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  • Voxathon LLC v. Alpine Electronics of America, Inc. (E.D. Tex. 2016)

    By Michael Borella —

    District Court for the Eastern District of TexasVoxathon sued Alpine, and a number of defendants that manufacture automobiles, for infringement of U.S. Patent No. 6,442,261.  According to the Court, the patent "relates to computer-implemented systems and methods for transferring information efficiently."  Specifically, claim 1 recites:

    A method for recovering calls using an attendant telephone set having a predetermined number of call appearance buttons comprising:
        receiving a plurality of incoming telephone calls from calling parties;
        identifying a telephone number of the calling party of each incoming telephone call;
        assigning each incoming telephone call to a next available call appearance button of said predetermined number of call appearance buttons;
        storing the identified telephone number associated with each incoming telephone call in a memory device; and
        automatically redialing, in response to the attendant's  selection of one of the call appearance buttons, the stored telephone number of the calling party of the incoming call assigned to the selected call appearance button.

    The defendants filed multiple 12(b)(6) motions to dismiss the case on the grounds that the claims of the '261 patent lack subject matter eligibility under 35 U.S.C. § 101.  The Court found that there were no material factual disputes that prevented it from evaluating these motions on the pleadings.  Despite Voxathon arguing that the defendants had misconstrued or disregarded several claim terms, the Court stated that construction of these terms would not change the substantive § 101 analysis.  Citing to the precedential Federal Circuit case of Bancorp Servs., L.L.C. v. Sun Life. Assur. Co. of Canada, the Court stated that it was not required to wait until after claim construction to make a § 101 determination.

    That out of the way, the Court reviewed the two-prong test for patent-eligibility under § 101 set forth in Alice Corp. v. CLS Bank Int'l.  First, one must determine whether the claim at hand is directed to a judicially-excluded law of nature, a natural phenomenon, or an abstract idea.  If so, then one must further determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to something more than the judicial exception.  Notably, generic computer implementation of an otherwise abstract process does not qualify as "something more."

    Applying the first prong, the Court characterized the claim as "directed to the abstract idea of responding to a sender of a message."  Despite explicit recitation of "a telephone set" and "call appearance buttons," the Court made an analogy between the claimed invention and a manual procedure that could be carried out by a human.  Particularly, the Court wrote that "[w]hether a message is received through a telephone or a letter, the steps of receiving a message, identifying the sender of the message, remembering the address or phone number of the sender of the message, and responding to the sender of a message remain the same."

    Voxathon argued that the claims disclosed an improved telephone set that solved problems in the prior art related to telephone calls going unanswered.  The Court rejected this notion, stating that any such new device "merely performs the abstract idea of responding to the sender of a message."  Looking to the claims found ineligible in Planet Bingo, LLC v. VKGS LLC and Content Extraction and Transmission LLC v. Wells Fargo Bank, National Ass'n, the Court concluded that the '261 patent similarly included steps of "1) collecting data, 2) recognizing certain data within the collected data set, and 3) storing that recognized data in a memory," and that the recalling step did not make a significant difference.

    Turning to the second prong, Voxathon used an expert declaration in an attempt to establish that the claim contains "several material, non-generic limitations."  The Court, however, rejected the declaration as being "inadequate" without explaining why.  (Apparently, this declaration did not raise a material issue of fact that prevented the Court from ruling on the 12(b)(6) motion.)  Instead, the Court stated that "the '261 patent simply automates an abstract idea — responding to the sender of a message — albeit through the use of a 'telephone set,'" and that "[a] generic computer can perform the same conventional and routine steps as the 'telephone set.'"

    Voxathon further argued that the claimed invention "eliminates errors associated with the process of receiving and redialing a phone number."  But the Court found this notion unavailing, because even "[t]hough a computer may be more efficient or less error-prone than a human, mere automation through a generic computer is not enough to render a patent eligible under § 101."  Finally, Voxathon noted that the claim's preemption is "narrow and not absolute."  Once again, the Court was unconvinced, and noted that the absence of compete preemption does not demonstrate patent-eligibility, and that the claim is effectively a monopoly over the aforementioned abstract idea.

    Consequently, the '261 patent was held to be invalid under § 101, and the case was dismissed.

    This is yet another example that tracks a familiar trend in § 101 jurisprudence: (1) a claim is viewed at a 10,000 foot level to remove from it all devices and machines, (2) this gist of the claim is declared abstract, and (3) when the devices and machines are examined separately from this gist of the claim, they are determined to be no more than routine and conventional, adding no patentable weight.  Following such a formula, virtually any software or business method claim can be rendered invalid.

    And therein lays the fundamental problem with the Alice test — its subjectivity.  While many claims that fail to meet the requirements of § 101 are more clearly abstract than claim 1 of the '261 patent, a reasonable application of the test to this claim — one that considered the claim as a whole or involved defining claim terms — might have come to the opposite conclusion.

  • Mortgage Grader, Inc. v. First Choice Loan Services Inc. (Fed. Cir. 2016)

    Financial Services Patent Claims Invalid

    By Joseph Herndon —

    Federal Circuit SealOn January 20, 2016, the Federal Circuit issued an opinion in the case captioned Mortgage Grader, Inc. v. First Choice Loan Services Inc., NYLX, Inc.  This case involves patent claims directed to systems and methods for assisting borrowers to obtain loans.  Mortgage Grader appealed the District Court's finding that the asserted claims are patent-ineligible on summary judgment.  Here, the Federal Circuit affirmed that finding.  This decision by the Federal Circuit stays in line with the Alice decision and the Federal Circuit decisions following Alice, and provides a large roadblock to any patent owner looking to assert any type of financial or economic practice-based patent claims.

