necessarily Preclude Assertion of Infringing Equivalents.
Like the most recent run of decisions overturning Federal Circuit patent jurisprudence, the Supreme Court found, in Festo, that the Federal Circuit’s rule that, whenever prosecution history estoppel applied, there would be no range of equivalents for the amended element, was too “inflexible” for the High Court’s taste.
After the Federal Circuit ruled in Ariad Pharmaceuticals v. Eli Lilly there is a separate and distinct “written description” requirement in the first paragraph of 35 U.S.C. § 112, some may have thought that all might be quiet on the “written description” front. But the recent case of Crown Packaging Technology, Inc. v. Ball Metal Beverage Container Corp., suggests that all may no longer be quiet on that front. In fact, I’ll express the “heretical” view that the Federal Circuit missed the real “written description” issue in this case, namely what is (or should be) the impact of the “characterised in that” (or as we Americans would phrase it “characterized in that”) language used in the common patent specification of the two patents involved in this case.
On March 10, 2010, District Court Judge Kathleen O’Malley was nominated by President Barack Obama to succeed Alvin Schall, who retired from the United States Court of Appeals for the Federal Circuit. Earlier today, Judge O’Malley was confirmed by the United States Senate, see Senate Confirms Five Judicial Nominees. O’Malley’s confirmation, along with the confirmation of 18 others in recent days, is the result of a deal between Senate Democrats and Republicans that ensured passage of 19 nominations in exchange for an agreement not to move forward with other controversial nominations, including the hotly challenged nomination of Goodwin Lui, who is Associate Dean and Professor of Law at University of California Berkeley School of Law. O’Malley will join 15 other colleagues on the Federal Circuit, 6 of who are on senior status.
Judge O’Malley has served on the the United States District Court for the Northern District of Ohio since being appointed by President William J. Clinton on September 20, 1994 and confirmed by a voice vote of the Senate on October 12, 1994. See Thomas: Nomination PN1786-103.
On Tuesday, November 9, 2010, the United States Court of Appeals for the Federal Circuit heard oral arguments in TiVo, Inc. v. EchoStar Corp. The case pits TiVo versus Dish, and any ruling from the Federal Circuit will necessarily define the extent to which a district court judge can rely on contempt proceedings to enforce an injunction rather than simply order a full blown new trial. In process the en banc oral argument in this case at the Federal Circuit did not substantially differ from the oral argument held at the Supreme Court the day earlier in the Costco copyright case, where the Supreme Court was struggling with the meaning of the phrase “lawfully made under this Title.” There are two phrases that will be at the center of resolving the TiVo case. The first is “fair ground of doubt,” and the second is “merely colorably different.”
Yesterday the United States Court of Appeals for the Federal Circuit issued a precedential opinion in American Medical Systems, Inc. v. Biolitec, Inc. The decision dealt with the scintillating topic of whether a term in the preamble of the claim is limiting. The district court determined it was, and so did the dissenting Judge on the panel, Judge Dyk. The majority of the panel (Judges Bryson and Prost), however, determined it was not limiting, and I think correctly reached that decision. What is of particular interest, however, is the fact that Judge Dyk in dissent came out and said that it was time for the Federal Circuit to en banc decide the appropriate standard for when the preamble is limiting because any fair reading of Federal Circuit “preamble jurisprudence” is difficult to reconcile. While I disagree with Judge Dyk on this case, I am all for settling of the law and in areas where there are conflicting panel decisions, which is pretty much everywhere. The Federal Circuit should aspire to certainty wherever possible. After all, that was why the Court was formed in the first place.
But on some occasions, the patent planets align and Judge Newman gets to write the majority opinion in a Federal Circuit case. And fortunately for us patent prosecutors, In re Vaidyanathan is one of those cases where Newman waxed very eloquent in saying: “Obviousness is determined as a matter of foresight, not hindsight.” More importantly for us prosecutors, she provided us with useful case law precedent to challenge rejections which are long on conjecture and speculation, but extremely short on facts, evidence, logic, or reasoning. In short, Judge Newman flattened a factually unsupported and badly reasoned obviousness rejection under 35 U.S.C. § 103 in Vaidyanathan.
