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  • The Further Elucidation of Domestic Dog Ancestry

    By Kevin E. Noonan —

    An international cadre of scientists* from almost 70 institutions worldwide recently reported their findings in the scientific journal Nature that the domesticated dog (Canis familiaris) arose from two populations of ancestral grey wolves (Canis lupus) (see "Grey wolf genomic history reveals a dual ancestry of dogs").

    The grey wolf is recognized as the species that survived the last Ice Age (the last glacial maximum or LGM occurring ~28,000-23,000 years ago) to give rise to domesticated dogs, but little is known about progenitor wolf populations.  Siberian grey wolves are known to have survived from this period but it is unknown the extent to which other grey wolf populations, which were widely distributed in the Northern Hemisphere for the last few hundred thousand years, either went extinct or responded to changes in climate by adaptation.  Archeological evidence places domesticated dog populations arising ~14,000 years ago, and divergence from grey wolf species occurring ~40,000-14,000 years ago.  But analyses of modern grey wolves and dogs have been unable to resolve domesticated dog origins due to, inter alia, dog genetic diversity and local extinction and gene flow occurring after domestication.

    To attempt to address these deficiencies, the researchers assessed 72 ancient wolf genomes over the past 100,000 years from Europe, Siberia, and North America:

    Image 1Sites of ancient wolf genomes reported in the study

    (consisting of 66 newly sequenced genomes, 5 previously sequenced specimens, and one ancient dhole genome from the Caucasus, dated to be more than 70,000 years old and used as an "outgroup" control).  These samples were ~69% males and through mitochondrial DNA analysis averaged 21,573 ± 5,133 years old.  As explained in the paper, the researchers "merged single-nucleotide polymorphism (SNP) genotypes called from these genomes with those from worldwide modern wolves (n = 68), modern (n = 369) and ancient (n = 33) dogs, and other canid species [and t]he total dataset spans the last 100,000 years."

    The results of genetic analyses on these SNPs showed a directionality of gene flow in wolf populations, from the Siberian wolf populations to the European and Central Asian wolves and not vice versa, starting after a time less than ~23,000 years ago; these conclusions were supported by mitochondrial DNA assessments ("our results suggest that Siberia acted as a source and Europe as a sink for migration throughout the Late Pleistocene and show no evidence of gene flow in the other direction").  Paradoxically, these results also showed that there remains what the researchers termed a "minority fraction of deep European ancestry" that has persisted in modern wolf populations, having 10-40% of their ancestry that is more divergent than the oldest Siberian wolves studied.  Some of this diversity was identified as coming from the African grey wolf in the Near East and an unknown canid originating in Tibet.  This persistent evidence indicated to these researchers that grey wolves, unlike other megafauna (e.g., woolly mammoths) did not come close to extinction.  And some North American grey wolf populations show evidence of admixture with coyotes, species that began to diverge from one another ~700,000 years ago (no similar coyote-wolf admixture was seen in Eurasian grey wolf populations).  The genetic relationships between these populations were represented in the paper by this graph:

    Image 2
    And while there is some evidence of Siberian grey wolf genetic admixture in North American wolf populations the genetic evidence reported by these authors showed no reverse admixture of North American grey wolf populations into Siberian grey wolves.  The evidence also suggests local extinction in North American grey wolf populations during the LGM of the last Ice Age.

    In comparing the proportion of genetic variation between rather than within grey wolf populations, the researchers found that wolf populations showed low levels of variation even between populations in distant regions in the Pleistocene.  In the last ~10,000 years, however, (i.e., the Holocene) further gene flow from Siberia was not detected while gene flow from European populations was seen in modern wolves from China and Siberia, with population bottlenecks perhaps (the authors speculate) being due to human "persecution" in the past few centuries (supported by widespread effective population size declines).

    In further analyzing the observed connectivity in grey wolf populations throughout the past 100,000 years the authors report assessment of alleles at specific genetic loci, finding twenty-four regions in grey wolf genomes having some evidence for natural selection.  The observed connectivity between grey wolf populations resulted in mutations becoming fixed in these population between 40,000 and 30,000 years ago in the case of the IFT88 gene (a gene wherein disruption results in craniofacial abnormalities and cleft lips in mice and humans) on wolf chromosome 25, a characteristic shared with domesticated dogs.  (It might be recalled that changes in visage in domesticated dogs has been hypothesized as being relevant to their acceptance by humans; see "Selection for Facial Features in Domestic Dogs: The Evolution of Cuteness").  Additionally, these researchers reported that "[t]hree regions with evidence for selection overlap olfactory receptor genes, with variants on chromosome 15 increasing in frequency from close to 0% to 100%" between 45,000 and 25,000 years ago, "suggesting that olfaction was a recurrent target of adaptation in wolves" and that "[m]ost of the detected selection episodes occurred before the divergence of dogs, and dogs share the selected alleles."  Illustrating how natural selection and intentional breeding can operate on similar phenotypic determinants, the authors report that "a region on chromosome 10, where variation among dogs is associated with body size, drop ears and other traits [has been] under recent selection in specific dog breeds" was also found to have been selected in wolves in the last 20,000 years.

