Keeping Track of the Commissioner

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:

Halo Recognizes that Not All Infringers are Angels

In Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S. — (2016), the Supreme Court rejected the Federal Circuit’s two-step Seagate test for the award of enhanced damages under 35 USC 284, holding that the aware of enhanced damages was within the discretion of the trial court, subject to review for abuse of that discretion.

The award of enhanced damages under Section 284 has had ups and downs under the Federal Circuit’s supervision.  Shortly after the Federal Circuit was created, in Underwater Devices, the Federal Circuit announced an “affirmative duty to exercise due care.”  Three years later in Kloster Speedsteel,  the Federal Circuit created an adverse inference from not introducing an opinion of counsel to demonstrate a lack of willfulness.  This adverse inference persisted until 2004, when the Federal Circuit recognized the gamesmanship surrounding opinions of counsel, and eliminated the adverse inference in Knorr-Bremse.  Then in 2007 the Federal Circuit raised the bar higher in Seagate establishing a two part, objective/subjective test.


Under Seagate, a patent owner must first show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent. Second, the patentee must demonstrate, again by clear and convincing evidence, that the risk of infringement was either known or so obvious that it should have been known to the accused infringer.  The Supreme Court said that this test is not consistent with 35 USC 284.

§284 provides simply that “the court may increase the damages up to three times the amount found or assessed.”  The Supreme Court noted that the statute contains no explicit limit or condition, and that the word “may” clearly connotes discretion.  However discretion is not without limits: a motion to a court’s discretion is a motion, not to its inclination, but to its judgment; and its judgment is to be guided by sound legal principles.

The Supreme Court instructed that awards of enhanced damages under the Patent Act over the past 180 years establish that they are not to be meted out in a typical infringement case, but are instead designed as a “punitive” or “vindictive” sanction for egregious infringement behavior. The Court said that:

The sort of conduct warranting enhanced damages has been variously described in our cases as willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—characteristic of a pirate.

Seagate reflects a sound recognition that enhanced damages are generally appropriate under §284 only in egregious cases, but the Supreme Court found the test “unduly rigid, and it impermissibly encumbers the statutory grant of discretion to district courts.”  In particular, the court was critical of the requirement of a showing of objective recklessness, finding no reason for the requirement in the context of deliberate wrongdoing.  The Federal Circuit said that the requirement of objective recklessness insulates an infringer from enhanced damages, so long has he or she can mount a reasonable defense, even if he did not act on the basis of a  defense or was even aware of it. The Supreme Court complaint that:

Under that standard, someone who plunders a patent—in- fringing it without any reason to suppose his conduct is arguably defensible—can nevertheless escape any come- uppance under §284 solely on the strength of his attorney’s ingenuity.

The Supreme Court said that culpability is generally measured against the knowledge of the actor at the time of the challenged conduct.  The Court found no reason to look to facts that the defendant neither knew nor had reason to know at the time he acted.  The Court said that Section 284 allows district courts to punish the full range of culpable behavior, although nothing says they must do so. 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. Consistent with nearly two centuries of enhanced damages under patent law, however, such punishment should generally be reserved for egregious cases typified by willful misconduct.


Sometimes the Application of a New Technology is Obvious from the New Technology Itself

In In re Cree, [2015-1365] (March 21, 2016), the Federal Circuit affirmed the decision of the PTAB in an ex parte reexamination that the claims directed to the production of white light through the “down-conversion” of blue light from LEDs was obvious from references teaching the down-conversion from other light sources including lasers.  The Board found that the claimed invention was predictable in view of the state of the art in LEDs, the market demand for white light devices, the finite number of identified means to convert light from LEDs into white light, and the advantages of using the down-conversion approach.

