Posts in Patents

The cost of medicines is on the agenda this week at the World Health Organization’s annual executive board meeting in Geneva. Nongovernmental organizations and certain middle-income countries argue that market-based drug development—reliant on intellectual property rights (IPRs) as its primary incentive—makes medicines too expensive. It fails, they say, to provide cures for those most in need but least able to pay. On the fringes of meetings such as the one happening this week, nongovernmental organizations talk excitedly about a new model for drug development, in which research and development (R&D) costs are “delinked” from the final prices of drugs. They join notables such as U.S. Senator Bernie Sanders and Nobel prize-winning economist Joseph Stiglitz. One of the main “delinkage” proposals is to replace the patent system with government-managed prizes.

For the past several years, the patent offices in the United States and Mexico have operated under a type of patent examination fast-tracking and work-sharing agreement known as a Patent Prosecution Highway (PPH). This agreement between the United States Patent and Trademark Office (USPTO) and the Mexican Institute of Industrial Property (IMPI) was set to expire in June of this year, and the status of the program going forward was uncertain. But on January 28, the Offices announced a new agreement that promises to improve upon the PPH system by creating an even “more streamlined approach” to obtaining a Mexican patent once a corresponding U.S. patent is granted than that presently offered under the PPH.

The U.S. Chamber of Commerce Global Innovation Policy Center (GIPC) released its eighth annual International IP Rankings. The United States achieved the top overall ranking as the strongest intellectual property regime in the world. The U.S. also tied for second place in the patent specific worldwide rankings with Japan, South Korea and Switzerland. In first place again this year for patents was Singapore, which marks the third consecutive year Singapore has achieved recognition as the top overall patent jurisdiction in the world.

The Federal Circuit in a precedential decision issued earlier today affirmed the Patent Trial and Appeal Board’s finding that Claim 11 of Prisua Engineering Corp.’s U.S. Patent No. 8,650,591 was unpatentable as obvious, and reversed and remanded for further consideration the Board’s finding that the other asserted claims were indefinite and could not be assessed for patentability under Sections 102 or 103. IPR2017-01188 was Samsung’s response to Prisua’s 2016 patent infringement lawsuit against the company, which alleged that Samsung’s “Best Face” feature infringed claims 1, 3, 4, and 8 of the ’591 patent. In that case, a jury in the Southern District of Florida ultimately found that Samsung had willfully infringed the asserted claims and awarded Prisua $4.3 million in damages, but that action was stayed pending the CAFC appeal.

An IPR petition must be based “only on a ground that could be raised under [35 U.S.C. §§] 102 [anticipation] or 103 [obviousness] and only on the basis of prior art consisting of patents or printed publications.” 35 U.S.C. § 311(b). The “printed publication” basis for IPRs seems as fundamental an issue as one can imagine. But until late December 2019, the Patent Trial and Appeal Board (PTAB) offered no precedential decision explaining “[w]hat is required for a petitioner to establish that an asserted reference qualifies as [a] ‘printed publication’ at the institution stage.” The Board presented that broad question in an April 2019 order announcing it would answer that question through its Precedential Opinion Panel (POP). Hulu, LLC v. Sound View Innovations, LLC, Case IPR2018-01039, Paper 15 (PTAB Apr. 1, 2019).

On January 30, the Court of Appeals for the Federal Circuit (CAFC) affirmed the Patent Trial and Appeals Board’s (PTAB) decision rendering claims 1-11 of U.S. Patent No. 7,529,806 (the ‘806 patent) obvious. The ‘806 patent, owned by Koninklijke Philips (Philips) is directed toward improved playback of digital content on a client device through reducing delay. The patent covers a method for forming media presentations using a control information file that does two things: (a) provides the media presentation in various alternative formats, allowing a client device’s media player to “choose the format compatible with the client’s play-out capabilities” opposed to using two way intelligence between the client and server software; and (b) provides the presentation in multiple files so that subsequent files download at the same time as files are played back.

The Federal Circuit needs to go en banc more often. That is the unmistakable lesson not just in light of the Supreme Court’s recent denials of certiorari on the hot questions of patent law, such as Section 101 and its application to diagnostic testing, or to whether Section 101 involves underlying factual questions. It is also tied into the very reason that Congress created the court in 1982: to provide predictability, stability, and clarity for the U.S. patent laws and system. Without these attributes, the patent system suffers—who, after all, wants to invest in patents where the governing rules are unclear or unpredictable?

In mid-December 2019, Congressmen Danny Davis (D-IL) and Paul Gosar (R-AZ) introduced the Inventor Rights Act of 2019 into the House of Representatives. If passed, the bill would do much to reestablish strong patent protection rights for inventors who own their own patents, giving them an opportunity to opt out of validity trials at the Patent Trial and Appeal Board (PTAB) while also undoing many of the harmful effects of U.S. Supreme Court decisions such as TC Heartland and eBay. While the Inventor Rights Act is directed at a subset of patent owners feeling the brunt of changes to the patent system wrought by Congress and the federal judiciary over more than a decade, the bill does go a long way in correcting the situation for those individual inventors who are likely to have the fewest resources to enforce their patent rights.