    Turning to the patents and substance of the patent-ineligibility challenge under § 101, the patents-in-suit, U.S. Patent Nos. 7,366,694 and 7,680,728, relate to financial transactions including a method for a borrower to evaluate and/or obtain financing, e.g., a loan. Claim 1 of the ‘694 patent is representative and reproduced here:

    1.  A computer-implemented system for enabling borrowers to anonymously shop for loan packages offered by a plurality of lenders, the system comprising:
        a database that stores loan package data specifying loan packages for home loans offered by the lenders, the loan package data specifying, for each of the loan packages, at least a loan type, an interest rate, and a required borrower credit grading; and
        a computer system that provides:
            a first interface that allows the lenders to securely upload at least some of the loan package data for their respective loan packages to the database over a computer network; and
            a second interface that prompts a borrower to enter personal loan evaluation information, and invokes, on a computer, a borrower grading module which uses at least the entered personal loan evaluation information to calculate a credit grading for the borrower, said credit grading being distinct from a credit score of the borrower, and being based on underwriting criteria used by at least some of said lenders;
            wherein the second interface provides functionality for the borrower to search the database to identify a set of loan packages for which the borrower qualifies based on the credit grading, and to compare the loan packages within the set, including loan type and interest rate, while remaining anonymous to each of the lenders and without having to post a request to any of the lenders, said second interface configured to display to the borrower an indication of a total cost of each loan package in the set, said total cost including costs of closing services not provided by corresponding lenders.

    The District Court concluded that all of the asserted claims are directed to the abstract idea of "anonymous loan shopping" and that they include no "inventive concept."

    On Appeal, the Federal Circuit followed the two-step framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.  First, the court determines if the claims at issue are directed to a patent-ineligible concept.  If not, the inquiry ends, as the claims are patent-eligible.  But if so, the next step is to look for an "inventive concept" — i.e., an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself.

    1.  Are the claims directed to a patent-ineligible concept?

    Regarding step 1, the Federal Circuit agreed with the District Court that the asserted claims are directed to the abstract idea of "anonymous loan shopping."

    The claim limitations recite nothing more than the collection of information to generate a "credit grading" and to facilitate anonymous loan shopping.  As the District Court explained, the claims specify that "the borrower is anonymous to the lender until the borrower has been informed of the cost of the loan based on the borrower's credit grading, and the borrower then chooses to expose its identity to a lender."

    The Federal Circuit simplified the series of steps covered by the asserted claims to be a borrower applies for a loan, a third party calculates the borrower's credit grading, lenders provide loan pricing information to the third party based on the borrower's credit grading, and only thereafter (at the election of the borrower) the borrower discloses its identity to a lender.  These simplified steps were found to be capable of being performed by humans without a computer.  This reasoning further supported the Federal Circuit's finding that the claims are directed to an "abstract idea".

    2.  Do the claims include an "inventive concept"?

    The Federal Circuit found that no inventive concept was recited in the claims that could save the claims from being found invalid under § 101.  Instead, the claims add only generic computer components such as an "interface," "network," and "database."

    It is well known now that generic computer components do not satisfy the inventive concept requirement.

    The Federal Circuit noted that the two common reasons found in prior cases for supporting "inventive concepts" were lacking in the instant case.  First, because nothing in the asserted claims purports to improve the functioning of the computer itself or effect an improvement in any other technology or technical field, there can be no inventive concept due to recitation of the generic computer components.  Second, the Federal Circuit further noted that the claims also do not solve any problem unique to the Internet of computer technical field.  For completeness, the Federal Circuit noted that the claims further are not adequately tied to "a particular machine or apparatus", which could have provided supported for patentability under Bilski.

    Thus, because the asserted claims are directed to an abstract idea and nothing in the claims adds an inventive concept, the claims are not patent-eligible under § 101.

    3.  Do §101 inquiries require resolution of underlying factual issues?

    Mortgage Grader argued that the District Court improperly resolved material factual disputes in connection with granting First Choice Loan's summary judgment motion of patent ineligibility.  The Federal Circuit disagreed, and noted that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment.

    The § 101 inquiry may contain underlying factual issues, but here, the Federal Circuit performed the § 101 analysis without resolving fact issues.  Since the issues were not considered to be directed to a material fact, summary judgment was still appropriate.

    The Federal Circuit noted that the parties submitted expert declarations, and the District Court acknowledged these materials were in the record.  But the District Court did not rely on them in its § 101 analysis.  Instead, in making its patent-eligibility determination, the District Court looked only to the claims and specifications of the patents-in-suit.

    The Federal Circuit noted that the mere existence in the record of dueling expert testimony does not necessarily raise a genuine issue of material fact.  However, the Federal Circuit did review the expert opinions, and disposed of them in turn.

    For instance, the Federal Circuit noted that First Choice Loan's experts simply provided non-material historical information about how people obtained mortgages in the period before the Internet, and this was considered by the Federal Circuit to add little if anything to the '694 patent's specification, which observed that "[t]here are newspaper or Internet referral sites which publish interest rates for one or more lenders."

    Further, Mortgage Grader's expert stated, neither of First Choice Loan's experts "reference[d] the asserted claims, but instead merely explain[ed] the existence of mortgage rate tables published in newspapers during the 1980s and 1990s."  Mortgage Grader's expert opined that the patents-in-suit solved the problem of information asymmetry between borrowers and lenders, which had previously permitted lenders to "steer" borrowers to predatory loans.  But that assertion about problem solving does not by its terms identify claimed process steps.

    In any event, the claims expressly encompass so-called "independent" third-parties who, in addition to determining a borrower's credit grading, may be "full time employee[s] of an entity providing the desired financial services" and may "receive[] a percentage commission from an affiliated company based on the loans funded through the program."  Plainly speaking, the Federal Circuit stated, conflicts-of-interest and predatory lending are still possible when practicing the claims, and thus, the Federal Circuit did not believe Mortgage Grader's expert opinions had any effect on the patent ineligibility analysis.

