Patent Docs

eDekka LLC v. 3balls.com, Inc. (E.D. Tex. 2015)

January 6, 2016

By Michael Borella —

As 2015 drew to a close, the toll of the Alice Corp. v. CLS Bank Int'l decision on software and business method patents became apparent. Post Alice, approximately 70% of all patents challenged under 35 U.S.C. § 101 have been invalidated in district courts, while the rate of § 101 rejections has exceeded 80% in some of the USPTO's art units where it was previously below 40%. As a consequence, patentees have become increasingly concerned about whether key patents in their portfolios might be subject to an Alice challenge in litigation, as well as whether their new technologies are protectable.

In addition to limiting the scope of patentable subject matter in Alice, the Supreme Court, in Octane Fitness v. Icon Health and Fitness and Highmark Inc. v. Allcare Health Management Systems, has increased the number of situations in which 35 U.S.C. § 285 allows bad faith assertion of patent rights to expose a litigant to attorneys' fees. Recently, these rulings came in play together in the Eastern District of Texas.

eDekka sued approximately 220 defendants, including 3balls, as allegedly infringing its U.S. Patent No. 6,266,674. Claim 1 of the '674 patent recites:

1. Method for storing information provided by a user which comprises:
    in response to user input, receiving and storing information;
    in response to user input, designating the information as data while the information is being received;
    in response to user input, designating at least a portion of the information as a label while the information is being received;
    in response to user input, traversing a data structure and providing an indication of a location in the data structure;
    in response to user input, storing the label at the location in the data structure; and
    associating the label with the data.

The Court described the patent as related to "storing and labeling information" and disclosing "a preferred embodiment that includes a cassette tape recorder with multiple buttons, a microphone, and a speaker." eDekka targeted "online retailers that offer a shopping cart feature on their e-commerce websites" as alleged infringers.

A number of the defendants filed motions to dismiss under 35 U.S.C. § 101 on the grounds that the '674 patent did not meet the patent-eligibility requirements set forth by Alice. The Court granted this motion, and the defendants followed up with another motion to make the case exceptional under 35 U.S.C. § 285.

Section 285, as interpreted in Octane Fitness, requires that an exceptional case "is simply one that stands out from others with respect to the substantive strength of a party's litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated." Further, "[d]istrict courts may determine whether a case is 'exceptional' in the case-by-case exercise of their discretion, considering the totality of the circumstances." If the district court determines a case to be exceptional, then shifting of attorney's fees is appropriate if the moving party can establish so based on a preponderance of evidence.

The defendants took the position that "(1) eDekka's case was objectively unreasonable; and (2) eDekka litigated in an unreasonable manner."

With respect to the defendants' first point, the Court noted that "the '674 [p]atent is demonstrably weak on its face, despite the initial presumptions created when this patent was issued by the PTO." Particularly, claim 1 refers to a data structure but does not limit this structure to one stored in or operated on a computer. Given the claim's high-level definition of the invention, and its lack of any physical structure, the Court concluded that the "claims were clearly directed toward unpatentable subject matter, and no reasonable litigant could have reasonably expected success on the merits when defending against the numerous § 101 motions filed in this case."

But, eDekka argued that the claimed invention improves the functioning of technology by reducing "the time to retrieve information and the amount of information that must be retrieved" despite there being no basis in the claims for this notion. eDekka also argued that the claims required a special purpose computer, even though there is no recitation of any sort of computer hardware in the claims, and only limited support for such in the specification.

The Court concluded that "eDekka repeatedly offered insupportable arguments on behalf of an obviously weak patent" and questioned whether eDekka thoroughly evaluated its claims against relevant law before initiating a large number of lawsuits. Accordingly, the Court determined that these facts supported the case being held exceptional under § 285.

With respect to the defendants' second point, the Court found that eDekka's litigation history "reflects an aggressive strategy that avoids testing its case on the merits and instead aims for early settlements falling at or below the cost of defense." For instance, just two days before the § 101 hearing, "counsel for eDekka contacted numerous defendants with offers to settle their cases for three-thousand dollars each." Thus, the Court found "that it is reasonable to conclude that eDekka acted with the goal of exploiting the high cost to defend complex litigation to extract nuisance value settlement[s] from defendants." This also weighed significantly toward the Court finding the case to be exceptional.

After considering the totality of circumstances, the Court held the case to be exceptional and awarded attorneys' fees to the defendants. The Court did so reluctantly, stating that it did not wish to "unintentionally narrow the public's access to the courts by chilling future decisions to seek redress for a case in which success is not guaranteed," but that "the threshold of exceptionality has been crossed by eDekka."

As noted above, Alice has dramatically increased the likelihood that certain types of claims will be invalidated under § 101. At first blush, this case might suggest that asserting such claims raises the specter of exceptionality challenges. Perhaps, but eDekka also attempted to defend its claims with unfounded arguments while engaging in an aggressive litigation strategy.
Recognicorp, LLC v. Nintendo Co. (W.D. Wash. 2015)

January 5, 2016

Generic Software Claims Found Ineligible under § 101

By Joseph Herndon —

A common theme found in recent patent litigation is that software claims lacking detail are more likely to be found invalid under 35 U.S.C. § 101.

The U.S. District Court for the Western District of Washington at Seattle issued an opinion on December 15, 2015 in a case captioned Recognicorp, LLC v. Nintendo Co. Ltd., et al. (case no. C12-1873RAJ) regarding patent eligibility under 35 U.S.C. § 101 of software claims. Ultimately, the District Court found that the patent claims are ineligible under § 101.

Through a number of assignments, Recognicorp is the current assignee of U.S. Patent No. 8,005,303 (the '303 Patent), entitled "Method And Apparatus For Encoding/Decoding Image Data". Recognicorp alleged that Nintendo infringed the '303 Patent by selling composite image customization products, including "software included on the Nintendo Wii to create and customize a facial (or other) feature of a Mii."

In the Nintendo gaming architecture, a Mii is a free-form digital avatar used in Nintendo's Wii gaming consoles, and allows users to develop a likeness of themselves, other people, or invented characters. After creating a Mii using the Mii Channel on a Wii or the Mii Maker application on a Nintendo 3DS or Wii U, Mii's can be used as playable characters in various titles for each of the named consoles.

The '303 Patent discloses a "method and an apparatus for encoding images" and explains that "[i]t is known in the art to create images on the basis of components that are assembled to form a complete image," such as by using "[p]aper strips containing exemplary features" or by using "a program element running on a computing platform which allows a user to select individual components and combining them on a pre-selected face." In so "constructing an image, pictorial entities are selected from a library of entities as assembled into images," storage of which may require "significant amounts of memory." As a result, the '303 Patent explains that "there exists a need in the industry to refine the process of encoding images such as to reduce the memory requirements for storage and the bandwidth required for the transmission of the image."

Figure 1 of the patent is reproduced below that illustrates a process flow diagram of the method of claim 1.

