Patent Docs

Impact of COVID-19 Pandemic on Patent Offices and Federal Courts — March 26 UPDATE

March 26, 2020

By Donald Zuhn —

On March 11, World Health Organization Director-General Tedros Adhanom declared that the COVID-19 outbreak "can be characterized as a pandemic," cautioning that the WHO has "rung the alarm bell loud and clear." At the time of the announcement, the WHO noted that there were 118,000 cases reported globally. In the fifteen days since the COVID-19 outbreak was declared a pandemic, the number of global cases has almost quadrupled, with the WHO reporting in its latest situation report that as of March 26 there have been 462,684 cases. The Director-General also stated that "[t]his is not just a public health crisis, it is a crisis that will touch every sector – so every sector and every individual must be involved in the fight." The WHO's March 11 declaration — and global developments since then — raise the question of how the pandemic is affecting the patent community.

We have been reporting (see links below) on the impact of the COVID-19 pandemic on the U.S. Patent and Trademark Office, World Intellectual Property Organization, European Patent Office, IP Australia, Intellectual Property Office of New Zealand (IPONZ), Brazilian Patent and Trademark Office (INPI), Canadian Intellectual Property Office (CIPO), Mexican Institute of Industrial Property (IMPI), and National Office of Intellectual Property (ONAPI) in the Dominican Republic, as well as U.S. Federal courts, including, in particular, the Supreme Court and Federal Circuit. Today we present recent developments in India, Sri Lanka, Israel, Mexico, Australia, New Zealand, Vietnam, and Indonesia in response to the COVID-19 pandemic.

In a Public Notice issued on March 19 by the Office of Controller General for Patents, Designs & Trademarks of Intellectual Property India, the Controller General indicated that "all in person hearings in Patents and Designs matters scheduled on or before 15th April, 2020 by the Controller should be changed to Video Conferencing (VC) hearings," and further, that "[w]herever the applicant is unable to agree for the VC hearing, the Controller shall adjourn such hearing for a date later than 15th April, 2020." The Public Notice also indicated that hearings scheduled for after April 15, 2020 will remain as is (at least for now). The Controller General also declared that pursuant to sub-rule (6) of Rule 6 of the Patents Rules, "the delay in transmitting or resubmitting documents to the Patent Office will be condoned/timeline be extended by the Controller on a petition for such condonation of delay/extension of time made not later than one month from the date when such COVID-19 outbreak ceased to exist."

However, only days later, on March 23, the Government of India announced a nationwide lockdown that would extend until March 31, and two days later, extended the lockdown until April 15. In a notice distributed to the patent community on March 25, Indian patent law firm D. P. Ahuja & Co. indicated that as a result of the shutdown, the Patent and Trademark Offices have been closed, that no filings will be possible at the Patent and Trademark Offices until the lockdown is lifted, and that all deadlines will be automatically extended or extendable with petitions. Indian patent law firm Chadha & Chadha confirmed that cases in India with deadlines on or before April 14, 2020 shall have a new deadline of April 15, 2020.

On Saturday, Sri Lankan patent law firm Varners noted that the Government of Sri Lanka had declared a public holiday from March 13-19 for all non-essential services, and then declared the period from March 20-27 as a period to work from home or remotely for all public sector and private sector personnel. Travel into Sri Lanka was also restricted for two weeks beginning March 17. As a result of these declarations, all Courts and the National Intellectual Property Office (NIPO) have been closed. Varners also noted that it was working with other leaders in the IP field to request the Director General of the National Intellectual Property Office to grant an extension of four weeks in respect of impending deadlines in view of the current circumstances.

On Monday, Dan Feigelson of 4th Dimension IP posted an article on his America-Israel Patent Law weblog, informing readers of a notice issued by the Israel PTO on Sunday implementing a Saturday night decision by the Israel cabinet to reduce the number of public sector employees that are still working. The ILPTO's implementation of the decision will remain in effect until May 1, 2020 or until the ILPTO publishes a new notice. As discussed in the article, the main points of the ILPTO's implementation include:

• many employees were already working from home, and will continue to do so; registration certificates will continue to issue, and the Patents, Trademarks and Designs Journals will continue to publish at the end of each month;
• the ILPTO will strive to meet its obligations under treaties (e.g. providing PCT search reports on time), and to issue renewal certificates on time, but certain services (recording assignments, licensing new practitioners, notices of formal defects in PCT national stage applications, daily notices of outgoing correspondence) will be delayed at least until after Passover (April 15, 2020);
• the ILPTO will continue to accept submissions electronically and, for those parties permitted to do so, in person or by regular post, but in-person meetings and proceedings before the ILPTO, including hearings in adjudicatory proceedings, will remain in suspension;
• deadlines for filing new applications, responses to office actions and the like will not be held in abeyance, but non-statutory deadlines in adjudicatory proceedings will be suspended;
• applicants or other parties in proceedings before the ILPTO who are unable to timely make submissions as a result of coronavirus-related circumstances may request extensions or reinstatement based on those circumstances, which will be taken into account when deciding whether or not to grant the extension or reinstatement;
• in cases in which the ILPTO has an announced policy capping the number of extensions, that cap will be temporarily be waived, but statutory deadlines (e.g. for opposing a patent application or requesting a patent term extension) cannot be waived;
• in order to allow applicants/owners to file requests for extension/reinstatement, at least until May 1, 2020, no files will be closed for an applicant's/owner's failure to take an action, nor will the ILPTO send pre-file closure notices (which in many instances are a prerequisite for closing a file).

Additional information regarding the points above can be found on the America-Israel Patent Law weblog. Most importantly, in an e-mail distributed to members of the patent community, Dr. Feigelson noted that "deadlines for PCT national phase entry, for payment of renewal fees, and for filing for patent term extensions remain in place," and further, "if any of your clients have a new drug that was recently approved or is about to be approved in Israel, the deadline for filing for PTE remains 90 days from the date of approval by the Israel Ministry of Health," which is not extendible.

Also on Monday, Mexican patent law firm OLIVARES notified the patent community that the Mexican Patent and Trademark Office (IMPI) had issued a decree stating that no terms would run from March 24 to April 19, 2020. OLIVARES noted "that IMPI will remain open and that it will be possible to file applications and briefs even though their filing date will be considered as April 20, 2020," and that the suspension would not apply to the release of preliminary injunctions imposed by IMPI during an infringement proceeding.

On Tuesday, Australian and New Zealand patent law firm Griffith Hack updated the patent community about developments in Australia and New Zealand. In particular, Griffith Hack reported that as of Monday, the Australian Federal Court's public-facing counters and face-to-face services had been closed until further notice, which had effectively stalled operation of the Court. The Court, however, was working on protocols to resume trials electronically. Griffith Hack also noted that both IP Australia and the Intellectual Property Office of New Zealand (IPONZ) were operating as usual, but both indicated that if circumstances related to the COVID-19 pandemic have affected or are affecting a business' ability to respond by a deadline, an extension of time could be requested (in the normal way) and would be assessed on a case-by-case basis. Additional news about the impact of the COVID-19 pandemic on IP Australia and IPONZ can be found at the patent offices' websites (IP Australia and IPONZ).

On Wednesday, Vietnamese patent law firm Vision & Associates notified the patent community that the Intellectual Property Office of Vietnam (IP Vietnam) is continuing to operate on its normal schedule at the present time, but in response to the COVID-19 pandemic is limiting in-person interviews with IP Vietnam's examiners until the situation is back to normal.

Earlier today, Indonesian patent law firm Biro Oktroi Roosseno notified the patent community that on Monday, the Directorate General of Intellectual Property (DGIP) issued Circular Letter Nomor: HKI-OT.02.02-10 regarding The Temporary Suspension of Activities in order to prevent the spread of COVID-19 at the DGIP. In its Circular, the DGIP announced that until April 5, the Intellectual Property Integrated Service Counters at the DGIP would be closed, that Applicants can still file applications online, and that dispensations would be provided by the DGIP for the late filing of all formality documents for Intellectual Property applications that would otherwise have been due in March 2020.