    Mortgage Grader's expert also provided an opinion that the patents-in-suit require use of a computer.  But, the Federal Circuit noted that use of a generic computer to implement a "fundamental economic practice" cannot provide an inventive concept sufficient to save claims from patent ineligibility, and thus, this opinion does not create a genuine dispute of material fact.

    The Federal Circuit having reviewed the expert reports found that no reasonable factfinder could find, based on the expert reports, that the asserted claims are directed to patent-eligible subject matter.

    Thus, the Federal Circuit found the patent claims to be directed to patent-ineligible subject matter, and that the District Court's granting of summary judgment, even with dueling expert opinions alleging factual disputes, was proper.  It seems that patent owners attempting to survive a summary judgment challenge under § 101 should consider submitting expert reports from patent specialists, to tie any alleged improvement described in the specification to the asserted claims, as well as to offer expert opinion regarding how the asserted claims constitute "significantly more" so as to recite an "inventive concept".  Some genuine issue of material fact seems to be present in this case, but such issue was not presented in a detailed way that satisfied the Federal Circuit.

    That being said, it's hard to find some "inventive concept" in these claims.  Once the generic computer components are removed (none of which are asserted as new), what remains are a recitation of basic manual steps to find a loan.  Mortgage Grader was unable to show that these steps solved some problem, provided some improvement in the banking field, or improved operation of computers used for banking services that could give rise to any inventive concept.

    Mortgage Grader, Inc. v. First Choice Loan Services Inc. (Fed. Cir. 2016)
    Panel:  Circuit Judges O'Malley and Taranto, and Chief District Judge Stark (sitting by designation)
    Opinion by Chief District Judge Stark

  • Q&A from Webinar on Top Patent Law Stories of 2015

    By Kevin E. Noonan, Michael Borella & Donald Zuhn —

    MBHB Logo 2Earlier today, we presented a live webinar on the "Top Patent Law Stories of 2015."  The webinar covered seven of the twenty stories that made it onto Patent Docs ninth annual list of top patent stories.  Posts on our top twenty stories can be found here (stories #16 to #20), here (stories #11 to #15), here (stories #6 to #10), and here (stories #1 to #5).  The seven stories that we addressed during the webinar were:

    ➤ District Court Patent Decisions Cause Concern
    ➤ Federal Circuit Clarifies PTA Rules
    ➤ Federal Circuit Decides Akamai v. Limelight on Remand
    ➤ Hi-Tech Fallout from Alice Corp. v. CLS Bank Int'l
    ➤ USPTO Expands on Subject Matter Eligibility Guidance
    ➤ Federal Circuit Decides Ariosa v. Sequenom and Denies Rehearing En Banc
    ➤ Federal Circuit Decides Amgen v. Sandoz

    Due to time constraints, we were unable to answer questions before the presentation was concluded and wanted to provide answers to some of the questions that attendees submitted.


    Q:      Do patents issue at a certain time on Tuesday?  I'll file on Monday anyway!­

    Kevin:  They are accessible on the website after midnight (in my experience).  But I don't think filing them on the grant date prior to their accessibility would overcome the decision that says a continuing/divisional application must be filed before grant.

    Don:  This question was raised in Immersion Corp. v. HTC Corp.  HTC contended that because patents issue automatically at 12:00:01 am on their issue date, Immersion could not have filed the applications that issued as the '720, '181, and '105 patents "before" the parent patent issued since the later-filed applications were filed on the same day as the parent patent issued.  Although the District Court was "not convinced of the correctness of Defendants' contention that a patent automatically issues at 12:00:01 a.m. on the issue day," the Court noted that "Plaintiff has presented no evidence of when on August 6, 2002 [i.e., the parent patent's issue date] the applications were filed."  Ultimately, I think the decision to file continuing applications no later than the Monday before the parent patent issues is the most prudent choice.


    Q:      Would the USPTO have contended that Gilead was delinquent even if they only learned of the publications the day they filed the IDS?

    Kevin:  Ther­e are savings provisions for art not known to the applicant under these circumstances.  But there is a short timeline for getting such art before the examiner in a way that does not implicate PTA.

    Don:  The USPTO would not have considered Gilead to be delinquent if Gilead had filed a certification under 37 C.F.R. § 1.704(d)(1).  That section states that:

    A paper containing only an information disclosure statement in compliance with §§ 1.97 and 1.98 will not be considered a failure to engage in reasonable efforts to conclude prosecution (processing or examination) of the application under paragraphs (c)(6), (c)(8), (c)(9), or (c)(10) of this section [(c)(6) and (c)(8) were discussed during today's webinar] if it is accompanied by a statement that each item of information contained in the information disclosure statement:
        (i) Was first cited in any communication from a patent office in a counterpart foreign or international application or from the Office, and this communication was not received by any individual designated in § 1.56(c) more than thirty days prior to the filing of the information disclosure statement; or
        (ii) Is a communication that was issued by a patent office in a counterpart foreign or international application or by the Office, and this communication was not received by any individual designated in § 1.56(c) more than thirty days prior to the filing of the information disclosure statement.

    As indicated in the rule, the short timeline Kevin mentioned above is 30 days.  Unlike the 3-month certification of 37 C.F.R. § 1.97(e), however, the 30-day period of § 1.704(d)(1) runs from the date on which information was "received by any individual designated in § 1.56(c)."


    Q:      ­What section of the AIA directs patentees to challenge Patent Term Adjustment determinations in the Eastern District of Virginia?

    Don:  Section 9 of the Leahy-Smith America Invents Act amended 35 U.S.C. § 154(b)(4)(A) by striking ''United States District Court for the District of Columbia" and inserting ''United States District Court for the Eastern District of Virginia."  Section 154(b)(4)(A), which concerns appeals of patent term adjustment determinations, states that "[a]n applicant dissatisfied with the Director's decision on the applicant's request for reconsideration [of a PTA determination] shall have exclusive remedy by a civil action against the Director filed in the United States District Court for the Eastern District of Virginia within 180 days after the date of the Director's decision on the applicant's request for reconsideration."  By the way, the same change in courts was also made to 35 U.S.C. §§ 32, 145, 146, and 293.


