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  • Bozeman Financial LLC v. Federal Reserve Bank (Fed. Cir. 2020)

    By Joshua Rich —

    Federal Circuit SealLess than two years ago, in Return Mail, Inc. v. U.S. Postal Service, 139 S. Ct. 1853 (2018), the Supreme Court held that a government entity — in that case, the U.S. Postal Service — is not a "person" under the America Invents Act, and therefore unable to avail itself of the AIA's post-issuance review proceedings.  But the Court did not resolve whether quasi-governmental entities would be barred from post-issuance proceedings as well.  Here, the twelve regional Federal Reserve Banks brought covered business method (CBM) review proceedings seeking to invalidate two Bozeman Financial patents.  And the Federal Circuit found, contrary to the Supreme Court, that they are "persons," entitled to do so under the AIA.

    Bozeman Financial is the assignee of U.S. Patent Nos. 6,754,640 and 8,768,840; the '840 patent issued from a continuation of a divisional of a continuation-in-part of the application that issued as the '640 patent.  The patents relate to the detection of fraud in financial transactions during payment authorization and clearing.  Claim 1 of the '840 patent, which is representative of all of the claims, covers:

    A computer implemented method for detecting fraud in financial transactions during a payment clearing process, said method comprising:
        receiving through one of a payer bank and a third party, a first record of an electronic financial transaction from at least one of the following group: a payer, a point-of-sale terminal, an online account and a portable electronic device;
        storing in a database accessible by each party to said payment clearing process of said electronic financial transaction, said first record of said electronic financial transaction, said first record comprising more than one parameter;
        receiving at said database at least a second record of said electronic financial transaction from one or more of a payee bank and any other party to said payment clearing process as said transaction moves along said payment clearing process, wherein said second record comprises at least one parameter which is the same as said more than one parameter of said first record;
        each of said first and second records received at said database comprise at least two of the same said more than one parameters;
        determining by a computer when there is a match between at least two of said parameters of said second record of said first financial transaction received at said database and the same parameters of said first record of said financial transaction stored in said database, and wherein any party to said payment clearing process is capable of verifying said parameters at each point along said financial transaction payment clearing process;
        sending a notification to said payee bank participant with authorization to process said electronic financial transaction when said parameters match; and
        sending a notification to said payee bank participant to not process said electronic financial transaction when said parameters do not match.

    The Federal Reserve Banks filed petitions for CBM review, challenging all 26 claims of the '640 patent and all 20 claims of the '840 patent.  Bozeman Financial filed a fulsome response to the Federal Reserve Banks' arguments in relation to the '840 patent, but sought to incorporate those rejoinders by reference in relation to the '640 patent rather than making the arguments independently.  The Patent Trial and Appeal Board rejected that attempted incorporation and found all of the claims of each patent invalid as drawn to ineligible subject matter under 35 U.S.C. § 101.  The Board also found 22 of the 26 claims of the '640 patent invalid under § 112.

    Bozeman Financial appealed the Board's decisions to the U.S. Court of Appeals for the Federal Circuit.  In doing so, it raised only the substantive grounds for the Board's subject matter eligibility decisions; it did not raise the Federal Reserve Banks' personalty.  Instead, after the Return Mail decision was issued, Bozeman Financial filed a supplemental brief raising the argument that the Federal Reserve Banks are not "persons" under the AIA, and therefore the CBM reviews were void ab initio.  In addition to disputing the merits of Bozeman Financial's argument, the Federal Reserve Banks argued that Bozeman Financial waived the issue by not raising it below or in its opening brief.

    Judge Moore, writing for the Federal Circuit, started from the proposition that a federal appellate court generally does not consider any issue not decided below.  Nor does it generally consider arguments that are not raised in an appellant's (or cross-appellant's) opening brief.  There are, however, exceptional circumstances in which an appellate court will consider issues nonetheless, and the Federal Circuit found that this was one of those circumstances.

    The Federal Reserve Banks have some characteristics that would suggest that they are part of the government (and therefore not empowered to bring post-issuance proceedings) and some that would suggest otherwise.  They were established by statute (in this case, 12 U.S.C. § 221 et seq.), implement the monetary and fiscal policies of the United States, and transfer profits to the United States Treasury.  However, the enabling statute establishes them each as a "body corporate," they have a board of directors, and the board enacts bylaws and governs the business of each bank.  They are therefore not directly supervised by government officials.  Most importantly, the Federal Reserve Banks can sue or be sued in "any court of law or equity."

    It is that last characteristic, especially potential liability in any court, that was most influential in determining that the Federal Reserve Banks are "persons" under the AIA.  In Return Mail, one of the bases for the holding that the U.S. Postal Service was the government was that it could only be sued in the U.S. Court of Claims for a taking if it were accused of patent infringement.  But with one exception — in which the Federal Circuit expressly declined to determine whether the Federal Reserve Banks were considered government agencies — patent infringement proceedings against them did not need to be brought in the Court of Claims under 28 U.S.C. § 1498(a).[1]  Thus, the Federal Circuit found that the Federal Reserve Banks were not part of the government for purposes of the AIA, and could properly bring CBM proceedings.

    From there, the Federal Circuit addressed the merits of the case.  Because Bozeman Financial had not challenged below the merits of the § 112 invalidation of 22 claims of the '640 patent, it could not do so now.  Furthermore, because it did not raise any separate arguments with regard to the '640 patent below, it could not do so now.  Thus, the four remaining claims of the '640 patent rose or fell with the claims of the '840 patent.  In the end, they fell.

    The Court applied the Alice test and, in the first step, found that the Board had correctly found the claims were directed to the abstract idea of "collecting and analyzing information for financial transaction fraud or error detection."  Essentially, the claims of the '840 patent call for the review and verification of documents to reduce transactional fraud.  The Federal Circuit has repeatedly found such claims to be directed to abstract ideas.  That is true even though the claims involve physical steps; prior cases have held that physical steps relating to processing checks did not transform an abstract idea into patent-eligible subject matter.

