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  • IPO Webinar on the New PTAB Landscape

    IPO #2The Intellectual Property Owners Association (IPO) will offer a one-hour webinar entitled "A New PTAB Landscape: The Impact of SAS, Recent Federal Circuit Decisions, and the Proposed Change to the BRI Standard" on May 31, 2018 from 2:00 to 3:00 pm (ET).  Hon. David Ruschke, Chief Judge of the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office; Gregory Castanias of Jones Day; and Erika Arner of Finnegan, Henderson, Farabow, Garrett & Dunner, LLP will discuss the path ahead after the recent host of major developments that will affect PTAB practice, including tips on how to build a successful appeal that results in remand or reversal, the impact of Federal Circuit decisions on PTAB practice, and how to try to convince the PTAB to change its mind about invalidating a patent on remand.

    The registration fee for the webinar is $135 (government and academic rates are available upon request).  Those interested in registering for the webinar can do so here.

  • Webinar on Impact of Oil States and SAS Institute

    IAMIAM will be offering a free webinar on "The Impact of Oil States and SAS Institute on Your PTAB Strategy" on May 29, 2018 starting at 4:00 (BST).  IAM North America editor Richard Lloyd will moderate a roundtable discussion of attorneys from Oblon, McClelland, Maier & Neustadt; Knobbe Martens; and Finnegan, Henderson, Farabow, Garrett & Dunner to discuss the implications of the Supreme Court's decision in decisions in Oil States v Greene's Energy and SAS Institute v Iancu and how they will affect the Patent Trial and Appeal Board (PTAB), inter partes review petitioners, and patent owners.  The roundtable will address the following topics:

    • Key takeaways from both the majority and dissenting opinions in Oil States
    •     Where the decision in Oil States leaves further challenges to inter partes reviews
    • The likely impact of SAS on petitioners and patent owners
    • How the PTAB intends to implement SAS
    •     The long-term effects on PTAB strategy for both petitioners and patent owners
    • The likely impact of a move away from broadest reasonable interpretation to the Philips claim construction standard in post-issuance reviews

    Those interested in registering for the webinar, can do so here.

  • Program Offers Views on Patent Cases from the Chambers

    Federal Circuit Bar AssociationThe Federal Circuit Bar Association, Virginia Bar Association IP Department, Maryland State Bar Association IP Department, and Bar Association of the District of Colombia IP Department will be hosting a program entitled "Views on Patent Cases from the Chambers — PTAB, VA, and MD" on June 7, 2018 at Eastern District of Virginia courthouse in Alexandria, VA.  A panel consisting of Chief Judge David Ruschke of Patent Trial and Appeal Board, U.S. Patent and Trademark Office; Magistrate Judge John F. Anderson, Eastern District Court of Virginia; District Judge Liam O'Grady, Eastern District Court of Virginia; and District Judge Marvin J. Garbis, District Court of Maryland will each provide insight into the day-to-day operations of their chambers and how they handle patent cases and answer questions from attendees.

    Additional information regarding the program can be found here.  The registration fee for the program is $25 (members of the sponsoring bar associations and non-members); there is no registration fee for jduges or students.  Those interested in registering for the conference can do so here.

  • Webinar on Secondary Considerations at the PTAB

    Strafford #1Strafford will be offering a webinar entitled "Secondary Considerations at the PTAB: Combating Obviousness Challenges, Establishing Nexus" on June 14, 2018 from 1:00 to 2:30 pm (EDT).  Matthew L. Fedowitz, Philip L. Hirschhorn, and Christopher M. Cherry of Buchanan Ingersoll & Rooney will guide patent counsel on the use of secondary considerations at the Patent Trial and Appeal Board (PTAB), examine what works and what does not when seeking to defeat validity challenges, review Federal Circuit decisions addressing secondary considerations evidence presented in an IPR trial, and offer best practices for arguing secondary considerations at the PTAB.  The webinar will review the following issues:

    • What lessons can be learned from cases where secondary considerations successfully defeated validity challenges?
    • What trends can be observed from unsuccessful attempts when using secondary considerations?
    • How have the federal courts addressed secondary considerations?

    The registration fee for the webcast is $297.  Those interested in registering for the webinar, can do so here.

  • Webinar on Protecting Software as a Medical Device

    Strafford #1Strafford will be offering a webinar entitled "Protecting Software as a Medical Device: Patents, Design Patents and Trade Secrets" on June 19, 2018 from 1:00 to 2:30 pm (EDT).  Cory C. Bell, Elizabeth D. Ferrill, and Susan Y. Tull of Finnegan Henderson Farabow Garrett & Dunner will guide counsel for companies in the medical device industry on protecting software as a medical device (SaMD), and discuss the new FDA rules regulating SaMD and how to leverage IP law to protect SaMD.  The webinar will review the following issues:

    • What are the hurdles for patent counsel to demonstrate a software-related claim is not abstract?
    • What factors should counsel consider when determining what type of IP protection to seek?
    • What guidance have the courts provided in recent decisions concerning patent eligibility for software-related inventions?

    The registration fee for the webcast is $297.  Those interested in registering for the webinar, can do so here.

  • AIDS Healthcare Foundation, Inc. v. Gilead Sciences, Inc. (Fed. Cir. 2018)

    By Kevin E. Noonan —

    Federal Circuit SealEver since the Supreme Court loosened the reins on declaratory judgment actions in patent cases twelve years ago, in MedImmune v. Genentech, courts have decided cases fleshing out the metes and bounds of the factual predicates thereof.  One of the most persistent questions is what is the extent to which a declaratory judgment plaintiff can base the action not on traditional grounds (such as those between competitors for a patented product) but rather on the effects of patents on consumers or beneficiaries of a patented compound; these questions have arisen with greatest vigor over patented drug products.  The public policy issues surrounding drug costs and regulation, and those of the proper interplay with patent law was considered by the Federal Circuit (and rejected) in AIDS Healthcare Foundation, Inc. v. Gilead Sciences, Inc. earlier this month.

