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  • Nantkwest, Inc. v. Matal (Fed. Cir. 2017)

    By Josh Rich —

    Federal Circuit SealPatent applicants dissatisfied with final outcome of patent prosecution proceedings have long had two options for court review of a Patent and Trademark Appeal Board decision:  an appeal to the Federal Circuit under 35 U.S.C. § 141 or a civil action in the Eastern District of Virginia under 35 U.S.C. § 145.  For over 175 years, applicants faced the same risk of paying the Patent and Trademark Office's fees in either proceeding.  But in the Nantkwest case, the Patent and Trademark Office asserted that it was entitled to recover attorneys' fees (and other expenses) regardless of the outcome of the case; a divided panel of the Federal Circuit affirmed that it was entitled to receive those fees.  As a result, future applicants dissatisfied with Patent and Trademark Office results are likely to think twice before filing an action under § 145.

    Background

    Dr. Hans Klingemann filed a patent application in 2001 directed to a method of treating cancer by administering natural killer cells.  His claims were rejected for obviousness by the examiner, and he appealed the Patent Trial and Appeal Board.  The Board affirmed the examiner's rejection.  Dr. Klingemann's assignee, Nantkwest, filed a civil action under § 145.  The District Court granted summary judgment of obviousness to the Patent and Trademark Office (which was upheld on appeal by the Federal Circuit).  The Patent and Trademark Office then sought to recover all of its expenses, including expert, paralegal, and attorneys' fees.

    Section 145 permits applicants dissatisfied with the final outcome of patent prosecution proceedings to file a civil action; it also provides that "[a]ll the expenses of the proceedings shall be paid by the applicant."  Traditionally, the Patent and Trademark Office applied that provision to seek recovery of costs — not attorney's fees — in cases in which it had prevailed.

    The Nantkwest District Court held that the Patent and Trademark Office was entitled to recover expert costs, but not attorneys' fees.  Nantkwest, Inc. v. Lee, 162 F. Supp. 3d 540 (E.D. Va. 2016).  It started with the strong presumption of the "American Rule":  that each party is required to pay its own attorneys' fees, regardless of the outcome of the case, in the absence of a clear statutory or contractual obligation to the contrary.  Id. at 542.  In doing so, the District Court relied on decades of Supreme Court decisions holding that "departures from the American Rule are authorized only when there is a 'specific and explicit provision[] for the allowance of attorneys' fees under [the] selected statute[].'"  Id. (quoting Baker Botts L.L.P. v. ASARCO LLC, ___ U.S. ___, 135 S.Ct. 2158, 2164 (2015); Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 260(1975)).  The District Court found that § 145 was not sufficiently specific and explicit to vary from the American Rule.  Id. at 543-45.  In doing so, it asserted that it was not compelled to follow the Fourth Circuit's decision in Shammas v. Focarino, 784 F.3d 219 (4th Cir. 2015), cert. denied sub nom. Shammas v. Hirshfeld, 136 S. Ct. 1376 (2016), because Shammas was erroneously decided.  Id. at 545-46.

    In the Shammas case, the Fourth Circuit considered whether the Patent and Trademark Office could recover fees when a dissatisfied applicant in an ex parte trademark proceeding elected to commence a de novo action in the district court.  As with § 145, 15 U.S.C. § 1071(b) permits such an action in relation to a trademark application.  But 15 U.S.C. § 1071(b)(3) provides, "In any case where there is no adverse party, a copy of the complaint shall be served on the Director, and, unless the court finds the expenses to be unreasonable, all the expenses of the proceeding shall be paid by the party bringing the case, whether the final decision is in favor of such party or not."

    The Fourth Circuit started from the proposition, admitted by Shammas, that "all the expenses of the proceeding" would generally be a broad enough term to include attorneys' fees.  784 F.3d at 222.  Shammas argued, however, that § 1071(b)(3) would have had to expressly identify attorneys' fees if it were to include them.  The Fourth Circuit recognized that the American Rule would compel such a requirement if it applied.  But it then determined that the American Rule did not apply because:

    [§ 1071(b)(3)] is not a fee-shifting statute that purports to rebut the presumption of the Rule.  Rather than imposing expenses based on whether the PTO prevails, § 1071(b)(3) imposes the expenses of the proceeding on the ex parte plaintiff, "whether the final decision is in favor of such party or not."  (Emphasis added).  Thus, even if Shammas had prevailed in the district court, he still would have had to pay all of the PTO's expenses.  Because the PTO is entitled to recover its expenses even when it completely fails, § 1071(b)(3) need not be interpreted against the backdrop of the American Rule.  Therefore, even assuming that a statute must explicitly provide for the shifting of attorneys fees to overcome the presumption of the American Rule, that requirement is not applicable here.

