Patent Docs

Webinar on MPEP Revisions

April 7, 2018

Strafford will be offering a webinar entitled "Patent Eligibility, Duty to Disclose and More: USPTO Manual of Patent Examining Procedure New Guidance" on April 26, 2018 from 1:00 to 2:30 pm (EDT). Thomas L. Irving, Adriana L. Burgy, and John M. Mulcahy of Finnegan Henderson Farabow Garrett & Dunner will examine the latest revisions to the USPTO Manual of Patent Examining Procedure (MPEP), including a discussion of patent eligibility, duty to disclose, and other changes to the MPEP, and explore the impact on patent prosecution and provide best practices for applying the new guidance. The webinar will review the following issues:

• How will examiners apply the revised MPEP?
• How can patent counsel use the revised MPEP to bolster their arguments when patents are being examined?
• How does the USPTO's disclosure standard differ from the courts' position?

The registration fee for the webcast is $297. Those interested in registering for the webinar, can do so here.
House Bill Would Establish National Security Commission on Artificial Intelligence

April 5, 2018

By Aaron Gin –

On March 20, 2018, Rep. Elise Stefanik (R-NY) introduced a bill (H.R. 5356) in the United States House of Representatives in an effort to establish a new National Security Commission on Artificial Intelligence. The Commission itself would be considered an independent establishment in the Executive Branch under 5 U.S.C. § 104.

The bill, entitled the National Security Commission Artificial Intelligence Act of 2018, directs the Commission to review advances in "artificial intelligence, related machine learning developments, and associated technologies." Specifically, the Commission will consider how to advance such technologies so as to "comprehensively address the national security needs of the Nation, including economic risk, and any other needs of the Department of Defense or the common defense of the Nation."

Various officials, including the Secretary of Defense, the respective Chairpersons of the Committees on Armed Services of the House and Senate, as well as the ranking minority members of those Committees would be responsible for selecting the Commission's eleven appointed members. Under the language of the bill, the Commission is tasked to provide an initial report no less than 180 days from enactment of the Act and a comprehensive report no later than one year from enactment. The reports are to be submitted to the President and Congress and will include subject matter such as:

(A) the competitiveness of the United States in artificial intelligence, machine learning, and other associated technologies, including matters related to national security, economic security, public-private partnerships, and investments;

(B) means and methods for the United States to maintain a technological advantage in artificial intelligence, machine learning, and other associated technologies, including quantum computing and high performance computing;

(C) developments and trends in international cooperation and competitiveness, including foreign investments in artificial intelligence, machine learning, and computer science fields;

(D) means by which to foster greater emphasis and investments in basic and advanced research to stimulate private, public, academic and combined initiatives in artificial intelligence, machine learning, and other associated technologies, including quantum computing and high performance computing;

(E) workforce and education incentives to attract and recruit leading talent in artificial intelligence and machine learning, including science, technology, engineering, and math programs;

(F) risks associated with United States and foreign country advances in military employment of artificial intelligence and machine learning, including under the international law of armed conflict, international humanitarian law, and escalation dynamics;

(G) associated ethical considerations related to artificial intelligence and machine learning as it will be used for future applications;

(H) means to establish data standards and provide incentives for the sharing of open training data within related data-driven industries;

(I) development of privacy- and security-protecting measures for data in artificial intelligence, machine learning, and associated technologies; and

(J) any other matters the Commission deems relevant to the common defense of the Nation.

The bill appropriates up to $10 million from the Department of Defense budget to fund the Commissions activities. Upon introduction, the bill was referred to the Committee on Armed Services, as well as the Committees on Education and the Workforce, Foreign Affairs, Science, Space, and Technology, and Energy and Commerce for a period of consideration and comment.

The bill defines "artificial intelligence" in very similar (and, in some cases, identical) terms as other pieces of proposed House and Senate AI legislation, namely:

(1) Any artificial system that performs tasks under varying and unpredictable circumstances without significant human oversight, or that can learn from experience and improve performance when exposed to data sets.

(2) An artificial system developed in computer software, physical hardware, or other context that solves tasks requiring human-like perception, cognition, planning, learning, communication, or physical action.

(3) An artificial system designed to think or act like a human, including cognitive architectures and neural networks.

(4) A set of techniques, including machine learning, that is designed to approximate a cognitive task.

(5) An artificial system designed to act rationally, including an intelligent software agent or embodied robot that achieves goals using perception, planning, reasoning, learning, communicating, decision making, and acting.

Recent legislative activity in this technology area of seems to suggest increasing public interest in artificial intelligence and its potential for positive and negative effects on society. Time will tell whether H.R. 5356 — and its national security focus — will enjoy increased traction as the bill is considered, as compared to similar AI legislation proposed under the Secretaries of Commerce (H.R. 4625 and S. 2217) and Labor (H.R. 4829).

