IP5 Unveils New Pilot Program for Collaborative Search and Examination

Maier & Maier

On July 1, 2018, the IP5 (Patent Offices for the US, the EU, Japan, Korea, and China) launched a new pilot program, PCT CS&E, testing collaborative search and examination for the PCT.  The Pilot Program is currently scheduled to take a total of three years. In years one and two the IP5 will be conducting the collaborative Pilot Program, while the third year will revolve around studying its effects. 100 applications from each International Search Authority will be accepted to the Pilot Program over the first two years, for a total of 500 files total. The goal of CS&E is to increase efficiency for the respective Patent Offices and applicants.

An application submitted to the CS&E Pilot Program is first reviewed by the PCT ISA to verify the fulfillment of required CS&E criteria and other application formalities before acceptance. The application is then sent to the first ISA (one of the IP5) for a provisional search and provisional opinion, which are sent to the “Peer” offices of the other IP5 who provide any additional comment and contribution to the search. After all four of the other offices have reviewed and contributed, the first ISA compiles the cumulative work, and produces a Final International Search Report and Written Opinion.

The total PCT CS&E process is expected to take a maximum of 16 weeks from receipt by the first ISA to the Final International Search Report and Written Opinion (eight weeks for initial search, four weeks for peer review, and four weeks for final drafting and incorporation of peer review). With the additional review from the other four IP5 offices, applicants who are planning to file in the IP5 may expect to have more expedited national phases.

There have previously been two pilot programs where the USPTO coordinated with other offices in order to determine the most effective operational system for inter-office collaboration. The goal of improving efficiency for applicants and patent offices will be reviewed in the third year of the Pilot Program. Participation in the PCT CS&E must be requested at the time of the filing and can be requested either online or using a provided PDF form. For more information on the Pilot Program, see the USPTO’s information page here.

Stephen Kunin Joins Maier & Maier PLLC

Maier & Maier

July 2, 2018 (Alexandria, VA) Maier & Maier PLLC is proud to announce its newest addition to the firm, Stephen Kunin, the former Deputy Commissioner for Patent Examination Policy at the United States Patent and Trademark Office.

As an expert in patent law for over 48 years, Mr. Kunin is a highly respected member of the patent industry. One of the masterminds of the revisions to the Rules of Practice and Manual of Patent Examining Procedure, Mr. Kunin worked over 3 decades at the U.S. Patent Office, serving his final ten years as Deputy Commissioner for Patent Examining Policy, and winning 9 Medals (4 Gold) from the Department of Commerce, a Career Achievement Award from the USPTO, and a Reinventing Government Hammer Award from the Vice President, among other notable distinctions.

Mr. Kunin brings with him an expert level of knowledge in every aspect of prosecution and post-issuance proceedings, a highly strategic thought leader on the tactical advantages of post-grant procedures in lieu of traditional litigation, and his continued specialty as a highly sought consultant and expert witness on all matters relating to USPTO patent policy, practice, and procedure.

Timothy Maier, Managing Partner of Maier & Maier, commented that “Stephen Kunin has a deep well of knowledge on patent issues, starting with his time at the Patent Office and continuing today. He’ll be an invaluable resource to our firm and his expertise will help us provide our clients with the best service possible.”

Ex Parte Jadran Bandic Sheds New Light On 101 Guidance

Maier & Maier

The Patent Trial Appeal Board (PTAB) recently reversed an examiner’s 101 Alice rejection in Ex Parte Jadran Bandic, and in so doing, provided insight into how the PTO will administer Director Iancu’s 101 Guidance Memo. The PTAB found the examiner’s analysis in Step One of the Alice rejection only considered limited portions of the claim and did not address whether the claim as a whole amounted to an abstract idea. Despite the fact that the PTAB overruled the examiner’s finding in Step One of the Alice analysis and negated a need to continue their review, the PTAB specifically went on to discuss the merits of Step Two, where they found that “The Examiner’s analysis of the second step of the Alice analysis is conclusory and unsupported.”[1]  This ruling indicates a clear directive that examiners will need to provide detailed explanations and specific supporting evidence to withstand scrutiny on appeal.

After consistent promises made since his nomination, PTO Director Iancu fulfilled those promises last month when he proposed new guidance for patent subject matter eligibility under 35 U.S. 101 in a Federal Registry Notice. The proposal came on the heels of the Federal Circuit’s precedential decision in Berkheimer v. HP Inc., which held that patent eligibility analyses should not group claims together indiscriminately and that eligibility determinations are not solely questions of law, but also questions of fact.[2] The PTO issued a memorandum addressing 101 rejections after the Berkheimer decision which is available for public comments here and will remain open for comments until August 20th, 2018.

