Patent Docs

Finjan, Inc. v. Blue Coat Systems, Inc. (Fed. Cir. 2018)

January 11, 2018

By Michael Borella —

The year's first substantive patent-eligibility decision from the Federal Circuit is a rare victory for the patentee. It is also further evidence that the outcome of an eligibility analysis may be more dependent upon how the analysis is carried out than the actual language of the claims under review.

Finjan asserted several patents against Blue Coat in the Northern District of California. After trial, the jury found that Blue Coat infringed four of these patents, and awarded $39.5 million in damages. Then, the District Court held a bench trial to address Blue Coat's patent eligibility challenge to Finjan's U.S. Patent No. 6,154,844. The District Court found the claims eligible, and Blue Coat appealed both verdicts.

Claim 1 of the '844 patent recites:

A method comprising:
    receiving by an inspector a Downloadable;
    generating by the inspector a first Downloadable security profile that identifies suspicious code in the received Downloadable; and
    linking by the inspector the first Downloadable security profile to the Downloadable before a web server makes the Downloadable available to web clients.

The District Court's claim construction order held that the term "Downloadable" means "an executable application program, which is downloaded from a source computer and run on the destination computer," and that the term "Downloadable security profile that identifies suspicious code in the received Downloadable" means "a profile that identifies code in the received Downloadable that performs hostile or potentially hostile operations." Importantly, the Federal Circuit conducted its review in light of these definitions.

The Supreme Court's Alice Corp. v. CLS Bank Int'l case set forth a two-part 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.

The Court began by distinguishing Finjan's claim with those of Intellectual Ventures I LLC v. Symantec Corp., where the Court concluded that "by itself, virus screening is well-known and constitutes an abstract idea." Particularly, claim 1 (as construed) requires that "the security profile includes details about the suspicious code in the received downloadable, such as . . . all potentially hostile or suspicious code operations that may be attempted by the Downloadable." Thus, "[t]he security profile must include the information about potentially hostile operations produced by a behavior-based virus scan." In this light, the claimed invention is distinguishable from traditional virus scans that look for previously identified patterns of suspicious code in executable programs.

The Court further found that the claimed invention is an improvement to computer technology. Notably, behavior-based virus scans "can analyze a downloadable's code and determine whether it performs potentially dangerous or unwanted operations—such as renaming or deleting files." Thus, these scans can detect previously unknown viruses as well as infected code that has been purposely obfuscated or scrambled to avoid traditional virus scan technology. Moreover, since the security profile is linked to the downloadable, a computer can safely decide whether to access the downloadable by reviewing its security profile.

The Court compared claim 1 favorably to those of Enfish LLC v. Microsoft Corp., in that the claim recites a method that "enables a computer security system to do things it could not do before." Therefore, the Court found that the claim is "directed to a non-abstract improvement in computer functionality, rather than the abstract idea of computer security writ large."

Blue Coat argued that the claim merely called for an outcome and did not specify how to attain that outcome. Such a claiming style was the kiss of death under § 101 in other cases, such as Apple, Inc. v. Ameranth, Inc., Affinity Labs of Tex., LLC v. DIRECTV, LLC, and the aforementioned Intellectual Ventures. But here, the Court concluded that the claims recite specific steps that accomplished a desired result. Based on this reasoning, and the holding that the invention is a technical improvement, the Court upheld the validity of the '844 patent.

This case further reinforces that procedural aspects of the § 101 inquiry can sometimes trump substantive aspects. The claim at issue is broad, somewhat vague, and could have very easily been found to not pass muster under the Alice test. But it also was construed by the District Court and, not unlike Enfish, the Federal Circuit reviewed the claim in light of its construction. Thus, due to the very nature and purpose of claim construction, the claim as construed was more specific than its plain language. In contrast, other panels have found more focused claims to be invalid when reviewed prior to construction (see, e.g., RecogniCorp, LLC v. Nintendo Co. Ltd. and Smart Systems Innovations, LLC v. Chicago Transit Authority).

This panel also refrained from summarizing the gist of the claim at a high level of abstraction then tautologically concluding that the claim is directed to an abstract idea. Here, the Court considered evidence beyond the claim itself to find that the invention was an improvement to a computing system.

All of this demonstrates that different Federal Circuit judges are applying the § 101 inquiry in different ways, and this practice very likely results in the validity of claims hanging on the luck of a panel draw. Perhaps if the stars align, 2018 will see the en banc Court decide how to apply the Alice test in a more consistent fashion going forward.

Finjan, Inc. v. Blue Coat Systems, Inc. (Fed. Cir. 2018)
Panel: Circuit Judges Dyk, Linn, and Hughes
Opinion by Circuit Judge Dyk
Top Four Stories of 2017

January 10, 2018

By Donald Zuhn –-

After reflecting upon the events of the past twelve months, Patent Docs presents its 11th annual list of top patent stories. For 2017, we identified nineteen stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants. In previous posts, we counted down stories #19 to #15, stories #14 to #10, and stories #9 to #5, and today we count down the top four stories of 2017. As with our other lists (2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look. As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know. In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2017" on January 17, 2018 from 10:00 am to 11:15 am (CT). Details regarding the webinar, which will focus on a handful of the most important stories on this year's list, can be found here.