    While the impetus for the reported research was to better understand the origin of domesticated dog species from earlier wolf populations, the results of these studies showed that history is more complex than anticipated.  A closer relationship was observed between modern domesticated dogs from eastern Eurasian wolves than western Eurasian populations, but modern domesticated dogs in the Near East and Africa could trace their ancestral species from a population of grey wolves related to extant southwestern Eurasian populations.  Recent population genetic events, including admixture and population changes further complicate the picture, according to the paper.  As summarized, the authors state that "[t]hese results could be taken to support an eastern or central Eurasian dog origin outside of north-eastern Siberia, but we cannot draw firm geographical conclusions in the absence of ancient wolf genomes from these and other candidate regions."

    To further complicate matters, their results showed that "dogs have variable proportions of two distinct components of wolf ancestry" between Siberian wolf progenitors and European grey wolf populations, as illustrated by this diagram:

    Image 3The authors state that the data were not sufficiently robust to distinguish between there having been an independent domestication event from these population or from admixture of domesticated dogs with local wolf populations.  As a consequence, the researchers failed to find a direct match between either of these ancestral species and these two sources of modern domesticated dogs, concluding that "the exact progenitor populations remain to be located."

    *Anders Bergström, David W. G. Stanton, Ulrike H. Taron, Laurent Frantz, Mikkel-Holger S. Sinding, Erik Ersmark, Saskia Pfrengle, Molly Cassatt-Johnstone, Ophélie Lebrasseur, Linus Girdland-Flink, Daniel M. Fernandes, Morgane Ollivier, Leo Speidel, Shyam Gopalakrishnan, Michael V. Westbury, Jazmin Ramos-Madrigal, Tatiana R. Feuerborn, Ella Reiter, Joscha Gretzinger, Susanne C. Münzel, Pooja Swali, Nicholas J. Conard, Christian Carøe, James Haile, Anna Linderholm, Semyon Androsov, Ian Barnes, Chris Baumann, Norbert Benecke29, Hervé Bocherens, Selina Brace, Ruth F. Carden, Dorothée G. Drucker, Sergey Fedorov, Mihály Gasparik, Mietje Germonpré, Semyon Grigoriev, Pam Groves, Stefan T. Hertwig, Varvara V. Ivanova, Luc Janssens, Richard P. Jennings, Aleksei K. Kasparov, Irina V. Kirillova, Islam Kurmaniyazov, Yaroslav V. Kuzmin, Pavel A. Kosintsev, Martina Lázničková-Galetová, Charlotte Leduc, Pavel Nikolskiy, Marc Nussbaumer, Cóilín O'Drisceoil, Ludovic Orlando, Alan Outram, Elena Y. Pavlova, Angela R. Perri, Małgorzata Pilot, Vladimir V. Pitulko, Valerii V. Plotnikov, Albert V. Protopopov, André Rehazek, Mikhail Sablin, Andaine Seguin-Orlando, Jan Storå, Christian Verjux, Victor F. Zaibert, Grant Zazula, Philippe Crombé62, Anders J. Hansen, Eske Willerslev, Jennifer A. Leonard64, Anders Götherström, Ron Pinhasi, Verena J. Schuenemann, Michael Hofreiter, M. Thomas P. Gilbert, Beth Shapiro, Greger Larson, Johannes Krause, Love Dalén & Pontus Skoglund.

  • IPO Webinar on WIPO Standard ST.26

    IPO #2The Intellectual Property Owners Association (IPO) will offer a one-hour webinar entitled "The Implementation of WIPO Standard ST.26" on July 14, 2022 from 2:00 pm to 3:00 pm (ET).  Anish Gupta, PCT Legal Examiner-International Patent Legal Administration, U.S. Patent and Trademark Office; Wayne Jaeschke of Johnson & Johnson; Hanna Kang, Legal Officer, PCT Legal and User Relations Division, World Intellectual Property Organization; and Mary Till, Senior Legal Advisor in the Office of Patent Legal Administration (OPLA), U.S. Patent Trademark Office will address the implementation of the World Intellectual Property Office (WIPO) Standard ST.26 and discuss the changes to sequence listings filed in patent applications that contain disclosures of nucleotide and/or amino acid sequences.  WIPO Standard ST.26, requiring XML formatting, went into effect worldwide on July 1, 2022.  The panel will provide guidance on how you will be able to prepare and submit a compliant sequence listing in U.S. patent applications and PCT applications filed on or after July 1, 2022.

    The registration fee for the webinar is $150 for non-members or free for IPO members (government and academic rates are available upon request).  Those interested in attending the webinar should register here.

  • The Compelling Implications of Using a Blockchain to Record and Verify Patent Assignments

    By Michael Borella —

    Given the recent bust cycle of cryptocurrencies and non-fungible tokens (NFTs), all things blockchain are currently tainted with words such as "bubble", "scam", and "fraud".  But blockchain technology, which is what enables cryptocurrencies and NFTs, remains a remarkably innovative tool.  When implemented properly, it can be used to create an immutable distributed digital ledger of transactions that is highly resistant to most forms of hacking.  Indeed, evidence of the efficacy of blockchain to solve specific real-world problems is beginning to emerge.  If all you can think of is Bitcoin or bored apes when someone mentions "blockchain", perhaps it is time to reconsider your understanding of the field.

    Particularly, the notion of smart contracts — snippets of computer-executed code that can be embedded into a blockchain to control the transfer and use of digital assets — has opened the door to a world of innovation.  NFTs are the most well-known use of smart contracts, but other uses include banking, investing, real estate, gaming, and many more.

