IP Intelligence

IP Intelligence

Insight on Intellectual Property

Important Federal Circuit Decision Provides More Clues on Software Eligibility

On Sept. 13, 2016, the Court of Appeals for the Federal Circuit gave applicants and patentees another tool with which to argue for the patent eligibility of their software innovations, finding that McRO’s lip-synchronizing patents were eligible under 35 U.S.C. § 101.  Judge Reyna, joined by Judges Taranto and Stoll, determined that representative claim 1 of the McRO patent was not directed to an ineligible abstract idea.  This is because the genus of rules limiting the claim contains sufficient specificity to go beyond the abstract by rendering and applying information, rather than merely organizing it, and avoids preempting all means of arriving at the result.

As we previously begged for a repeatable test not turning on subtleties of the individual matter,[1] we would enjoy ending the blog post here.  Unfortunately, we cannot. Continue Reading

Federal Circuit Holds PTAB Unreasonable in Denying Motion to Amend

In Veritas Technologies LLC v. Veeam Software Corp., Appeal No. 2015-1894 (Fed. Cir. Aug. 30, 2016), the Federal Circuit affirmed the PTAB’s conclusion of obviousness but vacated its denial of a conditional motion to amend and remanded for the PTAB to address the patentability of the substitute claims. The patent owner, Veritas, argued for a narrow construction of the unamended claims that it contended distinguished over the prior art, but the board rejected that construction as narrower than the broadest reasonable construction. Veritas had filed a conditional motion to amend to add narrower claims if the board concluded that the existing claims were unpatentable. But the board denied the motion to amend. Continue Reading

Federal Circuit Provides Guidance on Use of Common Sense in Obviousness Analysis

Last week, in Arendi S.A.R.L. v. Apple, the Federal Circuit reversed a Patent Trial and Appeal Board (PTAB) finding of invalidity in an inter partes review that relied on “common sense” to supply a claim limitation that was not disclosed by the prior art. When used to support a finding of obviousness, common sense is typically applied to provide a motivation to combine references, rather than to provide a limitation that is missing from the prior art. The court’s decision in this case is worth noting because it signals the Federal Circuit’s growing concern about conclusory PTAB findings of obviousness that are not supported by the record. Continue Reading

Defend Trade Secrets Act – A Budding Avenue for Trade Secret Enforcement

In June, agriculture giant Monsanto was the first to use the Defend Trade Secrets Act (DTSA) by filing a federal suit in the Eastern District of Missouri naming one former employee and a number of John and Jane Does as defendants.

The DTSA, 18 U.S.C. 1836, provides a federal civil action for filing a trade secret claim. Previously, the only federal relief was a criminal action under the Economic Espionage Act. One notable feature of the act is that it does not pre-empt traditional state law claims for trade secret misappropriation. In addition to providing a federal claim, the DTSA offers enhanced damages, ex parte seizure provisions and the ability to recover attorneys’ fees. To take advantage of the act, employers must accept its whistleblower immunity provisions and provide notice to their employees of the availability of such immunity.

From an intellectual property strategy perspective, recent decisions limiting the scope of patent and copyright protection have increased the importance of trade secrets in an intellectual property portfolio. For example, the Supreme Court’s Alice decision narrowing patentable subject matter relating to software has encouraged providing software as a service and maintaining source code as a trade secret. As a result, trade secret information often lies in the digital archives of companies, and increasingly, these archives are under attack from outside sources or through targeted recruitment of key employees. Monsanto’s facts are just one example of such efforts to misappropriate trade secret information. Continue Reading

PTO Provides Additional Guidance on Patent Eligibility of Life-Sciences Method Claims

 

On July 14, 2016, the PTO sent a memorandum to the examining corps regarding the recent rulings in Rapid Litigation Management Ltd. v. Cellzdirect, Inc., Appeal No. 2015-1570 (Fed. Cir. July 5, 2016), and Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371 (Fed. Cir. 2015), cert. denied, No. 15-1102, 2016 WL 1117246 (June 27, 2016). After briefly describing the cases, the memorandum concludes that they “do not change the subject matter eligibility framework [of Mayo/Alice], and the USPTO’s current subject matter eligibility guidance and training examples are consistent with these cases.” The memorandum does acknowledge, however, that Rapid Litigation Management “provide[s] additional information and clarification on the inquiry for determining whether claims are directed to a judicial exception” to 35 U.S.C. § 101. Continue Reading

Federal Circuit Helps Clarify What Constitutes a Commercial Sale under Pfaff

In The Medicines Co. v. Hospira Inc., Appeal No. 2014-1469 (Fed. Cir. July 11, 2016), the Federal Circuit issued a unanimous en banc decision ruling that the on-sale bar was not triggered by a supplier’s sale of manufacturing services to an inventor largely because the title to the invention and the right to market the invention never passed from the inventor to the supplier.