Since the Mayo v. Prometheus decision in 2012, where the Court first introduced the phrase “well-understood, routine, conventional activity previously engaged in by researchers in the field,” and the subsequent two-step framework for analysis set out by the Court in Alice in 2014, the exact parameters of patent eligibility under 101 have been under severe scrutiny. The PTO’s current guidance of the Mayo-Alice framework is found in MPEP 2106, directing that examiners “should conclude that an element (or combination of elements) represents well-understood, routine, conventional activity only when the examiner can readily conclude that the element(s) is widely prevalent or in common use in the relevant industry.”[3]

Much of Iancu’s career before becoming PTO director came as a litigator, including experience in front of the PTAB. This has lead to a significant amount of interest in the approach he’ll take as PTO Director, and especially with PTAB procedural issues. In a senate hearing last November, Iancu espoused the belief that “[t]o a large extent we should see how the recent development in the case law and some of the recent acts of Congress are working out, and take stock of that.” When the Berkheimer decision came down from the Federal Circuit, he took one of his first opportunities to take such stock.

Berkheimer v. HP, Inc. originated in the Northern District of Illinois with a summary judgment decision on Berkheimer’s 7,44,713 patent concerning digital asset management, after he had sued HP for infringement. The court held claims 1-7 and 9 invalid as ineligible under § 101 and held claim 10 indefinite and claims 11-19 invalid for indefiniteness due to their dependency on claim 10. Berkheimer appealed this decision to the Federal Circuit.

On appeal, Berkheimer argued that the district court had improperly neglected to consider his arguments as to claims 4-7’s validity, because it took arguments towards claim 1 as representative, and failed to apply the correct standard in deciding the validity of claims 4-7 for summary judgment. In its decision, the Federal Circuit determined that the question of whether something is “well-understood, routine, and conventional to a skilled artisan at the time of the patent is a factual determination.”[4] This means that the decision with respect to claims 4-7 should have been considered “in the light most favorable to the non-movant,” in this case, Berkheimer’s. Therefore, the court decision vacated-in-part and remanded the validity of claims 4-7 to the district court.

This decision addressing § 101 interpretation prompted Iancu to release a memo on the PTO’s additional guidance for examiners issuing rejections under 101. In order for an examiner to ‘readily conclude’ that something is well-understood, routine and conventional, the PTO offers four options for support of that factual finding.[5] The first three possibilities are citations:

1). To an express statement in the specification or to a statement made by an applicant during prosecution, specifically explaining that the finding “cannot be based only on the fact that the specification is silent with respect to describing such element.”

2). To a court decision from MPEP § 2106.05(d)(II) noting the finding.

3). To a publication which notes the finding (book, manual, review article, that “describes the state of the art and discusses what is well-known and in common use in the relevant industry”). It should be noted that the definition of publication here is not defined the same as a printed publication under 102, because 102 requires only 1 publication of the idea, whereas “well-understood” would require further evidence of its prevalence in the field.

4). Lastly, the memo provided that the examiner may take official notice of the well-understood, routine, conventional nature of the elements, but this is limited to situations where an examiner is certain of such nature, and should be done in accordance with MPEP  § 2144.03. If the applicant challenges the official notice in the manner allowed per the MPEP, then the examiner would in turn need to cite to one of the other three options.

With Ex Parte Jandran Bandic, the PTAB has given more insight into how they will be implementing this emphasis on factual findings for Step Two. The patent at issue covers an “analytic method of tissue evaluation,“ with the rejected claims addressing optomagnetic fingerprinting. The examiner rejected those claims because they amounted to “mere data-gathering” and “optomagnetic fingerprinting itself is disclosed in disclosures dating back to 2008”. In reversing this decision, the PTAB noted that the examiner failed to “persuasively explain why [the claims] are steps of “data gathering” and took issue with the fact that the examiner failed to provide any citations for the claim that optometric fingerprinting has been disclosed in prior art since 2008. Additionally, the PTAB referenced the Berkheimer decision and emphasized that an appearance of an element in a “prior disclosure is not adequate to show that the additional element would not be an activity sufficient to transform a claim into a patent-eligible application of an abstract idea”.[6]

This PTAB ruling provides some much needed insight into the level of scrutiny that will be placed on Step Two moving forward, and bears watching as we continue to get more decisions under Iancu’s post-Berkheimer 101 Memo PTO.

[1] Ex Parte Jadran Bandic, Dec. at 6 (PTAB April 30, 2018) (available at https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2016004417-04-30-2018-1).