For additional information regarding this topic, please see:

• H.R.5356 – National Security Commission Artificial Intelligence Act of 2018
• GOP rep introduces bill to address national security risks of artificial intelligence (The Hill, March 21, 2018)
• House lawmaker pitches new AI commission to brief Trump (Washington Examiner, March 21, 2018)
• Multiple Artificial Intelligence Bills Introduced in House and Senate (Patent Docs, February 15, 2018)
Ex parte Gershfang (PTAB 2018)

April 4, 2018

PTAB Affirms Patent Eligibility of Virtual Reality Advertising Claims

By James Korenchan —

In a decision issued last month, the Patent Trial and Appeal Board reversed the final rejection of all the pending claims in U.S. Application No. 12/628,383. The claims at issue are directed to evaluating an effectiveness of an advertisement in a virtual reality universe of a multiplayer online game. In particular, the claimed invention involves evaluating whether a proximity and direction of a user's avatar enables the avatar to effectively view a virtual advertisement and, based on this evaluation, providing a virtual barrier (e.g., a virtual landscape element) that induces the avatar to navigate towards viewing the advertisement. The claims had been rejected under 35 U.S.C. § 101 as reciting patent ineligible subject matter in the form of an abstract idea of organizing human activities. Representative claim 1 is as follows:

1. A method for navigating an avatar into a proximity and directionality favorable for viewing advertising content in a Virtual Universe (VU) of a multiplayer online game managed by at least one server, the method comprising:
    registering, by the at least one server, a visit by the avatar to a region of the VU that includes a target advertising content;
    determining, by the at least one server, a proximity to the target advertising content by the avatar;
    determining, by the at least one server, an avatar directionality of the avatar with respect to the target advertising content;
    determining, by the at least one server, a time with respect to which the avatar may be exposed to the target advertising content in the region;
    assigning, by the at least one server, at least one score to the visit, the proximity, the directionality, and the time;
    calculating, by the at least one server, an effectiveness score based on the at least one score;
    evaluating, by the at least one server, an effectiveness of the target advertising content by comparing the effectiveness score to a predetermined scale;
    automatically constructing, by the at least one server, a barrier blocking the avatar from moving away from the target advertising content based on the evaluating, the barrier comprising a landscape element; and
    inducing, by the at least one server, using the barrier, the avatar to navigate in such a way that the proximity and the avatar directionality of the avatar favor viewing of the target advertising content.

In considering the Alice framework and reversing the § 101 rejection, the Board summarized positions of both parties, first noting the Appellants' argument that the nature of virtual reality technology makes it so the claimed invention cannot be performed as an abstract idea in one's head. The Board also noted the Examiner's conclusion that the claimed invention is directed towards a business model for advertising to force a video game user to view an advertisement. In reaching this conclusion, the Examiner reasoned in his Answer that "the claimed virtual universe should be considered an environment for a video game on a generic computer network, using conventional technology" and that "[n]o specialized machinery is disclosed the specification or mandated in the claims."

But the Board sided with the Appellant. Citing the Federal Circuit's decision in Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016), the Board concluded that the plain focus of the claims is "not on economic or other tasks for which a computer is used in its ordinary capacity," but rather "on an improvement to computer functionality itself," the improvement being navigation within the virtual universe. The Board therefore refused to sustain the rejection of the claims under § 101.

Interestingly, however, one Board member disagreed with the Board's conclusion and wrote a dissenting opinion in an attempt to emphasize alleged differences between the claimed invention in the present case and that in Enfish. The dissent first addressed Enfish:

The invention of Enfish was "directed to an innovative logical model for a computer database." Enfish, 822 F.3d at 1330. In contrast to prior-art databases that were based upon a relational model, Enfish's invention was directed to a self-referential model wherein all information of the database appears in a single table, and given rows of the table reference other rows of that same table. Id. at 1332-33.

Further, the dissent noted how "[t]he Enfish court expressly noted various technological improvements to the computer functionality that the invention provided."

But the dissent did not agree that the present invention provided any such improvements. Addressing the claimed invention, the dissent noted Appellants' argument in the Appeal Brief that the invention is directed to tangible technology and that "embodiments of the invention overcome a problem specifically arising in computing technology, as only in a computerized virtual universe, could there be an issue as to how to induce an avatar to navigate in such a way that it views an electronic advertisement in such virtual universe," and concludes that this argument overlooks Appellants' admission that it was known to provide avatars and advertisements in virtual universes. The dissent then went on:

Appellants do not provide reasonable evidence that constructing barriers in virtual universes was technologically challenging in any way or that automatically evaluating the effectiveness of the advertisements provided any technological improvement either to the virtual universes or to the operation of the servers in which the virtual universes reside. . . . Appellants' invention is better characterized, then, as one that uses conventional navigation technology to improve upon the effectiveness of known virtual-universe advertising techniques.