    Not unlike the world-wide web circa 1993, blockchain is a new frontier, the applications of which are vast.  It is hard to see where the technology is going or how it will be used in the future.  The most likely outcome is that there will be a large number of spectacular failures, but also a few successes that could potentially be integrated into 80-90% of software moving forward.

    Patent assignments at the U.S. Patent and Trademark Office (USPTO) are stored in a publicly-accessible database operated by the USPTO.  These assignments record various entities' interests in a patent or patent application through a chain of title.

    The initial ownership of a patent asset usually lies in its inventors.  The inventors typically assign their rights to the patent asset to another entity (e.g., an employer).  Liens against these interests can be recorded, as well as further transfers to other entities through sale, mergers and acquisitions, legal proceedings, and so on.

    Could the USPTO implement its assignment database as a privately-controlled blockchain?  In short, the answer is "yes" — and doing so could possibly enable a number of interesting use cases.

    In fact, the USPTO's assignment database is a natural candidate for recording in a blockchain.  It is largely a write-only database of transactions in which records are rarely expunged (see M.P.E.P. § 323).  As new assignments are recorded, they can be added in new blocks.  These blocks can be mined (verified) by USPTO computer systems to ensure than they are proper.  Advantageously, standard smart contracts could be used to make assignment verification automated and effectively instantaneous for the vast majority of transactions.  This would be a significant improvement over today's manual verification process which can take weeks or months in some situations.

    For example, before an assignment transaction is placed in a block on the blockchain, the USPTO could verify that the assignor has the right to assign the patent asset.  Since the blockchain will record each asset's chain of title, the current ownership of the asset is known.  Thus, for instance, if the blockchain specifies that the asset was initially owned by entity A, transferred to entity B, then transferred to entity C, and has no subsequent transfers, entity C is the current owner.  Therefore, only entity C has the authority to transfer the asset to other entity, say entity D.  If some other entity E attempts to transfer or place any type of encumbrance on the asset, this transaction will fail mining procedures and not be placed on the blockchain.  As a consequence, the current ability for erroneous or fraudulent patent assignments to be filed effectively disappears.

    Of course, this means that all entities with interest in a patent asset would need to have an account or identity with the USPTO's assignment blockchain, and keep its credentials secure from conventional hacking attempts (e.g., phishing).  Many patentees already have such accounts in place with the USPTO.  Also, keeping an account secure is already a requirement for any person or entity using online banking, ecommerce, and so on.  The risk is well-understood and widely accepted at this point, and use of blockchain does not make the system any less secure.

    If a patentee's credentials are stolen and fraudulent transactions are successfully placed on the blockchain, this could be resolved in court, as it would be today.  To facilitate correction of such transactions, the USPTO could have the sole authority to place an "override" transaction on the blockchain that nullifies a specific previous transaction, and therefore returns title for an asset to its rightful owner.

    It may not be possible or desirable for all inventors to have their own USPTO assignment blockchain accounts, so an initial assignment agreement from the inventors to an assignee could be verified by including form language in a programmatically-interpretable document.  As long as the names of the inventors match those on the filed application and are accompanied by their verifiable digital signatures on the assignment proper, it would be assumed by smart contract code that this assignment is valid.  Again, disputes to such validity could be challenged in courts, as they are today.

    Further, mechanisms to add inventors to an asset or remove inventors from an asset would need to be supported.

    Another aspect of the proposed mining that would be beneficial is that it would have a low computational load compared to say, Bitcoin mining, since there would be no need to solve proof-of-work puzzles.  There would also be no need to reward the miners with coins or tokens from the blockchain (to be clear, this blockchain need not implement any coins, tokens, or currency — it could be purely a ledger of transactions).  The USPTO's current systems would likely be able to handle the computational cost of mining.  Alternatively, other U.S. government entities (or interested third parties) could offer servers to mine transactions and store their own copies of the assignment blockchain (of course, the blockchain consensus protocol would have to be arranged so that the USPTO has ultimate control over the determination of whether a transaction is valid).

    A USPTO assignment blockchain would have a number of interesting potential properties that could be exploited by way of smart contract.

    As one example, certified copies of a patent asset could be minted on demand as an NFT.  For a small fee, a unique PDF or image file could be generated and digitally signed by the USPTO to verify its authenticity.  This could even be used to replace patent plaques typically given to inventors by their employers with NFT-based awards instead.

    Also, smart contracts could be used to put various types of conditions and obligations on a patent asset.  For example, companies might incentivize their inventors to disclose more inventions by placing an obligation on all future owners of an asset to pay the inventors some percentage of future licensing, sales, settlements, or judgments involving to that asset (e.g., the inventors get 10% of the total value of such transactions).  This would allow inventors of commercially-valuable patents to enjoy the financial benefits of their inventions in a fashion that is more equitable than, say, a one-time nominal payout upon filing or grant.

    Since patents can only be asserted when all owners agree to do so, such contracts would have to clearly separate ownership of a patent asset from an obligation of the owner to compensate a previous owner for the asset's future revenue.

    Another potential use of smart contracts would be for ownership of an issued patent to revert to its previous owner should the current owner fail to pay maintenance fees on time.  Then, the previous owner would have a short grace period in which it could either pay the maintenance fees or let the patent expire.  Or, the initial owners of the patent could specify in a smart contract that the patent will be dedicated to the public within, say, 10 years of issuance regardless of who owns the patent at that time.