Patent Docs will continue to monitor and report on patent-related developments related to the COVID-19 pandemic. In addition, we encourage our readers to let us know about developments related to the COVID-19 pandemic at other patent offices.

For additional information regarding this topic, please see:

• "Impact of COVID-19 Pandemic on Patent Offices and Federal Courts — March 19 UPDATE," March 19, 2020
• "Impact of COVID-19 Pandemic on Patent Offices and Federal Courts — March 18 UPDATE," March 18, 2020
• "Impact of COVID-19 Pandemic on Patent Offices and Federal Courts — March 17 UPDATE," March 17, 2020
• "Impact of COVID-19 Pandemic on Patent Offices and Federal Courts – UPDATED," March 16, 2020
• "Impact of COVID-19 Pandemic on Patent Offices and Federal Courts," March 15, 2020
Kaken Pharmaceutical Co. v. Iancu (Fed. Cir. 2020)

March 25, 2020

By Kevin E. Noonan —

Ever since the Supreme Court's decision in Dickinson v. Zurko, patent applicants (and with the advent of inter partes review proceedings before the Patent Trial and Appeal Board, patentees) have found it difficult to overcome Patent Office determinations of obviousness, due to the deference to factual issues the Zurko case imposed on the Federal Circuit in reviewing PTO decisions. But one Achilles' heel to these difficulties arises over how the PTO construes claims, which remains subject to de novo review (because all the evidence before the Patent Office is inherently intrinsic evidence). And when the Office (through the PTAB) makes an error in construing a claim, the Federal Circuit remains ready to pounce, which was the basis for the Court overturning the PTAB's invalidation on obviousness grounds of Kaken Pharmaceutical's claims in the recent Kaken Pharmaceutical Co. v. Iancu decision.

The case arose in an IPR over all the claims of U.S. Patent No. 7,214,506, which are directed to methods for topically treating fungal infections in human nails. The Board initiated the IPR on petition by Acrux Ltd. and Acrux DDS Pty. Ltd. (who are not party to the appeal), and found all claims of the '506 patent to be unpatentable as obvious.

Claim 1 is representative:

1. A method for treating a subject having onychomycosis wherein the method comprises topically administering to a nail of said subject having onychomycosis a therapeutically effective amount of an antifungal compound represented by the following formula:


    wherein, Ar is a non-substituted phenyl group or a phenyl group substituted with 1 to 3 substituents selected from a halogen atom and trifluoromethyl group,
    R1 and R2 are the same or different and are hydrogen atom, C1-6 alkyl group, a non-substituted aryl group, an aryl group substituted with 1 to 3 substituents selected from a halogen atom, trifluoromethyl group, nitro group and C1-16 alkyl group, C2-8 alkenyl group, C2-6 alkynyl group, or C7-12 aralkyl group,
    m is 2 or 3,
    n is 1 or 2,
    X is nitrogen atom or CH, and
    *1 and *2 mean an asymmetric carbon atom.

The opinion notes that the specification provides a "series of interlocking definitions" for some of the terms used in the claims. For example, the specification defines "'[o]nychomycosis' [as] a class of 'superficial mycosis' that affects the 'nail of [a] human or an animal'" and defines "superficial mycosis" as "encompass[ing] infections that attack tissues of the 'skin or visible mucosa.'" These definitions are illustrated in a Figure from the '506 patent reproduced in the opinion:

And a specific form of onychomycosis, tinea unguium, fell within the scope of onychomycosis to the extent that the patent used the terms interchangeably. These definitions vary somewhat with what the Federal Circuit termed "common usage" but these differences were not dispositive to the Court's opinion.

The patented methods were directed at solving a problem in the art whereas oral administration of antifungal drugs had undesirable features (long treatment times, unpleasant side effects) while prior art topical approaches were "largely ineffective" due to their inability to permeate the nail plate. As it turns out, the patented invention was effective when the alternative recited for substituent X is nitrogen, and this compound is identified as KP-103; the specification notes that the effectiveness of this compound as an antifungal was known in the art but not its ability to prevent onychomycosis.

Acrux relied on two sets of prior art references in its IPR petition based on obviousness. The first consisted of the three references "Japanese Patent Application No. 10-226639 (JP '639); U.S. Patent No. 5,391,367; and R.J. Hay et al., Tioconazole nail solution—an open study of its efficacy in onychomycosis, 10 CLINICAL AND EXPERIMENTAL DERMATOLOGY 111 (1985)." These references teach onychomycosis treatment using various azole compounds, according to Acrux. The second set of references consisted of "H. Ogura et al., Synthesis and Antifungal Activities of (2R,3R)-2-Aryl-1-az-olyl-3-(substituted amino)-2-butanol Derivatives and Topical Antifungal Agents, 47 CHEM. PHARM. BULL. 1417 (1999) (Ogura); and Abstracts F78, F79, and F80, 36 INTERSCIENCE CONFERENCE ON ANTIMICROBIAL AGENTS AND CHEMOTHERAPY 113 (1996) (Kaken Abstracts)." These references taught that KP-103 was an effect antifungal agent. Acrux presented six combinations in making its obviousness arguments; the Board in its Final Written Decision (FWD) found the claims obvious over the combination of "JP '639, the '367 patent, and Hay, each in combination with the Kaken Abstracts." Relevant to the Board's FWD and the Federal Circuit's reversal thereof, Kaken argued (and the Board rejected) that the claim term "treating a subject having onychomycosis" means "treating the infection at least where it primarily resides in the keratinized nail plate and underlying nail bed." In the Board's view this construction was too narrow, because onychomycosis was expressly defined to include "superficial mycosis, which in turn is expressly defined as a disease that lies in the skin or visible mucosa" and also that the express definition of the term "nail" in the specification included "the tissue or skin around the nail plate, nail bed, and nail matrix." Based on this construction, the Board held that a skilled artisan would have been motivated to combine the references to achieve the claimed invention. The Board also gave little weight to Kaken's asserted secondary considerations of non-obviousness.

The Federal Circuit reversed the PTAB's judgment based on its incorrect claim construction, vacated the decision and remanded to the PTAB for further consideration based on the correct construction as determined by the Court, in an opinion by Judge Taranto, joined by Judges Newman and O'Malley. Applying the broadest reasonable interpretation standard, the Court held that the disputed claim term, "treating a subject having onychomycosis," means "penetrating the nail plate to treat a fungal infection inside the nail plate or in the nail bed under it," based on the specification and prosecution history. In its analysis of the specification the Federal Circuit opinion recognized that the definition of onychomycosis "links to three other crucial passages in the specification—two that provide express definitions of other terms and one that characterizes another term." Specifically, the specification discloses that onychomycosis is "a kind of the above-mentioned superficial mycosis, in the other word a disease which is caused by invading and proliferating in the nail of human or an animal." The opinion interprets this disclosure to mean, first, that onychomycosis is a nail disease and that it is a superficial mycosis. This does not compel the Board's conclusion that the claim term involves "any part of what is defined as the 'nail,' including parts other than the nail plate or nail bed, such as skin in its ordinary sense" (emphasis in opinion). The opinion finds fault in the Board's interpretation of the term to include "nail plate, nail bed, nail matrix, further side nail wall, posterial nail wall, eponychium and hyponychium which make up a tissue around thereof" which includes skin surrounding the nail. The opinion characterizes as "an unwarranted inference" that a statement that a disease that invades the body can involve (by implication) any part of the body. As pertinent illustration, the opinion states that "[a] disease that invades the nail plate or bed only is still a disease that invades the 'nail' as defined." Thus, "this language alone does not support the Board's conclusion that an infection of any individual structure of the nail constitutes onychomycosis."

The Federal Circuit also found fault in the Board's application of the specifications disclosure regarding onychomycosis as being a "superficial mycosis." Because the specification distinguished such mycosis from "deep" mycosis, the Board interpreted the term to mean fungal infection of the skin in contrast to Kaken's limitation to infections of the nail. The panel found this interpretation contrary to express disclosure in the specification distinguishing skin from nail, whereby characterization in the specification regarding the term "superficial mycosis" does not compel a construction where "every type of superficial mycosis affects every type of 'skin' structure."