The dissent thus agreed with the Examiner and, despite acknowledging the inherent computerization of virtual reality technology, concluded that "the invention is directed to the abstract idea of improving the effectiveness of advertising" using conventional technology without significantly more.

The Enfish court distinguished claims that focus on a specific improvement to computer functionality itself from those reciting economic or other tasks for which a computer is used in its ordinary capacity. Here, the dissent believed the claims to be in the latter category. To this point, perhaps most notable of the statements made in the dissenting opinion is the final one: "[T]he record indicates that the invention is an improved advertising idea performed with a computer – not an improvement to the operation of a computer itself" (emphasis in opinion). This is a compelling point, and one that inherently calls for a careful analysis when comparing claims with those in Enfish.

Ex parte Gershfang (PTAB 2018)
Before Administrative Patent Judges Carl W. Whitehead Jr., Bradley W. Baumeister, and Joseph P. Lentivech
Decision on Appeal by Administrative Patent Judge Whitehead Jr.
DSS Technology Management, Inc. v. Apple Inc. (Fed. Cir. 2018)

April 3, 2018

By Michael Borella —

Apple filed two petitions for inter partes review (IPR) against DSS's U.S. Patent No. 6,128,290. The Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office instituted the IPRs and issued final written decisions holding claims 1-4 and 9-10 of the '290 patent obvious. DSS appealed.

Claim 1 of the patent recites:

A data network system for effecting coordinated operation of a plurality of electronic devices, said system comprising:
    a server microcomputer unit;
    a plurality of peripheral units which are battery powered and portable, which provide either input information from the user or output information to the user, and which are adapted to operate within short range of said server unit;
    said server microcomputer incorporating an RF transmitter for sending commands and synchronizing information to said peripheral units;
    said peripheral units each including an RF receiver for detecting said commands and synchronizing information and including also an RF transmitter for sending input information from the user to said server microcomputer;
    said server microcomputer including a receiver for receiving input information transmitted from said peripheral units;
    said server and peripheral transmitters being energized in low duty cycle RF bursts at intervals determined by a code sequence which is timed in relation to said synchronizing information.

As described by the Federal Circuit, the claimed invention involves "bidirectional wireless data communications between a host or server microcomputer" and "a plurality of peripheral devices." Furthermore, "the transmitters within the host or server microcomputer and the peripheral units in the data network operate in a low duty cycle pulsed mode of operation." While in this mode, "when a peripheral unit is neither receiving nor transmitting, its reception and transmission circuitry may be powered down." According to the specification, doing so significantly reduces power consumption of the system.

The only claim element under dispute is italicized above. Particularly, both the server and peripheral transmitters are required to be able to operate in the low duty cycle mode. The PTAB concluded that one of ordinary skill in the art would be led to this element by the teachings of U.S. Patent No. 5,241,542 (Natarajan).

The Natarajan reference is directed to mobile units communicating wirelessly with a base station. Natarajan explicitly states that its focus is on reducing the battery consumption of mobile units. Like DSS's system, when the transmitters and receivers of these mobile units are not actively transmitting or receiving, they are configured to not consume power.

Apple argued before the PTAB that "because the mobile unit transmitters in Natarajan operated in low duty cycle RF bursts, it would have been plainly obvious to a person of ordinary skill in the art to have the base station operate in an analogous manner." Apple further contended that "because the base and mobile stations have the same physical structure, it would have been no more than using a known technique to improve similar devices in the same way."

DSS countered by observing that "Natarajan says nothing about [reducing power consumption] for the base station transmitter," and that "the stated goal of the Natarajan reference is to provide energy savings for the mobile units, not the base station." DSS further stated that "the base station in Natarajan uses a different communications scheme than the mobile units [in which it] cannot be turned off at any point during [a critical] period."

The PTAB sided with Apple, asserting that "Natarajan describes only the mobile units as battery-powered devices," but "the base units also are conventional microcomputers and contain similar wireless communication components as the mobile units." Based on this observation, the PTAB held that "that a person of ordinary skill in the art would have been motivated by Natarajan to apply the same power-conserving techniques to base units as it is disclosed with respect to mobile units, as well as that it would have been within the skill of the ordinarily skilled artisan to do so." The PTAB continued, remarking that there was "no persuasive evidence of record that it would have been uniquely challenging or difficult for one of ordinary skill in the art to do so."

On review, the Federal Circuit noted that a "patent can be obvious in light of a single prior art reference if it would have been obvious to modify that reference to arrive at the patented invention." The Court considered the PTAB's reasoning to be based on an invocation of "common sense" — that the skilled artisan would have used such an attribute to apply the power-saving features of Natarajan's mobile units to a base station (or, in this case, the claimed server). The Court, however, raised three considerations that would limit such reasoning:

First, common sense is typically invoked to provide a known motivation to combine, not to supply a missing claim limitation . . . .

Second, we have invoked common sense to fill in a missing limitation only when the limitation in question was unusually simple and the technology particularly straightforward . . . .

