Posts Tagged: "SAS Institute"

On March 9, e-commerce company Ingenio Inc. filed a petition for writ of certiorari with the U.S. Supreme Court asking it to take up an appeal of a decision last August by the U.S. Court of Appeals for the Federal Circuit in favor of patent owner Click-to-Call Technologies. Ingenio’s petition asks the Supreme Court to overturn the Federal Circuit’s ruling that Ingenio was estopped from challenging the validity of patent claims that were denied institution during inter partes review (IPR) validity proceedings at the Patent Trial and Appeal Board.

On August 17, the U.S. Court of Appeals for the Federal Circuit issued a precedential decision in Click-to-Call Technologies LP v. Ingenio, Inc. finding in part that, as a matter of law, Ingenio was estopped from challenging the validity of a patent claim on grounds it could have reasonably challenged during inter partes review (IPR) proceedings at the Patent Trial and Appeal Board (PTAB). Although the impact of this precedential holding will likely be limited due to the “unusual procedural posture” of this case, which involves a partial IPR institution prior to the U.S. Supreme Court’s 2018 ruling in SAS Institute, the Federal Circuit’s decision does underscore the circuitous nature of PTAB proceedings that often add many years to patent lawsuits filed in U.S. district court.

On January 13, the U.S. Court of Appeals for the Federal Circuit (CAFC) will hear oral argument in SAS Institute, Inc. v. World Programming, Ltd., a copyright infringement suit with far-reaching consequences for American creativity. SAS is a North Carolina-based software company, well known for its highly successful analytics software. World Programming, Ltd (WPL) is a British software company that, by its own admission, set out to “clone” SAS’s creative and popular software. The litigation that followed has been lengthy and stretched from North Carolina to the U.K. and back. While WPL largely prevailed in its home court, the litigation in North Carolina resulted in a verdict that WPL engaged in fraud and unfair and deceptive trade practices. The litigation in North Carolina did not decide the copyright infringement issues, so SAS was forced to file a separate suit, this time in Texas. But the judge in that case made a critical error, which is now on appeal.

SAS Institute is a software company in North Carolina. Founded in 1976, it employs thousands of people in the United States and thousands more around the world. World Programming, Ltd. (WPL) is a British company that decided to build a clone of SAS’s popular analytics software and, as several courts have found, broke the law to do it. After a decade of litigation across two continents and an unpaid multi-million-dollar judgment, the parties are once again in court. This time, however, WPL’s arguments pose grave dangers to all owners of other copyrighted works. WPL did not try to compete with SAS by building a different or better product. Instead, it ordered copies of SAS’s products under the guise of an educational license, but with the true intent to reverse-engineer and copy key elements, including the selection and arrangement of its outputs, and even the manuals licensed users receive from SAS. The result is that WPL produced a clone, taking the exact same input and producing the exact same output that SAS does. Avoiding the years of investment and fine-tuning that SAS undertook to create its market-leading software, WPL undercut SAS’s price in the market and lured away SAS’s customers.

Out of the 230 Orange Book patents challenged in IPR proceedings, 90.4% (208) of these patents were also challenged in Hatch-Waxman litigation perhaps due to the lucrative 180-day exclusivity incentive available to the first generic manufacturer to file a paragraph IV challenge when the Orange Book drug patent is successfully invalidated in a subsequent district court proceeding. Therefore, the IPR process has provided generic manufacturers a dual track option for challenging Orange Book patents by initiating Hatch-Waxman litigation and also pursuing IPRs. Overall, because the rate of settlement in IPRs is much lower than in Hatch-Waxman litigation, both generic manufacturers and patent owners obtain more favorable final decisions in IPRs as compared to their Hatch-Waxman litigation outcomes.

On Monday, June 4th, the Court of Appeals for the Federal Circuit heard oral arguments in St. Regis Mohawk Tribe v. Mylan Pharmaceuticals, a case appealed from the Patent Trial and Appeal Board (PTAB) which asks the appeals court to determine whether tribal sovereign immunity can be asserted to terminate inter partes review (IPR) proceedings at the PTAB. The Federal Circuit panel consisting of Circuit Judges Kimberley Moore, Timothy Dyk and Jimmie Reyna lobbed tough questions at counsel representing appellants St. Regis and Allergan, appellees Mylan and Teva as well as the respondent for the U.S. federal government, without giving much clue as to whether the panel favored the argument offered by any particular side.