    Q:      ­Are examiners given Chevron deference on their interpretations of USPTO regulations or is it only USPTO official policy that is given Chevron deference?­

    Kevin:  The examiners act under the Director's authority, so I think deference extends to their actions (provided that those actions are upheld on appeal or through grant, which puts the Director's imprimatur on them).


    Q:      Was MIT also a party to the Akamai v. Limelight case?  How could Akamai as a licensee bring an infringement suit on its own?­

    Mike:  The inventors of the MIT patent were an MIT professor and graduate student.  They founded Akamai to put their invention to work.  Akamai was the exclusive licensee of the patent, and MIT was also a party in the suit.


    Q:      With regard to Limelight, are we saying that there was direct infringement because all of the elements could be attributed to a single actor (Limelight) since those elements performed by the customer were necessary to avail themselves of Limelight's service?­

    Mike:  In a nutshell, yes.  It helped that Limelight instructed their customers on how to do the tagging.


    Q:      ­What is the Mayo/Alice test?­

    Mike:  This is the two prong test for patent-eligibility under § 101 that the Supreme Court introduced in Mayo Collaborative Services v. Prometheus Laboratories and refined in Alice Corp. v. CLS Bank International.  As explained in our presentation, it is applied as follows:

    1.  Is the claim at issue is directed to a judicially-excluded law of nature, a natural phenomenon, or an abstract idea?

    2.  If so, then is any element, or combination of elements, sufficient to ensure that the claim amounts to "something more" than the judicial exclusion. Generic computer implementation of an otherwise abstract process does not qualify as "something more."


    Q:      Would you say that Bilski is overruled?­

    Mike:  No, Alice did not overrule Bilski per se, but did erase the notion that merely satisfying the requirements of the machine or transformation test renders a claim patent-eligible.  The machine or transformation test is still a tool that can be used to evaluate patent-eligibility, but just tying a process to a generic machine will not satisfy the Alice test.


    Q:      What does "ordered" combination mean?­

    Mike:  Like "something more," the Supreme Court did not shine much light on this term.  Here is a quote from Alice:  "We have described step two of this analysis as a search for an 'inventive concept' — i.e., an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself."  From Diehr we have "a new combination of steps in a process may be patentable even though all the constituents of the combination were well known and in common use before the combination was made."  The latter sounds like § 102/103 language but was in reference to § 101.


    Q:      How do you think database related applications will play under Alice?  This is extremely valuable technology, but it seems pretty "computer-y" without much hardware to sink one's teeth into.­

    Mike:  One cannot patent just an arrangement of data — see In re Warmerdam.  However, a use of data in a database could be patent-eligible if that use meets § 101 requirements per Alice.  In other words, some claims incorporating a database are getting issued post-Alice, but claims to a database itself are not.


    Q:      What do you think about using the term "configured to" in a claim?  Is it good practice?

    Mike:  I could write a lot here, but in short I try to avoid "configured to" unless there doesn't seem to be a better alternative.  This language can be used to invoke § 112 ¶ 6, so you need to be careful.  Also, I don't think it will have much weight at all in an Alice analysis.


    Q:       In Ariosa, why didn't the court focus on the fact that the claims were limited to the cell-free portion of maternal blood which previously was being thrown out?

    Kevin:  It didn't matter — that is more an anticipation/obviousness argument which is not relevant under Mayo.

  • Redline Detection, LLC v. Star Envirotech, Inc. (Fed. Cir. 2015)

    The PTAB at the Federal Circuit — Supplemental Evidence Edition

    By Andrew Williams —

    USPTO SealOn New Year's Eve, the Federal Circuit affirmed the PTAB's denial of a motion to submit supplemental evidence pursuant to 37 C.F.R. § 42.123(a), notwithstanding the fact that the motion was timely filed and relevant.  In Redline Detection, LLC v. Star Envirotech, Inc., the Court explained that the Patent Office could interpret its own regulations related to PTAB trials, and that 37 C.F.R. § 42.5 provided the Board discretion in granting related motions.  Finally, the Court affirmed the Board's findings that the claims at issue were not unpatentable as obvious in view of the cited — a decision that was apparently reached because the Board did not consider the expert declaration filed by Redline as supplemental evidence.

    The regulation at issue in this case provides for the filing of supplemental information after the trial is instituted, but only by motion:

    § 42.123 Filing of supplemental information.
        (a) Motion to submit supplemental information.  Once a trial has been instituted, a party may file a motion to submit supplemental information in accordance with the following requirements:
            (1) A request for the authorization to file a motion to submit supplemental information is made within one month of the date the trial is instituted.
            (2) The supplemental information must be relevant to a claim for which the trial has been instituted.
        (b) Late submission of supplemental information.  A party seeking to submit supplemental information more than one month after the date the trial is instituted, must request authorization to file a motion to submit the information.  The motion to submit supplemental information must show why the supplemental information reasonably could not have been obtained earlier, and that consideration of the supplemental information would be in the interests-of-justice.
        (c) Other supplemental information.  A party seeking to submit supplemental information not relevant to a claim for which the trial has been instituted must request authorization to file a motion to submit the information.  The motion must show why the supplemental information reasonably could not have been obtained earlier, and that consideration of the supplemental information would be in the interests-of-justice.

    This rule was promulgated in response to the statutory mandate found at 35 U.S.C. § 316(a)(3): "The Director shall prescribe regulations . . . establishing procedures for the submission of supplemental information after the petition is filed . . . ."  Redline argued that this mandate was incorporated into the three tier scheme of subsections (a)-(c) of the rules.  If filed within the first month after institution, the argument went, and the information is relevant, the Board has no basis to deny the motion.  This position, however, did not take into account the overarching concern that the Office completes IPR proceedings in a timely manner, and that the moving party in all motions has "the burden of proof to establish that it is entitled to the requested relief."  37 C.F.R. § 42.20.