[2] 881 F.3d 1360 (Fed. Cir. 2018).

[3] PTO Notice, Fed. Reg, April 20, 2018 (available at https://www.federalregister.gov/documents/2018/04/20/2018-08428/request-for-comments-on-determining-whether-a-claim-element-is-well-understood-routine-conventional).

[4] Berkheimer v. HP Inc, 881 F.3d 1369 (Fed. Cir. 2018).

[5] PTO Notice, Fed. Reg, April 20, 2018 (available at https://www.federalregister.gov/documents/2018/04/20/2018-08428/request-for-comments-on-determining-whether-a-claim-element-is-well-understood-routine-conventional).

[6] Ex Parte Jadran Bandic, Dec. at 6 (PTAB April 30, 2018) (available at https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2016004417-04-30-2018-1).

Supreme Court Upholds IPR Proceedings; Rejects Partial Institutions

Maier & Maier

Two Supreme Court Decisions came down April 24, 2018 with potentially significant impacts on patent practice. First, in Oil States v. Greene’s Energy, the Court rejected Oil States’ Article III and 7th Amendment challenges to inter partes review (IPR) proceedings, declaring the proceedings constitutional under the public rights doctrine. Second, the Court ruled that Patent Trial and Appeal Board (PTAB) Final Written Decisions must address the patentability of all challenged claims if an IPR is instituted in SAS Institute v. Iancu, eliminating partial institutions.

Oil States Energy Services v. Greene’s Energy Group

After Oil States Energy Services sued Greene’s Energy Group for infringement in federal district court, Greene’s Energy challenged the patent at the PTAB, successfully arguing the patent was invalid. Oil States then appealed the decision to the Federal Circuit, challenging both the decision and the constitutionality of IPR proceedings at the PTAB as a whole. Oil States argued that patents were a private right and that actions revoking a patent must be limited to Article III courts before a jury, and alternatively that the Seventh Amendment requires a jury trial as patent validity was traditionally decided by a jury. Attempting to distinguish IPR proceedings from re-examination proceedings, which have previously been ruled constitutional, Oil States pointed out how the adversarial process of IPR proceedings mimicked the procedure of Article III courts, while re-examination mimicked the prosecution process at the PTO.

The Court’s 7-2 decision to uphold rested primarily on the finding that because patent rights are public rights, reconsideration of those rights need not be reviewed in an Article III court. Public rights are those “arising between the government and others, which from their nature do not require judicial determination and yet are susceptible of it.”[1] The Court then explained that to whatever extent patent rights are granted to a patent holder, they are statutory rights which cannot exceed the scope allowed by statute. The Court reasons that since the AIA is a statutory limitation of the patent rights, any rights granted to the patent owner are granted subject to continual review by the PTO and possible revocation.[2] Based on this construction reserving review for the PTAB, the Court resolved the Seventh Amendment challenge as moot, since it only applies when Congress has not properly assigned a matter to adjudication outside of an Article III tribunal.

Justice Gorsuch, joined by Justice Roberts, dissented from the opinion, specifically objecting to the conflation of the constitutional power of the executive to issue patents with the power to also revoke patents. He concludes his detailed history of the difference between those powers with an appeal to Article III’s purpose, explaining that “enforcing Article III isn’t about protecting judicial authority for its own sake. It’s about ensuring the people today and tomorrow enjoy no fewer rights against governmental intrusion than those who came before. And the loss of the right to an independent judge is never a small thing.”[3]

Despite these concerns, the Oil States decision has assured that any patent rights enjoyed today and tomorrow will be subject to review at the PTAB.

SAS Institute v. Iancu

SAS Institute challenged all 16 claims in ComplementSofts’s software patent in an inter partes review proceeding before the Patent Trial and Appeal Board (PTAB).  The PTAB instituted review on only some of the claims (claims 1 and 3-10).  The PTAB found claims 1, 3, and 5-10 invalid in the Final Written Decision, only upholding the validity of claim 4. SAS appealed this decision to the Federal Circuit, objecting to the PTAB’s failure to address all 16 challenged claims. The Federal Circuit upheld the PTAB in a 2-1 decision, which the Supreme Court has now reversed 5-4.

