Posts Tagged: "Arthrex"

Last week, the U.S. Patent and Trademark Office (USPTO) hosted a webinar to discuss recent revisions to the interim process for Director review of America Invents Act (AIA) trial decisions by the Patent Trial and Appeal Board (PTAB). While the revised procedures include the delegation of the Director’s review authority to a pair of newly created panels, officials from the USPTO indicated that the Director’s discretion to review and opine upon issues in delegated cases meet the constitutional mandate laid out by the U.S. Supreme Court in U.S. v. Arthrex (2021).

Today, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued a ruling in Shamoon v. Resideo Technologies, Inc. affirming a final written decision by the Patent Trial and Appeal Board (PTAB) that invalidated patent claims covering a communication system for accessing geographically remote locations. While the decision was nonprecedential, the Federal Circuit also struck down constitutional challenges to the PTAB proceedings raised by the pro se inventor and patent owner.

Following a remand on Appointments Clause issues under United States v. Arthrex, Inc., the U.S. Court of Appeals for the Federal Circuit (CAFC) today affirmed a Patent Trial and Appeal Board (PTAB) ruling finding all challenged claims of Polaris Innovations Limited’s patents unpatentable and denying Polaris’ motions to terminate. The decision is precedential and authored by Judge Stoll. Polaris’ U.S. Patent Nos. 6,532,505 and 7,405,993 are directed to computer memory. In May 2016, Polaris filed suit against NVIDIA Corporation for infringement of certain claims of the two patents. NVIDIA then filed inter partes review (IPR) petitions challenging some claims as invalid. A final written decision on the petition involving the ‘993 patent issued on December 19, 2018, finding all challenged claims unpatentable. A final written decision on the petition involving the ‘505 patent issued on December 4, 2018, likewise finding all challenged claims unpatentable.

In late March, the U.S. Court of Appeals for the Federal Circuit heard oral arguments in Arthrex, Inc. v. Smith & Nephew, Inc. (Arthrex II) to determine whether the U.S. Patent and Trademark Office (USPTO) had effectively addressed the constitutional violation under the Appointments Clause that was identified in previous rulings from the Federal Circuit and the U.S. Supreme Court (Arthrex I). While the impact of the Federal Circuit’s ruling will likely be cabined by the recent Senate confirmation of Kathi Vidal to serve as USPTO Director, the decision could call into question the validity of at least the USPTO’s Patent Trial and Appeal Board (PTAB) operations during the tenure of Drew Hirshfeld as performing the duties and functions of the USPTO Director up to Vidal’s confirmation.

Since the Supreme Court decision in United States v. Arthrex, Inc., 141 S. Ct. 1970 (2021), there has been much discussion about the Court’s ruling mandating an option for users to request that the Director of the U.S. Patent and Trademark Office (USPTO) review Final Written Decisions of the Patent Trial and Appeal Board (PTAB) rendered in trials under the America Invents Act (AIA) on the validity of issued patents. But there has been little or no discussion on such Director’s review of PTAB decisions on institution of AIA trials.

Last week, patent owner Cellspin Soft filed a citation of supplemental authorities  with the U.S. Court of Appeals for the Federal Circuit (CAFC) asking the appellate court to either vacate or reverse an order from the U.S. Patent and Trademark Office (USPTO) denying Director review following a pair of inter partes review (IPR) proceedings conducted at the Patent Trial and Appeal Board (PTAB). Cellspin Soft is challenging the USPTO’s denial as invalid both under the Administrative Procedures Act (APA), as well as under the U.S. Supreme Court’s precedent in United States v. Arthrex (2021). Cellspin had filed requests seeking Director review of a pair of final written decisions invalidating all challenged claims of U.S. Patent No. 9258698, Automatic Media Upload for Publishing Data and Multimedia Content. It claims a machine-implemented method of media transfer utilizing a digital data capture device and a Bluetooth-enabled mobile device for publishing multimedia content automatically onto a website with minimal user intervention. Issued to Cellspin Soft in February 2016, the ‘698 patent has been asserted in infringement suits filed in U.S. district courts against several defendants including Panasonic, GoPro, Garmin, Nikon, Canon and Eastman Kodak.