The panel found other portions of the specification that supported Kaken's construction, wherein an "effective" topical treatment would need to penetrate the nail plate. The significance of this disclosure for the panel is that "[a] patent's statement of the described invention's purpose informs the proper construction of claim terms, including when the task is to identify the broadest reasonable interpretation," citing In re Power Integrations, Inc., 884 F.3d 1370, 1376–77 (Fed. Cir. 2018). And if the term was to be properly construed under the Board's interpretation, many of the recited features of the invention (such as "high activity in [the] nail plate") would be unnecessary, according to the panel. And, relevant perhaps to the Board's reaction on remand, the opinion also notes that the Board had a "flawed understanding of the relationship between onychomycosis and tinea unguium" that contributed to its claim construction error.

Turning to the prosecution history, the Federal Circuit's opinion states there is "decisive support for limiting the claim phrase at issue to a plate-penetrating treatment of an infection inside or under the nail plate." This support includes rejection, on obviousness-type double patenting grounds, over a parent application directed to using KP-103 to treat "mycosis." In responding to this rejection, Kaken expressly asserted the distinction between mycosis and onychomycosis to be that "[o]nychomycosis is a condition that specifically affects the nail plate" and that the invention "shows the unexpected ability of an azolylamine derivate to penetrate nail and be retained by the nail" (emphases in opinion). The Examiner expressly noted his reliance on these distinctions in his "Reasons for Allowance," stating "unexpectedly and in contrast to previously evaluated compositions/methods, the instantly claimed method cures the onychomycosis because the medicament upon direct administration to the nail, penetrates through the nail plate and eradicates the infection at the site" (emphasis in opinion). The consequence of this sequence of events during prosecution is dispositive, according to the opinion:

This exchange would leave a skilled artisan with no reasonable uncertainty about the scope of the claim language in the respect at issue here. Kaken is bound by its arguments made to convince the examiner that claims 1 and 2 are patentable. See Standard Oil[ v. American Cyanamid Co., 774 F.2d 448,] 452 (Fed. Cir. 1985). Thus, Kaken's unambiguous statement that onychomycosis affects the nail plate, and the examiner's concomitant action based on this statement, make clear that "treating onychomycosis" requires penetrating the nail plate to treat an infection inside the nail plate or in the nail bed under it.

The Board's disregard of these aspects of the prosecution history raises a significant question regarding whether the Board considers mere institution of an IPR as evidence that the prosecution history is necessarily flawed, its consequence having resulted in an improvidently granted patent. And any such implied disregard for the prosecution history raises conflicts at least with proper claim construction that can, as here, result in the Board coming to the wrong conclusion on patentability.

The Federal Circuit reversed the Board's obviousness determination based on its erroneous claim construction, finding in the FWD statements interpreting how a skilled worker would have applied the asserted prior art that relied on this construction. The same error affected the Board's consideration of Kaken's asserted objective indicia of non-obviousness (inter alia, that there was no nexus between these indicia and the claims). The Court remanded, based on precedent including Arista Networks, Inc. v. Cisco Sys., Inc., 908 F.3d 792, 798 (Fed. Cir. 2018), and Dell Inc. v. Acceleron, LLC, 818 F.3d 1293, 1300 (Fed. Cir. 2016), while expressing no opinion on the outcome of the IPR when the Board applies the properly construed claims mandated by the Court's opinion.

Kaken Pharmaceutical Co. v. Iancu (Fed. Cir. 2020)
Panel: Circuit Judges Newman, O'Malley, and Taranto
Opinion by Circuit Judge Taranto
Story Telling

March 24, 2020

By Kevin E. Noonan —

Patent law (and, consequently, patent lawyers) can be viewed as having at least a slightly tighter tether on concrete, factual reality than other areas of the law, at least to the extent that making patent-related legal arguments are more fact-specific. This can cause some interesting contrasts when addressing arguments to a court; this was seen dramatically during the Myriad litigation, where some lawyers interpreted the claims to BRCA genes to encompass total genomic DNA, and of course to the infamous "magic microscope" argument (although choosing lithium as an example of a patent-ineligible product of nature was clever, insofar as the bonds in elemental lithium have a significant covalent character).

These realities impact storytelling in patent law, because telling a compelling story is a hallmark of good lawyering, whether in a patent application (to the Patent Office and investors) or in litigation (to a district court, the Federal Circuit, or the PTAB; by the time a case gets to the Supreme Court it is rare that the facts are as important or likely to be properly understood). But another thing Myriad taught patent lawyers is the flexibility of argument and how facts can be interpreted almost any way an advocate wants; as a former partner used to say, "your strengths are also your weaknesses" in homage to the pliability of fact-based argument.

An illustration of this principle, in an area far removed from legal argument (and indeed, being scientific argument might be thought to be devoid of the malleability of argumentation that arises in the law) was the interpretation of analogous biological features, as set forth by William Buckland, in The Bridgewater Treatises, Volume 6 (1836), with regard to Ichthyosaurus, a marine dinosaur, fossils of which had been discovered by several proto-paleontologists. The fossil was (and is) remarkable as appearing to be a combination of several parts recognized in other animals: "paddles similar to those of a whale, a crocodile-like head, vertebrae like those of a fish, and a sternum like that of the enigmatic creature from Australia, the platypus" (see B. Switek, Written in Stone, Bellevue Library Press, Kindle Edition, p. 56).

Buckland interpreted the animal thusly in finding it an example of God's handiwork:

The introduction to these animals, of such aberrations from the type of their respective orders to accommodate deviations from the usual habits of these orders, exhibits a union of compensative contrivances, so similar in their relations, so identical in their objects, and so perfect in the adaptation of each subordinate part, to the harmony and perfection of the whole; that we cannot but recognise throughout them all, the workings of one and the same eternal principle of Wisdom and Intelligence, presiding from first to last over the total fabric of Creation.

Of course, this interpretation was prior to Darwin's publication of the Origin of Species by Means of Natural Selection which, despite providing a mechanism by which evolution could occur, and the Herculean efforts of Thomas Henry Huxley to defend, was not immediately adopted. But Darwin's insight provided an alternative explanation (the modern one) to observations of the fossil anomaly, that of convergent evolution or homology, wherein, for example, the forelimbs of whale, bat, and human are derived from one another and illustrate "descent with modification," a mechanism that does not explain the forelimb of a crab (an example of an analogous rather than homologous structure). It is facile to mock Buckland's argument today, but better perhaps to recognize that his explanation was one dependent on his presumptions and lacking the theoretical structure Darwin (and his philosophical descendants) have provided to us.

These considerations are relevant, in a way, to the philosophical debates surrounding patent law today. These include patent eligibility, the role of patent exclusivity on drug prices, and the extent to which innovation should be protected by robust patents. These questions abound in the public discourse and in government, wherein a particular party's positions are frequently determined by a desired outcome rather than having a sound epistemological basis (see "FTC to the Rescue Regarding High Drug Prices and Patents"). But they have been nonetheless persuasive to policymakers and the public (see "A Solution in Search of a Problem"; "More Ill-conceived Remedies from Congress Regarding Prescription Drug Costs"; and "Even More Ill-Conceived Remedies from Congress Regarding Prescription Drug Cost"); it may be easy to remember tense Thanksgiving dinner discussions amongst patent lawyers' family members about why it was right for any to try to patent a person's genes (see "In Support of Gene Patents"). Similar arguments are arising today regarding, for example, university technology transfer (see "Pigs Fly, Hell Has Frozen Over, and the New York Times Supports Small Inventor and University Patenting"), or high insulin prices, or biologic drug pricing in the hundreds of thousand dollars annually (see "Cancer Drug Prices Continue to Rise").