The majority relies on the plain language of the statute, the America Invents Act (AIA), in its ruling that the PTAB must address all challenged claims once it institutes an IPR. Justice Gorsuch, the author of the majority opinion, declared, “The statute, we find, supplies a clear answer: the Patent Office must ‘issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner.’ In this context, as in so many others, ‘any’ means ‘every.’”[4]

This holding will impact the PTAB’s procedures, taking away their discretion to partially deny institution on individual challenged claims where they do not find a ‘reasonable likelihood of success”. Justice Ginsburg emphasizes efficiency as a concern in her dissenting opinion, rhetorically asking “Why should the statute be read to preclude the Board’s more rational way to weed out insubstantial challenges?. . . the Court’s opinion offers no persuasive answer to that question, and no cause to believe Congress wanted the board to spend its time so uselessly.”[5]

The removal of the PTAB’s current institution practice puts Director Iancu’s plan for issuing updated procedural guidance to the PTAB in the spotlight moving forward, and emphasizes the importance of the multiple patent reform bills currently being debated in Congress as potential solutions.

Meanwhile, the Court has remanded this case to be decided in accordance with their statutory interpretation, and the outcome will bear watching as it continues.

[1] Ex parte Bakelite Corp., 279 U. S. 438, 451 (1929).

[2] Oil States Energy Services v. Greenes Energy Group, Slip Op. at 10-11. (April 24, 2018).

[3] Oil States Energy Services v. Greenes Energy Group, Slip Op. at 12. (April 24, 2018) (Justice Gorsuch, dissenting).

[4] SAS Institute v. Iancu, Director, United States Patent and Trademark Office, Slip Op. at 1 (April 24, 2018).

[5] SAS Institute v. Iancu, Director, United States Patent and Trademark Office, Slip Op. at 1 (April 24, 2018). (Justice Ginsburg, dissenting)

Introduction of New Patent Legislation in Congress Looms Over PTAB Litigation Practice

Maier & Maier

Two new pieces of legislation were introduced in the past few weeks, one each in the House and the Senate, and both could have drastic implications for PTAB practice. The PACED Act, introduced in the Senate, would eliminate Tribal Immunity as a defense for all Patent Owners in proceedings before the Patent Office. The STRONGER Patents Act, introduced to the House as the counter part to the previous iteration in the senate, would make a number of changes to patent enforcement, including the reversal of the Supreme Court by making the validity standard in the PTAB match the standard in District Court.

The PACED Act

The ongoing Allergan appeal in the Federal Circuit on Tribal Immunity in an IPR is the apparent inspiration for the PACED Act, which would explicitly remove Tribal Sovereign Immunity as an option for defense in IPR’s. The PACED (“Preserving Access to Cost Effective Drugs”) Act, introduced by Senator Tom Cotton, abrogates sovereign immunity in all derivations, reexams, IPRs, post-grant reviews, and in federal reviews of the aforementioned proceedings.[1]

Cotton makes the motivation behind the bill clear, explaining that “This bill will make sure unscrupulous patent holders can’t game the system and block their competitors from entering the market”[2] referring to the ongoing appeal by Saint Regis and Allergan described here. The bill seeks to remove Allergan’s strongest argument, that Sovereign Immunity exists unless the Tribe has waived it or congress has specifically permitted the suit, as outlined by the Supreme Court.[3]

It should be noted that the proposed bill specifically limits the scope of these exceptions to Sovereign Immunity, explicitly stating that “shall apply only to the extent permitted under the 11th amendment to the Constitution of the United States.”

Whether the PACED Act successfully passes through the Senate and on to the House will be something to watch moving forward, though it is possible the Allergan appeal may resolve the issue without legislative intervention.

The STRONGER Patents Act

The STRONGER (“Support Technology & Research for Our Nation’s Growth and Economic Resilience”) Patents Act is the House version of the act introduced to the Senate with the same name last June, co-sponsored by senators Chris Coons, Tom Cotton, Mazie Hirono, and Dick Durbin. The House bill was introduced by the bipartisan duo of Steve Stivers and Bill Foster, and would represent the biggest overhaul of the U.S. patent system since the AIA in 2011[4].

Most of the notable changes proposed for the PTAB involve the relationship between the PTAB and federal District Court, with a goal of increasing efficiency and limiting litigation. Specifically, the bill would align the PTAB’s invalidity standards with the District Court’s, require the PTAB to consider District Court claim constructions along with prosecution history, and preclude institution if validity on § 102 or § 103 grounds had already been decided by a Federal Court or by the ITC.

Additional language weighing the scales in Patent Owners’ favor would require petitioners to demonstrate a reasonable likelihood of being sued for infringement of the patent or competitive harm from the validity of the patent and allow Patent Owners access to an expedited amendment process before a patent examiner during IPR and PGR proceedings. Conversely, the bill would also empower the ITC and state attorneys to curb bad faith demand letters for misleading language about their right to enforce a patent against the recipient.

With the bill now being introduced in both houses of Congress by bipartisan sponsors, and gaining considerable support, it will be worth monitoring moving forward.

[1] https://www.govtrack.us/congress/bills/115/s2514/text

[2] https://www.cotton.senate.gov/?p=press_release&id=901

[3] Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751, 754 (1998).

[4] https://stivers.house.gov/uploadedfiles/stronger_patents_act.pdf

Tribal Sovereign Immunity: Federal Circuit Stays Proceeding after PTAB Cast Doubt On Patent Defense Strategy

Maier & Maier

Last fall, Maier & Maier highlighted a new defense strategy for Patent Owners against IPR (Inter Partes Review) Petitions in an overview of the ongoing Allergan “Tribal Immunity” Proceeding. In sum, Allergan transferred their patent portfolio to the Saint Regis Mohawk Tribe (“Tribe”) in upstate New York, paying them a lump sum and royalties in exchange for retaining an exclusive license for the patent. In doing so, the Tribe became the Patent Owner, availing them of protection from suit under the Eleventh  Amendment.[1] As explained by the Supreme Court, “As a matter of federal law, an Indian tribe is subject to suit only where Congress has authorized the suit or the tribe has waived its immunity.”[2]. After the assignment, the Tribe filed a motion to dismiss based on their Tribal Immunity. Just last month, the Patent Trial and Appeal Board (PTAB) denied that motion and set forth an expedited schedule for oral argument on April 3, 2018. The Federal Circuit issued a stay of that proceeding, giving Allergan another opportunity to plead its case for the Tribe’s sovereign immunity.

The PTAB Decision

The PTAB panel primarily based its decision on two findings: 1). Tribal Immunity does not apply to the petition for IPR; and 2). Even if it does, the Tribe is not an indispensable party that the Proceeding could not continue without.

The Board relied on a few factors for the first finding, including an absence of statutory support for applying Tribal Immunity to administrative proceedings like the PTAB and the fact that the PTAB decision would be applied to the patent itself, not the Tribe as the patent holder.

Even if Tribal Immunity applied, the Board ruled that the proceeding would still continue because the Tribe is not an indispensable party. To come to this result, the Board conducted a thorough analysis of the sale to the Tribe and the alleged license back to Allergan. As explained in the decision, the involved parties/ characterization of an agreement as a license compared to a full assignment is not determinative, with precedent relying more heavily on the terms than the label given to it. According to the Board, Allergan’s exclusive right to practice the patent, coupled with the Tribe’s ‘illusory’ rights to enforce it, indicated that the agreement was an assignment and not a license. This in turn makes Allergan an owner and allows the proceeding to continue, as any of the Tribe’s interests could be fully represented by Allergan, tipping the scales in the indispensable party analysis.[3]

The Stay

After the PTAB decision, the Board sua sponte set forth an expedited schedule which would have brought a Final Written Decision by June.[4] Allergan filed an interlocutory appeal of the Board’s decision, requesting a stay of the IPR, which the Federal Circuit has granted. In the stay order, the Federal Circuit declared that “exclusive jurisdiction to resolve the threshold issue of whether these proceedings must be terminated vests in this court, and that the Board may not proceed until granted leave by this court.”[5]

The briefing schedule for the appeal is scheduled to be completed by May 18, 2018, including any amicus briefs, which are sure to be filed. Consequently, the IPR will not be heard anytime soon, and even upon the Federal Circuit’s ruling, the PTAB may not regain jurisdiction immediately. As the order explains, “The stay shall remain in effect until the day after oral argument in the appeals in June 2018.  The court will address whether the stay shall remain in effect or whether it will be lifted at that time based on further consideration of the merits of the appeals.”[6]

Implications

If the PTAB’s decision stands, it is unlikely that the Tribal Immunity defense will be a useful tool for Patent Owners in IPR proceedings. The PTAB ruled both against its application to IPR’s and established an alternate means to continue with the proceedings with the Tribe’s licensee, making the appeal an uphill battle.

Until the appeal is settled, anyone still seeking protection for their patents under Tribal Immunity will need to push the balance of their license agreement farther than Allergan and give the Tribe more than ‘mere royalties’ and an ‘illusory’ right to enforce so that 1). the licensee would not be determined the true owner and 2). the Tribe would not be deemed indispensable.[7]

The board’s decision struck another blow to sovereign immunity defenses, as just this past December the PTAB ruled that State Sovereignty could not be applied to dismiss an IPR proceeding when the Patent Owner has filed an infringement suit asserting the patent. In the Board’s view, the act of bringing suit is as a waiver of the Eleventh Amendment right that would otherwise apply to the proceeding.[8]

As we wait for the IPR to proceed again, you can check for updates at the PTAB’s online E2E tool, or at websites like PostGrant.com which allow for full-text searching and automatic update alerts.