Third, our cases repeatedly warn that references to 'common sense'—whether to supply a motivation to combine or a missing limitation—cannot be used as a wholesale substitute for reasoned analysis and evidentiary support, especially when dealing with a limitation missing from the prior art references specified.

Applying this framework, the Court observed that the technology at issue was not unusually simple or particularly straightforward. The Court pointed to the PTAB's own difficulties with claim construction to support this notion.

But the Court's primary issue with the PTAB was the latter body's conclusory reasoning:

After acknowledging that Natarajan does not disclose a base unit transmitter that uses the same power conservation technique, the Board concluded that a person of ordinary skill would have been motivated to modify Natarajan to incorporate such a technique into a base unit transmitter and that such a modification would have been within the skill of the ordinarily skilled artisan. In reaching these conclusions, the Board made no further citation to the record. It referred instead to the "ordinary creativity" of the skilled artisan. This is not enough.

Apple's expert opined that "a person of skill in the art applying the exact design disclosed in Natarajan to an application exactly as described in Natarajan, . . . would have conceived a system in which . . . the transmitter and the receiver of the base station . . . operate in low duty cycle RF bursts." But the Court found this testimony, like that of the PTAB, to lack supportive reasoning. The Court went on to point out that Natarajan's mobile units and base station have different transmission requirements, and Apple and the PTAB both failed to explain how applying the mobile unit's duty cycle to the base station would work in practice.

Finally, the Court stated that "this is not a case where a more reasoned explanation than that provided by the Board can be gleaned from the record." Therefore, Apple failed to establish a prima facie case that the challenged claims were obvious, and the Court reversed the PTAB's ruling.

Writing in dissent, Judge Newman took issue with two aspects of the decision. First, she would have found that the PTAB did explain its reasoning regarding the obviousness of the claims in a sufficient fashion. Essentially, Judge Newman believed that the PTAB incorporated parts of Apple's arguments by reference, and that these arguments were uncontested by DSS. (At the end of the day, the majority seems to object to the PTAB's conclusion that the duty cycle of the mobile units would also work for the base station, while Judge Newman found such an outcome plausible.) Second, she asserted that the proper remedy for finding the PTAB's reasoning to be inadequate was to vacate and remand the case for further review by the PTAB.

DSS Technology Management, Inc. v. Apple Inc. (Fed. Cir. 2018)
Panel: Circuit Judges newman, O'Malley, and Reyna
Opinion by Circuit Judge O'Malley; dissenting opinion by Circuit Judge Newman
Berkheimer Files Response to HP’s Petition for En Banc Review

April 1, 2018

By Michael Borella —

In early February, the Federal Circuit published an opinion in HP Inc. v. Berkheimer stating clearly –- for the first time — that patent-eligibility under 35 U.S.C. § 101 should be determined as a matter of law, but with possible underlying factual issues. While supported in principle by Supreme Court and previous Federal Circuit decisions, neither body had unambiguously stated that facts matter in eligibility disputes. Thus, this ruling has the potential to fundamentally shift how the § 101 inquiry is carried out.

Berkheimer's U.S. Patent No. 7,447,713 is directed to "digitally processing and archiving files in a digital asset management system." This system "parses files into multiple objects and tags the objects to create relationships between them," then compares these objects to "to archived objects to determine whether variations exist based on predetermined standards and rules." Doing so "eliminates redundant storage of common text and graphical elements, which improves system operating efficiency and reduces storage costs."

A District Court Judge in the Northern District of Illinois granted HP's motion for summary judgment of patent-ineligibility, contending that as a matter of law the claims of the '713 were directed to no more than unpatentable abstract ideas under the two prong rubric of Alice Corp. v. CLS Bank Int'l. On review, the Federal Circuit agreed with the District Court for some of the claims, but disagreed for others. In particular, the purported technical improvement of reducing storage requirements was enough to render a handful of the dependent claims not clearly ineligible.

In an opinion by Judge Moore, the Court stated "[l]ike indefiniteness, enablement, or obviousness, whether a claim recites patent eligible subject matter is a question of law which may contain underlying facts." The Court remanded the case back to the District Court for further review, another first for § 101 challenges.

On March 12, HP filed a petition for en banc review. In it, HP argued that the panel's decision was inconsistent with precedent, effectively required a factual review for all § 101 analyses, and would lead to protracted litigation. As I previously wrote, HP is on shaky ground for at least two of these points, and missed an opportunity to expound upon the potential can of factual worms opened by Judge Moore.

This week, Berkheimer filed a reply, arguing that en banc review is unnecessary. Berkheimer's position is set forth rather directly — the case law supports consideration of facts in the § 101 evaluation, and HP's parade of horribles is a hyperbolic overreaction to a decision that merely clarifies the status quo.