    Important in Redline's argument was the rules of statutory construction.  Specifically, that (1) the exclusion of language in one section that was included in another section generally means that the disparate inclusion or exclusion was intentional and purposeful, and (2) language that appears in different sections that were created and considered simultaneously creates a strong negative implication that they should be conflated.  The Federal Circuit deftly sidestepped these concerns by referring to these rules of construction as mere "guides" and citing to the Supreme Court precedent that these rules "need not be conclusive."  Chickasaw Nation v. United States, 534 U.S. 84, 95 (2001).

    Redline also argued that the plain language of the statute "establishes a comprehensive scheme that leaves no room for [the] PTAB to impose its own discretionary requirements."  If discretion were permitted, the argument goes, the rules should have so indicated.  The Court, however, pointed out that this rule does not, in fact, support such a reading.  Timeliness and relevance, instead, were two additional requirements for consideration of the motion, but this section must also be construed within the overarching context of IPR and PTAB trial regulations.  And ever present in this consideration is the one-year deadline for issuing a final written decision.

    Finally, Redline argued that prior PTAB decisions dictate that its motion to file supplemental information should have been granted.  In this case, Redline filed its petition without reliance on an expert declaration.  After the case was instituted on July 1, 2013, Redline filed its Motion for Supplemental Disclosure of New Exhibits on July 30, 2013.  This motion included the submission of four new pieces of evidence:  a sixty-page expert declaration, a resume of the expert, and two patents.  The Board denied the motion because it was not clear that any of the arguments or evidence could not have been filed with the original petition.  As such, the evidence was not "supplemental."  For its part, Redline argued cost-saving — the original petition presented twelve grounds of rejection, while the Board only instituted trial on two of those grounds.  By waiting, Redline argued, it only need to prepare the expert declaration directed to those two grounds.

    Redline and the Court focused on the cases of Palo Alto Networks, Inc. v. Juniper Networks, Inc., IPR2013-00369, and Pacific Market International, LLC v. Ignite USA, LLC, IPR2014-00561, as analogous to the present case.  In Palo Alto Networks, the Board allowed the introduction of supplemental information that helped establish that a prior art reference cited in the petition did in fact qualify as prior art.  The Board reasoned in that case that the information was not intentionally withheld, and allowing the information would not limit the timely completion of trial.  Redline asserted that the Board cited to § 42.123(b) and (c) for the requirement that the evidence not have been available earlier.  The Federal Circuit, however, found Redline's reliance on this case misplaced.  The Board in that case had stressed that granting the motion would not prevent trial from concluding in one year because the Patent Owner was already in possession of the information.  The petitioner had served the information in response to the Patent Owner's objections.  In this case, Redline did not (and apparently could not) make the same assertion.

    Redline's citation to Pacific Market International was equally unavailing.  There, as here, the petitioner sought to introduce a new declaration that supplemented its arguments of obviousness found in the petition.  Unlike the present case, however, the petition as-filed had included a sixty-page declaration.  That distinction was probably important in the Board's decision to grant the motion in Pacific Market International.  Again, Redline's reliance was found to be misplaced.  The Board in that case made it clear that meeting the requirements of 37 C.F.R. § 42.123(a) did not, itself, guarantee that the motion would be granted.  Therefore, to the contrary of Redline's assertion that the PTAB was obligated to follow the outcome of Pacific Market International, the case actually warns of the outcome about which Redline is complaining.

    Redline did also appeal the determination that the claims at issue were not unpatentable as obvious because the Board did not consider all of the evidence — mainly the testimony of its expert.  Specifically, because the Board did not grant Redline's motion and excluded the expert declaration, it necessarily erred in its motivation-to-combine analysis and ultimate obviousness determination.  Not surprising, however, the Court found there was substantial evidence "of record" for the Board's conclusion.

    There are at least two important takeaways of this case.  First, as a petitioner, always include in the petition all of the evidence of which you are aware.  It has to be assumed that if the evidence might want to be introduced later, any such motion might be denied.  Second, if there is legitimate supplemental evidence, it would behoove the moving party to explain in detail why the motion to introduce the evidence should be granted.  For example, for the petitioner, if the evidence is necessitated by the patent owner's preliminary response or the Board's decision to institute, explain why.  Plus, if possible, the sooner you can provide copies to the opposing party the better.  Chances are if you do not look like you are hiding the ball, and if there is still sufficient time to conclude the trial, the motion will likely be granted.  But if it is not, it is very unlikely the Federal Circuit will do anything about it on appeal.

    Redline Detection, LLC v. Star Envirotech, Inc. (Fed. Cir. 2015)
    Panel: Circuit Judges Lourie, Wallach, and Hughes
    Opinion by Circuit Judge Wallach

  • Guest Post — Jackson Laboratory Hosts Microbiome Symposium Related to Cancer and Immunology

    Editor's note: This is the fourth article in a series on advancements in microbiome research and development.

    By Jessica Miles* and Anthony D. Sabatelli** —

    Early last month, the Jackson Laboratory for Genomic Medicine in Farmington, CT held its second annual symposium, "Microbiome Meets Cancer and Immunology."  This year's event came on the heels of the formation of the Unified Microbiome Initiative (UMI), a consortium of microbiome researchers from across the country that includes JAX Professor and Director for Microbial Genomics George Weinstock.

