Posts Tagged: "covered business methods"

To come up with the list below I’ve reviewed all of our patent articles, and have come up with these top 10 patent stories for 2016. They appear in chronological order as they happened throughout the year. Just missing the top 10 cut were the Supreme Court denying cert. in Sequenom and the USPTO being sued for Director Lee declaring a federal holiday. As interesting as those stories may have been, there was far more consequential patent news in 2016. Also missing the cut, but particularly interesting were the rather egregious and insulting response filed in an Office Action in September, and the embarrassing concurring decision by Judge Mayer in Intellectual Ventures. While the latter two were truly train wreck moments, they were fleeting. Judge Mayer has completely marginalized himself on the Federal Circuit with no one embracing his extreme and inaccurate reading of Alice, and that type of albeit cringe-worthy and unprofessional response to an Office Action happens very rarely.

When the America Invents Act (AIA) was being formulated, from about 2005 – 2011, nothing was more subject to change bill-to-bill than the proposed “1st look” and “2nd look” procedures for issued US patents. Should the U.S. have a regular opposition procedure, or should existing inter partes reexam just be tweaked? The AIA final result is the universally dis-liked post grant troika known as PGR, IPR, and CBM… For today I will confine my remarks (and associated fixes) to three truly bad ideas that in practice have played out as particularly egregious. More specifically: (1) the lack of standing required for inter partes review (IPR) challenges; (2) the lack of any real ability to amend claims during a post grant proceeding; and (3) the trivially low threshold (i.e., reasonable likelihood) that initiates an IPR.

The Federal Circuit affirmed the Board’s decision to invalidate certain claims in three patents owned by Ameranth. The Court relied heavily on Ameranth’s concessions within the specification that certain aspects of the invention were “typical” or “commonly known.” Practitioners should be wary of using such language and should take steps to identify specific technological improvements.

It is that time once again when we look back on the previous year in preparation to close the final chapter on 2016 and to look ahead toward 2017. With patent reform surprisingly stalled, the biggest news stories of the year may have been the Patent Trial and Appeal Board (PTAB)… As 2016 started and through at least the first half of 2016 it seemed as if the PTAB had become rather all-powerful and completely unsusceptible to judicial restraints. As we close 2016 and look forward to 2017 a decidedly different picture seems like it is emerging… The other big news story of 2016 was with respect to patent eligibility…

Claimed methods incidental or complimentary to financial services are not necessarily reviewable as CBM patents. The claims as they were written must be directed to methods and apparatuses that have particular uses in connection with a financial product or service. For a patent to be a CBM patent, “[i]t is not enough that a sale has occurred or may occur, or even that the specification speculates such a potential sale might occur.”

The PTAB used the wrong standard to institute the CBM proceeding in the first place, which lead the Federal Circuit to vacate the PTAB decision and remand the case for further consideration by the PTAB – namely the application of the proper standard… As the Federal Circuit would point out later: “All patents, at some level, relate to potential sale of a good or service.” To allow this PTAB created standard that has no textual support in the statute to be applied would be to allow virtually any patent to be the subject of a CBM. That was clearly was not the intent of Congress and it would fly directly and unambiguously in the face of the explicit language of the statute. The PTAB is significantly limited in their power to institute a CBM.

Both petitioners’ and patent owners’ reliance on blog articles in the course of post grant proceedings has been approximately equal. However, the manner in which the blog articles were used did vary widely based on the litigator’s position during the proceeding. For petitioners, blog articles were most often cited to construe the claims (Apotex Inc. v. Amgen Inc., IPR2016-01542, Paper 2, p.69), were introduced as previous publications of an expert witness in order to help prove their qualifications (Samsung Electronics Co., v. Papst Licensing, IPR2016-01733, Ex. 1014, p. 99), or were used to bolster the credentials of one or more of the representing attorneys (Google, Inc. et al v. Smartflash, CBM2015-00132, Paper 17, p. 2). For patent owners, blog articles were most often referenced to provide support to summarize and clarify certain legal standards such as claim construction standards (Uniloc USA, Inc. et al v. Allscripts Healthcare Solutions, Inc., IPR2015-01615, Paper 12, p. 8), to clarify legislative history and identify Congressional intent (Coalition for Affordable Drugs VII v. Pozen, IPR2015-01241, Paper 13, p. 47), and to rebut the petitioner’s expert testimony by attacking the expert’s credibility (Coalition for Affordable Drugs VII v. Pharmacyclics, IPR2015-01076, Paper 20, p. 13).