    Having found the claims directed to an abstract idea, the Court proceeded to the second step of the Alice test.  Even the specification of the '840 patent indicated that methods for preventing check fraud and verifying financial transactions were well known.  Bozeman Financial argued that the ordered combination of the elements in the claims was a specific implementation of the invention that was not itself routine or conventional, but failed to provide any evidence that was so.  Bozeman Financial also argued that the claims met the machine-or-transformation test of Alice's step two, but that alone would not be sufficient and the Federal Circuit rejected the argument in any event.  Thus, all of the claims were found to lack patent-eligible subject matter.

    The Bozeman Financial case adds little to Alice jurisprudence, but does help clarify where the line between "governmental" and "non-governmental" entities lies with regard to personalty under the AIA.  The Federal Circuit has made it clear that even entities with some indicia of being the federal government can bring post-issuance proceedings, so long as they themselves can be sued for patent infringement in federal court.  There may be some exceptions — entities that can be sued in court but are closely enough tied to the federal government that they cannot bring petitions or those that cannot be haled into court but lack such strong ties — but for now, the line appears to be drawn between parties subject to suits for patent infringement under 35 U.S.C. § 271 and those subject only for takings under 28 U.S.C. § 1498(a).

    [1] See Software Design Corp. v. Fed. Reserve Bank of St. Louis, 583 F.3d 1371, 1379 (Fed. Cir. 2009), distinguished at Slip Op., p. 6-7 n. 3.

    Bozeman Financial LLC v. Federal Reserve Bank (Fed. Cir. 2020)
    Panel: Circuit Judges Lourie, Dyk, and Moore
    Opinion by Circuit Judge Moore

  • CVC Reply No. 2 to Broad’s Opposition No. 2 to CVC’s Motion No. 2 to Be Accorded Benefit of Priority

    By Kevin E. Noonan —

    University of California-BerkleyMarch 23rd was the deadline for the parties in Interference No. 106,115 between Senior Party The Broad Institute, Harvard University, and the Massachusetts Institute of Technology (collectively, "Broad") and Junior Party the University of California/Berkeley, the University of Vienna, and Emmanuelle Charpentier (collectively, "CVC"), to file their Reply Briefs to their opponents' Opposition to each parties Motions authorized by the PTAB last summer.  See "CRISPR Interference Parties Propose Motions" and "PTAB Redeclares CRISPR Interference and Grants Leave for Some (But Not All) of Parties' Proposed Motions".  CVC's Motion No. 2 was to be accorded the benefit of priority to three earlier-filed provisional applications contingent on the Patent Trial and Appeal Board granting the Broad's Motion No. 2 to Substitute the Count of the interference.

    The Broad's proposed Count was as follows:

    A method, in a eukaryotic cell, of cleaving or editing a target DNA molecule or modulating transcription of at least one gene encoded by the target DNA molecule, the method comprising:
        contacting, in a eukaryotic cell, a target DNA molecule having a target sequence with an engineered and/or non-naturally-occurring Type II Clustered Regularly lnterspaced Short Palindromic Repeats (CRISPR)-CRISPR associated Cas) (CRISPR-Cas) system comprising:
            a) a Cas9 protein, and
            b) RNA comprising
                i) a targeter-RNA that is capable of hybridizing with the target sequence of the DNA molecule or a first RNA comprising (A) a first sequence capable of hybridizing with the target sequence of the DNA molecule and (B) a second sequence; and
                ii) an activator-RNA that is capable of hybridizing to the targeter-RNA to form an RNA duplex in the eukaryotic cell or a second RNA comprising a tracr sequence that is capable of hybridizing to the second sequence to form an RNA duplex in the eukaryotic cell,
        wherein, in the eukaryotic cell, the targeter-RNA or the first sequence directs the Cas9 protein to the target sequence and the DNA molecule is cleaved or edited or at least one product of the DNA molecule is altered.

    The distinction the Broad made in its Motion was between embodiments of CRISPR methods that are limited to "single-molecule guide RNA" (aka "fused" or "covalently linked" species), versus embodiments that encompass single-molecule and "dual molecule" species (wherein in the latter versions, the "targeter-RNA" and "activator-RNA" as recited in the proposed Count are not covalently linked).  The Broad argued that this Count should be adopted by the Board because it "properly describes the full scope of the interfering subject matter between the parties because both parties have involved claims that are generic, non-limited RNA claims."  The brief also argued that proposed Count 2 "sets the correct scope of admissible proofs [i.e., their own] for the breakthrough invention described by the generic claims at issue in these proceedings—the successful adaption of CRISPR-Cas9 systems for use in eukaryotic environments," which The Broad contended current Court 1 (in either alternative) does not.

    In its Motion No. 2, CVC argued that it was entitled to priority to its earliest priority documents (USSN 61/652,086, filed May 25, 2012 (P1); USSN 61/716,256, filed October 19, 2012 (P2); USSN 61/757,640, filed January 28, 2013 (P3)) when this interference was declared, and filed this authorized contingent motion on October 14th to be accorded benefit.  As with CVC's Motion No.1 for priority under present Count 1, the significance for CVC should this motion be granted is that CVC and not the Broad would be Senior Party, with all the procedural advantages that status confers (the greatest of which being that CVC would be the presumptive first inventor).

    The arguments in this Reply Brief are parallel to the arguments CVC made in its Reply to the Broad's Opposition to CVC's Motion No. 1 for priority discussed in an earlier post (see "CVC Reply No. 1 to Broad's Opposition No. 1 to CVC's Motion No. 1 to Be Accorded Benefit of Priority").  These include that CVC was entitled to priority because priority application P1 (and, in the alternative, P2 and P3) set forth in detail the disclosure for at least one embodiment falling within the scope of proposed Count 2.  Although P1 did not disclose actual reduction to practice of CRISPR-Cas9 in eukaryotic cells, CVC maintains that "[t]he CVC inventors immediately understood that the CRISPR-Cas9 DNA-cleavage complex could be used in a variety of different cellular and noncellular settings."  According to CVC:

    P1 disclosed methods sufficient for a POSA to practice the method of [Proposed Count 2] without undue experimentation, and Broad has not proffered any credible evidence to the contrary.  While not required, CVC even provided post-filing date evidence confirming that materially the same methods disclosed in P1 for employing CRISPR-Cas9 in eukaryotes were successful.