    Id. at 223-24.  Thus, the Fourth Circuit awarded attorneys' fees to the Patent and Trademark Office.

    The Federal Circuit's Nantkwist Decision

    Like the Fourth Circuit in Shammas, the Federal Circuit in Nantkwest started with the question of whether the American Rule was applicable to the case.  The Federal Circuit rejected Nantkwest's argument that the Supreme Court's Baker Botts precedent applied to all fee-shifting statutes.  Rather, it found that the precedent only applied when a party was "attempting to extend [a fee-shifting statute's] reach to ancillary litigation Congress never intended."  Nonetheless, the Federal Circuit decided that attorneys' fees should be assessed, regardless of whether the American Rule applied.

    As the Supreme Court held in the Alyeska Pipeline case, the American Rule does not apply when a statute specifically and explicitly authorizes an award of fees.  Relying on the Shammas case and a Second Circuit case (United States v. 110-118 Riverside Tenants Corp., 886 F.2d 514 (2d Cir. 1989)), the Federal Circuit found that § 145 was sufficiently clear to authorize fees under the American Rule.  Specifically, it relied upon legal dictionaries and treatises to support the inclusion of attorneys' fees in expenses, and distinguished between costs — which normally do not include fees — and expenses.  The Court relied upon the belief that its conclusion was "particularly important here in the context of § 145's all expenses provision."  Unlike private attorneys, the Patent and Trademark Office relies upon the Office of Solicitor's employees, who do not bill hours individually or collect fees from a client.  Thus, it asserted that those fees were more similar to expenses for the government than a "fee."

    The majority of the panel also rejected Nantkwest's argument that the Patent and Trademark Office would have had to pay the attorneys' salaries regardless of whether it had to defend against Nantkwest's suit.  The Court rejected that argument "because the litigation required the lawyers to divert their time away from other pending matters."  Notably, the Court considered the imposition of expenses under § 145 regardless of the outcome of the case to be an intentional disincentive for the bringing of such a de novo case because of the expense and difficulty imposed by a review of all issues, with discovery available to the aggrieved applicant.  Thus, it held that the Patent and Trademark Office could recover all expenses including attorneys' fees in any such case.

    Judge Stoll dissented from the majority's decision, relying primarily on the American Rule.  She found that § 145 "neither mentions 'attorneys' fees' nor reflects a congressional intent to authorize them."  Unlike the majority, she relied primarily on the language of the statute and its lack of mention of attorneys' fees as a particularly telling sign.  Unlike other statutes that permit recovery of attorneys' fees, there is no discussion of fees, either as part of recoverable expenses or otherwise.  That was especially true in light of sources contemporaneous with the 1839 enactment of § 145's predecessor statute, which defined expenses as costs, and vice versa.  Finally, Judge Stoll noted that it would be particularly unusual to view § 145 as a fee-shifting statute in light of the imposition of expenses on both unsuccessful and successful litigants.

    Conclusion

    In light of the Federal Circuit's Nantkwest decision, applicants disappointed with Patent and Trademark Office proceedings will have to think twice before pursuing a de novo district court action.  The added cost of the Patent and Trademark Office's fees and expenses — in this case, over $100,000 — will have to be weighed against the greater chance of obtaining a patent.  If the pivotal issue is a question of law, rather than some fact missing from the record before the Board, it strongly suggests seeking an appeal to the Federal Circuit under § 141.  Only when additional fact-finding is required, and the patent application is especially important, will a district court action under § 145 be worth it.

    Nantkwest, Inc. v. Matal (Fed. Cir. 2017)
    Panel: Chief Judge Prost and Circuit Judges Dyk and Stoll
    Opinion by Chief Judge Prost; dissenting opinion by Circuit Judge Stoll

  • Cleveland Clinic Foundation v. True Health Diagnostics LLC (Fed. Cir. 2017)

    By Kevin E. Noonan –

    Federal Circuit SealMost people have had the experience of becoming lost and, having arrived at their destination, realizing that it was only one false turn that caused their confusion.  For those with a physics background one can recall the feature of vector calculus that a small displacement at a first position can result in a large displacement at a later position further along the vector's path.  Both these thoughts come unbidden when reading the Federal Circuit's decision on June 16th in Cleveland Clinic Foundation v. True Health Diagnostics LLC (where the one false turn was the Court's decision in Ariosa Diagnostics v. Sequenom and that initial "small nudge" can be found in the Supreme Court's Mayo Collaborative Services v. Prometheus Laboratories decision).