Claim 1 is provided below:

1.    A method for creating a composite image, comprising:
    displaying facial feature images on a first area of a first display via a first device associated with the first display, wherein the facial feature images are associated with facial feature element codes;
    selecting a facial feature image from the first area of the first display via a user interface associated with the first device, wherein the first device incorporates the selected facial feature image into a composite image on a second area of the first display, wherein the composite image is associated with a composite facial image code having at least a facial feature element code and wherein the composite facial image code is derived by performing at least one multiplication operation on a facial code using one or more code factors as input parameters to the multiplication operation; and
    reproducing the composite image on a second display based on the composite facial image code.

The District Court noted the Supreme Court's two-part test to analyze claims for patent-eligibility. First, courts must determine whether the claims at issue are directed to one of those patent-ineligible concepts, and if so, then secondly courts must examine what else is there in the claims before them by considering "the elements of each claim 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 second part has been characterized as searching 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.

Is the '303 Patent Directed to A Patent Ineligible Concept?

The District Court noted that in essence, the steps claimed in the '303 Patent boil down to: (1) displaying potential input variables (the facial features and their modifications), (2) selecting and manipulating the inputs, (3) deriving an output code by performing a "multiplication operation" on the inputs, and (4) outputting the original inputs on another device by performing the sequence in reverse on another device.

The District Court further summarized the '303 Patent by stating that, in other words, the '303 Patent utilizes a "paint by numbers" approach to creating, encoding, and decoding composite facial images. This reasoning was used to conclude that the steps of the patent are directed to the abstract idea of encoding and decoding composite facial images using a mathematical formula.

The District Court cited to other decisions and noted that such other courts have found that encoding and decoding data is a "fundamental concept" — or put another way, an abstract idea.

The District Court separately noted that processes that can be performed entirely in the human mind or with pen and paper are not patentable, and even without construing the claims to determine the precise parameters of the encoding scheme, the District Court noted that the specific image encoding process likely can be performed entirely within the human mind or with pen and paper. So long as the individual is provided the specific input variables — here, the facial feature element codes and code factors — she can apply the "multiplication operation" on the facial code until she can derive a composite image code. When another individual is provided this same composite facial image code, he could perform the multiplication operation backward to derive the same composite image.

This allegation by the District Court, that the claim can be performed entirely in the human mind, is troublesome since it ignores the first clause "displaying facial feature images on a first area of a first display via a first device associated with the first display," which cannot be performed in the human mind and necessarily requires computer technology. Nonetheless, seeing as this first step is likely considered insignificant extra-solution activity, the outcome of patent ineligibility is unlikely to be changed despite this possible flawed "separate" reasoning.

The District Court rounded out the analysis by rejecting the argument that the claims are necessarily rooted in computer technology, an attempt to save them from invalidity under section 101, by stating that the claims merely require reproducing the image on a different device or generically "transmitting" the image code. Transmission may be completed "either verbally or through electronic communication means" (also providing that the "data transmission medium" can be through "any other communication medium suitable for the transfer of data").

In other words, the '303 Patent does not solve a problem created by or specifically arising in a particular technological environment as it can be applied to many technological environments.

Does the '303 Patent Describe an Inventive Concept?

Here, the District Court noted that there is little doubt that the claimed steps for generating a composite facial image — namely selecting, manipulating, and incorporating facial features into a composite image — are purely conventional. The '303 Patent's specification itself discloses that these very methods for creating composite facial images were well established in the prior art.

The other claimed steps were considered obvious in the field. Generating a composite facial image necessarily requires a degree of customization based on manipulating the essential elements of a face. But, again, the '303 Patent itself acknowledges common techniques for creating composite facial images involved dividing the image of a face into constituent features and then selecting and combining features to create the image from a given library of features.

The District Court did away with the final step of reproducing a previously generated facial image as being obvious as well by assuming that there was no other use for it — "why create a customized face if not to recreate it?" Here, lack of description of alternative use cases in the specification probably did not help.

The Defendant argued that the encoding scheme and algorithm provide the "inventive concept" needed to render the claims patent-eligible. But, the '303 Patent itself acknowledged that constructing composite images based on selected individual features was well known in the art.

Since the '303 Patent's claimed methods and systems do not improve the function of a computer nor do they improve upon methods of creating composite images, the innovation claimed by the '303 Patent is merely a more efficient manner of encoding composite facial image data by using a generic computer.

The District Court concluded that the '303 Patent failed both prongs of the Alice test.

The "Machine or Transformation" Test

As an alternative, the District Court additionally analyzed the claims under the "Machine or Transformation" test, in which a method claim may be patentable if (1) it is tied to a particular machine or apparatus or (2) it transforms a particular article into a different state or thing. The discussion was short, however, with the District Court simply noting that the mere manipulation or reorganization of data does not satisfy the transformation prong and the machine prong was not considered.

Looking over the '303 Patent, it appears that the patent is well-written with sufficient detail, however, the claims failed to incorporate necessary detail to survive § 101. Because the claims are broad, the description of prior art or known concepts in the patent itself worked against any arguments alleging that the claims describe an inventive concept.

Novel aspects of claim 1 are within wherein clauses of the "selecting" limitation, and using wherein clauses to recite such aspects can be a problem itself since such clauses can be considered to recite optional material (MPEP § 2111.04). Further, those novel aspects are recited generically, such as "incorporates the selected facial feature image into a composite image on a second area of the first display," "associated with a composite facial image code having at least a facial feature element code," and "derived by performing at least one multiplication operation on a facial code". Details for how any of these functions are performed likely would improve the prospects of the claim surviving § 101.

If a broad independent claim is desired, perhaps usage of dependent claims as fallback positions to recite the details can be helpful if the patent is ever intended to be asserted in court.
Top Stories of 2015: #11 to #15

January 4, 2016

By Donald Zuhn —

After reflecting upon the events of the past twelve months, Patent Docs presents its ninth annual list of top patent stories. For 2015, we identified twenty stories that were covered on Patent Docs last year that we believe had (or are likely to have) the greatest impact on patent practitioners and applicants. Last week, we counted down stories #20 to #16, and today we count down stories #15 to #11 as we work our way towards the top five stories of 2015. As with our other lists (2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look. As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know. In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2015" on January 21, 2016 from 10:00 am to 11:15 am (CT). Details regarding the webinar, which will focus on a handful of the most important stories, can be found here.

15. Federal Circuit Decides Biosig v. Nautilus on Remand

In April, the Federal Circuit considered the question of indefiniteness on remand from the Supreme Court's reversal in Nautilus v. Biosig and found again that the Biosig's claims were not indefinite. In the earlier proceedings in the case, the District Court found the term "in spaced relationship" indefinite as a matter of law, and the Federal Circuit reversed, using its "insolubly ambiguous" test to hold that the claim was amenable to construction and thus not indefinite. The Supreme Court rejected the Federal Circuit's standard, holding that "a patent is invalid for indefiniteness if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty those skilled in the art about the scope of the invention," and reversed and remanded for reconsideration by the Federal Circuit under this standard. On remand, the Federal Circuit again reversed the District Court's indefiniteness determination, noting that that "an ordinarily skilled artisan would be able to determine this language requires the spaced relationship to be neither infinitesimally small nor greater than the width of a user's hands," and concluding that "[t]he term 'spaced relationship' does not run afoul of 'the innovation-discouraging 'zone of uncertainty' against which [the Supreme Court] has warned,' and to the contrary, informs a skilled artisan with reasonable certainty of the scope of the claim."

