It was Error Not to Consider Secondary Considerations, But They Wouldn’t Have Made a Difference

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In ClassCo, Inc. v. Apple, Inc., [2015-1853] (September 22, 2016), the Federal Circuit affirmed a PTAB decision affirming an Examiner’s rejection of claims to a call-screening
system that verbally announces a caller’s identity before the call is connected.as obvious under 35 USC 103.

The Federal Circuit rejected the reexam applicant’s that the combination of references was inconsistent with KSR, noting:

Contrary to ClassCo’s argument, KSR does not require that a combination only unite old elements without changing their respective functions. KSR, 550 U.S. at 416. Instead, KSR teaches that “[a] person of ordinary skill is also a person of ordinary creativity, not an automaton.” Id. at 421. And it explains that the ordinary artisan recognizes “that familiar items may have obvious uses beyond their primary purposes, and in many cases a person of ordinary skill will be able to fit the teachings of multiple patents together like pieces of a puzzle.” Id. at 420. The rationale of KSR does not support ClassCo’s theory that a person of ordinary skill can only perform combinations of a puzzle element A with a perfectly fitting puzzle element B.

The Federal Circuit concluded that the Board properly applied a flexible approach mandated by KSR.

The Federal Circuit did find that the Board erred in dismissing some of the objective evidence of non-obviousness, noting that it has previously explained that “when secondary considerations are present, though they are not always dispositive,
it is error not to consider them.”  The Federal Circuit said that a determination of whether a patent claim is invalid as obvious under § 103 requires consideration of all four Graham factors, and it is error to reach a conclusion of obviousness until all those factors are considered.

However, the Federal Circuit found that the Board correctly determined that much of the evidence deserved no weight because it did not have a nexus to the merits of the claimed invention.  However as to some of the evidence there was a nexus.  The Federal Circuit explained that nexus depends on whether the claims are commensurate in scope with the secondary considerations.  The Federal Circuit noted that dependent claims contained the touted features, and that it was reasonable to assume that the underlying independent claim includes these features.  Even though the indepdent claims encompassed other embodiments as well, the Federal Circuit further noted that it has not required a patentee to produce objective evidence of nonobviousness for every potential embodiment of the claim. A patent applicant ‘need not sell every conceivable embodiment of the claims in order to rely upon objective
indicia of nonobviousness.

However, despite finding error in the Board’s according no weight to the evidence of secondary considerations, the Federal Circuit found no error in the Board’s ultimate conclusion of obviousness.  The Federal Circuit said that the value that the evidence of secondary consideratons possesses in establishing nonobviousness is “not strong” in comparison to the findings and evidence regarding the prior art under the first three
Graham factors.

 

Ten Ways to Get Less Than You Claim

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There are a number of ways that a patent applicant can end up with less than the patent applicant appeared to claim:

No. 10 Disclaiming claim scope during prosecution of the application.  However, this disclaimer must be clear and unmistakable.  Omega Engineering, Inc, v. Raytek Corp., 334 F.3d 1314, 1325-26 (Fed. Cir. 2003).

No. 9 Distinguishing the prior art.  See, SkinMedica, Inc. v. Histogen Inc., 727 F.3d 1187 [108 U.S.P.Q.2d 1001] (Fed. Cir. 2013)(excluding the use of beads from the claimed three dimensional culturing based upon statements distinguishing the prior art).

No. 8 Criticizing the prior art.  See, Chicago Board Options Exchange Inc. v. International Securities Exchange LLC, 677 F3d 1361 [102 USPQ2d 1683] (Fed. Cir. 2012)(limiting scope of claims based upon characterization of prior art as “antiquated,” and having “inherent inadequacies,” and “deficiencies.”); Scimed Life Sys., Inc. v. Advanced Cardiovascular Sys., Inc., 242 F.3d 1337 [58 USPQ2d 1059] (Fed. Cir. 2001)(limiting claims to “coaxial lumen configuration” based, in part, criticisms of the dual lumen prior art in the Background Of the Invention.); Astrazeneca AB v. Mutual Pharmaceutical Co., 72 USPQ2d 1726 [72 USPQ2d 1726, 1730] (Fed. Cir. 2004)(limiting the meaning of solubilizer because of criticisms of prior art).

