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  • In re Cellect (Fed. Cir. 2023)

    By Kevin E. Noonan —

    Federal Circuit SealThe Federal Circuit decided a question left open during a recent spate of opinions involving the judicially created doctrine of obviousness-type double patenting (ODP):  the effect patent term adjustment (PTA) can (or should) have on creating circumstances where ODP will operate to find a patent invalid in the absence of a timely filed terminal disclaimer, in its opinion handed down yesterday in In re Cellect.

    The issue arose in a series of ex parte reexaminations over five patents owned by Cellect, U.S. Patent Nos. 6,424,369; 6,452,626; 6,982,742; and 7,002,621, that involve "solid state image sensors which are configured to be of a minimum size and used within communication devices specifically including video telephones" according to the '621 patent (only four of these patents were invalidated, the fifth, U.S. Patent No. 6,862,036 not having any PTA that raised the issue).  The chronological situation is set forth in an exhibit from Cellect's Federal Circuit appeal brief and reproduced in modified form in the opinion:

    Image
    The opinion also set forth the chain of invalidation under obviousness-type double patenting, stating that:

    [T]he '621 patent claims were found to be unpatentable over the '626 patent claims, which were found to be unpatentable over the '369 patent claims.  The '742 patent claims were also found to be unpatentable over the '369 patent claims.  The '369 patent claims were themselves found to be unpatentable over the '036 patent claims.  Thus, although the ODP invalidating reference patents form a network across the four ex parte reexamination proceedings, all invalidated claims can be traced back to the single family member patent that did not receive a grant of PTA:  the '036 patent.

    There was no dispute that the claims in these applications were patentably indistinct.  The Board issued four Decisions on Appeal affirming the reexamination division's invalidation of the '369, '626, '621, and '742 patents, all on the grounds that the provisions of 35 U.S.C. § 154(b)(2)(B):

    No patent the term of which has been disclaimed beyond a specified date may be adjusted under this section beyond the expiration date specified in the disclaimer . . .

    mandated that a terminal disclaimer be filed under circumstances where obviousness-type double patenting arose due to extension of patent term as PTA, i.e., that ODP must be determined after application of PTA.  (It will be recalled that the Federal Circuit reached a different conclusion with regard to patent term extension (PTE) under 35 U.S.C. § 156 in Novartis AG v. Ezra Ventures LLC, the Court expressly refusing to permit "a judge-made doctrine to cut off a statutorily-authorized time extension.") Because all of these patents had expired (but Cellect retained the right to sue for prior infringement under 35 U.S.C. § 286), the Board's decision invalidated these patents with no available remedy left for Cellect.  In its consolidated decision, the Board emphasized the potential inequities to the public due to the possibility of harassment by different parties owning patents to obvious variants of one another (in the absence of a terminal disclaimer preventing this potentiality) as representing an unjust extension of patent term to the public's detriment; see In re Fallaux, 564 F.3d 1313 (Fed. Cir. 2009)).  Finally, the Board rejected arguments that the Federal Circuit's jurisprudence did not rely on whether or not there was gamesmanship or the potential thereof under Gilead Sciences, Inc. v. Natco Pharma Ltd, but that under In re Longi, the public was entitled to the assumption that it is free to practice what is claimed in the patent and obvious modifications and variants thereof once the patent has expired.  759 F.2d 887 (Fed. Cir. 1985).

    The Federal Circuit affirmed the Board's judgment in these re-examinations in an opinion by Judge Lourie joined by Judges Dyk and Reyna.*  Although patentee asserted five arguments in its briefing, the Court discussed only three of these arguments (albeit in some instances apparently condensing the five arguments to three).

    The first argument which was dispositive for the Court in its affirmance was Cellect's position that PTA under 35 U.S.C. § 154 and PTE under 35 U.S.C. § 156 should be treated equivalently as Congressional mandates that should not be abridged by judicially created doctrines like obviousness-type double patenting.  The Court's opinion to the contrary was based on three principles.  The first was that it is inequitable to the public that a second, later-expiring patent should be obtained ("an unjustified timewise extension of patent term") on an obvious variant of a patented invention, based on AbbVie Inc. v. Mathilda & Terence Kennedy Inst. of Rheumatology Tr., 764 F.3d 1366, 1373 (Fed. Cir. 2014).  The panel's opinion found support in the statute (as had the Board), wherein application of PTA was limited under circumstances where there was or should have been a terminal disclaimer filed (35 U.S.C. § 154(b)(2)(B)): "Disclaimed term.— No patent the term of which has been disclaimed beyond a specified date may be adjusted under this section beyond the expiration date specified in the disclaimer" (emphasis in brief).  There is no such limitation in 35 U.S.C. § 156 and even though both statutes recite that an extension of the term shall be granted this distinction between the two types of extension was enough to convince the Court that the Board had come to the correct conclusion.

    This conclusion was based in part by the Court's precedent, particularly AbbVie, and by the panel's agreement with the distinction in statutory construction between 35 U.S.C. § 154 and § 156 as advocated by the Solicitor representing the USPTO.  The overriding policy consideration is the Court's focus on the need to "ensure that the applicant does not receive an unjust timewise extension of patent term" (as it has for over a decade; see "In re Janssen Biotech, Inc.; G.D. Searle LLC v. Lupin Pharmaceuticals, Inc."; "AbbVie Inc."; "Gilead Sciences, Inc. v. Natco Pharma Ltd."; "Eli Lilly & Co. v. Teva Parenteral Medicines, Inc."; and "Sun Pharmaceutical Industries, Ltd. v. Eli Lilly & Co.").  The fact that the limitations of terminal disclaimers is in the PTA statute but not the PTE statute indicates to the Court that Congress intended the effect of ODP to differ between these two approaches to statutory term restoration.  They "are dealt with in different statutes and deal with differing circumstances" and while "the expiration date used for an ODP analysis where a patent has received PTE is the expiration date before the PTE has been added" pursuant to Novartis AG v. Ezra Ventures LLC (Fed. Cir. 2018), and Merck & Co. v. Hi-Tech Pharmacal Co., 482 F.3d 1317 (Fed. Cir. 2007), the "expiration date used for an ODP analysis where a patent has received PTA is the expiration date after the PTA has been added" as the holding in this case.  Cellect's argument that both PTA and PTE should be treated equally because they "provide statutorily authorized time extensions" is "an unjustified attempt to force disparate statutes into one" according to the opinion.

    The panel perceived differences in the statutes ("each has its own independent framework established through an independent statutory schema") that justify the distinctions raised in this opinion despite the similarities that "both PTA and PTE are statutorily authorized extensions, and each serves to recover lost term," because they have "quite distinct purposes."  Importantly, the panel construes the statute in this manner because for them "[t]here is nothing in the PTA statute to suggest that application of ODP to the PTA-extended patent term would be contrary to the congressional design."  On the contrary, the Court understands Cellect's position to "effectively extend the overall patent term awarded to a single invention contrary to Congress's purpose" (which is to limit an extended term for a patentably distinct invention).  In the panel's view, the overriding consideration is "to ensure that the applicant is not receiving an unjust extension of time."

    Finally, in this regard, the Court understands that if terminal disclaimers are the solution to the problem of unjust extensions of time precluded by ODP, permitting PTA to apply where a terminal disclaimer has not been filed (to avoid application of 35 U.S.C. § 154(b)(2)(B)) would "frustrate the clear intent of Congress [by permitting] applicants to benefit from their failure, or an examiner's failure, to comply with established practice concerning ODP" (i.e., using terminal disclaimers to avoid invalidation).

    The opinion refuses to find the equities asserted in Cellect's second argument arising from the particular circumstances in this case to be a basis to come to a different conclusion than the Board had.  The Federal Circuit recognizes the preeminent policy purpose for applying ODP to the PTA circumstances in this case like every other.  If, as the Board asserted and the Federal Circuit agreed, Cellect's patents received an "unjust timewise extension" of their patent term, the absence of gamesmanship does not remedy these circumstances nor excuse Cellect from the consequences arising therefrom ("it does not matter how the unjustified extensions are obtained").  Moreover, the Federal Circuit agreed with the Board that a risk continued to exist regarding the other consideration in ODP, the possibility of separate ownership of patents that are not patentably distinct (no matter Cellect's promises that it would not alienate them, nor how remote or theoretical these risks might be).

    Finally, the Federal Circuit rejected Cellect's third argument that the re-examinations were improvidently granted because there was no substantial new question of patentability raised in them, based on the same examiner being responsible for permitting these patents to grant and not issuing a rejection in any of them based on ODP.  The panel found that institution of these re-examinations was supported by substantial evidence because, inter alia, there was nothing in the prosecution history of any of these patents that "affirmatively indicates that the examiner considered whether or not an ODP rejection should be made."  The Court also rejected the alternative proposed by Cellect of only considering the adjustment term, and not the entire patent term, for invalidation as an attempt to have the PTO or the Court grant a "retroactive" terminal disclaimer, giving Cellect "the opportunity to benefit from terminal disclaimers that it never filed."

    While we have come a long way from the conventional use of terminal disclaimers to protect the public from shenanigans of intentional delay by doling our patentably indistinct variations on an invention to extend protection beyond the statutory 17-year term prior to revision of the patent stature in response to U.S. accession of the GATT/TRIPS agreement, the philosophy applied by the Court in this decision is consistent with that judicial attempt to prevent "unjust" extensions of patent rights.  Of course, there are stratagems existing and to be developed to adapt to the regime established by the Federal Circuit's decision, which only reinforces the value of the clever draftsman in protecting important technologies under creative applications of the law as the Federal Circuit construed it in this case.

    * In June, the Court affirmed the Board's judgment under Rule 36 in Reexamination No. 90/014,452 and Cellect, LLC v. Samsung Electronics Co. in inter partes review proceedings IPR2020- 00475, IPR2020-00476, IPR2020-00477, and IPR2020-00512.

