Ha Ha, Our New Robot Overlords Can’t Get Patents

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On July 29, 2019, U.S. Patent Application Serial No. 16/524350 was filed naming DABUS as the inventor and Stephen L. Thaler as as the assignee/applicant. Papers accompanying the application clarified that the invention was conceived by a “creativity machine” name DABUS, and it should be named as the inventor of the application. On August 8, the U.S. Patent and Trademark Office issued a Notice to File Missing Parts of Nonprovisional Application.

On January 20, 2020, the Applicant filed a Petition to vacate the August 8 Notice, contending that inventorship should not be limited to natural persons and, therefore, the naming of DABUS as the inventor in the application was proper, and thus the Notice was unwarranted
and/or void.

The Commissioner’s decision states that to the extent the petitioner argues that an “inventor” could be construed to cover machines, the patent statutes preclude such a broad interpretation. Interpreting “inventor” broadly to encompass machines would contradict the plain reading of the patent statutes that refer to persons and individuals. The Commissioner also relied upon the Federal Circuit in Univ. of Utah v. Max-Planck-Gesellschafl zur Forderung der Wissenschaflen e.V., where the Federal Circuit held that a state could not be an inventor, and Beech Aircraft Corp. v. EDO Corp.,
stated that: “only natural persons can be ‘inventors.”

The Commission concluded that because the application names a machine, DABUS, as the inventor, and because current statutes, case law, and
USPTO regulations and rules limit inventorship to natural persons, the application does not comply with 35 U.S.C. § 115(a), and thus the USPTO properly issued the August 8, 2019 Notice requiring the inventor to be identified by his or her legal name.

The Commissioner also rejected Petitioner’s argument that the USPTO has granted patents relating to the DABUS machine and, thus implicitly legalized the process by which DABUS arrive at an invention. The granting of a patent under 35 U.S.C. § 151 for an invention that covers a machine does not mean that the patent statutes provide for that machine to be listed as an inventor in another patent application any more than a patent for a camera allows the camera hold a copyright. A machine does not
qualify as an inventor under the patent laws.

Finally, the Commissioner rejected Petitioner’s public policy arguments, including that allowing a machine to be listed as an inventor would incentivize innovation using AI systems, reduce the improper naming of persons as inventors who do not qualify as inventors, and support the public notice function by informing the public of the actual inventors of an
invention. The Commissioner found that these policy considerations do not overcome the plain language of the patent laws as passed by the Congress and as interpreted by the courts.

Pro Se Applicant, Gets the Same Result as the Pros: Method of Fishing is Abstract

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In In re Rudy, [2019-2301] (April 24, 2020), the Federal Circuit affirmed the PTAB decision that claims of U.S. patent application Serial No. 07/425,360 entitled “Eyeless, Knotless, Colorable and/or Translucent/Transparent Fishing Hooks with Associatable Apparatus and Methods,” were directed to subject matter ineligible for patenting under 35 U.S.C. § 101. As claimed, the user observes the clarity of water to determine whether the water is “clear, stained, or muddy,” measures light transmittance at a depth in the water where a fishing hook is to be placed, and selects a colored or colorless fishing hook based on the clarity and light transmittance of the water, in accordance with a chart.

Mr. Rudy originally filed the ’360 application on October 21, 1989, and it has undergone a lengthy prosecution, including numerous amendments and petitions, four Board appeals, and a previous trip to the Federal Circuit.

The Board’s reasoning and conclusion were fully in accord with the relevant caselaw. Applying the Supreme Court’s two-step Alice/Mayo framework, The Federal Circuit concluded, as the Board did, that the claim is directed to the abstract idea of selecting a fishing hook based on observed water conditions. The Federal Circuit said that the claims require nothing more than collecting information (water clarity and light transmittance) and analyzing that information (by applying the chart included in the claim), which collectively amount to the abstract idea of selecting a fishing hook based on the observed water conditions.

Mr. Rudy’s argument that fishing was a practical technological field was irrelevant to the fact that the claims at issue were ineligible. While Mr. Rudy further argued that determining the light transmittance with the accuracy could not be done mentally, the Federal Circuit found that the plain language of the claims encompasses mental determination. The Federal Circuit also rejected Mr. Rudy’s attempt to invoke the machine or transformation test, finding that the claims do not actually recite or require the purported transformation that Mr. Rudy relies upon.