No. 7 Identifying “Objects” of the Invention.  See, The Gentry Gallery Inc. v. The Berkline Corp., 45 USPQ2d 1498 (Fed. 1998)(liming the location of controls so that the claimed invention meets the objects).

No. 6 Failing to describe more than one embodiment.  See, Wang Laboratories, Inc. v. America Online Inc., 197 F3d 1377 [53 USPQ 1161] (Fed. Cir. 1999)(determining that the claims were properly limited to the “only embodiment described.”); General American Transportation Corp. v. Cryo-Trans, Inc., 93 F.3d 766, 770, 772, [39 USPQ2d 1801, 1803, 1805-06] (Fed.Cir. 1996)(limiting the claims to the disclosure which was “not just the preferred embodiment of the invention; it is the only one described”); Watts v. XL Systems Inc., 232 F3d 877, 56 USPQ2d 1836 (Fed. Cir. 2000)(limiting sealingly connected because the specification “ only describes one method in which ‘tapered external threads [are] dimensioned’ to achieve the sealing connection.”); Modine Mfg. Co. v. United States Int’l Trade Comm’n, 75 F.3d 1545, 1551 [37 USPQ2d 1609, 1612] (Fed. Cir. 1996)(claimed limited to disclosed embodiment because “when the preferred embodiment is described in the specification as the invention itself, the claims are not necessarily entitled to a scope broader than that embodiment.”).

No. 5 Using i.e. instead of e.g.  See Edwards Lifesciences LLC v. Cook Inc., 582 F3d 1322 [92 USPQ2d 1599] (Fed. Cir. 2009)(limiting the construction of the term malleable, because “the specification’s use of “i.e.” signals an intent to define the word to which it refers.”); see, also, Abbott Laboratories v. Novopharm Ltd., 323 F3d 1324 [66 USPQ2d 1200] (Fed. Cir. 2003).

No. 4 Incorporating definitions or limitations “by reference.”  X2Y Attenuators, LLC v. Int’l Trade Comm’n, 757 F.3d 1358 [111 USPQ2d 1607, 1610 (Fed. Cir. 2014)(claims limited by statements incorporated by reference).

No. 3 Failing to Identify described matter as “preferred.”  See Honeywell International Inc. v. ITT Industries Inc., 452 F3d 1312 [79 USPQ2d 1294, 1299] (Fed. Cir. 2006)( limiting “fuel injection system component” to a fuel filter because a fuel filter was not merely discussed as a preferred embodiment); see, also, Cultor Corp. v. A.E. Staley Mfg. Co., 224 F.3d 1328 [56 USPQ2d 1208](Fed. Cir. 2000)(Claims limited to use of citric acid where “preferably” language separated by a comma, and thus did not apply.).