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

• "Biosig Instruments, Inc. v. Nautilus, Inc. (Fed. Cir. 2015)," April 27, 2015

14. Supreme Court Decides Kimble v. Marvel

In August, the Supreme Court let stand its fifty-year ban on royalties post patent expiry (Brulotte v. Thys Co., 1964). The case involved U.S. Patent No. 5,072,856 to Kimble, directed to a toy that simulated the web-shooting devices used by the fictional Spiderman, which Kimble attempted to license to Marvel (which owns the rights to the Spiderman character, comic books, movies, and ancillary merchandise). Marvel instead chose to copy the invention, bringing their own version of the toy to market, and the parties subsequently settled the resulting patent infringement lawsuit on terms wherein Marvel purchased the patent for a lump sum (~$500,000) plus a 3% royalty; the settlement containing no limit on this royalty obligation with regard to patent expiry. Marvel brought a declaratory judgment action against paying post-expiry royalties in which it prevailed, and the Supreme Court majority refused to overrule the Brulotte rule. Although the majority recognized that royalty plans like the one at issue here can have advantages including "draw[ing] out payments over time and t[ying] those payments, in each month or year covered, to a product's commercial success," the majority believed that the principle of limiting the exclusive right to the statutory term is sufficiently important to require patentees and their licensees to "find ways around Brulotte" using other means.

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

• "Kimble v. Marvel Entertainment, LLC (2015)," August 20, 2015

13. FDA Approves First Biosimilar

In January, the FDA's Oncologic Drugs Advisory Committee ("ODAC") recommended the approval of Sandoz's biosimilar filgrastim application to market a version of Amgen's NEUPOGEN^® biologic drug, making Sandoz's application the first to be accepted under the new biosimilar pathway created by the Biologics Price Competition and Innovation Act (BPCIA), which was part of the healthcare reform package passed in 2010 and commonly referred to as "Obamacare." Two months later, the FDA approved the biosimilar version of Neupogen® for sale in the U.S. — thus becoming the first biosimilar to be approved under the BPCIA (a mere ten months after Sandoz filed its biosimilar application). Sandoz (a division of Novartis) began selling its biosimilar product in September under the brand name Zarxio™. Sandoz also avoided the disclosure provisions of the BPCIA in 2015, successfully arguing that those provisions were optional before the District Court and the Federal Circuit (but that's a "top story" for another day).

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

• "Sandoz' NEUPOGEN® Biosimilar Now on the Market," September 7, 2015
• "The First Biosimilar Application Has Been Approved — But What About the Patent Issues?" March 12, 2015
• "FDA Approves Sandoz Filgrastim Biosimilar," March 8, 2015
• ""No Clinically Meaningful Differences": The First Accepted Biosimilar Application Has Been Recommend for FDA Approval," January 14, 2015

12. Patent Reform Stalls in Congress

The year began with Rep. Bob Goodlatte (R-VA), the Chairman of the House Judiciary Committee, introducing his "Innovation Act" bill (H.R. 9), which sets forth several "reforms" of U.S. patent law, in substantially the same form as in the last Congress. In July, Rep. Goodlatte released a 200-page Report on H.R. 9. While many considered eventual passage of H.R. 9 to be a near certainty, the bill did not come to the House floor for a vote before the August recess and the year concluded with the bill sitting on the House calendar. Although the Innovation Act is primarily directed to addressing the "problem" of so-called "patent trolls," over the course of 2015 a different patent reform issue (especially in the biopharm sector) started to gain traction. In an article published last fall on Medium, Biotechnology Industry Organization (BIO) President and CEO Jim Greenwood highlighted this issue, urging Congress to modify the inter partes review (IPR) system, which he argued had "turn[ed] the serious business of medical innovation and entrepreneurial risk-taking into a casino." In a letter sent to the Senate and House Committees on the Judiciary, 101 patient organizations also expressed "concern[] that, as currently written, H.R. 9 falls short of preserving important patent protections for the biopharmaceutical innovation our communities rely on to achieve a better quality of life." The group of patient organizations contended that "IPR[s] opened the door to abuses that threaten the unique and specialized mechanisms under the Drug Price Competition and Patent Term Restoration Act (commonly referred to as the Hatch-Waxman Act) and the Biologics Price Competition and Innovation Act (BPCIA)." Whether the Innovation Act moves to a House vote, and whether that bill (or an alternative) proposes any reforms to the IPR system, will begin to play out as Congress reconvenes this week.

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

• "BIO CEO: IPR System Threatens Medical Innovation," December 6, 2015
• "Pigs Fly, Hell Has Frozen Over, and the New York Times Supports Small Inventor and University Patenting," October 28, 2015
• "101 Patient Organizations Ask Congress to Curb IPR Abuse," October 11, 2015
• "PTAB Denies Inter Partes Review Petitions Against Two Acorda Patents," August 24, 2015
• "Ferrum Ferro Capital Files Motion to Strike Allergan's Complaint Alleging Misuse of IPR Process," August 12, 2015
• "Representatives Seek Protections for Hatch-Waxman and BPCIA in Innovation Act," August 6, 2015
• "Rep. Goodlatte Releases Report on H.R. 9," August 4, 2015
• "CBO Provides Cost Estimate to Government to Implement Innovation Act," July 27, 2015
• "Allergan Fights Back, Files Complaint Against Venture Fund That Filed IPR Petition," July 13, 2015
• "A Sea Change for IPRs? — Part II," June 10, 2015
• "A Sea Change for IPRs?" June 9, 2015
• "Senate Judiciary Committee Passes PATENT Act," June 4, 2015
• "Group of National and State Organizations Asks Congress to Enact Legislative Reforms to Maintain Strong Patent System," June 1, 2015
• "A Modest Proposal (or Two)," April 22, 2015
• "Legislation Introduced in House to Eliminate Uncertainty Regarding AIA Grace Period," April 20, 2015
• "STRONG Patents Act of 2015 — An Alternative Patent Reform Bill," March 4, 2015
• "Rep. Goodlatte Introduces His Patent Reform Bill (Again) — Part II," February 9, 2015
• "Rep. Goodlatte Introduces His Patent Reform Bill (Again)," February 5, 2015
• "Pro-Patent Coalition Writes Letter to the House and Senate Judiciary Committees," January 29, 2015
• "Big Ten Lobbies Congress to Tread Lightly on "Patent Reform"," January 29, 2015