    The case arose when AIDS Healthcare Foundation (AHF) filed suit against defendants Gilead Sciences, Inc., Japan  Tobacco Inc., Johnson & Johnson, and Janssen Sciences Ireland UC over various drugs comprising the anti-HIV compound tenofovir alafenamide fumarate ("TAF") used in the treatment of AIDS.  Such drugs included TAF itself (sold as Genvoya®) as well as several embodiments comprising assorted other antiviral drugs (including Descovy® and Odefesey®).  Each defendant was either an owner of a patent relating to these drugs or licensee of such patents.  AHF provides healthcare to AIDS patients, including TAF-comprising drugs.  In filing its declaratory judgment action, AHF frankly stated that it was interested in "clear[ing] out the invalid patents" to enable generic drug companies to enter the marketplace as soon as possible; to that end AHF filed this action a mere two months after the FDA approved Genvoya® and thus almost four years before a generic competitor could file an Abbreviated New Drug Application.  AHF's justification for taking this preemptive strike so early was the "lengthy time consumed by litigating patent validity"; the opinion notes that it was "undisputed that no unlicensed source was offering a TAF product or preparing to do so when this declaratory action was filed."  AHF freely admitted that it was a consumer of AIDS treatment products and would not be involved in manufacturing any generic equivalents of any of the drugs protected by the patents-in-suit.

    The District Court dismissed AFH's declaratory judgment complaint on these grounds, that "encouraging others to produce generic TAF products in the future, and Healthcare's interest in purchasing such products," did not satisfy the "case or controversy" requirements for declaratory judgment relief.  This appealed followed.

    The Federal Circuit affirmed, in a precedential opinion by Judge Newman joined by Judges Dyk and Stoll.  The opinion notes at the outset the jurisdictional implications of AHF's complaint, and that a court is without authority to render a judgment unless the jurisdictional requirements are satisfied (which is complainant's burden to carry).  The facts comprising this burden are that there is "injury-in-fact, [a] connection between the challenged conduct and the injury, and redressability by the requested remedy," the Court citing Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 103–04 (1998).  The mere existence of a patent is not enough, without more, to establish these grounds.

    The panel rejected the three bases for jurisdiction asserted by AHF on appeal:

    (1) Healthcare is an indirect infringer of the TAF patents based on its requests to potential producers to provide the patented products;

    (2) Gilead's non-response to Healthcare's request for a covenant not to sue created a present controversy; and

    (3) public policy favors invalidation of invalid patents and thus the testing of "weak" patents.

    The facts adduced before the District Court did not establish that "under all the circumstances, []here is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment" as required under MedImmune Inc. v. Genentech, Inc., 549 U.S. 118, 127 (2007) (quoting Maryland Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941)).  The alleged lengthy time incurred by patent litigation was not enough, according to the opinion, to provide the required "immediacy and reality" because there was no current infringement (or preparation for infringing activity) and thus no threat of patent infringement litigation.  "If a declaratory judgment plaintiff has not taken significant, concrete steps to conduct infringing activity, the dispute is neither 'immediate' nor 'real' and the requirements for justiciability have not been met," according to the opinion, citing  Cat Tech LLC v. Tubemaster, Inc., 528 F.3d 871, 880 (Fed. Cir. 2008).  And "the mere possibility of future infringement does not meet the immediacy and reality criteria, for '[a] party may not obtain a declaratory judgment merely because it would like an advisory opinion,'" citing Matthews Int'l Corp. v. Biosafe Eng'g, LLC, 695 F.3d 1322, 1328 (Fed. Cir. 2012).  Here, AHF was only an "encourager" of future infringing activity and a future consumer of any  product resulting therefrom, and this was not enough to satisfy the "immediacy and reality" requirement.  And the Federal Circuit notes the procedures constituting the Hatch-Waxman generic drug regime (including the filing of an ANDA) none of which had occurred.

    Moreover, AHF alleged activities that at most would incur infringement liability for inducing infringement under 35 U.S.C. § 271(b).  However such liability depends on there being a direct infringer under § 271(a), and because of the lack of an ANDA filer or any party as a direct infringer, this basis also failed to establish declaratory judgment jurisdiction.  AHF had solicited third parties to produce a generic (and infringing) version of TAF-containing anti-AIDS drugs.  But no party had responded to AHF (they "elicited no response from the solicited pharmaceutical manufacturers") by taking steps to produce such infringing products, and under these circumstances AHF's supplications were not enough to establish declaratory judgment jurisdiction.  And AHF's role as a purchaser was also not enough, the opinion stating that "[s]uch an economic interest alone, however, cannot form the basis of an 'actual controversy' under the Declaratory Judgment Act," citing Creative Compounds, LLC v. Starmark Labs., 651 F.3d 1303, 1316 (Fed. Cir. 2011) (quoting Microchip Tech. Inc. v. Chamberlain Group, Inc., 441 F.3d 936, 943 (Fed. Cir. 2006)).  The Federal Circuit agreed with the District Court that "a potential customer's interest in buying infringing product does not create present liability for induced infringement," citing Arris Grp., Inc. v. British Telecomms. PLC, 639 F.3d 1368, 1374–75 (Fed. Cir. 2011).

    Finally, the Federal Circuit rejected AHF's argument that it had established that its legal interests were adverse to any of the defendants or that this created an existing controversy.  Once again, the Court relied on its Arris precedent that an adverse economic interest was by itself insufficient to support declaratory judgment jurisdiction.