To that point, Berkheimer points out that the panel explicitly stated that summary judgment on eligibility issues can be appropriate when there is no material issue of fact regarding whether the claims recite an inventive concept. Berkheimer further noted that authority to support the position that facts can be considered runs through the Supreme Court's Mayo Collaborative Servs. v. Prometheus Labs., Inc. decision as well as a number of Federal Circuit decisions. Notably, Enfish, LLC v. Microsoft Corp., McRO, Inc. v. Bandai Namco Games Am. Inc., Amdocs (Isr.) Ltd. v. Openet Telecom, Inc., Thales Visionix, Inc. v. U.S., and several other cases exhibit § 101 outcomes that turned on issues of fact.

Berkheimer continues by asserting that the panel correctly applied this law:

The panel recognized that the § 101 inquiry involves a basic question of what is the invention. This is not simply a question of reading the claims; it involves deeper inquiries as to what the invention is "directed to" at Alice step one, and—if the claims are directed to one of the exceptions to patent eligibility—whether they add an "inventive concept" at Alice step two. This requires a factual inquiry to evaluate the technological context of an invention, especially when assessing an inventive concept over what was well-understood, routine, and conventional to a skilled artisan at the time of the invention (which itself is an extrinsically facing historical fact variable based on a patent's priority date – namely October 2000 for the '713 patent).

HP and its amici claim the panel has opened the floodgates for patent assertion entities to manufacture factual allegations, advance an inexhaustible array of extrinsic evidence, proffer expert opinions, merely write bare assertions of improvements or advantages into a specification, or create a material issue of fact by the draftsman's or litigant's art. This purported "sea change" is illusory. Dispositive motions may still be made. The panel does not protect claims involving "nonce" word devices, generic computer components, ubiquitous elements, "apply it" directives, expected functionalities, longstanding commercial practices, methods of organizing human activities, and so on. Claims and their informing specifications will still be scrutinized under the Alice standard.

If taken up en banc, the Federal Circuit will have to consider the opposing poles of HP's contention that the panel made a mistake of biblical proportion and Berkheimer's position that the decision was little more than business as usual. The Court may be a little gun-shy given that the last time it entertained a § 101 dispute en banc, it was the much-maligned 5-opinion split decision that led to the Supreme Court rendering the Alice test. But in the nearly four years since then, the Federal Circuit has not managed to carry out its gap-filling function in a manner that has made Alice workable in practice.

Grading purely on the briefs, Berkheimer appears to have the edge in terms of clarity, succinctness, and interpretation of the case law. But both parties avoid addressing the 800-pound gorilla in the proceeding — how does one properly carry out a factual analysis under § 101? What is required for the patentee to establish that there is a material issue of fact? How understood does a claim element need to be in order to qualify as "well understood"? How does one explain § 101 issues to a jury when judges and patent examiners often express frustration over the jurisprudence and fail to apply the Alice decision clearly or consistently?

Within a few weeks we may begin to find out.
Conference & CLE Calendar

April 1, 2018

April 5, 2018 – "Paragraph IV Litigation and IPRs — Interplay Between Paragraph IV Litigation and IPRs, Multiple Generic Challengers, Key Issues in IPRs" (Strafford) – 1:00 to 2:30 pm (EDT)

April 6, 2018 – "Are Patents Under Attack?" (Federal Circuit Bar Association and Center for Innovation Policy at Duke Law) – 8:00 am to 4:45 pm (ET), Duke University School of Law, Durham, NC

April 7, 2018 – "Court of Appeals for the Federal Circuit Practice & Procedure" (John Marshall Law School Center for Intellectual Property, Information & Privacy Law) – 9:00 am to 4:30 pm (CT), John Marshall Law School, Chicago, IL

April 9, 2018 – "The Patent System: Transformative Times" (Federal Circuit Bar Association and Boston Patent Law Association) – 2:30 pm to 5:30 pm (ET), Northeastern University, Boston, MA

April 10, 2018 – "Federal Circuit Practice & Insights: A Townhall with Federal Circuit Judge Kara Stoll" (Federal Circuit Bar Association and Michigan IP Inn of Court) – 4:30 pm to 6:30 pm (ET), University of Detroit Mercy School of Law, Detroit, MI

April 12, 2018 – "Protecting Software as a Medical Device With Patents, Design Patents and Trade Secrets" (Strafford) – 1:00 to 2:30 pm (EDT)

April 14, 2018 – "Court of Appeals for the Federal Circuit Practice & Procedure" (John Marshall Law School Center for Intellectual Property, Information & Privacy Law) – 9:00 am to 4:30 pm (CT), John Marshall Law School, Chicago, IL

April 19, 2018 – "Overcoming § 101 Rejections for Computer and Electronics Related Patents — Leveraging USPTO Guidance and Recent Decisions to Meet 101 Patent Eligibility Requirements" (Strafford) – 1:00 to 2:30 pm (EDT)