    The case involved Cleveland Clinic's lawsuit for patent infringement against True Health over U.S. Patent Nos. 7,223,552, 7,459,286, and 8,349,581.  The technology disclosed and claimed in these patents relate to methods for detecting myeloperoxidase (MPO) in a bodily sample; a fourth patent, No. 9,170,260, is directed to methods for treating a patient having cardiovascular disease.  The following claims are representative according to the opinion:

    For the '522 patent:

    11.  A method of assessing a test subject's risk of having atherosclerotic cardiovascular disease, comprising comparing levels of myeloperoxidase in a bodily sample from the test subject with levels of myeloperoxidase in comparable bodily samples from control subjects diagnosed as not having the disease, said bodily sample being blood, serum, plasma, blood leukocytes selected from the group consisting of neutrophils, monocytes, subpopulations of neutrophils, and sub-populations of monocytes, or any combination thereo[f]; wherein the levels of myeloperoxidase in the bodily from the test subject relative to the levels of [m]yeloperoxidase in the comparable bodily samples from control subjects is indicative of the extent of the test subject's risk of having atherosclerotic cardiovascular disease.

    14.  A method of assessing a test subject's risk of developing a complication of atherosclerotic cardiovascular disease comprising: determining levels of myeloperoxidase (MPO) activity, myeloperoxidase (MPO) mass, or both in a bodily sample of the test subject, said bodily sample being blood, serum, plasma, blood leukocytes selected from the group consisting of neutrophils and monocytes, or any combination thereof; wherein elevated levels of MPO activity or MPO mass or both in the test subject's bodily sample as compared to levels of MPO activity, MPO mass, or both, respectively in comparable bodily samples obtained from control subjects diagnosed as not having the disease indicates that the test subject is at risk of developing a complication of atherosclerotic cardiovascular disease.

    15.  The method of claim 14, wherein the test subject's risk of developing a complication of atherosclerotic cardiovascular disease is determined by comparing levels of my[elo]peroxidase mass in the test subject's bodily sample to levels of myeloperoxidase mass in comparable samples obtained from the control subjects.

    For the '286 patent:

    21.  A method of assessing the risk of requiring medical intervention in a patient who is presenting with chest pain, comprising characterizing the levels of myeloperoxidase activity, myeloperoxidase mass, or both, respectively in the bodily sample from the human patient, wherein said bodily sample is blood or a blood derivative, wherein a patient whose levels of myeloperoxidase activity, myeloperoxidase mass, or both is characterized as being elevated in comparison to levels of myeloperoxidase activity, myeloperoxidase mass or both in a comparable bodily samples obtained from individuals in a control population is at risk of requiring medical intervention to prevent the occurrence of an adverse cardiac event within the next six months.

    22.  A method of determining whether a patient who presents with chest pain is at risk of requiring medical intervention to prevent an adverse cardiac event within the next six months comprising: comparing the level of a risk predictor in a bodily sample from the subject with a value that is based on the level of said risk predictor in comparable samples from a control population, wherein said risk predictor is myeloperoxidase activity, myeloperoxidase mass, a myeloperoxidase generated oxidation product, or any combination thereof, and wherein said bodily sample is blood, serum, plasma, or urine, wherein a subject whose bodily sample contains elevated levels of said risk predictor as compared to the control value is at risk of requiring medical intervention to prevent an adverse cardiac event within 6 months of presenting with chest pain, and wherein the difference between the level of the risk predictor in the patient's bodily sample and the level of the risk predictor in a comparable bodily sample from the control population establishes the extent of the risk to the subject of requiring medical intervention to prevent an adverse cardiac event within the next six months.

    For the '581 patent:

    5.  A method of determining whether a patient who presents with chest pain is at risk of requiring medical intervention to prevent an adverse cardiac event within the next six months comprising: determining the level of risk predictor in a bodily sample from the subject, wherein said risk predictor is myeloperoxidase activity, myeloperoxidase mass, a myeloperoxidase (MPO)-generated oxidation product or any combination thereof, wherein said bodily sample is blood, serum, plasma or urine, wherein said myeloperoxidase-generated oxidation product is nitrotyrosine or a myeloperoxidase generated lipid peroxidation product selected from [list of products] or any combination thereof, and comparing the level of said risk predictor in the bodily sample of the patient to the level of said risk predictor in comparable samples obtained from a control population, wherein a subject whose bodily sample contains elevated levels of said risk predictor as compared to the control value is at risk of requiring medical intervention to prevent an adverse cardiac event within 6 months of presenting with chest pain.