    The panel also affirmed the District Court's holding that Defendants' refusal to grant AHF a covenant not to sue did not support declaratory judgment jurisdiction, even in light of Gilead's alleged known penchant for protecting its patent rights.  Citing BP Chems. Ltd. v. Union Carbide Corp., 4 F.3d 975, 980 (Fed. Cir. 1993) and SanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d 1372, 1380–81 (Fed. Cir. 2007), the panel held that this by itself (i.e., in the absence of any affirmative actions by Defendants) was not enough ("[D]eclaratory judgment jurisdiction generally will not arise merely on the basis that a party learns of the existence of a patent owned by another or even perceives such a patent to pose a risk of infringement, without some affirmative act by the patentee." (emphasis added)).  And the Court rejected out of hand the policy considerations, for access to generic drugs, as being properly within the scope of the Hatch-Waxman regulatory regime, which provides "a balance of several policy interests, seeking to preserve the patent incentive to invent new drugs, while enabling validity challenge by ANDA filers before actual infringement occurs," citing Andrx Pharm., Inc. v. Biovail Corp., 276 F.3d 1368, 1371 (Fed. Cir. 2002).

    The entirety of the Federal Circuit's opinion reinforces the focus since MedImmune on the totality of the circumstances (rather than some bright line formula) as the proper measure of whether a declaratory judgment plaintiff has alleged sufficiently for a court to find declaratory judgment jurisdiction has been established.  Using this approach, while lacking the consistency of a bright line rule appears robust enough to prevent expansion of declaratory judgment jurisdiction into the realm of permitting public or patient interest groups interested in promoting their agendas onto the patent and regulatory frameworks for innovator and generic drugs, regardless of any purported societal benefits these groups may assert in support of their efforts.

    AIDS Healthcare Foundation, Inc. v. Gilead Sciences, Inc. (Fed. Cir. 2018)
    Panel: Circuit Judges Newman, Dyk, and Stoll
    Opinion by Circuit Judge Newman

  • Ex parte Hakkani-Tur (PTAB 2018)

    PTAB Affirms Patent Eligibility of Claims for Training a Spoken Language Understanding Classifier

    By James Korenchan —

    USPTO SealIn a decision issued earlier this month, the U.S. Patent and Trademark Office Patent Trial and Appeal Board reversed the final rejection of all twenty pending claims in U.S. Application No. 14/846,486, for which the real party in interest is Microsoft.  The claims at issue are directed to a system that trains a spoken language understanding (SLU) classifier based on user intent gleaned from user utterances (i.e., spoken natural language sentences and phrases, such as "send Mom an email").  In particular, the claimed invention involves collecting a variety of user utterances and semantically parsing the utterances (i.e., mapping the utterances into machine-understandable representations of their respective meanings) to generate a single graph that represents all the utterances in the form of nodes.  The claimed invention then involves clustering (i.e., grouping) the utterances by similar user intent, and using the resulting groups to train the SLU classifier.

    The claims had been rejected under 35 U.S.C. § 101 as reciting patent ineligible subject matter in the form of a mathematical calculation.  Representative claim 1 is as follows, and the other independent claims recite similar limitations:

    1.  A system for training a spoken language understanding (SLU) classifier, comprising:

    one or more computing devices, said computing devices being in communication with each other via a computer network whenever there is a plurality of computing devices; and

    a computer program having program modules executable by the one or more computing devices, the one or more computing devices being directed by the program modules of the computer program to,

    receive a corpus of user utterances,

    for each of the user utterances in the corpus,

    semantically parse the user utterance, and


    represent the result of said semantic parsing as a rooted semantic parse graph,


    combine the parse graphs representing all of the user utterances in the corpus into a single corpus graph that represents the semantic parses of the entire corpus and comprises a root node that is common to the parse graph representing each of the user utterances in the corpus,

    cluster the user utterances in the corpus into intent-wise homogeneous groups of user utterances, said clustering comprising finding subgraphs in the corpus graph that represent different groups of user utterances, each of said different groups having a similar user intent, each of the subgraphs being more specific than the root node alone and more general than the full semantic parses of the individual user utterances,

    use the intent-wise homogeneous groups of user utterances to train the SLU classifier, and

    output the trained SLU classifier.

    With the two-part Alice framework in mind, the key point of contention between the Appellant and the Examiner was whether the claim limitations involving the feature of clustering utterances based on user intent (referred to by the Appellant as "utterance intent clustering") are similar to the claim limitations at issue in McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1316 (Fed. Cir. 2016), and thus whether the reasoning in McRO applies in the present case.  To this point, the Appellant argued that, similar to McRO, the claims focus on a specific improvement to a SLU subsystem that is not used by other SLU systems.  The Appellant also argued that the utterance intent clustering feature recited by the claims is used to determine user intent in a way that is not found in conventional spoken dialog computing systems.  For these reasons, the Appellant asserted that the claims amount to significantly more than any abstract idea.

    The Examiner's arguments in support of the § 101 rejection were threefold.  First, the Examiner plainly disagreed that the reasoning in McRO is applicable to the claims at issue.  Second, the Examiner asserted that the utterance intent clustering is a mathematical calculation, and thus the improvement is not to a computer or other technology, but rather to the calculation itself.  Third, in citing to various portions of App. No. 14/846,486 for alleged support, the Examiner asserted that SLU classifiers themselves are mathematical calculations, and thus that any limitations directed to training a SLU classifier are merely field of use limitations and do not add significantly more to the abstract idea of utterance intent clustering.