Turning to step two of the Alice/Mayo inquiry, the Federal Circuit said the three elements of the claim (observing water clarity, measuring light transmittance, and selecting the color of the hook to be used) are each themselves abstract, being mental processes akin to data collection or analysis. Considered as an ordered combination, these three steps merely repeat the abstract idea of selecting a fishing hook based on observed water conditions. The Federal Circuit said that the transformation of an abstract idea into a patent-eligible claim requires more than simply stating the abstract idea while adding the words “apply it.”

The Federal Circuit concluded that the claims were directed to ineligible subject matter.

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Losing the Right to Challenge a Patent is not Enough to Confer Standing to Appeal IPR Decision

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In Argentum Pharmaceuticals LLC v. Novartis Pharmaceuticals Corp., [2018-2273] (April 23, 2020), the Federal Circuit dismissed the appeal, noting that the appellant remaining after settlement lacked Article III standing to appeal the PTAB’s IPR decision.

The Federal Circuit said that although it had jurisdiction to review final decisions of the Board under 28 U.S.C. § 1295(a)(4)(A), an appellant must meet the irreducible constitutional minimum of standing. This is true even if there is no such requirement in order to appear before the administrative agency being reviewed.

The Federal Circuit said that to prove standing, Argentum bears the burden of showing that it has (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision. The Federal Circuit added that Argentum must supply the requisite proof of an injury in fact when it seeks review of an agency’s final action in a federal court, by creating a necessary record in this court, if the record before the Board does not establish standing.

To establish injury in fact, an appellant must show that he or she suffered an invasion of a legally protected interest that is concrete and particularized and actual or imminent, not conjectural or hypothetical. An injury is particularized if it affects the appellant in a personal and individual way.

Argentum argued that it demonstrated at least three concrete injuries in fact. First, without an opportunity to appeal, it faces a real and imminent threat of litigation as it jointly pursues a generic version of Novartis’ Gilenya® product; but the Federal Circuit found that any ANDA would not be filed by Argentum, but by its manufacturing and marketing partner. Second Argentum argued that it will incur significant economic injury as its investments in developing a generic version of Gilenya® and preparing an ANDA would be at risk, but the Federal Circuit found that Argentum had not provided sufficient evidence to establish an injury in fact through economic harm. Third, Argentum argued that Argentum would be estopped under 35 U.S.C. § 315(e) from raising the patentability and validity issues in a future infringement action, but the Federal Circuit said that it had already rejected invocation of the estoppel provision as a sufficient basis for standing.

Accordingly, the Federal Circuit held that Argentum has failed to prove that it has suffered an injury in fact necessary to establish standing.

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Assignor Estoppel Cannot Resurrect Patent Invalidated in an IPR, but it Can Save Patent from Challenge in District Court

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In Hologic, Inc. v. Minerva Surgical, Inc.. [2019-2054, 2019-2081] (April 22, 2020), the Federal Circuit affirmed the district court’s determination that assignor estoppel does not bar the assignor from relying on our court’s affirmance of the Patent Trial and Appeal Board’s final decision invalidating the asserted patent claims in an inter partes review proceeding. and the district court’s determination summary judgment that assignor estoppel bars the assignor from asserting invalidity of the assigned second patent in district court.

Hologic and Cytyc sued Minerva Surgical for infringement of certain claims of its U.S. Patent Nos. 6,872,183 and 9,095,348, which relate to procedures and devices for endometrial ablation. Truckai invented the technology assigned the patents to NovaSure, which was later acquired by Cytyc. Truckai left NovaSure to found went on to found Minerva and develop competing technology. Minerva file IPRs as to both patents, but only the IPR against the ‘183 patent was instituted, the finding that the claims were unpatentable was affirmed by the Federal Circuit. The district court declined to award damages or an injunction as to the ‘183 patent, because it was invalidated. The district court awarded damages for infringement of the ‘358 patent.

The Federal Circuit examined the history of assignor estoppel, and noted that it has its limitations, noting that although estopped parties “cannot challenge the validity of” the patent at issue, “assignor estoppel does not limit their ability to defend themselves in other ways,” including “arguing that the patentee is itself collaterally estopped from asserting a patent found invalid in a prior proceeding.” Based on our precedent and the limits it places on the assignor estoppel doctrine, the Federal Circuit concluded that assignor estoppel does not preclude Minerva from relying on the Ho-logic decision to argue that the ’183 patent claims are void ab initio.