Among other things Cree contended that neither the Examiner nor the Board articulated any rational motivation to combine the teaches of down-conversion of laser light with high intensity LEDs.  The  Federal Circuit said that it was the availability of high-powered LEDs that provided the motivation to use such LEDs in known down-conversion production of white light.  Cree further argued that a person of ordinary skill would fail to appreciate that  teachings on down-conversion of laser light would be applicable to LEDs as well.  However the Federal Circuit found sufficient factual evidence that those of skill in the art have sufficient understanding of the scientific and engineering principles involved to have had a reason to combine the references.  Finally Cree argued that the Board’s rejection was based on “impermissible hindsight,” but the Federal Circuit found this to simply be “a repackaging” of the argument that there was insufficient evidence of a motivation to combine the references.

The Federal Circuit was also unimpressed with Cree’s showing of secondary considerations.  Cree pointed to third party press releases about the third party’s work on the same concept.  The Federal Circuit agreed that praise from a competitor tends to show non-obviousness, “self-serving statements from researchers about their own work do not have the same reliability.”   The Federal Circuit discounted evidence of licensing because it was unclear whether the licensing was due to the merits of the claimed invention or because of a desire to avoid litigation, prior business relationships, or for other economic reasons.”  Finally the Federal Circuit discounted evidence of commercial success because of a lack of showing of nexus between the invention and the success.


Actual Knowledge of a Published Application Can Trigger Pre-Issuance Damage (Quick Put Your Head in the Sand)

In Rosebud LMS Inc. v. Adobe systems Inc., [2015-1428] (February 9, 2016), the Federal Circuit affirmed the grant of summary judgment that Adobe Systems Inc. was not liable for pre-issuance damages under 35 U.S.C. §154(d) because it had no actual notice of the published patent application that led to asserted U.S. Patent No. 8,578,280.

35 USC 154(d) provides that:

a patent shall include the right to obtain a reasonable royalty from any person who, during the period beginning on the date of publication of the application for such patent under section 122(b) . . .and ending on the date the patent is issued (A)(i) makes, uses, offers for sale, or sells in the United States the invention as claimed in the published patent application or imports such an invention into the United States; . . . and (B) had actual notice of the published patent application

The Rosebud argued that Adobe had actual notice of its patents because it had previously sued Adobe on the grandparent of the patent in suit, that Adobe followed Rosebud and its product and sought to emulate some of its product’s features; and that it would have been standard practice in the industry for Adobe’s counsel to search for related patents.  Adobe, without conceding knowledge, argued that some affirmative action on the part of Rosebud was required to put Adobe on “actual notice” of the patent.

In a case of first impression, the Federal Circuit rejected the argument that some action on the part of patent owner is required for actual notice, but agreed that constructive notice is not sufficient to give “actual notice.”  Adobe presented a compelling argument based upon the legislative history of 154(d), but the Fedearl Circuit noted that the language enacted by Congress was not consistent with Adobe’s interpretation.  The Federal Circuit also distinguished the interpretation of 287(a) requiring an affirmative act to put an infringer on notice to be entitled to damages, noting the difference in the language of the two sections and noting that Congress could have used similar language in 154(d), but did not.

Noting several good reasons why some affirmative action on the part of the patent owner might make good policy sense, the Federal Circuit invited Congress to amend the statute if it wants a different result.

Even under this lesser standard for actual notice, the Federal Circuit agreed that Rosebud failed to show that Adobe had actual notice of the patent.  The Federal Circuit did not find that the earlier litigation on the grandparent of the current patent necessarily put Adobe on notice of the published application, it rejected the argument Adobe “followed” Rosebud and its products, is insufficient, and lastly rejected the argument that Adobe’s outside counsel would have discovered the publication preparing for the earlier litigation, noting that it never reached the claim construction stage because Rosebud missed all of its court-ordered deadlines.

Companies should rethink their competition monitoring programs.  Acquiring actual knowledge of a published application increases the company’s exposure to pre-issuance damages.  If the company actually uses its knowledge of the published application to reduce its liability — for example by designing around the claims or finding invalidating prior art — then this increased exposure is probably worth it.  However, if the knowledge of the published application is not going to be put to good use, the increased exposure comes with no benefit.



