Patent Filings Roundup: Dozens of Patents DJed Under Alice; Counterfeit Kids’ Bikes Challenged; Board Refuses Non-Fintiv Policy Arguments
District court filings were low this week with 49, a substantial percentage of which were filed against small or medium-sized companies by IP Edge or Leigh Rothschild-owned subsidiaries. The Patent Trial and Appeal Board (PTAB) was steady with 33, one post grant review (PGR), the rest inter partes reviews (IPRs). The fallout from the Magnetar-backed Irish entity Neodron filing in the International Trade Commission (ITC) continued with the usual trickle of filings against their portfolio; frequent litigant Omnitracs, LLC (through various subsidiaries), a fleet management company, was the target of a handful of challenges, and a handful of parties filed challenges on semiconductor-related disputes.
Imagine you are presenting to your boss and requesting approval of a $2 million purchase of four patent families. Already savvy about market prices, she is focused on the impact of the purchase to the business. Her question: “So what are these patents worth and what will the impact be of the purchase?” Unless you have done some sort of valuation to quantify the worth of these patents for the business, you may find yourself talking vaguely about synergies or avoided costs. This is because getting a valuation typically takes time and can be expensive. But what if there was a way to quickly model the worth of the patents to us?
The Federal Trade Commission (FTC) just can’t take “no, you’re wrong” for an answer. Despite its embarrassing reversal by the Ninth Circuit Court of Appeals in August, the FTC has now appealed its Qualcomm case to the full Ninth Circuit. A three-judge appellate panel overturned the trial court’s errant ruling, giving the FTC a comeuppance in its antitrust suit against Qualcomm, the trailblazer in wireless technology with thousands and thousands of patented inventions. The sheer cliff the FTC seeks to climb features daunting crags. The appellate judges ruled unanimously. They also found fundamental problems in the trial court’s (and FTC’s) legal and factual analysis, and so they gave basic aspects of the case fresh eyes, or de novo, review. And several federal departments, including the Justice Department Antitrust Division, weighed in with the trial court in opposition to the FTC.
Imagine you have found four patent families that address a specific risk to your business, and you are about to ask your boss to approve buying those patents for $2 million. Her questions might include, “What’s the going rate for patents?” Similarly, if you were working with your company’s accounting team and moving four patent families from your corporate parent to a subsidiary, the accounting department might ask, “What is the ‘fair market value’ of these patents for transfer pricing?” A preliminary issue arises: what are you really being asked for? This confusion in part stems from the common use of “price” and “value” nearly interchangeably in day-to-day conversations.
In an earlier article, “Tips for Selecting a ‘Lead Compound’ in Compound Claim Challenges,” I introduced an approach derived by U.S. federal courts called the “lead compound analysis,” and discussed the first stage of the analysis – “Lead Selection”. This post discusses the second stage – “Lead Development”. The lead development analysis involves assessment of the efforts required for modifying the lead compound to arrive at the claimed compound. As with the case of lead selection, the lead development also involves reviewing the similarities and dissimilarities between the lead and the claimed compounds. The courts have approached this inquiry broadly as the obviousness analysis under the KSR framework (KSR International Co. v. Teleflex Inc., 127 S. Ct. 1727 (2007)) and the Graham factors (Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966)).
Analyzing Vastly Different First Action Final Rejection Outcomes Following Recent Policy Change (Part II)
The USPTO recently revised Manual of Patent Examination Procedure (MPEP) Section 706.07(b) to retroactively impose a first action final rejection (FAFR) policy that significantly reduces patent applicants’ options (MPEP, E9R10.2019. Fed. Reg. Vol. 85, No. 133 page 41,571). In Part 1 of this two-part series, we analyzed the final agency decision provided by the USPTO as basis for the FAFR policy change. Here, in Part II, we analyze petition decisions relating to FAFRs made on amended claims filed in continuing applications. We discovered, when determining the propriety of a FAFR, the USPTO has been comparing whether claims are drawn to same invention using two separate legal standards: identical scope or patentably indistinct. The majority of the patent corps apply the 1969 legal standard which limits FAFR to claims of identical scope as previously examined. The results of our analysis indicated the new patentably indistinct standard authorizing FAFR on substantially amended claims originated in one Technology Center (TC), was upheld by the FA Decision (defined below), and then adopted by another TC in 2018. Codifying two alternative FAFR standards in the June 2020 MPEP permits all patent examiners to arbitrarily impose FAFRs on substantively amended claims, if they so wish.
Google has admitted it copied over 11,000 lines of Oracle’s creative Java code to build its Android smartphone platform, that it makes commercial use of the code it copied, and that it uses the code for the same purpose as Oracle and those who license its products. Now, Google wants the Supreme Court to hold that this is fair use under American copyright law. Stripping away the diversions that Google and its amici offer the Court, these are the core facts which show how extreme Google’s invocation of fair use in this case truly is…. As the October 7 oral argument date nears in Google v. Oracle, I’d like to build on the fair use discussion by Washington, D.C. attorney Terry Campo published in August to further analyze Google’s claims of fair use to excuse its copying. The company’s claims aren’t just insufficient, they’re undermined by Google’s own arguments.
