The Supreme Court has granted cert to Iancu in Iancu v. NantKwest, Inc. to resolve the question of whether all expenses incurred by the USPTO must be paid for by the applicant in a district court action under 35 U.S.C. 145 regardless of the outcome.

§145 allows for de novo review of an adverse PTAB decision in district court, instead of the direct appeal to the Federal Circuit under §141, but also states that “”[a]ll the expenses of the proceedings shall be paid by the applicant.” In this case, NantKwest’s patent application claims were rejected as obvious by the examiner at the PTO, which was upheld by the PTAB. NantKwest filed for review by the district court under §145. In a decision upheld by the Federal Circuit, the district court granted a motion for summary judgment for obviousness. Despite the USPTO’s custom of only requesting costs in both §145 and §141 appeals, the USPTO invoked the “all expenses” language to request both costs and attorney’s fees.

While NantKwest’s argument relies heavily on the “American System” and the 170 years of USPTO custom of not asking for attorney’s fees to inform the interpretation, the USPTO points to the Lanham Act and the historical meaning of expenses. Under the Lanham Act, a similar de novo review is available which also provides for “expenses” and was specifically and intentionally modeled after §145. In 2015, the 4^th Circuit ruled that the Lanham Act allowed for the recovery of attorney’s fees, creating a seeming circuit split on the issue.

After being denied attorney’s fees in the district court, the Federal circuit granted them on appeal, only to be followed by a sua sponte en banc review where the panel was overturned. This led to the now granted petition for certiorari to the Supreme Court. How this case is decided will likely impact the future choices for appellate review between §141 and §145 and bares watching as the case moves forward.

Earlier this month, Dex Media (the remaining appellee) filed a Petition for Writ of Certiorari over the Federal Circuit’s application of the one-year time-bar in Oracle Corp. v. Click-to-Call Technologies LP. According to the Federal Circuit, the one-year limit to file an IPR after being served with a complaint under 315(b) of the America Invents Act still applies even if the complaint has been voluntarily dismissed without prejudice.

While the Supreme Court mulls over a potential appeal, the decision is facing additional attacks from below. Despite the Federal Circuit’s explanation that “[s]imply put, § 315(b)’s time bar is implicated once a party receives notice through official delivery of a complaint in a civil action, irrespective of subsequent events,” the PTAB has interpreted the holding in a much more limited manner.[1] In IPR2018-01331, a challenge to Realtime Adaptive Streaming, LLC’s patent by Sling TV L.L.C. and Dish Network L.L.C., the PTAB granted institution despite the patent having been asserted against the petitioner over 12 months before the petition’s filing date.

In March 2017, Realtime Data LLC assigned the subject patent to Realtime Adaptive Streaming, LLC. Then, on June 6, 2017, Realtime Data LLC filed a complaint asserting the subject patent against Petitioner. Because Realtime Data was not the current patent owner, they opted to voluntarily dismiss the complaint. The patent was then asserted by Realtime Adaptive Streaming, LLC against Petitioner in October of 2017.

According to the PTAB, the complaint served to Petitioner in June 2017 is insufficient notice to trigger the § 315(b) time-bar because the complaint was filed without standing. Per the decision “Section 315(b) specifies that the time bar is triggered when ‘the petitioner is served with a complaint alleging infringement of the patent.’ Although the statute’s text is not explicit as to who must file and serve the complaint, § 315(b) is titled ‘Patent Owner’s Action,’ thus suggesting that only service of a patent owner’s complaint triggers the one-year time bar.”[2]

[1] Oracle Corp. v. Click-to-Call Technologies LP, Slip Op at 13 (CAFC Aug. 16, 2018).

[2] Sling TV, L.L.C. et al v. Realtime Adaptive Streaming, LLC, IPR2018-01331 Paper 9 at 7 (PTAB January 31, 2019).

On Tuesday, January 22, 2019, the Supreme Court upheld the Federal Circuit’s ruling in Helsinn Healthcare v. Teva Pharmaceuticals and confirmed that Congress did not change the meaning of the term “On-Sale” when it passed the AIA in 2012. For a full description of the case’s disposition, see our previous update on the oral argument held at the end of 2018.

In the decision, the Supreme court noted that “On-Sale” had a well-established meaning before the AIA was passed that included confidential sales and that Helsinn was not challenging that pre-AIA interpretation. Instead, the Court explained that the argument Helsinn was advancing was that the addition of “or otherwise available to the public” to § 102 changed the meaning of the term “On-Sale” to require public availability.