    But the Board disagreed with the Examiner on all three points.  The Board was quick to note that, although the portions of App. No. 14/846,486 cited by the Examiner might describe mathematical calculations, they do not discuss an SLU classifier, but rather discuss a method of developing the graph used to train the SLU classifier.  In addition, the Board stated that the last two steps of claim 1 are more than just field of use limitations.

    Yet the Board's reasoning for finding the claims patent-eligible was focused on differentiating the claims from those in McRO.  In McRO, the patent-eligible claims were directed to a system of automating facial animation through the use of a specific set of rules.  The McRO court found the claimed rules-based process was not the same as facial animation processes conventionally performed by human animators, and thus that the rules-based process provided a technological improvement and limited the claims to a specific, non-abstract animation process.  In addition, the McRO court went as far to state that "processes that automate tasks that humans are capable of performing are patent eligible if properly claimed."

    Here, although the claimed utterance intent clustering involves mathematical operations, the Examiner did not show that the utterance intent clustering is a process conventionally performed by humans.  In fact, as the Board was sure to note, Appellant's own specification describes how the claimed utterance intent clustering differs from (and improves upon) conventional processes where spoken dialog applications incorporate "a pre-determined set of domains and user intents that are manually designed by domain experts."  Before concluding that the claims are directed to patent-eligible subject matter, the Board provided an additional comparison to McRO:

    Further, similar to McRO, the claims do not merely organize information into a new form.  Rather, the utterance intent clustering limitation recites a specific order of steps (parsing utterances, combining all utterances into one graphs with a common root node, and then clustering into intent-wise homogeneous groups) that renders the information in a specific format used to create the desired results.  McRO, 837 F.3d at 1315.  The utterance intent clustering limitation, which produces intent-wise homogeneous groups that are then used to train the SLU classifier, is improving a technological process, as it is improving a specific process by which an SLU classifier is trained.

    This decision is somewhat reminiscent of another statement by the McRO court which was not mentioned here by the Board — particularly that "processes that automate tasks that humans are capable of performing are patent eligible if properly claimed."  Proper claiming of such processes is a line delicately walked by applicants operating in a variety of fields, and the buzzword "machine learning" certainly comes to mind in reading this decision.  Classification and training are leading aspects of machine learning, and the Board's decision here gives further insight into how some panels at the Patent Office handle claims in this realm.

    Ex parte Hakkani-Tur (PTAB 2018)
    Panel: Administrative Patent Judges Allen R. MacDonald, Robert E. Nappi, and James W. Dejmek
    Decision on Appeal by Administrative Patent Judge Nappi

  • Genetic Veterinary Sciences, Inc. v. LABOklin GmbH (E.D. Va. 2018)

    By Donald Zuhn —

    District Court for the Eastern District of VirginiaEarlier this month, in Genetic Veterinary Sciences, Inc. v. LABOklin GmbH, Senior District Judge Henry Coke Morgan, Jr. of the U.S. District Court for the Eastern District of Virginia granted a motion for judgment as a matter of law under Rule 50 of the Federal Rules of Civil Procedure filed by Plaintiff Genetic Veterinary Sciences, Inc. (doing business as Paw Prints Genetics) that claims 1-3 of U.S. Patent No. 9,157,114, which is assigned to Defendant University of Bern, are invalid under 35 U.S.C. § 101.  Genetic Veterinary Sciences ("GVS") had initiated the dispute between the parties by filing a complaint for declaratory judgment of invalidity and noninfringement of the '114 patent.

    The '114 patent, which is entitled "Method of determining the genotype relating to hereditary nasal parakeratosis (HNPK) and nucleic acids usable in said method," is directed to in vitro methods for genotyping a Labrador Retriever in order to determine whether the Labrador Retriever is a genetic carrier of Hereditary Nasal Parakeratosis ("HNPK"), which causes fissures to appear on a dog's nose.  Claims 1-3, which were at issue in this case, recite:

    1.  An in vitro method for genotyping a Labrador Retriever comprising:
        a) obtaining a biological sample from the Labrador Retriever;
        b) genotyping a SUV39H2 gene encoding the polypeptide of SEQ ID NO: 1 and
        c) detecting the presence of a replacement of a nucleotide T with a nucleotide G at position 972 of SEQ ID NO: 2.

    2.  The method according to claim 1, wherein the genotyping is achieved by PCR, real-time PCR, melting point analysis of double-stranded DNA, mass spectroscopy, direct DNA sequencing, restriction fragment length polymorphism (RFLP), single strand conformation polymorphism (SSCP), high performance liquid chromatography (HPLC), or single base primer extension.

    3.  The method of claim 1, wherein the genotyping utilizes a primer pair comprising a first primer and a second primer, each comprising a contiguous span of at least 14 nucleotides of the sequence SEQ ID NO: 2 or a sequence complementary thereto, wherein:
        a) said first primer hybridizes to a first DNA strand of the SUV39H2 gene;
        b) said second primer hybridizes to the strand complementary to said first DNA strand of the SUV39H2 gene; and
        c) the 3' ends of said first and second primers are located on regions flanking the position 972 of SEQ ID NO: 2, or of nucleotide positions complementary thereto.

    Prior to trial, GVS filed a motion for summary judgment regarding validity of the '114 patent, which the District Court denied.  GVS then filed a motion for reconsideration of the Court's denial of its motion for summary judgment, which the District Court also denied.  At trial, following the close of GVS' evidence, LABOklin moved for judgment as a matter of law, arguing that no reasonable juror could find claims 1-3 of the '114 patent invalid.  The District Court denied LABOklin's motion.  After the close of LABOklin's evidence, GVS moved for judgment as a matter of law that claims 1-3 were invalid as not patent eligible, which the District Court granted.