    In re Cellect (Fed. Cir. 2023)
    Panel: Circuit Judges Lourie, Dyk, and Reyna
    Opinion by Circuit Judge Lourie

  • CVC Files Response and Reply Brief in Interference No. 106,115 Appeal

    By Kevin E. Noonan –

    University of California-BerkleyIn its appeal from an adverse decision on priority by the Patent Trial and Appeal Board (PTAB) in Interference No. 106,115 (directed to CRISPR-mediated gene editing), Junior Party the University of California/Berkeley, the University of Vienna, and Emmanuelle Charpentier (collectively, "CVC") filed on May 19th its Response and Reply Brief to earlier briefing by Senior party Broad Institute, Harvard University, and MIT (collectively, "Broad").

    CVC's approach has always been directed to the apparent equities — that its inventors conceived first and were diligent in efforts to reduce their invention to practice while Broad obtained the seminal sgRNA embodiment from their (perhaps improvident, in retrospect) disclosure, while Broad has taken the approach of applying interference law to these facts and using the at least equally improvident statements of CVC's inventors in support of their argument that CVC was not entitled to the claimed invention because their conception was not complete.  CVC follows their basic approach in the Reply brief, avoiding arguments that could be countered by the "substantial evidence" deference the Board's factual determinations are given in favor of "legal standards" (which are reviewed de novo).

    In the Reply portion of the brief, CVC argues that "Broad's brief speaks most loudly through omission" insofar as CVC argues the brief does not identify anything Broad's inventors contributed to the Count (meaning conception, presumably, because it cannot be denied that the Broad inventors achieved successful reduction to practice before CVC).  The reason for Broad's "admission" and the basis for the Board's putative error according to CVC is that "[Broad inventor] Zhang learned of every feature of the count—CVC's discovery of the necessary and sufficient components for CRISPR-Cas9 gene editing, CVC's then still-unpublished single-guide RNA sequence, and their use for eukaryotic gene editing—when Zhang's collaborator, Marraffini, gave them to Zhang" (emphasis in brief).  And CVC points out the curious circumstance of the Board citing (and relying on) as evidence of Broad's conception an e-mail from Dr. Marraffini to the Broad inventor describing what he had learned from CVC.  Thereafter, CVC contends, all Broad did was what several other labs were able to do — efficiently practice sgRNA-comprising embodiments of CRISPR for gene editing in eukaryotic cells.  (The difference, of course, is that none of these other labs filed patent applications or obtained patents on claimed CRISPR embodiments that interfered with CVC's applications.)  Under Applegate v. Scherer, 332 F.2d 571, 573-74 & n.1 (C.C.P.A. 1964), CVC contends, the Board's determination that Broad was the first to invent under these circumstances contradicts the principle that the patent should be awarded to the inventor "'who had the thought,' not the mechanic who 'merely made the test' to prove it worked."  Voicing a direct challenge to Broad's (understandable) reliance on the Board's factual determinations and the substantial evidence deference due thereto, CVC argues the question before the Court is one of law, that their conception — the completeness vel non thereof being the basis for the Board's decision — was complete when a skilled artisan can reduce it to practice "regardless of whether the inventor succeeds" (emphasis in brief).

    CVC argues that "conception is complete when the invention is ready for hand-off to skilled artisans for reduction to practice," which is the situation in this interference in their telling of the tale.  CVC argues that the Board failed to apply this "governing" law, under which the facts establish that CVC had conceived of the invention before Broad.  In this regard, CVC cites Sewall v. Walters, 21 F.3d 411, 415 (Fed. Cir. 1994)(that conception is complete when an inventor's idea is sufficiently "definite and permanent" that "one of ordinary skill in the art could construct the apparatus without unduly extensive research or experimentation"); Cameron & Everett v. Brick, 1871 C.D. 89, 90 (Comm'r Pat.), and Dolbear v. American Bell Telephone Co., 126 U.S. 1 (1888) (the telephone interferences, wherein Bell prevailed despite not being first to reduce to practice).  The Board erred, CVC contends, by improperly relying on Burroughs Wellcome Co. v. Barr Laboratories, Inc., 40 F.3d 1223 (Fed. Cir. 1994), for the principle that a need for "extensive research or experimentation" can indicate incomplete conception.  CVC arrays copious precedent to the contrary, including Mergenthaler v. Scudder, 11 App. D.C. 264, 279 (1897), and In re Tansel, 253 F.2d 241, 244 (C.C.P.A. 1958), to the extent that, in their view, all these cases "say the same thing": that "[c]onception is complete when 'the work of the inventor ceases and the work of the mechanic begins'" and that additional work that was not "inventive" does not rebut conception, citing Acromed Corp. v. Sofamor Danek Group, Inc., 253 F.3d 1371 (Fed. Cir. 2001).  CVC accuses Broad of "changing the subject" by convincing the Board to focus on CVC's purported "difficulties" in reducing the invention to practice rather than recognizing CVC's exclusive conception of sgRNA-comprising CRISPR-mediated gene editing in eukaryotic cells, citing the conventionality of how the invention was reduced to practice by several other groups once CVC's conception of the invention was shared with the scientific community.  And the brief characterizes as "new rationales" Broad's assertions that two of the other groups that reduced the invention to practice were not "independent" of CVC, noting that these groups reduced the invention to practice using "different (prior art) techniques" than those proposed and used by CVC (emphasis in brief).  Repeating in this context its fundamental argument regarding conception versus reduction to practice, CVC posits that taking Broad's and the Board's position would result in "award[ing] the invention of the century to the lab that was quickest to reduce to practice" which "cannot be correct," citing Edison v. Foote, 1871 C.D. 80, 81 (Comm'r Pat.) ("Invention is not the work of the hands, but of the brain,"), and Sinclair & Carroll Co. v. Interchemical Corp., 325 U.S. 327, 330 (1945) ("patent law rewards 'innovation,' not 'the work of a mechanic'").

    The brief then attacks the basis for the Board's priority decision, CVC's difficulties in reducing its invention to practice.  CVC here relies on Sewall and Rey-Bellet v. Engelhardt, 493 F.2d 1380, 1387 (C.C.P.A. 1974), in arguing that even "extensive testing" itself does not disprove conception, and Cameron that an inventor can have complete conception even where "much patience and mechanical skill, and perhaps a long series of experiments" turn out to be necessary to reduce an invention to practice.  The proper interpretation of the history of its efforts to reduce their invention to practice, CVC argues, is that they "planned to reduce its invention to practice with prior-art techniques; that [their] plan never changed; and that [they] succeeded with the same design it started with."  Instead, and erroneously CVC argues, the Board imposed a standard of "certainty of success" that the history of CVC's efforts did not satisfy (but should not have been required to do so) that even Broad concedes.  But while Broad emphasizes that the Board recited the proper legal standard (that did not require certainty) CVC argues that this was not the standard the Board applied (that did so require).  CVC supports this argument with citations to the record where the Board stated as much, defining conception for example as "a definite and permanent idea . . . of a system [CVC} knew would" work, and that their research plan was required to "achieve a functional . . . system" (emphasis in brief).

    Finally in this regard the brief recites arguments made by Broad that are consistent with this misapplication of the legal standards CVC argues support its claim to priority for this invention, most of which involve CVC's experimental difficulties (wherein the proper standard is "whether a skilled artisan could succeed with ordinary skill, not whether the inventor did") (emphasis in brief).  CVC also repeats its argument that the students initially tasked to reduce to practice sgRNA-comprising CRISPR-mediated gene editing in eukaryotic cells were of less than ordinary skill in the art (which while true does not impress as their strongest argument).

    CVC also attacks Broad's arguments in its brief by invoking seven "failed" attempts by CVC inventors, 5 of which that were not considered by the Board and the other two having been successful:

    Image 1
    And could be further distinguished either by not having been begun by October 2012 or that were later successful:

    Image 2
    Broad's arguments are further flawed, CVC argues, because they simply repeat the Board's errors of law regarding incomplete conception.  Rather than being supported by the Burroughs Wellcome precedent (misapplied, according to CVC), the Board's and Broad's arguments on incomplete conception are contrary to interference rubrics that conception is evaluated at the alleged conception date whether "subsequent testing succeeded or failed, or even took place" which is not by itself dispositive, citing In re Jolley, 308 F.3d 1317, 1325 (Fed. Cir. 2002) ("[w]hether the inventor's experiments 'succeeded or failed, or even took place, does not determine whether conception was complete'").  And the consistency of the elements of the invention, i.e., "(1) a single-guide CRISPR-Cas9 complex; (2) comprising crRNA, tracrRNA, and Cas9; (3) in a 'eukaryotic cell'; (4) 'capable of cleaving' 'target DNA'" which was used by CVC, Broad, and the other labs was further evidence of conception.  Broad's arguments (erroneous, according to the brief) that CVC was "reconsidering" other elements (such as codon optimization) are "irrelevant" and wrong, inter alia, as not being recited in the Count.

    CVC turns from arguing about the bases and grounds of the Board's decision to recite its fundamental argument that "awarding the invention to a copyist flouts the originality requirement."  Most of the arguments in this section of the brief reiterate CVC's contentions that Broad obtained every element of the invention from CVC's disclosure ("Zhang contributed nothing") and reduced the invention to practice using "routine techniques."  CVC cites Burroughs Wellcome (somewhat ironically) for its holding wherein priority was awarded to the party that conceived of treating AIDS with AZT, not the party that had "confirmed [its] operability"; the outcome in Barba v. Brizzolara, 104 F.2d 198 (C.C.P.A. 1939), that "awarded the patent to Brizzolara, who 'had the idea' of mounting an air conditioner above the train car headroom, not Barba, who worked out 'particular means' to mount it 'without the exercise of invention'"; and the outcome in Applegate where the patent was awarded to the party that "'had the thought' of using the particular chemical on lampreys—not Applegate, 'who merely made the test' to prove efficacy."  Yet another Board error, according to CVC, is to "equat[e] reduction to practice with invention where originality is at issue," under circumstances where "Zhang spent a year trying to solve a puzzle with the wrong pieces before jettisoning his experiments, and claiming conception, the same day Marraffini slipped him the right pieces—every feature of the count—from CVC" (emphasis in brief).  And CVC dismisses Broad's assertions that their inventors had reduced dual-guide CRISPR embodiments by late 2011 as being "flatly contradicted by the record" and barred under SEC v. Chenery Corp., 318 U.S. 80, 93-94 (1943), as not being raised below.  Additionally, CVC reminds the Court that in 2011 there was no recognition in the art that the tracrRNA molecule was needed for CRISPR activity until CVC's inventors disclosed that "mature tracrRNA was critical to the final DNA-cleavage complex" (emphasis in brief).  There is no evidence according to CVC that the Broad inventors either told anyone they appreciated the importance of the tracrRNA nor performed any experiments to confirm this activity, while on the contrary there was evidence (records from a Broad lab meeting and an NIH grant proposal) indicating that the Broad inventors had no understanding of the role of the tracrRNA in CRISPR-mediated gene editing.  And all that changed, according to CVC, when Dr. Marraffini disclosed CVC's sgRNA CRISPR embodiment, illustrated by this graphic:

    Image 3
    The brief is succinct:  "Zhang invented nothing before June 26."