The Court disagreed, explaining that “The addition of ‘or otherwise available to the public’ is simply not enough of a change for us to conclude that Congress intended to alter the meaning of the reenacted term ‘on sale.’… Given that the phrase “on sale” had acquired a well-settled meaning when the AIA was enacted, we decline to read the addition of a broad catchall phrase to upset that body of precedent.”[1]

In keeping the meaning the same as under pre-AIA precedent, the Court held that “Because we determine that Congress did not alter the meaning of “on sale” when it enacted the AIA, we hold that an inventor’s sale of an invention to a third party who is obligated to keep the invention confidential can qualify as prior art under §102(a).”[2]

[1] Helsinn Healthcare v. Teva Pharmaceuticals USA, Inc., Slip Opinion at 8 (2019).

[2] Helsinn Healthcare v. Teva Pharmaceuticals USA, Inc., Slip Opinion at 9 (2019).

As Director Iancu promised in his recent address,  the USPTO has issued revised guidance on the evaluation of eligibility. Specifically, the guidance sheds light on how the USPTO will address §101 abstract analysis and §112 in relation to computer implemented inventions. This memo is part of Iancu’s long-stated mission of bringing greater clarity and predictability on Alice/Mayo interpretations for inventors. Per the official press release, the releases aim to ensure “consistent, predictable, and correct application of these principles”.

For §101, the guidance provides two key changes: identifying specific categories of concepts defined as abstract and providing a two-step analysis for how to deal with such concepts when determining eligibility under §101.

By listing out the specifically identified concepts defined as abstract, the USPTO hopes to bring more structure to §101 objections and force analysis to specifically identify the category and caselaw behind the objection. The concepts the guidance lists as abstract from court decisions are as follows: mathematical concepts, certain methods of organizing human activity, and mental processes.

The two-step analysis is also aimed at reigning in objections to any subject matter relating to one of those concepts. The first step prescribed by the guidance is whether the claim recites one of the identified judicial exceptions. If so, the next step is to identify whether the recitation of the abstract judicial exception is integrated as part of a practical application. If the claim recites a judicial exception with no practical application, only then should the claim be analyzed further under Step 2 of the Alice/Mayo test.

With respect to §112, the revision hones in on computer-implemented inventions to provide guidance on “proper application of means-plus-function principles under § 112(f), definiteness under § 112(b), and written description and enablement under § 112(a).”

Both the guidance memos are available in full on the USPTO website. Find §112 here and § 101 here. The USPTO is seeking written comments to this guidance to be sent to  Eligibility2019@uspto.gov on or before March 8, 2019.

The different standards between the PTAB and the ITC came to bear in a recent Federal Circuit appeal between Nobel Biocare Services AG and Instradent USA, Inc. (Appeal No. 2017-2256 ). The decision came on an appeal from an IPR where Instradent sought to invalidate Nobel’s patent relating to dental implants with a critical date of May 23, 2003. The original patent holder (Alpha-Bio Tech. Ltd) brought an estimated 200-500 catalogs describing the material to a 2003 trade show, which usually occurred in March and corresponds to the ‘March 2003’ date printed on the catalog cover.

In 2015, the ITC ruled that the testimony from the Patent Owner that the trade show usually occurred in March and the March 2003 date on the catalog was insufficient to establish the available date. In the underlying 2015 IPR, the PTAB, considering new testimony from a competitor corroborating the March 2003 date for the catalog, found sufficient evidence that it was publicly available in March of 2003, before the critical May 23, 2003 date. This allowed the anticipation rejection to stand and invalidated the subject claims. Both decisions were appealed to the Federal Circuit.

The ITC appeal was decided first, where the Federal Circuit upheld the insufficiency of the evidence for the March 2003 catalog, followed by the appeal of the IPR sufficient evidence finding which was also upheld.

In explanation of affirming the two seemingly conflicting decisions, the Federal Circuit highlighted two things. First, the panel pointed to the additional evidence of corroborating testimony from their competitors. Secondly, and more significant for decision making purposes, the panel emphasized that the standards of evidence are different between the ITC and the PTAB. In support of the IPR decision, the panel explained, “As the Board correctly observed, the evidentiary standard in its proceedings, preponderance of the evidence, is different from the higher standard applicable in ITC proceedings, clear and convincing evidence”. The panel then cited to its 1966 decision in Consolo v. Fed. Mar. Comm’n which stated that “the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency’s finding from being supported by substantial evidence.”