    The opinion notes that the prior art taught that MPO in blood was an early symptom of heart disease associated with atherosclerotic plaques that could be "indirectly" detected in blood, and that the inventors here "purportedly discovered how to 'see' MPO in blood and correlate that to the risk of cardiovascular disease."  The specification (as was the practice prior to the Mayo decision) disclosed that MPO could be detected "by any of a variety of standard methods known in the art," and that commercially available kits could be modified to detect MPO according to the methods disclosed and claimed in these patents.  In addition, according to the opinion, the patents disclosed and claimed statistical methods derived from populations of cardiovascular disease patients and "control" groups of individuals without disease to provide a basis for diagnosing cardiovascular disease using MPO detection.

    The '260 patent, which claims methods of treatment, "builds on" the diagnostic patents according to the opinion; claim 1 is representative:

    1.  A method for administering a lipid lowering agent to a human patient based on elevated levels of myeloperoxidase (MPO) mass and/or activity comprising:
        (a) performing an enzyme linked immunosorbent assay (ELISA) comprising contacting a serum or plasma sample with an anti-MPO antibody and a peroxidase activity assay to determine MPO activity in the serum or plasma sample;
        (b) selecting a patient who has elevated levels of MPO mass and/or activity compared to levels of MPO mass and/or activity in apparently healthy control subjects; and
        (c) administering a lipid lowering agent to the selected human patient.

    Defendant True Health is a diagnostics company according to the opinion, that Cleveland Clinic sued for literal infringement of the '522, '286, and '581 patents, and for contributory infringement and inducement of infringement of the '260 patent.  The District Court granted True Health's motion to dismiss under Fed. R. Civ. Proc. 12(b)(6) for failure to state a claim with regard to the diagnostic method patents, because the claims of these patents were directed to patent-ineligible subject matter (i.e., "laws of nature").  The Court also granted True Health's motion regarding the contributory and inducement claims.  These motions were granted without claim construction, which the District Court justified based on Cleveland Clinic's purported failure to offer any proposed construction for any claim terms and for failing to point out any claim used by the Court as a representative claim that plaintiff asserted was not representative.  With regard to the substantive basis for granting True Health's motion, the District Court relied upon the Mayo/Alice two-step analysis, finding that the claims were directed to the "law of nature" regarding the correlation between MPO levels in blood and cardiovascular disease.  The Court then found the claims to lack the ineluctable "something more" required by the Mayo/Alice test, in view of the specification's disclosure regarding the use of conventional detection methods.  In addition, the Court found that "comparing" MPO blood levels in patients with population control values constituted "a bare mental process."  For the method of treatment claims, the District Court determined that a testing service was not a "material or apparatus" as required for contributory infringement to lie, citing In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323, 1337 (Fed. Cir. 2012).  Finally, the District Court based its finding that Cleveland Clinic had not sufficiently plead inducement on its appreciation that there were insufficient facts in the complaint to support the allegation.

    The Federal Circuit affirmed, in an opinion by Judge Reyna joined by Judges Lourie and Wallach.  Addressing the procedural issues, the panel held that considering (and granting) a motion to dismiss based on Fed. R. Civ. Proc. 12(b)(6) without claim construction was not error, nor was there error in considering certain claims to be representative.  Curiously, the Court based its affirmance of the latter principle on substantive grounds, that it disagreed with Cleveland Clinic that other claims provided the requisite "inventive concept" that the representative claims did not.  This basis does not address the underlying question, of whether generally a district court can cherry pick claims asserted by a plaintiff to find that the Mayo/Alice test is not satisfied, and while this conclusion may be the correct one, in this case affirming this procedural shortcut precludes future plaintiffs of the ability to overcome a Section 101 challenge based on there being at least one asserted claim that satisfies the test.  Of course, the precedent regarding Cleveland Clinics' second challenge, that a district court can grant a motion to dismiss without claim construction, is as prevalent as it is mystifying, and the panel here relies upon some of it to affirm the procedural posture of the case (e.g., Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d 1369, 1373–74 (Fed. Cir. 2016).

    Turning to the substance, the panel easily found the diagnostic method claims ineligible, relying heavily on its earlier decision in Ariosa v. Sequenom.  This manner of deciding the question has the benefit of efficiency; in a decision comprising about 6,000 words, it takes the Court less than 1500 to apply its Ariosa precedent here.  With regard to step one of the Mayo/Alice test, many of the same tropes in the earlier case recur:  that the method claims are directed "merely" to the "discovery that patients with cardiovascular disease have significantly greater levels of leukocyte and [MPO]," (constructively reading the word "discovery" out of Section 101); that the claims "do not purport to alter MPO levels in any way" (creatively analogizing these claims to those in Genetic Techs v. Merial, where the court stated those claims "involved[d] no creation or alteration of DNA sequences"); that the detected elevated MPO levels "exists in principle apart from human action"; and that Cleveland Clinic had not invented any new and useful laboratory technique to detect MPO levels, thus distinguishing these methods from the patent-eligible methods at issue in Rapid Litigation Management Ltd. v. CellzDirect, Inc., 827 F.3d 1042 (Fed. Cir. 2016).

