In Berkheimer and Aatrix, the Federal Circuit indicated that although patent eligibility under Section 101 is ultimately a question of law, the determination may have factual underpinnings that, at least in some cases, render it inappropriate for motions to dismiss or for summary judgment… However, following Berkheimer and Aatrix, the Federal Circuit has itself affirmed numerous Section 101 rulings that were made at the dismissal or pleadings stage. This article provides a summary of recent district court decisions granting Rule 12(b)(6) motions to dismiss under Section 101.
All too often, the prospective licensee/purported infringer usually doesn’t begin its efforts to acquire the patent(s) until after making disparaging statements about them during negotiations. As an example, consider the time line discussed in the case of Gust, Inc. v. Alphacap Ventures, LLC, No. 2017-2414 (Fed. Cir. September 28, 2018) in which Alphacap Ventures, the purported infringer, demanded re-assignment of the patent owner’s patents as part of a settlement offer, but only after arguing for the invalidity of such patents under 35 U.S.C. § 101… While disparaging the patents question might serve a useful purpose in reducing their value, such disparaging statements will likely haunt the new owner during subsequent assertion assuming the new owner conceals such statements because of their potentially harmful nature.
What makes SCOTUS’s assertions in patent law jurisprudence that there are these “exceptions” or additional “requirements” particularly annoying to many of us in the patent bar is that patent law is essentially statutory. In other words, there should be no “federal common law of patents” that allows SCOTUS (or any other court for that matter) to make “exceptions” to or make additional “requirements” for what is already expressly written in the patent statutes. Indeed, in other areas of federal law, SCOTUS has made it abundantly clear that “federal common law” doesn’t exist. The most famous example is Erie v. Tompkins where SCOTUS overturned its prior view of a “federal common law” applicable in cases involving diversity jurisdiction. So we in the patent bar may rightly ask: why does SCOTUS believe it can create what is, in essence, a “federal common law of patents” to supplant or modify the existing patent statutes?
The Qualcomm decision is unique in that it appears to be the first decision to require a SEP holder to license its patented technology to its competitors, and not just its downstream customers, on FRAND terms. This decision casts doubt on the longstanding practice, common in industries such as the telecommunication and automotive industries, in which SEP holders seek to secure “FRAND” licenses with downstream companies that make finished products, while refusing to license (or licensing on non-FRAND terms) those same SEPs to their competitors or other companies further up the supply chain (such as component suppliers). The decision also emphasizes U.S. courts’ focus on the express language of SSOs’ IPR policies and the willingness to review the SSO guidelines in interpreting the agreements SEP holders enter into with SSOs. In this regard, the decision may bode well for SEP implementers, given the court’s broad understanding of what it means to “practice” a relevant standard and its view that SEP holders’ FRAND obligations extend to all potential licensees, irrespective of their position in the supply chain.
Last week, in Ancora Technologies v HTC America, the Federal Circuit reversed a lower court’s invalidity ruling under 35 USC §101 by concluding that Ancora’s claimed subject matter was concrete—not abstract—because it assigned specific functions to specific parts of a computer to improve computer security… This case is yet another in a string of post-Alice cases suggesting that patents should be drafted with an emphasis on the technical problem and technical solution delivered by the claims.
Although every case had its own special facts reflecting unique personalities, technologies and business models, one necessary element was present in every single case. Somebody had done something stupid. And they still do. Sometimes it’s about what people do when getting ready to leave their job and go into competition. They brazenly solicit customers or foment discontent among the staff they want to recruit. They use the company’s computer system to research and prepare their business plan. They download thousands of confidential files they’re not supposed to have anyway, and then try to cover their tracks by using specialized software – I’m not making this up– called “Evidence Destroyer.”