There is a window open for legislative action on patent reform, and the innovator community is blowing it. Google fired its lobbyists in Washington, D.C., and then rehired all new lobbyists with an antitrust and economic background. Meanwhile, the Trump Administration has held roundtable talks about how to combat counterfeits in online marketplaces, which have been thinly veiled forums asking what, if anything, the government can do to punish Amazon for rampant counterfeits. Facebook has few friends in Washington, D.C. after the last election and its privacy issues, and its recent quarterly report shows expenses significantly up, that revenue growth slowed significantly and the CFO suggests that is likely to continue into the future. The time is right for a legislative fix for the patent eligibility crisis facing real innovators in the life sciences and software industries. There is a unique opportunity for a legislative fix for 101, with many of those who have favored a weakened patent system no longer focused on the issue the way they once were, and partners in the Senate IP Subcommittee who actually, truly understand patents, the patent system and innovation.

Much has been written about how artificial intelligence (AI) and machine learning (ML) are about to transform the global productivity, working patterns and lifestyles and create enormous wealth. Gartner projects that by 2021, AI augmentation will create $2.9 trillion of business value and $6.2 billion hours of worker productivity globally. McKinsey forecasts AI potentially could deliver additional economic output of around $13 trillion by 2030, boosting global GDP by about 1.2 percent a year. Companies around the globe are all racing to adopt and innovate AI and ML technologies. Indeed, by any account, much progress has been made and the adoption and innovation rates are quickening. But who is winning or leading in the race? A quick review of U.S. patent data may provide a glimpse into the state of the race.

Jamie Holcombe, Chief Information Officer at the U.S. Patent and Trademark Office (USPTO), seemed surprised to learn on Wednesday that both the Public and Private versions of the USPTO’s Patent Application Information Retrieval (PAIR) System have serious issues that are making workflows untenable for users.

Holcombe was participating in a public Forum on the PAIR system, where USPTO staff listened to stakeholders’ experiences since the Office implemented major security changes to the system on November 15, 2019. “The USPTO disabled the ability to look up public cases outside of a customer number using Private PAIR,” explained Shawn Lillemo, Software Product Manager at Harrity LLP, who attended the Forum. “Most patent professionals prior to the change could retrieve all the PAIR information they needed from Private PAIR. That is no longer true.”

The Federal Circuit recently denied a petition by BioDelivery Sciences International, Inc. (BioDelivery) for a rehearing en banc following a refusal by the Patent Trial and Appeal Board (PTAB) to apply the Supreme Court’s decision in SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018). See BioDelivery Scis. Int’l, Inc. v. Aquestive Therapeutics, Inc., Nos. 2019-1643, 2019-1644, 2019-1645, 2020 U.S. App. LEXIS 1030 (Fed. Cir. Jan. 13, 2020) (Before Prost, Chief Judge, Newman, Lourie, Dyk, Moore, O’Malley, Reyna, Wallach, Taranto, Chen, and Hughes, Circuit Judges) (Opinion for the Court, Lourie, Circuit Judge) (Dissenting opinion, Newman, Circuit Judge). The petition for rehearing arrived at the Federal Circuit following a decision by the PTAB to disregard a remand order by the Federal Circuit ordering the PTAB to apply the Supreme Court’s holding in SAS Institute and decide all of the claims and grounds challenged in an inter partes review. Rather, the PTAB, on remand, withdrew all of its past actions as to the proceedings at issue and denied the petition in its entirety. BioDelivery then petitioned the Federal Circuit for a rehearing en banc, but the Federal Circuit voted to deny the rehearing, with Circuit Judge Newman offering the only dissenting opinion.

Things are bad for many innovators and there is little hope for improvement on the foreseeable horizon. Despite the best efforts of Senator Thom Tillis (R-NC) and Senator Chris Coons (D-DE), efforts to reform America’s patent system for the better have stalled to the point that the Senate IP Subcommittee is moving on from patent matters and will focus on copyright reform throughout 2020. “Given the reasonable concerns that have been expressed about the draft as well as the practical realities of the difficulty of passing legislation, absent stakeholder consensus I don’t see a path forward for producing a bill—much less steering it to passage—in this Congress,” Senator Tillis told the Intellectual Property Owners Association in an interview published earlier today. Sources tell IPWatchdog that it is not inconceivable that the Subcommittee will steer back toward patent issues – namely patent eligibility reform – but disagreement among the interested constituencies has shelved any hope for patent eligibility reform. Shockingly, the disagreement that has shelved the long-awaited legislative fix for 35 U.S.C. 101 is among those who support reform. It seems the various constituencies that want 101 reform have their own demands and – if you can believe it – would prefer no change to a change that doesn’t give them 100% of what they are seeking.

Earlier this month, the European Patent Office (EPO) and the UK Intellectual Property Office (UKIPO) each rejected two patent applications that designated an artificial intelligence named DABUS as the inventor. While the UKIPO published a decision setting out its reasoning, the EPO simply stated at the time that the applications did “not meet the requirement of the European Patent Convention (EPC) that an inventor designated in the application has to be a human being, not a machine.” Now, the EPO has released more detail about the grounds for its decision. In the EPO press release today, the Office explained: “The EPO considered that the interpretation of the legal framework of the European patent system leads to the conclusion that the inventor designated in a European patent must be a natural person. The Office further noted that the understanding of the term inventor as referring to a natural person appears to be an internationally applicable standard, and that various national courts have issued decisions to this effect.”

On January 23, the Patent Trial and Appeal Board (PTAB) issued a final written decision holding all claims (1-20) of U.S. Patent No. 9,160,713 B2 (the ‘713 patent) unpatentable. The ‘713 patent, owned by Centripetal Networks, Inc. (CN), was challenged in an inter partes review (IPR) by Cisco System, Inc. (Cisco). Of the latest eight final written decisions from the PTAB, all challenged claims were found unpatentable in seven: