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  • Mitchell International, Inc. v. Audatex North America, Inc. (PTAB 2016)

    PTAB Ignores District Court Claim Construction, Finds Patent Invalid

    By Joseph Herndon —

    USPTO SealOn February 19, 2016, the USPTO Patent Trial and Appeal Board (PTAB) issued a final written decision in the Covered Business Method (CBM) patent review between Mitchell International, Inc. and Audatex North America, Inc. in which all challenged claims were found to be drawn to a patent ineligible abstract idea.  While the CBM review had a predictable result of finding non-technical business method claims unpatentable, the claim construction analysis by the PTAB is troubling.

    Mitchell filed a petition requesting a CBM review of claims 1-29 of U.S. Patent No. 7,912,740.  The '740 patent issued on March 22, 2011 and relates generally to a method and system for entering data relating to an insurance claim for a damaged vehicle, and the data is processed into a valuation report that is transmitted through the world wide web.  According to the background of the patent, when a vehicle is damaged, the owner of the vehicle may file a claim with an insurance carrier, and if the repair costs of the damaged vehicle exceed its value, or a certain percentage of its value, the vehicle may be considered "totaled".  A problem with some existing systems is that the valuation does not account for specific variations of the vehicle, such as the condition of the vehicle or added aftermarket equipment.  To obtain a more accurate valuation, an adjuster may access a more extensive database through the internet.

    Claim 1, reproduced below, is illustrative of the claims at issue:

    1.  A method for obtaining an automobile insurance claim valuation report, comprising:
        transmitting a uniform resource locator over an electronic communication network from a client computer;
        connecting with a web site that corresponds to the uniform resource locator, the web site provides a plurality of web pages that allow an operator to input data relating to an insurance claim for a damaged vehicle;
        entering data relating to the insurance claim;
        processing the entered data to generate a valuation report for the damaged vehicle, the valuation report provides a market value for the damaged vehicle; and
        transmitting the valuation report to the client computer over the electronic communication network.

    Standing and Claim Construction

    The PTAB stated that the '740 patent is a covered business method patent because at least one claim of the '740 patent is directed to a covered business method.  No analysis was given, but because the Patent Owner did not dispute such determination in the Patent Owner Response, the PTAB moved forward with the CBM review.

    In a CBM patent review, claim terms are interpreted according to their broadest reasonable construction in light of the specification of the patent in which they appear.  Under the broadest reasonable interpretation standard, and absent any special definitions, claim terms are given their ordinary and customary meaning as would be understood by one of ordinary skill in the art in the context of the entire disclosure.

    The PTAB construed a number of claim terms.  Of note was the construction of the terms "insurance claim" as encompassing, but not being limited to, "any data that would be used in making an insurance claim".  A CBM may only be instituted when the underlying patent has been asserted, and here, the District Court in the co-pending litigation construed "insurance claim" in a different more limiting way, namely to be a "request to recover market value or repair cost in association with an insurance policy."

    The District Court's construction was pointed out to the PTAB, but the PTAB ignored the District Court's construction.  The PTAB stated that the Federal Circuit in Phillips v. AWH Corp., 415 F.3d 1303, 1315 (Fed. Cir. 2005) (en banc), requires that the claims "must be read in view of the specification, of which they are a part".  Using the claim construction standards set forth in Phillips, the PTAB found that there is nothing in the specification of the '740 patent that would limit the claim term "insurance claim" in the more limiting way.  Presumably, the District Court also used those same claim construction standards set forth in Phillips, and so it is troubling to see conflicting claim constructions used by the PTAB and District Court.

    While the differing claim constructions between the PTAB and the District Court likely do not amount to much difference for patentability of the claims, seen below, it is a problem to have variation in claim construction performed parallel to each other.

    Patentable Subject Matter Under 35 U.S.C § 101

    Mitchell asserted that claims 1–29 of the '740 patent are not directed to patent-eligible subject matter under 35 U.S.C. § 101.

    The PTAB followed the framework from the Alice decision for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.  First, it must be determined whether the claims at issue are directed to a patent-ineligible concept.  Second, the elements of each claim must be considered both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent-eligible application.

    The PTAB disposed of the claims rather quickly under § 101.  Each of the challenged claims was found to be directed to the fundamental concept of providing a vehicle valuation using information about the vehicle.  The only technological features recited in the claims at issue are generic computer implementation systems performing generic computer functions.  As acknowledged by Audatex's expert, the claims do not improve the function of the computer, they do not solve a problem unique to the internet, nor are they tied to a particular machine or apparatus.

    Thus, the PTAB found that claims 1–29 are directed to patent-ineligible subject matter under 35 U.S.C. § 101.

    Audatex's Motion to Amend

    Audatex filed a contingent Motion to Amend to substitute new claims 30–58 for original claims 1–29, respectively.  The PTAB denied this motion.

    The ultimate burden of persuasion is with the Patent Owner, Audatex, to demonstrate the patentability of the amended claims, and because this burden was not met, the Motion to Amend was denied.

    The new claims recited the same limitations of claims 1-29 and added the following underlined limitations of "the insurance claim being a request to recover market value or repair cost in association with an insurance policy", "providing a parts list and calculated estimate data through the web site", and "processing the entered data to generate a valuation report for the damaged vehicle, the valuation report provides a market value for the damaged vehicle, before the damaged vehicle was damaged, based on factors including mileage, condition, and geographic location."

    The PTAB found that Audatex did not establish that the amended claims are patentable under 35 U.S.C. § 101.  Audatex argued that the amended claims recite a system and method that solves a technical problem, and that the amended claims do not preempt all means for obtaining a valuation report.  But, the PTAB found that the claims still are drawn to the abstract idea of providing a vehicle valuation report, and recite no more than a generic computer for doing so.  The § 101 analysis remained the same.

    The PTAB also found that Audatex did not establish that the claims are patentable over the prior art.  Not discussed here, but the PTAB found claims 1-29 were unpatentable under § 101 and also anticipated by a prior art reference to Reimel.  The PTAB found that, it would have been well within the level of skill of the ordinary artisan to use the vehicle valuation system of Reimel to provide a parts list and calculate estimate data, as well as leave out the damage caused by an accident to obtain a pre-damage valuation for the vehicle, as recited in the amended claims.

    Thus, because Audatex did not meet its burden of demonstrating the patentability of the proposed substitute claims, and the Motion to Amend was denied.  As a result, the '740 patent was left with invalid claims.

    Mitchell International, Inc. v. Audatex North America, Inc. (PTAB 2016)
    Before Lora M. Green, William V. Saindon, and Patrick M. Boucher, Administrative Patent Judges.
    Final Written Decision by Lora M. Greeb

  • In re Queen’s University at Kingston (Fed. Cir. 2016)

    By Andrew Williams —

    Federal Circuit SealAre communications between a patent agent and a client privileged?  Up until last week, the Federal Circuit had not addressed the subject, although there had been a split with the district courts that had considered the issue.  But, in In re Queen's University at Kingston, the Federal Circuit decided the question in the affirmative.  Therefore, unless the Court rehears this case, otherwise takes up the issue en banc, or the holding is overturned by the Supreme Court, there will be a patent agent-client privilege.  The panel was not in complete agreement, however.  Writing in dissent, Judge Reyna indicated that he would not have created this new privilege.  He complained, in part, that the extent of the new privilege is unclear.  However, without trying to be tautological, the privilege should extend as far as a patent agent is ethically allowed to practice before the Patent Office.

    The facts of the case are essentially irrelevant.  The Canadian Queen's University at Kingston and PARTEQ Innovations had sued Samsung in the Eastern District of Texas, alleging that the SmartPause feature on Samsung's newest devices infringed the patents-in-suit.  Samsung moved the District Court to compel the production of documents withheld because of "privilege relating to communications with its patent agents."  The magistrate judge granted the motion to compel.  The District Court did not alter that determination and did not certify the issue.  However, it did agree to stay production pending a writ of mandamus (from which this case stems).

    The first question is whether the Federal Circuit should even have granted mandamus review in the first place.  There are three considerations for review when a claim of privilege is at issue:  "whether (1) there is raised an important issue of first impression, (2) the privilege would be lost if review were denied until final judgment, and (3) immediate resolution would avoid the development of doctrine that would undermine the privilege."  Slip Op. at 5 (citing  In re Seagate Tech., LLC, 497 F.3d 1360, 1367 (Fed. Cir. 2007) (en banc)).  As noted above, this is a case of first impression for the Federal Circuit.  In addition, the Court reasoned that if it waited until final judgement on the merits, it would basically be impossible for the Court to "disentangle" the impact of these documents.  It is, however, unclear how this element would ever be considered in the negative (wouldn't it always be difficult to disentangle the impact of wrongly-compelled produced documents).  Finally, immediate resolution would avoid further inconsistent development of the doctrine in the district courts.  As such, even though the Court noted that the legal standard is exacting, it found it to be present in this case.

    In ultimately finding that the privilege exists, the Court relied heavily on Sperry v. State of Florida, 373 U.S. 379 (1963).  This is the same case that the Patent Office cites as authority for promulgating ethics rules, such as the recent adoption of the USPTO Rules of Professional Conduct (see "USPTO Publishes Final Rule Adopting New Rules of Professional Conduct").  The Federal Circuit in this case relied on Sperry because Rule 501 of the Federal Rules of Evidence allows a court to define new privileges based on the common law, which is not static but interpreted "in light of reason and experience . . . ."  The Sperry case addressed two issues.  First, the Supreme Court determined that non-attorney patent agents practicing before the Patent Office were, in fact, practicing law.  Second, it held that the State of Florida could not regulate this practice.  This is because Congress authorized this practice of law by non-attorneys, and the States could therefore not prohibit or regulate this activity.  As the Federal Circuit noted, "[i]n holding that the State of Florida had no authority to regulate the admitted practice of law by patent agents, the Supreme Court emphasized that it is Congress who has authorized and continues to permit the practice of law by patent agents when appearing before the Patent Office."

    Of course, new privileges are not created lightly.  Indeed, the Court noted that there is a presumption against recognizing a new privilege.  The attorney-client privilege is most well-known, which exists to "encourage full and frank communication."  However, there are plenty of cases where new privileges were not adopted, such as with accountants and jailhouse lawyers.  It was the unique role of patent agents as established by Congress that weighed in favor of the privilege.  In essence, clients have a reasonable expectation that all communications related to legal services in preparing and prosecution patent applications will be kept privileged.  As the Court put it:

    Whether those communications are directed to an attorney or his or her legally equivalent patent agent should be of no moment.  Indeed, if we hold otherwise, we frustrate the very purpose of Congress's design: namely, to afford clients the freedom to choose between an attorney and a patent agent for representation before the Patent Office.

    Slip Op. at 19.

    The dissent did call into question the scope of the patent agent-client privilege.  The majority did address the issue in the original analysis:  "reason and experience compel us to recognize a patent-agent privilege that is coextensive with the rights granted to patent agents by Congress."  Slip Op. at 18.  Nevertheless, it also included a section entitled "D: Scope of Privilege," in which it held that:

    Communications between non-attorney patent agents and their clients that are in furtherance of the performance of these tasks, or 'which are reasonably necessary and incident to the preparation and prosecution of patent applications or other proceeding before the Office involving a patent application or patent in which the practitioner is authorized to practice' receive the benefit of the patent agent-privilege.

    Slip Op. at 24-25.  Conversely, "[c]ommunications that are not reasonably necessary and incident to the prosecution of patents before the Patent Office fall outside of the scope of the patent-agent privilege."  Slip Op. at 25.  Of course, such a pronouncement was probably unnecessary, because if a patent agent were to so make a communication, it would likely be an unauthorized practice of law, as the Court recognized and noted in Footnote 8.

    Because the standard for creating new privileges is exacting, it was not surprising that one of the judges dissented.  The dissent had several reasons why it did not think it was appropriate to create a patent-agent-client privilege.  As already referenced, one of the top reasons was that the new privilege was complicated and uncertain.  Judge Reyna did not see the scope of a patent agents work as being cut-and-dry.  In fact, he found that there was plenty of grey area, such as issuing invalidity opinions for potential reexamination or inter partes review filings or drafting assignments for still pending applications.  In fact, in a somewhat ironic twist, the dissent noted:

    I believe that advising clients on whether a privilege would apply in court to the various acts a patent agent might be asked to perform is itself outside scope of an agent's authorized practice before the USPTO.  Therefore, a client concerned about maintaining a privilege may need to hire an attorney to determine whether this court's newly created agent-client privilege would apply in her circumstances.

    Slip Op. at 10 (J. Reyna, dissenting).

    Judge Reyna's logic probably faltered a bit when he tried to argue that there is insufficient public interest to support such a finding.  For example, in his footnote 2, he compares the zero amicus briefs that were filed in the present case with the 14 that were filed in the Supreme Court case of Jaffee v. Redmond.  However, even he must recognize the distinction between an original three-judge panel at an appellate court and a case for which the Supreme Court has granted cert.  Almost certainly if this case is reheard at the Federal Circuit, there will be amicus briefs filed.  Moreover, Judge Reyna asserts that because both a patent agent and a patent applicant have a duty of disclosure with the Patent Office, that a privilege between the two is unnecessary.  According to the argument, the encouraging of "full and frank communication" is less effective.  Of course, this does not address the fact that communications between an agent and its client to determine what falls within this duty are the exact types of communications that should be privileged.  If not, then it does not make sense to protect any communication related to patent practice before the Office, regardless of whether it is made by an agent or attorney.

    Because there was a dissent filed in this case, it is very possible that there will be a request for rehearing or a petition for cert. to the Supreme Court.  We will continue to monitor this case in the event that there are any further developments.

    In re Queen's University at Kingston (Fed. Cir. 2016)
    Panel: Circuit Judges Lourie, O'Malley, and Reyna
    Opinion by Circuit Judge O'Malley; dissenting opinion by Circuit Judge Reyna

  • IPO Responds to USPTO Call for Case Study Topics

    By Donald Zuhn —

    IPO #2In December, the U.S. Patent and Trademark Office invited stakeholders to submit patent quality-related topics that they believe should be the subject of a case study as part of a new Enhanced Patent Quality Initiative pilot program (see "USPTO Seeks Topics for Quality Case Study Pilot Program").  The Office noted that it regularly performs case studies to investigate specific quality-related issues and individual examiner work products, and that such case studies allow the Office to investigate how a particular issue is being treated or addressed across hundreds or thousands of applications, and where appropriate, to take action to remediate quality issues or to formulate best practices to further enhance quality.

    Last month, the Intellectual Property Owners Association (IPO) accepted the Office's invitation by submitting five suggested topics that the IPO thought should be the subject of a case study.  The five topics proposed by the IPO were:

    1.  Markush Grouping Rejections –- the IPO proposes that the Office study whether rejections made under the "judicially approved improper Markush grouping doctrine" are consistent with the treatment of Markush claims as guided by the case law, Office policy, and the MPEP.  The IPO contends that a significant number of rejections for improper Markush groupings have been issued since 2011, when the Office issued supplemental examination guidelines and further guidance was provided at a Biotechnology/Chemical/Pharmaceutical Customer Partnership meeting.  The IPO suggests that the study focus on improper Markush group rejections as opposed to "garden variety" Markush rejections (e.g., minor formatting issues such as use of "consisting of" versus "comprising" or use of "and" versus "or"), as well as compare rejections issued for Technology Center 1600 (biotech & organic chemistry) and TC1700 (chemical and materials).  The IPO requests that the Office examine whether any claim rejections made under the "judicially approved improper Markush grouping doctrine" are proper, because the current version of the MPEP does not expressly authorize rejections made on this basis.

    2.  Restriction Requirement vs. Unity of Invention –- the IPO also proposes that the Office study restriction practice in U.S. national stage applications and determine how frequently U.S. examiners find lack of unity when the PCT examiner did not, and how frequently U.S. examiners issue a restriction requirement that is significantly different from any lack of unity finding by the PCT examiner.  The IPO also requests that the Office analyze whether in such cases, the U.S. examiner's different restriction requirement was proper under the unity of invention rules.

    3.  Helping Users Evaluate Usefulness of Patent Prosecution Highway Based on Differing Patentability Determinations in U.S. vs. Foreign Patent Applications –- the IPO also proposes that the Office study applications being examined under the Patent Prosecution Highway (PPH) to determine how frequently U.S. examiners reject claims over prior art that was considered in the foreign patent application on which the PPH request was based, and examine the bases for the different patentability determinations.  The IPO also requests that in cases where differences are detected, the Office should determine whether the prior art rejection in the U.S. case was proper under U.S. law, and if so, whether the differences in treatment between the U.S. and foreign applications were due to:

    (i) a "broadest reasonable interpretation" of the claim that was not applied in the foreign application; (ii) a different understanding of the claimed invention; (iii) a different understanding of the prior art; (iv) a difference between obviousness under U.S. law and the standard applied by the foreign patent office (e.g., inventive step); or (v) no apparent reason.

    The IPO also suggests that the Office analyze differences across technology centers, and report the results by technology center.

    4.  Comparing Office Actions Before and After RCE –- the IPO also proposes that the Office study Office actions before and after an RCE has been filed to determine whether after final practice can be further improved. The IPO suggests that the Office conduct the study by determining whether an applicant filed an amendment in response to a final Office action, checking for the mailing of an advisory action refusing entry of the after final amendment, and then where an RCE was subsequently filed to have the identical claim amendment considered, comparing the first Office action after the RCE was filed with the final Office action.  According to the IPO, the study should focus on distinguishing cases in which an examiner performed additional searching from those in which the examiner merely reissued the same Office action without any substantive changes.

    5.  Correlating Appeal Conference Data with Final Rejection Practice and PTAB Outcomes –- the IPO also proposes that the Office study pre-appeal brief conference data and compare that data with final rejections and PTAB outcomes. The IPO notes that the Office could conduct the study by reviewing appeal conference outcomes and tracking cases that are reopened or allowed at that stage to determine whether any particular art units or examiners have a disproportionate number of cases in those categories.  According to the IPO, cases that are reopened or allowed at the appeal conference stage are an indicator that the final rejection was improper.

  • E-Loan, Inc. v. IMX, Inc. (PTAB 2016)

    Typical "Business Method Patent" Struck Down by PTAB using CBM Review

    By Joseph Herndon —

    USPTO SealOn February 16, 2016, the USPTO Patent Trial and Appeal Board (PTAB) issued a final written decision in the Covered Business Method (CBM) patent review between E-Loan, Inc. and IMX, Inc. in which all challenged claims were found to be drawn to a patent ineligible abstract idea.

    E-Loan filed a Petition seeking CBM review of U.S. Patent No. 5,995,947, which describes a method and system for making loans, such as mortgages.  Figure 1, reproduced below, shows that brokers use broker stations 120 to transmit loan profiles to a transaction server 110, thereby entering those loan profiles into system 100 for processing, to review the status of loan profiles as they are processed by system 100, to receive and review bids by lenders on loan profiles, and to accept or decline bids.  Lenders use lender stations 130 to search database 111 for desired types of loans, to sort selected loans by particular desired criteria, bid on loan applications, and to receive notice when their bids are accepted.  The transaction server 110 enters loan profiles into trading system database 111 in response to requests from broker stations 120, searches the trading system database in response to requests from lender stations 130, and modifies trading system database 111 in response to changes in status of loan profiles stored therein.  The transaction server 110, broker station 120, and lending station 130 all comprise general purpose processors.

    FIG1
    Claims 7, 8, 26, and 27 were challenged, and claims 1, 7, and 8 are illustrative and reproduced below.

    1.  A method for processing loan applications, said method including the steps of maintaining a database of pending loan applications and their statuses at a database server, wherein each party to a loan can search and modify that database consistent with their role in the transaction by requests to said server from a client device identified with their role.

    7.  A method as in claim 1, wherein
        said roles include a lender and said client device includes a lender station associated with at least one said lender; and
        said lender can search the database for particular desired types of loans, and can bid on loan applications.

    8.  A method as in claim 7, wherein said lender is notified when its bid is accepted.

    CBM Patent?

    A "covered business method patent" is a patent that claims a method or a corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except the term does not include patents for technological inventions.

    To determine whether a patent is eligible for a covered business method patent review, the focus is on the claims.  A patent need have only one claim directed to a covered business method to be eligible for review.

    1.  Financial Product or Service

    The PTAB found that claims 1 and 7 meet the first part of the covered business method requirement because they cover a method of processing loan applications and data processing used in the practice, administration, or management of a financial product or service.  Loans are clearly financial products because they are agreements between two parties stipulating the movement of money or other consideration.

    2.  Technological Invention Exception

    The definition of a "covered business method patent" excludes patents for "technological inventions."  When determining whether a patent is for a technological invention, the PTAB considers whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution.

    The PTAB noted that the technological invention exception does not result from (a) mere recitation of known technologies, (b) reciting the use of known prior art technology to accomplish a process or method, or (c) combining prior art structures to achieve the normal, expected, or predictable result of that combination.

    E-Loan contended that the challenged claims solve a commercial or business problem of making loan processing less expensive, rather than a technical problem and do so with known technologies.  The PTAB noted that the purpose of the '947 patent was to eliminate the paper-intensive process through automation to provide widespread dissemination of loan applications and lending program information for automatic comparison in real time.  Such automation using known computer technologies does not result in a technical solution to a technical problem.

    Further, the challenged claims recite the use of known computer hardware and software technologies such as a "database," "database server," "transaction server," and "client device/lender station" to accomplish loan processing.

    IMX did not oppose E-Loan's contentions that the claims lack a technological invention.  Thus, claims 1 and 7 do not recite a technological invention, and therefore, the '947 patent is eligible for covered business method patent review.

    3.  Constitutionality of CBM Review

    IMX challenged the CBM as being unconstitutional, and argued that issued patents are no longer under the jurisdiction of the U.S. Patent and Trademark Office ("USPTO") and may be set aside, annulled, or corrected only by the courts of the United States, not by the USPTO or PTAB.  IMX argued that post-grant proceedings to invalidate patents deprive patent owners of due process and invade the province of Article III courts.

    The PTAB noted the recent decision of the Federal Circuit in MCM Portfolio LLC v. Hewlett-Packard Co., No. 2015-1091, 2015 WL 7755665 (Fed. Cir. Dec. 2, 2015), which held that Congress can grant authority to the USPTO to correct or cancel issued patents.  Congress has done so by creating inter partes reexamination proceedings, ex parte reexamination proceedings, inter partes review, post-grant review, and covered business method patent review.

    CBM Review

    The sole ground of unpatentability asserted by E-Loan was under 35 U.S.C. § 101.

    The PTAB followed the framework from the Alice decision for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.  First, it must be determined whether the claims at issue are directed to a patent-ineligible concept.  Second, the elements of each claim must be considered both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent-eligible application.

    1.  Abstract Idea

    E-Loan argued that the challenged claims are directed to the abstract idea of managing a loan application, and that all limitations of the challenged claims can be and have been performed for years by humans using pen and paper, e.g., by placing a stack of loan applications in a drawer, searching and modifying the applications, sorting loan applications by lenders who bid on applications, and providing notice of bids.  E-Loan asserted that the '947 patent describes this conventional loan process performed by hand and describes the invention as automating this process with computers.

    The PTAB agreed with E-Loan and found that each of the challenged claims is directed to a fundamental economic or longstanding commercial practice of loan processing.  The '947 patent describes the conventional loan processes as involving large amounts of information that must be collected, compared, evaluated, and disseminated among parties to a transaction so lenders can offer loans at competitive rates.  Claim 1 automates this known method and system of processing loan applications by maintaining a database of pending loan applications and their statuses at a database server where each party to a loan can search and modify that database consistent with their role in the transaction by requests to the server from client devices.

    The Specification itself discloses the invention as an advantageous method and system for automating loan applications.

    2.  Significantly More?

    IMX argued that an online auction platform for brokers to solicit lender bids was revolutionary, and that the challenged claims do not preempt the concept of managing a loan process.  Further, IMX contended that the Petition does not allege that "searching the database for particular desired types of loans" is a purely conventional function.

    The PTAB noted that mere existence of a non-preempted use of an abstract idea does not prove that a claim recites patent-eligible subject matter, and that searching a database of pending loans and bidding on loan applications is conventional.  Further, claiming a database server of pending loan applications that parties can search and modify, a transaction server, and a lender station does not transform this abstract idea into patent-eligible subject matter.  The claimed computers merely automate conventional loan processes performed by hand using pen and paper forms, as discussed above.

    Moreover, IMX's arguments that the challenged claims reverse the rate sheet technique of conventional loans by allowing brokers to solicit lenders to bid for borrowers' mortgages using the online auction platform was not found persuasive.  In conventional processes, lenders bid on loan applications they received from brokers, and the challenged claims recite lenders bidding on loan applications.

    Merely combining an abstract idea like a reverse auction with conventional loan processing does not create an inventive step by itself.