    In assessing the patent eligibility of claims 1-3 of the '114 patent, the District Court noted that the analysis follows the two-step framework set forth by the Supreme Court in Alice Corp. Ptv. Ltd. v. CLS Bank Int'l (2014).  Pursuant to that framework, courts first determine whether the claims at issue are directed to a patent-ineligible concept, and if so, then consider the elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the claim into a patent-eligible application.  The District Court noted that this second step "represents a 'search for an 'inventive concept''—i.e., an element or combination of elements that is 'sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.'"

    In applying the Alice two-step framework to the claims at issue, the District Court "[r]eview[ed] Claim one (1) individually, and then as an ordered combination with Claims two (2) or three (3)," and determined that "Claim one (1) of the '114 Patent, even in combination with Claims two (2) and three (3), is directed to patent ineligible subject matter, namely the discovery of the genetic mutation that is linked to HNPK."  The Court noted that as in Ariosa Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. 2015), "[s]imilarly here, the methods claimed in the '114 patent begin and end with the discovery of a natural phenomenon," adding that "[t]he fact that the research to which the patent refers is conducted in a lab [i.e., noting that claim 1 recites an in vitro method] does not form a basis for transforming the discovery of a law of nature into patent eligible subject matter."  According to the Court, "[p]arts (a), (b), and (c) of Claim 1, which break down how the mutation is discovered, do not provide anything apart from the scientific designation of the mutation," and "the mutation of the SUV39H2 gene at position 972 in a Labrador Retriever arises through a natural process."

    In response to GVS' motion, LABOklin argued that claims 1-3 were patent eligible in view of the Federal Circuit's decisions in Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals Int'l Ltd., and Rapid Litigation Management Ltd. v. CellzDirect, Inc.  The District Court noted that in Vanda, the Federal Circuit reasoned that the patent claim at issue "was distinguishable from a patent claim that was aimed at a natural phenomenon because the claim did more than simply recite how to discover the correlation between CYP2D6 and iloperidone, it additionally applied that discovery to a particular regimen of treatment."  According to the Court, however, "Vanda is distinguishable from this case because the '114 Patent does not claim a method of applying the discovery—the presence a point mutation in the SUV39H2 gene—to a new method of treating Labrador Retrievers."

    As for LABOklin's reliance on CellzDirect, the District Court indicated that this too was "misplaced."  The Court noted that in CellzDirect, "the Federal Circuit held that a claim was not directed to natural law when it claimed a 'new and useful laboratory technique for preserving hepatocytes,'" and that "[t]he Federal Circuit was careful to distinguish its ruling from other cases where claims amounted to nothing more than 'observing or identifying the ineligible concept itself.'"  According to the Court, "Claim 1 of the '114 Patent is not a new and useful laboratory technique," and "amounts to nothing more than 'observing or identifying' the natural phenomenon of a mutation in the SUV39H2 gene, which has been rejected by the Federal Circuit as a basis for satisfying Step 1 of Alice."

    The opinion concludes by finding that contrary to the testimony of LABOklin's expert that claim 1 of the '114 patent recites a patentable method of discovery, "the evidence does not support Dr. Friedenberg's opinion that paragraphs (a), (b), and (c) of Claim 1 constitutes a method."  In particular, the District Court determined that:

    [P]aragraphs (a) through (c) merely provide the supplying of Labrador DNA in part (a), point to the location of the mutation in dog's DNA in (b), and in (c) describe and locate the point mutation.  These three paragraphs constitute a discovery of a natural phenomenon, not a method.

    With respect to claims 2 and 3, the District Court noted these claims "only contain a number of alternative methods to locate the mutation, all of the methods are well known and have been around for decades."

    The Court indicated that "after translating the complex scientific jargon used in the patent, the result is that it contains a valuable scientific discovery of a natural phenomenon without any inventive concept which transforms it from patent ineligible subject matter to patent eligible subject matter."  The Court therefore granted GVS' motion for judgment of invalidity as a matter of law.

    Genetic Veterinary Sciences, Inc. v. LABOklin GmbH (E.D. Va. 2018)
    Opinion & Order by Senior District Judge Morgan, Jr.

  • Praxair Distribution, Inc. v. Mallinckrodt Hospital Products IP Ltd. (Fed. Cir. 2018)

    By Kevin E. Noonan —

    Federal Circuit SealLast week, the Federal Circuit found all patent claims invalid for obviousness in an inter partes review, in Praxair Distribution, Inc. v. Mallinckrodt Hospital Products IP Ltd.  But the Court did not render its decision without engendering a judicial disagreement between the majority and Judge Newman on the proper role of the printed matter doctrine in obviousness determinations.

    Mallinckrodt's patent-in-IPR, U.S. Patent 8,846,112, was directed to methods for providing nitric oxide gas as a treatment for dilating pulmonary blood vessels in neonates.  However, the art recognized a side effect, pulmonary edema, for which infants with pre-existing left ventricular dysfunction (LVD) were at particular risk.  A diagnostic assay (pulmonary capillary wedge pressure, or "PCWP") having greater than a specific value was taught in Mallinckrodt's patent to exclude infants at risk for this side effect.  Claim 1 is representative of the claims invalidated by the Patent Trial and Appeal Board, while Claim 9 was found nonobvious in the Board's Final Written Decision:

