Posts Tagged: "novelty"

As I noted in part one of my talk at the IPWatchdog Patent Masters Symposium, the validity statistics for SEPs do not look very good at first glance. Thus, according to a 2017 PricewaterhouseCoopers study, plaintiffs in U.S. courts (ignoring patent type) have on average a 33% chance of success—only a 27% chance in the case of telecommunications patents. This chance of success is probably overstated for Standard Essential Patents (SEPs), based on the easy availability of prior art. Indeed, according to RPX’s 2014 study, in the United States, SEPs are likely to be less than half as successful as non-SEPs.In my talk, I pointed to the high invalidation rates in Europe to buttress my point that, at first glance, SEPs seem particularly vulnerable to validity challenges. Thus, in Germany, a supposed nirvana for patent assertion, the authors of the study “Patent Paper Tigers” reviewed the case law of the German Federal Patent Court and the German Federal Court of Justice in nullity matters in the period from 2010 to 2013 and found that: The nullification rate of all Senates of the German Federal Patent Court is 79.08% in total; and the nullification rate at the German Federal Patent Court regarding Software and Telecom patents which are (currently) of particular relevance from an economic point of view is 88.11%. Returning to the point made in the first part of my talk, having noted that most SEP nullification comes from obviousness, and not novelty, there should be no public interest exception to my argument that: unprovoked—that is, without first having made a FRAND offer or counteroffer—serial nullification of SEPs is contrary to the duty to negotiate in good faith and should remove a party’s defense against an injunction to SEPs.

Now, there is a flaw in this theory, and that is that, in the past few years, third parties have emerged that will—for their members or other contracted entities—kill patents.

Recently, the United States Court of Appeals for the Federal Circuit (“the Federal Circuit”) issued its opinion in Solutran, Inc. v. Elavon, Inc., 2019-1345, 2019-1460 (Fed. Cir., July 30, 2019) in which the Court held claims 1-5 of Solutran’s U.S. Patent No. 8,311,945 invalid under 35 U.S.C. § 101 for failing to recite patent eligible subject matter. In reversing the District Court, the Federal Circuit found that the claims of the patent recited an abstract idea (electronically processing paper checks) and that the claims failed to transform that abstract idea into patent-eligible subject matter. More importantly, the Federal Circuit dismissed Solutran’s argument that the claims were patent eligible simply because they were novel and non-obvious, noting that: “We have previously explained that merely reciting an abstract idea by itself in a claim—even if the idea is novel and non-obvious—is not enough to save it from ineligibility.” The Solutran decision is not the first time the Federal Circuit has held that novelty/non-obviousness does not bear on the question of patent eligibility.

Boulder, CO-based shoe manufacturer Crocs, Inc. (NASDAQ:CROX) had a design patent rejected by the U.S. Patent and Trademark Office. The patent struck by the USPTO is U.S. Patent No. D517789. Issued in March 2006 and assigned to Crocs, it protected the ornamental design of footwear. The design patent illustrations attached to the ‘789 design patent showcase the well-known Crocs design featuring holes in the footwear material around the front of the foot and a strap behind to hold the footwear in place against a person’s heel… The Examiner refused to recognize a priority claims of earlier filed applications dating back to June 23, 2003. According to the Examiner, the shoe that is the subject of the ‘789 design patent was not adequately disclosed prior to May 28, 2004, making an earlier priority date claim impossible to recognize.

Ironically, judicial decisions on patent eligibility tend to depend on inventiveness, with tests of originality that tend to refer to novelty, reducing the issue of patentability to novelty. For example, post-Alice Federal Circuit decisions in Enfish and Bascom flush out the two-step tests of a technical contribution and an inventive step, thereby reducing patentability to inventiveness. Uncertainty about patent validity, the changing standards for assessing patent validity or the false equivalence between patentability and novelty, has tended to destabilize the patent system.

Essentially, §102 requires the patent applicant to demonstrate that the invention is new. In essence, in order for a claimed invention to violate this “newness” requirement it must be exactly identical to the prior art… In order to understand the requirements of §102 it will be helpful to explore the concept of anticipation in detail. A claim is said to be “anticipated” if comparison of the claimed invention with a prior art reference reveals that each and every element in the claim under attack is shown or described, organized, and functioning in substantially the same manner as in the prior art reference.

The problem-solution paradigm has become a cornerstone of patentability in Europe. If the invention cannot be reduced to the format of a technical solution to a technical problem, this could be a sign that either the supposed invention is non-technical, or the contribution over the state of the art is non-technical. In Europe, non technical inventions are excluded much in the same way as abstract ideas are deemed non-patent eligible in the US. Inventions that make no technical contribution are refused for obviousness. The EPC and the subsequent case law do not have a precise definition of what is technical (non-abstract) and non-technical (abstract). Nevertheless there is a growing body of case law on inventions which involve a mix of technical features and non technical features and that are refused for lack of inventive step because the non-technical features are disregarded.

In Europe and the US, patentability depends on a showing of inventiveness that is based on similar legal requirements but practice differs substantially and the resulting patent quality varies… At the USPTO, patent applications are rejected for obviousness (35 USC §103) already in a first Office Action by an examiner and his/her supervisor… Over in Europe the examination of inventive step begins with an opinion following which the applicant is invited to comment/amend.

Rather than the drastic measure of abolishing § 101, such as that proposed by previous USPTO Director Kappos, we think that a simple change to § 101 that removes the confusing notion of “inventiveness” from statutory interpretation would do the trick. Our proposal strikes a middle ground, in that, while removing “inventiveness” concepts from § 101 analysis, it retains the historical exceptions rooted in pre-emption that were reiterated in the Triad.

A patent is a proprietary right granted by the Federal government pursuant to laws passed by Congress. The Congressional power to authorize patents is found in Article I, Section 8, Clause 8, of the United States Constitution. exclusive rights are provided for a limited time as an incentive to inventors, entrepreneurs and corporations to engage in research and development, to spend the time, energy and capital resources necessary to create useful inventions; which will hopefully have a positive effect on society through the introduction of new products and processes of manufacture into the economy, including life saving treatments and cures. See Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 480 (1974).

When people say that inventors do not need to start with a patent application and can wait to file I cringe. It is not that this is universally bad advice, but it certainly comes with a lot of risk, even more risk now that the United States is a first to file country with only an infinitesimally small grace period remaining. Today it is imperative that the U.S. first to file laws be interpreted to mean file first before you disclose anything, demonstrate your invention publicly or offer it for sale. The risk of waiting to file a patent application is simply too great and may forever foreclose the ability to obtain a patent.

Properly used, a qualified search can be one of the most cost-effective and valuable tools a company can have to not only capture and create innovation, but also to avoid being sued for infringement. This dual purpose for a search is important to understand. A novelty search is intended to determine whether a patent can likely be obtained, but sometimes it will be quite useful to undertake a more comprehensive analysis of the search results to determine whether moving forward might result in a charge of patent infringement. In order to maximize the value of a company’s portfolio it is critical for business managers to understand the of importance of a search— including what kinds of searches are available, why to consider search before filing patent application, when to get searches, who should conduct and review search, and how to strategically use search result.

Chien argues that it is impossible for someone to donate their technology without fearing that another will get a patent on it and defeat the well-meaning donation to the public. Such a statement plays into urban mythology and preys upon those who are convinced that patent applicants can and do steal innovations and get patents instead of the rightful inventor. If that were actually true I’d be all in favor of opening up the patent system, whatever that means. Unfortunately, Chien builds her argument on a factually erroneous foundation.