No. 2 Use of unnecessarily narrow language.  For example “very important” (Inpro II Licensing, S.A.R.L. v. T-Mobile USA, Inc., 450 F.3d 1350 [78 USPQ2d 1786, 1788] (Fed. Cir. 2006)(limiting claims because of “very important” feature described in specification.)); “important feature,” (SafeTCare Manufacturing Inc. v. Tele-Made Inc., 497 F3d 1262 [83 USPQ2d 1618] (Fed. Cir. 2007)(limiting claims because of an “important feature of the present invention” described in specification).);  “critical,” (harmacia & Upjohn Co. v. Mylan Pharm., Inc., 182 F.3d 1373 [50 USPQ2d 1033, 1037] (Fed. Cir. 1999)(limiting the claims because the specification indicated that “the use of spray-dried lactose is a critical feature of the present invention.”).) “necessary,” (Atofina v. Great Lakes Chemical Corp., 441 F.3d 991 [78 USPQ2d 1417, 1421](Fed. Cir. 2006)(Statement in specification that “it is necessary to have a catalyst to have a catalyst containing solely chromium” limited claims).); “solely,” (Atofina v. Great Lakes Chemical Corp 441 F.3d 991 [78 USPQ2d 1417, 1421]( (Fed. Cir. 2006) (Statement in specification that “it is necessary to have a catalyst to have a catalyst containing solely chromium” limited claims).); “essential,” (X2Y Attenuators v. ITC, [110 USPQ2d 1707, 1610] (Fed. Cir. July 7, 2014)(limiting claims to sandwich configuration because of description in specification that the sandwich configuration is “an essential element among all embodiments”).)  “requires,” (Andersen Corp. v. Fiber Composites, LLC, 474 F.3d 1361, 1367 [81 USPQ2d 1545, 1549] (Fed. Cir. 2007)(limiting the claims because of a statement in the specification that successful manufacture “requires” a particular step).);  and “universal” (X2Y Attenuators v. ITC, [110 USPQ2d 1707, 1610] (Fed. Cir. July 7, 2014)(limiting claims to sandwich configuration because of description in specification that the sandwich configuration is a “feature [] universal to all the embodiments”).)

No. 1 Describing “the invention” rather than embodiments of the invention.  See, Honeywell International Inc. v. ITT Industries Inc., 452 F3d 1312 [79 USPQ2d 1294, 1299] (Fed. Cir. 2006)(limiting “fuel injection system component” to a fuel filter because at least four times the specification described it as “this invention” or “the present invention”); Pacing Techs., LLC v. Garmin Int’l, Inc., 778 F.3d 1021 [113 USPQ2d 1859, 1862] (Fed. Cir. 2015)(noting that “the present invention includes …” or “the present invention is …” or “all embodiments of the present invention are ….” limits the claims); Scimed Life Sys., Inc. v. Advanced Cardiovascular Sys., Inc., 242 F.3d 1447 [58 USPQ2d 1059] (Fed. Cir. 2001)( limiting claims to “coaxial lumen configuration” based, in part, on description of “the invention” and “the present invention.”); Watts v. XL Sys., Inc., 232 F.3d 877 [56 USPQ2d 1836, 1840] (Fed. Cir. 2000)(limiting claims to use of misaligned taper angles based on description of “the present invention”); Astrazeneca AB v. Mutual Pharmaceutical Co., 384 F.3d 1333 [72 USPQ2d 1726, 1730] (Fed. Cir. 2004)(limiting claims to solubilizers suitable according to the invention).

Federal Circuit Remands Issue of Enhanced Damages for Determination Whether This was an Egregious Case of Misconduct Beyond Typical Infringement

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In WesternGeco LLC v. Ion Geophysical Corp., [2013-1527, 2014-1121, 2014-1526] (September 21, 2016), the Federal Circuit, on remand from the Supreme Court after Halo Electronics, Inc. v. Pulse Electronics, Inc., vacated the district court’s judgment with respect to enhanced damages, but reinstated its earlier opinion and judgment in all other respects.

The district court found that WesternGeco prevailed on the subjective prong of the two-part In re Seagate test, but not the objective prong, and denied enhanced damages for willful infringement.  The Supreme Court removed the objective prong in Halo, so the Federal Circuit vacated and remanded the case for the district court to address enhanced damages under the new standard set forth in Halo, giving district courts greater discretion in awarding enhanced damages in cases where the defendant’s infringement was egregious, cases “typified by willful misconduct.”

The Federal Circuit said that the principal problem the Supreme Court had with with
Seagate’s two-part test was that it requires a finding of objective recklessness in every case before district courts may award enhanced damages: “The subjective willfulness
of a patent infringer, intentional or knowing, may warrant enhanced damages, without regard to whether his infringement was objectively reckless.”