4. Supreme Court: § 286 Trumps Laches Defense

In March, the Supreme Court vacated the Federal Circuit's affirmance of a District Court decision that a patent infringement suit filed by SCA Hygiene Products Aktiebolag against First Quality Baby Products, LLC was barred by laches (even though SCA brought suit about 7 years after it first notified First Quality regarding its allegations of infringement). The Supreme Court's decision in SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC was based, in part, on the Court's earlier decision in Petrella v. Metro-Goldwyn-Mayer, Inc., where the Court barred laches as a defense in copyright infringement actions based on a three-year statute of limitations enacted by Congress. The Federal Circuit, sitting en banc, based its affirmance of the District Court on the reasoning that although Congress had enacted a six-year time limitation on money damages in 35 U.S.C. § 286, the provisions of 35 U.S.C. § 282 made unenforceability, which includes the equitable doctrine of laches, available as a defense. However, as in Petrella, the Supreme Court determined that there was no basis for the Federal Circuit's decision that laches could contradict the statute of limitations provisions of § 286. The Court also opined that the doctrine of laches was developed for situations where Congress had not specified a fixed time for bringing suit, and thus was a "gap-filling" doctrine to cure in equity what the law did not expressly provide. However, when, as here, Congress had provided an express statute of limitations "there is no gap to fill" and thus no purpose for laches.

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

• "SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC (2017)," March 21, 2017

3. Use of Tribal Sovereign Immunity as Shield to PTAB Review

In September, Allergan creatively invoked the protection of sovereign immunity under the Eleventh Amendment to the Constitution by assigning six Orange Book-listed patents protecting Allergan's RESTASIS^® (Cyclosporine Ophthalmic Emulsion 0.05%), which is used to treat chronic dry eye, to the St. Regis Mohawk Tribe (SRMT). The patents had been challenged in inter partes review (IPR) proceedings. Allergan paid SRMT $13.75 million upon transferring these patents, which SRMT licensed to Allergan for $15 million per year until the patents expire in 2024. Shortly after the transfer, SRMT filed a motion before the Patent Trial and Appeal Board (PTAB) to have six IPRs involving the patents dismissed based on SRMT's sovereign immunity upon Allergan's assignment of the patents. In October, Federal Circuit Judge William Bryson, sitting by designation on the bench of the U.S. District Court for the Eastern District of Texas, granted a motion made by Allergan to join SRMT to ANDA litigation as a necessary party, and then found the claims of the Orange Book-listed patents asserted in ANDA litigation to be invalid. Judge Bryson's decision rendered moot the inter partes review proceedings before the PTAB (insofar as the claims at issue before the District Court and the Board were the same). Back at the PTAB, the Board was sufficiently vexed over the question of whether SRMT was entitled to have the Board dismiss, on grounds of sovereign immunity, IPRs on patents SRMT licensed from Allergan to solicit amicus curiae briefs on the issue from "interested parties." However, in December, an expanded panel of the Board issued an order dismissing a sovereign immunity challenge by the State of Minnesota in Ericsson Inc. v. Regents of the University of Minnesota. The coincidence of these two decisions was curious, particularly because while the scope of sovereign immunity enjoyed by the various recognized Tribes of Native Americans is both uncertain and subject to Congressional abrogation, a State's sovereignty is acknowledged and protected by the Eleventh Amendment. The Board's decision in Ericsson Inc. provides some insight into not only how the Board may rule on SRMT's motion, but also on how the Board (and the Patent Office) perceives its role and authority to make such decisions, and almost certainly means that tribal sovereign immunity will be making a return trip to our list of top stories next year.

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

• "PTAB Decides Patent Infringement Lawsuit Waives Eleventh Amendment Sovereign Immunity to Inter Partes Review, December 19, 2017
• "More Instances of Tribal Sovereign Immunity Shielding Patents from PTAB Invalidation," November 1, 2017
• "District Court Allows Mohawk Tribe to Join ANDA Litigation, Finds Patents at Issue Invalid," October 16, 2017
• "Mohawk Nation Exercises Sovereign Immunity in Inter Partes Review," September 25, 2017
• "Allergan Avails Itself of Sovereign Immunity," September 13, 2017

2. Supreme Court to Decide Constitutionality of Post-Grant Review Proceedings

In November, the Supreme Court heard oral argument in Oil States Energy Services, LLC v. Greene's Energy Group, LLC, where the sole question being considered by the Court is:

1.Whether inter partes review––an adversarial process used by the Patent and Trademark Office (PTO) to analyze the validity of existing patents––violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.

Ultimately, Oil States Energy Services, LLC may come down to the Court's decision in the 1898 case of McCormick Harvesting Machine v. Aultman. In that case, the patentee had sought to add claims via reissuance, but the Examiner found that at least some of the issued claims were invalid and sought to revoke the patent right. The Supreme Court at the time determined that the Patent Office did not have the authority to do so, with the McCormick Harvesting Machine Court stating that:

It has been settled by repeated decisions of this court that when a patent has received the signature of the secretary of the interior, countersigned by the commissioner of patents, and has had affixed to it the seal of the patent office, it has passed beyond the control and jurisdiction of that office, and is not subject to be revoked or canceled by the president, or any other officer of the government. It has become the property of the patentee, and as such is entitled to the same legal protection as other property.

The only authority competent to set a patent aside, or to annul it, or to correct it for any reason whatever, is vested in the courts of the United States, and not in the department which issued the patent.

Regardless of how the Supreme Court comes down with respect to the question presented, this case will no doubt appear on our top stories list again next year.

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

• "Is a Patent a Private or Public Right? — Supreme Court Hears Oral Arguments in Oil States Energy Services, LLC. v. Greene's Energy Group, LLC," November 30, 2017
• "Oil States Energy Services, LLC v. Greene's Energy Group, LLC — Positions Taken in Selected Amicus Curiae Briefs," November 27, 2017
• "Oil States Preview Take II — Just What Did the Supreme Court Hold in McCormick Harvesting Machine v. Aultman?" November 21, 2017
• "Supreme Court Preview — Oil States Energy Services, LLC v. Greene's Energy Group, LLC," November 15, 2017

1. Supreme Court Narrows Venue Options for Patentees

In May, the Supreme Court, in TC Heartland LLC v. Kraft Foods Group Brands LLC, reversed the Federal Circuit and held that the word "resides" in the patent venue statute (28 U.S.C. § 1400(b)), "refers only to the State of incorporation" of the alleged infringer. The case stemmed from a lawsuit brought by Kraft Foods Group Brands LLC against TC Heartland, LLC and Heartland Packaging Corp. in the U.S. District Court for the District of Delaware. TC Heartland is incorporated in Indiana, and has its headquarters in Carmel, Indiana. As a result, it moved to either dismiss the action on venue grounds (among others) or transfer venue to the Southern District of Indiana. The District Court denied the motion, and TC Heartland petitioned the Federal Circuit for a writ of mandamus to either dismiss or transfer the case, which the Federal Circuit denied. In reversing the Federal Circuit's decision, the Supreme Court looked at whether Congress had changed the meaning of § 1400(b) (the patent venue statute) when it amended 28 U.S.C. § 1391 (the general venue statute) in 1988 — the Court had previously determined, in Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957), that the general venue statute does not override the patent venue statute, and therefore that the residence of an accused infringing corporation was its place of incorporation. In answering the above inquiry in the negative, the Court pointed out that Congress ordinarily provides a clear indication of its intent in the text of the amended provision, and that this clear indication was missing from § 1391.

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

• "More on Venue — Plexxikon v. Novartis Pharmaceutical Corp. (N.D. Cal. 2017)," December 13, 2017
• "More Views on Venue — Federal Circuit Addresses In re Micron Fallout," December 12, 2017
• "In re Micron Technology, Inc. (Fed. Cir. 2017)," November 22, 2017
• "Does the Federal Circuit's In re Cray Decision Suggest a New Business Model for Savvy Infringers?" October 1, 2017
• "Views on Venue — Take Two: Did the District of Delaware Get It Right?" September 24, 2017
• "In re Cray Inc. (Fed. Cir. 2017)," September 21, 2017
• "Views on Venue — District of Delaware Provides Some Guidance on Venue in ANDA Cases Post-TC Heartland," September 19, 2017
• "TC Heartland LLC v. Kraft Foods Group Brands LLC (2017)," May 22, 2017
• "TC Heartland LLC v. Kraft Foods Group Brands LLC — 98 Professors Chime In," March 26, 2017
• "Supreme Court Preview — TC Heartland LLC v. Kraft Foods Group Brands LLC," March 23, 2017
• "Xilinx, Inc. v. Papst Licensing GmbH & Co. KG (Fed. Cir. 2017)," February 19, 2017
Wi-Fi One, LLC v. Broadcom Corp. (Fed. Cir. 2018) (en banc)

January 9, 2018

By Andrew Williams —

On Monday, the en banc Federal Circuit held in Wi-Fi One, LLC v. Broadcom Corp. that PTAB time-bar determinations under 35 U.S.C. § 315(b) are appealable because they do not fall within the scope of the judicial-review prohibition of § 314(d). This decision overruled Achates Reference Publishing, Inc. v. Apple Inc., which was decided before the Supreme Court interpreted § 314(d) in Cuozzo Speed Technologies, LLC. v. Lee, but as we reported at the time, it was unclear whether time-bar determinations fell within the concerns of "shenanigans" expressed by Justice Breyer. The original panel decision in Wi-Fi One, authored by Judge Bryson and joined by Judge Dyk, determined that the Cuozzo v. Lee decision did not change anything ("We see nothing in the Cuozzo decision that suggests Achates has been implicitly overruled."). On the other hand, Judge Reyna writing separately believed that such decisions should be subject to review after Cuozzo. Nevertheless, he concurred in the decision because he believed Wi-Fi One had not shown that Broadcom was either a real party in interest in the underlying litigation at question, or was in privity with one of the defendants of that case. Judge Reyna, as author for the majority for the current en banc decision, got his chance to explain why he believes time-bar determinations are now appealable. The other two Wi-Fi One panel judges joined the dissent penned by Judge Hughes (which was also joined by Judge Lourie, a member of the original Achates panel). Rounding out the opinions, Judge O'Malley filed a concurrence because she thought resolution of the question simply turned on the distinction between authority to exercise discretion when reviewing the adequacy of a petition and authority to undertake such a review in the first instance. This, of course, harkens back to the "ultimate authority to invalidate" standard articulated in Versata Dev. Grp., Inc. v. SAP America, Inc. for CBM review. The Court did not extend the ruling to any other disputes arising from §§ 311-314, but this decision will certainly pave the way for more challenges (and potentially more appealable issues).

The Wi-Fi One case stems from a 2010 lawsuit filed by Telefonaktiebolaget LM Ericsson ("Ericsson") in U.S. District Court for the Eastern District of Texas. Ericsson asserted U.S. Patent Nos. 6,772,215 ("Method for minimizing feedback responses in ARQ protocols"), 6,466,568 (Multi-rate radiocommunication systems and terminals), and 6,424,625 ("Method and apparatus for discarding packets in a data network having automatic repeat request") against multiple defendants. The Court indicated that the technical aspects of these patents were not relevant to the opinion, but those interested can look to the panel decision for a description of the technology. Importantly, Broadcom, the company that filed the three IPR petitions at issue in this case, was never a defendant in the litigation. Nevertheless, the Patent Owner (which became Wi-Fi One during the course of the IPR proceedings when Ericsson transferred ownership) alleged that Broadcom was in privity with one or more of the defendants in the Texas litigation. Because the IPR petitions were filed more than a year after the commencement of that case, Wi-Fi One argued they were time-barred. The Board denied Wi-Fi One the opportunity to take discovery regarding the relationship of the parties, and the Federal Circuit denied a petition for a writ of mandamus. Ultimately, the Board instituted the IPRs, and issued Final Written Decisions finding the challenged claims unpatentable. After the Federal Circuit panel affirmed because it found Achates unchanged by Cuozzo, the Court granted Wi-Fi One's petition for rehearing en banc to answer the question:

Should this court overrule [Achates] and hold that judicial review is available for a patent owner to challenge the PTO's determination that the petitioner satisfied the timeliness requirement of 35 U.S.C. § 315(b) governing the filing of petitions for inter partes review?

In deciding the question in the affirmative, the majority started at the same place the Supreme Court did in the Cuozzo decision, with the recognition that there is a strong presumption favoring judicial review of administrative actions. Correspondingly, Congress must provide "clear and convincing" indications that it intends to prohibit appellate review. The majority did not find such strong indications in the statutory language, the legislative history, or the statutory scheme as a whole. Specifically, 35 U.S.C. § 314(d) recites: "No Appeal—The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable." The natural reading, according to the majority, is that this bar is limited to determinations to institute as set forth in § 314. It is § 314(a) that both identifies the threshold requirement for institution ("a reasonable likelihood that petitioner would prevail with respect to at least 1 of the claims challenged in the petition") and provides that the director has discretion not to institute. Section 315(b), instead, controls the authority to institute IPRs unrelated to the preliminary patentability assessment even should a "reasonable likelihood" be found. "The time-bar determination, therefore, is not akin to either the non-institution or preliminary-only merits determinations for which unreviewability is common in the law, in the latter case because the closely related final merits determination is reviewable."

The majority also found that the overall statutory scheme supported its conclusion, especially in view of Cuozzo's directive to examine determinations that are "closely related" to § 314(a). For example, there are preliminary procedural requirements found in §§ 311-313 that are closely related to the preliminary patentability determination (or the discretion not to institute). On the other hand, the majority believed that the time-bar determination was fundamentally different than any such determination. It also found such a determination to not be "some minor statutory technicality," as referred to in Cuozzo. Instead, "[t]he time bar is not merely about preliminary procedural requirements that may be corrected if they fail to reflect real-world facts, but about real-world facts that limit the agency's authority to act under the IPR scheme." Because "enforcing statutory limits on an agency's authority" is the type of issue that has been historically reviewed, the majority held "that time-bar determinations under § 315(a) are reviewable by this court." The case was remanded to the merits panel to consider the Wi-Fi One's time-bar appeal.

Judge O'Malley agreed with much of the reasoning of the majority, but she filed a concurrence because she thought that resolution of the question presented was much simpler. She pointed out that it was important for the Court to address time-bar determinations to "give effect to the congressionally imposed statutory limitations on the PTO's authority to institute IPRs" She essentially reiterated the position she expressed in her concurrence in the Click-To-Call Technologies, LP v. Oracle Corporation remand from the Supreme Court (see "IPR Update — Is Reviewability of Time-Bar Institution Decisions Headed En Banc?"). That case was "GVR'ed" for further consideration in view of Cuozzo v. Lee after that decision was issued. Click-To-Call was a per curiam decision, concluding that Achates had not been overturned by the Cuozzo decision, and in any event it was also bound by the Wi-Fi One case. But Judge O'Malley wrote a separate concurrence to express her belief that the issue should be addressed en banc. In that decision, as well as the present concurrence, she focused on the difference between a petition for a PTAB post-grant proceeding (whether IPR, CBM, PGR, or derivation) and the act of institution by the PTAB as provided for by the statute. Believing that Congress established this distinction, she pointed out that "315(b)'s bar on institution in necessarily directed to the PTO, not those filing a petition to institute." The statute commands that an IPR proceeding "may not be instituted" by the Board if the petition is time barred. As she put it, "Congress is well versed in establishing statutory time bars. Congressional discretion should control the application of such time bars, not that of the Director of the PTO." Correspondingly, she added that she did "not see the need to say more."

The dissent, written by Judge Hughes, did not believe that appealability prohibition found in 35 U.S.C. § 314(d) was so limited because Congress's intent to prohibit judicial review was "clear and unmistakable." In so doing, it identified a couple of problems with the majority's position. First, it looked at the impact of the Director's decision regarding real parties in interest under different scenarios. On the one hand, if the patent owner alleges that an unidentified third party that has not been sued is a real party in interest, the Board's determination either way would not be reviewable (because the time bar would not be implicated). However, if the unidentified third party had been sued more than a year prior, than such a determination would be reviewable (at least according to the majority decision). Therefore, according to the dissent, the exact same determination would lead to different conclusions regarding appealability, which it found to be illogical. But is it? In the former example, the determination would have no practical consequences — if that decision could be appealed, nothing would change. However, if the decision of the Board results in the institution of a case that should have been time-barred, that would contravene the Congressional limits on the PTAB's authority to review cases using the IPR mechanism. It seems to be just such a decision that the courts should be reviewing.