    Because the goal of this blog series is to highlight advancements in microbiome research and development, previous articles in the series have tended to focus on the most well-studied and commercially-advanced areas of microbiome research.  However, not only can bacteria in the gut have impacts on distal tissues and organs, but also bacteria and other microogranisms colonize nearly every organ and tissue.  As such, there are countless other aspects of the human microbiome that have been previously understudied and, sometimes, underappreciated.  This session at JAX brings attention to these emerging areas of research, which hold great promise for the development of therapies for autoimmune diseases and cancer.  Ongoing research and commercial developments in these specialty areas will be reviewed in articles in 2016.

    Dr. Weinstock organized and delivered opening remarks for the one-day event, which drew attendees from across CT, as well as, Maine, Massachusetts, New York, Pennsylvania, and California.  Michael Stitzel, a co-organizer of the conference and Assistant Professor at JAX, moderated the morning session on "Inflammation, Microbiome, and Autoimmunity."  The Salk Institute's Janelle Ayres, Assistant Professor of Immunology and Microbial Pathogenesis, gave the morning's first talk, "Infection and Inflammation Induced Muscle Wasting Protection Mediated by the Microbiome."  She described her recent finding that a member of the mouse microbiome, E. coli O21:H+, protects from muscle wasting following infection or in a colitis model.  Her studies were published in the October 30th issue of Science.

    Gary Huffnagle, Professor of Microbiology and Immunology at University of Michigan, reported pioneering research on the lung microbiome.  Previously believed to be a sterile site, the healthy lung harbors a low level of microbes with a community composition resembling that of the mouth.  During disease, the profile of this community shifts, enriching for Proteobacteria, a major group of gram-negative bacteria.  His remarks were followed by a talk from David Artis, Professor of Immunology at Weill Cornell, on "Immune Regulation at Barrier Surfaces."  He discussed the function of innate lymphoid cells (ILCs) in diverse tissues, including those in the lung, gut, and in different types of adipose tissue.

    To close the morning session, Mount Sinai's Miriam Merad, shared her work on "Identification of a Commensal that Shapes Gut Tissue Immunity and Repair."  The commensal, Trichomonas muris, a protozoan associated with mice, protects mice from infection and colitis.  A Professor of Oncological Sciences, Medicine, Hematology and Medical Oncology, Dr. Merad also demonstrated that the microbiome mediates macrophage-neuronal crosstalk: in the intestine, macrophages signal to neurons by secreting bone morphogenetic protein 2 (BMP2), while enteric neurons promote macrophage development by producing colony stimulatory factor 1 (CSF1).  The microbiota modulates expression of the genes that control these signals.

    JAX Professor Karolina Palucka moderated the afternoon session, "Microbiome, Inflammation, and Cancer."  To start, Alexander Chervonsky, Associate Professor of Pathology/Molecular Pathogenesis and Molecular Medicine at the University of Chicago, discussed "Microbiota and Host Immunity."  His work explained the mechanisms by which the gut microbiota regulates two distinct processes: the development of type 1 diabetes and the addition of sugar residues to intestinal epithelia — called fucosylation — in response to infection.  Next, JAX Assistant Professor Julia Oh presented her seminal work characterizing the skin microbiome in healthy and diseased individuals.  Her remarks were followed by a talk from Gabriel Nuñez, Professor of Pathology at University of Michigan.  Speaking on "Pathogen Virulence, Host Immunity, and Microbiota," Dr. Nuñez demonstrated a dual role for host immunity and microbiome-mediated clearance in a mouse model of pathogenic, intestinal E. coli infection.

    José R. Conejo-Garcia, Professor of Tumor Microenvironment and Metastasis at the Wistar Institute, detailed the influence of the microbiome on tumor growth in different tumor types in his talk, "Commensal Organisms and Polymorphic Mucosal Surfaces Determine the Effectiveness of Anti-Tumor Immunotherapies."  The session's keynote, "Cancer as a Disease of the Symbiont/Metaorganisms," delivered by the NIH's Giorgio Trichieri, described the connections between the microbiome, inflammation, and tumor growth, and while also highlighting the work of several previous presenters.

    Overall, it was an exciting day of talks: the event was a fantastic opportunity to showcase research into less conventional, but therapeutically important, aspects of the microbiome.  The symposium's proceedings illustrated the diversity of human microbiome research beyond the gut, the complex interplay between microbes and host at these sites, and the recognition of the role of the microbiome in systemic disease.  Research and commercial activity related to these topic areas will be covered in depth in upcoming installments of this series.

    * Jessica Miles is a Technology Specialist at Dilworth IP
    ** Dr. Sabatelli is a Partner with Dilworth IP

    For additional information regarding this topic, please see:

    • "The Emergent Microbiome: A Revolution for the Life Sciences – Part III, Psychobiotics," October 13, 2015
    • "The Emergent Microbiome: A Revolution for the Life Sciences – Part II, 2015 Patent Trends," August 11, 2015
    • "The Emergent Microbiome: A Revolution for the Life Sciences – Part I, R&D Leaders," August 10, 2015

  • Cuozzo Speed Technologies, LLC v. Lee

    By Kevin E. Noonan —

    Supreme Court Building #2The Supreme Court on Friday granted certiorari to review the Federal Circuit's decision that the U.S. Patent and Trademark's Patent Trial and Appeal Board was entitled to perform claim construction in inter partes review proceedings using the broadest reasonable interpretation standard. This case, Cuozzo Speed Technologies, LLC v. Lee, has the potential to significantly change (and indeed, may level the playing field) for these proceedings, which have been termed "death panel[s]" for granted U.S. patents by not less an authority than former Federal Circuit Chief Judge Randall Rader (although it must be conceded that the Board's decisions have been seemingly more even-handed, i.e., not every claim in every patent challenged in these reviews has been struck down).  The Court also agreed to consider the extent to which the Board's decision to institute an IPR is reviewable when the Board does not confine itself to the art and grounds asserted in the IPR petition.