11. Australia Follows U.S. Lead on DNA Claims

In June, the High Court of Australia heard the long anticipated appeal from the unanimous decision of a 5-judge bench of the Full Federal Court to allow Myriad's claims to isolated nucleic acids. In October, the High Court of Australia handed down its decision in D'Arcy v Myriad Genetics Inc [2015] HCA 35, unanimously striking down the validity of the first three claims of Myriad's patent, which related to isolated nucleic acid sequences of the BRAC1 gene. In reaching that decision, the majority judgment characterized the claimed invention as "information" rather than a chemical product, because it was defined as a code for the BRAC1 gene, which can be stored in various products, such as the isolated DNA of a person or cDNA where the introns in the sequence have been excised. The product was merely the medium in which that information resides. The High Court's decision marked a dramatic departure from the Australian Parliament's position on "gene patents" in recent years. Australia Patent Law only expressly excluded from patentability "human beings and biological processes for their generation", and in 2010 the Patent Amendment (Human Genes and Biological Materials) Bill 2010, which sought to exclude not only DNA and RNA, but all biological entities from patentability, failed to pass after the Senate Legal and Constitutional Affairs Legislation Committee (SLCALC) recommended against the Bill. As one of Patent Docs correspondents noted, the High Court's decision in D'Arcy v Myriad Genetics Inc brought Australia's position on isolated DNA and RNA in line with that of the United States, while representing a marked deviation from major trading partners such as Europe and the U.S. on the issue of patentability of cDNA.

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

• "Australian High Court Has Ruled in Myriad Gene Patent Case," October 8, 2015
• "High Court Rules Myriad's BRCA Genes Not Patentable Subject Matter in Australia," October 8, 2015
• "Isolated Nucleic Acids Not Patentable in Australia," October 7, 2015
• "Isolated Gene Sequences Suffer A Cruel Fate in the Hands of the High Court of Australia," October 7, 2015
• "High Court of Australia Hears Myriad Appeal," June 16, 2015
Court Report

January 3, 2016

By Sherri Oslick —

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

Spectrum Pharmaceuticals, Inc. et al. v. Amneal Pharmaceuticals LLC
2:15-cv-01697; filed September 3, 2015 in the District Court of Nevada

• Plaintiffs: Spectrum Pharmaceuticals, Inc.; University of Strathclyde
• Defendant: Amneal Pharmaceuticals LLC

Infringement of U.S. Patent No. 6,500,829 ("Substantially Pure Diastereoisomers of Tetrahydrofolate Derivatives," issued December 31, 2002) following a Paragraph IV certification as part of Amneal’s filing of an ANDA to manufacture a generic version of Spectrum's Fusilev® (levoleucovorin, used to treat advanced metastatic colorectal cancer). View the complaint here.

OSI Pharmaceuticals, LLC et al. v. Apotex Inc. et al.
1:15-cv-00772; filed September 2, 2015 in the District Court of Delaware

• Plaintiffs: OSI Pharmaceuticals, LLC; Genentech, Inc.
• Defendants: Apotex Inc.; Apotex Corp.

Infringement of U.S. Patent No. 6,900,221 ("Stable Polymorph on N-(3-Ethynylpheny1)-6, 7-Bis(2MethoxyEthoxy)-4-Quinazolinamine Hydrochloride, Methods of Production, and Pharmaceutical Uses Thereof," issued May 31, 2005) following a Paragraph IV certification as part of Apotex’s filing of an ANDA to manufacture a generic version of OSI's Tarceva® (erlotinib, used to treat non-small cell lung cancer and advanced pancreatic cancer). View the complaint here.

Merck Sharp & Dohme Corp. et al. v. Actavis Laboratories FL, Inc. et al.
0:15-cv-61858; filed September 2, 2015 in the Southern District of Florida

• Plaintiffs: Merck Sharp & Dohme Corp.; Cubist Pharmaceuticals LLC; Optimer Pharmaceuticals LLC; MSD Investment Holdings (Ireland); MSD International GmbH
• Defendants: Actavis Laboratories FL, Inc.; Actavis Pharma, Inc.; Actavis, Inc.

Infringement of U.S. Patent Nos. 7,906,489 ("18-Membered Macrocycles and Analogs Thereof," issued March 15, 2011), 8,586,551 (same title, issued November 19, 2013), 7,378,508 ("Polymorphic Crystalline Forms of Tiacumicin B," issued May 27, 2008), 7,863,249 ("Macrolide Polymorphs, Compositions Comprising Such Polymorphs, and Methods of Use and Manufacture Thereof," issued January 4, 2011), and 8,859,510 (same title, issued October 14, 2014) following a Paragraph IV certification as part of Actavis' filing of an ANDA to manufacture a generic version of Merck's Dificid® (fidaxomicin, used for the treatment of Clostridium difficileassociated diarrhea in adults 18 years of age or older). View the complaint here.

Jazz Pharmaceuticals, Inc. et al. v. Amneal Pharmaceuticals, LLC
2:15-cv-06562; filed September 2, 2015 in the District Court of New Jersey

• Plaintiffs: Jazz Pharmaceuticals, Inc.; Jazz Pharmaceuticals Ireland Ltd.
• Defendant: Amneal Pharmaceuticals, LLC

Infringement of U.S. Patent No. 9,050,302 (“Method of Administration of Gamma Hydroxybutyrate with Monocarboxylate Transporters,” issued June 9, 2015) following a Paragraph IV certification as part of Amneal’s filing of an ANDA to manufacture a generic version of Jazz's Xyrem® (sodium oxybate, used to treat narcolepsy). View the complaint here.

AstraZeneca AB et al. v. Alkem Laboratories Ltd. et al.
3:15-cv-06609; filed September 2, 2015 in the District Court of New Jersey

• Plaintiffs: AstraZeneca AB; Aktiebolaget Hassle; AstraZeneca LP; Zeneca Inc.
• Defendants: Alkem Laboratories Ltd.; Ascend Laboratories, LLC

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), 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 Alkem’s 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.

AstraZeneca AB et al. v. Actavis Elizabeth LLC et al.
3:15-cv-06610; filed September 2, 2015 in the District Court of New Jersey

• Plaintiffs: AstraZeneca AB; Aktiebolaget Hassle; AstraZeneca LP; Zeneca Inc.
• Defendants: Actavis Elizabeth LLC; Actavis, Inc.

Infringement of U.S. Patent Nos. 6,369,085 ("Form of S-omeprazole," issued April 9, 2002) and 7,411,070 (same title, issued August 12, 2008) following a Paragraph IV certification as part of Actavis’ filing of an ANDA to manufacture a generic version of AstraZeneca's Nexium 24HR® (esomeprazole magnesium, used for the treatment of gastroesophageal reflux disease). View the complaint here.

Janssen Pharmaceutica, N.V. et al. v. Mylan Pharmaceuticals, Inc. et al.
1:15-cv-00152; filed September 2, 2015 in the Northern District of West Virginia

• Plaintiffs: Janssen Pharmaceutica, N.V.; Janssen Sciences Ireland UC; Gilead Sciences, Inc.; Gilead Sciences Ireland UC
• Defendants: Mylan Pharmaceuticals, Inc.; Mylan, Inc.