The second problem identified by the dissent is that vacating the invalidity decisions of the Board based on such threshold questions as timeliness or real parties in interest would "squander the time and resources spent adjudicating the actual merits of the petition." While it is true that this would disturb the initial reason why IPRs were established in the first place ("providing quick and cost effective alternatives to litigation"), such may be the cost necessary to protect Patent Owners. Without the threat of judicial review, the PTAB has no particular incentive (outside the desire to get the case right in the first place) to develop procedures to get the question of real parties in interest correct. Instead, with the knowledge that their decisions could be reviewed, the Board will certainly be motivated to try to get the answer right in the first place.

Again, this case is limited to the time-bar issue found in 315(b), and the Court explicitly did not decide whether all disputes arising from §§ 311-314 are final and nonappealable. Nevertheless, it will certainly open the door to other challenges of determinations made by the PTAB at the institution stage. It will be interesting to see if this is a limited example or if the flood gates of appellate review are now open.

Wi-Fi One, LLC v. Broadcom Corp. (Fed. Cir. 2018) (en banc)
Panel: Chief Judge Prost and Circuit Judges Newman, Lourie, Bryson, Dyk, Moore, O'Malley, Reyna, Wallach, Taranto, Chen, Hughes, and Stoll
Opinion by Circuit Judge Reyna, joined by Chief Judge Prost and Circuit Judges Newman, Moore, O'Malley, Wallach, Taranto, Chen, and Stoll; concurring opinion by Circuit Judge O'Malley; dissenting opinion by Circuit Judge Hughes, joined by Circuit Judges Lourie, Bryson, and Dyk
The PTAB Strikes Back — Issues Order Prohibiting St. Regis Mohawk Tribe from Filing Any Additional Papers in IPR

January 8, 2018

By Kevin E. Noonan –

As previously reported, the St. Regis Mohawk Tribe filed a request for oral hearing that included a "request for discovery into the identity and impartiality of the merits panel assigned to this case." The paper was replete with justifications for its request and specific discovery it was seeking, all premised on its apprehension that the Patent Trial and Appeal Board (PTAB) might deprive the Tribe of due process by, inter alia, empaneling an expanded panel of Board members (including specifically Chief Administrative Patent Judge David Ruschke) that would not be impartial in deciding whether the Tribe's sovereign immunity precluded the Board from deciding on the validity of the patents (U.S. Patent Nos. 8,629,111; 8,633,162; 8,642,556; 8,648,048; 8,685,930; and 9,248,191) involved in the consolidated IPRs.

Last week, the PTAB responded, in a sharply worded per curiam decision denying the Tribe's motion and an Order precluding the Tribe from filing any additional papers in this IPR. The Board's displeasure was evident from the first sentence of the Order, wherein the Board noted that the Tribe's January 2nd filing was "without authorization" and was based only "purportedly" on 37 C.F.R. § 42.70(a). The Board characterized this request as being improper and then proceeded to list its reasons why.

First, the request for oral argument is improper in the Board's view because it was made at the same time as the request for discovery, which had not been made prior to the request for oral argument and thus was not an issue that could be raised under Rule 70(a) by that rule's plain language. Second, the Board's Scheduling Order in these consolidated IPRs mandated that any request for Oral Argument be made by DUE DATE 4, which in this case was July 20, 2017 (and at that time, both Mylan and the patent owner at that time, Allergan, requested oral argument, which requests were granted on August 1, 2017). Thus, in the Board's view, the request was untimely (although, in addition to the Tribe having been added as the real party in interest after that date, the substantive basis for the request was unknown at DUE DATE 4). Third, under these circumstances Board rules required the Tribe to have sought authorization to file its discovery request, 37 C.F.R. § 42.70(a), (b), which it did not do. And it is clear the Board believes this action was willful: the Order states that "counsel for the Tribe ignored our rules (once again) and preemptively filed its paper." In verbiage dripping with institutional sarcasm, the Board offered to "assist the Tribe in complying with our rules" by mandating that "the Tribe shall not file any further papers in these proceedings without prior authorization from the Board" (emphasis in Order).

After noting that the Board had the power to expunge the (in its view) improvident request from the record, the Order states that it shall decline to do so in order to "ensure the record is clear regarding why we deny not only the Request for Oral Hearing, but the Tribe's request for authorization to file a motion for additional discovery, as well." And that reasoning is that the request "far exceeds the scope of permissible discovery in these proceedings." The first ground for this decision is that the rule cited in the Tribe's request, 37 C.F.R. § 42.51, relates to discovery between the parties, not from the Board itself. As such, the Board can take shelter from the fact that its rules were not promulgated to permit a party from interrogating the Board as the Tribe has attempted to do, "and the Tribe has not pointed us to any legal authority that suggests otherwise." That would be enough, according to the PTAB, to justify denial of the Tribe's discovery request.

In addition, the Board asserted that the Tribe has proffered nothing more than "gross speculation" regarding its allegations of impropriety by the Board, either in its alleged lack of impartiality or susceptibility to political pressure, here citing its decision with regard to discovery from a party in Garmin Int'l, Inc. v. Cuozzo Speed Techs. LLC, Case IPR2012-00001, Paper No. 26, slip op. at 6 (PTAB Mar. 5, 2013). This portion of the Order is backed in a footnote with a citation to the USPTO Rules of Professional conduct with regard to allegations regarding the qualifications or integrity of a judge (37 C.F.R. § 11.802(a), albeit these are qualified as being allegations a practitioner knows to be false or with reckless disregard as to its truth or falsity'), and 37 C.F.R. §§ 11.804, 11.901 (related to penalties for violating these Rules).

After noting that the makeup of the panel has always been "listed on the cover page of our decisions" and reminding the Tribe's counsel that the Board has "considered this issue twice now," the Order concludes with a stark warning:

As a final note, we caution counsel for the Tribe that failure to comply with an applicable rule or order, abuse of discovery, and abuse of process are all grounds for sanctions. 37 C.F.R. § 42.12(a)(1), (5), (6). We strongly advise counsel for the Tribe to review our rules and caution that any further actions that demonstrate a disregard for our process will not be tolerated. See 37 C.F.R. § 42.12(b).
Top Stories of 2017: #5 to #9

January 7, 2018

By Donald Zuhn –-

After reflecting upon the events of the past twelve months, Patent Docs presents its 11th annual list of top patent stories. For 2017, we identified nineteen stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants. In two prior posts, we counted down stories #19 to #15 and stories #14 to #10, and today we count down stories #9 to #5 as we work our way towards the top four stories of 2017. As with our other lists (2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look. As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know. In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2017" on January 17, 2018 from 10:00 am to 11:15 am (CT). Details regarding the webinar, which will focus on a handful of the most important stories on this year's list, can be found here.

9. Federal Circuit Affirms Inequitable Conduct Determination in Regeneron Pharmaceuticals v. Merus

In July, a divided panel of the Federal Circuit affirmed a District Court decision finding Regeneron's U.S. Patent No. 8,502,018, which is directed to transgenic mice expressing human variable domain immunoglobulin (Ig) genes, unenforceable due to inequitable conduct. It was undisputed that during prosecution of the '018 patent, four references were known to Regeneron and its counsel that were not cited to the U.S. Patent and Trademark Office — these references were cited by a third party during prosecution of a related application after Regeneron received a Notice of Allowance for the '018 patent. While Regeneron did not submit these references to the Office during prosecution of the application that issued as the '018 patent, Regeneron did cite these references in all other pending related applications. The District Court, applying the rubrics of the Federal Circuit's decision in Therasense, Inc. v. Becton, Dickinson and Co., found the '018 patent unenforceable due to inequitable conduct. In particular, the District Court determined that the uncited references were "but-for" material (i.e., the patent would not have granted but for the non-disclosure because the undisclosed references rendered the granted claims unpatentable), not cumulative to references considered by the Examiner, and there was an intent to deceive the Examiner by not disclosing the uncited references. With respect to the second prong of the Therasense test — intent to deceive — the District Court had cataloged instances of litigation misconduct in drawing an adverse inference that there was an intent to deceive. The District Court findings included improperly withholding and citing on privilege logs documents clearly not privileged (such as experimental data), withholding as privileged information where the privilege had been waived, and withholding evidence of patent prosecution counsels' reasoning and state of mind relevant to whether counsel had an intent to deceive. In affirming the District Court's decision, the panel majority reviewed the litigation misconduct described by the District Court and found that the District Court's decision to draw an adverse inference that there was an intent to deceive was not an abuse of discretion. Judge Newman penned a strong dissent, based on her conviction that "my colleagues apply incorrect law and add confusion to precedent," writing that "[t]he panel majority thus convicts Regeneron, its counsel, and its scientists, with no trial, no evidence, and no opportunity to respond in their defense."

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

• "Regeneron Pharmaceuticals, Inc. v. Merus N.V. (Fed. Cir. 2017)," July 28, 2017

8. Supreme Court Interprets "Substantial Portion" in § 271(f)(1)

In February, in Life Technologies Corp. v. Promega Corp., the Supreme Court reversed a determination by the Federal Circuit that there could be circumstances in which a party may be liable under § 271(f)(1) for supplying or causing to be supplied a single component for combination outside the United States, holding instead "that a single component does not constitute a substantial portion of the components that can give rise to liability under §271(f)(1)." Promega had sued Life Technologies for infringement of several of its patents, alleging that Life Technologies sold genetic testing kits that were not covered by the license agreement between the parties. In reversing the Federal Circuit, the Supreme Court pointed out that Life Technologies manufactured all but one component of its kits in the United Kingdom — manufacturing Taq polymerase in the United States and then shipping the Taq polymerase to its United Kingdom facility to be combined with the other four components of the kit. Turning to the question of whether, as a matter of law, a single component could ever constitute a "substantial portion" so as to trigger liability under § 271(f)(1), the Court answered that question in the negative, holding that "one component does not constitute 'all or a substantial portion' of a multicomponent invention under §271(f)(1)," and adding that to resolve the question presented in the instant case, the Court did not need to define how close to "all" of the components "a substantial portion" must be. The Supreme Court therefore reversed the judgment of the Federal Circuit and remanded the case since only a single component of the patented invention at issue was supplied from the United States.

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

• "Life Technologies Corp. v. Promega Corp. (2017)," February 22, 2017

7. Supreme Court Interprets BPCIA in Amgen v. Sandoz

The Supreme Court handed down its opinion in Sandoz Inc. v. Amgen Inc. in June, marking the first time the Court has interpreted the Biologics Price Competition and Innovation Act (BPCIA) for the approval of biosimilar drugs. The Court described the BPCIA as "a carefully calibrated scheme for preparing to adjudicate, and then adjudicating, claims of infringement" related to biosimilar applications. This process begins with the disclosure by a biosimilar applicant of an abbreviated Biologics License Application (aBLA) and related information in order to "enable the sponsor to evaluate the biosimilar for possible infringement of patents it holds on the reference product." Nevertheless, the Court held that the reference product sponsor (RPS) cannot seek enforcement of the disclosure provision in 42 U.S.C. § 262(l)(2)(A) by injunction under federal law. This was essentially the result reached by Federal Circuit. However, the Supreme Court reversed and remanded the question whether the disclosure provision was enforceable under state law, or whether the BPCIA pre-empted any state law claim. With regard to the 180-day notice-of-commercial-marketing provision of the statute, the Court reversed the Federal Circuit and held that the notice may be provided "either before or after receiving FDA approval."