If willfulness is established, the question of enhanced damages must be left to the district court’s discretion.  However, nothing says that enhanced damages must follow a finding of egregious misconduct. As with any exercise of discretion, courts should continue to take into account the particular circumstances of each case in deciding whether to award damages, and in what amount. Section 284 permits district courts to exercise their discretion in a manner free from the inelastic constraints of the Seagate test.

The Federal Circuit said that after Halo, the objective reasonableness of the accused
infringer’s positions can still be relevant for the district court to consider when exercising its discretion.  The Federal Circuit noted that the Supreme Court itself has said that district courts should exercise their discretion, taking into account the particular circumstances of each case,” and consider all relevant factors in determining whether to award enhanced damages.

The Federal Circuit said that on remand the district court must review the sufficiency of the evidence of willfulness as a predicate to any award of enhanced damages, mindful of Halo’s replacement of Seagate’s clear-and-convincing evidence standard with the “preponderance of the evidence standard.”  Then the district court must consider whether enhanced damages should be awarded, and specifically whether the infringement constituted an egregious case of misconduct beyond typical infringement meriting enhanced damages under § 284 and, if so, the appropriate extent of the enhancement.

 

Inherent Disclosure is Sufficient to Support a Priority Claim

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In Yeda Research v. Abbott GmbH. [2015-1662] (September 20, 2016), the Federal Circuit affirmed the district court’s decision that U.S. Patent No. 5,344,915 was entitled to priority of its parent application, and thus was not invalid.

The issue before the Federal Circuit was the legal standard for written description support. The Federal Circuit said that in order for the claims of the patent to benefit from the parent application’s filing date, the claimed invention must be disclosed by the parent application in a way that clearly allows a person of ordinary skill to recognize that the inventor invented what is claimed and possessed the claimed subject matter at the date of filing.  The Federal Circuit turned to the doctrine of inherent disclosure: Under the doctrine of inherent disclosure, when a specification describes an invention that has certain undisclosed yet inherent properties, that specification serves as adequate written description to support a subsequent patent application that explicitly recites the
invention’s inherent properties.

It was undisputed that the later-claimed protein with the same partial N-terminus sequence and additional traits disclosed in the parent application.  The Federal Circuit concluded that the application inherently discloses the remaining amino acids in the N-terminus sequence of TBP-II and serves as adequate written description support for the patent claiming TBP-II. The Federal Circuit said that it is not necessary for an application to disclose a protein’s complete N-terminus sequence in order to provide an adequate written description.

 

Backgrounds — The Less Said the Better

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Prosecutors are repeatedly being told by the Federal Circuit, and we are gradually learning, that the less said on the Background the better.  Whether it is by admitted prior art, criticisms of the prior art that work a disclaimer, or objects of the invention that limit the scope of the claims, backgrounds can do more harm than good.  Usually the less said the better.

The Background of U.S. Patent No. 8,007,204 is one that might be improved by brevity, although its problem — irony — is not as fatal as those listed above.  The ‘204 Patent is directed to a Floating Structure for Support of Mixed Use Facilities.  One of the problems of the prior art identified in the background are the restrictions of intellectual property laws:

8007204

The solution is a floating structure in the middle of the ocean, protected, of course, by patent issued by a land-based society.

8007204-2

 

Substantial Evidence Supported Infringement of Limitations That Did Not Need Construction

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In Lifenet Health v. Lifecell Corporation, [2015-1549](September 16, 2016) the Federal Circuit affirmed the district court’s judgment that the claims of U.S. Patent No. 6,569,200 on plasticized soft tissue grafts suitable for transplantation into humans were not invalid and were infringed.

At issue was the claim language that the “one or more plasticizers are not removed
from said internal matrix of said plasticized soft tissue graft prior to transplantation into a human.”  This language was added during prosecution to distinguish over prior art where the introduced plasticizers were removed before implantation.  The accused product instructed users to soak the grafts in saline which would remove as much as 50% of the plasticizers.