There are arguments, of course, and explanations for apparent anomalies in the effects of patent law on society (see, e.g., "The Effect of Patents and Drug Price Regulation on New Drug Diffusion Globally"). But these tend to fail the "cocktail party" test (wherein making these arguments rapidly causes people to eschew remaining in them for very long). The answer is not (solely) "educating the public" (with all the risks of condescension that arise from such efforts). Perhaps it is how the argument is made, evidence of which has begun to become evident in television commercials by pharmaceutical and biotechnology companies discussing the value new drugs bring. Testimonials, from the beneficiaries of these drugs, can also be useful. But there is also a need for economic research and arguments about the macroscopic effects of these advances, not regarding only their immediate costs but societal benefits with regard to economic productivity and reductions in ultimate healthcare costs, in addition to the less quantifiable aspects on the children and loved ones of those whose lives have been saved or extended by these medical advances (see, e.g., "Addressing Increased Drug Costs — A Proposal").

There is no magic bullet or overarching argument that can save the day. But changing or at least challenging the current memes that threaten to kill the golden goose of innovation is a necessary place to start if short-term pursuit of immediate benefits (see "The ACLU, Working for the Man") that disregards the long-term consequences of poorly thought out changes to how innovation is promoted and protected is to be accomplished. It is critical that we do so and it needs to be done now.
Allen v. Cooper (2020)

March 23, 2020

By Kevin E. Noonan —

In a decision containing not a small amount of whimsy (more regarding that aspect anon), Justice Kagan, joined almost unanimously by her brethren today upheld a State's (here, North Carolina) sovereign immunity against suit for copyright infringement, in Allen v. Cooper.

The case (and the whimsy) arose over Petitioner Allen's suit against North Carolina's unauthorized use of copyrighted materials relating to the discovery and salvage of the pirate Blackbeard's "flagship" Revenge off the coastal waters of that state and, hence, being State property. Petitioner relied on the provisions of the Copyright Remedy Clarification Act of 1990 (CRCA), codified at 17 U. S. C. § 511:

[A] State "shall not be immune, under the Eleventh Amendment [or] any other doctrine of sovereign immunity, from suit in Federal court" for copyright infringement. 17 U. S. C. §511(a). [I]n such a suit a State will be liable, and subject to remedies, "in the same manner and to the same extent as" a private party. §511(b).

North Carolina asserted sovereign immunity under the Eleventh Amendment:

The 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 an- other State, or by Citizens or Subjects of any Foreign State.

The District Court found for plaintiff, based on the express provisions of the CTCA, and on Section 5 of the Fourteenth Amendment, in view of the "the States' 'pattern' of 'abus[ive]' copyright infringement." The Fourth Circuit reversed, based on the Supreme Court's decision in Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, 527 U. S. 627 (1999), holding the Patent Remedy Act, enacted by Congress on the same day and having substantially the same provisions.

The Court affirmed, in a decision by Justice Kagan and joined by the Court with the exception of two portions of the opinion in which Justice Thomas did not join; in addition, Justice Breyer wrote a concurring opinion joined by Justice Ginsberg. The opinion noted that the express language of the Eleventh Amendment is not unequivocal but that sovereign immunity stands for the "presupposition of our constitutional structure which it confirms," citing Blatchford v. Native Village of Noatak, 501 U. S. 775, 779 (1991). This presumption is, first, that "each State is a sovereign entity in our federal system," citing Seminole Tribe of Fla. v. Florida, 517 U. S. 44, 54 (1996). Second, "[i]t is inherent in the nature of sovereignty not to be amenable to [a] suit" absent consent, cited in Seminole Tribe relying on The Federalist No. 81, p. 487 (A. Hamilton). Finally, that "fundamental aspect of sovereignty constrains federal 'judicial authority'" according to the Court, citing Blatchford.

The immunity is not absolute and the Court has recognized exceptions, in instances where Congress enacts a statute having "unequivocal statutory language" that abrogates a State's sovereign immunity (citing Dellmuth v. Muth, 491 U. S. 223, 228 (1989)) and there is some constitutional provision that excuses Congress's encroachment on sovereign state prerogatives (citing Kimel v. Florida Bd. of Regents, 528 U. S. 62, 78 (2000)). In this case the first prong of the test was indisputably met. As for the second prong, Petitioner relied on Congress's Article I power to grant copyrights, and the Fourteenth Amendment's grant to Congress of the power to enforce the Amendment's due process provisions.

The Court rejected these arguments, the opinion stating that "[t]he slate on which we write today is anything but clean." The Article I power to grant copyrights (and patents) "impose a corresponding duty (i.e., not to infringe) on States no less than private parties," according to the Court, citing Goldstein v. California, 412 U. S. 546, 560 (1973). Hence, abrogation of North Carolina's sovereign immunity is the best, or only, way to protect Petitioner's copyright (according to Petitioner). But, the opinion asserts, "[t]he problem for Allen is that this Court has already rejected his theory, in Florida Prepaid. While that case involved Congress's failed attempt to abrogate State sovereign immunity for patent infringement, the constitutional basis for copyright protection arises in in the same provision of Article I as patent protection (Section 8, clause 8) and thus that decision mandates the Court's opinion here. The Court noted that the justifications for stripping States of sovereign immunity in Florida Prepaid for patents were the same as asserted here: "to ensure 'uniform, surefire protection' of intellectual property." While acknowledging that this was a "proper Article I concern," the opinion reiterates the holding of Florida Prepaid that it isn't enough to satisfy the second prong, that there is a constitutional provision supporting this exercise of federal power, based on the Court's decision in Seminole Tribe v. Florida. The rubric from the case is that Congress does not have the power, under Article I, to "circumvent" the limitations sovereign immunity places on federal jurisdiction. As stated in the opinion, "the power to 'secur[e]' an intellectual property owner's 'exclusive Right' under Article I stops when it runs into sovereign immunity."

The Court also rejected Petitioner's argument that Central Va. Community College v. Katz provided "an exit ramp" from the Florida Prepaid precedent. 546 U. S. 356, 359 (2006). Katz involved the Bankruptcy Clause, which the Court decided enabled Congress to compel states to participate in bankruptcy proceedings. But the opinion notes that the Court had expressly exempted bankruptcy proceedings from Seminole Tribe's general rule. The Court refused here to extend "bankruptcy exceptionalism" to the Copyright Clause. Bankruptcy proceedings were "in rem" according to the Court, and accordingly "it does not implicate States' sovereignty to nearly the same degree as other kinds of jurisdiction," citing Katz. In addition, the Court in Katz found that bankruptcy proceedings and the Bankruptcy Clause had a "unique history" that produced in the Court "a felt need to curb the States' authority." This need stemmed from the "wildly divergent schemes" different States had at the founding of the Republic for discharging debt in bankruptcy and that the States at that time had a history of not respecting discharge orders from other states. As is its wont, the Court reverted to the origins and purposes (the Framers' intentions) of the Bankruptcy Clause for justification for its distinction. And the Court in Katz had found that by ratifying the Constitution, the States had agreed to yield their sovereign immunity (in view of the language of the Bankruptcy Clause itself); because a State can always waive its immunity any apparent inconsistency was thus resolved.

Florida Prepaid, and stare decisis, were enough in the Court's view to determine the outcome here, because finding abrogation of North Carolina's sovereign immunity would be directly contrary to affirming Florida's sovereign immunity in the Court's earlier precedent. The only way to abrogate sovereign immunity in this case would be to overrule the Court's recognition of Florida's sovereign immunity. Calling stare decisis a "foundation stone of the rule of law" (and citing Michigan v. Bay Mills Indian Community, 572 U. S. 782, 798 (2014), a case on Indian tribe immunity for the principle), the opinion states that there must be a "special justification" for doing so (as well as a belief that the earlier case had been wrongly decided), which the Court did not find here.