The United States Court of Appeals for the Federal Circuit earlier today decided to take up important issues relating to inequitable conduct en banc, vacating the earlier panel decision in Therasence, Inc. v. Becton Dickinson and Co., which issued January 25, 2010. See en banc order.
The en banc appeal will be heard on the basis of the original filed briefs, additional briefing and oral argument, with the oral argument date and time to be determined. Appellees’ briefs are due within 20 days from today, and appellants’ en banc brief is due 45 days from today. The en banc response brief is due within 30 days of service of the appellants’ new en banc brief, and the reply brief within 10 days of service of the response brief. Briefs of amici curiae will be entertained, and any such amicus briefs may be filed without leave of court but otherwise must comply with Federal Rule of Appellate Procedure 29 and Federal Circuit Rule 29. The Court officially invited the United States Patent and Trademark Office to participate and submit an amici brief.
Judge Randall Rader, soon to be Chief Judge of the CAFC
No one could rightly accuse me of being biased against patents. As a patent prosecutor for over 32 years, most would say I’m the exact opposite. But I do find certain patented inventions that don’t rise to the level of being unobvious under 35 U.S.C. § 103to one of ordinary skill in the art. Such is the patented memorabilia card in Media Technologies Licensing, LLC v. The Upper Deck Company that was deemed obvious on summary judgment, a judgment which was affirmed by a majority of a Federal Circuit panel.
Normally, I find Judge Rader, the heir apparent for Chief Judge of the Federal Circuit, to write cogently and persuasively, even in dissent. Witness his withering blast in In re Bilskiwhere he rightly takes the majority to task for the nonsensical “machine or transformation” test. But unfortunately, like the line from Hamlet, Judge Rader “doth protest too much, methinks” without case law support in his dissent in Media Technologies.
On February 17, 2010, the United States Court of Appeals for the Federal Circuit issued an order in Hyatt v. Kappos vacating the previous decision issued by a 3 judge panel on August 11, 2009, when the case was then styled Hyatt v. Doll. Chief Judge Michel wrote for the court and was joined by Judge Dyk, with Judge Moore providing a strong dissent. The primary issue in Hyatt v. Dudas was whether the district court properly excluded evidence. An appeal was taken from the Board of Patent Appeals within the Patent Office to the United States Federal District Court for the District of Columbia pursuant to 35 U.S.C. 145. Hyatt argued that a plaintiff in a § 145 action is entitled to submit additional evidence subject to no limitations other than those imposed by the Federal Rules of Evidence. Not surprisingly, the Patent Office disagreed, arguing that § 145 actions are at least partly a form of appeal of PTO decisions and that evidence not submitted to the PTO through negligence must be properly excluded at the district court.
I, like many other patent prosecutors, have experienced frustration when a patent examiner makes an obviousness rejection under 35 U.S.C. § 103 (or an anticipation rejection under 35 U.S.C. § 102) based on a mischaracterization of what a reference fairly teaches. The height of a patent prosecutor’s angst occurs when the Board of Appeals and Interferences (BPAI) also adopts findings of fact based on such mischaracterizations.
In In re Chapman, the BPAI made not one, but three mischaracterizations of what the primary reference fairly taught. Two of those mischaracterizations on which the BPAI’s obviousness ruling was based were later deemed to be significant by the Federal Circuit. And fortunately for the patent applicant, the Federal Circuit didn’t treat these two significant mischaracterizations as “harmless errors” because “they increase the likelihood that [the patent applicant] was erroneously denied a patent on grounds of obviousness.”
How to Write a Patent Application is a must own for patent attorneys, patent agents and law students alike. A crucial hands-on resource that walks you through every aspect of preparing and filing a patent application, from working with an inventor to patent searches, preparing the patent application, drafting claims and more. The treatise is continuously updated to address relevant Federal Circuit and Supreme Court decision impacting patent drafting.
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