[1] The Eleventh Amendment provides that “Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.” U.S. Const. amend. XI.  See also Covidien LP v. University of Florida Research Foundation Incorporated; Neochord, Inc. v. University of Maryland Baltimore; Reactive Surfaces Ltd., LLP v. Toyota Motor Corporation.

[2] Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751, 754 (1998).

[3] Mylan Pharmaceutocals Inc., et al. v. Saint Regis Mohawk Tribe, IPR2016-01127, Paper 130 at 39 (PTAB, February 23, 2018).

[4] Mylan Pharmaceutocals Inc., et al. v. Saint Regis Mohawk Tribe, IPR2016-01127, Paper 132 at 4 (PTAB, February 23, 2018)

[5] Saint Regis Mohawk Tribe, Allergan, Inc. v. Mylan Pharmaceuticals Inc., et al., 2018-1638, Document 4 at 2 (Fed. Cir. March 28, 2018).

[6] Saint Regis Mohawk Tribe, Allergan, Inc. v. Mylan Pharmaceuticals Inc., et al., 2018-1638, Document 4 at 2-3 (Fed. Cir. March 28, 2018).

[7] See Luminara Worldwide, LLC v. Liown Elecs. Co., 814 F.3d 1343, 1351 (Fed. Cir. 2016) (“a financial interest . . . without more does not amount to a substantial right.”); see also Propat Int’l Corp. v. RPost, Inc., 473 F.3d 1187, 1191 (Fed. Cir. 2007) (“[T]he fact that a patent owner has retained a right to a portion of the proceeds of the commercial exploitation of the patent, . . . does not necessarily defeat what would otherwise be a transfer of all substantial rights in the patent.”)

[8] Ericsson Inc. v. Telfonaktiebolaget Lm Ericsson, IPR2017-01186, Paper 14 at 4 (PTAB, December 19, 2017).

Tribal Sovereign Immunity: PTAB Decision Casts Doubt On Patent Defense Strategy

Maier & Maier

Last fall, Maier & Maier highlighted a new defense strategy for Patent Owners against IPR (Inter Partes Review) Petitions in an overview of the ongoing Allergan “Tribal Immunity” Proceeding. In sum, Allergan transferred their patent portfolio to the Saint Regis Mohawk Tribe (“Tribe”) in upstate New York, paying them a lump sum and royalties in exchange for retaining an exclusive license for the patent. In doing so, the Tribe became the Patent Owner, availing them of protection from suit under the Eleventh  Amendment.[1] As explained by the Supreme Court, “As a matter of federal law, an Indian tribe is subject to suit only where Congress has authorized the suit or the tribe has waived its immunity.”[2]. After the assignment, the Tribe filed a motion to dismiss based on their Tribal Immunity. Just last month, the Patent Trial and Appeal Board (PTAB) denied that motion.

The Decision

The PTAB panel primarily based its decision on two findings: 1). Tribal Immunity does not apply to the petition for IPR; and 2). Even if it does, the Tribe is not an indispensable party that the Proceeding could not continue without.

The Board relied on a few factors for the first finding, including an absence of statutory support for applying Tribal Immunity to administrative proceedings like the PTAB and the fact that the PTAB decision would be applied to the patent itself, not the Tribe as the patent holder.

Even if Tribal Immunity applied, the Board ruled that the proceeding would still continue because the Tribe is not an indispensable party. To come to this result, the Board conducted a thorough analysis of the sale to the Tribe and the alleged license back to Allergan. As explained in the decision, the involved parties/ characterization of an agreement as a license compared to a full assignment is not determinative, with precedent relying more heavily on the terms than the label given to it. According to the Board, Allergan’s exclusive right to practice the patent, coupled with the Tribe’s ‘illusory’ rights to enforce it, indicated that the agreement was an assignment and not a license. This in turn makes Allergan an owner and allows the proceeding to continue, as any of the Tribe’s interests could be fully represented by Allergan, tipping the scales in the indispensable party analysis.[3]

Implications

Moving forward, it is unlikely that the Tribal Immunity defense will be a useful tool for Patent Owners in IPR proceedings. The PTAB has ruled against its application to IPR’s, established an alternate means to continue with the proceedings with the Tribe’s licensee, and any appeal to the Federal Circuit would face an uphill battle.