Defensive Collateral Estoppel Applies Only if Essentially Identical Accused Product Found Non-infringing
In its opinion, the Federal Circuit explained that defensive collateral estoppel of non-infringement applies in very limited circumstances where “a close identity exists between the relevant features of the accused device and the device previously determined to be non-infringing such that they are ‘essentially the same.’” Accused products are essentially the same where “the difference between them are merely ‘colorable’ or ‘unrelated to the limitation in the claim of the patent.’” Thus, “[i]f accused devices in a second suit remain ‘unchanged with respect to the corresponding claim limitations at issue in the first suit,’ the patentee is precluded from pursuing its infringement claims a second time.” The burden is on the proponent of claim or issue preclusion to show that the accused products are essentially the same.
On October 30, the Federal Circuit Court of Appeals reversed a decision from the International Trade Court invalidating the Converse Chuck Taylor sneaker design trade dress. Converse Inc. v. ITC, No. 2016-2497, 2018 WL 5536405 (Fed. Cir. Oct. 30, 2018). At first glance, this appeared to be great news for Converse. However, the decision highlights multiple obstacles that Converse, and other brand owners, will continue to face as they seek to enforce product design trade dress in the US.
The Federal Circuit recently reversed the Western District of Washington’s dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure where the district court held that the claimed subject matter was ineligible for patenting under 35 U.S.C. § 101. Specifically, the Federal Circuit, reviewing the decision de novo, concluded that the claimed method of improving security was a non-abstract computer-functionality improvement because it was done by a specific technique that departs from earlier approaches resulting in a beneficial reduction of the risk of hacking.
The number of trademark applications being filed by foreign companies with the United States Patent and Trademark Office (USPTO) has been growing steadily – and in China’s case rapidly – since 2013. In 2013, a total of 328,180 trademark applications were filed in the USPTO, of which 57,977 (17%) were filed by foreign applicants. In 2017, 451,009 trademark applications were filed with the USPTO and the total number filed by foreign-based applicants rose to 119,883 (26%)… It is important for U.S. companies to recognize that the increases in trademark filings in general and by foreign companies, in particular, signify future stiff competition in the marketplace and potentially serious threats to existing trademarks.
In Hamilton Beach Brands v. F’Real Foods, the Federal Circuit found that under the Administrative Procedure Act, the Patent Trial and Appeal Board’s adopted claim construction in an IPR need not be identical to a construction proposed by a party so long as the construction is “similar enough” to provide notice for the parties to argue for or against the construction.
The default position of brands has often been to protect as many marks as possible, driving other applicants out and helping establish a well-known and profitable identity. When names can make or break a brand, a significant number of trademarks are created purely for protection. However, these protective practices lead to a systemic problem. When new entrants to a market are faced with trademark clutter, their only choice is to adopt equally aggressive application strategies. This behavior leads to more clutter and further reduces the available pool of marks for the next generation of applicants.
Artificial intelligence technologies are transforming industries and improving human productivity and health. Unfortunately, the stark reality appears to be that artificial intelligence technologies are likely to be more heavily scrutinized under 35 U.S.C. § 101 and less likely to be allowed… The Court in Electric Power Group made note that: “we have treated analyzing information by steps people go through in their minds, or by mathematical algorithms, without more, as essentially mental processes within the abstract-idea category”. The authors propose that this sentence of the decision is of utmost importance in the context of patenting A.I. technology.
Looking first at patent litigation, approximately 20,000 companies have been sued for patent infringement in the U.S. since 2010; even your neighborhood restaurant is at risk. A particular global fast food chain is sued, on average, at least once a year for patent infringement. Those suits aren’t over hamburger recipes or kids’ meal toys: They’re over its mobile apps, point-of-sale technologies and other software that have nothing to do with food. Even financial and management consulting firms find themselves in the middle of trade secret, patent and copyright disputes over issues ranging from talent acquisition to website display carousels to website functionality to software the firms themselves developed.
It’s football season, so of course we should be talking about beer. Specifically, beer secrets. For fourteen years James Clark had an enviable job at Anheuser-Busch, where he had access to the brewer’s confidential recipes. For unexplained reasons he resigned. Instead of joining a competitor, he went to see a lawyer about planning a class action against his former employer for “intentionally overstating the alcohol content” of the company’s “malt beverages.”… Anheuser-Busch sued him for misappropriation of its secrets for making beer.