UPDATED 5/12/2013 at 3:31pm

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 Corporation en 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.

UPDATED: 2:07pm ET

Well, the United States Court of Appeals for the Federal Circuit sort of decided CLS Bank v. Alice Corporation earlier today. Truthfully, all the important questions that we thought might be answered remain completely and totally unanswered because there were only 10 judges who sat on the en banc tribunal and no more than 5 judges signed on to any one opinion.

The only thing we know is this — the Federal Circuit issued an extraordinarily brief per curiam decision, which stated:

Upon consideration en banc, a majority of the court affirms the district court’s holding that the asserted method and computer-readable media claims are not directed to eligible subject matter under 35 U.S.C. § 101. An equally divided court affirms the district court’s holding that the asserted system claims are not directed to eligible subject matter under that statute.

Thus, all of the asserted claims are not patent eligible. At the moment I am completely flabbergasted and don’t know what to say.

This is the final segment of my three-part interview with Chief Judge James Smith and Vice-Chief Judge James Moore of the Patent Trial and Appeal Board of the United States Patent and Trademark Office.

In Part I of the interview we talk about their daily roles, USPTO leadership, the battle to get funded to expand the Board and much more. Part II of the interview picked up with a comparison between the operation of the PTAB and the Federal Circuit, and then goes on to discuss the working relationship between Chief and Vice-Chief.

In the finale, Part III (which is below), we talk about how cases are assigned to various panels, and we spend time chatting about how and why a case might be a good candidate for an expanded board.  We also discussed when PTAB jurisdiction attaches. A light-bulb went off for me during that discussion with respect to the so-called mediation program that has as its goal the short-circuiting of appeals that ought to be unnecessary for the Board to consider.

QUINN: So there was something that you talked about a little bit before.  You just touched on the signing based on familiarity.  Obviously the Board is broken down like the examining corps because you don’t want somebody with—I tell clients all the time it’s like you don’t want me working on a biotech or chemical application at all so you have to have certain familiar—within that subside who is—do you just randomly assign or do you go within that unit and say okay well these judges have a particular facility with this type of technology because bio is big, chemicals big area, not everybody knows or has the same facility.  How is that decision made?  And then the second part of that question was I did want to go back and get into what kind of factors do you consider when you’re thinking about expanding a panel?  I’m not asking you to say well in this case we did it because or whatever, but is there like a list of factors or things that you maybe weigh one way or the other?

This is Part II of my interview with the top two Administrative Patent Judges at the United States Patent and Trademark Office, Chief Judge James Smith and Vice-Chief Judge James Moore.

In Part I of the interview we talk about their daily roles, USPTO leadership, the battle to get funded to expand the Board and much more. Part II (which appears below) picks up with a comparison between the operation of the PTAB and the Federal Circuit, and then goes on to discuss the working relationship between Chief and Vice-Chief.

QUINN: Okay – maybe at the moment while I have it in my head – I don’t know that I have a good sense of what either of your job descriptions really entails on a day-to-day basis.  I know both of you, I see you out and about and I have a sense of what you do and it seems to me that neither one of you probably sleep very much.  And it seems quite different probably than what you would expect from like say for example Judge Rader is the Chief Judge of the Federal Circuit who in a lot of those—and you clerked at the Federal Circuit so maybe you can speak to this.  It seems that the Chief of a court like that is—it’s maybe not quite as heavy of an administrative lift as what you guys deal with, at least that’s my perception.  So let me ask you first ,Your Honor, if you had to describe your day-to-day functions and I know they change depending on what’s on fire at the moment, how do you describe your day-to-day functions and then if you could go in talking, maybe compare to how the Federal Circuit operates which I think a lot more lawyers are probably more familiar with.

Happy New Year and welcome to 2013!

I want to start 2013 with a bang! Thus, I decided to make our first article of the year my interview with the top two Administrative Patent Judges at the United States Patent and Trademark Office — Chief Judge James Moore and Vice-Chief Judge James Smith.