    The PTAB also noted that claim 19's responsiveness in "real time" adds nothing significant.  It is an attempt to capture the general nature of computer processing.  The '947 patent discloses "real-time" processing involving receipt of "real time quotes for 10 year Treasury notes, 30 year Treasury bonds, DJIA (Dow Jones Industrial Average), and NSDQ (National Securities Dealers Quotes)."  Claim 19 recites only that transaction server responds in real time to requests to search and modify the database.  The challenged claims do not recite any "real-time trading" at the database.

    Thus, the PTAB concluded that the challenged claims do not recite an inventive concept, and therefore, the claims are drawn to a patent ineligible abstract idea.

    The PTAB noted that the challenged claims did not recite a method or system where brokers solicit bids from multiple lenders, but rather that a lender at a lender station "can search" a database of loan applications and bids on loan applications (claim 7).  Had the claims recited more details distinguishable from conventional practices of lenders receiving loan applications from a broker, evaluating the applications, and responding to brokers with an offer of a loan, then the claims may have had a chance to survive the section 101 challenge.

    This patent is representative of typical "business method" patents that were granted by the USPTO, say between 2000-2010.  During that time period, as a patent applicant, you could expect to receive a patent on such arguably "new" business method services, or financial services, as automated by computers/Internet that provided additional functionality.  Following the AIA legislation, these types of patents are all but dead, or at least subject to a high risk of being found invalid under the CBM review put in place for the purpose of killing these patents.

    E-Loan, Inc. v. IMX, Inc. (PTAB 2016)
    Before James P. Calve, Matthew R. Clements, and Brian P. Murphy,  Administrative Patent Judges.
     Final Written Decision by James P. Calve

  • Court Report

            By Sherri Oslick —

    Gavel About Court Report:  Each week we will report briefly on recently filed biotech and pharma cases.

    Unimed Pharmaceuticals LLC et al. v. Lupin Atlantis Holdings SA et al.
    1:15-cv-00904; filed October 9, 2015 in the District Court of Delaware

    • Plaintiffs:  Unimed Pharmaceuticals LLC; Besins Healthcare Inc.; Besins Healthcare Luxenbourg SARL
    • Defendants:  Lupin Atlantis Holdings SA; Lupin Ltd.; Lupin Pharmaceuticals, Inc.

    Infringement of U.S. Patent Nos. 6,503,894 ("Pharmaceutical Composition and Method for Treating Hypogonadism," issued January 7, 2003), 8,466,136 ("Testosterone Gel and Method of Use," issued June 18, 2013), 8,466,137 (same title, issued June 18, 2013), 8,466,138 (same title, issued June 18, 2013), 8,486,925 (same title, issued July 16, 2013), 8,729,057 (same title, issued May 20, 2014), 8,741,881 (same title, issued June 3, 2014), 8,754,070 (same title, issued June 17, 2014), and 8,759,329 (same title, issued June 24, 2014), 9,125,816 ("Pharmaceutical Composition and Method for Treating Hypogonadism," issued September 8, 2015), 9,132,089 (same title, issued September 15, 2015) following a Paragraph IV certification as part of Lupin's filing of an ANDA to manufacture a generic version of AbbVie's AndroGel® (testosterone gel, used to treat conditions associated with a deficiency or absence of endogenous testosterone).  View the complaint here.


    Bayer Intellectual Property GmbH et al. v. Aurobindo Pharma Ltd. et al.
    1:15-cv-00902; filed October 9, 2015 in the District Court of Delaware

    • Plaintiffs:  Bayer Intellectual Property GMBH; Bayer Pharma AG; Janssen Pharmaceuticals Inc.
    • Defendants:  Aurobindo Pharma Ltd.; Aurobindo Pharma USA Inc.; Breckenridge Pharmaceutical Inc.; Micro Labs Ltd.; Micro Labs USA Inc.; Mylan Pharmaceuticals Inc.; Mylan Inc.; Prinston Pharmaceutical Inc.; Sigmapharm Laboratories LLC; Torrent Pharmaceuticals Limited; Torrent Pharma Inc.; InvaGen Pharmaceuticals Inc.

    Infringement of U.S. Patent Nos. 7,157,456 ("Substituted Oxazolidinones and Their Use in the Field of Blood Coagulation," issued January 2, 2007), 7,585,860 (same title, issued September 8, 2009), and 7,592,339 (same title, issued September 22, 2009) following a Paragraph IV certification as part of defendants' filing of an ANDA to manufacture a generic version of Bayer's Xarelto® (rivaroxaban, used to reduce the risk of stroke and systemic embolism in patients with nonvalvular atrial fibrillation, for the treatment of deep vein thrombosis (DVT), pulmonary embolism (PE), and for the reduction in the risk of recurrence of DVT and of PE, and for the prophylaxis of DVT, which may lead to PE in patients undergoing knee or hip replacement surgery).  View the complaint here.


    AstraZeneca AB v. Teva Pharmaceuticals USA, Inc.
    1:15-cv-00909; filed October 9, 2015 in the District Court of Delaware

    Infringement of U.S. Patent No. 8,628,799 ("Coated Tablet Formulation and Method," issued January 14, 2014) following a Paragraph IV certification as part of Teva's filing of an ANDA to manufacture a generic version of AstraZeneca's Kombiglyze XR (saxagliptin and metformin hydrochloride, extended-release, used as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes mellitus).  View the complaint here.


    Novartis Pharmaceuticals Corp. et al. v. Roxane Laboratories, Inc. et al.
    1:15-cv-00908; filed October 9, 2015 in the District Court of Delaware et al.

    • Plaintiffs:  Novartis Pharmaceuticals Corp.; Novartis AG
    • Defendants:  Roxane Laboratories, Inc.; Boehringer Ingelheim Roxane, Inc.

    Infringement of U.S. Patent Nos. 6,894,051 ("Crystal Modification of a N-phenyl-2-pyrimidineamine Derivative, Processes for Its Manufacture and Its Use," issued May 17, 2005) and RE43,932 ("Crystal Modification of a N-phenyl-2-pyrimidineamine Derivative, Processes for Its Manufacture and Its Use," issued January 15, 2013) following a Paragraph IV certification as part of Roxane's filing of an ANDA to manufacture a generic version of Novartis' Gleevec® (imatinib mesylate, used for various indications, including treatment of myeloid leukemia).  View the complaint here.


    Forest Laboratories LLC et al. v. Accord Healthcare Inc. et al.
    1:15-cv-00903; filed October 9, 2015 in the District Court of Delaware

    • Plaintiffs:  Forest Laboratories LLC; Forest Laboratories Holdings Ltd.; Adamas Pharmaceuticals Inc.
    • Defendants:  Accord Healthcare Inc.; Intas Pharmaceuticals Ltd.

    Infringement of U.S. Patent Nos. 8,039,009 ("Modified Release Formulations of Memantine Oral dosage Forms," issued October 18, 2011), 8,168,209 ("Method and Composition for Administering an NMDA Receptor Antagonist to a Subject," issued May 1, 2012), 8,173,708 (same title, issued May 8, 2012), 8,283,379 ("Method and Compositions for the Treatment of CNS-Related Conditions," issued October 9, 2012), 8,329,752 ("Composition for Administering an NMDA Receptor Antagonist to a Subject," issued December 11, 2012), 8,362,085 ("Method for Administering an NMDA Receptor Antagonist to a Subject," issued January 29, 2013), and 8,598,233 ("Method for Administering an NMDA Receptor Antagonist To A Subject," issued December 3, 2013) following a Paragraph IV certification as part of Accord's filing of an ANDA to manufacture a generic version of Forest's Namenda XR® (memantine hydrochloride, used for the treatment of moderate to severe dementia of the Alzheimer's type).  View the complaint here.


    AstraZeneca AB et al. v. Zydus Pharmaceuticals (USA) Inc. et al.
    3:15-cv-07415; filed October 9, 2015 in the District Court of New Jersey

    • Plaintiffs:  AstraZeneca AB; Aktiebolaget Hassle; AstraZeneca LP; Zeneca Inc.
    • Defendants:  Zydus Pharmaceuticals (USA) Inc.; Cadila Healthcare Ltd.

    Infringement of U.S. Patent Nos. 6,369,085 ("Form of S-omeprazole," issued April 9, 2002), 7,411,070 (same title, issued August 12, 2008), and 8,466,175 (same title, issued June 18, 2013) following a Paragraph IV certification as part of Zydus' filing of an ANDA to manufacture a generic version of AstraZeneca's Nexium® (esomeprazole magnesium, used for the treatment of gastroesophageal reflux disease).  View the complaint here.


    Salix Pharmaceuticals, Inc et al. v. Taro Pharmaceutical U.S.A., Inc. et al.
    1:15-cv-07980; filed October 9, 2015 in the District Court of New York

    • Plaintiffs:  Salix Pharmaceuticals, Inc; Norgine B.V.
    • Defendants:  Taro Pharmaceutical U.S.A., Inc.; Taro Pharmaceuticals Industries Ltd.

    Infringement of U.S. Patent Nos. 7,169,381 ("Colon Cleansing Compositions and Methods," issued January 30, 2007) and 7,658,914 ("Colon Cleansing Compositions," issued February 9, 2010) following a paragraph IV certification as part of Taro's filing of an ANDA to manufacture a generic version of Salix's MoviPrep® (PEG 3350, sodium sulfate, sodium chloride, potassium chloride, sodium ascorbate and ascorbic acid oral solution, used for cleansing of the colon as a preparation for colonoscopy).  View the complaint here.  [NB: The complaint was later voluntarily dismissed.]


    Flamel Ireland, Ltd. v. Mylan Pharmaceuticals Inc. et al.
    1:15-cv-00178; filed October 9, 2015 in the Northern District of West Virginia

    • Plaintiff:  Flamel Ireland, Ltd.
    • Defendants:  Mylan Pharmaceuticals Inc.; Mylan, Inc.; SmithKline Beecham (Cork) Ltd.

    Infringement of U.S. Patent No. 8,101,209 ("Microparticulate Oral Galenical Form for the Delayed and Controlled Release of Pharmaceutical Active Principles," issued January 24, 2012) following a paragraph IV certification as part of Mylan's filing of an ANDA to manufacture a generic version of GSK's Coreg CR® (carvedilol phosphate extended release capsules , used to treat congestive heart failure).  View the complaint here.