    Turning to step 2 of the Mayo/Alice test, the opinion dutifully recites the requirement that the claims be considered "as a whole" ("as an ordered combination"), but not surprisingly fails to find an inventive concept, again with frank reliance on the Court's Ariosa decision and based on the patentee's failure to invent a new method for detecting MPO levels in blood (not surprisingly, because that was not their invention).  The panel's final application of its Ariosa precedent comes in dismissing Cleveland Clinics' argument regarding lack of preemption, because in Ariosa the Court held that "[w]here a patent's claims are deemed only to disclose patent ineligible subject matter under the Mayo framework, as they are in this case, preemption concerns are fully addressed and made moot."  Even less is made of claims that the invention here was groundbreaking; as considered by the Federal Circuit any such characteristic does not imbue a claim with patent-eligible weight.

    On the issue of contributory or induced infringement, the opinion finds that the District Court did not err, under Sixth Circuit precedent, in denying Cleveland Clinic the opportunity to amend its complaint to cure the purported deficiencies in its factual allegations.  This precedent, abuse of discretion, is sufficiently deferential to the District Court that the Federal Circuit easily affirmed the decision below.

    The outcome here is not surprising, and the failure of the Cleveland Clinic in an Ohio courtroom to defeat a motion to dismiss indicates how difficult it has become to assert claims such as the ones at issue here.  There may be ways for the creative draftsman to work around the constraints created by the Mayo/Alice framework as elucidated in the Ariosa precedent and its related cases (now including this one) for new technologies.  But unless the Supreme Court sees the error in its ways, or Congress overrules its Mayo/Alice decisions, technology transfer of university inventions will not be to startups and licensees but to copycats and pirates for the foreseeable future.

    Cleveland Clinic Foundation v. True Health Diagnostics LLC (Fed. Cir. 2017)
    Panel: Circuit Judges Lourie, Reyna, and Wallach
    Opinion by Circuit Judge Reyna

  • GlaxoSmithKline LLC v. Glenmark Pharmaceuticals Inc. (D. Del. 2017)

    District Court Overrules Defendants' Objections to Magistrate's Report on Lost Profits

    By Donald Zuhn —

    District Court for the District of DelawareEarlier this month, in GlaxoSmithKline LLC v. Glenmark Pharmaceuticals Inc., U.S. District Judge Leonard P. Stark of the U.S. District Court for the District of Delaware issued a Memorandum Order that, inter alia, overruled objections by Defendants Glenmark Pharmaceuticals Inc., USA and Teva Pharmaceuticals USA, Inc. to a Report and Recommendation issued by Magistrate Judge Burke and adopted the Report.  The Report had recommended, in part, that the District Court deny Defendants' motion for summary judgment related to a claim for lost profits by Plaintiffs GlaxoSmithKline LLC and SmithKline Beecham (Cork) Ltd.

    Glenmark and Teva had objected to the Magistrate's Report on two grounds, the first of which is relevant to this discussion.  In particular, Defendants argued that the Report wrongly permitted GlaxoSmithKline to present a lost profits calculation that contemplates a "but-for" world that excludes non-party manufacturers' generic products (in this case, generic carvedilol products).  In summarizing Defendants' argument, the Court noted that:

    Defendants insist that the but-for world to which comparisons must be made in order to assess GSK's claim for lost profits damages is a world in which non-party manufacturers of generic carvedilol would have existed, and from which direct infringers (i.e., physicians) would have obtained carvedilol.  It follows, then, that GSK lost no profits due to Defendants' allegedly infringing conduct, because even absent Defendants' infringement, GSK would still have lost those same sales — albeit to non-party manufacturers, rather than to Defendants.

    The District Court, however, found Defendants' argument to be unpersuasive.  Although the Court noted that "at all times relevant to the lost profits analysis, there were generic carvedilol tablets available from at least eight different generic manufacturers," the Court also noted that the Report had properly explained that "the law is clear that a lost profits analysis must be based on a world in which infringement of the asserted patent does not exist, and therefore it does not allow for infringing alternatives to be available in the hypothetical 'but for' world."  The Court indicated that "the generic carvedilol of these non-party manufacturers is an infringing alternative — and not a non-infringing alternative," and therefore concluded that "[t]hese non-parties' products, thus, would not exist in the but-for world, which must be constructed to include 'likely outcomes with infringement factored out of the economic picture'" (emphasis in Memorandum Order).