The district court found that no further claim construction was needed.  Lifecell argued that the district court failed to resolve a legal dispute regarding the scope of the claim, however the Federal Circuit found that Lifecell did not properly raise the issue.  Lifecell wanted the jury to be instructed that removal of any plasticizer from any part of the graft was enough to avoid infringement, which the Federal Circuit found was not only an argument about degree of removal, but also an argument about from where the pasticizer is not to be removed.  Regarding degree, Lifecell did get the interpretation  and instruction it wanted.  Regarding location, Lifecell failed to properly raise an issue of what “internal matrix” meant .

Examining the record, the Federal Circuit found that there was substantial evidence to support the jury’s determination that plasticizer is not removed “from the internal matrix” of the accused tissue grafts before transplantation.

The Federal Circuit went on to reject Lifecell’s arguments based on joint infringement, finding that the limitations were not steps that needed to be performed, but limitations on the structure.  Similarly, the Federal Circuit rejected the argument that the claim contained mixed method and apparatus limitations.

PTAB Decision to Institute Despite An Alleged § 315 Time Bar is Not Reviewable

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In Wi-Fi One, LLC v. Broadcom Corporation, [2015-1944] (September 16, 2016), the Federal Circuit affirmed the PTAB’d decision in IPR2013-00601 that the claims of U.S. Patent No. 6,772,215 were anticipated.

Wi-Fi argued that Broadcom was barred from petitioning for inter partes review under 35 U.S.C. § 315(b)  because it was in privity with a time-barred district court litigant.  To determine whether a petitioner is in privity with a time-barred district court litigant, the Board conducts a flexible analysis that “seeks to determine whether the relationship between the purported ‘privy’ and the relevant other party is sufficiently close such that
both should be bound by the trial outcome and related estoppels.” Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012).

The Federal Circuit also rejected Wi-Fi’s substantive challenges

In Achates the Federal Circuit held that 35 USC 314(d) “prohibits this court from reviewing the Board’s determination to initiate IPR proceedings based on its assessment of the time-bar of § 315(b), even if such assessment is reconsidered
during the merits phase of proceedings and restated as part of the Board’s final written decision.”  Wi-Fi argued that the Supreme Court’s recent decision in Cuozzo Speed Technologies,LLC v. Lee, implicitly overruled Achates.  Also the Supreme Court held that institution decisions were generally unreviewable, the court emphasized that:

our interpretation applies where the grounds for attacking the decision to institute inter partes review consist of questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review. This means that we need not, and do not, decide the precise effect of § 314(d) on appeals that implicate constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond “this section.”  Thus, contrary to the dissent’s suggestion, we do not categorically preclude review of a final decision where a petition fails to give “sufficient notice” such that there is a due process problem with the entire proceeding, nor does our interpretation enable the agency to act outside its statutory limits by, for example, canceling a patent claim for “indefiniteness under § 112” in inter partes review. Such “shenanigans” may be properly reviewable in the context of § 319 and under the Administrative Procedure Act, which enables reviewing courts to “set aside agency action” that is “contrary to constitutional right,” “in excess of statutory jurisdiction,” or “arbitrary [and] capricious.”

However, the Federal Circuit saw nothing in Cuozzo that overruled Achates.  The Federal Circuit found that §315 was precisely the kind of statute “closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review” that the Supreme Court said was unreviewable.

 

The Federal Circuit also rejected the patent owner’s substantive arguments, finding no error in the PTAB’s determination that the challenged claims were anticipated.

Read Our Lips: Not Everything is Abstract

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In MCRO, Inc. v. Bandai Namco Games America, Inc., [2015-1080] (September 13, 2016), the Federal Circuit reversed judgment on the pleadings that U.S. Patent Nos. 6,307,576 and 6,611,278 on the automated synchronization of animations with sound was invalid as directed to an abstract idea.