April 23-24, 2018 – Paragraph IV Disputes conference (American Conference Institute) – New York, NY
Webinar on § 101 Rejections in Computer and Electronics Patents

March 31, 2018

Strafford will be offering a webinar entitled "Overcoming § 101 Rejections for Computer and Electronics Related Patents — Leveraging USPTO Guidance and Recent Decisions to Meet 101 Patent Eligibility Requirements" on April 19, 2018 from 1:00 to 2:30 pm EDT. Charles Bieneman of Bejin Bieneman and Michael P. Shepherd of Fish & Richardson will guide patent counsel for overcoming § 101 rejections for computer and electronics related patents, and review recent case law and USPTO guidance on § 101 patent eligibility and offer strategies to address § 101 rejections. The webinar will review the following issues:

• What are the significant recent § 101 decisions at the Federal Circuit, the district courts and PTAB?
• How can specifications and claims be drafted to guard against § 101 rejections?
• What strategies and arguments can be used in patent prosecution to overcome § 101 rejections?

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

March 31, 2018

American Conference Institute (ACI) will be holding its 12th Annual Paragraph IV Disputes conference on April 23-24, 2018 in New York, NY. ACI faculty will provide insights into:

• Understanding the correlation between Paragraph IV filings and the speed of ANDA approvals
• Reviewing recent Federal Circuit rulings and District Court interpretations of TC Heartland, and their impact on venue
• Exploring Oil States vs. Greene's Energy Group and the constitutionality of IPR proceedings
• Examining the impact of the Sovereign immunity defense and the status of a Congressional response
• The interplay between the new FDA leadership and Hatch-Waxman litigation
• Recent PTAB decisions and appeals in the pharmaceutical practice group
• Deciphering recent Federal Circuit opinions addressing obviousness in the ANDA setting
• Reviewing the state of the law on induced infringement for Hatch-Waxman cases
• Evaluating typical ethical predicaments that may arise in Paragraph IV litigation

The conference will offer presentations on the following topics:

• Paragraph IV Litigation Year in Review: Present Developments and Future Forecasts
• The Evolving Principles of Venue and Jurisdiction in the Aftermath of TC Heartland
• IPR Update: Oil States, SAS and the Future of IPRs: An Assessment of Challenges to Inter Partes Review Presently before the Supreme Court
• IPR Update: The Question of Sovereign Immunity: A Legitimate Means of Pharmaceutical Patent Protection?
• The Distinctive Roles of The Magistrate Judge and Local Counsel in Paragraph IV Proceedings
• View From the Bench: The Federal Judges Speak on Paragraph IV Litigation
• The Impact of New FDA Leadership on Hatch-Waxman Practice
• PTAB Update: Wins, Losses and Appeals
• Fireside Chat with the PTAB: Thoughts on Practice, Procedure, IPRs and Other Meanderings in the World of Pharmaceutical Patent Validity Challenges
• Obviousness Update for PIV Litigation: Matters of Inherency, Anticipation and Secondary Considerations
• FTC Keynote: Antitrust Developments Concerning Brands & Generics
• The Devil in the Label Details: A New Test for Induced Infringement
• Ethics: Case Studies in Ethical Developments Influencing Paragraph IV Practice

In addition, two post-conference workshops will be offered on April 25, 2018. The first, entitled "Jurisdiction and Venue Selection Master Class" will be offered from 8:30 am to 12:00 pm, and the second, entitled "Biosimilar Litigation Boot Camp for the Hatch-Waxman Litigator" will be offered from 1:00 to 4:30 pm.

The agenda for the Paragraph IV Disputes conference can be found here. More information regarding the workshops can be found here and here. A complete brochure for this conference, including an agenda, detailed descriptions of conference sessions, list of speakers, and registration form can be obtained here.

The registration fee for the conference alone is $2,395 (or a special $1,795 in-house rate for pharmaceutical & biotech organizations), or $3,495 for the conference and both workshops. Patent Docs readers are entitled to a 10% discount off of registration using discount code P10-999-PTD18. Those interested in registering for the conference can do so here, by e-mailing CustomerService@AmericanConference.com, or by calling 1-888-224-2480.

Patent Docs is a media partner of ACI's 12th Annual Paragraph IV Disputes Conference.
Putting on Your Best Face: Expanded PTAB Panels in IPRs and Other PTO Proceedings

March 29, 2018

By Kevin E. Noonan —

There has been a great deal of angst generated by the practice before the U.S. Patent and Trademark Office's Patent Trial and Appeal Board (PTAB) of expanding panels from the customary three Administrative Patent Judges to include additional APJ's, including the Chief Judge and his deputies. This practice was identified, seemingly by accident, during oral argument in Yissum Research Development Co. v. Sony Corp.; there, it became evident that the USPTO administration can and had intervened to alter or expand panels. This practice has raised concerns regarding whether the PTAB is observing the procedural niceties that ensure due process will be satisfied. This happened most recently in Ericsson v. Regents of the University of Minnesota and LSI Logic v. Regents of the University of Minnesota, which some commentators have noted are strikingly similar, and the practice has raised judicial eyebrows at the Supreme Court as well as the Federal Circuit. The most recent donnybrook has involved production of redacted e-mails and other documents requested by counsel and obtained under a Freedom of Information Act request relating to the St. Regis Mohawk Tribe's assertion (unsuccessful, so far) tribal sovereign immunity to avoid Final Written Decision in a series of inter partes review proceedings initiated prior to transfer of patent rights from drugmaker Allergan to the tribe.