    As in Reply Brief No. 1, CVC argues that "Broad asserts arguments founded on legal and factual inaccuracies:

    (i) Broad misconstrues blazemarks law by importing into the count elements that simply are not present, and Broad ignores P1's clear blazemarks;

    (ii) Broad requires a working example for written description despite the clear legal precedent that neither examples nor actual reduction to practice is required;

    (iii) Broad post-hoc fabricates reasons—with no credible evidence—that a POSA would have expected P1 to disclose "unique conditions" for using CRISPR-Cas9 in eukaryotes for adequate written description; and

    (iv) Broad distorts the legal standard for constructive reduction to practice by conflating obviousness with written description and enablement, arguing that adequate written description and enablement must provide a POSA with a reasonable expectation of success."

    CVC argues in its Reply that it disclosed three "example embodiments" in P1 that fell within the scope of Proposed Count 2:  a fish cell (E4), a human cell (E5), and a fruit fly cell (E6).  CVC argues that P1 provides a written description for each embodiment, and that this description in conjunction with the general knowledge in the art would have enabled a person having ordinary skill in the art (POSA) in 2012 to make and use each embodiment without undue experimentation, that each embodiment meets all the limitations of Proposed Count 2, and that this was sufficient for CVC to be entitled to the benefit of priority to the invention set forth in Proposed Count 2, citing Falkner v. Inglis, 448 F.3d 1357, 1362 (Fed. Cir. 2006); Storer v. Clark, 860 F.3d 1340, 1345 (Fed. Cir. 2017); 37 C.F.R. § 41.201.

    CVC argues that the Broad's arguments regarding putative insufficiencies in it P1 priority application conflate the requirements for obviousness, particularly the "reasonable expectation of success" under which the Broad prevailed in the earlier interference between these parties (Interference No. 106,048) and the enablement requirement under 35 U.S.C. § 112(a) and In re Wands, 858 F.2d 731, 739 (Fed. Cir. 1988), that the disclosure be sufficient that the invention can be practiced by one having ordinary skill in the art without undue experimentation.  CVC argues that the Broad's arguments are legally deficient:

    Blazemarks cases deal with situations where the applicant made specific selections from multiple long lists to arrive at a specific, narrowly claimed invention, such as a specific compound, plasma concentration, or specific mutation.  In re Ruschig, 379 F.2d 990, 993 (CCPA 1967); Purdue Pharma v. Faulding Inc., 230 F.3d 1320, 1327 (Fed. Cir. 2000); and Novozymes v. DuPont Nutrition Biosci., 723 F.3d 1336, 1348 (Fed. Cir. 2013).  These cases demonstrate that blazemarks are merely a tool to assess written description support for a claim.  This tool provides a backstop of objective proof that a POSA would recognize in the specification the claimed subject matter, and prevents hindsight selection of narrow subject matter to demonstrate that the Applicants possessed the invention.  The tool is inapt where, as here, (1) the features are not an element of the count, and (2) Broad has not presented evidence that alternative features (e.g. alternative eukaryotic cells, target sequences, or delivery methods) are inoperable.  See Novozymes, 723 F.3d at 1350.

    CVC further argues that the POSA at the time the P1 priority document was filed would have understood, from the P1 disclosure, that the CRISPR-Cas9 systems described therein could be performed in vitro, in a prokaryotic cell, and in a eukaryotic cell, by explicit disclosures thereof.  The Reply brief cites expressly in support of this argument the disclosure of CRISPR-Cas9 systems in Example 1, which include "a fish cell, human cell, and fruit fly cell."  CVC also cites the disclosure of claim 67 of P1, which recites a method of using the CRISPR-Cas system in a vertebrate cell, and notes that there are "only five types of vertebrate cells [as disclosed] in paragraph [00165]:  "a cell from a vertebrate animal (e.g., fish, amphibian, reptile, bird, mammal)."  As for disclosure of practice of CRISPR in human cells, the Reply brief cites Claim 69 of P1, which is directed to a method of using the CRISPR-Cas system in a human cell.  Finally, CVC cites the "[n]umerous researchers [who] used materially the same components and methods disclosed in P1 to make embodiments of [Proposed Count 2]" after the P1 priority date, which CVC states "confirm[s] enablement."

    And as in CVC's Reply No 1, its Reply No. 2 take to task the Broad's expert declarant, for personal lack of competence with regard to CRISPR technology ("Dr. Mirkin's research focus is nanoparticles—not CRISPR or any other type of gene editing") and that "Dr. Mirkin's testimony is fraught with conclusory statements and speculation, contravening 37 C.F.R. § 41.158(a) ("[e]xpert testimony that does not disclose the underling facts or data on which the opinion is based is entitled to little or no weight.").  CVC's arguments and examples regarding specific deficiencies tracked its arguments in its Reply No. 1, that Dr. Mirkin's review was "myopic" based on testimony where the expert "admitted" that he only reviewed "a select four paragraphs of Example 1 in P1," and stated that his testimony was "based on my review paragraphs [00248]-[00251] [that] do not disclose) any . . . 'blazemarks'" for performing CRISPR in eukaryotic cells.  According to CVC, "Dr. Mirkin ignored other disclosures in P1 that clearly describe using the CRISPR-Cas9 systems in eukaryotic cells."

    This Reply brief also concludes with CVC refutation of the Broad's arguments as merely being an attempt to apply its (and the Board's) obviousness determination in the '048 Interference to the current interference, which is error due to the different evidentiary showings between the two Interferences, and misreads the holding on In re Wright, 866 F.2d 422 (Fed. Cir. 1989), regarding the evidentiary standards for establishing enablement.

  • Nike, Inc. v. Adidas AG (Fed. Cir. 2020)

    By Kevin E. Noonan —

    Federal Circuit SealThe procedural niceties of the U.S. Patent and Trademark Office's implementation of the post-grant review features of the Leahy-Smith America Invents Act continue to be explicated in the Federal Circuit (and of course, the Supreme Court).  Most recently, the question before the Federal Circuit in Nike, Inc. v. Adidas AG was whether the Patent Trial and Appeal Board (PTAB) complied with the due process provisions of the Administrative Procedures Act, finding that it did not, and remanding for further proceedings that did so comply.