    A virtually unlimited number of additional uses for a blockchain-based assignment database may be possible.  As was the case for the web in the early 1990's, there is a "wild west" aspect to blockchain in the early 2020's.  But most experts agree that the underlying technology is sound and highly adaptable.  It remains to be seen if, when, and how, these advances will impact patent operations.

  • The Supreme Court Sidesteps America’s Patent Eligibility Crisis

    By Michael Borella —

    Supreme Court Building #1In an order that is clearly less impactful and damaging than a number of opinions that the Supreme Court has disgorged in the last two weeks, the justices have denied certiorari in American Axle & Mfg. Inc. v. Neapco Holdings LLC.  To many, American Axle represented the Gordian Knot in patent-eligibility that had been unartfully tied by the Court with help from the Federal Circuit.  The case was possibly the best opportunity yet to clarify what was meant by the remarkably vague two-part test set forth in Alice Corp. v. CLS Bank Int'l.

    Complaints about the opaque and harmful nature of Alice began shortly after it was issued, and have continued for the eight years since.  Notably, criticisms did not just come from patent attorneys and patentees — federal judges, sitting U.S. senators, and law professors have also spoken up against the opinion and its erratic interpretation by the federal courts and the USPTO.  Former Chief Judge Paul Michel of the Federal Circuit summed the situation up by stating that Alice "created a standard that is too vague, too subjective, too unpredictable and impossible to administer in a coherent consistent way in the patent office or in the district courts or even in the federal circuit."

    The current state of patent-eligibility under 35 U.S.C. § 101 has deviated far afield from the plain language of the statute and even from the less plain language of Alice.  The Federal Circuit has interpreted the eligibility test to require consideration of the daylight between the claimed invention and the prior art, as well as whether the claims sufficiently recite how to practice the invention with enough specificity.  These notions were formerly the exclusive domain of other sections of Title 35 — but no longer.  And the Court is apparently okay with the current state of affairs despite these affairs violating principles of statutory interpretation.

    As a result, garage door openers, electric vehicle charging stations, and mobile phones — inventions that should pass the § 101 inquiry with flying colors — are now too abstract for patenting.  In practice, this means that it can be immensely difficult for an inventor, a business, a patent attorney, a patent examiner, or even a judge to predict whether an invention is viable.  The validity of certain types of claims, those involving software in particular, are perpetually in an indeterminate state until examined in the USPTO or challenged post-issuance.

    Some of us were hoping that the Court might take up American Axle so patent law no longer had to share a box with Schrodinger's Cat.  But now it looks like that will not happen, possibly for a long time.  Fixing Alice has proven remarkably difficult despite its obvious problems.  Congress tried three years ago and gave up.  The USPTO tried to clarify the Alice test through examination guidance but only made it more complicated.

    The vagaries of patent eligibility produce clear winners and losers.  The economics favor patentees with deep pockets who can persist through multiple rounds of examination and litigation.  These large companies can file hundreds of patents per year, with the understanding that even losing 10-20% to Alice is just a cost of doing business.  Individual inventors and startups are budget-constrained, often having to bet the farm on a single patent application.  All it takes is an unreasonable patent examiner at the USPTO to make obtaining protection virtually impossible.

    Viewed this way, there is a throughline in the Court's recent rulings — protecting the interests of the powerful over those of the weak.  This misguided consistency is harmful in general and not what drives an economy that is more and more based on innovation and intangible assets.

    In any event, given that we are where we are and that the current state of § 101 is unlikely to change, what can we do?  Are there any best practices to put into place now that the Court has declined to revisit Alice?  In short, yes, there are a few things that a patentee can do to insulate themselves.

    The easiest way to deal with Alice is to not deal with Alice.  Thus, you should consider the nature of the invention when making the decision of whether to file.  If the invention is not sufficiently technical in nature (where technical inventions improve the operation of machines rather than that of businesses or people) or if the invention is not thoroughly fleshed out, it might not be the best candidate for a patent application.  But if the invention is technical and understood in detail, this technical character and such details should be discretely called out in the specification and recited by the claims, as should the differences between the invention and the prior art.  It has been established that the courts look for these three factors (technicality, specificity, and novelty) in both parts of the § 101 analysis.

    For pending applications under examination, you have to work with what you have.  You cannot modify the specification, but you can amend the claims.  By placing specific, technical features that distinguish over the prior art in the claims (assuming that such features are supported by the specification), you can move the odds in your favor.

    When determining whether to assert a granted patent, the same calculus is involved.  If the claims recite a specific, technical advance over the prior art, then they are in reasonably good shape to survive an eligibility challenge in court.  If not, you may have an uphill battle.

    While these factors are not 100% determinative, they are the best guideposts for navigating the Alice labyrinth.  At this point, we have to assume that the Court and Congress are unlikely to reassess patent eligibility for years.  And given the well-placed lack of faith in these institutions, it is not out of the question that such a reassessment could result in a framework that is even worse than the mess we are stuck with today.