    To recap (briefly), the claims of challenged U.S. Patent No. 6,778,074 (the '074 patent) relate to using a Global Positioning System ("GPS") to determine compliance with local speed limits.  Figure 1 from the patent is representative:

    FIG
    The speedometer 12 is mounted on dashboard 26, and has a backplate 14 with speed markings, a color display 18, and a needle 20 mounted on the backplate.  The position of the vehicle is tracked by the GPS, and the speed of the vehicle correlated with the vehicle's position and location (there being different speed limits at different places). The colored filter adjusts so that speeds above the legal speed are displayed in red, while legal speeds are displayed in white.

    Claim 10 was at issue in the IPR and reads as follows:

    10.  A speed limit indicator comprising:
        a global positioning system receiver;
        a display controller connected to said global positioning system receiver, wherein said display controller adjusts a colored display in response to signals from said global positioning system receiver to continuously update the delineation of which speed readings are in violation of the speed limit at a vehicle's present location; and
        a speedometer integrally attached to said colored display.

    The PTAB found this claim to be invalid as obvious, based on claim interpretation using the "broadest reasonable interpretation" of the claim terms.  In particular, the Board construed the term "integrally attached" to require that the speedometer and the colored display be separately identifiable from each other, otherwise "'attached' effectively would be read out of the claim."  Under this construction, this claim term was construed to mean "discrete parts physically joined together as a unit without each part losing its own separate identity."

    Cuozzo argued on appeal that this broad interpretation of the term was improper and that the Board should have used the claim construction standard enunciated most recently by the Federal Circuit in Philips v. AWH (Fed. Cir. 2006)(en banc); this construction would perforce have been more likely to result in a favorable outcome (for Cuozzo) for the claims at issue.  The Federal Circuit disagreed, in an opinion by Judge Dyk joined by Judge Clevenger over a strenuous dissent by Judge Newman.  The majority held that the Board's use of the BRI standard was consistent with prior Patent Office practice and Federal Circuit case law and that Congress had impliedly consented to this practice (inter alia, by not passing proposed legislation (yet) that would change the standard to the one Cuozzo advocated).  Judge Newman's dissent was based in part on the rationale generally used by the PTO and the court's to use this standard during ex parte prosecution, i.e., that the Office had an obligation to the public to issue valid claims, and the patent applicant could amend the claims in response to rejections under this standard to ensure they had the proper metes and bounds under the statute.  Judge Newman pointed out the distinction that this conventional justification for this standard did not apply to claims in inter partes review, because unlike claims in prosecution there had been a prior determination that the claims are patentable; and in practice the patentee could not readily amend the claims in response to the asserted grounds of invalidity.

    Last summer the Federal Circuit refused to reconsider the question en banc, with Judges Dyk, Lourie, Chen, Wallach, Taranto, and Hughes voting against rehearing and Chief Judge Prost and Judges Newman, Moore, O'Malley and Reyna dissenting.  The dissenter's rationale was set forth succinctly as follows:

    But in IPRs, as in district court litigation, an already issued claim is being analyzed solely for the purposes of determining its validity.  In this context, it makes little sense to evaluate the claim against the prior art based on anything than the claim's actual meaning.

    Cuozzo's certiorari petition followed, having the following Questions Presented:

    1.  Whether the court of appeals erred in holding that, in IPR proceedings, the Board may construe claims in an issued patent according to their broadest reasonable interpretation rather than their plain and ordinary meaning.

    2.  Whether the court of appeals erred in holding that, even if the Board exceeds its statutory authority in instituting an IPR proceeding, the Board's decision whether to institute an IPR proceeding is judicially unreviewable.

    Briefs for the parties will become due in the near future, with amicus briefs on both sides of the issue being expected.  Congress could moot at least the first presented Question by passing those provisions of the most recent "patent reform" legislation that would direct the Office to use the district court standard of claim construction.  Recent experience, however, says that solution is unlikely.

    For additional information regarding this topic, please see:

    • "No Rehearing En Banc for In re Cuozzo Speed Technologies — PTAB Update," July 9, 2015
    • "In re Cuozzo Speed Technologies, LLC (Fed. Cir. 2015)," February 4, 2015
    • "In re Cuozzo Speed Technologies LLC Federal Circuit Argument — The Patent Office Asks to Have Its Cake and Eat It Too," November 10, 2014
    • "Federal Circuit Schedules Argument for First IPR Final Written Decision – In re Cuozzo Speed Technologies LLC," October 2, 2014
    • "The First IPR Decision — A Win for the Patent Challenger," November 18, 2013

  • Court Report

            By Sherri Oslick —

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

    Merck Sharp & Dohme B.V. v. Teva Pharmaceuticals USA Inc.
    1:15-cv-00806; filed September 11, 2015 in the District Court of Delaware

    • Plaintiff:  Merck Sharp & Dohme B.V.
    • Defendants:  Teva Pharmaceuticals USA Inc.; Teva Pharmaceutical Industries Ltd.

    Infringement of U.S. Patent No. 5,989,581 ("Drug Delivery System for Two or More Active Substances," issued November 23, 1999) following a Paragraph IV certification as part of Teva's filing of an ANDA to manufacture a generic version of Merck's NuvaRing® drug product (ethinyl estradiol and etonogestrel vaginal ring, used for contraception).  View the complaint here.


    Kowa Co., Ltd. et al. v. Zydus Pharmacueticals (USA) Inc. et al.
    3:15-cv-06792; filed September 11, 2015 in the District Court of New Jersey

    • Plaintiffs:  Kowa Co., Ltd.; Kowa Pharmaceuticals America, Inc.; Nissan Chemical Industries, Ltd.
    • Defendants:  Zydus Pharmacueticals (USA) Inc.; Cadila Healthcare Ltd.