The U.S. Patent and Trademark Office (USPTO) has submitted proposed rulemaking for review by the White House’s Office of Management and Budget (OMB). Although the details are not public, the proposed rule is anticipated to formalize prudential doctrines on trial institution that the Patent Trial and Appeal Board (PTAB) currently applies through precedential opinions such as Apple Inc. v. Fintiv, Inc.; General Plastic Industries Co. Ltd. v. Canon Kabushiki Kaisha; and Becton, Dickinson & Co. v. B. Braun Melsungen AG. These doctrines provide legal frameworks under which the PTAB may deny institution of an inter partes review (IPR) based on fairness—rather than on merits alone. Because the doctrines reduce the odds that certain categories of IPRs will be instituted, they are subjects of fierce dispute among patent lobbyists and, most recently, a lawsuit filed under the Administrative Procedure Act (APA) in the Northern District of California. Apple Inc. v. Iancu, No. 5:20-cv-06128 (N.D. Cal.). As the two sides fight for their respective interests, the public—and policymakers—should not lose sight of the big picture: these doctrines protect basic tenets of fairness and they are, on balance, good policy. Stakeholders and OMB should therefore support the USPTO in its rulemaking effort.
Patent Filings Roundup: Clash of Clans Conflict Continues; First ANDA-Related Pharmaceutical Patent Discretionary Denial; Freedom-to-Operate Action on Synthetic Peptide Tech
District court patent filings bounced back this week to 86, while the Patent Trial and Appeal Board (PTAB) saw a slight jump to 44, fueled in part by eight under-the-wire covered business methods (CBM) filings just prior to that program’s expiry. WSOU Holdings filed another round against new defendants from their massive Nokia/Alcatel-Lucent portfolio, asserting new one-off patents not previously asserted, bringing their litigation total this year to 131, and bringing new defendants F5 Networks and Xilinx into the fray. It seems there may be no end to new suits in sight.
In Part I of this article, we briefly summarized how O’Reilly v. Morse was relied upon in the denial for rehearing in the recent case of AAM v. Neapco to assert that a patent claim to a method of making a motor vehicle axle failed to qualify as patent eligible subject matter under 35 U.S.C. § 101. The concurring opinions concluded that claim 22 of the patent at issue, U.S. 7,774,911, “merely invoked” natural law, and did not describe what had been obtained in the patent. Consequently, as in O’Reilly v. Morse, the claim was “too broad, and not warranted by law.” We also noted an apparent paradox in that, while claims cannot preempt natural law and must be supported by an enabling specification, they necessarily must be able to read on embodiments that incorporate later-developed technology. The key to resolving this dilemma is the notion of invention, which was the basis for the holding by the Court of the King’s Bench in Hornblower v. Boulton.
The USPTO recently revised the Manual of Patent Examination Procedure (MPEP) Section 706.07(b) to retroactively impose a first action final rejection (FAFR) policy that significantly reduces a patent applicant’s options (MPEP, E9R10.2019. Fed. Reg. Vol. 85, No. 133 page 41,571). Here, in Part I of this two-part series, we identify and analyze the final agency petition decision behind the policy change. In Part II, we provide summary and analysis of petition decisions relating to premature final office actions. Codifying the new FAFR standard in the June MPEP revision opens the door for all patent examiners to impose FAFRs on substantively amended claims, if they so wish.
Morse Code: Is There a Message Behind the Federal Circuit Split in American Axle v. Neapco? (Part I of II)
It may seem surprising that the patent eligibility of making an axle for a motor vehicle could be so divisive among judges of a court tasked by design with the most difficult questions of patent law. And this internal division might appear particularly surprising given that the roots of the views expressed among the judges in the split decision by the Court of Appeals for the Federal Circuit in American Axle & Mfg., Inc. v. Neapco Holdings LLC et al., Case No. 2018-1763, slip op. (Fed. Cir., July 31, 2020) pre-date a famous 170-year old Supreme Court decision involving Samuel F. B. Morse’s telegraphy method, which was featured by the concurring opinions in the denial of the petition to rehear the case en banc. When viewed in a larger context, however, the most significant realization might be a unifying and constructive underlying message from the Federal Circuit bench.
Gathering Business Data? Be Careful, Mom is Watching – A Comment on Data Scraping and the Compulife Case
When people say that “data is the new oil,” they’re talking about new ways of creating wealth. No matter what business you’re in, success today depends on learning everything you can about your customers and competitors. And there’s so much information sloshing around the internet, every industry—from restaurants to manufacturers to sports teams—is busy extracting insights from “big data” analysis. But, like drilling for oil, prospecting for data sometimes gets your hands dirty. Recently, a court ruled that a startup company providing life insurance quotes to consumers had created its database – the engine of its busines – by taking data from an existing company (Compulife) that had built theirs from scratch.
Trademark law has seen substantial developments in 2019 and 2020, with four major cases in the United States and Europe rising to the top. The U.S. Supreme Court (SCOTUS) issued two of those decisions, the most recent being especially significant because the court has not opined on the topic of trademark genericism in nearly 100 years. The other SCOTUS case dealt with the hotly contested topic of awarding profits obtained through innocent (unknowing) trademark infringement.
The U.S. Patent and Trademark Office (USPTO) earlier this week announced the creation of the National Council for Expanding American Innovation (NCEAI), an initiative ostensibly intended to “build a more diverse and inclusive innovation ecosystem by encouraging participation demographically, geographically, and economically.” Reactions to the Council were mixed, with a number of IPWatchdog sources contacting us to alternately express their confusion, skepticism or support. We put out a call for official reactions to share these varying responses, which raise a number of questions to be monitored as the NCEAI moves forward.