  • Supreme Court Denies Cert in American Axle

    By Kevin E. Noonan —

    Supreme Court Building #2In a month where the Supreme Court's conservative majority has exercised its judicial muscle by striking down several well-established precedents, one portion of their jurisprudence is as fixed a constant as the North Star:  the Court will not address the morass in patent subject matter eligibility created by the decisions in Bilski, Mayo, Alice, and Myriad, and once again refused to do so in American Axle & Mfg. Inc v. Neapco Holdings LLC.  For a Court whose political inclinations are evident and frequently commented upon, the chorus of dissent regarding the state of subject matter eligibility law from the patent community, industry groups, the U.S. Patent and Trademark Office, members of Congress, half (at last count) of the judges on the Federal Circuit, and the Solicitor General has fallen on particularly deaf ears, this refusal being the latest (along with denial of certiorari today in another, less celebrated subject matter eligibility case, Spireon, Inc. v. Procon Analytics, Inc.) in an increasingly long line.

    Perhaps this is a blessing in disguise, however, because it is possible that the Court recognizes its decisions have backed the Justices into a rhetorical corner (albeit a Minoan labyrinth may be a better analogy) from which there is no doctrinally straightforward way out.  Alternatively, the Court may believe that the district courts and Federal Circuit have more work to do in clarifying (or muddying) subject matter eligibility law before they will revisit the question.  They may be waiting for Congress to step forward, believing that whatever else their decisions have done they have illuminated the divide between stakeholders who need certainty in the law, such as biotechnology and pharmaceutical companies whose products are sufficiently costly that uncertainties in return on investment threaten to impair innovation, and other companies who would rather more readily be able to "efficiently infringe."  Or perhaps it's as simple as the Court, like Professor Quincy Adams Wagstaff in Horse Feathers, having decided that "whatever it is, I'm against it."

    The parlous state of Section 101 remains uncorrected.

  • University of Massachusetts v. L’Oreal S.A. (Fed. Cir. 2022)

    By Kevin E. Noonan —

    Federal Circuit SealIn reviewing (and reversing) the District Court's claim construction in University of Massachusetts v. L'Oreal S.A., the Federal Circuit availed itself of both the disclosure in the specification and the prosecution history to construe a limitation in a wherein clause, based on its determination that the term did not have a plain meaning and thus other indicia of what the claim term at issue meant should be considered.  The Court also reviewed the District Court's favorable consideration of L'Oreal S.A.'s motion to dismiss on jurisdictional grounds, vacating this determination as an abuse of discretion for failure to grant the University jurisdictional discovery.

    The issue arose in the University's lawsuit for patent infringement against L'Oreal S.A. and L'Oreal USA, Inc. over U.S. Patent Nos. 6,423,327 and 6,645,513; the opinion sets forth claim 1 of the '327 patent as representative:

    1.  A method for enhancing the condition of unbroken skin of a mammal by reducing one or more of wrinkling, roughness, dryness, or laxity of the skin, without increasing dermal cell proliferation, the method comprising topically applying to the skin a composition comprising a concentration of adenosine in an amount effective to enhance the condition of the skin without increasing dermal cell proliferation, wherein the adenosine concentration applied to the dermal cells is 10-4 M to 10-7.

    (Where the District Court's construction of the italicized language was the basis for its determination that the claims were invalid for being indefinite.)

    While the District Court proceedings were ongoing, L'Oreal USA petitioned the Patent Trial and Appeal Board (PTAB) for institution of inter partes review, which the Board denied.  However, the Board in making its assessment of the institution petition construed the "wherein" clause of claim 1 of the '327 patent to mean the concentration of adenosine at the dermal cells (located underneath the skin surface) rather that the concentration at the skin surface (which comprises the epidermis) (the opinion noting that under 35 U.S.C. § 314(d) these determinations were "final and unappealable").  The District Court also construed the wherein clause to have this meaning without overt construction, holding that the clause was given its "plain and ordinary meaning without the need for further construction."

    In applying this construction to the question of invalidity under 35 U.S.C. § 112(b), the District Court granted summary judgment for L'Oreal USA that the claim was indefinite in reciting the limitation "topically applying to the skin a composition comprising a concentration of adenosine in an amount effective to enhance the condition of the skin without increasing dermal cell proliferation" because of the perceived distinctness between the amount of adenosine (directly) applied to the epidermis and the amount (indirectly) applied to the dermal cells and the resulting concentration that is sufficient to both enhance the condition of the skin while not increasing dermal cell proliferation.

    The Federal Circuit reversed the District Court's claim construction and vacated summary judgment of indefiniteness in an opinion by Judge Taranto, joined by Judges Mayer and Prost.  The University argued with regard to the claim construction issue that the concentration recited in the wherein clause should be construed to mean the amount of adenosine in the dermis after it has entered the dermal layer, i.e., "the number of moles of adenosine divided by the volume (liters) of the dermis itself."  The Federal Circuit disagreed, holding that the District Court had erred in its construction and vacating and remanding for proceedings based on the Court's construction as set forth in this opinion.  (Review was de novo, because  the District Court relied only upon intrinsic evidence.)  The Court's analysis began with its determination that the meaning of the concentration language in the wherein clause, viewed in the context of the claim as a whole, was not plain and even less plain under the University's construction of it.  The opinion notes that the clause recites adenosine concentration administered to the dermal cells, while the preceding clause relating to skin enhancement recited applying the adenosine-containing composition to the skin (the epidermis). While the way the claim is written with regard of the term "applied" suggested to the panel (as it did to the Board and District Court) a difference in meaning, that is not enough according to the opinion.  The panel recognized that "[t]he same [composition] can be applied directly to one object [(the skin)] and indirectly to the other [(the dermis)]."  Under the Federal Circuit's construction, the concentration of adenosine referenced in the two portions of the claim are the same concentration, which the opinion states is consistent with the language of the dependent claims as well.  The concentration referenced in the skin-enhancement clause refers to the concentration in the composition before it is applied to the skin, which is the same concentration referenced in the wherein clause in the Court's opinion, contrary to the University's proposed construction.  According to the opinion, the University's construction would have the concentration recited in the wherein clause refer to something that does not exist until the composition is applied (and the adenosine absorbed into the skin and the dermal layer).  But if that construction was followed, the wherein clause (in the Court's view) would need to be rewritten to recite "wherein the adenosine permeating to the dermal layer results in a concentration of adenosine in the dermal layer of 10-4 M to 10-7 M."  The need for these linguistic gymnastics was enough for the panel to hold that the claim language at issue had no plain meaning and that resort to the specification and prosecution history was in order.

