New Federal Circuit Ruling Clarifies “Published Application” Rule for IPRs

Daniel Ehrlich

The Federal Circuit clarified that a published U.S. application (published application) is available for IPR as long as its filing date (its “effectively filed” date in AIA vernacular) is before the priority date of the challenged patent, even if the publication date of the published application is after the priority date of the challenged patent.

A published application is available as prior art as a printed publication under pre-AIA sections 102(a) and 102(b) as of its publication date, but (like a U.S. patent) is also available under as prior art under pre-AIA section 102(e) as of its filing date. The AIA retains this attribute of published applications: a published application is available as prior art under section 102(a)(1) as of its publication date, and is also available under as prior art under section AIA 102(a)(2) as of its filing date (effectively filed date).

Lynk Labs argued that, despite the available of a published application as prior art under pre-AIA section 102(e) as of its filing date, a published application is not available for use in an IPR unless that published application was published or accessible to the public prior to the priority date of the challenged patent. Section 311(b) limits the scope of an IPR to “ground[s] that could be raised under section 102 or 103 and only on the basis of prior art consisting of patents or printed publications.” Lynk Labs’ argument is based upon a nuanced reading of section 311(b), that the scope of IPRs is limited to “prior art” patents and “prior art” printed publications, and that while a patent have a prior art effect of under pre-AIA section 102(e)(2) as a “patent,” a  “prior art” printed publication is effective as prior art only as of its publication date (or public accessibility date). That is, since section 311(b) refers to patents and printed publications, but does not specifically call out published applications, the provision of section 102(e)—giving prior art effect as of the filing date—applies to patents as used in section 311(b) but does not apply to published applications as published applications are not specifically mentioned in section 311(b).

The Federal Circuit agreed that a published application is a “printed publication,” but pointed out that that a published application is a specific type of printed publications, a type of “printed publication” that by virtue of section 102(e)(1) is prior art as of its filing date.  The Federal Circuit thus concluded that the plain language of sections 311 and 102(e) permit an IPR challenge based upon published applications and that such published applications are effective as prior art as of their filing date.

The Federal Circuit rejected Link Labs’s arguments concerning the case law requirements of public accessibility, not only that a reference be accessible to the public but when it must be accessible to the public, to quality as a “printed publication.” The Federal Circuit discussed the legislative background of reexamination (added in 1980) , inter partes reexamination and eighteen-month publication with the prior art effect of published applications (added in 1999), and IPR—replacing inter partes reexamination (in 2011). The Federal Circuit rejected the argument that published applications are not printed publications, or are printed publications only if accessible to the public before the priority date of the challenged patent, as based upon case law (or “old soil”) from an era before pending patent applications were published. Thus Federal Circuit thus disagreed with the contention that a published application is a “prior art” “printed publication” for purposes of 311(b) only as of the date it is published or accessible to the public.

In short: a published application is available for IPR as long as its filing date is before the priority date of the challenged patent, even if the publication date of the  published application is after the priority date of the challenged patent.

Overcoming Sect. 101 Rejections: USPTO Guidance, Recent Decisions to Meet Sect. 101 Patent Eligibility Requirements

Daniel Ehrlich

Maier & Maier is pleased to announce that distinguished partner, Stephen Kunin, will be speaking in an upcoming Strafford live video webinar, “Overcoming Sect. 101 Rejections: USPTO Guidance, Recent Decisions to Meet Sect. 101 Patent Eligibility Requirements” scheduled for Tuesday, April 27, 1:00pm-2:30pm EDT.

We encourage anyone interested in Section 101 issues at the USPTO to tune in.  The panel will review case law, USPTO guidance, and offer response strategies.

For more information or to register >

 

Updates in U.S. Patent Law, April 2017

Daniel Ehrlich

Federal Circuit Rules that Patent Holder Cannot Evade Patent Marking Statute with Retroactive Statutory Disclaimer

In Rembrandt Wireless Technologies, LP v. Samsung Electronics Co., Ltd., No. 16-1729 (Fed. Cir. 2017), the Federal Circuit determined that a patent holder could not use a retroactive statutory disclaimer to avoid having to fully comply with the patent marking statute.
The relevant statute, 35 U.S.C. § 287, states that “[p]atentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented” by appropriately marking the patented article. The statute further provides that, “[i]n the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice.”
Rembrandt had sued Samsung for infringement of a number of claims of two of its patents, US Patent Nos. 8,023,580 and 8,457,228. During the time period in which Samsung was allegedly infringing, Rembrandt had licensed the ‘580 patent to Zhone Technologies, which manufactured products embodying claim 40 of the patent, which was one of the claims Rembrandt had asserted in litigation. Zhone did not mark these products with the patent number.
Before trial, Samsung moved to limit Rembrandt’s damages on the grounds that Rembrandt did not comply with the marking statute (because the product manufactured by Zhone was not marked) and that Rembrandt was therefore not entitled to damages for infringement of any of the claims of the ‘580 patent for any time period before Samsung was notified of the infringement by the filing of the complaint. In response, Rembrandt withdrew claim 40 from its infringement allegations and filed a statutory disclaimer in the US Patent and Trademark Office to disclaim claim 40.
The District Court accepted Rembrandt’s argument that this statutory disclaimer removed its obligation to mark claim 40, for the reason that “a disclaimed patent claim is treated as if it never existed.” The Federal Circuit disagreed, stating that such an interpretation defeated the purpose of the patent marking statute, because allowing Rembrandt to use a disclaimer to avoid the consequences of its failure undermined the public notice function of the marking statute.
However, the Federal Circuit noted that it has not been resolved whether the marking statute applies on a patent-by-patent basis or on a claim-by-claim basis, and the failure to mark claim 40 may limit only the award of damages based on claim 40. The Federal Circuit elected to remand the case for determination of this issue.