In an effort to improve the optics of the situation, a March 13, 2018 "Chat with the Chief (Judge)" program, featuring David P. Ruschke, Chief Patent Judge, joined by Michelle N. Ankenbrand, Lead Administrative Patent Judge, addressed the issue by discussing a study of the use of expanded panels in IPR and other proceedings before the PTAB. The program started with the assertion that the Chief Judge has the authority (albeit not citing the statutory basis therefor), to expand panels but moderated that statement by emphasizing that expanded panels are "rare" and "ordinarily not used." Expanded panels, when they are used are used for two purposes. According to these officials. First, the panels are used when the Board is considering "issues of exceptional importance," which the Judge's PowerPoint slide characterized as "guidance." Second (and perhaps more controversially), expanded panels are used to maintain uniformity (termed "consistency") in PTAB (USPTO, actually) policy decisions. The Chief Judge explained that an expanded panel requires a written request to the Commissioner of Patents or his delegate (who?); the request can come from an APJ, a merits or interlocutory panel, a patent owner or applicant in ex parte matters, or the parties in inter partes reexamination, interference, or "AIA trial." The request must also contain reasons for expanded panel consideration; this can, again with some controversy, relate to an issue of first impression or "governed by a prior Board decision where Commissioner has determined it would not be in the public interest to follow the prior Board decision" (emphasis added). Acceptable justifications or rationales include:

• Predictable and uniform application of agency policy
• Similarly situated parties, under the same facts, are treated the same
• Notice to the public

In practice, when expanded panels are employed, it is preferred that the panel include the Chief and a Deputy; include in the decision an explanation of the reason for expanding the panel; and preferably the expanded panel does not change the result arrived at by the original panel. In view of these rationales, decisions from expanded panels are expected to be designated either as informative or precedential.

The study described by the Chief Judge involved four questions: 1) how frequent were expanded panels convened? 2) under what circumstances? 3) what was the reasoning behind expanding the panel? and 4) what was the result? The study considered 7,390 petitions filed before December 31, 2017, involving 6,033 institution decisions, 1,912 Final Written Decisions (FWDs), and "thousands" of interlocutory orders. Expanded panel decisions were assessed "manually" and excluded families where expanded panels were used to conserve resources (multiple consolidated cases).

Regarding the first question, the statistics showed 23 expanded panels of 6,033 institution decisions; 31 expanded panels of thousands of interlocutory orders; no expanded panels in 1,912 FWDs; and 5 expanded panels involving decisions in multiple consolidated IPRs.

Expanded panels when they arose were empaneled to make a decision on the merits 80% of the time and on request for rehearing in the other 20%.

Data on the rationales for expanded panels were explicated in more detail.

There were 21 instances where the panel was expanded at institution to consider questions of statutory interpretation.

These included:

• § 314(a) Multiple Petitions: General Plastic v. Canon, Case IPR2016-01357, -01358, -01359, -01360, -01361 (PTAB Sept. 6, 2017) (Paper 19) (precedential) (vote from 3-0 to 7-0 with expansion on rehearing)
    – Emphasizes the factors that the Board considers in deciding whether to exercise its discretion to deny a follow-on Petition in an AIA proceeding under 35 U.S.C. § 314(a).

• § 325(d) Similar Art/Arguments: Neil Ziegmann v. Carlis G. Stephens, Case IPR2015-01860 (PTAB Sept. 6, 2017) (Paper 13) (vote from 3-0 to 5-0 with expansion on rehearing)
    – Emphasizes that prior art or arguments may be considered "substantially the same" under 35 U.S.C. § 325(d) if they are "cumulative to or substantially overlap with issues previously considered by the Office with respect to the patent."

• CBM Pre-Institution Disclaimer: Facebook v. Skky, Case CBM2016-00091 (PTAB Sept. 28, 2017) (Paper 12) (precedential) (vote from 3-0 to 5-0 with expansion on rehearing)
    – Emphasizes that CBM patent review eligibility is determined based on the claims of the challenged patent as they exist at the time of the decision to institute, and that statutorily disclaimed claims must be treated as if they never existed for the purpose of institution.

Five instances arose at institution decision for questions of petition requirements.

Four occurred on motion procedure.

Twelve involved decisions to impose sanctions.

