Posts Tagged: "Judge S. Jay Plager"

Federal Circuit issued a Rule 36 summary judgment in Chart Trading Development, LLC v. Interactive Brokers LLC, affirming the invalidation of patent claims owned by Chart Trading in covered business method (CBM) proceedings instituted at the Patent Trial and Appeal Board (PTAB). In issuing the summary affirmance of the PTAB, the Federal Circuit panel of Circuit Judges Pauline Newman, S. Jay Plager and Kimberly Moore declined the opportunity to comment on Chart Trading’s arguments on the PTAB’s alleged due process violations by changing the construction of a key term in its final written decision… If the government can award a franchise and that franchise can be taken away in a manner that violates the APA, what is the point in seeking the government franchise in the first place? If the Court charged with making sure the agency that strips government franchises is following the rules is going to decide cases of such importance with only one word — Affirmed — one has to question whether a government franchise is at all a worthwhile pursuit.

There is an alternative route is available to stay true to Supreme Court eligibility jurisprudence: Apply the Supreme Court’s standard approach of narrowly construing statutory exceptions to narrowly construe the implicit statutory exception to 35 U.S.C. § 101 for abstract ideas… In accordance with Supreme Court guidance regarding construction of statutory exceptions, the implicit statutory exception for abstract ideas should be construed “narrowly in order to preserve the primary operation of the provision” of 35 U.S.C. § 101. Clark, 489 U.S. at 739 (citing Phillips, 324 U. S. at 493).  To do otherwise would risk “frustrat[ing] the announced will of the people.” Phillips, 324 U. S. at 493.

In Interval Licensing LLC v. AOL, Inc., the Federal Circuit affirmed a judgment finding patent claims asserted by Interval Licensing LLC failed to recite patent-eligible subject matter under 35 U.S.C. § 101. In dissent, Judge Plager criticized the “abstract idea” framework under Alice. He argued first that the concept of an “abstract idea” is extremely difficult to apply in patent cases because the term is by definition “abstract,” meaning “difficult to understand,” and an “idea,” which is “something that lives in the interstices of someone’s brain, a psychophysiological area not fully understood to this day.”

These issues of fairness and fair use are played out in the recent Oracle v. Google decision. In a convoluted case that has gone up to the Supreme Court once and will again, the Federal Circuit finally was able to make a ruling that the blatant, verbatim copying of computer code is not a fair use. At issue were the copying of 37 Oracle programs or apps, constituting over 11,500 lines of code, by Google for their use in the Android operating system for smart phones and other uses… In the Federal Circuit’s final analysis of the four factors, they again noted that Google could have written their own code or properly licensed with Oracle, but instead chose to copy. “There is nothing fair about taking a copyrighted work verbatim and using it for the same purpose and function as the original in a competing platform.” Accordingly, the Federal Circuit held that Google’s use of the Oracle code was not a fair use.

The Federal Circuit found Google’s use of Java API packages in it’s Android operating system was not a fair use as a matter of law, resurrecting a multi-billion dollar copyright case brought by Oracle Corp against Google. With copyrightability and fair use now decided, unless the Supreme Court intervenes (which seems unlikely) this case will head back to the district court for a damages trial with the sole question being how much money Google owes Oracle America. “This is a hugely important development in the law of copyright and fair use. If it stands, there are numerous implications,” said J. Michael Keyes is a partner at the international law firm Dorsey & Whitney.

The CBM determination includes patents that are “financial in nature” according to the claims; not patents that are “complementary” or “incidental” to financial activity according to the specification or post-grant assertion of the patent… Further, the Board’s reliance on post-grant activity, that Secure Axcess alleged infringement against financial institutions, was improper. “Those choices do not necessarily define a patent as a CBM patent, nor even necessarily illuminate an understanding of the invention as claimed.”

When applying that definition to the present case, the majority opinion rejected as too limiting Secure Axcess’s proposal that CBM review should be limited to “products and services such as credit, loans, real estate transactions, securities and investment products, and similar financial products and services”. However, the Federal Circuit also rejected the Board’s much more expansive approach that CBM review should apply to financial products or services that were merely “used in” and “incidental to” a financial activity… In dissent, Judge Lourie disagreed with the majority’s holding on the basis of Secure Axcess’s claims being “surely claims to ‘a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service.’” This, he argued, was because “[t]here can be little doubt that such claims meet the ‘method or apparatus for performing data processing’ limitation of the statute.”

The Court held that remand was improper. Generally, remand is proper where the governing legal standards change during appeal. However, the Court found that the change in legal standard would not affect the district court’s order because Medgraph failed to present a case of direct infringement even under the broader theory of attribution in Akamai V.

In 2013, Google, Inc. (“Google”) filed inter partes review and covered business method petitions challenging the validity of Unwired Planet, LLC’s (“Unwired”) patent, at issue on appeal. The patent describes a prioritization of search results based upon the location of a mobile device and including prioritization of “preferred providers” within those search results, in turn providing a “farther-over-nearer” ordering of the results. The Board invalidated all of the challenged claims as obvious. The Federal Circuit concluded, “[b]ecause the use of alphabetical order as prioritization information would sometimes meet the farther-over-nearer claim elements, the Board was correct to conclude that the proposed combination” rendered claim 1 obvious.

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.

The ’510, ‘984, and ‘797 patents were each held eligible for similar reasons. Again, the court found that even if the claims were directed to an abstract idea, they would be eligible under step two of the Alice framework. The Court again relied on the unique and unconventional distributed architecture found in the specification and construed into the claim in the previous proceeding. This architecture allowed for load distribution – a technological and unconventional solution to a technological problem. While the ‘984 claims contained generic components and functions, the overall ordered combination of the limitations were unconventional and solved the technological problem.

Amdocs (Israel), Ltd. v. Openet Telecom, Inc., Appeal No. 2015-1180, is a precedential case from the U.S. Court of Appeals for the Federal Circuit that reverses a judgment on the pleadings that certain asserted software claims directed to gathering network information were patent-ineligible. In so doing, Step One of Alice/Mayo is not clarified at all, because the majority accepted “for argument’s sake” the district court’s view of the disqualifying abstract ideas, and in each instance then explained why the claims seen in their entirety are not disqualified under Step two… The Federal Circuit concluded that the claim is “much closer to those in BASCOM and DDR Holdings than those in Digitech, Content Extraction, and In re TLI Commc’ns. The Court explained that even if it were to agree that claim 1 is directed to an ineligible abstract idea under step one, the claim is eligible under step two because it contains a sufficient ‘inventive concept.’

The Federal Circuit dismissed Husky’s appeal, finding that it lacked jurisdiction to review the Board’s determination of whether assignor estoppel barred institution of an inter partes review for two reasons. First, Husky’s appeal did not fall into any of the three categories of challenges that were reviewable by the Federal Circuit: there were no constitutional concerns at issue, the question of assignor estoppel did not depend on other less closely related statutes, and there was no question of interpretation reaching beyond § 314(d). Second, Husky’s challenge only implicated the question of who may ask the Board to evaluate the validity of a patent, not the Board’s authority to invalidate a patent.