    In its review of the disclosure in the specification, the many recitations of the concentration of adenosine in the disclosed composition did not set forth this concentration after penetration into the dermal layer; instead they all disclose concentrations before the composition is applied to the skin.  The opinion states that "[t]his is significant evidence that the wherein clause is best read to refer to the concentration of adenosine in the composition applied to the surface of the skin," referencing Phillips v. AWH Corp., 415 F.3d 1303, 1316 (Fed. Cir. 2005) (en banc); VirnetX, Inc. v. Cisco Systems, Inc., 767 F.3d 1308, 1318 (Fed. Cir. 2014); and Netcraft Corp. v. eBay, Inc., 549 F.3d 1394, 1397–98 (Fed. Cir. 2008).  And there is no disclosure of measuring adenosine concentration in the dermis or the need to do so.

    But it is in the prosecution history that the Court found the most persuasive evidence for its construction that the concentration recited in the claims should be construed as the adenosine concentration in the composition before application to the skin.  The Court first looked to the claims as filed, which did not recite the wherein clause present in the claims as granted (that limitation was recited in a dependent claim, but without any mention of dermal cells).  The applicants amended the claim to overcome prior art, and in incorporating the adenosine concentration limitation into the independent claim changed the wording to what was recited in claim 1 of the '327 patent.  However, in their response containing this amendment, the applicants maintained that "[t]his amendment would add no new matter, as it merely includes a range of concentrations of adenosine recited in dependent claims" (emphasis in opinion).  In this response the applicants further distinguished two other prior art references based on concentration of adenosine in the composition before being applied to the skin (as the opinion states, "with no suggestion of a difference in location of concentration measurement").  And the examiner's comments in the reasons for allowance, both in the '327 patent and the '513 patent, contained the statement that the "[i]nstant claims are directed to a method of enhancing the condition of unbroken skin . . . where the method comprises administering adenosine at a concentration of 10-4 M to 10-7 M, to the skin" (emphasis in opinion).  In view of this prosecution history, the Federal Circuit held that "the wherein clause's reference to the recited concentrations being 'applied to the dermal cells' be read as referring to concentrations of the composition applied to the skin's surface."  The construction the University advanced before the District Court and on appeal was inconsistent with this history according to the opinion, and "cannot fairly be squared with the understanding that both [the University] and the examiner expressed during prosecution, and on which skilled artisans are entitled to rely," this latter phrase perhaps providing the impetus for the Court's decision.

    And in remaining unpersuaded by the University's attempts to distinguish the prosecution history, the Court refused to credit statements in the prosecution history made in response to the examiner's reasons for allowance, which merely recited the claim language and asserted that the applicants did not concede that the examiner's reasons were the only reasons the claims should be allowed (illustrating the futility in believing that such statements would be persuasive in actions to enforce the patent).

    The Federal Circuit, applying its construction concluded that the District Court's finding that the claims were indefinite "must be vacated and . . . remanded for the district court to conduct any further proceedings that are necessary" (the panel refusing L'Oreal's suggestion that it enter a judgment of non-infringement directly).

    Regarding the jurisdictional question, the District Court adopted a magistrate judge's recommendation that the Court grant L'Oreal S.A.'s motion to dismiss under Federal Rule of Civil Procedure 12(b)(2) without permitting jurisdictional discovery to the University.  The Federal Circuit disapproved of that action, holding that under Third Circuit law it was an abuse of discretion.  The basis for this holding was that "at the very least" jurisdictional discovery was appropriate under Eurofins Pharma US Holdings v. BioAlliance Pharma SA, 623 F.3d 147, 157 (3d Cir. 2010).  The University had "made more than clearly frivolous, bare allegations that L'Oréal S.A. was subject to personal jurisdiction," these allegations including that "L'Oréal S.A. introduced the accused products into the stream of commerce" and that L'Oreal USA was "L'Oréal S.A.'s agent in certain potentially relevant respects."  There was also evidence that L'Oreal S.A. had performed product research on adenosine-containing compositions for treating skin and may have licensed the technology to L'Oreal USA.  Also telling for the panel was that "L'Oréal S.A. did not specifically deny allegations that it developed and licensed the relevant technology to L'Oréal USA" but instead had rather weakly asserted that it had not "directly developed" any of the skincare products at issue in the lawsuit.  The Federal Circuit held that because "this evidence raises the possibility that discovery might have uncovered the requisite contacts under our precedent" (emphasis in opinion), it vacated the District Court's jurisdictional determinations and held that on remand the University was entitled to jurisdictional discovery before the District Court came to and jurisdictional conclusions.