Regarding Beauregarding

A Beauregard claim  is a claim to a computer program written as a claim to an article of manufacture: a computer-readable medium on which instructions are encoded for carrying out a process.  Beauregard appealed the rejection of his claims directed to software on a tangible storage medium.  The Court never approved this method of claiming software, because the Commissioner of Patents conceded that “that computer programs embodied in a tangible medium, such as floppy diskettes, are patentable subject matter under 35 U.S.C. § 101 and must be examined under 35 U.S.C. § 102 and 103,” and dismissed the appeal In re Beauregard, 53 F.3d 1583 (Fed. Cir. 1995).

This worked well until In re Nuijten, 500 F.3d 1346 (Fed. Cir. 2007), where the Federal Circuit held that signals were not patent eligible, because their ephemeral nature kept them from falling within the statutory categories of 35 U.S.C. § 101.  This undermined  Beauregard claims to computer programs electronically distributed.  In 2010, the USPTO advised applicants that, to avoid running afoul of In re Nuijten, software claims should be directed to non-transitory computer-readable media.

However, the USPTO’s wording may be problematic, because rewritable storage media such as flash drives, are regarded by at least some as “transitory.” To resolve this potential issue with the USPTO’s non-transitory computer-readable media, it may behoove the applicant to provide an explanation or definition of “non-transitory” that does not exclude legitimate tangible temporary storage media.  For example,  this language from recently issued U.S. Patent No. 9113131:

Generally speaking, a computer-accessible medium may include any tangible or non-transitory storage media or memory media such as electronic, magnetic, or optical media—e.g., disk or CD/DVD-ROM coupled to computer system 400 via bus 430. The terms “tangible” and “non-transitory,” as used herein, are intended to describe a computer-readable storage medium (or “memory”) excluding propagating electromagnetic signals, but are not intended to otherwise limit the type of physical computer-readable storage device that is encompassed by the phrase computer-readable medium or memory. For instance, the terms “non-transitory computer-readable medium” or “tangible memory” are intended to encompass types of storage devices that do not necessarily store information permanently, including for example, random access memory (RAM). Program instructions and data stored on a tangible computer-accessible storage medium in non-transitory form may further be transmitted by transmission media or signals such as electrical, electromagnetic, or digital signals, which may be conveyed via a communication medium such as a network and/or a wireless link.

U.S. Patent No. 9110963 explains:

The terms “tangible” and “non-transitory,” as used herein, are intended to describe a computer-readable storage medium (or “memory”) excluding propagating electromagnetic signals, but are not intended to otherwise limit the type of physical computer-readable storage device that is encompassed by the phrase computer-readable medium or memory. For instance, the terms “non-transitory computer readable medium” or “tangible memory” are intended to encompass types of storage devices that do not necessarily store information permanently, including for example, random access memory (RAM). Program instructions and data stored on a tangible computer-accessible storage medium in non-transitory form may further be transmitted by transmission media or signals such as electrical, electromagnetic, or digital signals, which may be conveyed via a communication medium such as a network and/or a wireless link.

A simpler explanation is provided in U.S. Patent  No. 9148676:

The term “non-transitory”, as used herein, is a limitation of the medium itself (i.e., tangible, not a signal ) as opposed to a limitation on data storage persistency (e.g., RAM vs. ROM).

When claiming software stored on a computer readable medium, explaining the claim terms may be important.