    CVC completes this portion of the brief by frankly accusing Broad of misrepresenting the facts on several occasions ("reflect[ing] an unfortunate pattern"): in 2014 during ex parte prosecution, by telling the PTO that its inventors had successfully achieved CRISPR-mediated gene editing including tracrRNA that, in this interference, was admitted to be untrue, and that a 2012 NIH grant proposal recognized sgRNA species could be used in CRISPR and in this interference admitting that sgRNA was provided by Dr. Marraffini from CVC. CVC provides this synopsis:

    After a decade of patent prosecution, a prior interference, and an appeal to this Court, Broad finally revealed—halfway through this second interference—that Zhang learned of CVC's invention, including its sgRNA sequence, from Marraffini.  Broad concealed that for years.  It resisted discovery even after the Marraffini email was revealed.  . . .  Broad's assertions that Zhang invented everything cannot be credited, let alone for the first time on appeal.

    The remainder of CVC's Reply brief is devoted to CVC's other grounds of appeal.  These include their arguments that the PTAB violated the requirements for Administrative Procedures Act (APA) review for being "inconsistent with the APA's promise of reasoned decisionmaking."  These arguments substantially repeat the arguments in CVC's opening brief, including that the Board held for Broad because there "must be differences" between CVC's efforts to reduce the invention to practice and the Broad inventors' efforts with no evidence other than the difference in timing of successful outcomes; that the Board "fail[ed] to consider contrary evidence" to Broad's argument that CVC's conception was incomplete, including the consistency in CVC's inventive efforts in reducing the invention to practice; disregarding the success of other groups to reduce to practice gene editing in eukaryotic cells by sgRNA-comprising CRISPR based on CVC's conception; and the Board's purportedly mistaken analysis of CVC's actually achieving success in reducing embodiments within the scope of the Count using microinjection.

    The Reply also addresses CVC's argument — and Broad's  response — regarding the proper standard for satisfaction of the written description requirement as it was applied by the Board in denying CVC benefit to its earliest-asserted priority document, U.S. provisional application 61/654,086, filed May 25, 2012 ("P1") (the significance of which is a contrary decision would have resulted in CVC being Senior Party in the interference). CVC insists that its disclosure satisfies the statutory requirements as they have been explicated by the Supreme Court, in Evans v. Eaton, 20 U.S. (7 Wheat.) 356, 434 (1822); and the Federal Circuit, in Alcon Rsch. Ltd. v. Barr Labs., Inc., 745 F.3d 1180, 1190 (Fed. Cir. 2014); and Crown Packaging Tech., Inc. v. Ball Metal Beverage Container Corp., 635 F.3d 1373, 1380-81 (Fed. Cir. 2011).  This allegation of misapplication is based on CVC's assertion that the PTAB required them to provide a working example to support an "expectation of success," based on the Board awarding priority to CVC's later-filed U.S. provisional application 61/757,640, filed January 28, 2013 ("P3") which differs, CVC contends, only by providing such a working example.  This is contrary to how the written description requirement has been interpreted by the Court, inter alia, in Ariad Pharms., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1352 (Fed. Cir. 2010) (en banc), and by the Supreme Court in Diamond Rubber Co. v. Consolidated Rubber Tire Co., 220 U.S. 428, 435-36 (1911).  Once again, CVC is succinct in its argument, stating that "[c]onvincing others the invention will work is not part of written description" (emphasis in brief).  The brief further characterizes Broad's argument that the Board's decision is supported by substantial evidence as a "strawman" because it supports (not surprisingly) the Board's factual determinations (and their accompanying entitlement to deference) on the written description issue.

    The brief then turns to CVC's response to Broad's appeal of its contingent motion that the Board should have either expanded the Count to encompass dual-guide RNA (dgRNA) or remove certain of Broad's claims from the scope of the interference.  Part of CVC's argument is procedural: despite the Board having "multiple, independent grounds" for denying Broad's Preliminary Motions on these issues in the interference Broad challenges only one ground for each, which "dooms the cross-appeal" by "fail[ing] to show entitlement for relief," citing LSI Corp. v. Regents of Univ. of Minn., 43 F.4th 1349, 1355 (Fed. Cir. 2022), and providing illustrations of these alternative yet unchallenged grounds for each Motion.

    After setting forth its counter-statement of the issues and facts on appeal (and providing the following illustration of the differences between sgRNA and dgRNA species):

    Image 4
    CVC's brief sets forth the Board's decision on motions and CVC's contentions that the decisions were proper and correct.  The bases for CVC's argument is that the Board's construction of the term "guide RNA" (as a claim construction issue, reviewed de novo by the Federal Circuit; Intel Corp. v. Qualcomm Inc., 21 F.4th 801, 808 (Fed. Cir. 2021)), to mean sgRNA species thereof was consistent with Broad's own disclosure in the specification(s) of Broad's patents and applications in the interference.  On this basis, CVC argues the Board's claim construction was correct under the "broadest reasonable interpretation" standard applied in interferences, under Dionex Softron GmbH v. Agilent Techs., Inc., 56 F.4th 1353, 1358 (Fed. Cir. 2023).  And using that standard, CVC argues, the meaning of the term "guide RNA" is controlled by the disclosures in the specification (which are "clear and unambiguous" and "consistent" according to CVC) under Phillips v. AWH Corp., 415 F.3d 1303, 1315 (Fed. Cir. 2005) (en banc).  Nor does the doctrine of claim differentiation mandate a different construction, according to CVC, because the doctrine is "a guide" that does not provide a "rigid rule," and the specification dictates a contrary construction as recognized in GPNE Corp. v. Apple Inc., 830 F.3d 1365, 1371 (Fed. Cir. 2016).  And the Board's claim construction cannot be overturned by the application of the Jinek 2012 reference (Jinek et al., 2012, "A Programmable Dual-RNA–Guided DNA Endonuclease in Adaptive Bacterial Immunity," Science 337(6096): 816-21)) because that is extrinsic evidence (which the Board and both parties recognized during the interference), and in any case the Jinek 2012 reference did not establish a plain and ordinary meaning of the term "guide RNA" understood by those skilled in the art according to CVC.  Finally, CVC notes that the Board refused to consider publications asserted by Broad in its brief and in the interference that predated the Jinek 2012 reference in view of the plain meaning of the "guide RNA" term in Broad's specifications.

    Broad has filed its Reply to CVC's Responsive brief (which will be the subject of a future post).  With this filing briefing in this interference is complete and the parties (and the rest of us) await scheduling of the oral hearing (which to date is not on the Federal Circuit's calendar).

  • Webinar on Using Sequence Data to Strengthen Biologics Patent Claims and Applications

    IPWatchdogIPWatchdog and CAS will be offering a webinar entitled "Use Sequence Data to Strengthen Biologics Patent Claims and Applications" on August 29, 2023 at 12:00 pm (ET).  Gene Quinn of IPWatchdog, Inc. will moderate a panel consisting of Lisa L. Mueller of Casimir Jones, S.C.; Raymond N. Russell of Tarolli, Sundheim, Covell & Tummino LLP; and Anne Marie Clark of CAS IP Services, who will discuss challenges and ways to use quality sequence data more effectively to build stronger biologics patent claims and applications.  The panel will address the following topics:

    • Avoiding claims pitfalls with competent sequence search strategies
    • Insights to ensure biologics claims meet novelty and obviousness
    • How recent court rulings are affecting written claims
    • When and why to make go/no-go application decisions
    • Amending claims as new research data arises to capture IP value

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

  • FDA Approves Sandoz Biosimilar for Tysabri®

    By Kevin E. Noonan –

    FDAIt was not so long ago that many, including members of Congress, were bemoaning the slow approval and introduction into the marketplace of biosimilar alternatives to (generally expensive) biologic drugs.  See "Trump Administration Considering Reduction in Biologics Exclusivity Period"; "A Solution in Search of a Problem"; "FDA Issues Plan for Further Facilitating Biosimilar Development"; "Senators Ask FTC to Investigate Biosimilar Litigation Settlement Agreement"; "Biosimilars Action Plan: Balancing Innovation and Competition"; "Congress Jumps on Bandwagon to Reduce Biologic Drug Exclusivity Term".  These sentiments were largely from outcome-oriented groups with little understanding or regard for process or an appreciation of what has been required of the U.S. Food and Drug Administration and biosimilar applicants to bring safe and effective biosimilar drugs to market (and to be sure the same chorus would be vocally critical should a biosimilar fail to be safe, effective, and cheaper than the reference biologic drug product).  These calls have only intensified in the wake of the COVID pandemic (see, e.g., S6: The Biosimilar Red Tape Elimination Act, introduced on November 17, 2022; "Interchangeable Biosimilars: In a Battle of Safety vs. Cost, Where Does Sen. Lee Stand?").