The Federal Circuit was mindful of the seeming unfairness to Hologic in this situation, pointing out that although Minerva would have been estopped from challenging the validity of the ’183 patent claims in district court, it was able to challenge their validity in an IPR proceeding and, hence, circumvent the assignor estoppel doctrine. Minerva had the right to do so under the AIA and Federal Circuit precedent. While the Federal Circuit understood Hologic’s predicament, it nevertheless concluded that the district court did not abuse its discretion in denying Hologic its requested injunctive and monetary relief following a finding of patent infringement of the ‘183 patent.

As to the ‘348 patent, the Federal Circuit declined Minerva’s invitation to “abandon the doctrine” of assignor estoppel entirely. Although recognizing that assignor estoppel is not a broad equitable device susceptible of automatic application, the Federal Circuit agreed with the district court that the equities weigh in favor of its application in this case. The Federal Circuit found the facts analogous to those in Diamond Scientific, Shamrock, and other cases in which an inventor executes broad assignments to his employer, leaves his employer, founds or takes on a controlling role at a competing company, and is directly involved in the alleged infringement.

Because the district court did not abuse its discretion in applying the doctrine of assignor estoppel, the Federal Circuit affirmed the district court’s grant of summary judgment of no invalidity as to the ’348 patent.

The Scope of Patent Term Extension under 35 USC §156 Only Includes the Active Ingredient of an Approved Product

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In Biogen International GmbH v. Banner Live Sciences, LLC, [2020-1373] (April 21, 2020), the Federal Circuit affirmed the district court’s determination that Banner does not infringe the extended portion of U.S. Patent No. 7,691,001.

The ‘001 patent covers the administration of dimethyl fumarate, methyl hydrogen fumarate, or combinations thereof , and cover both the dimethyl ester and monomethyl ester forms are covered by this claim.

Biogen asserted the ’001 patent in an infringement action against Banner in the District of Delaware. Banner immediately moved for a judgment of
noninfringement, arguing that § 156(b)(2) limits the scope of the ’001 patent’s extension to methods of using the approved product as defined in § 156(f)—in this case, DMF, its salts, or its esters—and that MMF is none of those. Biogen responded that § 156(b)(2) does not limit extension of a method of treatment patent to uses of the approved product, but instead only to uses of any product within the original scope of the claims. Biogen further argued that, in any event, “product” in § 156 has a broader meaning encompassing any compound that shares with the approved product an “active moiety.”


The district court agreed with Banner’s interpretation of § 156 in both respects and rendered a judgment of noninfringement. It rejected Biogen’s argument that extension of a method of treatment patent under § 156(b)(2) is not limited to uses of the approved product.

The Federal Circuit explained that under § 156, an NDA holder is entitled to extend the term of only one patent for the corresponding approved product. Subsection (a) places several conditions on term extension for an NDA holder, including that the applicant’s approved NDA must be “the first permitted commercial marketing or use of the product. Subsection (b) limits the scope of the patent extension to “any use approved for the product,” and further, for method of treatment patents, to uses also “claimed by the patent.” The Federal Circuit said that citically, for the purposes of the appeal, subsection (f) defines “product” as “the active
ingredient of . . . a new drug . . . including any salt or ester
of the active ingredient.” § 156(f)(2)(A).

The Federal circuit said that “Active ingredient” is a term of art, defined by the FDA as “any component that is intended to furnish pharmacological activity or other direct effect,” 21 C.F.R. § 210.3(b)(7), and it “must be present in the drug product when administered.” The active ingredient
of a given drug product is defined by what is approved and is specified on the drug’s label. The Federal Circuit noted that MMF is not the approved product, nor is it specified as the active ingredient on the Tecfidera® label. Esters are included in the statutory definition of what can be extended, but MMF is the de-esterified form of DMF, not an ester of DMF. Thus, it is
not the same product under § 156(f) and does not fall within the scope of the ’001 patent’s term extension under § 156(b)(2).

Getting the Infringement Case Dismissed as Moot Still Counts as a Win; District Court Should have Considered Defendants’ Fees Motion

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In Dragon Intellectual Property v. Dish Network, [2019-1280, 2019-1284] (April 21, 2020), the Federal Circuit vacated and remanded the denial of attorney’s fees under § 285 because the district court erred in holding that Appellants are not prevailing parties.