Regarding Section 5 of the Fourteenth Amendment, the Court recognized that the Amendment "fundamentally altered the balance of state and federal power," citing Seminole Tribe, and that the Court has held that (under the right circumstances) the this Amendment gives Congress the power to abrogate State sovereign immunity, citing Fitzpatrick v. Bitzer, 427 U. S. 445, 456 (1976). But this power is limited: for example, it must be tailored to "remedy or prevent" State conduct that violates the Amendment's due process guaranties, citing City of Boerne v. Flores, 521 U. S. 507, 519 (1997). The Court has fashioned a "means-ends test" in this regard, wherein "Congress can permit suits against States for actual violations of the rights guaranteed in Section 1" of the Amendment. The Court requires a "congruence and proportionality between the injury to be prevented or remedied and the means adopted to that end." But the limits on this grant of power are what the amendment actually bars, which are violations of due process. In this case, the question the Court apprehends is "[w]hen does the Fourteenth Amendment care about copyright infringement?" finding the answer is "sometimes," particularly when States deprive a citizen of property without due process of law. But "sometimes" does not mean "always," according to the opinion, excluding for example instances of negligence, citing Daniels v. Williams, 474 U. S. 327, 328 (1986). Copyright infringement must be intentional, or at least reckless, for the due process protections of the Fourteenth Amendment to come to bear, and only where the State does not offer a remedy for the infringement, citing Hudson v. Palmer, 468 U. S. 517, 533 (1984).

In resolving the question before it regarding the Fourteenth Amendment, the Court once again turned to its decision in Florida Prepaid, as defining unconstitutional infringement to be "intentional conduct for which there is no adequate state remedy." In that case, "the statute's abrogation of immunity [the Patent Remedy Act], the equivalent of the CRCA's—was out of all proportion to what it found [in the legislative history]." This was because, inter alia, "Congress did not identify a pattern of unconstitutional patent infringement" (indeed, the Court characterized the evidence as "thin," amounting to only two examples in the context of most States complying with the Patent Statute). In addition, that evidence was that States' infringement was "innocent or at worst negligent" rather than reckless or intentional. The Court noted that the Patent Remedy Act was disproportionate to the harm that provoked it, stating "it exposed all States to the hilt" of liability for patent infringement. It was not carefully and narrowly claimed to correct a problem but provided "a uniform remedy for patent infringement." It did not "enforce" Section 1 (due process) of the Fourteenth Amendment and thus was not "appropriate" for enforcing the Amendment under Section 5.

In view of the "identical scope" of the statute at issue here the Court rhetorically asks "[c]ould . . . this case come out differently" (and answering "no") unless there was stronger evidence of intentional or reckless (i.e., unconstitutional) infringement. In this case there was a greater quantum of evidence supporting State infringement of copyrights (including a 155-page report from the Register of Copyrights). But the Court held that even this wasn't enough. The Court found the evidence "scarcely more impressive" ("only a dozen possible examples of state infringement" and "seven court cases brought against States" as well as "five [uncorraborated] anecdotes taken from public comments") than the evidence for States' patent infringement in Florida Prepaid. And only two of these examples raised any due process issues. Under this analysis the Court found that this statute failed the "congruence and proportionality" test and the outcome could not differ from the Court's earlier decision in Florida Prepaid.

The opinion concludes with the Court suggesting that Congress could pass a statute abrogating State sovereign immunity. Noting that Congress passed both the Patent Remedy Act and the CRCA prior to the Court's decision in Seminole Tribe, the opinion suggests that "Congress will know the rules" regarding "the importance of linking the scope of its abrogation to the redress or prevention of unconstitutional injuries—and of creating a legislative record to back up that connection" should Congress decide to pursue another statute to abrogate State sovereign immunity. Such a "tailored statute" could "effectively stop States from behaving as copyright pirates" and, as a consequence, "bring digital Blackbeards to justice."

Justice Thomas wrote separately in concurrence, joining all but two sections of the Court's opinion and raising a question he believes unsettled in the law. Regarding the first of these section of the opinion, regarding stare decisis, the Justice believes that the Court has a responsibility to overrule earlier precedent for error without requiring "special justifications" as discussed in the opinion. His second disagreement involved the opinion's discussion of the possibility of future legislation abrogating State sovereign immunity; here the Justice thinks such talk goes beyond the Court's role to provide opinions "only [on] the case before us in light of the record before us," citing Manhattan Community Access Corp. v. Halleck, 587 U. S. ___, ___ (2019) (slip op., at 15). As for the question, Justice Thomas is not convinced that "[c]opyrights are a form of property."

Justice Breyer also wrote a concurring opinion, joined by Justice Ginsberg. The gist of the concurring opinion (also colorfully set forth) is that the Court's decision in Florida Prepaid was incorrect, and setting forth the Justice's more fulsome explication of his views in Justice Stevens' dissent in Florida Prepaid and the Court's opinion in Kimble v. Marvel Entertainment, LLC, 576 U. S. 446, 455–456 (2015), as well as his own dissent in Franchise Tax Board of California v. Hyatt, 587 U.S. ___, ___ (2019).

Allen v. Cooper (2020)
Opinion by Justice Kagan, joined by Chief Justice Roberts and Justices Alito, Sotomayor, Gorsuch, and Kavanaugh, joined by Justice Thomas except for the final paragraph in Part II–A and the final paragraph in Part II–B; opinion concurring in part and concurring in the judgment by Justice Thomas; opinion concurring in the judgment by Justice Breyer, joined by Justice Ginsburg
Facebook, Inc. v. Windy City Innovations, LLC (Fed. Cir. 2020)

March 22, 2020

By Joshua Rich —

It's often said that hard cases make bad law. And that is what had happened here: faced with an unreasonable number of potentially asserted claims in litigation, and a Plaintiff not required to identify which of those claims it would actually assert within the filing limit (one-year) between being served with a complaint and filing to initiate an inter partes review (IPR) proceeding, Facebook played the novel gambit of trying to join its own IPR to attack the claims actually asserted against it. At the Patent Trial and Appeal Board, it actually worked (with a little assistance from the USPTO Director). But the Federal Circuit held otherwise, finding that joinder was only permitted for other parties who were seeking review of the same issues, not for the same party seeking to change the scope of the review. Thus, it vacated the PTAB's decision on the late-added claims, despite otherwise affirming the PTAB's decision on the merits of the claims.

The dispute between Facebook and Windy City began on June 2, 2015, when Windy City sued Facebook for infringement of four patents in the U.S. District Court for the Western District of North Carolina. Those four patents, U.S. Patent Nos. 8,458,245; 8,694,657; 8,473,552; and 8,407,356, have 58, 671(!), 64, and 37 claims, respectively. The Complaint did not identify which of those 830 claims Facebook allegedly infringed. Facebook was served with the Complaint the day after it was filed, and moved to dismiss it on July 24, 2015, arguing that the Complaint was deficient because it did not identify the allegedly infringed claims. Facebook then filed a motion to transfer the case to the Northern District of California on August 25, 2015.

The North Carolina District Court did not take action on either motion for over six months. Then, on March 16, 2016, over ten months after Facebook had been served, that North Carolina District Court transferred the case to the U.S. District Court for the Northern District of California without ruling on the motion to dismiss. The Northern District judge didn't rule on the motion either, but entered a scheduling order on April 6, 2016 that included a case management conference for July 7, 2016. Under the Northern District's Patent Local Rules, Windy City wouldn't have to identify its asserted claims until two weeks after that conference, on July 21, 2016. Cognizant that the deadline for filing petitions for inter partes review — one year after service of the complaint[i] — was more than a month earlier than that and was also quickly approaching, Facebook moved for an order requiring Windy City to identify no more than 40 asserted claims by May 16, 2016. The Northern District denied that motion.

On June 3, 2016, the very last day on which it could timely file IPR petitions, Facebook filed petitions challenging the validity of some of the claims of each of the four asserted patents. The Patent Trial and Appeal Board instituted review of all but two of the challenged claims,[ii] on all the obviousness grounds in the petitions. But Facebook's foresight was not perfect; when Windy City ultimately identified its asserted claims on October 19, 2016, there were a number of claims in the '245 and '657 patents that hadn't been challenged in the IPR petitions. With the statutory deadline for filing petitions to challenge those claims long past, Facebook tried to get the newly identified claims in through a procedural back door. It filed additional petitions on those claims, along with motions for joinder with the earlier-filed petitions.