The Federal Circuit’s endorsement that the different standards hold weight in application of prior art eligibility highlights the necessity of proper strategic planning when deciding how to proceed with any patent disputes.

After over a decade of outstanding service and commitment to our clients, Maier & Maier is proud to have obtained 1000 patent grants for our clients from the United States Patent & Trademark Office. The most recent in a string of successes, this achievement represents both the quality and consistency of Maier & Maier’s work.

The milestone comes during the most successful year to date for Maier & Maier. Nearly 250 grants to date in 2018, repeated successes litigating for our clients, and the addition of new partner and renowned patent expert, Steve Kunin, have all combined to make 2018 the best yet, and helped the firm earn a spot as one of U.S World & News Report’s Best Law Firms.

With continued commitment to our clients, Maier & Maier is looking forward to even greater things for years to come!

On Monday, December 17, 2018, the PTAB denied institution of Supercell Oy’s PGR2018-00066 petition. The challenged patent, U.S. Pat. No. 9,873,044, which discloses a Method for controlling a server device, a server device, a computer-readable recording medium, and a game system. The petition proposed three grounds of rejection (one under §101 and two under §112). The Board found Supercells’ proposed §101 rejection unpersuasive because the petitioner failed to demonstrate that it was more likely than not that at least one of the challenged claims was unpatentable. Supercell’s proposed §112 rejections also failed because the Board found that one of ordinary skill in the art would understand the meaning of “enabling invitations,” “detecting,” and “giving incentives” in light of the specification, and because the Board found the claims to be sufficiently definite under § 112(b).

This petition was filed as part of an ongoing arms race between GREE, Inc. and Supercell Oy in the social gaming technology field, with eighteen PTAB proceedings between the two. Supercell Oy tapped Fenwick & West to challenge 16 of GREE’s patents, and GREE has countered by using Maier & Maier PLLC (4 proceedings), Ropes & Gray (4 proceedings), Kilpatrick Townsend & Stockton LLP (4 proceedings), Oliff PLC (3 proceedings), and Oblon McClelland Maier & Neustadt, LLP (1 proceeding).

Overall more than half of the proceedings have been instituted (9), with four still pending the Board’s institution decision. Out of the sixteen proceedings, GREE has only successfully prevented three of the proceedings from being instituted, with Maier & Maier obtaining two of those Non-Institution Decisions.

Maier & Maier’s 50% non-institution rate dwarfs the rate for both GREE’s overall defense against Supercell’s campaign (25%) and the overall rate for PGR’s at the PTAB, which clocks in at 26.8%.

All the above statistics and information about the individual PTAB proceedings was obtained using the PostGrant Portal.

At the 10^th Annual Patent Law & Policy Conference late last month, USPTO Director Iancu announced that more USPTO guidance on Section 101 was forthcoming. As he explains, “the USPTO plans to issue guidance to help our examiners and applicants who struggle with these issues every single day”. Throughout his address, he focused on a few primary themes that will likely be reflected in the future guidance and bare taking note of moving forward.

First, he highlighted the importance of gaining clarity on §101 eligibility.  Citing to both historical records from James Madison and recent decisions from several Federal Circuit Judges, Iancu set out his goals for people to be able to understand the laws and predict outcomes. As he notes, “[F]or the IP system to work as intended, we must ensure that our laws are clear and that the IP rights we issue are predictable, reliable, and of high quality.”

Second, he emphasized the need to “keep invalidity rejections in their own lanes”. Lauding the Patent Act of 1952, Iancu praised the separation of rejections for applications as being not novel, as being obvious, or as being indefinite or too broad to be fully enabled, which were clearly laid out as separate in the text of the statute. Per his address, “The genius of the 1952 Patent Act was that it clearly categorized the conditions for patentability, in addition to and separate from the categories of invention.”

Finally, he explains that the judicial exceptions to 101 eligibility should be applied in a limited manner, specifying that “the judicial exceptions should address categories of subject matter that are not eligible per se, or on their own, no matter how inventive or well-claimed they are.” This limits the application of 101 to things that the Supreme Court has declared ineligible even if they satisfy every other requirement perfectly.