On November 28, 2012, I interviewed Judges Smith and Moore on the Alexandria Campus of the USPTO in the Madison Building. We sat around a modest conference table in the office of Chief Judge Smith. We chatted for approximately 60 minutes with the tape recorder app on my iPhone running. By the time the interview was transcribed, verified and fact-checked we were up against the holiday, so I decided to lead off 2013 with this inside look at the The Patent Trial and Appeal Board (PTAB).

The PTAB was newly created on September 16, 2012, to replace the Board of Patent Appeals and Interferences. The name has changed to take into account the new workload on so-called post-grant procedures ushered in by Phase II of the America Invents Act, which went into effect on September 16, 2012. The Board, however, is still the Board, and Smith and Moore have been at the helm in charge of unprecedented growth in the number of Judges. In part the growth of the Board has been to push the appeals backlog down, but perhaps primarily to be ready to handle the new responsibilities thrust on the Board by Congress under the AIA.

For those who are looking for insight into how the board operates this interview series is mandatory reading. As a patent attorney I know about the Board, and I suspect you do as well. But only very few cases are ever appealed, although that number is unfortunately growing for a variety of reasons, so how well can any of us really know the Board? Smith and Moore give us a rare glimpse into the Board and the day-to-day inner workings of the two top Administrators who themselves also work hard to seek opportunities to stay engaged and join panels whenever possible. In Part I we talk about their daily roles, USPTO leadership, the battle to get funded to expand the Board and much more.

On Friday, December 7, 2012, the United States Court of Appeals for the Federal Circuit issued a precedential opinion in Raylon v. Complus Data that gives hope to defendants everywhere who face objectively baseless patent infringement claims. For a very long time I have preached that the tools to deal with the bad actors in the patent community (i.e., patent trolls) exist if only the Federal Circuit and the district courts would stand up to the challenge. Rule 11 of the Federal Rules of Civil Procedure give district courts the ability to sanction litigants for frivolous court filings. Unfortunately, Rule 11 is almost never used. Today, however, the Federal Circuit determined that the district court abused its discretion when it denied the defendants’ Rule 11 motions.

At the conclusion of the decision Judge Prost, writing for the majority, wrote:

We reverse the district court’s holding that there was no Rule 11 violation and remand to the district court to determine, in the first instance, a proper sanction. Because the court’s evaluation of § 285 relied on its Rule 11 analysis, we vacate the district court’s denial of attorneys’ fees and costs, and remand for the court to reconsider defendants’ motions in light of our decision.

Of particular note, however, is that Judge Reyna only joined in the decision, but chose to file a separate concurring opinion. Judge Reyna explained that he differed only slightly with his colleges (Judges Prost and Moore). Judge Reyna would not have preferred not to remand the issue for further consideration on the merits of the defendants’ request for attorneys fees, but rather would have found this case exceptional and remanded only on the issue of what sanctions would be appropriate pursuant to 35 U.S.C. § 285.

Five years ago, on Thursday, September 20, 2007, the United States Court of Appeals for the Federal Circuit issued two decisions that provoked much debate, and which deserve to be remembered.  One the Court got right  and, sadly, one the Court got excruciatingly wrong.

The first case, In re Comiskey, seemed rather straight forward and certainly not earth shattering, except perhaps for one issue – namely that the Federal Circuit issued its decision on patentable subject matter grounds without patentable subject matter ever being an issue during prosecution or on appeal.

In Comiskey, one set of claims were directed to the purely mental process of arbitrating a matter and deciding the outcome. The Federal Circuit did not waste time pointing out that arbitration is extremely well known and could hardly be considered patentably new or nonobvious, rather they cut to the chase and explained that the law does not allow patents to be issued on particular business systems that depend entirely on the use of mental processes, deciding that “the application of human intelligence to the solution of practical problems is not in and of itself patentable.”

A key provision of the Hatch-Waxman Act resides in 35 U.S.C. § 271(e)(1) which provides immunity from a patent infringement suit where the testing of the patented invention is for the purpose of securing regulatory approval from the FDA.  Or to use the specific language of 35 U.S.C. § 271(e)(1), there is no patent infringement if the use of the patented invention is “solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs.”