    The case arose on remand from an earlier opinion from the Court affirming-in-part and vacating-in-part the Board's decision in an inter partes review initiated by Adidas against Nike's U.S. Patent No. 7,347,011.  In the earlier proceedings, Nike moved that all claims of the '011 patent be cancelled and, on motion to amend, submitted new claims 47-50.  The claims are directed to articles of footwear having textile upper portions knitted to reduce waste in manufacturing.  The Court opinion set forth the new proposed claims in their entirety (wherein the italicized portion of claim 49 was at issue before the Court):

    47.  An article of footwear comprising
        an upper incorporating a flat knit textile element, the flat knit textile element
            (1) having flat knit edges free of surrounding textile structure such that the flat knit edges are not surrounded by textile structure from which the textile element must be removed, some of the flat knit edges joined together to form an ankle opening in the upper for receiving a foot, the ankle opening having an edge comprised of one of the flat knit edges; and
            (2) having a first area and a second area with a unitary construction, the first area being formed of a first stitch configuration, and the second area being formed of a second stitch configuration that is different from the first stitch configuration to impart varying properties to the textile element; and
        a sole structure secured to the upper.

    48.  The article of footwear recited in claim 47, wherein at least one of the first stitch configuration and the second stitch configuration forms an aperture in the flat knit textile element and the joined edges shape the flat knit textile element to form a lateral region, a medial region, an instep region and a heel region of the upper.

    49.  The article of footwear recited in claim 47, wherein at least one of the first stitch configuration and the second stitch configuration forms a plurality of apertures in the flat knit textile element, the apertures formed by omitting stitches in the flat knit textile element and positioned in the upper for receiving laces.

    50.  The article of footwear recited in claim 47, wherein the flat knit textile element is one of an exterior layer, an intermediate layer, and an interior layer of the upper, and the joined edges shape the flat knit textile element to form a lateral beforeregion, a medial region, an instep region and a heel region of the upper.

    In the earlier proceedings, the PTAB granted Nike's motion to cancel all claims in the '011 patent and denied Nike's motion to amend, on the grounds that Nike had not sustained its burden of showing new claims 47-50 to be patentable.  Adidas asserted three prior art references in support of this determination:  U.S. Patent No. 5,345,638 (Nishida); U.S. Patent No. 2,178,941 (Schuessler I); and U.S. Patent No. 2,150,730 (Schuessler II).  The Federal Circuit vacated the Board's decision due to two errors:

    First, the Board failed to determine how substitute claims 48 and 49 "should be treated per the standard set forth in" the Board's then-informative decision Idle Free Systems, Inc. v. Bergstrom, No. IPR2012-00027, 2013 WL 5947697 (P.T.A.B. June 11, 2013).  Nike I, 812 F.3d at 1342.  Second, the Board failed to examine Nike's long-felt need evidence.

    Initially neither party requested additional briefing, but before the Board could issue another Final Written Decision the Federal Circuit handed down its decision in Aqua Prods., Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017) (en banc).  The effects on the law occasioned by this decision prompted both parties to submit briefing, and thereafter the Board again denied Nike's motion to amend.

    Relevant to this appeal, the Board held claim 49 to be unpatentable over disclosure in a reference, a knitting technology handbook by Spencer, that was of record in the proceeding but not asserted nor relied upon by either party.  The Board relied on this reference to show what was well known in the art, and the Court's jurisprudence in Genzyme Therapeutic Prods. Ltd. v. Biomarin Pharm. Inc., 825 F.3d 1360, 1369 (Fed. Cir. 2016), that it could consider this evidence.

    In addition, the Board found (and the Federal Circuit affirmed) that Nike's claims did not show satisfaction of long-felt need because the art showed that the need had been satisfied prior to the date of invention.

    The Federal Circuit affirmed in part, vacated in part, and remanded in an opinion by Judge Stoll joined by Judges Lourie and Chen.  The opinion sets out the issue, and its decision, succinctly:

    Nike asserts that the Board erred by relying on Spencer to find substitute claim 49's requirement of forming apertures "by omitting stitches" was a well-known technique.  According to Nike, the Board violated the APA by failing to give notice that it would rely on Spencer to support its obviousness conclusion for substitute claim 49.  We agree.

    The opinion acknowledges that in Aqua Products it had left open the question of whether the Board could sua sponte raise patentability challenges to claims in a motion to amend.  While further acknowledging that this case presents only a part of this question, the Federal Circuit held that "the Board may sua sponte identify a patentability issue for a proposed substitute claim based on the prior art of record" but "[i]f the Board sua sponte identifies a patentability issue for a proposed substitute claim[] it must provide notice of the issue and an opportunity for the parties to respond before issuing a final decision under 35 U.S.C. § 318(a)."  The Court recognizes that the Board must not be "constrained" to the arguments raised by petitioner, particularly in view of the ability of a petitioner to not oppose a motion to amend (in that case the Office would have no procedural avenue for examining the patentability of claims proposed in the motion).  "It makes little sense to limit the Board, in its role within the agency responsible for issuing patents, to the petitioner's arguments in this context," according to the opinion.  Thus, the Board's consideration of the patentability of claim 49 was not its error, nor was it error to consider for the Board to consider the patentability of claim 49 in view of the Spencer reference teachings, that reference having been made of record in the IPR.  The error was the Board's failure to provide Nike with notice and an opportunity to be heard, under 5 U.S.C. §§ 554(b)(3) and (c)(1).  This is consistent with the Court's prior admonishments that ""an agency may not change theories in midstream without giving respondents reasonable notice of the change and the opportunity to present argument under the new theory," citing SAS Institute, Inc. v. ComplementSoft, LLC, 825 F.3d 1341, 1351 (Fed. Cir. 2016), and Genzyme.  This rubric is also consistent with the Court's decision in In re Magnum Oil Tools Int'l, Ltd., 829 F.3d 1364, 1373 (Fed. Cir. 2016) (that the Board could not hold claims to be unpatentable for obviousness in view of a combination of prior art different from the combination asserted by petitioner) and in In re IPR Licensing, Inc., 942 F.3d 1363, 1369 (Fed. Cir. 2019) (that the Board could not rely on a reference not asserted in the only ground instituted in the petition).  That none of these cases involved a motion to amend did not deter the panel from reaching its decision, the Court affirmatively adopting these "holdings and principles" to apply to Board review of motions to amend.  Again the Court spoke directly to its holding:

    We therefore adopt these holdings and principles to apply in the context of a motion to amend.  Accordingly, we hold that it is appropriate for the Board to sua sponte raise unpatentability grounds based on the IPR record and not be limited to the unpatentability grounds asserted by the petitioner in its petition or opposition to the motion to amend, provided that the Board gives the parties notice and an opportunity to respond.

    Applying this decision to the facts before it, the Court held that the Board had violated these principles in relying on the Spencer reference in determining claim 49 was obvious, and remanded to the Board for further proceedings.  The panel noted that Petitioner Adidas had not made the invalidity argument asserted by the Board against claim 49, nor had it relied upon the Spencer reference (even though both parties had relied on other disclosure in Spencer).  "By including this new theory for the first time in its decision on remand, the Board denied Nike notice of the issues that the Board would consider and an opportunity to address the factual and legal arguments on which the Board's patentability determination would rest," in contravention of 35 U.S.C. § 554(b)–(c) according to the opinion.  Nike had no notice that the Board would rely on the Spencer reference for certain teachings and this was the source of the Board's error, according to the panel, which distinguished the factual predicates here from those in Genzyme.  '[T]he Board's decision here rests exclusively on an argument that the Board itself raised, addressed, and decided in its decision on remand, thereby depriving Nike of 'notice or an opportunity to be heard at a meaningful point in the proceedings'" in the Court's view.  For these reasons the Federal Circuit vacated the Board's obviousness determination that claim 49 was obvious and remanded to the Board for further proceedings.

    Nike, Inc. v. Adidas AG (Fed. Cir. 2020)
    Panel: Circuit Judges Lourie, Chen, and Stoll
    Opinion by Circuit Judge Stoll

  • Impact of COVID-19 Pandemic on Patent Offices and Federal Courts – April 12 UPDATE

    By Donald Zuhn —

    World Health OrganizationOn 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 its situation report for April 12, the WHO indicates that to date there have been 1,696,588 cases globally.  The WHO's declaration last month — and global developments since then — raise the question of how the pandemic has been 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), National Office of Intellectual Property (ONAPI) in the Dominican Republic, Intellectual Property India, National Intellectual Property Office (NIPO) in Sri Lanka, Israel Patent Office, Intellectual Property Office of Vietnam (NOIP), and Directorate General of Intellectual Property (DGIP) in Indonesia, as well as U.S. Federal courts, including, in particular, the Supreme Court and Federal Circuit.  Today we present a summary of procedural changes and deadline extensions being offered by the above patent offices:

    IP Australia

    • 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 can be requested (in the normal way) and will be assessed on a case-by-case basis.

    Instituto Nacional da Propriedade Industrial (INPI) — Brazil

    • Cancelled all in-person meetings until further notice.
    • Postponed deadlines until April 14, 2020.

    Canadian Intellectual Property Office (CIPO)

    • Hearings of the Patent Appeal Board and the Trademarks Opposition Board will take place by telephone and/or teleconference until at least April 30, 2020.
    • Regional offices in Toronto, Vancouver, Edmonton, and Montréal will not be receiving CIPO correspondence until further notice.
    • Initially extended all deadlines falling between March 16 and March 31 to April 1, and then further extended all deadlines to May 1, 2020.

    Oficina Nacional de la Propiedad Industrial (ONAPI) — Dominican Republic

    • Has not provided any deadline extensions as result of COVID-19 pandemic [as far as Patent Docs is aware].

    European Patent Office (EPO)

    • Has extended periods expiring on or after the March 15, 2020 for all parties and their representatives to April 17, 2020.

    Intellectual Property India

    • Has indicated that no filings will be possible until India's nationwide lockdown has been lifted, and that all deadlines will be automatically extended or extendable with petitions.
    • Cases with deadlines on or before April 14, 2020 have been assigned a new deadline of April 15, 2020.

    Directorate General of Intellectual Property (DGIP) — Indonesia

    • Has provided an extension of time for the submission of any formality documents and payment of any annuity fees that fall due between March 23 and April 21, 2020, when the DGIP is scheduled to resume service.

    Israel Patent Office

    • Certain services (recording assignments, licensing new practitioners, notices of formal defects in PCT national stage applications, and daily notices of outgoing correspondence) will be delayed at least until after Passover (April 15, 2020).
    • In-person meetings and proceedings before the ILPTO, including hearings in adjudicatory proceedings, have been suspended until May 1, 2020.
    • Deadlines for filing new applications, responses to office actions, and the like will not be held in abeyance.
    • 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.
    • Caps on the number of extensions have been temporarily waived.
    • Deadlines for PCT national phase entry, for payment of renewal fees, for filing for patent term extensions remain in place.
    • Deadline for filing for PTE remains 90 days from the date of approval by the Israel Ministry of Health.

    Instituto Mexicano de la Propiedad Industrial (IMPI)

    • Has suspended all activities from March 27 to April 19, 2020, precluding ability to file motions until April 20, 2020.
    • Still possible to pre-file applications online, but such applications will have to be digitally signed on April 20, at which time an application number will be assigned by the IMPI.

    Intellectual Property Office of New Zealand (IPONZ)

    • 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 can be requested (in the normal way) and will be assessed on a case-by-case basis.

    National Intellectual Property Office (NIPO) — Sri Lanka

    • Government of Sri Lanka declared a public holiday from March 13-19, 2020 for all non-essential services, and declared the period from March 20-27, 2020 as a period to work from home or remotely for all public sector and private sector personnel.