    Infringement of U.S. Patent No. 6,465,477 ("Stable Pharmaceutical Composition," issued October 15, 2002) following a Paragraph IV certification as part of Zydus' filing of an NDA (under § 505(b)(2) of the Food, Drug and Cosmetic Act) to manufacture a generic version of Kowa's Livalo® (pitavastatin, used as an adjunctive therapy to diet to reduce elevated total cholesterol, lowdensity lipoprotein cholesterol, apolipoprotein B, triglycerides, and to increase high-density lipoprotein cholesterol).  View the complaint here.


    Depomed, Inc. et al. v. Actavis Elizabeth LLC et al.
    2:15-cv-06797; filed September 11, 2015 in the District Court of New Jersey

    • Plaintiffs:  Depomed, Inc.; Grunenthal GmbH
    • Defendants:  Actavis Elizabeth LLC; Actavis LLC; Actavis Inc.

    Infringement of U.S. Patent No. 8,536,130 (""Use of 1 Phenyl-3-Dimethylamino-Propane Compounds for Treating Neuropathic Pain," issued September 17, 2013) following a Paragraph IV certification as part of Actavis' filing of an ANDA to manufacture a generic version of Depomed's Nucynta ER® (tapentadol hydrochloride, used for the management of moderate to severe acute pain in adults).  View the complaint here.


    Millennium Pharmaceuticals Inc. v. Hospira, Inc.
    1:15-cv-00804; filed September 10, 2015 in the District Court of Delaware

    Infringement of U.S. Patent Nos. 6,713,446 ("Formulation of Boronic Acid Compounds," issued March 30, 2004) and 6,958,319 (same title, issued October 25, 2005), licensed exclusively to Millennium, following a Paragraph IV certification as part of Hospira's filing of an ANDA to manufacture a generic version of Millenium's Velcade® (bortezomib, used to treat multiple myeloma).  View the complaint here.


    Janssen Pharmaceutica N.V. et al. v. Apotex Inc. et al.
    1:15-cv-07121; filed September 10, 2015 in the Southern District of New York

    • Plaintiffs:  Janssen Pharmaceutica N.V.; Janssen Pharmaceuticals, Inc.; Janssen Research & Development, LLC
    • Defendants:  Apotex Inc.; Apotex Corp.

    Infringement of U.S. Patent No. 6,407,079 ("Pharmaceutical Compositions Containing Drugs Which Are Instable or Sparingly Soluble in Water and Methods for Their Preparation," issued June 18, 2002) following a Paragraph IV certification as part of Apotex's filing of an ANDA to manufacture a generic version of Janssen's Sporanox® (itraconazole, used for the treatment of certain fungal infections).  View the complaint here.

  • Conference & CLE Calendar

    CalendarJanuary 20, 2016 – "Patent Eligibility Post-Alice: Practical Advice for Navigating the Current 35 USC § 101 Regime" (American Intellectual Property Law Association) – 12:30 – 2:00 pm (Eastern)

    January 20, 2016 – "Insider Threat: Employee Mobility and Trade Secrets" (Intellectual Property Owners Association) – 2:00 to 3:00 pm (ET)

    January 21, 2016 – "Top Patent Law Stories of 2015" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT)

    January 21, 2016 – "Obviousness Standard After the AIA: Leveraging Latest PTO and Court Guidance — Overcoming Challenges of Obviousness and Attacks on Patent Validity" (Strafford) – 1:00 to 2:30 pm (EST)

    January 27, 2016 – "NPE Patent Litigation: Latest Developments — Leveraging Alice, Federal Rules Amendments, and Patent Office Proceedings in Defending Infringement Disputes" (Strafford) – 1:00 to 2:30 pm (EST)

    February 4, 2016 – "Evolving PTAB Trial Practice: Navigating Complex Procedural Rules — Strategically Using Routine and Additional Discovery, Requests for Joinder, and Motions to Amend" (Strafford) – 1:00 to 2:30 pm (EST)

    February 8-9, 2016 - Naples Patent Experts Conference (University of Akron School of Law) – Naples, FL

    February 9, 2016 – "Caught in a web — how the court in Kimble v. Marvel ruled on whether payment of royalties for an expired patent in unlawful per se" (American Intellectual Property Law Association) – 12:30 – 1:30 pm (Eastern)

    February 24, 2016 – "Patentable Subject Matter after Alice: Best Practices for Addressing 35 U.S.C. § 101" (McDonnell Boehnen Hulbert & Berghoff LLP) – 10:00 am to 11:15 am (CT)

    March 10-11, 2016 - Advanced Patent Law Seminar (Chisum Patent Academy) – Cincinnati, OH

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

  • Webinar on Patentable Subject Matter after Alice

    MBHB Logo 2McDonnell Boehnen Hulbert & Berghoff LLP will be offering a live webinar on "Patentable Subject Matter after Alice: Best Practices for Addressing 35 U.S.C. § 101" on February 24, 2016 from 10:00 am to 11:15 am (CT).  In this presentation, Patent Docs contributor and MBHB attorney Michael S. Borella, Ph.D. will review the case law, USPTO § 101 guidance, and other sources, and provide an array of strategies for patent drafting and prosecution that will help you (1) avoid § 101 rejections, and (2) address § 101 rejections that you do receive when prosecuting software and business method inventions.  Each of the examples will be based on actual experience with overcoming § 101 rejections at the USPTO.

    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.

  • IPO Webinar on Safeguarding Trade Secrets

    IPO #2The Intellectual Property Owners Association (IPO) will offer a one-hour webinar entitled "Insider Threat: Employee Mobility and Trade Secrets" on January 20, 2016 from 2:00 to 3:00 pm (ET).  Clifford Atlas of Jackson Lewis, Buckmaster De Wolf of General Electric Co., and Randall Kay of Jones Day will discuss best practices for safeguarding trade secret and other confidential corporate information from appropriation by employees, as well as contractors, and consultants.  The panel will also consider the flip side of the issue:  best practices for avoiding a lawsuit when hiring an employee from a competitor.

    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.