In 2011, as part of the American Invents Act (“AIA”), Congress significantly restructured the way in which previously issued patents could be challenged.   In some cases, existing post-issuance proceedings, like ex parte reexamination and reissue proceedings, were kept intact as such proceedings existed prior to the AIA.  In other cases, existing post-issuance proceedings, like inter partes reexamination, were replaced with new proceedings, such as the inter partes review proceedings (“IPRs”).    In addition, brand new proceedings were created, such as post-grant review proceedings (“PGRs”), covered business method patent review proceedings (“CBMs”), and supplemental examination proceedings.  In each instance, Congress made policy choices as to who could (or could not) bring and/or participate in such proceedings, and who could (or could not) raise challenges to decisions made by the government in such proceedings. 

One week ago, the United States Supreme Court issued two decisions pertaining to inter partes review (IPR) challenges at the Patent Trial and Appeal Board (PTAB). Meanwhile, the United States Patent and Trademark Office has issued fresh patent eligibility guidance thanks to the Federal Circuit’s recent decision in Berkheimer v. HP. Join Gene Quinn and Todd Dickinson, former USPTO Director and current Senior Partner at Polsinelli, on Thursday, May 3, 2018, at 12pm EST, for a free webinar.

On Thursday, April 26th, the U.S. Patent and Trademark Office issued new guidance regarding the effects of the U.S. Supreme Court’s judgment in SAS Institute Inc. on America Invents Act (AIA) trial proceedings held before the Patent Trial and Appeal Board (PTAB). Along with the new guidance, the USPTO also announced a webinar with PTAB Chief Judge David Ruschke taking…

My thoughts continue to be that the statute is very simple and mandates the PTAB to issue a final written decision on all claims challenged. This seemed to be consistent with what Justice Alito and Justice Gorsuch were saying during the oral arguments. However, Justice Sotomayor dominated questioning throughout the early stages of the oral argument, continually saying that what was being sought was a reversal of the Court’s decision in Cuozzo. Justice Breyer, who seemed clearly in favor of the respondent, sought to re-write the statute to find the actions of the PTAB to be in keeping with the text of the statute. Nevertheless, the oral arguments suggest there will be a split among the justices, perhaps along political lines (i.e., liberal wing vs. conservative wing). Should the conservative viewpoint of Justices Alito and Gorsuch prevail there is also a chance that the Supreme Court will rule that the PTAB cannot grant partial institutions… After the conclusion of the oral arguments, I reached out to a number of industry insiders to ask them to provide their thoughts and predictions, which are admittedly quite different than my own analysis. Their answers follow.

The United States Supreme Court will hear oral arguments in SAS Institute v. Matal on Monday, November 27, 2017. This case will give the Supreme Court the opportunity to declare whether the Patent Trial and Appeal Board must issue a written decision covering all claims challenged in an inter partes review proceeding. In advance of this much anticipated hearing, I reached out to a number of industry insiders with a simple question: What are you thoughts and predictions on SAS Institute in advance of Supreme Court oral arguments? Their answers follow.

Oil States Energy Services LLC v. Greene’s Energy Group, LLC, now scheduled for oral argument before the Supreme Court on November 27, is clearly receiving all the attention this fall. The possibility of finding Patent Trial and Appeal Board (PTAB) post grant proceedings unconstitutional cannot be understated. But oral arguments will also be heard on that same day in the less-noticed SAS Institute v. Matal… Should any form of IPRs survive Oil States, the following SAS Institute decision should be watched with equal anticipation. A reversal in SAS Institute will no doubt have you rethinking your PTAB strategy.

The nation’s highest court will once again address issues surrounding the controversial Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO). The case it will decide is SAS Institute, Inc. v. Lee, which will be argued during the October 2017 term, and which will force the Court to again look at how the USPTO, and more specifically the PTAB, is implementing the post-grant patent validity trials created when Congressional passed of the America Invents Act (AIA) of 2011… As SAS Institute’s petition notes, the track record of the PTAB is clear. The PTAB believes that final written decisions need only to address certain challenged claims, not every challenged claim.

The Federal Circuit held that the Board’s changed claim construction of “data flow,” violated the Administrative Procedure Act (APA), even if it was correct. In particular, it deprived the petitioner of the procedural protections of the APA, which prohibits an agency from changing legal theories during a proceeding without giving respondents notice of the change and the opportunity respond to the new theory. Because the Board changed its construction of the term “data flow” absent any suggestion from the parties, and without any notice, there was no meaningful opportunity to respond to the unanticipated change. Therefore, the Court vacated the decision of the Board to afford the parties an opportunity to present arguments on the Board’s newly-adopted construction of “data flow.”