    United States Patent and Trademark Office (USPTO)

    • Has waived the petition fee pursuant to 37 C.F.R. § 1.17(m) when patent applicant or patent owner files a reply with a petition under 37 CFR 1.137(a) in those instances when patent applicants or patent owners were unable to timely reply to an Office communication due to the effects of the coronavirus outbreak, which resulted in the application being held abandoned or the reexamination prosecution terminated or limited.
    • Has waived requirements for submitting an original handwritten signature personally signed in permanent dark ink or its equivalent for certain correspondence with the Office of Enrollment and Discipline and certain payments by credit card.
    • Pursuant to Coronavirus Aid, Relief, and Economic Security Act (CARES Act), will extend certain deadlines occurring between March 27, 2020 and April 30, 2020 by 30 days from the initial date on which those patent-related documents or fees were due, "provided that the filing is accompanied by a statement that the delay in filing or payment was due to the COVID-19 outbreak."

    Nation Office of Intellectual Property (NOIP) — Vietnam

    • Has limited in-person interviews with IP Vietnam's examiners.
    • Has extended deadlines falling between March 30, 2020 and April 30, 2020 for establishing IP rights for all IP matters (i.e., claiming priority, submitting documents, responding to Decisions/Notifications from IP Vietnam, paying annuity and renewal fees, making payment of relevant fees, filing appeals) to May 30, 2020.

    World Intellectual Property Organization (WIPO)

    • Has suspended the transmittal of PCT documents (e.g., PCT Forms, letters) on paper.
    • The International Bureau will be transmitting documents only via e-mail until further notice.


    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 any changes or updates to the information provided above, as well as any developments related to the COVID-19 pandemic at other patent offices.

    For additional information regarding this and other related topics, please see:

    • "USPTO Answers FAQs on Extension of Patent Deadlines under CARES Act," April 6, 2020
    • "Impact of COVID-19 Pandemic on Patent Offices and Federal Courts – April 2 UPDATE," April 2, 2020
    • "USPTO Announces Extension of Certain Patent Deadlines," March 31, 2020
    • "Impact of COVID-19 Pandemic on Patent Offices and Federal Courts — March 29 UPDATE," March 29, 2020
    • "Impact of COVID-19 Pandemic on Patent Offices and Federal Courts — March 26 UPDATE," March 26, 2020
    • "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

  • CVC Reply No. 1 to Broad’s Opposition No. 1 to CVC’s Motion No. 1 to Be Accorded Benefit of Priority

    By Kevin E. Noonan —

    University of California-BerkleyMarch 23rd was a busy day at the Patent Trial and Appeal Board (PTAB) regarding Interference No. 106,115 between Senior Party The Broad Institute, Harvard University, and the Massachusetts Institute of Technology (collectively, "Broad") and Junior Party the University of California/Berkeley, the University of Vienna, and Emmanuelle Charpentier (collectively, "CVC"), where the parties filed their Reply Briefs to their opponents' Opposition to each parties Motions authorized by the PTAB last summer.  See "CRISPR Interference Parties Propose Motions" and "PTAB Redeclares CRISPR Interference and Grants Leave for Some (But Not All) of Parties' Proposed Motions".  CVC's Motion No. 1 was to be accorded the benefit of priority to three earlier-filed provisional applications.

    To recap, Count 1 of the interference as declared is:

    An engineered, programmable, non-naturally occurring Type II CRISPR-Cas system comprising a Cas9 protein and at least one guide RNA that targets and hybridizes to a target sequence of a DNA molecule in a eukaryotic cell, wherein the DNA molecule encodes and the eukaryotic cell expresses at least one gene product and the Cas9 protein cleaves the DNA molecules, whereby expression of the at least one gene product is altered; and, wherein the Cas9 protein and the guide RNA do not naturally occur together, wherein the guide RNAs comprise a guide sequence fused to a tracr sequence.

    or

    A eukaryotic cell comprising a target DNA molecule and an engineered and/or non-naturally occurring Type II Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR)-— CRISPR associated (Cas) (CRISPR-Cas) system comprising
        a) a Cas9 protein, or a nucleic acid comprising a nucleotide sequence encoding said Cas9 protein; and
        b) a single molecule DNA-targeting RNA, or a nucleic acid comprising a nucleotide sequence encoding said single molecule DNA-targeting RNA; wherein the single molecule DNA-targeting RNA comprises:
            i) a targeter-RNA that is capable of hybridizing with a target sequence in the target DNA molecule, and
            ii) an activator-RNA that is capable of hybridizing with the targeter-RNA to form a double-stranded RNA duplex of a protein- binding segment,
        wherein the activator-RNA and the targeter-RNA are covalently linked to one another with intervening nucleotides; and
        wherein the single molecule DNA-targeting RNA is capable of forming a complex with the Cas9 protein, thereby targeting the Cas9 protein to the target DNA molecule, whereby said system is capable of cleaving or editing the target DNA molecule or modulating transcription of at least one gene encoded by the target DNA molecule.

    CVC was not granted priority to its earliest priority documents (USSN 61/652,086, filed May 25, 2012 (P1); USSN 61/716,256, filed October 19, 2012 (P2): USSN 61/757,640, filed January 28, 2013 (P3)) when this interference was declared, and filed this authorized motion on October 14th to be accorded benefit.  The significance, of course, for CVC should this motion be granted is that CVC and not the Broad would be Senior Party, with all the procedural advantages that status confers (the greatest of which being that CVC would be the presumptive first inventor).

    CVC's Substantive Motion No. 1 argued that it was entitled to priority to its earliest provisional filings, because these applications set forth in detail the disclosure for at least one embodiment falling within the scope of Count 1.  CVC further argued that these priority documents "disclosed, for the first time, that complexes of Cas9 and a double- or single-molecule DNA-targeting RNA . . . are useful for targeted DNA cleavage and described numerous applications of this gene-editing technology, including modifying target DNA in eukaryotic cells" and that "[t]he CVC inventors immediately understood that the CRISPR-Cas9 DNA-cleavage complex could be used in a variety of different cellular and noncellular settings."  The brief recited (prophetic) Example 1 in the P1 specification, asserting that the failure of the P1 specification to show actual reduction to practice is not required to satisfy the requirement for entitlement benefit.  According to CVC:

    [A person of ordinary skill in the art] reading P1 in light of the state of the art at the time of filing would have understood that the application describes and enables at least one embodiment within the scope of Count 1.  Moreover, post-filing-date publications report successfully practicing CVC's claimed invention in eukaryotes using the very methods and components that P1 describes.  The Board should therefore accord CVC the benefit of P1's May 25, 2012 filing date with respect to Count 1.