    1.  A method of providing pharmaceutically acceptable nitric oxide gas, the method comprising:
        obtaining a cylinder containing compressed nitric oxide gas in the form of a gaseous blend of nitric oxide and nitrogen;
        supplying the cylinder containing compressed nitric oxide gas to a medical provider responsible for treating neonates who have hypoxic respiratory failure, including some who do not have left ventricular dysfunction;
        providing to the medical provider (i) information that a recommended dose of inhaled nitric oxide gas for treatment of neonates with hypoxic respiratory failure is 20 ppm nitric oxide and (ii) information that, in patients with preexisting left ventricular dysfunction, inhaled nitric oxide may increase pulmonary capillary wedge pressure (PCWP), leading to pulmonary edema, the information of (ii) being sufficient to cause a medical provider considering inhaled nitric oxide treatment for a plurality of neonatal patients who (a) are suffering from a condition for which inhaled nitric oxide is indicated, and (b) have pre-existing left ventricular dysfunction, to elect to avoid treating one or more of the plurality of patients with inhaled nitric oxide in order to avoid putting the one or more patients at risk of pulmonary edema. (italics denoting limitations found by the Board to implicate the printed matter doctrine)

    9.  The method of claim 7, further comprising:
        performing at least one diagnostic process to identify a neonatal patient who has hypoxic respiratory failure and is a candidate for inhaled nitric oxide treatment;
        determining prior to treatment with inhaled nitric oxide that the neonatal patient has pre-existing left ventricular dysfunction;
        treating the neonatal patient with 20 ppm inhaled nitric oxide, whereupon the neonatal patient experiences pulmonary edema; and
        in accordance with the recommendation of [claim 7], discontinuing the treatment with inhaled nitric oxide due to the neonatal patient's pulmonary edema.

    (Italics denoting the limitations relied upon by the Board to find the claim non-obvious.)

    The Board found claims 1-8, 10, and 11 to be obvious over a combination of four prior art references, but found claim 9 not to be obvious, its analysis for this claim resting on its construction of the phrase "in accordance with" (as discussed below).

    The PTAB gave the limitations set forth in italics above to implicate the printed matter doctrine, insofar as they recited information transmitted to a doctor or other medical practitioner.  These encompassed mental steps, according to the Board, and on these grounds were given no patentable weight in the Board's obviousness assessment.  So construed, the Board found claims 1-8, 10, and 11 to be obvious because the skilled worker would have been motivated to combine the prior art, which disclosed the provisions of claim 1 having patentable weight (i.e., not disclosing the information regarding neonatal risk to nitric oxide (NO) administration).  On the contrary the Board found claim 9 not obvious because the prior art did not teach excluding from NO treatment neonates identified using the method recited in the claim.

    The Federal Circuit affirmed the Board's obviousness determination for claims 1-8, 10, and 11 and reversed the Board's finding that claim 9 was nonobvious, in a decision by Judge Lourie, joined by Chief Judge Prost and Judge Newman; Judge Newman filed a concurring opinion.  As discussed in the opinion, Mallinckrodt argued that the Board's application of the printed matter doctrine for claim construction was improper and should be limited to determining whether the claims were invalid after the claims were construed.  The Federal Circuit disagreed, holding that it was proper not to give printed matter patentable weight under these circumstances, and that the printed matter doctrine (and exclusion of these limitations) was proper when what the limitation recites is the content of the information provided according to the claims as recited here.

    The Board and the panel majority did not apply the printed matter doctrine on grounds that the claims did not recite patent eligible subject matter under Section 101, but limited its consideration to obviousness, citing AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042, 1064 (Fed. Cir. 2010), to the effect that merely adding an instruction sheet or other informational content to a drug product, even if required by the FDA for approval, is not sufficient to create a functional relationship that could form a basis for distinguishing the prior art.

    The panel majority also rejected Mallinckrodt's further argument that considering whether the limitation encompassed "mental steps" was error, stating that the printed matter doctrine "and the §102 and §103 novelty and non-obviousness inquiries overlap," citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 90 (2012).  The panel's analysis of claim 3 was relevant to patents interacting with thought by a medical practitioner, wherein:

    [T]he potential benefit of treating the [neonatal patient] with 20 ppm inhaled nitric oxide vs. the potential risk that inhaled nitric oxide could cause an increase in PCWP leading to pulmonary edema in patients who have pre-existing [LVD], in order to arrive at a decision of whether or not to treat the [neonatal patient] with inhaled nitric oxide.

    And this, according to the opinion, is equivalent to a doctor thinking about the information provided.  Relevant to Judge Newman's concurrence (albeit not expressly directed to it), the opinion states that "adding an ineligible mental process to ineligible information still leaves the claim limitation directed to printed matter."

    The opinion also rejected Mallinckrodt's argument that the term "pharmaceutically acceptable" incorporates the information contained in what the Board considered the printed matter.  Instead, the Federal Circuit held that the term is related to "the physical condition of the gas" rather than how or to whom the gas is administered, and that this phrase does not impart a functional relationship with the information recited in the limitation excluded under the printed matter doctrine.

    With regard to Mallinckrodt's assertion that the Board erred with regard to the secondary considerations of non-obviousness it asserted before the Board, the panel agreed that secondary considerations must be taken into account.  Here, these were not relevant because the evidence for secondary considerations was based on the information that the Board and Federal Circuit determined had no patentable weight ("No patentable weight means no patentable weight.").

    Turning to the question of the obviousness of claim 9, the opinion recognized this question turned on construction of the phrase "in accordance with," and whether there was a functional relationship between the "recommending" step and the "discontinuing treatment" step.  For the purpose of deciding this question, the panel assumed the Board's construction was proper, stating that the claim "requires a medical provider to take a specific action, discontinuing treatment, as a result of the recommendation limitation," a construction that suffices to create a functional relationship which neither party nor the panel disputed.  This "interrelating" the information with the "concrete step" of discontinuing treatment meant to the panel that the Board had not erred in finding a functional relationship between the two limitations.

