Posts Tagged: "CAFC"

Affinity Labs of Texas, LLC, lost two cases at the Federal Circuit last week, both in decisions authored by Judge Bryson, which Chief Judge Prost and Judge Wallach joining the opinions. Although the patents at issue in the two cases were different, they shared a similar specification. In the DirecTV decision, the Federal Circuit followed the Alice/Mayo framework and found the claims patent ineligible. Perhaps of note, the Court rebuffed Affinity’s arguments regarding novelty, explaining patent eligibility does not turn on novelty of the claims. In the Amazon decision the Federal Circuit ruled that basic user customization is insufficient to qualify as inventive under Mayo and Alice.

Over the last several months certain new trends are developing at the Federal Circuit as the court pivots to address the new reality of a much more interested Supreme Court, and the reality of a dramatically increased case load thanks to the enormous popularity of the AIA-created post grant administrative proceedings. Join me on Tuesday, September 20, 2016, at 1pm Eastern for a discussion on Federal Circuit Trends in a Post-Alice World. I will be joined by Robert Schaffer and Joseph Robinson, partners at Troutman Sanders and co-authors of the Federal Circuit Review.

It is hard to ignore the fact that the Federal Circuit again continued to point out that the innovation at issued was an improvement. This should give patent practitioners important clues into how to characterize software related innovations so as to maximize the likelihood of prevailing in Alice inspired challenges and rejections. Hopefully the United States Patent and Trademark Office will not ignore McRo and will issue guidance to patent examiners. Taking a “nothing to see here” approach to this case would be inexcusable.

In the final decision by the Board in the IPR, the Board denied the patent owner’s motion solely because the patent owner did not discuss whether each newly added feature was separately known in the prior art. The Board concluded that the motion and the declaration of Veritas’s expert, Dr. Levy, was insufficient because it did not discuss the features separately but discuss only the newly added feature in combination with other known features. The Federal Circuit found that denying the motion to amend for this reason alone was unreasonable and, therefore, the decision of the Board had to be set aside as being arbitrary and capricious.

GPNE sued Apple for direct infringement of claims in two of GPNE’s patents. The patents at issue relate to a two-way paging system, where the paging devices are capable of not only receiving messages but also sending messages back in response. The claims asserted by GPNE all recited “nodes” rather than “pagers,” even though the word “node” was not used anywhere other than in the Abstract of the two patents containing the asserted claims. Seizing on this, Apple argued at the Markman hearing that a “node” as claimed should be construed as being a “pager.” The district court ultimately agreed with Apple, and ultimately so too did the Federal Circuit.

A lack of written opinion in the Rule 36 affirmance issued by Federal Circuit wasn’t an issue for PCT’s counsel. “These types of results reflect a wholesale rejection of the laundry list of appellate issues Holland had attempted to raise,” Laurus noted. “Prompt resolution of this is better than some lengthy opinion that might issue months down the road.”

In PCT International, Inc. v. Holland Electronics, LLC, the use of a Rule 36 judgment is particularly disconcerting because the Federal Circuit upheld the issuance of a permanent injunction by the district court. Since the Supreme Court’s decision in eBay v. MercExchange over a decade ago it has become increasingly difficult, indeed at times impossible, for victorious patent owners to enjoy exclusive rights once they have prevailed in a patent infringement litigation. Issuing a Rule 36 judgment where the patent owner was victorious and a permanent injunction stands robs the patent owner community of vital Federal Circuit precedent that could otherwise be used to inform district courts on the appropriateness of this extraordinarily important remedy.

The Court recognized that “‘[c]ommon sense has long been recognized to inform the analysis of obviousness if explained with sufficient reasoning.’” However, “there are at least three caveats to note in applying ‘common sense’ in an obviousness analysis.” First, common sense is typically invoked to provide a known motivation to combine, and not to supply a missing claim limitation. Second, while some cases have allowed use of common sense to supply a missing claim limitation, “the limitation in question was unusually simple and the technology particularly straightforward.” Third, common sense “cannot be used as a wholesale substitute for reasoned analysis and evidentiary support, especially when dealing with a limitation missing from the prior art references specified.”

On appeal, the Federal Circuit reviewed whether there was substantial evidence supporting the district court’s finding that Nathan and Matheson should be added as co-inventors. In determining that the inventorship evidence below was sufficient, the Court reiterated that all inventors are required to be named even if their contribution is limited to a single aspect of a single claim, and that co-inventors need not have collaborated at the same time to be named.

While much of the specification focuses on a scheme involving patient-identifying information, the Court held that a specification’s focus cannot be limited on one particular embodiment where it expressly contemplates other embodiments or purposes. The specification clearly disclosed that sorting and storage could be done in a number of ways, not only by patient-identifying information. The Court held that the district court erred when it determined that the specification limited the invention to storing prescription containers based on patient name and slot availability. Thus, the Court reversed the grant of summary judgment and remanded the case for further proceedings.

The Court held that the Board improperly continued to apply the BRI standard following the expiration. While the examiner properly applied the BRI prior to expiration, the BRI standard no longer applies the moment the patent expires – even if it means the Board applies a different standard than the examiner.

The Court noted that all of Warsaw’s arguments related to the Board’s findings of fact, and were therefore reviewed for “substantial evidence.” The Board’s reconciliation of the potentially conflicting descriptions in the reference amounted to a re-weighing of evidence, which is not permitted under the standard of review. The Court also affirmed the Board’s motivation to combine analysis. Finally the Court summarily rejected Warsaw’s arguments presented for the first time on appeal.

However, in spite of the Court’s determination that the Markush group was closed, the Court agreed with Multilayer that the use of the transitional phrase “consisting of” does not necessarily suggest that a Markush group is closed to mixtures, combinations, or blends. Although recognizing that, typically, there exists a presumption that Markush groups are closed to “blends,” the Court acknowledged that the presumption can be overcome by a combination of other claim language and the specification itself. Here, the Court found explicit evidence of an intent to include blends insofar as the Markush group itself included blends and categories of resins that overlap, and certain dependent claims required layers of film to comprise blends of at least two resins.

One particularly disconcerting and largely unpredictable aspect of Alice is how it has been used to render games patent ineligible. This type of Alice-creep is particularly disconcerting because it ignores the primary concern of the Supreme Court in Mayo. Much of the 101 patent eligibility mischief we now experience can be traced back directly to Mayo v. Prometheus, where the Supreme Court ruled that conventional steps are not enough to transform a law of nature into a patent eligible process… Given that the Alice framework is really the Mayo framework applied to abstract ideas instead of laws of nature, why should Alice ever be used to deal with a process that a patent examiner acknowledges is new, non-obvious and appropriately described? It would seem that Alice simply has no relevance in such a circumstance.

The Federal Circuit again addressed whether Pulse’s domestic sales activities were either a sale or an offer for sale in the U.S. While the patent statute does not define “sale,” the Court has previously held that it carries its ordinary meaning, including the transfer of title or property. Further, a “sale” must be understood in view of the strong policy against extraterritorial liability for patent infringement. Here, no sale occurred in the U.S., because the final formation of a contract and all elements of performing the contract occurred outside the U.S.