    Things have been looking up with a half dozen biosimilar drugs having been allowed in the past year (see Table).  The most recent is Tyruko (natalizumab-sztn) from Sandoz, whose approval was announced by the FDA and is a biosimilar for Biogen's Tysabri (natalizumab) approved for the treatment of relapsing forms of multiple sclerosis (MS), specifically clinically recognized forms of the disease that includes clinically isolated MS, relapsing-remitting MS (West Wing viewers will recognize this as the form President Bartlet suffered from), and active secondary progressive MS.

    According to the announcement, in addition to MS the drug is approved for "inducing and maintaining clinical response and remission in adult patients with moderately to severely active Crohn’s Disease (CD) with evidence of inflammation who have had an inadequate response to, or are unable to tolerate, conventional CD therapies and inhibitors of TNF-α (tumor necrosis factor)."

    The announcement contains a caution, that use of Tyruko, like Tysabri, is associated with an increased risk of progressive multifocal leukoencephalopathy (PML), "a viral infection of the brain that usually leads to death or severe disability."  For this reason availability of the drug is limited by a risk evaluation and mitigation strategy (REMS).

    This approval brings to 42 the number of approved biosimilar products.

    Table* Approved as interchangeable biosimilar

  • USPTO Shares Data on Multiple IPR Challenges

    By Kevin E. Noonan –

    USPTO SealOne of the many criticisms of the post-grant review proceedings instituted by the Leahy-Smith America Invents Act, both post-grant review (PGR) available within 9 months of patent grant based on all provisions of the Patent Act and inter partes review (IPR) throughout the entire term of the patent but limited to prior art-based rejections under Section 102 and 103), is that patentees can be harassed by multiple challenges by multiple parties on the same patent and similar prior art (including both serial and parallel varieties of such challenges).  The U.S. Patent and Trademark Office, being sensitive to these criticisms has provided statistical analyses of PGR and IPR challenges and the most recent was posted in July on the PTO website (see Patent Trial and Appeal Board
    Multiple Petitions Study).

    The Report begins with serial IPR petitions, defined as "one petition or a group of two or more petitions filed more than 90 days after the first petition by the same petitioner challenging same patent, with one count per group per fiscal year."  The statistics, accumulated from FY15 to FY22, illustrate the effect of two PTAB decisions:  NVIDIA Corp. v. Samsung Elecs. Co., Case IPR2016-00134, Paper 9 (PTAB May 4, 2016), and General Plastic Industrial Co., Ltd. v. Canon Kabushiki Kaisha, Case IPR2016-01357 et al., Paper 19 (PTAB Sept. 6, 2017) (precedential).  As explained by the Office, the General Plastic decision provided non-exclusive factors for the Board to consider when exercising its discretion to institute an IPR and directed to "follow-on" petitions for PGR, IPR, and the now sunsetted Covered Business Methods proceedings.  These statistics are set forth in graphs of attempts at PGR/IPR institution:

    Image 1

    and instituted PGRs/IPRs:

    Image 2
    showing a gradual and then accelerating decline in serial petitions after the precedential General Plastics decision was handed down.  The PTO explains that serial petitions were instituted for a number of reasons, including patent owner acquiescence, the patent owner asserting new claims in district court litigation, there being a large number of claims at issue, and in one case, Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (precedential), the petitioner dismissing an ITC proceeding which had provided the basis for institution denial of the original petition.  The PTO assessment of the collated data show that 74 out of 4,233 challenges (~1.75%) involved serial petitions, with only 25 or ~0.6% resulting in institution.

    Similar statistical assessments were presented to "parallel institutions," i.e., where a group of petitions are filed 90 days or less apart by the same petitioner against the same patent.  These statistics are set forth in graphs of attempts at parallel PGR/IPR institution:

    Image 3

    and instituted parallel PGRs/IPRs:

    Image 4
    For parallel petitions, the PTO identified Comcast Cable Commc'ns, LLC v. RoviGuides, Inc., IPR2019-00224, Paper 10 (PTAB Apr. 3, 2019), and an update to the Trial Practice Guide as relevant events during a single fiscal year that were responsible for the decline in granted parallel PGRs and IPRs.  The PTO identified instances where a petitioner prevailed on institution of parallel petitions over patent owner objection as cases where there were a large number of claims, priority date issues, prior art eligibility, or different claims contested.  The Office notes that in FY21 70% of those instituted parallel PGRs/IPRs were instance where the patent owner did not contest institution, whereas those statistics dropped to 54% in FY22.

    The Office presented an assessment of these statistics showing that the majority of petitions in FY15 and FY22 were single petitions, but that the instances of multiple petitions had a steady trend downward during that time:

    Image 5
    While these statistics are certainly useful at a low level of granularity to show that multiple serial and parallel petitions are declining over the period the statistics were studied, it is unlikely that the picture they present will be considered sufficiently rosy to rebut or even stem the Findings and proposed amendments to the statute being considered by Congress (see "Senator Coons And Co-Sponsors Introduce the PREVAIL Act").

    For those interested in further statistics, these are provided in an Appendix and the Office has also provided an Executive Summary of the study.

  • Rembrandt Diagnostics LP v. Alere, Inc. (Fed. Cir. 2023)

    By Kevin E. Noonan –

    Federal Circuit SealThe Federal Circuit reviewed the latest decision from the Patent Trial and Appeal Board (PTAB) in an inter partes review that claims 3-6 and 10 of U.S. Patent No. 6,548,019 are obvious, in Rembrandt Diagnostics LP v. Alere, Inc.; prior proceedings were reported at Alere, Inc. v. Rembrandt Diagnostics, LP, 791 F. App'x 173 (Fed. Cir. 2019), and Rembrandt Diagnostics, LP v. Alere, Inc., 809 F. App'x 903 (Fed. Cir. 2020).

    The claims are directed to assay devices for testing biological fluids, as illustrated in Figures 3 and 6 and explained in the opinion as follows:

    The test assay device receives a fluid sample "introduced directly to the sample loading zone" (30) of one or more assay test strips (22) . . . the assay test strips (22) may each be encapsulated within separate "flow control channel[s]" (34) in one embodiment.  . . .  Figure 6 illustrates that to assemble the full testing assay device, the test strip assembly (22, 28, 34) from Figure 3 may be combined with a holder (40) and placed inside a fluid sample container (i.e., a cup) (2) that has a cap (45) to fit over the opening (3) of the container.  . . .  Figure 6 also shows that the sample loading zones (30) of the assay test strips are oriented toward the base (1) of the fully assembled container.  As the assay sample fluid in the container contacts the sample loading zone (30), it migrates upward through the assay test strip.  Id. at 6:55–67.  In another embodiment, multiple test strips may be held within a single "continuous in width" flow control channel.

    ImageExemplary Claim 3 at issue in this appeal reads as follows (wherein the language of independent claim 1 is distinguished by being in italics):

    3.  A device [according to claim 1] for collecting and assaying a sample of biological fluid, the device comprising:
        (a) a flow control channel defined by at least one liquid pervious side joined to liquid impervious sides, wherein the internal dimensions of the flow control channel are sufficient to permit placement therein of an assay test strip;
        (b) an assay test strip within the flow control channel, wherein the assay test strip has a sample loading zone therein, and wherein further the assay test strip is disposed within the flow control channel so the sample fluid contacts the sample loading zone at a liquid pervious side of the flow control channel; and,
        (c) a sample fluid container having a base, an open mouth, and walls connecting the base to the mouth;
    wherein the flow control channel is disposed inside the sample fluid container with the liquid pervious side oriented the base of the sample fluid container so that the assay sample fluid, when added to the container, is delivered to the sample loading zone of the assay test strip by entry through a liquid pervious side of the flow control channel without migration through an intermediate structure, and     wherein entry of fluid into the flow control channel creates an ambient pressure within the flow control channel equivalent to the ambient pressure outside of the flow control channel, thereby eliminating a pressure gradient along which excess sample fluid could flow into the flow control channel.
            wherein one of the liquid impervious sides of the flow control channel is formed as a portion of a liquid impervious backing; and wherein the device farther comprises a holder fittable inside the fluid sample container, the holder having at least one slot formed therein to receive the backing.

    The prior art cited by the Petitioner comprised two combinations of prior art patents:  the first, U.S. Patent No. 5,656,502 (the '502 patent) in view of U.S. Patent No. 5,985,675 (the '675 patent) or U.S. Patent No. 5,602,040 (the '040 patent) and the second, U.S. Patent No. 6,379,620 (the '620 patent) in view of the '502 patent or U.S. Patent No. 5,500,375 (the '375 patent).  As explained in the opinion, the '502 patent discloses a device that holds only one test strip, wherein one end of the strip holder is open permitting liquid to enter the device and come into contact with the test strip.  The '675 patent discloses the additional feature that such devices can contain more than one test strip that can be used for a number of different assays, and the '040 patent discloses that the device can "incorporate two or more discrete bodies of porous solid phase material, e.g., separate strips or sheets, each carrying mobile and immobilised reagents."

    In the second combination, the '620 patent discloses test strips oriented upwards towards the container mouth (which is in the opposite direction to the claimed invention), and the '375 patent discloses one or a plurality of test strips that are contained in a sealed holder laminate that does not require extraneous wicks for augmenting sample migration, wherein multiple tests can be performed at the same time.

    The procedural history of the case began when Rembrandt asserted the '019 patent against Alere in district court proceedings for infringement (this action remains stayed while the IPR proceedings are concluded).  In response, Alere filed an IPR petition, wherein in that IPR the Board did not institute against all '019 patent claims and Rembrandt disclaimed claims 1, 9, and 11-15 of the '019 patent.  As a consequence the Board instituted only as to claims 2-5.  The Board found claim 2 to be invalid for anticipation by the '675 patent but that the challenger failed to establish invalidity for the other claims.  In the appeal from that Board decision the Federal Circuit affirmed the Board's claim construction but remanded for consideration of all challenged claims under SAS Institute Inc. v. Iancu.