    But that is not "the end of the inquiry," according to the opinion.  The correct question was whether claim 9 as a whole would have been obvious, and the panel held that it is.  The obviousness question regarding claim 9 was based on one reference, to Bernsasconi (A. Bernasconi & M. Beghetti, Inhaled Nitric Oxide Applications in Paediatric Practice, 4 Images in Paediatric Cardiology 4 (2002)), which disclosed that children with preexisting LDV were at risk when treated with nitric oxide and should be monitored to minimize severe adverse event occurrence.  The Board found that the reference taught "that [nitric oxide] may be given to patients with LVD, as long as those patients are monitored carefully during treatment," which was contrary to the panel's interpretation of the claim language.  The Federal Circuit held that this interpretation of the language of claim 9 was incorrect, and when properly understood the teachings of the Bernasconi reference were not contrary to what was claimed.  The Board's error:  "[t]he Board conflated excluding a patient with LVD from nitric oxide treatment and discontinuing nitric oxide treatment in a patient with LVD after that patient experiences a pulmonary edema," according to the opinion.  The claim does not exclude patients from nitric oxide treatment, but provides that the treatment be discontinued if pulmonary edema ensues.

    The Federal Circuit found that the factual bases for the Board's non-obviousness determination were not supported by substantial evidence.  Moreover, remand was not necessary because "[t]he Board's uncontested findings regarding Bernasconi render claim 9 obvious under the proper reading of the claim."  According to the opinion, the Bernasconi teachings of "careful observation and intensive monitoring during [nitric oxide] inhalation" include discontinuing treatment if pulmonary edema developed as a result of the treatment.  The undisputed facts in the panel's opinion were that nitric oxide treatment was known in the art; that pulmonary edema in response to the treatment was known in the art; that pulmonary edema was known to be a potentially fatal side effect of treatment; and that "discontinuing a treatment in response to a serious side effect was known in the prior art."  On these facts:

    "[T]here is only one permissible factual finding," [citing] Corning v. Fast Felt Corp., 873 F.3d 896, 903 (Fed. Cir. 2017), that "careful observation and intensive monitoring" of patients with LVD treated with nitric oxide, motivated by the dangerous possibility of a pulmonary edema known to result from that treatment, includes or at least suggests to a person of ordinary skill discontinuing nitric oxide treatment after a patient with LVD administered nitric oxide suffers a pulmonary edema.

    The panel also faulted the Board's reliance on secondary considerations, finding insufficient nexus to the claimed invention.

    Judge Newman's concurrence disagreed with the majority's reliance on the printed matter doctrine, on the grounds that there is no printed matter recited in the claims, only information ("[b]ecause claim limitations directed to mental steps may attempt to capture informational content, they may be considered printed matter lacking patentable weight in an obviousness analysis," according to the majority opinion).  Judge Newman perceived the conflation between mental steps and the printed matter doctrine by the Board as sanctioned by the majority to be another extension of patent eligibility considerations into what should be a straightforward obviousness analysis, with resulting doctrinal confusion.  And this has practical consequences, because by denoting the limitations as having no patentable weight as printed matter the obviousness analysis can be performed as precedent expressly forbids it from being done:

    [T]he form of analysis whereby limitations are removed from the claim before the claim is analyzed for patentability, is contrary to the patent statute, which requires determination of patentability of the claimed subject matter as a whole.  It is improper to pluck limitations out of the claims, as of "no patentable weight," and then to review patentability of the remainder.  See In re Gulack, 703 F.2d 1381, 1385 (Fed. Cir. 1983) ("Under section 103, the board cannot dissect a claim, excise the printed matter from it, and declare the remaining portion of the mutilated claim to be unpatentable.  The claim must be read as a whole.").  The Board stated that it afforded no patentable weight to the "providing information" and "evaluating" limitations, but gave patentable weight to the "recommendation" limitation in claim 9.  Such piece-meal analysis does not impart precision to patentability analysis.

    As is frequently the case, Judge Newman makes the better argument.  Perhaps due to Section 101 fatigue or because the Supreme Court's penchant for ignoring the statutory silos of eligibility, anticipation, and obviousness is contagious, the majority's decision imports the incoherence of eligibility law into the obviousness context (doing little to clarify the standards in either).  And by extending the application of the printed matter doctrine to claims that don't recite printed matter, this precedential decision has the capacity to make mischief (having the Court's imprimatur) until such time that another panel can creatively avoid its application or in the unlikely event that the Federal Circuit considers the question en banc (an eventuality that seems likely only if the Court becomes enamored with this approach to invalidating claims on eligibility grounds under the auspices of an obviousness determination).  Neither possibility can be particularly comforting to the patent community.

    Praxair Distribution, Inc. v. Mallinckrodt Hospital Products IP Ltd. (Fed. Cir. 2018)
    Panel: Chief Judge Prost and Circuit Judges Newman and Lourie
    Opinion for the court by Circuit Judge Lourie; opinion concurring in the judgment by Circuit Judge Newman

  • SAP America, Inc. v. InvestPic, LLC (Fed. Cir. 2018)

    By Michael Borella —

    Federal Circuit SealSAP America, Inc. (SAP) filed a declaratory judgment action in the Northern District of Texas, alleging that U.S. Patent No. 6,349,291 of InvestPic, LLC (InvestPic) was invalid under 35 U.S.C. § 101.  The District Court invalidated the '291 patent during the pleadings stage.  InvestPic appealed the ruling to the Federal Circuit.

    Claim 1 of the '291 patent recites:

    A method for calculating, analyzing and displaying investment data comprising the steps of:
        (a) selecting a sample space, wherein the sample space includes at least one investment data sample;
        (b) generating a distribution function using a re-sampled statistical method and a bias parameter, wherein the bias parameter determines a degree of randomness in a resampling process; and,
        (c) generating a plot of the distribution function.

    Other independent claims recite similar subject matter.