    CVC's brief in support of Substantive Motion No. 1 to be accorded priority benefit to these provisional applications tracked (in large part) its arguments regarding priority to these provisional application if the Board granted the Broad's motion to substitute its Proposed Count No. 2, the Broad's Opposition brief tracked the same arguments made in its Opposition to CVC's Motion to be accorded benefit to these priority documents for Proposed Count 2 here with regard to Count 1 in the interference as declared.  Broadly stated, these arguments were: "(1) the PTAB's fact findings in the [earlier] 048 interference" (which the Broad argues are binding in this interference) and "(2) an independent assessment of the evidence of record."

    In its Reply, CVC argues that "Broad asserts arguments founded on legal and factual inaccuracies:

    (i) Broad misconstrues blazemarks law by importing into the count elements that simply are not present, and Broad ignores P1's clear blazemarks;
    (ii) Broad requires a working example for written description despite the clear legal precedent that neither examples nor actual reduction to practice is required;
    (iii) Broad post-hoc fabricates reasons—with no credible evidence—that a POSA would have expected P1 to disclose "unique conditions" for using CRISPR-Cas9 in eukaryotes for adequate written description; and
    (iv) Broad distorts the legal standard for constructive reduction to practice by conflating obviousness with written description and enablement, arguing that adequate written description and enablement must provide a POSA with a reasonable expectation of success.

    CVC argues in its Reply that it disclosed three "example embodiments" in P1 that fell within the scope of Count 1:  a fish cell (E1), a human cell (E2), and a fruit fly cell (E3).  CVC argues that P1 provides a written description for each embodiment, and that this description in conjunction with the general knowledge in the art would have enabled a person having ordinary skill in the art (POSA) in 2012 to make and use each embodiment without undue experimentation, that each embodiment meets all the limitations of Count 1, and that this was sufficient for CVC to be entitled to the benefit of priority to the invention set forth in Count 1, citing Falkner v. Inglis, 448 F.3d 1357, 1362 (Fed. Cir. 2006); Storer v. Clark, 860 F.3d 1340, 1345 (Fed. Cir. 2017); 37 C.F.R. § 41.201.

    CVC argues that the Broad's arguments regarding putative insufficiencies in it P1 priority application conflate the requirements for obviousness, particularly the "reasonable expectation of success" under which the Broad prevailed in the earlier interference between these parties (Interference No. 106,048) and the enablement requirement under 35 U.S.C. § 112(a) and In re Wands, 858 F.2d 731, 739 (Fed. Cir. 1988), that the disclosure be sufficient that the invention can be practiced by one having ordinary skill in the art without undue experimentation.  CVC argues that the Broad's arguments are legally deficient:

    Blazemarks cases deal with situations where the applicant made specific selections from multiple long lists to arrive at a specific, narrowly claimed invention, such as a specific compound, plasma concentration, or specific mutation.  In re Ruschig, 379 F.2d 990, 993 (CCPA 1967); Purdue Pharma v. Faulding Inc., 230 F.3d 1320, 1327 (Fed. Cir. 2000); and Novozymes v. DuPont Nutrition Biosci., 723 F.3d 1336, 1348 (Fed. Cir. 2013).  These cases demonstrate that blazemarks are merely a tool to assess written description support for a claim.  This tool provides a backstop of objective proof that a POSA would recognize in the specification the claimed subject matter, and prevents hindsight selection of narrow subject matter to demonstrate that the Applicants possessed the invention.  The tool is inapt where, as here, (1) the features are not an element of the count, and (2) Broad has not presented evidence that alternative features (e.g. alternative eukaryotic cells, target sequences, or delivery methods) are inoperable.  See Novozymes, 723 F.3d at 1350.

    CVC further argues that the POSA at the time the P1 priority document was filed would have understood, from the P1 disclosure, that the CRISPR-Cas9 systems described therein could be performed in vitro, in a prokaryotic cell, and in a eukaryotic cell, by explicit disclosures thereof.  The Reply brief cites expressly in support of this argument the disclosure of CRISPR-Cas9 systems in Example 1, which include "a fish cell, human cell, and fruit fly cell."  CVC also cites the disclosure of claim 67 of P1, which recites a method of using the CRISPR-Cas system in a vertebrate cell, and notes that there are "only five types of vertebrate cells [as disclosed] in paragraph [00165]:  "a cell from a vertebrate animal (e.g., fish, amphibian, reptile, bird, mammal)."  As for disclosure of practice of CRISPR in human cells, the Reply brief cites Claim 69 of P1, which is directed to a method of using the CRISPR-Cas system in a human cell.  Finally, CVC cites the "[n]umerous researchers [who] used materially the same components and methods disclosed in P1 to make embodiments of Count 1" after the P1 priority date, which CVC states "confirm[s] enablement."

    The Reply Brief also takes to task Broad's expert witness, Dr. Mirkin, who "is woefully unqualified to provide expert testimony on gene-editing systems from the viewpoint of a POSA in 2012," according to CVC.  At least one basis for this allegation of professional incompetence cited by CVC is that "Dr. Mirkin's research focus is nanoparticles—not CRISPR or any other type of gene editing."  Further, CVC was able to elicit under cross-examination that "Dr. Mirkin admitted he had not published any gene editing papers before May 2012, has never personally performed any CRISPR laboratory research, and none of his numerous scientific publications concerns CRISPR."  CVC also alleges that "Dr. Mirkin's testimony is fraught with conclusory statements and speculation, contravening 37 C.F.R. § 41.158(a) ("[e]xpert testimony that does not disclose the underling facts or data on which the opinion is based is entitled to little or no weight.").