    On remand, Rembrandt argued that Alere raised new theories in reply to patentee's patent owner statement, and that through its expert witness had proposed three new theories of invalidity.  As noted in the opinion, these objections were not raised against obviousness rejections based on either of the three combinations of references cited by the panel here.  The Board rejected Rembrandt's objections and found in its Final Written Decision that claims 2-6 and 10 were unpatentable, once again finding claim 2 to be anticipated by the '675 patent and the remaining claims to be obvious.  The Board's reasoning for the obviousness of claims 3-6 credited Alere's expert testimony (Rembrandt did not rebut with an expert witness of its own) that, based on the second combination of references asserted by Alere the skilled worker would have modified the disclosure of the '620 patent "to remove the wicking material and re-orient the flow control channels towards the bottom of the container."  This would have the advantage, Alere persuasively argued, of "reduc[ing] cost, complexity, and oversaturation of the test strip" based on the unrebutted testimony of its expert.  And as for claim 10, the Board credited the first combination of references for teaching modification of the single test strip embodiment disclosed in the '675 patent in view of the other references because the skilled worker would have recognized the advantages of multiple strips, an argument again supported by unrebutted testimony from Alere's expert witness.

    The Federal Circuit affirmed, in an opinion by Judge Reyna joined by Chief Judge Moore and Judge Dyk.  On appeal, Rembrandt argued that the Board abused its discretion in considering Alere's purportedly new theories and erred in its obviousness determinations because they were not supported by substantial evidence.  The Federal Circuit rejected Rembrandt's abuse of discretion argument because, first, it was forfeited when it objected on this basis on one obviousness ground (not at issue here) but did not assert this objection against the Board's obviousness determinations based on either of the two combinations of references at issue before the Court.  The panel rejected what the opinion term Rembrandt's "generic" objection in its brief (merely arguing the existence of their objection without expressly objecting to either of these reference combinations as it had to a third).  Part of the panel's decision was based on lack of notice and unfairness to both parties for the Board to read Rembrandt's objection this broadly.  An additional ground for rejecting Rembrandt's abuse of discretion objection is the Court's recognition of the procedural and strategic context of IPR proceedings, where the Court has not permitted the Board "to consider a new theory of unpatentability raised by petitioner in reply or a new theory of patentability raised by patent owner in surreply," citing for example Intelligent Bio-Sys., Inc. v. Illumina Cambridge Ltd., 821 F.3d 1359, 1369 (Fed. Cir. 2016), and Henny Penny Corp. v. Frymaster LLC, 938 F.3d 1324, 1329–31 (Fed. Cir. 2019), while in other instances the Court held such consideration was within the proper scope of the Board's sound discretion, citing Ericsson Inc. v. Intell. Ventures I LLC, 901 F.3d 1374, 1379 (Fed. Cir. 2018); Chamberlain Grp., Inc. v. One World Techs., Inc., 944 F.3d 919, 925 (Fed. Cir. 2019); and Belden Inc. v. Berk-Tek LLC, 805 F.3d 1064, 1081–82 (Fed. Cir. 2015).  In each of these cases whether the Board exercised its discretion properly or not was fact-specific and depended on whether considering such theories was fair to the parties.  Important to the Court's determination of the Board's exercise of its discretion properly included, for example, whether a party "merely expand[ed] on a previously argued rationale as to why the prior art disclosures are insubstantially distinct from the challenged claims" (Ericsson) or whether a party was "elaborating on their arguments on issues previously raised" (Chamberland).  More generally the panel acknowledged that these situation arose because "the very nature of the reply and sur-reply briefs are to respond (whether to refute, rebut, explain, discredit, and so on) to prior raised arguments within the confines of 37 C.F.R. § 42.23(b)" and thus can be proper.  The Federal Circuit accordingly has held that “there is no blanket prohibition against the introduction of new evidence during an IPR," citing Anacor Pharms., Inc. v. Iancu, 889 F.3d 1372, 1380–82 (Fed. Cir. 2018), provided there is adequate notice to the other party, Genzyme Therapeutic Prods. Ltd. P'ship v. Biomarin Pharm. Inc., 825 F.3d 1360, 1366 (Fed. Cir. 2016).

    Here, the Court found Rembrandt's arguments not to support an abuse of discretion by the Board, citing two examples.  With regard to claim 10, the objection related to Alere's argument that modifying the '675 patent as suggested by the other cited references would be beneficial as to "cost and time savings."  The panel recognized that in their petition Alere argued that modifying the device disclosed in the '675 patent would increase the "efficiency" of that device by permitting "multiple tests to be conducted simultaneously."  Rembrandt countered in its Patent Owner's statement that the secondary references did not provide motivation for the combination, and Alere replied with the "cost and time savings" argument.  The Federal Circuit considered this argument to have a "nexus" in Rembrandt's arguments in its Patent Owner's statement and was "a fair extension of [Alere's] previously raised efficiency argument" and thus was not an abuse of discretion for the Board to consider it.  With regard to similar objections based on similar arguments Alere made in its Reply on the obviousness of claims 3-6, the Court held that Alere's arguments were responsive to Rembrandt's assertions in its Patent Owner statement; in addition in this case Alere was responding to the Board's original institution decision that the petition did "not explain sufficiently why modifying [the '620 patent] to remove the wicking material would have been understood to be beneficial."  Finally, the Court rejected Rembrandt's objection on the grounds that Alere cited previously unidentified disclosure in certain of the cited references.  The Court distinguished precedent where such arguments were prohibited (such as Apple and Ariosa Diagnostics v. Verinata Health, Inc., 805 F.3d 1359 (Fed. Cir. 2015)); the panel considered Alere's arguments to be "a legitimate reply" to Rembrandt's arguments because it was based on the same references and the same legal argument.  Because ("in short") "Alere's responsive reply arguments do not constitute new theories," the Court held it was not an abuse of discretion for the Board to consider them.

    The panel also rejected Rembrandt's other argument, that the Board's factual findings did not support its obviousness determinations.  These arguments, the opinion states, "center on the interpretation of disclosures from the prior art and the presence of motivation to combine."  What Rembrandt is lacking, the opinion notes, is any "counter testimony from a qualified declarant to refute Dr. Bohannon's conclusions regarding how [a skilled artisan] would have interpreted the identified disclosures."  The Court notes that the Board was presented with "two alternative theories" and it was not the Court's "task 'to determine which theory [they] find more compelling,'" citing Shoes by Firebug LLC v. Stride Rite Childs. Grp., LLC, 962 F.3d 1362, 1371 (Fed. Cir. 2020).  Thus, in the Court's opinion, the Board's obviousness determination were supported by substantial evidence.

    Rembrandt Diagnostics LP v. Alere, Inc. (Fed. Cir. 2023)
    Panel: Chief Judge Moore and Circuit Judges Dyk and Reyna
    Opinion by Circuit Judge Reyna

  • Judges Issue Standing Orders Regarding the Use of Artificial Intelligence

    By Michael Borella —

    The impact of generative artificial intelligence (AI) is unsurprisingly significant in the field of education, with some teachers and professors responding by instituting oral examinations, handwritten essays, or requiring that first drafts of written material can only be composed on "locked down" computers with no access to AI tools.  But as the education system (as just one example) is wrestling with the implication of these tools, so is the legal community.

    In a recent case that has rocketed into infamy, two lawyers filed a brief in the Southern District of New York that had been written at least in part by the large language model (LLM) ChatGPT.[1]  After opposing counsel and the judge determined that the brief cited to case law that did not exist and the quotes from these fictitious cases were fabrications by ChatGPT, the court imposed sanctions under Rule 11 for purposes of deterrence.  The lawyers were ordered to pay a $5,000 penalty.  Their infraction, which was described in detail by the court, was not the mere use of generative AI, but failing to properly cite check and otherwise vet a brief in a judicial proceeding.

    Perhaps in response to this case, we have seen a number of judges issue standing orders on how AI can and cannot be used in proceedings before them.

    Eastern District of Pennsylvania Judge Michael M. Baylson published an order on June 6 which states:

    If any attorney for a party, or a pro se party, has used Artificial Intelligence ("AI") in the preparation of any complaint, answer, motion, brief, or other paper, filed with the Court, and assigned to Judge Michael M. Baylson, MUST, in a clear and plain factual statement, disclose that AI has been used in any way in the preparation of the filing, and CERTIFY, that each and every citation to the law or the record in the paper, has been verified as accurate.[2]

    While Judge Baylson is engaging in an earnest attempt to avoid a mess like the one in New York, his order is overly broad.  Using AI tools such as ChatGPT, Bard, and the like is currently an intentional act on the part of the user.  In the near future, however, as these tools are integrated into legal search and word processing software, lawyers may not know — and have no reasonable way of finding out — whether AI has been used at any point during preparation.  For example, are the case summaries provided by your favorite search engine the result of human effort, AI, or both?  Likewise, is the grammar suggestion provided by your word processor the output of AI or a rules-based algorithm?

    When considering these issues, it is important to keep in mind the differences between traditional AI and generative AI.  Traditional AI is trained to address specific fields or problems and typically is a form of classifier.  Examples include spam filtering, image classification, speech recognition, and recommendation systems.  Generative AI, on the other hand, is capable of creating new content that is open ended and often not limited to any particular field.  Current generative AI tools include ChatGPT and Bard, but also image generation tools (Dall-E, Stable Diffusion, and Midjourney), as well as music composition tools (no suggestions here as I've yet to find one that allows the non-musician to generate high quality music of a variety of styles from a simple prompt).

    In short, traditional AI and generative AI are different animals.  Traditional AI is everywhere already but useful only in limited ways, whereas we are collectively kicking the tires of generative AI but its eventual footprint is likely to be enormous.

    In not differentiating between traditional and generative AI, Judge Baylson's order — if read strictly — puts a significant burden on lawyers appearing in his court, especially those without a technical background.  Luckily, two other judges have issued orders that are more focused.

    U.S. Court of Trade Judge Stephen Alexander Vaden is concerned with the risk of disclosing confidential information to the entities operating generative AI tools.  His order reads:

    Generative artificial intelligence programs that supply natural language answers to user prompts, such as ChatGPT or Google Bard, create novel risks to the security of confidential information.  Users having "conversations" with these programs may include confidential information in their prompts, which in turn may result in the corporate owner of the program retaining access to the confidential information.  Although the owners of generative artificial intelligence programs may make representations that they do not retain information supplied by users, their programs "learn" from every user conversation and cannot distinguish which conversations may contain confidential information . . .