Infringement of U.S. Patent Nos. 8,841,310 ("Combinations of a Pyrimidine Containing NNRTI with RT Inhibitors," issued September 23, 2014), 7,125,879 ("HIV Inhibiting Pyrimidines Derivatives" issued October 24, 2006), and 8,101,629 (""Salt of 4-[[4-[[4-(2-Cyanoethenyl)-2,6-Dimethylphenyl]amino]-2-Pyrimidinyl]Amino]Benzonitrile" issued January 24, 2012), all licensed to Gilead, following a Paragraph IV certification as part of Mylan's filing of an ANDA to manufacture a generic version of Gilead's Complera® (emtricitabine, rilpivirine, and tenofovir disoproxil fumarate, used to treat HIV-1 in adults who have never taken HIV-1 medicines before and who have no more than 100,000 copies/mL of virus in their blood). View the complaint here.

Jazz Pharmaceuticals, Inc. et al. v. Lupin Ltd. et al.
2:15-cv-06548; filed September 1, 2015 in the District Court of New Jersey

• Plaintiffs: Jazz Pharmaceuticals, Inc.; Jazz Pharmaceuticals Ireland Ltd.
• Defendants: Lupin Ltd.; Lupin Pharmaceuticals Inc.; Lupin Inc.

Infringement of U.S. Patent Nos. 6,472,431 ("Microbiologically Sound and Stable Solutions of Gamma-Hydroxybutyrate Salt for the Treatment of Narcolepsy," issued October 29, 2002), 6,780,889 (same title, issued August 24, 2004), 7,262,219 (same title, issued August 28, 2007), 7,851,506 (same title, issued December 14, 2010 ("Sensitive Drug Distribution System and Method" issued February 22, 2011), 8,263,650 ("Microbiologically Sound and Stable Solutions of Gamma-Hydroxybutyrate Salt for the Treatment of Narcolepsy," issued September 11, 2012), 8,324,275 (same title, issued December 4, 2012), 8,461,203 ("Microbiologically Sound and Stable Solutions of Gamma-Hydroxybutyrate Salt for the Treatment of Narcolepsy," issued June 11, 2013), 7,668,730 ("Sensitive Drug Distribution System and Method," issued February 23, 2010), 7,765,106 (same title, issued July 27, 2010), 7,765,107 (same title, issued July 27, 2010), 7,895,059 (same title, issued February 22, 2011), 8,457,988 (same title, issued June 4, 0213), 8,589,182 (same title, issued November 19, 2013), 8,731,963 (same title, issued May 20, 2014), 8,772,306 ("Method of Administration of Gamma Hydroxybutyrate with Monocarboxylate Transporters," issued July 8, 2014), 8,859,619 ("Microbiologically Sound and Stable Solutions of Gamma-Hydroxybutyrate Salt for the Treatment of Narcolepsy," issued October 14, 2014), 8,952,062 (same title, issued February 10, 2015), and 9,050,302 (“Method of Administration of Gamma Hydroxybutyrate with Monocarboxylate Transporters,” issued June 9, 2015) following a Paragraph IV certification as part of Lupin’s filing of an ANDA to manufacture a generic version of Jazz's Xyrem® (sodium oxybate, used to treat narcolepsy). View the complaint here.
Conference & CLE Calendar

January 3, 2016

January 6, 2016 – "Preparing for and Navigating PTAB Appeals Before the Federal Circuit — Conducting PTAB Trials With Eye to Appeal, Determining Errors for Appeal, Understanding PTO Practice and Federal Circuit Law" (Strafford) – 1:00 to 2:30 pm (EST)

January 7, 2016 – "STRANGLEHOLD! Written Description and Functional Claiming in the Chemical and Biotech Arts" (American Intellectual Property Law Association) – 12:30 – 2:00 pm (Eastern)

January 7, 2016 – Ex parte appeals and AIA trials (U.S. Patent and Trademark Office's Dallas Office) – 9:00 to 11:30 am am (CT), Dallas, TX

January 7, 2016 – "Double-Patenting: Impact of Gilead on Bio and Pharma" (Intellectual Property Owners Association) – 2:00 to 3:00 pm (ET)

January 8, 2016 – "Double-Patenting: Tech Patents, Double Patenting, and Ex Parte Reexam" (Intellectual Property Owners Association) – 2:00 to 3:00 pm (ET)

January 14, 2016 – "Strategic Use of Patent Reissue: Determining Whether and When to Pursue a Reissue Application — Correcting Errors, Responding to an IPR Challenge and Mastering the Recapture Rule" (Strafford) – 1:00 to 2:30 pm (EST)

January 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 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)

***Patent Docs is a media partner of this conference or CLE
USPTO Program on Ex Parte Appeals and AIA Trials

January 3, 2016

The U.S. Patent and Trademark Office's Dallas Office will be hosting a program focusing on tips and strategies for filing and managing ex parte appeals and AIA trials on January 7, 2016 from 9:00 to 11:30 am am (CT) at the Dallas USPTO, Terminal Federal Building Annex, 207 South Houston Street, Dallas, TX. The program will begin with a tour of the new office followed by an overview of PTAB operations, and then attendees may participate in small break-out sessions lead by local administrative patent judges to discuss (1) AIA trials; (2) ex parte appeals; (3) successful briefing; and (4) oral advocacy skills. Attendees also will have the opportunity to meet the new Regional Director Hope Shimabuku, on her first day at the Dallas USPTO.

The event is free and open to the public. However, because space is limited, those wishing to attend must RSVP by contacting the Dallas USPTO at dallas@uspto.gov.
IPO Webinars on Double Patenting

January 2, 2016

The Intellectual Property Owners Association (IPO) will offer two one-hour webinars on double patenting. The first webinar, entitled "Double-Patenting: Impact of Gilead on Bio and Pharma," is being offered on January 7, 2016 from 2:00 to 3:00 pm (ET). Tim Babcock of Akros Pharma Inc., Jack Brennan of Fish & Richardson, and Jeremy Lowe of Axinn Veltrop will focus on tips for patent prosecution after Gilead v. Natco, as well as the litigation outlook with a particular focus on biosimilars. The second webinar, entitled "Double-Patenting: Tech Patents, Double Patenting, and Ex Parte Reexam," is being offered on January 8, 2016 from 2:00 to 3:00 pm (ET). Barry Bretschneider of BakerHostetler, Jeffrey Hohenshell of Medtronic, and Lissi Mojica of Dentons US LLP will examine how double patenting arises in tech company patent portfolios, how ex parte reexamination differs from other post-grant proceedings vis-a-vis double patenting, and how it can be used to invalidate vulnerable patents.