The provisions of the America Invents Act governing joinder and consolidation in IPRs, 35 U.S.C. § 315(c) & (d), provide in relevant part:

(c) Joinder.—
If the Director institutes an inter partes review, the Director, in his or her discretion, may join as a party to that inter partes review any person who properly files a petition under section 311 that the Director, after receiving a preliminary response under section 313 or the expiration of the time for filing such a response, determines warrants the institution of an inter partes review under section 314.

(d) Multiple Proceedings.—
Notwithstanding sections 135(a), 251, and 252, and chapter 30, during the pendency of an inter partes review, if another proceeding or matter involving the patent is before the Office, the Director may determine the manner in which the inter partes review or other proceeding or matter may proceed, including providing for stay, transfer, consolidation, or termination of any such matter or proceeding.

Over Windy City's objection, the PTAB granted the motions for joinder, reasoning that the newly-challenged claims, although not identical, involve "substance . . . very similar such that the addition of [the new] claims . . . is not likely to affect the scope of the trial significantly." The Board noted that the addition of the new claims would not significantly disrupt the schedule, briefing, or discovery, and that Facebook did not unduly delay challenging those claims. Indeed, the Board indicated that under the circumstances here, Facebook could not have reasonably determined which claims were asserted against it by the expiration of the one-year deadline.

This joinder was not without controversy, however. Two of the Administrative Patent Judges on the panels granting joinder concurred in the decision to express "concerns with permitting a party to, essentially, join to itself." They did not themselves believe that "§ 315(c), when properly interpreted, [would] authorize same-party joinder because a party cannot be joined to a proceeding 'as a party' if it already is a party to that proceeding." However, in light of the USPTO Director's repeated espousal for allowing such joinder — including in a brief filed as an intervenor in these proceedings — the concurring APJs agreed to follow their boss's interpretation despite their disagreement.

The IPRs then proceeded to final written decisions, in which the PTAB found Facebook had shown some claims of each of the patents invalid as obvious, but had failed to do so for certain other claims of each of the patents. Both parties appealed: Facebook on the claims found not invalid, and Windy City on both the question of same-party joinder and on the claims found invalid.

The Federal Circuit took up the issue of same-party joinder first. Both sides argued that § 315(c) is unambiguous,[iii] but they reached opposing conclusions as to what it meant. Facebook asserted that it permits same-party joinder (including to raise new claims); Windy City asserted that it does not allow same-party joinder or the inclusion of new issues upon joinder. Ultimately, the Federal Circuit determined that Windy City's position was correct: not only is the statute unambiguous, it prohibits both same-party joinder and the inclusion of new issues upon joinder.

The Federal Circuit's analysis started, as it must, with the language of the statute. The time-bar provision, § 315(b), was clearly the impetus for the attempted joinder. However, that section expressly indicates that "[t]he time limitation set forth in the preceding sentence shall not apply to a request for joinder under subsection (c)." The joinder provision in subsection (c) then indicates that the Director has the discretion in an instituted IPR to "join as a party to that inter partes review any person who properly files a petition under section 311 . . ." For the Federal Circuit, the critical word in that provision is a "party." That is, the joinder provision clearly relates to adding new persons to a proceeding, not new questions or issues. In this case, a petitioner is already a party to an IPR and therefore logically cannot be joined.

The Federal Circuit noted that the PTAB appeared not to be viewing the joinder provision in that manner, and instead was viewing the provision in terms of joining later proceedings to earlier proceedings. The Federal Circuit rejected that understanding under the plain language of the statute. But it also indicated that the distinction between the two views was analogous to the distinction between Rules 19 and 20 of the Federal Rules of Civil Procedure and Rule 42. The former two rules clearly relate to parties rather than issues, whereas Rule 42 relates to issues rather than parties. Furthermore, there is another provision, § 315(d), relating to consolidation of proceedings with potentially different issues rather than joinder. Thus, the structure of the statute would not suggest that different proceedings could be "joined."

The Federal Circuit recognized that the Board's Precedential Opinion Panel had previously analyzed this issue in Proppant Express Investments, LLC v. Oren Technologies, LLC, No. IPR2018-00914, Paper 38 (P.T.A.B. Mar. 13, 2019), and came to the opposite conclusion. But the Federal Circuit reviews the statutory construction de novo, and potentially defers to the Board only if it finds ambiguity in the statute. Since it did not find any ambiguity, the Federal Circuit rejected any deference to the POP decision.

The Federal Circuit also relied on the fact that Facebook had changed the scope of the proceedings by adding new claims. As the Supreme Court had found in the SAS case, "Congress chose to structure a process in which it's the petitioner, not the Director, who gets to define the contours of the proceeding."[iv] That meant that the original petition created the scope of the IPR proceeding, which could not be altered by a second petition (even one by the same petitioner). Finally, the Federal Circuit considered the legislative history of the statute and found that it supported its interpretation.

Having resolved that the statute did not permit same-party joinder, the Federal Circuit vacated the PTAB's findings of invalidity of any claims not included in the original petitions. It then proceeded to consider whether the PTAB's decision on the other claims was supported by substantial evidence. It found that the PTAB's analysis was sufficiently clear and supported to affirm.[v]

In addition to the panel opinion, the Federal Circuit included additional views to address the POP's decision in Proppant, which issued after primary briefing in the appeal, and whether deference would be appropriate. Facebook had earlier suggested the Federal Circuit should defer under Chevron, but the Federal Circuit had never done so with a nonprecedential Board decision (and expressly refused to do so here). But Proppant was precedential, which caused the Federal Circuit to look more closely. Proppant suggested that the Director had discretion to allow same-party joinder, but would only exercise that discretion where fairness requires it and would alleviate unfairness to a party.

The Federal Circuit again rejected that deference for a number of reasons. First, it found the statute unambiguous, which preempts Chevron deference. Second, although the AIA gave the Director rulemaking authority in relation to the procedures for joinder in IPRs (and therefore deference would be most appropriate), it found that was different from interpreting the statute itself. The panel found that there was no deference indicated for statutory interpretation, just filling in the interstices of the statute. Finally, the Federal Circuit found that there were other ways to alleviate the potential unfairness to parties (including patent local rules, which normally would call for early disclosure of asserted claims) that would cause less disruption to the statutory scheme. Thus, it rejected the Proppant decision.

In rejecting same-party joinder, or joinder that would change the scope of an IPR, the Federal Circuit brought the process into harmony with joinder rules in Federal litigation. And while Facebook was not accorded the quick, less expensive justice that IPRs are intended to provide, it is unlikely that its situation will recur. Had the Federal Circuit found otherwise, it might have created a back door that would allow procrastinating defendants more time to determine whether they wanted to challenge all of the claims asserted in litigation.

Facebook, Inc. v. Windy City Innovations, LLC (Fed. Cir. 2020)
Panel: Chief Judge Prost and Circuit Judges Plager and O'Malley
Opinion by Chief Judge Prost; additional views by Chief Judge Prost and Circuit Judges Plager and O'Malley

[i] See 315 U.S.C. § 315(b).

[ii] The IPR institution decisions were made prior to the Supreme Court’s resolution of SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018).

[iii] As discussed below, Facebook also argued that the Federal Circuit should defer under Chevron to the USPTO’s interpretation of the statute, which would only be appropriate if the statute were ambiguous. See Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).

[iv] SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1355 (2018).