    Because generative artificial intelligence programs challenge the Court's ability to protect confidential and business proprietary information from access by unauthorized parties, it is hereby:

    ORDERED that any submission in a case assigned to Judge Vaden that contains text drafted with the assistance of a generative artificial intelligence program on the basis of natural language prompts, including but not limited to ChatGPT and Google Bard, must be accompanied by:

    (1) A disclosure notice that identifies the program used and the specific portions of text that have been so drafted;

    (2) A certification that the use of such program has not resulted in the disclosure of any confidential or business proprietary information to any unauthorized party.[3]

    These two requirements are simple — lawyers can use LLMs to assist with submissions, but must notify the court that they did so and attest to not having disclosed a party's confidential information to such tools.  This will incentivize the lawyers to think twice before they submit a ChatGPT prompt such as "Write a legal argument that [trade secret] was improperly obtained by John Smith based on [factual allegations]."

    Finally, Judge Arun Subramanian of the Southern District of New York has issued a simple yet balanced and effective order:

    Use of ChatGPT and Other Tools.  Counsel is responsible for providing the Court with complete and accurate representations of the record, the procedural history of the case, and any cited legal authorities.  Use of ChatGPT or other such tools is not prohibited, but counsel must at all times personally confirm for themselves the accuracy of any research conducted by these means.  At all times, counsel—and specifically designated Lead Trial Counsel—bears responsibility for any filings made by the party that counsel represents.[4]

    In a minimally restrictive fashion, Judge Subramanian reminds lawyers that they are ultimately responsible for the veracity and accuracy of their filings.  This is not unlike reminding senior lawyers that they need to review and check the work of their junior associates.

    To be certain, these are not the only standing orders on generative AI that we will see.  Within a few months it may be rare for any judge not to have such an order in place.  Eventually, the gist of such orders will likely be synthesized into a standard of practice adopted by the vast majority of the judiciary.

    Of course, this begs the question of whether such a standard of practice will also put disclosure, confidentiality, and veracity requirements on judges' use of generative AI as well.

    [1] https://storage.courtlistener.com/recap/gov.uscourts.nysd.575368/gov.uscourts.nysd.575368.54.0_2.pdf.

    [2] https://www.paed.uscourts.gov/documents/standord/Standing%20Order%20Re%20Artificial%20Intelligence%206.6.pdf.

    [3] https://www.cit.uscourts.gov/sites/cit/files/Order%20on%20Artificial%20Intelligence.pdf.

    [4] https://www.nysd.uscourts.gov/sites/default/files/practice_documents/AS%20Subramanian%20Civil%20Individual%20Practices.pdf.

  • In re Theripion (Fed. Cir. 2023)

    By Kevin E. Noonan –

    Federal Circuit SealThe Patent Trial and Appeal Board (PTAB) has benefited, particularly after enactment of the Leahy-Smith America Invents Act, from the deference to its factual findings mandated by the Supreme Court's interpretation in Dickenson v. Zurko of the application (deferential for factual determinations) of the standard-of-review provisions in the Administrative Procedures Act.  This deference does not extend to the Board's decisions based on legal standards nor can the PTAB escape from Federal Circuit review of its reasoning (or failure to provide its reasoning), requirements illustrated in the Court's decision in In re Theripion.

    The case arose as an appeal from a decision from the PTAB in ex parte prosecution of U.S. Application No. 15/909,314, a U.S. national phase application from International Publication No. WO 2017/044424.  The Board affirmed the Examiner's determination that claims 1-13, 16, 22-24, and 27 of the '314 application were obvious.  Claim 1 is representative of the claims reviewed by the Court:

    1.  A fusion polypeptide comprising, from an amino-terminal position to a carboxyl-terminal position, ApoA1-L1-D, wherein:
        ApoA1 is a first polypeptide segment comprising an amino acid sequence having at least 95% identity with amino acid residues 19-267 or 25-267 of SEQ ID NO:2, wherein said first polypeptide segment has cholesterol efflux activity;
        L1 is a first polypeptide linker consisting of from 10 to 40 amino acid residues; and
        D is an immunoglobulin Fc region,
        wherein the fusion polypeptide has increased cholesterol efflux activity as compared to the ApoA1-L1-D fusion polypeptide in which L1 is a two amino acid linker or is absent.

    As explained in the opinion, there is a correlation between low blood levels of high-density lipoprotein (HDL) and the risk of stroke and heart attack, which are related to atherosclerosis.  Therapeutic intervention accordingly have been directed towards increasing HDL levels.  Apolipoprotein A-1 ("ApoA1") is "the principal protein component of HDL."  Thus, one stratagem for increasing HDL levels is to introduce ApoA1 into an individual having low HDL levels.  A drawback to this approach is that ApoA1 only remains intact in a human for a short time (it has a short "half-life").  The invention claimed in the '314 application is directed to modifying the protein to increase its half-life by linking it through a polypeptide linker to a portion of an antibody molecule (comprising the immunoglobulin Fc region).  (As explained in the opinion, antibody molecules have a relatively long half-life in vivo in contrast to ApoA1.)  The opinion sets out the understanding in the art that fusion proteins comprising immunoglobulin Fc regions were known to have improved half-lives, the art disclosing an ApoA1-Fc fusion (but in contrast to the claimed invention not having a polypeptide linker between these two components of the fusion protein).  This distinction is relevant, because the prior art fusion protein was deficient in one of ApoA1-HDL's important functions, increasing the process whereby the body removes free cholesterol from the bloodstream (termed reverse cholesterol transport, RCT).  Theripion's claims were directed to ApoA1-Fc fusion proteins joined by a polypeptide linker comprising 10-40 amino acids that had such beneficial RCT properties.

    The Examiner rejected the '314 application's claims for obviousness based on the combination of 4 references:  Knudson et al., 2011, U.S. Patent Publication No. 2011/0178029; Ledbetter et al., 2015, U.S. Patent No. 8,937,157; Bacus et al., 2009, U.S. Patent Publication No. 2009/0318346; and Lagerstedt et al., 2015, U.S. Patent Publication No. 2015/0353626.  (The Examiner applied other references to certain of the claims but these were not considered by the panel on appeal.)  The Board affirmed these rejections and this appeal followed.

    The Federal Circuit vacated and remanded, in an opinion by Judge Stark, joined by Judges Hughes and Cunningham.  Importantly for the panel's decision, the Board is required to "make the necessary findings and have an adequate evidentiary basis for its findings" to enable the Court to review them, under In re Nuvasive, Inc., 842 F.3d 1376, 1382 (Fed. Cir. 2016).  In addition, the Board must "articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made" concerning obviousness, Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983), although the amount of such explanation will vary case-by-case "depending on the complexity of the matter and the issues raised in the record," Pers. Web Techs., LLC v. Apple, Inc., 848 F.3d 987, 992 (Fed. Cir. 2017).

    The basis for Theripion's appeal (with which the panel agreed) is that the Board erred in its analysis of whether the claimed invention showed unexpected results (one of the objective indicia of non-obviousness) and whether the skilled worker would have had a motivation to combine the cited art with a reasonable expectation of success in achieving the claimed invention.  But the Court's agreement was limited by "the extent that we find the Board failed to adequately explain how it determined the '314 application's claims are obvious in light of the totality of the record before it" according to the opinion.  One example of the dearth in the Board's explanation involved whether including the linker would produce the improved RCT activity of the claimed fusion proteins, Theripion's contention that the Board found unpersuasive.  The opinion states that the panel was unable to discern the Board's reasoning of why this result would have been expected on the record before it, which was limited to the declarative statement that "[t]hus, one of ordinary skill in the art would similarly expect that use of a peptide linker, such as Gly4Ser4, would increase the biological activity (i.e., cholesterol efflux activity) of a Fc fusion protein with ApoA1."  In contrast, Theripion had submitted a declaration from one of the named inventors (and the lead author of one of the cited references) that "common practice in the art of Fc fusion protein engineering [was] to not include a peptide linker, or to include only a short, one or two amino acid linker, between the N-terminus of an Fc region and the C-terminus of a fusion partner."  In addition, Theripion provided prior art examples of linker-comprising fusion proteins that did not necessarily increase (and in at least one instance, decreased) protein function.  Finally, Example 1 of the '314 application showed a side-by-side comparison between ApoA1-Fc fusion proteins comprising a 26 amino acid sequence linker and one having none or a 2-amino acid linker, wherein increased RCT activity was seen only in the embodiment having the long linker.  While the Court did not hold that this evidence was insufficient or that the Board erred in finding it unpersuasive, the opinion states that "we cannot discern from [the Board's] opinion the reasons for such a conclusion [of nonpersuasiveness].  Nor can we determine whether the Board adequately considered the totality of Theripion's evidence."

    Illumination of the Board's reasoning was also not present in its explanation of why the Examiner was persuaded by the combination of Bacus and Ledbetter, particularly regarding the disclosure in Bacus of fusion proteins comprising linkers that involved "an entirely different type of protein."  Similarly, the panel found no reasoning on the record of why Ledbetter's disclosure that longer linkers were associated with increased DNase activity (another entirely different protein) using "yet another type of linker" was persuasive.  According to the opinion, "[t]he Board did not provide any rationale for why a skilled artisan would have expected Ledbetter's data relating to DNase fusion protein activity to be predictive of ApoA1 activity in the fusion proteins claimed in the '314 application.  After all, ApoA1 is an entirely different kind of protein than Bacus' ErbB or Ledbetter's DNase."  Finally, the Board apparently entirely ignored (at least on the record) prior art evidence that including a linker could reduce protein activity, particularly because the protein in these studies (DNase) was the same as in the Ledbetter reference relied upon by the Examiner to support the obviousness rejection.  And while recognizing that neither the Board nor the Examiner were obliged to "explicitly discuss every issue or every piece of evidence" and that failure to do so "does not alone establish that [the Board] did not consider [any such evidence]," Novartis AG v. Torrent Pharms. Ltd., 853 F.3d 1316, 1328 (Fed. Cir. 2017), the Board "must examine the relevant data and articulate a satisfactory explanation for its action[,] including a rational connection between the facts found and the choice made" under Motor Vehicle Mfrs. Ass'n. Reaching the heart of the matter, the opinion concludes this portion of its assessment of the Board's performance in this case by stating that "we are concerned that the Board may have improperly used the claims of the '314 application 'as a template for its own reconstruction,'" citing Sensonics, Inc. v. Aerosonic Corp., 81 F.3d 1566, 1570 (Fed. Cir. 1996).