USPTO Design Day 2017

On April 25, 2017, the USPTO held its annual Design Day, a seminar featuring Examiners, Practitioners, and Industrial Designers, to discuss the latest developments in design patents.
Design Day 2017 opened with an introduction of Karen Young, the newly named Director of the Tech Center 2900, which is responsible for all design examination. Director Young shared several key statistics showing increasing interest in design patents. In fiscal year 2016, 40,406 design applications were filed, up from 36,889 in FY 2015. 20,361 applications have already been filed in FY 2017. The current backlog of unexamined applications is 44,578, resulting in a 12.9 month average pendency to first action and a 19.1 month average overall pendency for design applications. To keep up with the increased filings and work toward lowering the current backlog, 29 new design examiners were hired in June 2016, increasing the total number of design examiners to 187. However, over 100 of these examiners are still junior examiners without signatory power.  As a result, clear and consistent communication is critical for effect prosecution.
The day also included updates from speakers on international treaties, best prosecution practices, perspectives from in-house counsel and an industrial designer, case law updates, a discussion of design patents in the fashion industry, and a mock argument demonstrating the implications of prosecution history on the enforceability of design patents after issuance.
Please contact us if you are interested in additional information on particular topics covered at Design Day 2017 or if you have general inquiries regarding design filings in the U.S.

Updates from the Federal Circuit, March 2017

Daniel Ehrlich

Federal Circuit Applies Panduit Factors to Specific Feature

In Mentor Graphics Corp. v. EVE-USA, Inc., No. 15-1470 (Fed. Cir. March 16, 2017), the Federal Circuit determined that the Panduit factors could apply to a patented feature that represented only one part of a multi-component product, as well as to a patented product.
Under the Panduit test, a patentee is entitled to damages based on lost profits if it can establish (1) demand for the patented product, (2) an absence of acceptable non-infringing alternatives, (3) that it has the manufacturing and marketing capability to exploit the demand, and (4) the amount of profit it would have made.
In this case, Mentor Graphics asserted several patents against Synopsis, the parent company of EVE. A jury found that EVE’s “ZeBu” hardware emulator infringed one of Mentor’s patents, U.S. Patent No. 6,240,376 (the ‘376 patent), which covered a method for debugging source code. When arguing damages, Mentor had argued that it was entitled to lost profit damages for lost sales of its “Veloce” hardware emulators due to infringing sales of “ZeBu” emulators, because it would have made additional sales of the “Veloce” emulators if not for the infringing “ZeBu” sales. A jury found that Mentor satisfied all four Panduit factors, despite the fact that the feature was only one aspect of the “ZeBu” hardware emulator, and awarded lost profits.
Synopsis argued that the District Court erred in failing to apportion lost profits based on Mentor’s inventive contribution to the emulator, rather than based on the entire cost of the emulator. However, the Federal Circuit affirmed the decision of the District Court, finding that in the relevant market (suppliers of emulators to Intel, which consisted of Mentor Graphics and Synopsis), for each sale that EVE made, Mentor lost that exact sale. There were no non-infringing alternatives, and Intel would not have purchased the emulators if they lacked the claimed features. Therefore, it was appropriate for the District Court not to apportion the award of lost profits.

Federal Circuit Upholds Inertial Tracking System Claims In Thales Visionix v. United States

In Thales Visionix Inc. v. United States, No. 15-5150 (Fed. Cir. Mar. 8, 2017), the Federal Circuit reversed a decision of the Court of Federal Claims which had found the claims of a patent on an inertial tracking system invalid under 35 U.S.C. §101.
In particular, the patent at issue, U.S. Patent No. 6,474,159 (the ‘159 patent) had claimed an inertial tracking system having a first sensor on an object being tracked, a second sensor on a moving reference frame, and an element that determines the tracked object’s orientation relative to the moving reference frame using the signals of both sensors. Prior art systems had tracked the positions of the object and the moving reference frame relative to the earth and fused the data, which caused some error to build up over time which had to be periodically corrected.
Thales had alleged that the helmet-mounted display of the F-35 Joint Strike Fighter infringed the claims of the ‘159 patent. However, the Court of Federal Claims found that the claims were directed to an abstract idea, in particular the abstract idea of “using laws of nature governing motion to track two objects,” and as such were not patent-eligible under 35 U.S.C. §101.
The Federal Circuit reversed this decision, finding that the claims were nearly indistinguishable from the claims of Diamond v. Diehr in terms of patentability, and were patent-eligible under the Alice standard. In particular, the Federal Circuit characterized the claims as using mathematical equations in conjunction with inertial sensors “in a non-conventional manner to reduce errors in measuring the relative position and orientation of a moving object on a moving reference frame,” just as the claims in Diehr had been directed to using mathematical equations to reduce the likelihood of problems in rubber molding. The Federal Circuit stressed that the mere use of a mathematical equation does not “doom the claims to abstraction.” Since the claims did not seek to cover the general use of the mathematical equations, but merely sought to cover the application of the equations to the unconventional configuration of sensors, the claims were not directed to an abstract idea and were thus patent-eligible.