Dragon Intellectual Property, LLC separately sued DISH, SXM and eight other defendants, alleging infringement of claims of U.S. Patent No. 5,930,444. DISH filed a petition seeking inter partes review of the ’444 patent, which the Board instituted and subsequently granted SXM’s request for joinder. The district court stayed proceedings as to DISH and SXM pending the resolution of the IPR, but proceeded with claim construction as to the other eight defendants.

Following claim construction in the district court, Dragon, DISH, SXM, and the other eight defendants stipulated to noninfringement, the district court entered judgment of noninfringement in favor of all defendants, including DISH and SXM, based on the district court’s claim construction order and the parties’ stipulation. DISH and SXM then moved for attorneys’ fees under 35 U.S.C. § 285 and 28 U.S.C. § 1927, but before the motions were resolved, Dragon appealed both the district court’s judgment of noninfringement and the Board’s final written decision that the claims were invalid. In a prior decision, the Federal Circuit affirmed the IPR, and dismissed the appeal of non-infringement as moot. On remand, Dragon moved to vacate the finding of non-infringement as moot, which the district court granted, while retaining jurisdiction over the motion for attorneys fees.

The district court agreed that DISH and SXM “achieve[d] a victory” over Dragon but held that neither DISH nor SXM is a prevailing party because they were not granted “actual relief on the merits.” The district court added that “success in a different forum is not a basis for attorneys’ fees” in the district court.

The Federal Circuit said that it has held that a defendant can be deemed a prevailing party even if the case is dismissed on procedural grounds rather than on the merits. Consistent with its decision in B.E. Technology, the Federal Circuit held that DISH and SXM are prevailing parties. Accordingly, it vacated and remanded the district court’s order denying Appellants’ motions for attorneys’ fees under 35 U.S.C. § 285.

The Federal Circuit declined appellants’ invitation to determine whether attorneys’ fees under 35 U.S.C. § 285 could include fees from the IPR. The Federal Circuit remarked “we see no basis in the Patent Act for awarding fees under § 285 for work incurred in inter partes review proceedings that the Appellants voluntarily undertook,” but remanded for the district court’s initial determination.

Wrong or Even Purposefully Evasive Decisions on IPR Time Bar Are Not Reviewable

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In Thryv, Inc., v. Click-To-Call Technologies, LP, [18-916] (April 20, 2020), the Supreme Court vacated the Federal Circuit’s decision vacating the PTAB’s Final Written Decision invalidating claims of U.S. Patent No. 5,818,836 relating to a technology for anonymous telephone calls.

Entities associated with Thryv, Inc. sought inter partes review of the ‘836 patent, and patent owner Click-to-Call argued that the petition was untimely under §315(b). The PTAB disagreed and instituted review, eventually issuing a final written decision reiterating its §315(b) decision and finding 13 of the patent’s claims unpatentable. Click-to-Call appealed the Board’s §315(b) determination. Treating the Board’s application of §315(b) as judicially reviewable, the Federal Circuit concluded that the petition was untimely, vacated the Board’s decision, and remanded with instructions to dismiss.

The Supreme Court held that 35 USC §314(d), which precludes judicial review of the USPTO’s institution decision, applies to §315(b)’s time prescription, and vacated the Federal Circuit’s decision and remanded.

The issue was whether a challenge based on §315(b) ranks as an appeal of the agency’s decision “to institute an inter partes review.” §314(d). The Supreme Court found no need to venture beyond Cuozzo’s holding that §314(d) bars review at least of matters “closely tied to the application and interpretation of statutes related to” the institution decision, because a §315(b) challenge easily meets that measurement. Section 315(b), sets forth a circumstance in which “[a]n interpartes review may not be instituted,” expressly governs institution and nothing more.

The Supreme Court said that this conclusion is strongly reinforced by the statute’s purpose and design. Congress designed inter partes review to weed out bad patent claims efficiently. Allowing §315(b) appeals, however, would unwind agency proceedings determining patentability and leave bad patents enforceable.

The Supreme Court rejected Click-to-Call’s argument that §314(d)’s bar on judicial review was limited to the USPTO’s threshold determination under §314(a) of whether the petitioner has a reasonable likelihood of prevailing. Finding Cuozzo is “fatal” to that interpretation.

Justice Gorsuch and Sotomayor dissented, with a persuasive explanation of not just how the majority got it wrong, but also why they are wrong, noting: “No matter how wrong or even purposefully evasive, the Director’s assessment of a petition’s timeliness is always immune from review.” According to Gorsuch and Sotomayor it was only the initial determination of a reasonable likelihood of success that was insulated from review, since this would necessarily be reviewed as part of the review of the Final Written Decision.