The Federal Circuit began by noting that one cannot assume that claims are directed to patent ineligile subject matter because all inventions, at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.  Instead, the claims must be considered as a whole to ascertain whether their character as a whiole is directed to excluded subject matter.  If the claims are not directed to an an abstract idea, then the inquiry ends, otherwise the analysis proceeds to Step II of the Alice frameword to determine whether the claims contain an inventive concept sufficient to transform the claim into a patent-eligible application.  one way of deciding Step II in computer implemented inventions is to consider whether there is an improvement to the underlying technological process, and not simply implementing the method on a computer.

The Federal Circuit disagreed that the claims were drawn to an abstract idea, saying that it has previously cautioned that court must be careful to avoid oversimplifying claims by looking at them generally and failing to account for their specific requirements.

The Federal Circuit noted that the claims at issue were limited to rules with specific characteristics.  The claims were directed to animation methods that previously could only be performed by humans.  While the defendants did not dispute that such inventions were patent eligible if properly claimed, but argued that the claims were improper because they did not claim the specific rules.  The Federal Circuit found that the claims were limited to rules with certain characteristics, former a proper genus.  The key issue was whether the claims focus on a “specific means or method” that improves the relevant technology, or whether the are directed to the result or effect.

In the end the Federal Circuit found that it was the incorporation of the claimed rules, and not the mere use of a computer, that improved the existing technological process,  Interestingly the Federal Circuit found that it made no difference that the result was not tangible, as there is no requirement that the invention be tied to a machine or transform an article to be patentable.

The Federal Circuit noted that the claims did not preempt all processes for achieving automated lip-synching of 3-D characters, although the absence of preemption does not always indicate patent eligibility.  The Federal Circuit noted that the claims were limited to a specific kind of rules, thereby preventing broad preemption of all automated methods of lip-synching.  The defendants arguedd that all methods of animation must use the same specific kind of rules, but there was no such evidence in the record.

The Federal Circuit concluded that the claims were not directed to an abstract idea, and ended the Alice inquire at Step I.

 

 

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Keeping Track of the Commissioner

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The Commissioner exercises supervisory authority over the Patent and Trademark Office, and decides a variety of kinds of petitions.  These decisions are collected on the USPTO website:

Compliance with PTAB’s Requirements for Motion to Amend Arbitrary and Capricious?

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In Veritax Technologies LLC, v. Veeam Software Corp., [2015-1894] (August 30, 2016).  The Federal Circuit vacated the PTAB’s denial of the patent owner’s motion to amend in IPR2014-00090 as arbitrary and capricious.

The Board also denied the motion to amend without making an evidentiary determination of patentability of the proposed new claims.  The Board concluded only that the patent owner failed to address something the Board said must be addressed, namely, whether each newly added feature in each proposed claim, as distinct from the claimed combination of features, was independently known in the prior art.  The Federal Circuit said:

The Board concluded that the motion and the declaration of Veritas’s expert, Dr. Levy, do not discuss the features separately but discuss only “the newly added feature in combination with other known features.” Id. That conclusion, the sole basis for denying the motion to amend, is unreasonable and hence must be set aside as arbitrary and capricious.

The Federal Circuit said that the the patent owner’s submissions contained statements that the newly added features are not described in the prior art.  The Federal Circuit said that there is no reason to doubt that it is only the combination that was the “new feature,” a scenario recognized in a long line of Supreme Court and Federal Circuit
cases noting that novel and nonobvious inventions often are only a combination of known individual features.  The Federal Circuit said that “In this case, we fail to see how describing the combination is meaningfully different from describing what is new about the proposed claims, even in comparison to the unamended claims.”

Thus according to the Federal Circuit, a strict adherence to the PTAB’s stated requirement for a statement “whether the feature was previously known anywhere, in whatever setting, and whether or not the feature was known in combination with any of the other elements in the claim.” (Toyota Motor Corp. v. American Vehicular Sciences LLC, IPR2013-00419, slip op. at 4–5 (Paper 32) (PTAB March 7, 2014)), can be “arbitrary and capricious.”  One has to wonder what other PTAB requirements are similarly “arbitrary and capricious.”