Seven involved questions of sovereign immunity; and ten were at the request of the PTAB panel. In these ten cases, HTC America v. Virginia Innovation Sciences, Case IPR2017-00870, -00871, -00872, -00873, -00874, -00875, -00876, -00877, -00878, -00879 (PTAB Sept. 13, 2017), the original panel suggested expansion to maintain uniformity due to substantial difference of opinion among the judges on a group of 10 related cases regarding an issue arising under 35 U.S.C. § 112(f).

With regard to the fourth question, the Chief Judge contended that the expanded panel came to the same conclusion as the original panel, with the exception of Target Corp. v. Destination Maternity Corp. (IPR2014-00508), and Nidec Motor Co. v. Zhongshan Broad Ocean Motor Co., No. 2016-2321, slip op. (Fed. Cir. Aug. 22, 2017).

The Chief provided these conclusions:

• Expanded panels are very rare
• Most expanded panel decisions issued as original decisions, not decisions on rehearing
• Panels were expanded for guidance and consistency:
    • to provide forward-looking guidance on reoccurring issues; and/or
    • to treat similarly situated parties the same
• Underlying result remained the same after panel expansion on rehearing, except for Target and Nidec, both of which address same-party joinder

Article I courts, and the PTAB in particular, have a legitimate goal: providing consistent application of the law to applicants and, in the case of implementing the adversarial avenues the AIA created, developing a consistent body of procedural and substantive law. To this end, for example, the PTAB has designated some (albeit few) cases precedential, thus providing notice to the public regarding how the Office can be expected to conduct the "trials" mandated by the statute. But the manner in which the Board has attempted to provide this consistency, in particular with regard to expanded panels in post-grant review proceedings, has provoked sufficient controversy that Chief Judge Ruschke felt it necessary (or at least politically expedient) to requisition a study and include the results in his "chat." The kerfuffle that has arisen over expanded PTAB panels is the direct result of the chimerical nature of the proceedings engendered by the Leahy-Smith America Invents Act. Characterized as "trials" in the rhetoric used to obtain passage of the Act, the various post-grant review instruments are more in the nature of "a specialized agency proceeding" as the Supreme Court noted in Cuozzo Speed Technologies v. Lee. Seen in this light the practice of expanding panels to ensure consistency of agency action would appear to have some merit. Seen as a trial, however, the overriding consideration is due process, wherein a patentee cannot be deprived of her property except in an adjudicatory proceeding where she has a fair opportunity to be heard without the deck stacked against her. The Office has been zealous in putting patents of purportedly dubious validity through the gauntlet of post-grant review. To many, the Board needs to be just as zealous in ensuring that patentees be deprived of their patent properties only if due process is followed as rigorously in the Office as it is in district court. It may be impossible to reconcile these two diverse mistresses intertwined in post-grant review, but if the Office does not, cannot, or will not, eventually the Supreme Court will.
Federal Circuit Issues Stay in St. Regis Mohawk Tribe Sovereign Immunity Appeal

March 28, 2018

By Kevin E. Noonan —

The Federal Circuit has granted the St. Regis Mohawk Tribe's motion for stay in inter partes review proceedings before the Patent Trial and Appeal Board, in St. Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc. In the Order, the Court notes that the PTAB had scheduled final hearing in the IPR for April 3, 2018, and that the Court had sua sponte ordered expedited briefing in the Tribe's appeal in advance of a June 2018 date for oral argument.

The Order also contained this passage, indicating a certain degree of impatience with how the PTAB has observed the jurisdictional niceties:

At this juncture, it appears that the appeals divested the Board of jurisdiction over the aspects of the case on appeal, see Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58 (1982); Princz v. Fed. Republic of Ger., 998 F.2d 1 (D.C. Cir. 1993) (appeal from denial of motion to dismiss on grounds of sovereign immunity divests district court of jurisdiction over entire case); Apostol v. Gallion, 870 F.2d 1335 (7th Cir. 1989); accord In re Graves, 69 F.3d 1147, 1149 (Fed. Cir. 1995), and that exclusive jurisdiction to resolve the threshold issue of whether these proceedings must be terminated vests in this court, and that the Board may not proceed until granted leave by this court. The stay shall remain in effect until the day after oral argument in the appeals in June 2018. The court will address whether the stay shall remain in effect or whether it will be lifted at that time based on further consideration of the merits of the appeals.

The Tribe’s opening brief is due no later than April 18, 2018, and Mylan and the other Petitioners' brief are due no later than May 11, 2018, with the Tribe's Reply brief and the joint appendix due no later than May 18, 2018. While not specifically mentioned, amicus briefing falls under Federal Circuit Rule 29, wherein briefs will be due one week after the Tribe's brief for amici supporting their position and amici supporting neither party, and one week after Petitioner's brief for its amicus supporters. Amici must obtain permission of all parties or leave of the court.

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