On November 19, 2014, the United States Court of Appeals for the Federal Circuit issued a decision in e.Digital Corporation v. Futurewei Technologies, Inc. e.Digital appealed from a judgment of non-infringement made by the U.S. Federal District Court for the Southern District of California. The district court based its determination of non-infringement on the fact that e.Digital was collaterally estopped from seeking a construction of a claim limitation in e.Digital’s U.S. Patent Nos. 5,491,774 and 5,839,108 different from another court’s previous construction of the same limitation in the ’774 patent.
The Federal Circuit, with Judge Moore writing and joined by Judges O’Malley and Reyna, held that the district court correctly applied collateral estoppel to the ’774 patent, but improperly applied the doctrine to the unrelated ’108 patent.
To understand the ruling in this case one must first look at the prior case that construed the critical claim. Previously, in a litigation in the United States Federal District Court for the District of Colorado, e.Digital asserted claims 1 and 19 of the ’774 patent. The ’774 patent discloses a device with a microphone and a removable, interchangeable flash memory recording medium that allows for audio recording and playback. Asserted claims 1 and 19 recited “a flash memory module which operates as sole memory of the received processed sound electrical signals.” The district court construed the sole memory limitation to require “that the device use only flash memory, not RAM or any other memory system” to store the “received processed sound electrical signals.” The district court based its construction on the written description of the ’774 patent and its determination that the use of RAM had been disclaimed during prosecution. With this claim construction decided, the parties stipulated to a dismissal of the case with prejudice.
Earlier today the United States Court of Appeals for the Federal Circuit ruled that Dolly the cloned sheep, and any other genetic clones, are patent ineligible in the United States because the “claimed clones are exact genetic copies of patent ineligible subject matter.” The case decided was In re Roslin Institute(Fed. Cir. May 8, 2014).
The Roslin Institute of Edinburgh, Scotland (Roslin) is the assignee of U.S. Patent Application No. 09/225,233 (the ’233 application) and had appealed from a final decision of the Patent Trial and Appeal Board, which held that all of Roslin’s pending claims were unpatentable subject matter under 35 U.S.C. § 101. The Board also rejected Roslin’s claims as anticipated and obvious under 35 U.S.C. §§ 102 and 103. Having determined that genetic clones are not patent eligible the Federal Circuit, in a decision by Judge Dyk who was joined by Judges Moore and Wallach, did not reach the 102 or 103 issues, instead simply affirming the Board’s rejection of the claims under § 101.
To tell the story involved in this case we must travel back to July 5, 1996, when Keith Henry Stockman Campbell and Ian Wilmut successfully produced the first ever cloned mammal from an adult somatic cell: Dolly the Sheep. The cloning method Campbell and Wilmut used to create Dolly was a significant scientific breakthrough. Campbell and Wilmut obtained U.S. Patent No. 7,514,258 (the ’258 patent) on the somatic method of cloning mammals, which was been assigned to Roslin. The ’258 patent was not at issue in this case.
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.
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.
PTAB Vice-Chief Judge Moore at recent swearing in ceremony.
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.
PTAB Chief Judge Smith at recent swearing in ceremony.
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.
SMITH: I can do both of those things, I believe together. One clear difference between being Chief Judge of this Board and being Chief Judge of the Federal Circuit is that the size of our organization is substantially larger with roughly 200 judges and more than 120 support staff; we are 300 plus people to manage. I don’t think Judge Rader has quite that many.
Patent Trial and Appeals Board: Chief Judge James Smith (left) and Vice-Chief Judge James Moore (right). November 28, 2012.
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 Datathat 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.