[v] The PTAB had construed the claims according to the broadest reasonable interpretation, the standard that was in place at that time.
Conference & CLE Calendar

March 22, 2020

March 26, 2020 – "China and the Changing Global Patent System" (LexisNexis IP) – 1:00 pm (ET)

April 27-28, 2020 – Paragraph IV Disputes Master Symposium (American Conference Institute) – New York, NY POSTPONED

May 20-21, 2020 – Advanced Summit on Life Sciences Patents (American Conference Institute) – New York, NY POSTPONED
Webinar on China and the Changing Global Patent System

March 22, 2020

LexisNexis IP will be offering a webinar on "China and the Changing Global Patent System" on March 26, 2020 at 1:00 pm (ET). Gene Quinn of IPWatchdog.com; Hon. Randall Rader, Chief Judge (ret.) of the United States Court of Appeals for the Federal Circuit; and Robert Sterne of Sterne Kessler will discuss whether Eastern preferences for out of court solutions and negotiations will lead to mediation and arbitration becoming increasingly important for the disposition of patent infringement and associated trade disputes as litigation in the U.S. declines and continues to move overseas to Germany and increasingly to China. The webinar will address the following topics:

• How the Collapse of the UPC is a damaging blow to Europe;
• Why the fall of the Unitary Patent creates opportunities in China; and
• Will China and German courts become even more important alternatives to U.S. litigation?

There is no registration fee for this webcast. However, those interested in registering for the webinar, should do so here.
Naples Roundtable Requests PTAB to Make Decisions Precedential

March 20, 2020

The Naples Roundtable, a 501(c)(3) non-profit organization whose primary mission is to explore ways to improve and strengthen the U.S. patent system, will on Monday, March 23rd file a Request with the U.S. Patent and Trademark Office, to designate Ex parte Olson (Appeal 2017-006489), and Ex parte Fautz (Appeal 2019-000106) as precedential. Both were designated "informative" on July 21, 2019. In each case, the Patent Trial and Appeal Board reversed an Examiner's decision rejecting the claims in each application as being directed to patent-ineligible subject matter under 35 U.S.C. § 101 under the Supreme Court's Mayo/Alice jurisprudence. The basis for the Board's decision reversing the Examiner in each case was the 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (hereinafter "Guidance").

The Olson claims were directed to a catheter navigation system involving mathematical equations used in the claimed system and methods that reduced registration errors in a 3D imaging system resulting in improved catheter placement in a patient. The Board found error in the Examiner's application of Revised Step 2A, 2nd Prong, wherein the claims recited additional limitations that applied the results of the mathematical formulae to achieve the claimed result, i.e., reduce errors in catheter placement by accounting for patient-specific non-linearities and inhomogeneities in catheter navigation, again finding similarities to how the Arrhenius equation was used in Diamond v. Diehr.

The Fautz claims were directed to magnetic resonance tomography (MRT) and methods for performing MRT using the apparatus and recited three mathematical formulae and four calculations that use those formulae. As in Olson, the Board held that the Examiner improperly applied Revised Step 2A, 2nd Prong.

And in each case, the rationale for the Board's decision avoided having to consider Revised Step 2B, regarding whether the claim recited that ineluctable "something more" recited in the Revised Guidance.

The letter is signed by Gary Griswold, Naples Roundtable President; Kevin E. Noonan, Patent Docs author and MBHB Partner: Andrew Baluch, Naples Roundtable Amicus Committee Chair; and Teresa Summers, Naples Roundtable Treasurer.
Impact of COVID-19 Pandemic on Patent Offices and Federal Courts — March 19 UPDATE

March 19, 2020

By Donald Zuhn —

Last week, World Health Organization Director-General Tedros Adhanom declared that the COVID-19 outbreak "can be characterized as a pandemic," cautioning that the WHO has "rung the alarm bell loud and clear." At the time of the announcement, the WHO noted that there were 118,000 cases reported globally in 114 countries. In its latest situation report, the WHO indicates that as of March 19, there have been 209,839 cases in 167 countries. The Director-General also stated that "[t]his is not just a public health crisis, it is a crisis that will touch every sector – so every sector and every individual must be involved in the fight." The WHO's declaration last week – and global developments since then – raise the question of how the pandemic is affecting the patent community.

All week, we have been reporting (here, here, here, and here) on the impact of the COVID-19 pandemic on the U.S. Patent and Trademark Office, World Intellectual Property Organization, European Patent Office, IP Australia, Intellectual Property Office of New Zealand (IPONZ), Brazilian Patent and Trademark Office (INPI), Canadian Intellectual Property Office (CIPO), and Mexican Institute of Industrial Property (IMPI), and U.S. Federal courts, including, in particular, the Supreme Court and Federal Circuit. Today we present recent developments in the USPTO and Dominican Republic in response to the COVID-19 pandemic.

In a USPTO Alert e-mail distributed earlier today, the USPTO announced that it considered the effects of COVID-19 to be an "extraordinary situation" within the meaning of 37 C.F.R. § 1.183 for affected patent and trademark applicants, patentees, reexamination parties, and trademark owners. AS a result, the USPTO was waiving the requirements under 37 C.F.R. § 1.4(e)(1) and (2) for an original handwritten signature for certain correspondence with the Office of Enrollment and Discipline and certain payments by credit card. In its Alert, the Office noted that the requirements of § 1.4(e)(1) and (2) are the only USPTO requirements for original handwritten, ink signatures, and that the Office has no other requirements for original handwritten, ink signatures.

Dominican patent law firm Troncoso y Caceres notified the patent community regarding developments in the Dominican Republic. The Judicial Power of the Dominican Republic has communicated through its Council that in compliance with the state of national emergency requested by the President, court hearings throughout the country are suspended until April 13, and has provided that courts will only be in operation for document reception service with the minimum necessary personnel. The National Office of Intellectual Property (ONAPI) has suspended all legal terms granted to individuals for the registration of distinctive signs until March 31, 2020, and with the exception of patent, utility model, and industrial design applications for registration, for which face to face service remains, is otherwise accepting only online service.

Patent Docs will continue to monitor and report on patent-related developments related to the COVID-19 pandemic. In addition, we encourage our readers to let us know about developments related to the COVID-19 pandemic at other patent offices.
Mallinckrodt Files Certiorari Petition in iNO v. Praxair

March 19, 2020

By Kevin E. Noonan —

Mallinckrodt filed a certiorari petition with the Supreme Court last week, over the Federal Circuit panel decision (by Chief Judge Prost joined by Judge Dyk; Judge Newman dissented on the issue before the Court in this petition) affirming dismissal of a suit by Mallinckrodt's subsidiary, iNO Pharmaceuticals, in iNO Therapeutics LLC v. Praxair Distribution Inc. From the first sentence, the petition frames the issue as one of lower court confusion with the Supreme Court's subject matter eligibility jurisprudence:

In the years since this Court's decision in Mayo Collaborative Services LLC v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012), the lower courts have struggled to apply the judicially-created exceptions to the subject matter that Congress declared eligible for patent protection in 35 U.S.C. § 101.

In addition to painting the Federal Circuit with a brush both familiar to and consistent with the Court's view on its appellate junior, the petition makes the characterization that "[t]here is no more pressing issue in patent law than resolving the uncertainty that has surrounded the judicial exceptions to §101." To be honest, however, following these exhortations with a reiteration of the situation at the Federal Circuit, including the almost cri de coeur nature of the concurrences and dissents by Federal Circuit judges in Athena Diagnostics Inc. v. Mayo Collaborative Services LLC is likely to fall on deaf ears, having already done so when the Court denied Athena's cert petition. The petition is perhaps on firmer ground when adding a reminder of the Government's views, from the Solicitor General in Hikma Pharm. USA Inc. v. Vanda Pharma. Inc. (see "Solicitor General Recommends That Supreme Court Deny Certiorari in Hikma Pharmaceuticals v. Vanda Pharmaceuticals"), because there the SG urged the Court to revisit its subject matter eligibility jurisprudence just not in that case (specifically stating (and quoted in this petition) that "further guidance from this Court is amply warranted" and should be provided "in a case where the current confusion has a material effect on the outcome of the Section 101 analysis). This gives this petition the opportunity to affirmatively state that "[t]his is just such a case."