    According to the Court, "the '291 patent states that 'conventional financial information sites' on the World Wide Web 'perform rudimentary statistical functions' that 'are not useful to investors in forecasting the behavior of financial markets because they rely upon assumptions that the underlying probability distribution function ('PDF') for the financial data follows a normal or Gaussian distribution.'"  The Court goes on to observe that "[such an] assumption, the patent says, 'is generally false': 'the PDF for financial market data is heavy tailed (i.e., the histograms of financial market data typically involve many outliers containing important information),' rather than symmetric like a normal distribution."  As a consequence, "statistical measures such as the standard deviation provide no meaningful insight into the distribution of financial data," and traditional "analyses understate the true risk and overstate the potential rewards for an investment or trading strategy."  In other words, real-world financial data does not fit a so-called bell curve, and any statistics based on the incorrect assumption that it does will be flawed.

    As a solution to this problem, the '291 patent "proposes a technique that utilizes resampled statistical methods for the analysis of financial data, which do not assume a normal probability distribution."  Accordingly, this technique "estimates the distribution of data in a pool (a sample space) by repeated sampling of the data in the pool," with replacement.  A bias parameter is used to "specify the degree of randomness in the resampling process."  Doing so purportedly results in a more accurate sample distribution.

    The Supreme Court's Alice Corp. v. CLS Bank Int'l case set forth a test to determine whether claims are directed to patent-eligible subject matter under 35 U.S.C. § 101.  One must first decide whether the claim at hand is directed to a judicially-excluded law of nature, a natural phenomenon, or an abstract idea.  If so, then one must further decide whether any element or combination of elements in the claim is sufficient to ensure that the claim amounts to "significantly more" than the judicial exclusion.  But generic computer implementation of an otherwise abstract process does not qualify as significantly more.  On the other hand, a claimed improvement to a computer or technological process is typically patent-eligible.

    From the outset, one can see that InvestPic was fighting an uphill battle.  Claim 1 is mainly limited to a mathematical calculation, and the problem domain is that of financial services.  Both math and money have been previously viewed as being per se abstract ideas under Alice.

    Of course, this observation was not lost on the Court, as it wrote "[t]he focus of the claims, as is plain from their terms, quoted above, is on selecting certain information, analyzing it using mathematical techniques, and reporting or displaying the results of the analysis."  According to the Court, all of these aspects have been previously found to be abstract, such as in the Electric Power Group v. Alstom S.A. decision.

    The Court also differentiated claim 1 from the patent-eligible claims of McRO, Inc. v. Bandai Namco Games America Inc.  In the latter case, the claims "were directed to the creation of something physical – namely, the display of lip synchronization and facial expressions of animated characters on screens for viewing by human eyes."  According to the Court, the improvement in McRO was in "how the physical display operated (to produce better quality images), unlike (what is present here) a claimed improvement in a mathematical technique with no improved display mechanism."  Furthermore, McRO "had the specificity required to transform a claim from one claiming only a result to one claiming a way of achieving it."

    The Court further explained that the broad, mathematically-oriented (but patent-eligible) claims of Thales Visionix Inc. v. U.S. differed from InvestPic's invention because "the improvement was in a physical tracking system," while claim 1 "is not a physical-realm improvement but an improvement in wholly abstract ideas."  Ultimately, the Court concluded that "the focus of the claims is not any improved computer or network, but the improved mathematical analysis."

    Declaring the claims abstract, the Court moved on the second step of Alice.  Here, InvestPic fared no better, as the Court stated "[w]e readily conclude that there is nothing in the claims sufficient to remove them from the class of subject matter ineligible for patenting and transform them into an eligible application," and (subtlety invoking Berkheimer v. HP Inc.) "there are no factual allegations from which one could plausibly infer that they are inventive."  Particularly, all additional elements were either abstract themselves or (as recited in other claims) conventional computer components.

    The Court therefore concluded:

    There is, in short, nothing "inventive" about any claim details, individually or in combination, that are not themselves in the realm of abstract ideas.  In the absence of the required "inventive concept" in application, the claims here are legally equivalent to claims simply to the asserted advance in the realm of abstract ideas—an advance in mathematical techniques in finance.  Under the principles developed in interpreting § 101, patent law does not protect such claims, without more, no matter how groundbreaking the advance.  An innovator who makes such an advance lacks patent protection for the advance itself.  If any such protection is to be found, the innovator must look outside patent law in search of it, such as in the law of trade secrets, whose core requirement is that the idea be kept secret from the public.

    Or, technical advances are likely patent-eligible, non-technical advances are not.  Where one draws that line is critical and it is clear where this particular panel has drawn it.

    Even under a generous reading of Alice and its progeny, these claims might be found lacking.  But the difficulty with cases like this one is how they are applied.  We have seen how the Electric Power Group case has been broadly viewed by the courts and the U.S. Patent and Trademark Office (USPTO) to contend that virtually any invention involving collection, processing, and output of information is ineligible.  Clearly, this is improper, it can be rebutted in many situations, but the process for doing so requires time and money — something that small companies might not have.

    When faced with an invalidity contention based on Electric Power Group or this case, one should focus on the specificity of the claims at hand and their ability to solve a technical problem (as opposed to a mathematical or financial problem), and explain how the claims here were significantly broader and vaguer.  The crux of the problem is that this strategy still may not win the day, even for clearly technical inventions.  The Alice test is ill-defined and has been applied subjectively and inconsistently by the Federal Circuit and USPTO.  Until this aspect of the law is fixed, cases like this one may continue to haunt patentees.

    SAP America, Inc. v. InvestPic, LLC (Fed. Cir. 2018)
    Panel: Circuit Judges Lourie, O'Malley, and Taranto
    Opinion by Circuit Judge Taranto