The registration fee for each webinar is $135 (government and academic rates are available upon request). Those interested in registering for the webinar can do so here.
Top Stories of 2015: #16 to #20

December 31, 2015

By Donald Zuhn —

After reflecting upon the events of the past twelve months, Patent Docs presents its ninth annual list of top patent stories. For 2015, we identified twenty stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants. Today, we count down stories #20 to #16, and then in the coming week, we will work our way towards the top stories of 2015. As with our other lists (2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look. As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know. In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2015" on January 21, 2016 from 10:00 am to 11:15 am (CT). Details regarding the webinar, which will focus on a handful of the most important stories on this year's list, can be found here.

20. USPTO Launches Patent Quality Initiative

In February, the U.S. Patent and Trademark Office announced the launch of a comprehensive and enhanced patent quality initiative, and kicked off the initiative by requesting comments from the public on how the Office could enhance patent quality. The Office indicated that its quality efforts would be aimed at improving patent operations and procedures, enhancing the customer experience, and improving existing quality metrics, and would target three "patent quality pillars": (1) excellence in work products (i.e., issued patents and Office actions), (2) excellence in measuring patent quality, and (3) excellence in customer service. The Office followed the announcement of the quality initiative with a two-day "Quality Summit" in March. Earlier this month, the Office invited stakeholders to submit patent quality-related topics that should be the subject of a case study as part of an enhanced patent quality initiative pilot program. The Office regularly performs case studies to investigate specific quality-related issues as well as review individual examiner work products, and 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.

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

• "USPTO Seeks Topics for Quality Case Study Pilot Program," December 21, 2015
• "USPTO Launches Enhanced Patent Quality Initiative," March 5, 2015

19. TPP Moves Forward

For the past six years, a dozen countries have negotiated the Trans Pacific Partnership (TPP) treaty, a multilateral free trade agreement, with the negotiations shrouded in secrecy. This secrecy was not absolute, with the Wikileaks website periodically publishing purported drafts of the agreement. With the announcement in October that the parties had come to substantial agreement on the treaty, Wikileaks once again released portions of the agreement, and in November, the Obama Administration released the approved text of the agreement. One of the more controversial provisions of the agreement would reduce the term of market exclusivity of biologic drugs from 12 years as provided by the Biologic Price and Competition and Innovation Act (BPCIA) to 8 years. However, there has been vociferous opposition to the agreement, despite Congress having granted the President so-called "fast-track authority" for the TPP. As a consequence, Congress can ratify the agreement but cannot amend the agreement or filibuster Senate consideration. Given the level of political opposition, in addition to the antipathy of the Republican Party to anything the President proposes, it is likely that the agreement will not be ratified, if it ever is, until a new Administration takes power in January 2017.

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

• "What Are the IP Provisions of the TPP?" November 9, 2015
• "What May Be the IP Provisions of the Trans Pacific Partnership Agreement," October 15, 2015
• "Transparency and the Trans-Pacific Partnership Treaty," March 11, 2015

18. Myriad Settles with Diagnostic Companies

In the aftermath of the Supreme Court's decision in AMP v. Myriad Genetics in 2013, Myriad filed suit against six genetic diagnostic test providers (Ambry Genetics, Gene-by-Gene, Quest, GeneDx, Invitae, and LabCorp) and was itself sued in declaratory judgment actions by three others (Quest, Invitae, and Counsyl). Five of these actions were consolidated in the District of Utah, where Myriad's preliminary injunction motion was denied on the grounds that Myriad was unlikely to prevail on the merits regarding the asserted claims in view of the Supreme Court's Myriad opinion, and late last year, the Federal Circuit affirmed that determination. Following those setbacks for Myriad, several companies opposing Myriad (Ambry Genetics, LabCorp, Invitae, and Pathway Genomics) issued press releases in January announcing that the action against them had settled. The press releases from those companies stated that Myriad's infringement allegations had been dismissed "with prejudice" and that each of the parties had received a "covenant not to sue" by Myriad. The only financial considerations announced were that each party would bear its own costs of the litigation. In February, Myriad settled with the remaining defendants. In diagnostic patent news unrelated to the above litigation, but nevertheless of interest to applicants and practitioners, the U.S. Patent and Trademark Office issued its report on so-called "second opinion" genetic diagnostic testing, more than three years after the June 2012 deadline mandated by Section 27 of the Leahy-Smith America Invents Act.

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

• "PTO Releases Report on Confirmatory Genetic Diagnostic Testing," October 6, 2015
• "Koepsell and Noonan on Gene Patenting," May 28, 2015
• "Quest Diagnostics and Inserm Launch BRCA Data-Sharing Initiative," April 30, 2015
• "The ACLU, Working for the Man," March 24, 2015
• "Game Over for Myriad — Update," February 16, 2015
• "Game Over for Myriad," February 10, 2015
• "Myriad Throws in the Towel," January 27, 2015

17. USPTO Announces PTAB Rules Changes

In March, U.S. Patent and Trademark Office Director Michelle Lee issued a statement on the PTO Blog indicating several "quick-fix" and proposed rule changes. Among the "quick fix" changes, the Office nearly doubled the number of pages for a motion to amend, with opposition briefing and reply briefing receiving a commensurate amount of additional pages. These changes were followed by a first "Final Rules" package of amendments to the Rules of Practice before the Patent Trial and Appeal Board (PTAB), which was issued in May, and a second rules package introduced in the form of a Notice of Proposed Rulemaking in August. No sweeping changes were proposed in the second rules package, and with respect to the change many stakeholders were hoping for (i.e., to the Broadest Reasonable Interpretation (BRI) standard for construing claims), the Board affirmed the use of the BRI standard in all but the most limited circumstances, relying heavily on the Federal Circuit's decision in In re Cuozzo.

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

• "Single-APJ Institution Pilot Program — USPTO Requests Written Comments for IPR Proceedings," August 27, 2015
• "Views from the Director's Office on Post-Grant Reviews by the PTAB," August 26, 2015
• "PTAB Finally Proposes Rule Amendments: The More Things Change . . . ," August 19, 2015
• "Final 'Ministerial' Rule Amendments for Practice Before the PTAB," May 20, 2015
• "USPTO Director Announces 'Quick-Fix' and Anticipated Changes to PTAB Practice," March 30, 2015

16. District Court Patent Decisions Are Cause for (Initial) Concern

A pair of district court decisions in the District of Delaware bear watching to see how (or if) the Federal Circuit weighs in. In Immersion Corp. v. HTC Corp., the trial court construed 35 U.S.C. § 120 to prohibit filing a continuation application on the day its immediate parent granted, contrary to established U.S. Patent and Trademark Office practice (the lower court refusing to grant the Office any deference in the matter). The decision, if affirmed, may well put more patents at risk than Myriad, Mayo, and Alice combined. Speaking of Mayo, the trial court in Endo Pharmaceuticals Inc. v. Actavis Inc. found claims directed to methods of using oxymorphone to treat pain in patients with renal impairment to be facially invalid under 35 U.S.C. § 101 as being directed to patent-ineligible subject matter, relying heavily on the Supreme Court's decision in Mayo.