    Theripion also contended that the Board erred its assessment of unexpected results by considering the Bacus and Ledbetter references (which as noted above were directed to different fusion proteins) rather than the reference by Knudson regarding ApoA1-Fc fusion proteins; this reference Theripion argued was the closest prior art which on that basis should have been considered, citing Kao Corp. v. Unilever U.S., Inc., 441 F.3d 963, 970 (Fed. Cir. 2006), and Adapt Pharma Ops. Ltd. v. Teva Pharms. USA, Inc., 25 F.4th 1354, 1372-73 (Fed. Cir. 2022).  Once again the panel states that while it appears the Board believed the Bacus and Ledbetter references were the closest prior art "the Board never expressly says so" and on these grounds the panel instructs the Board on remand to "determine which prior art is the closest prior art and explain why that is, and then consider and explain whether Theripion's results are unexpected relative to that closest prior art."

    Further, regarding the question of unexpected results, the Board failed to address (and thus the Court "had no analysis to review") whether there was a problem known in the prior art regarding low RCT activity in ApoA1-Fc fusion proteins having polypeptide linkers shorter than the 10-40 amino acids recited in Theripion's claims.  The Court recognized that "the '314 application solv[ing] a problem that was not recognized in the prior art, if true, could support a finding of nonobviousness, as it would support Theripion's contention that its results were unexpected," citing In re Gruskin, 234 F.2d 493, 498 (C.C.P.A. 1956).

    Turning to the question of the existence of a motivation to combine by the person of ordinary skill in the art, the panel noted that the Board asserted the combination of the Knudson, Bacus, Ledbetter, and Lagerstedt references, and Theripion argued that the "art fails to teach or suggest any functional relationship between linker length and protein function in the context of an ApoA1-Fc fusion."  Further, Teripion provided declaration evidence that the N-terminus of the Fc portion of the fusion protein "has generally been viewed in the art as a natural linker region that does not require further extension when constructing an Fc fusion protein."  This was evidence, Theripion contended before the Examiner, the Board, and the Federal Circuit that showed the skilled artisan would have had no motivation to combine the cited references.  As it did throughout the opinion, the panel found that the Board provided no basis for its conclusion to the contrary; indeed the opinion states that the Board "made findings regarding what each prior art reference taught in isolation and failed to articulate any reason why a skilled artisan would have modified Knudsen's system with Ledbetter's linker – other than the unexplained assertion that 'incorporation of such a linker increases biological activity of the fusion partner,' for which there is little, if any, support in the record."  This explanation is insufficient, the opinion asserts, because the Board "must articulate a reason why" a person of skill would be motivated to combine references," citing Nuvasive (emphasis in opinion) which in this case the Board did not.

    The Federal Circuit concludes the opinion with an explanation why it vacated and remanded rather than reversed, as Theripion had advocated they do.  The opinion states that "[g]iven that we are presently unsure of the bases on which the Board reached its subsidiary factual findings supporting its ultimate legal conclusion of obviousness, we are not in a position to determine whether there is substantial evidence to support the Board's determination," citing Alacritech, Inc. v. Intel Corp., 966 F.3d 1367, 1370-73 (Fed. Cir. 2020).

    In re Theripion (Fed. Cir. 2023)
    Panel: Circuit Judges Hughes, Cunningham, and Stark
    Opinion by Circuoit Judge Stark

  • Federal Circuit Special Committee Recommends One-Year Suspension of Judge Newman

    By Kevin E. Noonan –

    Federal Circuit SealA Special Committee of Federal Circuit judges (consisting of Chief Judge Kimberly Moore, former Chief Judge Sharon Prost, and Judge Richard Taranto) that has been investigating for several months allegations against Judge Pauline Newman related to her competency to remain on the bench, released an Order on July 31st suspending the Judge from participating in the Court's business for a year.  The suspension, if imposed by the Judicial Council, is subject to review should Judge Newman agree to submit to neurological and psychiatric tests previously mandated by the Special Committee.  To date the Judge has refused, although she has provided evidence from her own medical specialists as to her competency.

    The basis for a hearing held on July 13th (a redacted transcript of which is included as an Exhibit to the Order) and the Special Committee's Order is whether Judge Newman's refusal to comply was itself judicial misconduct, which the Committee found it was.  In its Order, the Committee sets forth the legal, procedural, and factual justifications for its actions and its decision in the Order.  These include a legal justification for the Committee's authority to conduct the investigation and issue its Orders, and the evidence supporting its basis for requiring the mandated medical and psychiatric examination and records that Judge Newman has failed, in their view, to provide.  Judge Newman has had no good cause for that conduct, according to the Order.  Accordingly, her refusal constitutes judicial misconduct.

    The Order recognizes Judge Newman's distinguished career, but says that "[t]he question presented to this Committee, however, is not whether Judge Newman has had an extraordinary career or whether she has made important contributions to the law" but rather to address "the unenviable task of investigating . . . whether Judge Newman now suffers from a disability that renders her no longer capable of performing her job as a judge."  At the same time, the Order asserts that Judge Newman is responsible for "extraordinary delays in issuing opinions" (a substantive allegation about her performance) and "concerns about her mental fitness raised by numerous interactions with court staff" (allegations supported by information in Exhibits appended to the Order).

    The Order goes on to lay the blame on Judge Newman, asserting that the Committee has been frustrated in the performance of their duties "under governing rules and statutes" by the Judge's "consistent refusal to cooperate."  These include the Judge's refusal to submit to "a neurological evaluation and neuropsychological testing ("medical examinations") by professionals selected by the Committee and to provide certain medical records," illustrating an unwillingness to recognized and address that "selected by the Committee" is at least part of the basis for the Judge's resistance.  (Judge Newman supplied such medical and psychiatric information from her own doctors, which did not satisfy the Committee.)  Indeed, the Order characterizes Judge Newman's behavior as unreasonable recalcitrance (complaining that the Committee had asked for this review "in some instances for the third time"; emphasis in Order).  And the consequence according to the Order is that the Committee has not been able to satisfy its statutory duty (which requires a "comprehensive written report"), the Order emphasizing that it has limited the inquiry to whether Judge Newman's resistance is itself judicial misconduct (a meta-style change in the issues that are the subject of the Order); as a consequence the Committee does not need to render a decision on the merits of their investigation.

    The Order justifies the Committee's inquiry on the merits by the existence of "incon­trovertible data from the Clerk's Office establishing that Judge Newman (despite having a significantly reduced workload) is unable to complete her work in a timely fashion."  This evidence is that the Judge authored less than half the number of opinions (including dissents) than the average of the Court's judges (28 versus 61); these statistics are not consistent with a separate study by Professor Paul R. Gugliuzza (32 versus 47) albeit taken over a different timeframe; see "Judge Newman and the On-Going Attempts to Remove Her from the Federal Circuit").  (The Order responds by asserting that the public record is deficient, inter alia, for failing to take into consideration per curiam opinions.)  The Order further cites the length of time taken to issue an opinion (199 days versus 53 days) and the number of panels on which the Judge sat (65 versus 129), summarizing that the Judge "took four times as long to write half the opin­ions while sitting on half the number of cases as her colleagues."  Currently, the Order sets out, Judge Newman has "a backlog of seven opinions that have not issued, and they now average 230 days old."

    Secondly, the Order cites "extensive evidence" from more than 20 interviews with court staff (some of which are in the appended materials).  This evidence is characterized as reports of "deeply troubling interactions" which "sadly suggest(s) significant mental deterioration including memory loss, confusion, lack of comprehension, paranoia, anger, hostility, and severe agitation."  The Committee "strongly disagrees" with Judge Newman's characterizations of the evidence as "minutiae" and "petty grievances," asserting that these events "raise concerns about serious dysfunction on Judge Newman's part" and accordingly "amply warrant" the Committee's demand for medical and psychiatric testing (by their doctors not the Judge's).  The Order follows with a litany of descriptions of these accusations; interestingly in one anecdote a member of Judge Newman's staff refused to curtail her assisting the Judge in personal or scheduling matters, and when compelled to testify under oath this staff member invoked the Fifth Amendment repeatedly.  Another assistant according to the Order was threatened with dismissal by the Judge for his role in raising issues relating to the Judge's behavior, along with allegations by the Judge that the assistant had stolen undefined information when his computer went with him to another assistant's post within the Court.  This description is replete with stories that the Judge was "angry," speaking in an "angry voice," "pacing back and forth," and "mumbling" about alleged slights.  The Order ascribes to unnamed Court staff description of their interactions with the Judge as being "aggressive, angry, combative, and intimidating"; "bizarre and unnecessarily hostile"; making "personal accusations"; "agitated, belligerent, and demonstratively angry"; and "ranting, rambling, and paranoid."  This purported behavior (as well as the Clerk of Court advising staff either not to interact with the Judge or to bring a co-worker with them), the Order states, "does not evince merely bad behavior; it raises serious concerns about Judge Newman's cognitive functioning."  All of these vignettes are asserted in the Order as giving the Committee "ample justification" in its demands for physical and psychological examination.  Coupled with the Judge's refusal to comply the Committee finds her conduct to be "prejudicial to the effective and expeditious administration of the business of the courts" citing 28 U.S.C. § 351(a) and In re Complaint of Judicial Misconduct, C.C.D. No. 17-01 (U.S. Jud. Conf. 2017).