This Hatch-Waxman provision, commonly known as the “safe harbor,” has been construed twice by the Supreme Court, and in an expansive manner to immunize alleged infringing activity.  First, in the 1990 case of Eli Lilly & Co. v. Medtronic, Inc., the Supreme Court ruled that this “safe harbor” applied to medical devices, not just drugs as was originally believed (including by the respective House and Senate floor managers for the Hatch-Waxman Act).  In fact, the basis for the holding in the Medtronic case makes this “safe harbor” essentially applicable to the testing of any patented invention that is for the purpose of securing regulatory approval from the FDA (e.g., food additives, cosmetics, etc.).  See Guttag, “The Ever Expanding ‘Safe Harbor’ of Hatch-Waxman:  The Merck v. Integra Lifesciences Case,” Cincinnati Bar Association Report, page 16 (August 2005).

In the immortal words of baseball great Yogi Berra, “It’s déjà vu all over again”.  A little more than a year after they previously heard AMP v. USPTO, the CAFC panel of Judges Lourie, Bryson and Moore have once again taken up the question of whether isolated DNA and related methods are patent eligible subject matter under 35 U.S.C. §101.

To recap, last year, the same panel ruled that the composition claims reciting isolated DNA were patent eligible, with Judges Lourie and Moore supporting patent eligibility and Judge Bryson dissenting.  All three Judges also agreed method claims involving “analyzing” or “comparing” DNA were not patent eligible.  Lastly, all three Judges agreed that a screening claim (claim 20 of the ‘282 patent) was patent eligible.  For a full discussion of last year’s decision (in English and Japanese), please click here.  After the decision, AMP appealed to the Supreme Court, who later vacated the CAFC decision and remanded the case to the CAFC for further consideration in view of their Mayo decision (English summary;Japanese summary).

Last week the United States Court of Appeals for the Federal Circuit issued a curious decision in Ergo Licensing, LLC v. CareFusion 303, Inc.  This decision should send chills down the spine of everyone who has patents in the software space, and needs to be carefully considered by all those who draft patent applications in the software space.  The panel was made up of Judges Newman, Linn and Moore.  The opinion was delivered by Judge Moore, and a dissent filed by Judge Newman.

Judge Newman explained in dissent that the way in which the Ergo patent was drafted was similar to the way that thousands of similar patents are drafted and that this decision upsets the overwhelming weight of Federal Circuit precedent on the issue.  Judge Newman is correct.  Whether this becomes one of those decisions that is an aberration of is something to be afraid of remains to be seen, but moving forward your software patent applications should become far more detailed in an effort to deal with this case.

 

In the recently issued case of ClearValue, Inc. v. Pearl River Polymers, Inc., Judge Moore, writing for the Federal Circuit panel, distinguished the holding in the 2006 case of Atofina v. Great Lakes Chemical Corp. In ClearValue, Judge Moore ruled that a process having a claimed raw alkalinity of “less than or equal to 50 ppm” was anticipated under 35 U.S.C. § 102 by a prior art process disclosing an alkalinity of “150 ppm or less.” I believe Judge Moore was correct in ruling that the claimed alkalinity of “less than or equal to 50 ppm” was anticipated by the art disclosed alkalinity of “150 ppm or less.” But her basis for distinguishing Atofina in ClearValue is very problematic in a number of respects, and could create further unnecessary confusion as to when a narrower claimed range in a process is anticipated by a broader range disclosed by the prior art.

As illustrated by the ClearValue and Atofina cases, one area where the Federal Circuit sometimes struggles in articulating clear doctrine is when is a narrower claimed range in a process is anticipated under 35 U.S.C. § 102 by a broader range disclosed by the prior art. A significant contributor to this problem is the unfortunate and interchangeable use by the Federal Circuit of the phrases “overlapping” and “encompassing.” (I have also found patent examiners fail to understand the difference between these phrases.) In my view, the phrase “overlapping” should be used only when the claimed and the art disclosed ranges partially overlap or share at least one common end point. By contrast, when a narrower claimed range fits within a broader range disclosed by the prior art, the term “encompassing” is more appropriate to describe the relationship of the claimed narrower range to the disclosed broader range. (Some refer to an “encompassed” range as a “sub-range.”)