    The Court also stated that "[t]he issue for the lost profits calculation is whether the product is non-infringing, not whether the alternative supplier has been, or could be, successfully sued for infringement," agreeing with GlaxoSmithKline that "[i]t doesn't matter whether the sales by other generic suppliers would be non-infringing, because the ultimate use of those products by doctors would be infringing and thus not a permissible consideration" (emphasis in Memorandum Order).  In denying Defendants' objections to the Report and adopting the Report, the Court concluded that "because the but-for world is one in which no infringing alternatives exist, other generic carvedilol products that directly infringe [GlaxoSmithKline's patent] must be excluded, even if the sales of those products are not induced by Defendants."

  • Conference & CLE Calendar

    CalendarJune 27, 2017 – "CRISPR Confusion: A Legal and Practical Analysis for IP Professionals" (Technology Transfer Tactics) – 1:00 to 2:00 pm (Eastern)

    June 27, 2017 – "Essential Developments in Patent Subject Matter Eligibility: What Lies Ahead in 2017?" (The Knowledge Group) – 12:00 to 2:00 pm (EST)

    June 28, 2017 – "Exhaustion Unleashed: Licensing, Other Business Strategy, and Litigation after Lexmark" (Intellectual Property Owners Association) – 2:00 to 3:00 pm (ET)

    June 29, 2017 – Judicial Conference (U.S. Patent and Trademark Office Patent Trial and Appeal Board) – 1:00 to 5:00 pm (ET) – Alexandria, VA

    June 29, 2017 – "Section 102 and Prior Art: Navigating the Expanded Scope of Prior Art and AIA Exceptions" (Strafford) – 1:00 to 3:30 pm (EDT)

    June 29, 2017 – "Patent Eligibility Determination in a Post-Alice World: Significant Updates & Developments" (The Knowledge Group) – 12:00 to 1:30 pm (EST)

    June 30, 2017 – "Important Developments in Japanese Patent Law" (Intellectual Property Law Association of Chicago) – 5:00 to 6:00 pm (CT), Chicago, IL

    July 6, 2017 – "Lessons from PTAB Full or Partial Denials to Obtain a Denial and Avoid an IPR" (Strafford) – 1:00 to 2:30 pm (EDT)

    July 13, 2017 – "Labeling and Induced Infringement in Pharma Patent Litigation and Protecting IP Rights" (Strafford) – 1:00 to 2:30 pm (EDT)

    August 10-11, 2017 – Advanced Patent Law Seminar (Chisum Patent Academy) – Seattle, WA

    August 14-15, 2017 – Advanced Patent Law Seminar (Chisum Patent Academy) – Seattle, WA

    ***Patent Docs is a media partner of this conference or CLE

  • IPO Webinar on Exhaustion

    IPO #2The Intellectual Property Owners Association (IPO) will offer a one-hour webinar entitled "Exhaustion Unleashed: Licensing, Other Business Strategy, and Litigation after Lexmark" on June 28, 2017 from 2:00 to 3:00 pm (ET).  Paul Jahn of Morrison & Foerster LLP; William Krovatin of Merck & Co., Inc.; and Richard Rainey of Covington & Burling LLP will explore the significant ramifications of the recent U.S. Supreme Court decision in Impression Products v. Lexmark, and will discuss how companies will need to react to the newly-fortified power of exhaustion, including:

    • Structuring licenses as a way around exhaustion;
    • Antitrust concerns about enforcing post-sale restrictions through contracts after Lexmark; and
    • Structuring patent ownership, supply chain management, and inventory management to reduce exhaustion, and important tax implications.

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

  • Webinar on Labeling and Induced Infringement in Pharma Patent Litigation

    Strafford #1Strafford will be offering a webinar/teleconference entitled "Labeling and Induced Infringement in Pharma Patent Litigation and Protecting IP Rights" on July 13, 2017 from 1:00 to 2:30 pm (EDT).  Thomas L. Irving and Barbara R. Rudolph of Finnegan Henderson Farabow Garrett & Dunner will provide guidance to patent counsel on the implications of recent cases for labeling and discuss strategic considerations of label language, and offer best practices for labeling.  The webinar will review the following topics:

    • What impact will recent decisions have on label language?
    • How do use codes fit in?
    • What strategic considerations should patent owners keep in mind when labeling drugs?