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

• "Endo Pharmaceuticals Inc. v. Actavis Inc. (D. Del. 2015)," December 9, 2015
• "IPO Files Amicus Brief in Immersion Corp. v. HTC Corp.," August 17, 2015
• "Immersion Corp. v. HTC Corp. (D. Del. 2015)," March 18, 2015
Court Report

December 31, 2015

By Sherri Oslick —

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

Warner Chilcott (US), LLC et al. v. Teva Pharmaceuticals USA, Inc. et al.
1:15-cv-00761; filed August 31, 2015 in the District Court of Delaware

• Plaintiffs: Warner Chilcott (US), LLC; Warner Chilcott Co., LLC; Qualicaps Co., Ltd.
• Defendants: Teva Pharmaceuticals USA, Inc.; Teva Pharmaceutical Industries Ltd.

Infringement of U.S. Patent No. 6,649,180 ("Hard Capsule Formed of Cellulose Ether Film with a Specific Content of Methoxyl and Hydroxypropoxyl Groups," issued November 18, 2003) following a Paragraph IV certification as part of Teva's filing of an ANDA to manufacture a generic version of Warner Chilcott's Delzicol® (mesalamine delayed release capsules, used for the treatment of mildly to moderately active ulcerative colitis in patients 12 years of age older and for the maintenance of remission of ulcerative colitis in adults). View the complaint here.

Johnson Matthey Pharmaceutical Materials, Inc. et al. v. InSite Vision Inc.
1:15-cv-00763; filed August 31, 2015 in the District Court of Delaware

• Plaintiffs: Johnson Matthey Pharmaceutical Materials, Inc.; Johnson Matthey Inc.; Johnson Matthey Public Limited Co.
• Defendant: InSite Vision Inc.

Infringement of U.S. Patent Nos. 8,299,295 ("Polymorphs of Bromfenac Sodium and Methods for Preparing Bromfenac Sodium Polymorphs," issued October 30, 2012), 8,481,780 (same title, issued July 9, 2013), 9,045,388 (same title, issued June 2, 2015), and 9,061,968 (same title, issued June 23, 2015) based on InSite's filing of an NDA seeking approval to manufacture and sell its BromSite™ product (bromfenac sodium (0.075%) ophthalmic product, used to reduce post-operative inflammation in the eye and to prevent pain following cataract surgery). View the complaint here.

Janssen Pharmaceutica, N.V. et al. v. Mylan Pharmaceuticals, Inc. et al.
1:15-cv-00760; filed August 31, 2015 in the District Court of Delaware

• Plaintiffs: Janssen Pharmaceutica, N.V.; Janssen Sciences Ireland UC; Gilead Sciences Ireland UC; Gilead Sciences, Inc.
• Defendants: Mylan Pharmaceuticals, Inc.; Mylan Inc.

Infringement of U.S. Patent Nos. 8,841,310 ("Combinations of a Pyrimidine Containing NNRTI with RT Inhibitors," issued September 23, 2014), 7,125,879 ("HIV Inhibiting Pyrimidines Derivatives" issued October 24, 2006), and 8,101,629 (""Salt of 4-[[4-[[4-(2-Cyanoethenyl)-2,6-Dimethylphenyl]amino]-2-Pyrimidinyl]Amino]Benzonitrile" issued January 24, 2012), all licensed to Gilead, following a Paragraph IV certification as part of Mylan's filing of an ANDA to manufacture a generic version of Gilead's Complera® (emtricitabine, rilpivirine, and tenofovir disoproxil fumarate, used to treat HIV-1 in adults who have never taken HIV-1 medicines before and who have no more than 100,000 copies/mL of virus in their blood). View the complaint here.

Merck Sharp & Dohme Corp. et al. v. Actavis Laboratories FL, Inc. et al.
2:15-cv-06541; filed August 31, 2015 in the District Court of New Jersey

• Plaintiffs: Merck Sharp & Dohme Corp.; Cubist Pharmaceutlcals LLC; Optimer Pharmaceuticals LLC; MSD Investment Holdings; MSD International GmbH
• Defendants: Actavis Laboratories FL, Inc.; Actavis Pharma, Inc.; Actavis, Inc.

Infringement of U.S. Patent Nos. 7,906,489 ("18-Membered Macrocycles and Analogs Thereof," issued March 15, 2011), 8,586,551 (same title, issued November 19, 2013), 7,378,508 ("Polymorphic Crystalline Forms of Tiacumicin B," issued May 27, 2008), 7,863,249 ("Macrolide Polymorphs, Compositions Comprising Such Polymorphs, and Methods of Use and Manufacture Thereof," issued January 4, 2011), and 8,859,510 (same title, issued October 14, 2014) following a Paragraph IV certification as part of Actavis' filing of an ANDA to manufacture a generic version of Merck's Dificid® (fidaxomicin, used for the treatment of Clostridium difficileassociated diarrhea in adults 18 years of age or older). View the complaint here.

Gilead Sciences, Inc. et al. v. Mylan Inc. et al.
1:15-cv-00149; filed August 31, 2015 in the Northern District of West Virginia

• Plaintiffs: Gilead Sciences, Inc.; Emory University
• Defendants: Mylan Inc.; Mylan Pharmaceuticals Inc.

Infringement of U.S. Patent Nos. 6,642,245 ("Antiviral Activity and Resolution of 2-Hydroxymethyl-5-(5-fluorocytosin-1-yl)-l,3-oxathiolane," issued November 4, 2003), 6,703,396 ("Method of Resolution and Antiviral Activity of 1,3-Oxathiolane Nucleoside Enantiomers," issued March 9, 2004), 8,592,397 ("Compositions and Methods for Combination Antiviral Therapy," issued November 26, 2013), and 8,716,264 (same title, issued May 6, 2014) following a Paragraph IV certification as part of Mylan's filing of an ANDA to manufacture a generic version of Gilead's Complera® (emtricitabine/rilpivirine/tenofovir disoproxil fumarate, used for the treatment of HIV-1 infection in adults). View the complaint here.
01 Communique Laboratory, Inc. vs. Citrix Systems, Inc., (N.D. Ohio 2015)

December 30, 2015

Patent Eligibility Requires Consideration of the Claim as a Whole

By Joseph Herndon —

The U.S. District Court for the Northern District of Ohio (Eastern Division) issued an opinion on December 21, 2015 in the case captioned 01 Communique Laboratory, Inc. vs. Citrix Systems, Inc., et al. (case no. 1:06-cv-253) regarding patent eligibility under 35 U.S.C. § 101 of software claims.

The Court found the patent claims to be eligible under § 101. The claims at issue are claims independent claim 24 and dependent claim 45 in U.S. Patent No. 6,928,479 (the '479 patent").

Independent claim 24 is provided below.