As a reminder, the case involved methods (and devices) for treating infants with inhaled nitric oxide gas; perhaps more accurately, the claims recited methods to identifying infants in respiratory distress who should not be administered the conventional iNO treatment, due inter alia to their having a congenital defect, left ventricular hypertrophy, which predisposed such infants to pulmonary edema. Illustrative claims of the patents-in-suit* include:

Claim 1 of U.S. Patent No. 8,795,741:

1. A method of treating patients who are candidates for inhaled nitric oxide treatment, which method reduces the risk that inhalation of nitric oxide gas will induce an increase in pulmonary capillary wedge pressure (PCWP) leading to pulmonary edema in neonatal patients with hypoxic respiratory failure, the method comprising:
    (a) identifying a plurality of term or near-term neonatal patients who have hypoxic respiratory failure and are candidates for 20 ppm inhaled nitric oxide treatment;
    (b) determining that a first patient of the plurality does not have left ventricular dysfunction;
    (c) determining that a second patient of the plurality has left ventricular dysfunction, so is at particular risk of increased PCWP leading to pulmonary edema upon treatment with inhaled nitric oxide;
    (d) administering 20 ppm inhaled nitric oxide treatment to the first patient; and
    (e) excluding the second patient from treatment with inhaled nitric oxide, based on the determination that the second patient has left ventricular dysfunction, so is at particular risk of increased PCWP leading to pulmonary edema upon treatment with inhaled nitric oxide.

Claim 1 of U.S. Patent No. 8,776,794:

1. A gas delivery device comprising:
    a gas source to provide therapy gas comprising nitric oxide;
    a valve attachable to the gas source, the valve including an inlet and an outlet in fluid communication and a valve actuator to open or close the valve to allow the gas through the valve to a control module that delivers the therapy gas comprising nitric oxide in an amount effective to treat or prevent hypoxic respiratory failure; and
    a circuit including:
    a memory to store gas data comprising one or more of gas identification, gas expiration date and gas concentration; and
    a processor and a transceiver in communication with the memory to send and receive signals to communicate the gas data to the control module that controls gas delivery to a subject and to verify one or more of the gas identification, the gas concentration and that the gas is not expired.

(where the italicized limitations are relevant to the Federal Circuit's decision).

The District Court held/found that the claims of the HF patents (vide infra) were directed to patent-ineligible subject matter, and a divided panel of the Federal Circuit affirmed; the Court refused to rehear the decision en banc.

The petition terms method-of-treatment claims as "the one island of stability" in subject matter eligibility jurisprudence, which the decision below has disrupted by "extend[ing] the judicially created exceptions to the plain text of 35 U.S.C. §101 far beyond anything envisioned by this Court," characterizing the case as an opportunity for the Supreme Court to "rein in the Federal Circuit's runaway jurisprudence" on § 101 that "threatens innovation at the forefront of medical science." The petition asserts three reasons why the Court should grant certiorari. First, the decision below "heightens confusion" because it is contradictory to the "traditional understanding" (not upset by the Court's decision in Mayo) that method-of-treatment claims are eligible for patenting. The petition illustrates this confusion by returning to statements made by most of the Federal Circuit judges in concurrences and dissents in Athena, as well as additional similar statements in Interval Licensing LLC v. AOL, Inc., 896 F.3d 1335, 1348 (Fed. Cir. 2018) by Judge Plager; Berkheimer v. HP Inc., 890 F.3d 1369, 1374 (Fed. Cir. 2018) by Judges Lourie and Newman; Smart Sys. Innovations, LLC v. Chicago Transit Auth., 873 F.3d 1364, 1377 (Fed. Cir. 2017) by Judge Linn; and Ariosa Diagnostic, Inc. v. Sequenom Inc., 788 F.3d 1371, 1381 (Fed. Cir. 2015) by Judge Linn; (where the combination of such citations may be effective to further illustrate this confusion). The petition terms this an "extraordinary" "collective and consistent cry for help from the Federal Circuit" with evident justification. The petition also cites such luminaries as former Chief Judge Paul Michel, in testimony before the Senate Subcommittee on Intellectual Property last June (see "Senate Subcommittee on Intellectual Property Holds Hearings on Proposed Revisions to 35 U.S.C. § 101"), public statements by current PTO Director Andrei Iancu and former Director David Kappos, testimony by practitioners and patent law groups (Including the American Bar Association and American Intellectual Property Lawyers Association), and legal scholars (including Mark Lemley and Christopher Holman), all asserting that the uncertainty created by inconsistent decisions by the Federal Circuit and district courts are harmful to innovation and the patent system.

The petition then turns to the potential for harm this decision poses, in disrupting the "island of stability" of patent eligibility for method-of-treatment claims, citing Natural Alternatives Int'l. Inc. v. Creative Compounds, LLC, 918 F.3d 1338 (Fed. Cir. 2019), and Endo Pharma. Inc. v. Teva Pharm. USA Inc., 919 F.3d 1347 (Fed. Cir. 2019), as well as Vanda. This case "breaches that firewall" by holding for the first time that a method-of-treatment claim is patent ineligible. The petition characterizes as the Federal Circuit "finess[ing] the point" by considering the claims to instruct inaction, which Petitioner counters by interpreting Mallinckrodt's claims as being directed to "an integrated treatment protocol" involving "selective action" (anticipating at least some of the argument Respondent can be expected to make). And the evils this decision could occasion are not limited to such selective treatment claims, the petition asserting that this principle "could reach . . . manufacturing processes in which testing and predefined criteria are used to determine whether a step previously performed on all batches can be skipped in some instances, increasing efficiency . . .," this argument taking the issue outside the realm of diagnostics and illustrating the potential scope of the problem.

The petition next makes the bald assertion that "the Federal Circuit's decision is wrong." And the basis for the statement is, first, that Congress spoke expansively in drafting Section 101 and the implicit judicial exceptions recognized by the Court are not as expansive as the Federal Circuit's decision below makes them. The petition characterizes (properly) the claims in Mayo as being "an oddity" and accordingly, readily distinguishable from Mallinckrodt's claims (most easily by noting that the Mayo claims did not require any action on the part of a physician who had practiced the claimed method to determine whether the amount of administered drug was in the therapeutic range). The Federal Circuit's mistake here was in disregarding this distinction and in failing to heed the Court's prescription that claims must be considered as a whole, citing (of course) Diamond v. Diehr, 450 U.S. 175, 188 (1981). The petition also criticizes the decision below for attempting to distinguish the Vanda decision (noting that the author of this opinion dissented in that one), the deficiency in the attempt being crafting an "arbitrary distinction" between "treating and not treating" steps neither found or required by the statute or the Court's eligibility decisions (and further noting that the scope of the Vanda claims were even broader, wherein was claimed all dosages of the drug at 12 mg/day or less, while the claims here recited a "single, specific course of action," the petition reciting unclaimed, potential alternatives that reduced the scope of preemption).

The final reason the petition asserts supporting the Court's grant is the threat to personalized medicine, which Petitioner calls "the next frontier of medical research." While compelling writing, such paeans to the coming beneficent future and the threat subject matter eligibility restrictions pose to it have become commonplace (due, at least in part, to the truth of these assertions), but frankly the Court has shown no tendency to be persuaded by them. Perhaps this is due to the expected salvo of amicus briefing and legal and popular literature to the contrary, that patenting is a tax and an impediment to innovation, and perhaps it reflects the individual Justice's views on the proper place for patents involving medicine. No matter how well written or how cogent the arguments made (here, by Seth Waxman, a preeminent Supreme Court advocate), it is hard to place much hope in any change of heart in this regard by the Court in this case.

Mylan will have an opportunity to file a responsive brief in due course, and the Court should it grant certiorari can be expected to hear argument in the Fall term (COVID-19 willing).

* The full list of claims asserted by iNO and Mallinckrodt include U.S. Patent Nos. 8,282,966; 8,293,284; 8,795,741; 8,431,163; and 8,846,112, collectively termed the "heart failure patents" or "HF patents," and U.S. Patent Nos. 8,573,209; 8,776,794; 8,776,795; 9,265,911; and 9,295,802, collectively termed the "delivery system infrared patents" or "DSIR patents."

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