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

• "Amgen Inc. v. Sandoz Inc. (Fed. Cir. 2017) — One Last Dance . . . ," December 14, 2017
• "HUMIRA® Biosimilar Update — Settlement in AbbVie v. Amgen Case Announced and AbbVie v. Boehringer Ingelheim Litigation Begins," September 28, 2017
• "Amgen Inc. v. Hospira, Inc. (Fed. Cir. 2017)," August 10, 2017
• "Sandoz Inc. v. Amgen Inc. (2017)," June 12, 2017
• "Sandoz, Amgen, and the Federal Government at the Supreme Court — Timing of BPCIA 180-Day Notice of Commercial Marketing Provisions," April 27, 2017
• "Supreme Court Hears Oral Argument in Sandoz v. Amgen — Patent Dancing and Missing Puzzle Pieces," April 26, 2017
• "Supreme Court Preview — Sandoz Inc. v. Amgen Inc. — 180 Day Notice of Commercial Marketing Provisions of BPCIA," April 25, 2017
• "Supreme Court Preview — Sandoz Inc. v. Amgen Inc.," April 24, 2017
• "Supreme Court to Review BPCIA — Amgen v. Sandoz Petitions for Writs of Certiorari Granted," January 15, 2017

6. New Administration Withdraws U.S. from TPP Agreement

Only days after being sworn into office, President Trump made good on one of his signature campaign promises and notified the other twelve countries that were considering ratifying the Trans-Pacific Partnership (TPP) Agreement (i.e., Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam) that the United States was withdrawing from the treaty and that he would not ask Congress to ratify it. The President's stated reasons for doing so, reiterated many times during his campaign, were that the treaty was bad for American workers and part of a pattern of trade agreements that had taken jobs from U.S. workers and encouraged businesses to offshore capital and production capacity in favor of countries where labor was cheaper than in the U.S. Some in the patent community thought the President was wrong to withdraw from the TPP, believing that the agreement was generally favorable to American interests and would have had no effect on the U.S. job market, in part because the provisions of the treaty favored American innovators, specifically biotechnology and pharmaceutical companies, but all creative industries (including film, recording artists, and writers, among others) whose efforts are not offshored. In July, the United States Trade Representative released the summary of its objectives for NAFTA renegotiation, including its objectives for the intellectual property and competition provisions of the agreement. However, the provisions that the USTR indicated it would be seeking — which appear to be intended to create a template for future bilateral or multilateral agreements — reestablish the basic framework initially negotiated by the Obama Administration as part of the TTP, which President Trump had rejected as a "continuing rape of our country." The Trump Administration's decision to pursue many of the same intellectual property protection objectives in renegotiating NAFTA as had been negotiated as part of TPP was all the more remarkable in light of the decision by the other TPP member states (also in July) to continue to seek a broader free trade market with the same sort of intellectual property requirements.

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

• "The Trump Administration's Intellectual Property and Competition Objectives for NAFTA Renegotiation: What Was Wrong with the TPP?" July 20, 2017
• "Why President Trump Is Wrong about Trans-Pacific Partnership Agreement," January 26, 2017

5. Supreme Court Expands Exhaustion Doctrine in Impression Products v. Lexmark

In May, the Supreme Court unsurprisingly reversed the Federal Circuit regarding the metes and bounds of the patent exhaustion doctrine. The Court ruled in Impression Products, Inc. v. Lexmark International, Inc. that the doctrine precludes a patentee from using the patent laws to enforce any agreement that restricts a purchaser's post-sale ownership rights in a patented article, and that the doctrine extends to patented products sold abroad. The decision reversed Federal Circuit precedent that permitted patentees to limit the scope of rights transferred to purchasers upon sale of a patented article, provided that such restrictions were "clearly worded" (Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700 (Fed. Cir. 1992)) and further expanded the scope of exhaustion to include sales made outside the U.S., which the Federal Circuit had held were outside the reach of exhausting U.S. patent rights (Jazz Photo Corp. v. International Trade Commission, 264 F.3d 1094 (Fed. Cir. 2001)). The decision represents a culmination of the Court's delineation of the expansive scope of exhaustion regarding intellectual property rights that can be found in Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008), and (in the copyright context) Kirtsaeng v. John Wiley & Sons, Inc., 568 U.S. 519 (2013).

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

• "Patent Exhaustion and Pharmaceuticals, October 10, 2017
• "Impression Products, Inc. v. Lexmark International, Inc. (2017)," May 30, 2017
Conference & CLE Calendar

January 7, 2018

January 9, 2018 – "After-Final Practice: Navigating PTO Options to Compact Patent Prosecution — Utilizing After-Final Consideration Pilot 2.0, Pre-Appeal Conference and More" (Strafford) – 1:00 to 2:30 pm (EST)

January 9, 2018 – "Sequence Listings and Patent Applications" – 1:00 to 2:30 pm (ET)

January 9, 2018 – "Unlocking Open Data for our Patent Customers" (U.S. Patent and Trademark Office) – 12:00 to 1:00 pm (ET)

January 10, 2018 – "The Ramifications of TC Heartland and Recent Decisions About Venue in Patent Cases" (Federal Circuit Bar Association) – 1:00 pm to 2:15 pm (EST), Washington, DC

January 11, 2018 – "Patent Term Adjustments and Extensions: Leveraging Recent Decisions and USPTO Rule Changes" (Strafford) – 1:00 to 2:30 pm (EST)