24. A computer program product for use on a server computer linked to the Internet and having a static IP address, for providing access to a personal computer from a remote computer, the personal computer being linked to the Internet, its location on the Internet being defined by either (i) a dynamic public IP address (publicly addressable), or (ii) a dynamic LAN IP address (publicly un-addressable), the computer program product comprising:
    (a) a computer usable medium;
    (b) computer readable program code recorded or storable in the computer useable medium, the computer readable program code defining a server computer program on the server computer wherein:
        (i) the server computer program is operable to enable a connection between the remote computer and the server computer; and
        (ii) the server computer program includes a location facility and is responsive to a request from the remote computer to communicate with the personal computer to act as an intermediary between the personal computer and the remote computer by creating one or more communication sessions there between, said one or more communication sessions being created by the location facility, in response to receipt of the request for communication with the personal computer from the remote computer, by determining a then current location of the personal computer and creating a communication channel between the remote computer and the personal computer,10 the location facility being operable to create such communication channel whether the personal computer is linked to the Internet directly (with a publicly addressable) dynamic IP address or indirectly via an Internet gateway/proxy (with a publicly unaddressable dynamic LAN IP address).

The '479 patent is owned by Communique, and the claimed invention is a "system, computer product and method for providing a private communication portal" through which individuals may remotely access a personal computer from a remote computer using a locator server acting as an intermediary between the personal and remote computers.

The Court utilized the two-part framework set forth in Mayo for distinguishing patent claims that cover laws of nature, natural phenomena, or abstract ideas from patent eligible claims. The first step is to "determine whether the claims at issue are directed to one of those patent-ineligible concepts." If the claim is not directed to one of the three patent ineligible concepts, no further analysis is required — the claim is patent eligible under § 101. But if the claim is directed to an abstract idea, the Court must undertake the second step of Mayo to determine whether the elements of a claim, "both individually and 'as an ordered combination,'" contain "additional elements" that "transform the nature of the claim into a patent-eligible application" of an abstract idea.

Abstract Idea?

The Court cited several cases in which the claims were found to be directed to abstract ideas, and noted those as examples including claims directed to algorithms, mathematical formulas, and conventional economic and business principles and practices, such as hedging risk and use of an intermediary; methods equivalent to human mental work; "[a]ge-old ideas [and] basic tools of research and development, like natural laws and fundamental mathematical relationships"; methods of budgeting; use of advertising as currency; guaranteeing a party's performance; automated call distribution; computerized telephone call routing system; and customizing content based on information known about customer.

The Defendant asserted that claim 24 usurps the abstract idea of an intermediary connecting two endpoints, and adds nothing of a technical nature. The Defendant further argued that claim 24 covers an abstract idea of an intermediary that, in response to a request for communication, finds a current location of the requested endpoint and creates a connection between the two devices, and argued that the invention could be, and was, performed by humans when telephone operators connected one caller to a second caller at the first caller's request.

However, the Court found that the Defendant's analogy breaks down when claim 24 is considered as a whole, as the Supreme Court in Alice requires. The Court noted that while an operator can connect callers, the operator could not do so if the recipient of the call has a dynamic (changing) phone number that is unknown to the operator (publicly unaddressable IP address). In addition, the "then current location" of the personal computer in claim 24 is not simply the personal computer's current IP address — or a telephone number in the analogy — but includes determining the then current "communication session for communicating with the personal computer."

The Court also noted that to further determine if a claim is directed to an abstract idea, "the court must identify the purpose of the claim — in other words, determine what the claimed invention is trying to achieve — and ask whether that purpose is abstract." Here, the purpose of claim 24, as reflected in the '479 patent specification, in creating the private communication channel for remote access is not simply to allow people to talk with each other, but to allow direct access of data on the personal computer from the remote computer. A telephone operator cannot and does not provide the caller with direct access to data on the callee's desk. The Court found that the Defendant oversimplified the subject matter of the '479 patent and claim 24 in an attempt to characterize the invention as an abstract idea.

Thus, the Court found that the '479 patent and claim 24 are not merely directed to a broad concept of remote access or automatic call routing, and that the '479 patent and claim 24 do not involve a basic or fundamental business or economic practice or principle, algorithm, a conventional idea that existed in a pre-Internet world simply implemented by a computer, or an idea that could be performed by humans.

Rather, the Court noted that claim 24 describes a "particular approach" to solving problems with prior art remote access patents that could only exist in a post-Internet world, utilizing a "location facility" that creates the private communication portal between the personal and remote computers in a specific way, even if the IP address of the personal computer is dynamic and not publicly addressable, to achieve the solution taught by the '479 patent.

Thus, the Court concluded that the '479 patent and claim 24 are not directed to an abstract idea. The Court further noted that even if claim 24 were determined to be an abstract idea, the claim would still be patent eligible under the second step of the Mayo analysis.

Inventive Concept?

For purposes of completion of the analysis, the Court examined the claim under the second step of the Mayo test that requires the Court to "search for an 'inventive concept' . . . that is 'sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.'"

The Court stated that a "software patent can be eligible under § 101 when it claims a solution to a problem necessarily rooted in computer technology, and does not merely recite a conventional business or economic practice known from a pre-Internet world that is simply implemented on a generic computer performing generic computer functions."

Again, here, the Court found that the Defendant failed to consider claim 24 as a whole, as required by Alice, by arguing that specific individual elements of claim 24 were previously known, and that "under certain circumstances," remote access between two server computers was possible before the '479 patent. But the '479 patent does not claim to invent each individual element of the claim or remote access, but to solve the problems with existing remote access technology.

The '479 patent and claim 24 disclose a specific solution, rooted in computer technology, to remote access problems that can only arise in the realm of computer networks, and accomplishes that solution even in the face of specific Internet-centric challenges.

In summary, the Court followed the two-step framework as required and found that the claims satisfy section 101. Notably, the Court ignored arguments against elements of the claim individually, and required the theoretical consideration of the claim "as a whole".

Most helpful to the patent owner is also probably that the claim is easily found to be necessarily rooted in computer technology for solving a specific problem that existed.

In reviewing this opinion, I find parallels to prosecution of pending U.S. patent applications at the USPTO. Many Examiners issue Office Actions alleging that claims are ineligible under 35 U.S.C. § 101, but they do not consider the claim as a whole. Moreover, often times, Examiners oversimplify the subject matter of the claims in an attempt to characterize the invention as an abstract idea by simply ignoring aspects of the claims during the section 101 analysis, or by characterizing novel aspects recited in the claims are routine, or generic computer implementation. This opinion offers some guidance on strategies for responding to such rejections in instances in which the Examiner may not have fully appreciated the breadth of the claim.

Further, it is helpful to see additional examples of software claims found to be patent eligible, which today does not happen too often. When drafting and prosecuting patent applications, it is often helpful to show Examiners that Courts have found claims similar to those pending in the application to be patent eligible, and so looking to such cases as examples is a great way to strategize a scope of claims to file.

01 Communique Laboratory, Inc. vs. Citrix Systems, Inc. (N.D. Ohio 2015)
Opinion by Judge Lioi

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