There just seems to be something wrong in allowing an administrative agency to determine an issue of law outside of its expertise (the significance of service of a complaint), and then barring the courts from reviewing it. It is bad policy to insulate the patent office from review, and bad precedent to insulate any administrative agency from review.

Selection of Primary Reference in a Design Case is a Question of Fact that Should Not be Resolved on Summary Judgment

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In Spigen Korea Co. Ltd. v. Ultraproof, Inc., [2019-1435, 2019-1717] (April 17. 2020) the Federal Circuit reversed summary judgment of invalidity of three asserted design patents (U.S. Design Patent Nos. D771,607, D775,620, and D776,648 direct to a cell phone case) because the district court resolved a genuine dispute of material fact at summary judgment.

Figures 3–5 of the ’607 patent are illustrative of the claimed design:

The ’620 patent disclaims certain elements present in the ’607 patent. Figures 3–5 of the ’620 patent are illustrative of the claimed design:

Lastly, the ’648 patent disclaims most of the elements present in the ’607 and ’620 patents. Figures 3–5 of the ’648 patent are illustrative of the claimed design:

Ultraproof filed a motion for summary judgment of invalidity of the design patents, arguing that the designs were obvious as a matter of law in view of a primary reference, U.S. Design Patent No. D729,218 in view of U.S. Design Patent No. D772,209.

Spigen argued that there was a material factual dispute over whether the ’218 patent is a proper primary reference that precludes summary judgment, and the Federal Circuit agreed.

For design patents, the ultimate inquiry for obviousness is whether the claimed design would have been obvious to a designer of ordinary skill who designs articles of the type involved. This inquiry is a question of law based on underlying factual findings. One underlying factual issue is whether a prior art design qualifies as a “primary reference.”

A “primary reference” is a single reference that creates basically the same visual impression as the claimed design. To be basically the same, the designs at issue cannot have substantial differences in their overall visual appearances. If “major modifications” would be required to make a design look like the claimed design, then the two designs are not “basically the same.” “Slight differences” in design, however, do not necessarily preclude a “basically the same” finding.

Although a trial court judge may determine almost instinctively whether the two designs create basically the same visual impression, a trial court is not free to find facts at the summary judgment phase. Thus, if based on the evidence, a reasonable jury could find in favor of the non-moving party, a trial court must stay its hand and deny summary judgment of obviousness.

The Federal Circuit determined that a genuine dispute of material fact exists as to whether the ’218 patent is basically the same as the Spigen Design Patents and hence, a proper primary reference. The the Federal Circuit reversed the district court’s grant of summary judgment of invalidity and remand for further proceedings.

Claims focusing on a Specific Means or Method Improving Cardiac Monitoring Technology are Patent Eligible

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In Cardionet, LLC v. Infobionic, Inc., [2019-1149] (April 17, 2020), the Federal Circuit reversed the dismissal of CardioNet’s complaint for infringement of U.S. Patent No. 7,941,207 on the ground that it claims ineligible under 35 U.S.C. § 101.

At step one of the Alice/Mayo inquiry, the district court concluded that the claims are directed to the abstract idea that atrial fibrillation and atrial flutter can be distinguished by focusing on the variability of the irregular heartbeat. The district court concluded that although the idea of using a machine to monitor and analyze heart beat variability and interfering beats so as to alert the user of potential atrial fibrillation or atrial flutter events may well improve the field of cardiac telemetry, CardioNet did not identify improvements to any particular computerized technology.

The Federal Circuit began its analysis with Alice step one, and looked to whether the claims focused on a specific means or method that improves the relevant technology or are instead directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery. The Federal Circuit concluded that the asserted claims of the ’207 patent were directed to patent-eligible subject matter, saying that the claims focus on a specific means or method that improves cardiac monitoring technology; they are not directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery.

The Federal Circuit agreed that the claims of the ’207 patent are akin to claims it had previously determined are directed to technological improvements, including in Visual Memory LLC v. NVIDIA, in McRO,.

The Federal Circuit said that at the heart of the district court’s erroneous step one analysis is the incorrect assumption that the claims are directed to automating known techniques.

Because it concluded under Alice step one that the asserted claims of the ’207 patent are not directed to an abstract idea, we do not reach Alice step two.

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