Know your patent documents

Most are familiar with a U.S. utility patent, have a seven digit number followed by a “B”:


Beginning in March 2001, applications have been published (unless the applicant requests non-publication at the time of filing.  Publications are readily distinguished by the eleven digit number — four digits representing the year, and the seven digits representing a running count for the year:


Design patents have a six digit number prefaced with a “D” and followed by an “S”:


Plant patents have a five digit number prefaced with a “PP” and followed by a “P”:
PPReissue patents have a five digit number prefaced with an “RE” and followed by an “E”:


In addition to patents, there are other patent related documents that patent professionals occasionally stumble upon.  Defensive Publications were offered between April 1968 and May 8, 1985, and were replaced by Statutory Invention Registrations.  They have up to a  six digit number prefaced with a “T”:


Statutory Invention Registration is a registration of an invention pursuant to 35 USC §157, and replaced Defensive Publications.  SIRs were eliminated by the AIA in 2011. An SIR has up to a four digit number, prefaced by an “H” and followed by an “H”:



Just Because You Can, Doesn’t Mean You Should

In Ethicon Endo-Surgery, Inc. v. Covidien LP, [2014-1771](January 13, 2016), the Federal Circuit held that the same panel of the PTAB can make the decision to institute an IPR and the final written decision, and that the PTAB did not err in finding the claims obvious.

The Federal Circuit held that neither the statute nor the Constitution precludes the same panel of the Board that made the decision to institute inter partes review from making the final determination, rejecting Ethicon’s challenge that this process raises “serious due process concerns.”  The Federal Circuit said that combining the decision to institute with the final decision in a single panel is less problematic than other procedures approved by the Supreme Court. The Federal Circuit said that both the decision to institute and the final decision are adjudicatory decisions that do not involve combining investigative and/or prosecutorial functions with an adjudicatory function, and found the procedure directly analogous to a district court determining whether there is “a likelihood of success on the merits” and then later deciding the merits of a case.

Even if not Constitutionally infirm, a procedure that requires a panel of the Board to decide to institute without receiving evidence from the patent owner, and then deciding whether they were wrong does seem to be biased against the Patent Owner.  The USPTO proposed a pilot program, under which an IPR trial will be conducted by a panel of three APJs, two of whom were not involved in the determination to institute the IPR.  The USPTO published a request for comments in the Federal Register on August 25, 2015, seeking public comment on the proposed pilot program, and the comment deadline was later extended to November 18, 2015.  The AIPLA weighed-in in favor of the change, noting that it would remove the actual or perceived bias in the process.

Teaching Away Must Be Apparent from the Art as a Whole, and not Just Isolated Examples

In Merck & Cie v. Gnosis S.P.A., [20140-1779] (Fed. Cir. 2015) the Federal Circuit affirmed a PTAB decision in an IPR that the claims were invalid for obviousness, rejected patent owner Merck’s arguments that the prior art taught away form the claimed method, and that objective indicia of non-obviousness further support the patentability of the claims of U.S. Patent No. 6,011,040 relating to methods of using folates to lower levels of homocysteine in the human body.

The Federal Circuit said that if all elements of the claims are found in a combination of prior art references, as is the case here, the fact finder should further consider whether a person of ordinary skill in the art would be motivated to combine those references, and whether in making that combination, a person of ordinary skill would have a reasonable expectation of success, and found that the Board’s finding of a motivation to combine the prior art to arrive at the claimed method was supported by substantial evidence.

The Federal Circuit rejected Merck’s argument that the prior art taught away from the combination, stating that Merck was citing isolated prior art disclosures, and that viewing the prior art as a whole.  The Federal Circuit also rejected Merck’s argument that there was no showing that a person of ordinary skill would have a reasonable expectation of success, stating that KSR does not require an explicit statement of a reasonable expectation of success in every case.  The Federal Circuit said the Board impliedly found a reasonable expectation of success, and declined to overturn the Board’s decision for failure to state expressly that a person of ordinary skill would have had a reasonable expectation of success.

With respect to objective indicia of non-obviousness, the Federal Circuit noted that even when present, however, objective indicia “do not necessarily control the obviousness determination.”  The Federal Circuit found that the Board properly considered Merck’s evidence regarding objective indicia of nonobviousness, but found that the nexus between the merits of the invention and the evidence of commercial success, licensing, copying, and industry praise was weak.  Thus, the Board’s finding that this evidence of commercial success should be afforded little weight was supported by substantial evidence.