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

  • Seminar on Japanese Patent Law Developments

    IPLACThe Intellectual Property Law Association of Chicago (IPLAC) International Patent Committee will be offering a seminar on "Important Developments in Japanese Patent Law" by Kisaragi Associates on June 30, 2017 from 5:00 to 6:00 pm (CT) in Chicago, IL.  The seminar will provide important guidance on important developments in Japanese Patent Law and Administrative Practices, including information on the following topics:

    • How to obtain patents for software-related inventions in Japan that will be enforceable in courts.
    • The benefits of Japan’s accession to the Patent Law Treaty.
    • Methods to accelerate patent prosecution in Japan, including use of the Japanese version of the Patent Prosecution Highway (PPH).

    The registration fee for the webinar is $10 (IPLAC members) or $20 (non-members).  Those interested in registering for event can contact John S. Paniaguas of Clark Hill PLC at johnp@clarkhill.com or Prof. Joshua Sarnoff of DePaul University College of Law at jsarnoff@depaul.edu.  Additional information regarding the seminar can be found here.

  • Webcast on Developments in Patent Subject Matter Eligibility

    The Knowledge GroupThe Knowledge Group will offer a live webcast entitled "Essential Developments in Patent Subject Matter Eligibility: What Lies Ahead in 2017?" on June 27, 2017 from 12:00 to 2:00 pm (EST).  Fang Xie of Greenberg Traurig, LLP; Robert McFarlane of Hanson Bridgett LLP; Mark Thronson of Blank Rome LLP; and Alison Maddeford of Riley Safer Holmes & Cancila LLP will provide attendees with an in-depth analysis of the fundamentals as well as essential developments in patent subject matter eligibility.  The panel will cover the following topics:

    • Patent Subject Matter Eligibility – Laws and Regulations
    • Judicial Framework for Determining Patentability
    • The 2016 Subject Matter Eligibility Cases
    • Recent Court Decisions
    • Recent Trends, Developments and Updates

    The registration fee for the webcast is $99.  Those interested in registering for the webinar can do so here.

  • Webinar on PTAB Full or Partial Denials

    Strafford #1Strafford will be offering a webinar/teleconference entitled "Lessons from PTAB Full or Partial Denials to Obtain a Denial and Avoid an IPR" on July 6, 2017 from 1:00 to 2:30 pm (EDT).  Thomas L. Irving, Joshua L. Goldberg, and Cory C. Bell of Finnegan Henderson Farabow Garrett & Dunner will provide patent counsel with an analysis of the ever-increasing number of Patent Trial and Appeal Board (PTAB) denials and partial denials and offer take-home lessons applicable in practitioners' daily practice.  The webinar will review the following topics:

    • How can practitioners use the lessons of the PTAB denials to learn what patent owners are doing to achieve their ultimate success: An IPR petition denial?
    • What can petitioners learn from the partially denied IPR institution decisions?
    • How can practitioners prosecute applications and claims to enhance likelihood of denial of IPRs and PGR petitions?

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

  • Recognicorp, LLC v. Nintendo Co. — Petition for En Banc Rehearing and Amicus Briefs

    By Paul Cole* —

    Federal Circuit SealProceedings for infringement of U.S. Patent No. 8,005,303 (Recognicorp, assigned from IQ Biometrix) resulted in an appeal decided on 28 April 2017, which decision was reviewed in this space by Michael Borella, and also criticised (see "Regnoicorp — A Miscarriage of Justice Calling for En Banc Reconsideration").

    As expected, a petition for en banc rehearing was filed on 30 May, and was followed on 11 June by an Independent Inventors' amicus brief, and on 13 June by a further amicus brief by the author.

    Recognicorp explained that encoding and decoding data using computers is an important and innovative field of technology and objected that the panel opinion threatened the validity of all encoding and decoding patents, including patents covering important technologies such as MP3 audio coding, MPEG video coding, JPEG image coding and encryption.  It cited decisions where such claims have been upheld including DDR Holdings, LLC v. Hotels.com; Cal. Inst. of Tech. v. Hughes Communs., Inc.; and TQP Dev and LLC v. Intuit Inc.

    Their brief identified at least two inventive concepts recited in the claims of the '303 patent:

    (1) using a single composite facial image code composed of a number of facial feature element codes, such as for lips or eyes, to represent the entire facial image instead of encoding the image pixel-by-pixel as was done in the prior art; and

    (2) using a particular algorithm to combine the various facial feature element codes together into a single composite facial image code by multiplying the facial code by a code factor for each facial feature.

    They argued that these qualified as improvements in technology or in a technical field.  There was no basis for holding that the fields of image encoding and data compression were not "technical field[s]" in which patentable improvements could be made, nor could reducing bandwidth and memory storage requirements be disregarded but instead enjoyed status as specific improvements in the functioning of a computer.  The improvements achieved here should be contrasted with Digitech where no improvement was asserted.