In the meantime, anyone still seeking protection for their patents under Tribal Immunity will need to push the balance of their license agreement farther than Allergan and give the Tribe more than ‘mere royalties’ and an ‘illusory’ right to enforce so that 1). the licensee would not be determined the true owner and 2). the Tribe would not be deemed indispensable.[4]

This decision strikes another blow to sovereign immunity defenses, as just this past December the PTAB ruled that State Sovereignty could not be applied to dismiss an IPR proceeding when the Patent Owner has filed an infringement suit asserting the patent. In the Board’s view, the act of bringing suit is as a waiver of the Eleventh Amendment right that would otherwise apply to the proceeding.[5]

Allergan and the Tribe will now continue their defense in the IPR Proceeding with the PTAB, with a Final Decision expected by June, at which point it will likely go to the Federal Circuit for an appeal.[6] You can check for updates using the USPTO E2E platform or subscribe to case alerts here: www.postgrant.com.

[1] The Eleventh Amendment provides that “Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.” U.S. Const. amend. XI.  See also Covidien LP v. University of Florida Research Foundation Incorporated; Neochord, Inc. v. University of Maryland Baltimore; Reactive Surfaces Ltd., LLP v. Toyota Motor Corporation.

[2] Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751, 754 (1998).

[3] Mylan Pharmaceutocals Inc., et al. v. Saint Regis Mohawk Tribe, IPR2016-01127, Paper 130 at 39 (PTAB, February 23, 2018).

[4] See Luminara Worldwide, LLC v. Liown Elecs. Co., 814 F.3d 1343, 1351 (Fed. Cir. 2016) (“a financial interest . . . without more does not amount to a substantial right.”); see also Propat Int’l Corp. v. RPost, Inc., 473 F.3d 1187, 1191 (Fed. Cir. 2007) (“[T]he fact that a patent owner has retained a right to a portion of the proceeds of the commercial exploitation of the patent, . . . does not necessarily defeat what would otherwise be a transfer of all substantial rights in the patent.”)

[5] Ericsson Inc. v. Telfonaktiebolaget Lm Ericsson, IPR2017-01186, Paper 14 at 4 (PTAB, December 19, 2017).

[6] Mylan Pharmaceutocals Inc., et al. v. Saint Regis Mohawk Tribe, IPR2016-01127, Paper 132 at 4 (PTAB, February 23, 2018)

Maier & Maier Secures IPR Victory for Foxrun Development before the PTAB

Maier & Maier

The internationally recognized Maier & Maier PLLC law firm won a major IPR victory for Foxrun Development securing a non-institution decision from the PTAB, overcoming 4 challenges to their network security patent asserted by Terralink in IPR2017-02102.

The patent reviewed (9,460,319 B1) relates to enhancing computer network security by physically blocking unused computer ports with “linear actuators” and a “securing member”. Terralink challenged the patent on two counts of obviousness, one count of anticipation and one count under 35 U.S.C. § 112(f) by referencing two patent applications (US 2016/0294098 and US 2015/0020189 A1), which also related to physically blocking unused computer ports.

In response to the September 13, 2017 Petition by Terralink, Maier & Maier argued that the § 112(f) ground was invalid for an IPR proceeding, while the other three grounds failed to meet the statutory standard. As the PTAB decision explained, Terralink neglected to explain “where each element of the claim is found in the prior art patents or printed publications relied upon” by failing to identify both corresponding components and corresponding functionality.

Maier & Maier successfully argued that none of the asserted grounds for unpatentability demonstrated a reasonable likelihood of success as discussed above, and obtained the PTAB’s non-institution decision for Foxrun Developments on March 6, 2018-less than six months after the petition was filed.

Federal Circuit Rules on Patent Term Adjustment (PTA) in PCT Cases

Maier & Maier

In Actelion Pharms., Inc. v. Matal, the USPTO granted a Patent Term Adjustment (PTA) of 40 days for Actelion’s patent relating to pyridine derivatives.  The patent at issue was a national stage application filed under the Patent Cooperation Treaty.  Actelion contended that it should have been entitled to either 41 days from the 30-month deadline for filing or 45 days from the application’s actual filing date.

When filing the application, Actelion did not mark the check box on the USPTO form to expressly request early commencement of the national stage examination.  However, Actelion did submit a statement in a Preliminary Amendment that “Applicant earnestly solicits early examination and allowance of these claims.”  The USPTO determined that this statement did not comply with 35 U.S.C. § 371(f), which requires an express request for early commencement.  The Federal Circuit affirmed the USPTO determination, indicating that it is possible to request early commencement without using the optional USPTO form, but that Actelion’s statement failed to expressly request early commencement, particularly since it failed to even referenced § 371(f).