PTAB Incorrectly Determined that Claimed Element was Printed Matter where that Matter was not Claimed for its Communicative Content

In In re Distefano, [2015-1453] (Fed. Cir. 2015), the Federal Circuit reversed the PTAB’s affirmance of the rejection of claim 24 of Distefano’s patent application, rejecting the PTAB’s determination that “one of the limitations of independent claim 24 fell within the printed matter doctrine and therefore was not entitled to patentable weight.”

Distefano claimed a method of designing web pages.  Claim 24 required:

     24. A method of designing, by a user in a user interface having first and second display regions each capable of displaying a plurality of element [sic], an electronic document, comprising:

selecting a first element from a database including web assets authored by third party authors and web assets provided to the user interface or outside the user interface by the user;

displaying the first element in the second display region;

interactively displaying the electronic document in the first display region;

modifying the first element displayed in the second display region upon receiving a first command to modify the first element in the second display region; and

displaying the modified first element in the first display region, wherein the modified first element forms at least part of the electronic document.

The parties agreed that the  elements other than the highlighted selecting limitation were anticipated, and the PTAB refused to give the selecting limitation patentable weight under the printed matter doctrine. The Federal Circuit explained that it has consistently limited the printed matter rule to matter claimed for its communicative content.  The Federal Circuit explained that only if the limitation in question is determined to be printed matter does one turn to the question of whether the printed matter nevertheless should be given patentable weight. The determination of whether printed matter is given such weight turns on whether the claimed informational content has a functional or structural relation to the substrate.

The Federal Circuit found that the PTAB erred in its application of the first step.  The Federal Circuit recognized that the selected web assets “can and likely do communicate some information” but found that “the content of the information is not claimed.”  Thus, it did not have to decide whether the printed matter should be give printed matter.








No Need to Accentuate the Positive — Eliminate the Negative

In Inphi Corporation v, Netlist, Inc., [2015-1179] (November 13, 3015), the Federal Circuit affirmed the BPAI decision affirming the examiner’s final decision declining to reject claims amended during inter partes reexamination to add a negative limitation. At issue in this appeal is a negative claim limitation Netlist introduced by amendment, limiting the
claimed chip selects to exclude three particular types of signals (CAS, RAS, and bank-address signals):

wherein the system memory domain is compatible with a first number of chip selects, and the physical memory domain is compatible with a second number of chip selects equal to twice the first number of chip selects, wherein the plurality of memory devices comprises double-data rate (DDR) dynamic random-access memory (DRAM) devices and the chip selects of the first and second number of chip selects are DDR chip selects that are not CAS, RAS, or bank address signals.

The Federal Circuit said that “[n]egative claim limitations are adequately
supported when the specification describes a reason to exclude the relevant limitation.” Santarus, 694 F.3d at 1351.  The Federal Circuit characterized the issue as  whether the specification of the ’537 patent provides a “reason to exclude” CAS, RAS, or bank address signals that is sufficient to satisfy the written description requirement.  The Federal Circuit quoted from Santarus that:

Negative claim limitations are adequately supported when the specification describes a reason to exclude the relevant limitation. Such written description support need not rise to the level of disclaimer. In fact, it is possible for the patentee to support both the inclusion and exclusion of the same material.

The Federal Circuit said that the “reason” required by Santarus is provided, for instance,
by properly describing alternative features of the patented invention.

The parties agreed that the disclosure in the ’537 patent distinguishes among the relevant
signal types, but disagreed about whether that distinction creates a “reason to exclude” that satisfies the requirements of § 112, paragraph 1, and the Federal Circuit held that the disclosure as an alternative was a sufficient reason to exclude.

As long as the disclosure makes a distinction, you don’t have to accentuate the positive, or eliminate the negative, the disclosure will support a negative limitation.