In addition to natural phenomena and laws of nature, Iancu identifies three categories of abstract ideas that fall under this umbrella.

“1. Mathematical concepts like mathematical relationships, formulas, and calculations.

2. Certain methods of organizing human interactions, such as fundamental economic practices; commercial and legal interactions; managing relationships or interactions between people; and advertising, marketing, and sales activities.

3. Mental processes, which are concepts performed in the human mind, such as forming an observation, evaluation, judgment, or opinion.”

The current climate of rapid innovation has exacerbated the confusion. “We are all currently grappling with the eligibility of all sorts of technology, from things like toys that communicate with one another, to computer virus screening; from computer databases, to methods of treating various diseases. Now I am not expressing any view as to the ultimate validity of any particular claims drawn to these technologies. Such claims, if they are actually ‘directed to’ math or laws of nature or some other matter that the Supreme Court said is per se ineligible, might perhaps fail under 101.

“But without more, why would such technology be deemed as ineligible by itself? The Supreme Court has never held such technology, by itself, to be prohibited. And why should it be?”

By letting the separate rejections speak for themselves, Iancu hopes to reign in these judicial exceptions and allow for worthy technology to gain protection. As he puts it, “I think that we can overcome the current Section 101 morass if we carefully follow Supreme Court precedent, if we don’t allow the judicial exceptions to swallow the entire statute, and if we allow the rest of the statutes (102, 103, 112) to do the work they were meant to do.”

For the full remarks made by Director Iancu, click here. 

 

On Tuesday, December 4, the Supreme Court heard oral arguments in Helsinn Healthcare v. Teva Pharmaceuticals centered around the meaning of the phrase “On-Sale” under the AIA and whether the term was changed from the previous meaning.

Helsinn originally sued Teva for infringement of four patents relating to palonosetron dosages in chemotherapy treatments in the District of New Jersey. While the drug use was in testing and development, Helsinn entered into a License Agreement and a Supply and Purchase Agreement with MGI Pharma, Inc, which was binding as of April 6, 2001. It wasn’t until January 30, 2003 that Helsinn filed a provisional application on the dosage. All four of the patents claim priority to that application, raising the question of whether the Supply & Purchase Agreement constituted the dosages being “On Sale” as Prior Art under §102.

Three of the patents were filed between 2003 and 2006 and are governed under the pre-AIA “On Sale” interpretations, while one of the patents was filed in May of 2013 and is subject to the AIA language. Pre-AIA, patents were invalid if “the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of application for patent in the United States” under 35 U.S.C. 102. Under the AIA, patents are invalid if “the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” 35 U.S.C. 102(a)(1).

The District Court found the three pre-AIA patents valid because by interpreting the MGI Agreement as a contract for a future sale once the idea was reduced to practice, rather than a sale at the time of enactment. They also found the AIA patent valid by interpreting the new language to require a public sale or offer for sale, while this Agreement was confidential between MGI and Helsinn. On appeal by Teva, the Federal Circuit reversed on all four patents, finding them all invalid due to a prior sale and also that the claims were ready for patenting prior to the critical date. Helsinn appealed.

Helsinn’s first argument was that “on sale” has always required public availability and the Agreement would not be prior art under either pre-AIA or AIA language. This argument centered on the idea that there is ambiguity about the meaning of the phrase “on sale” as to whether it means someone is actively seeking purchasers or merely requires an offer to at least one person. The idea here being that Helsinn’s private sale to MGI might not constitute being “on sale” whereas an open offer to prospective buyers at large would have.

In oral arguments, the justices seemed unconvinced of any such ambiguity. Justice Sotomayor objected to his alternative meaning of the phrase. “This [public] definition of ‘on sale,’ to be frank with you, I’ve looked at the history cited in the briefs, I looked at the cases, I don’t find it anywhere.” Meanwhile, Justice Kavanaugh commented that “it’s pretty hard to say something that has been sold was not on sale”.

Helsinn also argued that the AIA language’s inclusion of “or otherwise available to the public” meant that the preceding list of prior art forms must be ‘available to the public’ as well. This would indicate a new additional requirement from the previous iteration of §102 where the invention must be on sale to the public, eliminating the confidential Agreement as invalidating prior art.

Currently, the only change to the on sale requirement from pre-AIA to AIA was the new eligibility of sales abroad as prior art. Helsinn’s interpretation would change that, but so far the Court does not seem to be buying it.