    University of Massachusetts v. L'Oreal S.A. (Fed. Cir. 2022)
    Panel: Circuit Judges Prost, Mayer, and Taranto
    Opinion by Circuit Judge Taranto

  • USPTO Provides Guidance on PTAB Discretionary Denials of Challenges Based on Parallel Litigation

    By Joshua Rich —

    USPTO SealOn June 22, 2022, the U.S. Patent and Trademark Office issued two documents regarding the Patent Trial and Appeals Board's discretionary denials of post-grant challenges based on parallel litigation: a retrospective study of such denials since 2019[1] and a prospective interim guidance memorandum from the Director regarding considerations for future decisions.[2]  Both documents discuss the circumstances in which the PTAB may choose to deny institution of post-grant challenges when the same patent is being asserted in district court or ITC litigation.  In combination, the two documents identify how to narrow the discretion that the PTAB will exercise in determining whether to proceed based on parallel litigation.

    The USPTO's retrospective study identified four cases as causing substantial inflections in discretionary denials of post-grant challenges:  (1) NHK Spring Co., Ltd. v. Intri-Plex Techs., Inc., Case IPR2018- 00752, Paper 8 (Sept. 12, 2018); (2) Apple Inc. v. Fintiv, Inc., Case IPR2020-00019, Paper 11 (March 20, 2020); (3) Sand Revolution II, LLC v. Continental Intermodal Group – Trucking LLC, Case IPR2019-01393, Paper 24 (June 16, 2020); and (4) Sotera Wireless, Inc. v. Masimo Corporation (§ II.A), IPR2020-01019, Paper 12 (Dec. 1, 2020).

    In NHK, the PTAB denied institution both on the basis that the cited prior art had already been considered in the Office and because the same invalidity challenges were being raised in the IPR petition and district court litigation.  NHK was notable as the first decision expressly citing the "advanced state" of the district court litigation as a basis for denying the petition, namely that the trial was scheduled to occur before the inter partes review would have reached a final decision.  But it also served as the catalyst for many others to seek denial of institution on the basis of parallel litigation.

    Fintiv was one of those cases in which the patent owner asked the PTAB to deny institution.  By that time, there had been enough such requests that the PTAB decided to provide some guidance to parties regarding the considerations that would go into the exercise of its discretion.  The PTAB therefore provided a list of six non-exclusive factors that it would consider:
        (1) whether a stay exists in the parallel litigation or would likely be granted if a proceeding is instituted;
        (2) proximity of the court's trial date to the Board's projected statutory deadline;
        (3) investment in the parallel proceeding by the court and parties;
        (4) overlap between issues raised in the petition and in the parallel proceeding;
        (5) whether the petitioner and the defendant in the parallel proceeding are the same party; and
        (6) other circumstances that impact the Board's exercise of discretion, including the merits.

    The promulgation of the Fintiv factors brought increased clarity to whether the PTAB would exercise its discretion to deny institution of a petition, but it also brought a substantial upswing in the percentage of cases in which the argument would arise.  It also led to a similar upswing in the number of cases in which the existence of parallel proceedings would lead to denial of institution.

    The upward trend can be clearly seen in one of the USPTO's graphs of both the number of cases and percentage of cases in which discretionary denial was raised:

    Image 1
    A little over a year after the Fintiv factors were promulgated, the PTAB decided Sand.  There, the petitioner sought reconsideration of a decision denying institution of an IPR by submitting a stipulation stating that it would not raise the same grounds in the IPR and parallel proceeding.  The Board found that the stipulation, submitted to resolve the fourth Fintiv factor in the petitioner's favor, tipped the balance and instituted the proceeding.  The Sand decision caused the pendulum to swing back toward institution: more parties submitted similar stipulations and the number of discretionary denials based on parallel proceedings eventually shrank.

    The trend downward for discretionary denials really escalated with the Sotera decision.  There, the petitioner filed an even broader stipulation agreeing that it would not assert in the district any grounds "raised or that could have been reasonably raised in an IPR."  The PTAB instituted the review in Sotera, and many petitioners followed Sotera's lead, which has led the Board not to exercise its discretion to reject review of the post-grant challenges.

    Again, the USPTO's statistical picture tells the tale.  Once petitioners began filing robust Sotera-like petitions in the months after the decision, discretionary denials of institution dropped quickly:

    Image 2
    While these cases were being resolved, the USPTO asked for comments to support potential rules on approaches to the exercise of discretion.  It received 822.  So while the Office is sifting through those comments, Director Vidal issued interim guidance to help practitioners.  The guidance came in the form of four practices that the Board will implement.

    First, whether the PTAB will have discretion to deny institution depends on the strength of the petition.  If the petition's evidence is insufficient to justify institution on the merits, the Board will not rely on the Fintiv factors as an alternative ground for denial.  If the petition makes a sufficient showing under the statute — but not a strong one — the Fintiv factors will be in play.  But if the petition's evidence is compelling, the PTAB will not deny institution on the basis of the Fintiv factors.

    Second, the PTAB will consider the Fintiv factors only in relation to parallel district court litigation.  Although it has denied institution based on parallel ITC proceedings in the past, it will no longer do so because the ITC lacks the power to invalidate a patent and its rulings are not binding on the Office or district courts.