January 11, 2018 – "USPTO on Using Declarations Regarding Prior Art under the AIA" (Intellectual Property Owners Association) – 2:00 to 3:00 pm (ET)

January 17, 2018 – "Top Patent Law Stories of 2017" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT)

January 17, 2018 – Customer Partnership Meeting of Technology Center 2600 (U.S. Patent and Trademark Office) – 8:30 am to 4:00 pm (ET)

January 18, 2018 – "PTAB — A Year in Review" (Foley & Lardner) – 1:00 to 2:00 pm (CST)

January 18, 2018 – "Strategic Use of Patent Reissue: Whether and When to Pursue a Reissue Application — Correcting Errors, Responding to an IPR Challenge and Mastering the Recapture Rule" (Strafford) – 1:00 to 2:30 pm (EST)

January 18, 2018 – "IP Year in Review And Look Ahead" – Patent Research (LexisNexis) – 2:00 pm (ET)

January 19, 2018 – "Paragraph IV Patent Certifications: Recent Legal and Regulatory Developments" (The Knowledge Group) – 12:00 to 1:30 pm (EST)

January 23, 2018 – "Drafting Software Patents to Survive Section 101 and AIA Challenges — Anticipating and Minimizing the Risk of 101, 103 Rejections, Recent Court Guidance" (Strafford) – 1:00 to 2:30 pm (EST)

January 25, 2018 – "IP Year in Review And Look Ahead" — Patent Prosecution (LexisNexis) – 2:00 pm (ET)

January 29, 2018 – "IP Year in Review And Look Ahead" — Patent Drafting (LexisNexis) – 2:00 pm (ET)

January 31, 2018 – "Paragraph IV Litigation: Best Practices and Practical Tips in 2018" (The Knowledge Group) – 3:00 to 4:00 pm (ET)

March 5-6, 2018 – Advanced Patent Law Seminar (Chisum Patent Academy) – Houston, TX

March 8-9, 2018 – Advanced Patent Law Seminar (Chisum Patent Academy) – Cincinnati, OH
IPO Webinar on Using Declarations Regarding Prior Art under the AIA

January 6, 2018

The Intellectual Property Owners Association (IPO) will offer a one-hour webinar entitled "USPTO on Using Declarations Regarding Prior Art under the AIA" on January 11, 2018 from 2:00 to 3:00 pm (ET). Kathleen Fonda, Senior Legal Advisor, Office of Patent Legal Administration, U.S. Patent and Trademark Office; Courtenay Brinckehoff of Foley & Lardner LLP; and Gary Ganzi, Senior Counsel and Head of Intellectual Property, Evoqua Water Technologies, LLC will discuss the regulation regarding declarations was promulgated by the USPTO through 37 C.F.R. § 1.130.

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.
USPTO Patent Quality Chat Webinar Series

January 6, 2018

The U.S. Patent and Trademark Office will be offering the next webinar in its Patent Quality Chat webinar series from 12:00 to 1:00 pm (ET) on January 9, 2018. The latest webinar, entitled "Unlocking Open Data for our Patent Customers" will be hosted by Thomas A. Beach, Chief Data Strategist, and Scott Beliveau, Branch Chief of Advanced Analytics, who will discuss how attendees can leverage the recent release of new data in USPTO's Open Data Portal, which marks the first time that comprehensive data on over 4.4 million Office actions from the last several years has been made readily available to the public. The presentation will also highlight some of the USPTO's quality efforts using this data to improve the consistency of patent prosecution and the quality of issued patents.

Instructions for viewing the webinar can be found here.

Additional information regarding the Patent Quality Chat webinar series can be found on the USPTO's Patent Quality Chat webpage.
Webinar on Drafting Software Patents to Survive § 101 and AIA Challenges

January 6, 2018

Strafford will be offering a webinar entitled "Drafting Software Patents to Survive Section 101 and AIA Challenges — Anticipating and Minimizing the Risk of 101, 103 Rejections, Recent Court Guidance" on January 23, 2018 from 1:00 to 2:30 pm (EST). Michael L. Kiklis and Stephen G. Kunin of Oblon McClelland Maier & Neustad will provide guidance to patent practitioners on how to draft their patent applications to overcome both § 101 and AIA challenges. The webinar will review the following issues:

• What are the hurdles for patent counsel to demonstrate a software-related claim is not abstract?
• If an abstract idea is found, how can patent practitioners pass Alice’s step two?
• What guidance have the courts provided in recent decisions concerning patent eligibility for software-related inventions?
• What best practices should counsel use to help software-related inventions survive AIA challenges?

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

January 6, 2018

The Knowledge Group will offer a webcast entitled "Paragraph IV Litigation: Best Practices and Practical Tips in 2018" on January 31, 2018 from 3:00 to 4:00 pm (ET). Paul B. Sudentas of Locke Lord LLP and Nigamnarayan Acharya of Baker Donelson will provide an in-depth analysis of the current trends and recent updates involving case filings, and also provide attendees with best practices and practical strategies to help overcome the evolving legal climate and year to come. Key topics to be addressed by the webcast include:

• Abbreviated New Drug Application (ANDA) – Legal Overview
• Recent Updates and Developments
• 2018 Legal Roadmap for Paragraph IV Litigation
• Paragraph IV and Its Relationship with:
– The Food and Drug Administration Reauthorization Act (FDARA)
– The Generic Drug User Fee Amendments (GDUFA)
• Best Practices and Practical Tips

The registration fee for the webcast is $49. Those interested in registering for the webinar can do so here.

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