    Turning to specific testimony, CVC asserts that Dr. Mirkin's consideration of certain portions of P1 was "myopic," and cites testimony where the expert "admitted" that he only reviewed "a select four paragraphs of Example 1 in P1," and stated that his testimony was "based on my review paragraphs [00248]-[00251] [that] do not disclose) any . . . 'blazemarks'" for performing CRISPR in eukaryotic cells.  According to CVC, "Dr. Mirkin ignored other disclosures in P1 that clearly describe using the CRISPR-Cas9 systems in eukaryotic cells."

    Citing his deposition testimony, CVC asserts that "Dr. Mirkin could not dispute the following facts:

    • P1 discloses that the RNAs used in Example 1's CRISPR-Cas9 systems are "DNA-targeting RNAs" and that Example 1's SpCas9 protein is a "site-directed modifying polypeptide" . . . ;

    • P1 discloses that the "subject methods" of the application involve "contacting a target DNA with a complex" comprising "a DNA-targeting RNA and a site-directed modifying polypeptide" . . . ;

    • P1 discloses that "the subject methods may be employed to induce DNA cleavage and DNA modification in mitotic or post-mitotic cells" which include a "eukaryotic cell," and P1 explicitly identifies a "fish," "human," and "fruit fly" cell – all of which are indisputably eukaryotic cells . . . ; and

    • P1 expressly claims using CRISPR-Cas systems in a vertebrate cell (claim 67), a mammalian cell (claim 68), and a human cell (claim 69) . . . ."

    The Reply brief concludes with CVC refutation of the Broad's arguments as merely being an attempt to apply its (and the Board's) obviousness determination in the '048 Interference to the current interference, which is error due to the different evidentiary showings between the two Interferences, and misreads the holding on In re Wright, 866 F.2d 422 (Fed. Cir. 1989), regarding the evidentiary standards for establishing enablement.

  • Conference & CLE Calendar

    CalendarApril 14, 2020 – "What's in the Trump Trade Agreements regarding Intellectual Property?" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT)

    April 14, 2020 – "Innovation in the Age of COVID-19: The Future of Drug Repurposing, Diagnostics, Ventilators, Personal Protective Equipment and More" (LexisNexis® and IPWatchdog) – 11:00 am to 1:00 pm (EDT)

    April 16, 2020 – "The Impact of COVID-19 on Patent Prosecution and Examination" (Intellectual Property Owners Association) – 12:00 to 1:00 pm (ET)

    April 16, 2020 – "Increased IP Liability and Trade Secret Theft Risk During A Downturn Economy" (AON and IPWatchdog) – 11:00 am to 1:00 pm (EDT)

    April 21, 2020 – "Dosage Patents in the UK, Europe and Beyond" (J A Kemp) – 15:30 to 16:30 pm GMT

  • IPO Webinar on Impact of COVID-19 on Patent Prosecution and Examination

    IPO #2The Intellectual Property Owners Association (IPO) will offer a one-hour webinar entitled "The Impact of COVID-19 on Patent Prosecution and Examination" on April 16, 2020, from 12:00 to 1:00 pm (ET).  Thomas Gibb of Murgitroyd; Laura Peter, Deputy Director of the U.S. Patent and Trademark Office, and Michael Richardson, director of the PCT Business Development Division of the World Intellectual Property Organization (WIPO) will discuss the latest information regarding the measures being undertaken by patent offices around the world and how these will impact patent prosecution and examination.

    There is no registration fee for IPO members for this webcast (the fee for non-members is $150).  Additional information regarding the webcast can be found here.

  • Webinar on Innovation in Age of COVID-19

    LexisNexisLexisNexis® and IPWatchdog will be offering a webinar on "Innovation in the Age of COVID-19: The Future of Drug Repurposing, Diagnostics, Ventilators, Personal Protective Equipment and More" on April 14, 2020 from 11:00 am to 1:00 pm (EDT).  Jeff Blumenfeld of Lowenstein Sandler, Orin Herskowitz of Columbia University and Columbia Technology Ventures (CTV), Phil Johnson of Johnson-IP Strategy & Consulting, David Kappos of Cravath, Gaby L. Longsworth of Sterne Kessler Goldstein & Fox, Hon. Chief Judge Paul Michel, Gene Quinn of IPWatchdog.com, and Robert Greene Sterne of Sterne Kessler Goldstein & Fox will discuss the COVID-19 pandemic, the science, what governments are doing, policies that could and should be adopted in order to be in a better position for the next pandemic, or if/when COVID-19 returns, and what you and your team, firm, or corporation may be able to do to contribute to this unique global effort.

    There is no registration fee for this webinar.  However, those interested in registering for the webinar, should do so here.

  • Webinar on Increased IP Liability and Trade Secret Theft Risk

    AONAON and IPWatchdog will be offering a webinar on "Increased IP Liability and Trade Secret Theft Risk During A Downturn Economy" on April 16, 2020 from 11:00 am to 1:00 pm (EDT).  Gene Quinn of IPWatchdog.com and Brian Hinman and Nick Chmielewski of Aon Intellectual Property Solutions will discuss the ways that companies can assess and mitigate IP risk during the very challenging and disruptive global economic climate brought about by the COVID-19 virus situation.

    There is no registration fee for this webinar.  However, those interested in registering for the webinar, should do so here.

  • Webinar on Dosage Patents

    J A KempJ A Kemp will be offering a webinar entitled "Dosage Patents in the UK, Europe and Beyond" on April 21, 2020 from 15:30 to 16:30 pm GMT (Greenwich Mean Time).  Amanda Simons and Ravi Srinivasan of J A Kemp will consider the law surrounding dosage patents at the EPO and in the UK and the strategic questions which are raised by the Actavis v ICOS decision, and also look at how this issue is dealt with in other jurisdictions.  Topics to be covered will include:

    • Background to the law on dosage patents at the EPO and in the UK
    • Summary of the Actavis v ICOS decision of the Supreme Court
    • Discussion of how to manage the difference in approach around Europe
    • Review of the global position on dosage patents

    Those wishing to register can do so here.