In the alternative, Actelion argued that even if the PTA was calculated from the 30-month deadline, it should have resulted in 41 days rather than 40 days.  The 30-month deadline happened to fall on a federal holiday and therefore examination did not commence until the following day.  Actelion argued that the federal holiday should have been included in the PTA calculation from the 30-month deadline, which would have resulted in 41 days rather than 40 days.  The Federal Circuit agreed with the USPTO calculation of 40 days because PCT regulations prohibited national stage commencement on a federal holiday.  Therefore, the additional day was not “undue delay” caused by the PTO, which would warrant PTA.

The USPTO determination of 40 days was affirmed.  Based on this ruling, it is advisable to ensure that § 371(f) is expressly invoked or the appropriate box is checked when requesting to commence national stage examination at an earlier date.

Federal Circuit Extends §101 to Cover Graphical User Interfaces in Core Wireless v. LG

Maier & Maier

In Core Wireless Licensing S.A.R.L. v. LG Electronics, Inc., 2016-2684, 2017-1922 (Fed. Cir. Jan. 23, 2018), a panel of the U.S. Court of Appeals for the Federal Circuit (Moore, O’Malley, Wallach) upheld patent claims directed to a graphical user interface under 35 U.S.C. §101, concluding that the claims were not directed to a patent-ineligible abstract idea.

Core Wireless brought an action against LG in the Eastern District of Texas alleging infringement of U.S. Patent Nos. 8,713,476 and 8,434,020, having claims dealing with an application summary screen that is displayed while the one or more applications summarized are in an un-launched state. The District Court denied summary judgment based on 35 U.S.C. §101, and LG appealed.

The Federal Circuit began its analysis by determining that the claims of the two patents in question were directed to an “improved user interface,” a non-abstract idea, rather than the abstract idea of an index. Specifically, these claims were “directed to a particular manner of summarizing and presenting information in electronic devices.” For example, claim 1 required “an application summary that can be reached directly from the menu” and further limiting the application summary (such as having the application summary list a limited set of data with each of the data in the list being selectable to launch the respective application and enable the selected data to be seen within the respective application) as well as a particular manner of accessing the summary window and certain other limitations.

The Court analogized the case to other cases in which a computer-implemented claim was found eligible, such as Enfish, LLC v. Microsoft Corp., Thales Visionix Inc. v. U.S., Visual Memory LLC v. NVIDIA Corp., and Finjan, Inc. v. Blue Coat Systems, Inc., specifically noting that the claims in each of these cases were found to improve a computer or technological system, and were thus not abstract. (Just like in many of these cases, the Court looked to the patent specifications in order to determine what aspects of a computer the claims were directed toward improving.)

Once the §101 matter was resolved, the Court also heard the issue of non-infringement. This turned, in large part, on the Court’s interpretation of the phrase “unlaunched state” in the claims, which LG had (unsuccessfully) argued in the District Court should refer to a situation in which the applications were “not running” rather than “not displayed.” LG argued that it would not infringe if the applications were required to be “not running.” The court (minus Judge Wallach, who dissented on this point) sided with the District Court, finding that the District Court correctly construed “unlaunched state” as “not displayed.”

Importantly, the claims in this case were considered to be an improvement to computer technology because they improved the ability of a user to use the computer. In order to use prior art systems, users had to “drill down through many layers to get to desired data or functionality [which] could seem slow, complex and difficult to learn, particularly to novice users,” while the claimed invention, by contrast, was much more user-friendly. This effectively adds “user-friendliness” or “usability” to the list of innovations which can be an improvement to computer technology, significantly expanding the list of patent-eligible subject matter.

It has also historically been a little unclear as to how graphical user interface designs can be protected by intellectual property rights. There is a circuit split between the Ninth Circuit and other circuits as to whether GUIs are copyrightable subject matter, and past Federal Circuit jurisprudence as to their patentability has come down on both sides of the line. However, the vast majority of cases (such as, for example, Intellectual Ventures I LLC v. Erie Indemnity Co., Intellectual Ventures I LLC v. Capital One Bank (USA), and Internet Patents Corp. v. Active Network, Inc.) have found GUIs to be ineligible, while the one case that upheld a GUI patent claim (Trading Technologies Int’l v. CQG Inc) was a non-precedential opinion that dealt with an extremely detailed claim. This case provides applicants with a clear model to follow for future applications on interface technology or any similar technology.