    After setting forth the deficiencies in the medical and psychological testing Judge Newman has offered instead of the Committee's selected medical practitioners, and the importance and statutory bases for the Committee's investigation, the Order states its conclusion that Judge Newman's behavior amounts to judicial misconduct and recommends a one-year ban on the Judge sitting on any new cases until she complies with the Committee's demands.  The remainder of the Order sets forth a history of the proceedings against the Judge and the evidence accumulated relating to the Committee's inquiries (the identities of witnesses and experts being redacted, although their status and position within the Court's staff are noted).  The Order also sets for the Committee's legal and evidentiary justifications for the proceedings and the Order (the evidentiary bases being disclosed in part in the appended affidavits and other Exhibits).  From this evidence, the Committee concluded that:

    Judge Newman's extended delays relative to her colleagues, coupled with her considerably lower productivity during the same period, is strong cause for concern that she suffers from a disability impairing her ability to carry out the responsibilities of her office.

    And that:

    The results of the Committee investigation demonstrate that Judge Newman's lower productivity is indicated in three ways: (1) she does not assign herself a comparable share of opinions (even considering her higher rate of dissenting) and takes unreasonable lengths of time to complete opinions she does assign herself (as detailed above); (2) she does not participate in motions panels, an important and time-consuming task required of active judges; and, (3) Judge Newman's participation in cases has substantially slowed over the last year: May 2022-April 2023.  From May 2022 through April 2023, the average active Federal Circuit judge participated in deciding 129 cases; Judge Newman in contrast participated in deciding only 65 cases.

    Finally, the Order addresses the allegations (see below) raised by Judge Newman in her suit brought in District Court and rejects them, and further rejects any allegations of bias against the Judge.

    The Committee's recommendation for a one-year suspension is mitigated by the Committee's further decision that it may be lifted should Judge Newman undergo the required tests by the Committee's chosen medical and psychiatric professionals and should those results rebut the allegations of unfitness raised in part by the Committee itself.

    Judge Newman for her part has filed suit in the District Court for the District of Columbia on allegations that the Special Committee's actions violate Article III of the Constitution (regarding life tenure for federal judges) and Article I (that the House of Representatives has sole authority to remove a federal judge from office); Fifth Amendment violations of due process; First Amendment violations related to a "gag order" against the Judge; and Fourth Amendment violations for unconstitutional search relating to the compulsory medical and psychiatric examinations.  That suit is ongoing, but the parties are under an Order by the District Court to submit to "informal" mediation that will be overseen by Thomas Griffith, a retired judge on the Court of Appeals for the D.C. Circuit.

    Judge Newman has recently given interviews to IP Law 360, Bloomberg Industry Group  and the Bloomberg's On the Merits podcast, the Washington Post, and Clause 8 podcast to explain her beliefs on the falsity of the allegations against her and why the Special Committee has taken its actions against her.

    Two former Chief Judges of the Court, Judge Paul Michel and Judge Randal Rader, have spoken out in the Judge's defense (see "Chief Judge Moore v. Judge Newman: An Unacceptable Breakdown of Court Governance, Collegiality and Procedural Fairness" and "The Federal Circuit Owes Judge Newman an Apology," respectively) and Dr. Ron Katznelson has published a study on possible motivations other than Judge Newman's competency that may have factored in the creation of the Special Committee and its recent actions.

    It is likely that the Judicial Council will follow the Committee's recommendation and suspend Judge Newman from participating in the Court's business.  In view of her age, this is a significant sanction, imposed not on the asserted basis that Judge Newman cannot satisfy the requirements of her office but that in challenging the allegations against her she has committed judicial misconduct.  However this matter resolves, it is a sad chapter and perhaps ultimately an end to an illustrious career diminished (regardless of the encomiums to it contained in the Order) by these proceedings against her.

  • American Axle’s Claims Found Eligible on Remand

    By Michael Borella —

    District Court for the District of DelawareThe storied case of American Axle v. Neapco Holdings has entered a new chapter — not the final chapter but the plot has thickened considerably.  As a recap, Judge Stark, then of the District Court for the District of Delaware, found all asserted claims of U.S. Patent No. 7,774,911 invalid under 35 U.S.C. § 101 as being directed to a law of nature implemented by well-understood, routine, and conventional means.

    The main thrust of this opinion and those that follow was focused on claims 1 and 22, which read:

    1.  A method for manufacturing a shaft assembly of a driveline system, the driveline system further including a first driveline component and a second driveline component, the shaft assembly being adapted to transmit torque between the first driveline component and the second driveline component, the method comprising:
        providing a hollow shaft member;
        tuning at least one liner to attenuate at least two types of vibration transmitted through the shaft member; and
        positioning the at least one liner within the shaft member such that the at least one liner is configured to damp shell mode vibrations in the shaft member by an amount that is greater than or equal to about 2%, and the at least one liner is also configured to damp bending mode vibrations in the shaft member, the at least one liner being tuned to within about ±20% of a bending mode natural frequency of the shaft assembly as installed in the driveline system.

    22.  A method for manufacturing a shaft assembly of a driveline system, the driveline system further including a first driveline component and a second driveline component, the shaft assembly being adapted to transmit torque between the first driveline component and the second driveline component, the method comprising:
        providing a hollow shaft member;
        tuning a mass and a stiffness of at least one liner, and
        inserting the at least one liner into the shaft member;
        wherein the at least one liner is a tuned resistive absorber for attenuating shell mode vibrations and
        wherein the at least one liner is a tuned reactive absorber for attenuating bending mode vibrations.

    A Federal Circuit majority affirmed Judge Stark, adding their observation that the specification of the '911 patent does not disclose how to achieve the claimed goals as further grounds of ineligibility.  Judge Moore penned a vociferous dissent questioning the majority's reading of the record and application of the Alice Corp. v. CLS Bank Int'l two-part eligibility test.

    Less than a year later, in response to a petition for en banc rehearing, the majority withdrew its original opinion and handed down a revised opinion finding claim 22 still ineligible but vacating and remanding the District Court's decision about claim 1.  The majority also took the opportunity to express its disagreement with Judge Moore's view of the facts and relevant law.

    American Axle filed a petition for Writ of Certiorari with the Supreme Court.  After a long wait, the Court denied the petition.  Thus, the majority's reasoning is still good law.  More correctly, it is still binding precedent — whether the decision was good is still hotly debated.  Indeed, the reasoning of American Axle was instrumental in an abomination of an ITC decision finding a diamond-encrusted drill bit to be an abstract idea.

    Today, we have a decision on remand to the District Court.  Judge Williams has taken on the case, given Judge Stark's promotion to the Federal Circuit.  The issues under dispute were cross-motions related to the eligibility of claim 1 and its dependent claims under § 101, as well as validity under § 102 and non-infringement.  Here, we focus just on the § 101 dust-up.

    As an initial matter, the parties disagreed as to whether the Federal Circuit's invalidation of claim 22 could be imputed to claim 1.  Judge Williams quickly put this matter to rest, finding that:

    [T]he Federal Circuit expressly stated that "Claim 1 is different than claim 22," and "that the 'characteristics' that can be 'tuned' in claim 1 include variables other than mass and stiffness," which were the variables the Federal Circuit relied on in finding that claim 22 was directed to a natural law, i.e., Hooke's law.

    Another preliminary motion went in the other direction, with Judge Williams ruling that the issue of whether claim 1 is directed to an abstract idea (as opposed to a natural law) was not waived by Neapco's lack of contentions on that point until now.  Notably, "the Federal Circuit explicitly remanded the case for the district court to address this alternative eligibility theory, i.e., the abstract idea theory, in the first instance."

    Addressing the substance of claim 1 under Alice, Judge Williams started with the premise that "[t]he Alice step one inquiry considers what the patent asserts to be the focus of the claimed advance over the prior art."  He wasted no time concluding that the claimed invention was "directed to a method of designing and manufacturing a tangible propshaft with reduced vibration that includes tuning and  positioning a liner within a propshaft to attenuate bending and shell mode vibration."  According to the judge, this is "[f]ar from an abstract idea," as the claims involve a tangible system and had "an observable real-world impact."

    In this regard, Neapco's position that the claims merely recite a "desired result of attenuating certain vibration modes and frequencies" based on abstract concepts of tuning and positioning failed to consider the claims as a whole.  Judge Williams went back to Diamond v. Diehr's prohibition on dissecting claims in the § 101 calculus to support this point.

    For further support, Judge Williams appears to agree with Judge Moore in principle that the specification describes "a meaningful improvement to the design and manufacturing of propshafts."  He also notes that "the specification provides the design parameters a person of ordinary skill in the art should use to tune a liner to reduce propshaft vibration . . . [o]ther embodiments illustrate how tuned liners may be physically structured in several distinct ways."  Moreover, the dependent claims explicitly recite how to achieve the specific damping of two modes of vibration.

    Neapco's attempt to bifurcate the claims under part one of Alice in order to ignore the "conventional" tangible aspects was, in the opinion of the judge, blurring the line between part one and part two of the test.  Moreover, he was skeptical of Neapco's contentions as improperly incorporating arguments against novelty rather than eligibility.

    Accordingly, the District Court found claim 1 and its dependents to not be non-abstract and eligible under part one of Alice.  This obviated the need for a part two analysis.

    While this opinion is a breath of fresh air in the patent eligibility swamp (if for no other reason than it simply making sense), the story is still not over.  It is almost inevitable that Neapco will appeal again to the Federal Circuit.  And, it is likely that the appellate proceeding will go against American Axle.

    Judge Williams relies heavily on the principles of Diehr, which were modified if not overruled by Alice.  There are numerous precedential Federal Circuit opinions that can be used to counter his findings on the combining of parts one and two of Alice (the Federal Circuit routinely bends it's understanding of Alice to fit its desired outcome), as well as his comments on whether novelty can be considered under part one (it can and has been in many cases including some that Judge Williams quotes for other purposes).  Additionally, if Judge Stark ends up on the panel that hears the appeal, it is unlikely that he will be willing to contradict what he initially concluded about the eligibility of claim 1 over five years ago.

    Memorandum Order by District Judge Gregory B. Williams