Perhaps the most challenging to accept is the notion that a tribunal created with a specific purpose of invalidation can be impartial to both the petitioners and the defendants. The AIA tribunal stands in contrast to the Court system, as their inherent mission is not to evaluate, but to challenge, contest, and invalidate. In addition, a “winners and losers” system, allowing one party to outspend the other, or to create joinders to outnumber the other, remains very damaging to the inventors, investors and small businesses.

As the above cases illustrate, PTAB decisions have affected district court cases in different ways. Determining whether the use of a PTAB decision is likely to be permitted or will have any effect requires a multifactorial analysis that considers at least the nature of the PTAB outcome (e.g., final or preliminary), factors contributing to that outcome (e.g., whether they were based on the merits of the case), and potential drawbacks attached to the requested use (e.g., jury confusion). Additional considerations might include, for example, the level of sophistication of the technology already being considered by the jury, which might factor into a court’s analysis of the likelihood of jury confusion. Parties seeking to rely on PTAB decisions in district court should consider these factors. The AIA has only been in place for five years and the law in this area will continue to develop over the next several years.

All of the post grant challenges ushered in by the America Invents Act (AIA) were a bad idea. They never should have been created in the first place. All the post grant proceedings have done is make infringing patents a more economical choice, while making it more costly for innovators to obtain and keep the protection they need to make innovating a worthwhile endeavor. It was all too predictable that a new tribunal would over assert its own jurisdiction, but the breadth of just how arbitrary, capricious and fundamentally unfair the process would be was simply not predictable.

Unfortunately, Mr. President, after five years I cannot report back that the AIA has yet ”improve[d] patent quality and help[ed] give entrepreneurs the protection and the confidence they need to attract investment, to grow their businesses, and to hire more workers.” The current implementation of PTO post issuance proceedings is undermining confidence in our patent system, chilling innovation at its roots, and, in eyes of some, giving the AIA a bad name.

The enumerated problems with the post grant procedures could be bettered by both the courts and the USPTO. The courts have had an opportunity to change the standard for claim construction in the post grant procedures but have declined. However, the USPTO can ameliorate the problem itself by providing for more liberal leave to amend. The rationale for BRI at the USPTO is that patentee can amend at the Office but not in court. The Office can more easily allow for claims that are further limiting and this would greatly reduce the problem.

While the Patent Office likes to tout statistics that assert most patent claims challenged in IPR are not invalidated, those statistics are simply not credible. When reporting its statistics the Patent Office ignores the reality that once an IPR is actually instituted few claims are actually adjudicated to be patentable. The Office is also grossly misleads when they characterize claims not subject to a final written decision as “remaining patentable.”… Recently I’ve heard a story from a former PTAB judge who explained that institution of IPR challenges is far more likely when there are multiple petitions filed against the same patent because it makes it easier for PTAB judges to meet their production quota. If that is not proof that the PTAB is hopelessly broken I don’t know what is.

At exactly 11:42am on September 16, 2011, President Barak Obama signed the America Invents Act into law. As President Obama put his pen down he said: “All right guys, congratulations, the bill is signed.” It was at this precise moment that U.S. patent laws dramatically changed forever. With this in mind, over the next two weeks we will be examining the AIA in great detail in a special AIA 5th Anniversary series. I’ve invited a number of guests to comment, discuss and/or editorialize about the AIA. Below is a sneak peak of some of the contributions already received. As articles are published this preview article will be updated with links to the entire series.

Earlier today the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) declined to institute a covered business method (CBM) review of U.S. Patent No. 6,006,227, which is owned by Mirror World Technologies, LLC. The decision is significant not only because the PTAB refused to institute a covered business method review, but because the panel — Administrative Patent Judges Thomas Giannetti, David McKone, and Barbara Parvis — cited the Federal Circuit’s recent decision in Enfish v. Microsoft when they found that the challenged claims of the ‘227 patent were not abstract.