    Although the panel opinion objected that, like Digitech, "a user starts with data, codes that data using 'at least one multiplication operation,' and ends with a new form of data" Recognicorp replied that this was plainly not what the claims of the '303 patent recited.  They did not recite "start[ing] with data," or even "gathering . . . data [without] . . . input from a physical device," but rather began with "displaying facial feature images" which are "select[ed]" "via a user interface."  Similarly, the claims did not "end with a new form of data," but rather they ended with the display, on a second display, of the reproduction of a facial image based on the composite facial image code.  There was no basis for finding the claims ineligible under Alice step one merely because of the involvement of a mathematical method, compare MCro v Bandai, and also Enfish, which started with a mathematical table of rows and columns, performed mathematical operations and ended with a self-referential table for a computer database.

    In relation to the second step of Alice, it was argued that the panel wrongly rejected the potential that mathematical equations and algorithms, even when implemented on a computer to produce tangible benefits in that computer's operation, could constitute patentable inventive concepts.  The panel opinion failed to perform any such analysis — it did not attempt to analyze whether the "facial feature element codes," "code factors," and the "particular encoding process using the specific algorithm disclosed" that used those codes to create a "composite facial image code" was "significantly more" than "the abstract idea of encoding and decoding image data".  Recognicorp argued that improvements in computer and software technology often take the form of new and innovative mathematical operations and algorithms, which when appropriately claimed as being performed on a computer as part of a technological process, should be eligible for patent protection.

    The Individual Inventors' brief also took the position that the panel opinion had ignored the rule in Alice that eligibility under § 101 requires an analysis of all claim limitations as an ordered combination.  That rule had been clarified in McRO to require that all claim limitations be addressed in step 1 of the Alice test but had been discarded by the decision.  The wisdom "that courts 'must be careful to avoid oversimplifying the claims' by looking at them generally and failing to account for the specific requirements of the claims" stated in McRO had been ignored.  The consequence was that under the instant decision, patent examiners not only now have carte blanche to ignore any claim limitation and issue of evidence under step 1 of Alice, but are free to ignore decades of established precedential decisions focused on preemption in favor a per se rule having no basis in preemption.

    The Cole brief followed many of the arguments of Recognicorp and the Individual Inventors and asked:

    • What scope is attributable to the phrase "directed to" in the first stage of the Alice test, at what level of abstraction is interpretation of a representative claim impermissibly untethered from the express language of that claim, and is an abstraction permissible where it omits reference to elements positively recited in a representative claim?

    • Is a new and beneficial result improving a technological process available to rebut an objection that claimed subject matter falls within the law of nature, natural phenomenon or abstract idea exception?

    • Is the Alice test, as applied in the breadth of the present decision, incompatible with the obligations of the United States under Article 27 of TRIPS?

    In relation to the first question, the brief argued that the words "directed to" lack clear definition, which may account for the risk of inappropriate paraphrasing of specific and detailed claim language leading to unacceptable flexibility.  Arbitrary disregard of claimed elements when conducting the § 101 analysis creates uncertainty for patent applicants based both in the U.S. and in Europe, for those involved in re-examination and contentious proceedings before the USPTO and for those involved in litigation.  The solution is to reaffirm the rule accepted as black letter law that all elements or limitations recited in a claim must be taken into account when considering anticipation or infringement, and hence by implication § 101 eligibility (citing the case law listed in MPEP 2131 Anticipation), and that the arrangement of those elements specified in the claim must also be considered.

    Evidence of invention pertinent to § 103 should be equally applicable to § 101, and there was no evidence that the prior art paper strips nor the coding systems of Samuel Morse or Paul Revere can be said to beneficially improve the transmission of images.

    Finally, it argued that the present decision is in conflict with established legal principles under the EPC as exemplified in the landmark decision T 208/84 Computer-related invention/VICOM.  In that decision, the EPO held that a claim to digitally filtering a data array was an ineligible mathematical method, but it became eligible when explicitly applied to digitally processing images.  In contrast, the panel opinion here rejects operations performed on coded data as ineligible, but refuses to acknowledge that such operations should become eligible when applied to the production of images.

    It is to be hoped that the petition will be granted and that the present case will provide a landmark decision leading to a fairer and less arbitrary approach to eligibility both for computer-related inventions and for those such as Sequenom in life sciences.

    * Mr. Cole is a European Patent Attorney and Partner with Lucas & Co. in Warlingham, Surrey, UK and Visiting Professor at the Centre for Intellectual Property Policy & Management at Bournemouth University.