In Part I, we looked at two of the legal principles that govern Arthrex Director review: Director review must be implemented by notice-and-comment “regulation,” not website, and the Administrative Procedure Act (APA) requires that the Director’s decision demonstrate “reasoned decisionmaking.” Today, we’ll look at a few more legal obligations that confine the U.S. Patent and Trademark Office’s (USPTO’s) discretion as the USPTO seeks a lawful implementation of Director review. This Part II concludes with a plea that the USPTO take the public interest seriously, as the public interest is reflected in various statutes outside the Patent Act.

On November 16, the U.S. Supreme Court denied petitions for certiorari in two cases from the Federal Circuit: IYM Technologies LLC v. RPX Corporation and Advanced Micro Devices, Inc. and WhitServe LLC v. Donuts Inc. IYM asked the Supreme Court to grant review “to determine whether the Arthrex decision applies to all appeals that were pending when [the Arthrex decision] issued.” In the WhitServe petition, WhitServe asserted that a determination of patent ineligibility “necessitates impermissible fact-weighing at the pleading stage and eviscerates the statutory presumption of validity.”

Nearly four months ago, the Federal Circuit for the first time addressed the applicability of the Takings Clause of the Fifth Amendment to IPRs, holding in Celgene Corp v. Peter “that the retroactive application of inter partes review (IPR) proceedings to pre-America Invents Act (AIA) patents is not an unconstitutional taking under the Fifth Amendment” Celgene Corp. v. Peter, 931 F.3d 1342, 1362 (Fed. Cir. 2019). Since then, the court has continued to reject similar Patent Trial and Appeal Board (PTAB)-related Takings Clause claims on the merits. E.g., Collabo Innovations v. Sony Corp., No. 2018-1311 (Fed. Cir. Aug. 5, 2019). Unsurprisingly, Celgene filed a request for an en banc rehearing, and the government has just this week filed its response. Both Celgene’s en banc petition and the government’s response address the merits of Celgene’s constitutional claim—but as we hinted at in an earlier article analyzing the Celgene decision, there is a serious question whether the Federal Circuit should have even reached the merits of the Takings Clause issue in its panel opinion. In light of Supreme Court Takings Clause precedent, the Federal Circuit may want to either request supplemental briefing to decide whether it should have addressed the constitutional question in the first place, or potentially even revise the panel opinion and leave this issue to be decided in another case.

The Federal Circuit’s decision in Arthrex, Inc. v. Smith & Nephew, Inc. generated excitement late last week, when many initially speculated that the Patent Trial and Appeal Board (PTAB) would not be able to continue operations as usual in light of the ruling. However, now that the dust has settled, it seems more likely that the effects of Arthrex will be limited to a small subset of cases. While he could not comment on next steps directly as it is a pending matter, USPTO Director Andrei Iancu suggested during a panel at the John Marshall Law School’s 63rd IP Conference in Chicago on Friday that the Office would not be significantly burdened by the decision. USPTO guidance is likely to be issued soon. Of course, the decision has not done much to bolster the already shaky reputation of the PTAB or its Administrative Patent Judges with some, and there are several scenarios in which the Federal Circuit’s quick fix to avoid shutting down the Board entirely might be challenged. Below are some early reactions to the ruling and predictions about how it may play out. 

This week in Other Barks & Bites: the Federal Circuit hands out three precedential decisions; the USPTO sends its SUCCESS Act Report to Congress; the Copyright Royalty Board proposes royalty rates on ephemeral recordings for certain Internet transmissions; China unveils legislation to create a public blacklist for patent offenders; the Ninth Circuit revives a copyright case against Taylor Swift’s “Shake It Off”; Google agrees to buy Fitbit for $2.1 billion; and the USPTO seeks public comments on the type of IP protections that should be extended to inventions developed by AI technology.