Earlier today the United States Court of Appeals for the Federal Circuit decided not grant a petition for en banc rehearing in Retractable Technologies Inc. v. Becton, Dickinson and Company.  See Order and dissents. While a failure to order rehearing en banc is typically not newsworthy, this one was because there were two separate and passionate dissents. Judge Moore wrote the first dissent and was joined by Chief Judge Rader (who was on the original panel along with Judge Lourie and Judge Plager). The second dissent was written by Judge O’Malley. Both dissents make compelling cases for this case to have been reheard en banc to once and for all address the split among the Federal Circuit relative to claim interpretation.

The July 29, 2011 Federal Circuit decision in Assoc. for Molecular Pathology et al. v. U.S.P.T.O. and Myriad Genetics has been eagerly awaited by the biotechnology community and by persons concerned with the ethical implications of DNA technology. Although a significant part of the decision involved standing to sue, I will only discuss the scientific portions of the decision that deals with the very real ethical question of whether human genes and/or gene sequences should be patented.

The decision in Myriad was written by Judge Alan Lourie with concurrences-in-part by Judges Moore and Bryson. Judge Bryson also filed a dissent-in-part. Judge Lourie, who has a Ph.D. in chemistry, is well suited to understand all the issues associated with genetic sequence cases and has written some key biotechnology decisions, such as the Regents of the University of California v. Eli Lilly, 119 F.3d 1559 (Fed. Cir. 1997) (Cloned human insulin product did not infringe patented rat insulin.) and In re Deuel , 51 F.3d 1552 (Fed. Cir. 1995) (Settled an issue of obviousness between genetic sequences). Judge Bryson was also part of the Lily decision.

Just as all of us have slowly started to absorb the implications of the remand in Prometheus Laboratories, Inc. v. Mayo Collaborative Services, as well as the triumvirate of opinions in Association for Molecular Pathology (AMP) v. USPTO, on the standard for patent-eligibility under 35 U.S.C. §101, the Federal Circuit (finally) issued its long awaited (by some of us) remand decision in Classen Immunotherapies, Inc. v. Biogen IDEC. That there was a majority (and a dissenting) opinion in the remand of Classen wasn’t surprising. But that there was yet a third “additional views” opinion would likely not have been predicted by anyone. And it is that “additional views” opinion, along with the majority and dissenting opinions, that will certainly generate a “firestorm” through the Federal Circuit, and which may eventually reach the Supreme Court. The judicial donnybrook on the question of what the standard is (or should be) for patent-eligibility under 35 U.S.C. §101 is about to begin in earnest.

As my fellow patent attorney, Kevin Noonan, poignantly says on Patent Docs, the Classen remand decision “[couldn’t] be more different from the Federal Circuit’s earlier decision.” That earlier decision (with Judges Moore and Newman on the panel), which came out not long after the Federal Circuit’s famous (and some would say “infamous”) en banc Bilski decision, is astounding for its brevity (one paragraph of 69 words), or as Kevin also poignantly observed, the claimed method was longer than the opinion by 20 words. As I also commented when that earlier opinion came out, it was ghastly for completely failing to explain how the “new” Bilski “machine or transformation” test was applied to the claimed method. See CAFC: Method for Calibrating Drug Dosage is Transformative.

After much anticipation, the United States Court of Appeals for the Federal Circuit earlier today issued a decision in Association for Molecular Pathology v. Myriad Genetics.  The decision on first glance will seem to be a split decision, particularly by Federal Circuit standards.  The majority opinion was written by Judge Lourie, Judge Moore wrote a concurring opinion and Judge Bryson concurred in part and dissented in part.  Having said that, the outcome largely seems to be what was predicted by the patent community.  On the major substantive issue — are isolated DNA molecules patent eligible subject matter — the Federal Circuit reversed the decision of the district court and ruled that isolated DNA molecules do constituted patent eligible subject matter.  The Federal Circuit also ruled that methods relating to the screening for potential cancer therapeutics are, likewise, patent eligible subject matter.  All three Judges also found the “comparing” and “analyzing” claims to be ineligible for patent protection because they were not transformative, and thus were merely abstract mental steps.