    Third, following Sotera, the PTAB will not discretionarily deny institution if the petitioner files a stipulation indicating that it will not pursue in the district court the same invalidity grounds or any grounds that could reasonably be raised before the PTAB.  That is, the Office is making the downward trend its full-time practice based on the overwhelming strength of the fourth Fintiv factor.

    Fourth, in determining the second Fintiv factor (the proximity of the court's trial date to the Board's projected statutory deadline), the PTAB will consider not only scheduled trial date, but also time-to-trial statistics such as number of cases before the judge and speed and availability of other case dispostions.  This is because — as numerous comments pointed out — different courts have different practices regarding the likelihood of extensions of the trial date.  It is a point strongly reflected in the statistics published by the USPTO — in 2021, review of the Fintiv factors led to discretionary denial about 10% of the time when the case was pending in the District of Delaware, about 15% of the time when the case was pending in the Western District of Texas, and almost 65% of the time when the case was pending in the Eastern District of Texas.

    In light of Director Vidal's guidance, practitioners have much greater clarity regarding how to address discretionary challenges based on parallel litigation.  Patent owners know they should not raise the issue based on an ITC proceeding, and likely should not in a slower-to-trial jurisdiction.  But they also know that the argument fits nicely with an argument on the merits, as an attack on the strength of the petition can be couched as a Fintiv argument.  The petitioner, however, can moot the Fintiv argument if it is willing to provide a broad, Sotera-like stipulation not to pursue in the district court any invalidity grounds that it can raise before the PTAB.  As a result, the PTAB's discretion will be much more limited and Fintiv decisions will be far more predictable.

    [1] https://www.uspto.gov/sites/default/files/documents/ptab_parallel_litigation_study_20220621_.pdf
    [2] https://www.uspto.gov/sites/default/files/documents/interim_proc_discretionary_denials_aia_parallel_district_court_litigation_memo_20220621_.pdf

  • Conference & CLE Calendar

    CalendarJune 28-29, 2022 – Summit on Biosimilars & Innovator Biologics: Legal, Regulatory, and Commercial Strategies for the Innovator and Biosimilars Marketplace (American Conference Institute) – Boston

    June 28, 2022 – UPC Masterclass — Session 3: "The UPC Approach to Damages Actions and Compensation Claims" (Hoffmann Eitle)

    June 28, 2022 – "The Hand of History—The Mind of the Inventor" (U.S. Patent and Trademark Office) – Session 4: Toys, umbrellas, and more

    June 29, 2022 – "Life After Brexit – IP Developments in UK and Europe" (Intellectual Property Owners Association and Chartered Institute of Patent Attorneys) – 11:00 am to 12:00 pm (ET)

    June 29, 2022 – Artificial Intelligence (AI) and Emerging Technologies (ET) Partnership Series (U.S. Patent and Trademark Office) – 1:00 pm to 5:00 pm (ET)

    June 30, 2022 – UPC Masterclass — Session 3: "The UPC Approach to Damages Actions and Compensation Claims" (Hoffmann Eitle)

    June 30, 2022 – "Partnering with the Department of Defense to Protect the Warfighter: Investments in National Health Security" (Biotechnology Innovation Organization) – 1:00 pm to 3:00 pm (ET)

    July 5, 2022 – European biotech patent law update (D Young & Co) – 9:00 am, noon, and 5:00 pm (BST)

    July 8, 2022 – UPC Masterclass — Session 4: "The New Regime on the Revocation of European Patents/ The 'Long-arm Jurisdiction'" (Hoffmann Eitle)

  • USPTO AI/ET Partnership Series

    AI ET Partnership
    The U.S. Patent and Trademark Office will be holding the inaugural meeting of the Artificial Intelligence (AI) and Emerging Technologies (ET) Partnership Series from 1:00 pm to 5:00 pm (ET) on June 29, 2022.  The meeting will explore various patent policy issues including subject matter eligibility, inventorship, and disclosure practice, and also explore data from patent filings and how they inform innovation trends in these critical technology areas.  The meeting will include discussions of the following topics:

    • National Artificial Intelligence Initiative
    • Patent Eligibility Jurisprudence Report
    • Panel 1: Subject Matter Eligibility and the Impact on AI/ET Innovation
    • USPTO AI Dataset & Trends
    • Panel 2: Inventorship and the Advent of Machine-Generate Inventions
    • Panel 3: Disclosure and AI/ET Inventions

    Additional information regarding the customer partnership meeting, including how to participate online, can be found here.

  • BIO Webinar on Partnering with DoD

    Biotechnology Innovation OrganizationThe Biotechnology Innovation Organization will be offering a webinar entitled "Partnering with the Department of Defense to Protect the Warfighter: Investments in National Health Security" from 1:00 pm to 3:00 pm (ET) on June 30, 2022.  The webinar will detail the many new and previously available sources of capital, as well as the processes for applying for funding, from the U.S. Department of Defense (DoD).  The meeting will include discussions of the following topics:

    • Opening Remarks: Overview and DoD Priorities
    • Panel 1: Investing at the Speed of Need: Novel Technologies and Platforms to Accelerate Drug Development
    • Panel 2: Repurposing and Redirecting: An Alternate Approach to Accelerating Medical Countermeasures
    • Closing Remarks: How to Work with DoD

    Those interested in registering for the program, can do so here.