  • Conference & CLE Calendar

    CalendarMarch 15, 2016 – Patent Bar & Office Dialog Summit (Intellectual Property Owners Association) – Washington, D.C.

    March 16, 2016 – "Preparing for the European Unified Patent Court (UPC)" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT)

    March 16, 2016 – "Trade Secrets in Biotech, Biosimilars & Medical Devices" (American Intellectual Property Law Association) – 12:30 – 2:00 pm (Eastern)

    March 18, 2016 - American Intellectual Property Law Association Quarterly Journal (AIPLA QJ) Symposium – George Washington University Law School

    March 24, 2016 – "Structuring Patent Licensing Agreements: Avoiding Litigation, Allocating Risk and Maximizing Patent Value" (Strafford) – 1:00 to 2:30 pm (EDT)

    March 30, 2016 – "Patent Prosecution from a Litigator's Viewpoint: Position Your Patent to Succeed in Litigation & Post-Grant Procedures" (American Intellectual Property Law Association) – 12:30 – 2:00 pm (Eastern)

    March 31, 2016 – "Conducting and Analyzing Patent Searches — Strategies for Validity, Patentability, Infringement, FTO and State-of-the-Art Searches" (Strafford) – 1:00 to 2:30 pm (EDT)

    April 5-7, 2016 – IP Strategy, Patent Portfolio Development and Innovation*** (Fleming) – Boston, MA

    April 12, 2016 – "A Federal Trade Secrets Act? The Defend Trade Secrets Act of 2016" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CDT)

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

  • Webinar on Defend Trade Secrets Act of 2016

    MBHB Logo 2McDonnell Boehnen Hulbert & Berghoff LLP will be offering a live webinar on "A Federal Trade Secrets Act? The Defend Trade Secrets Act of 2016" on April 12, 2016 from 10:00 am to 11:15 am (CDT).  In this presentation, MBHB attorney Joshua Rich will cover:

    • The background of existing trade secrets laws;
    • The provisions of the Defend Trade Secrets Act of 2016;
    • The status of the Defend Trade Secrets Act in Congress and chances for passage; and
    • Other important trade secrets developments.

    While there is no fee to participate, attendees must register in advance.  Those wishing to register can do so here.  CLE credit is pending for the states of California, Illinois, New Jersey, New York, North Carolina, and Virginia.

  • Webinar on Patent Licensing Agreements

    Strafford #1Strafford will be offering a webinar/teleconference entitled "Structuring Patent Licensing Agreements: Avoiding Litigation, Allocating Risk and Maximizing Patent Value" on March 24, 2016 from 1:00 to 2:30 pm (EDT).  John M. Augustyn of Leydig Voit & Mayer and Peter J. Toren of Weisbrod Matteis & Copley will prepare IP counsel to craft effective patent licenses by reviewing key clauses and licensing in joint development projects, and outline best practices for structuring the agreement to avoid litigation, allocate risk and maximize patent value.  The webinar will review the following issues:

    • What are the key contract terms to include in patent licensing agreements?
    • What steps should be taken when structuring a licensing agreement in the context of a joint development project?
    • What factors must be considered to structure a patent license to avoid or minimize litigation?

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

  • Webinar on Conducting and Analyzing Patent Searches

    Strafford #1Strafford will be offering a webinar/teleconference entitled "Conducting and Analyzing Patent Searches — Strategies for Validity, Patentability, Infringement, FTO and State-of-the-Art Searches" on March 31, 2016 from 1:00 to 2:30 pm (EDT).  Thomas L. Irving of Finnegan Henderson Farabow Garrett & Dunner, Jonathan E. Grant of Grant Patent Services, and Cory C. Bell of Finnegan Henderson Farabow Garrett & Dunner will provide guidance to patent counsel on structuring and conducting patent searches, and discuss reporting of search results and offer best practices for analyzing patent searches to maximize patent protection.  The webinar will review the following issues:

    • What are the benefits and pitfalls of classification searching and keyword searching?
    • What are the critical considerations when determining what, when and where to search?
    • What are the key components of an effective search strategy, analytical process and follow-up steps to ensure a successful patent application?

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

  • Conference on IP Strategy, Patent Portfolio Development and Innovation

    FlemingFleming will be holding a conference on IP Strategy, Patent Portfolio Development and Innovation from April 5-7, 2016 in Boston, MA.  The conference will offer sessions covering the following topics:

    • Enhanced Patent Quality Initiative: Moving Forward
    • Synchronizing IP Strategy with Corporate Innovation Strategy
    • Navigating Patent Portfolio Development in 2016: Keeping Abreast of the Ever-Changing Landscape
    • Commercialization of Intellectual Property and Integrating it to your IP Strategy
    • Streamlining Tactics for Partnering with External Counsel
    • Global Patent Portfolio Protection and Prosecution

    A full program for this conference, including an agenda, detailed descriptions of conference sessions, list of speakers here.  The registration fee for the conference is $2,496 (practitioner) or $3,099 (non practitioner).  Those interested in registering for the conference can do so here.

    Patent Docs is a media partner of the IP Strategy, Patent Portfolio Development and Innovation conference.