BACKGROUND

The Medicines Company (MedCo) contracted with Ben Venue Laboratories (Ben Venue) to manufacture Angiomax, a drug product, which is covered by two of MedCo’s patents (U.S. Patent Nos. 7,582,727 and 7,598,343).  Slip op. at 5.  Before the critical date from which the on-sale bar of § 102(b) must be measured, MedCo paid Ben Venue a fee to manufacture three batches of product according to the patents-at-issue.  Slip op. at 6-7.  The batches were provided by Ben Venue and placed in quarantine with MedCo’s distributor, and only released and made available for sale after the critical on-sale bar date.  Slip op. at 7-8. Continue Reading

Federal Circuit Provides Additional Guidance in Reversing Holding of Patent-Ineligibility of Biotech Invention

Although it is not yet a bright line, the Federal Circuit has considerably decreased the fuzziness of the distinction between patent-eligible and patent-ineligible inventions, at least where the exception to 35 U.S.C. § 101 is a law of nature. In Rapid Litigation Management Ltd. v. Cellzdirect, Inc., Appeal No. 2015-1570 (Fed. Cir. July 5, 2016), the Federal Circuit reversed the district court’s holding of invalidity under § 101, ruling that the district court erred in applying both step 1 and step 2 of the Supreme Court’s framework for determining patent eligibility. See Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2355 (2014).

The district court held that the patent in suit is directed to a law of nature—that hepatocytes, a type of liver cell, are capable of surviving multiple freeze-thaw cycles—and that the patented process lacks the requisite inventive concept. Hepatocytes have a number of uses, such as for investigating how drugs may be metabolized by the liver or measuring a drug’s effect on liver biology, but their availability is limited and their life span is short. The prior art disclosed freezing hepatocytes (“cryopreservation”), thawing them when needed, and recovering the viable cells using density gradient fractionation, but persons of ordinary skill in the art understood that that process could damage the cells and lead to poor recoveries of viable cells. Moreover, pooled samples from multiple donors, desirable to create a collection of cells approximating average liver cells, could be created only by accumulating and freezing cells from single donors and then thawing and combining them for immediate use. Those skilled in the art believed that cryopreservation could be employed only once, and cryopreservation could damage cells, which severely limited the creation of pooled cells.

The inventors’ discovery was a law of nature: that a fraction of hepatocytes can survive multiple freeze-thaw cycles. Based on that discovery, the inventors claimed a method of producing a collection of hepatocytes by subjecting previously frozen and thawed cells to fractionation to separate and recover viable cells, and refreezing the viable cells, which, after being thawed again, exhibit 70 percent viability. Thus, claim 1 recites: Continue Reading

Federal Circuit Confirms That the BPCIA Always Requires Post-Licensure Notice

The Federal Circuit answered one of the questions left open by its July 27, 2015, decision in Amgen Inc. v. Sandoz Inc. (Appeal No. 2015-1499): whether the 180-day commercial marketing notice under the Biologics Price Competition and Innovation Act (BPCIA) is mandatory even for a biosimilar applicant that has participated in the so-called patent dance. Yesterday, in a decision that may delay lower-cost competition for biologics, the Federal Circuit ruled in Amgen, Inc. v. Apotex, Inc. (Appeal No. 2016-1308) that all biosimilar applicants must provide their reference-product rivals at least 180 days’ notice before launching a biosimilar.

As was discussed in a July 27, 2015, BakerHostetler Alert, the Federal Circuit had found in the earlier Sandoz case that the 180-day notice was mandatory at least for a biosimilar applicant that had elected not to participate in the BPCIA’s patent dance – an exchange of patent information intended to streamline disputes that starts with the applicant’s providing its application and related information to the reference-product sponsor. That decision did not address the situation of an applicant that did participate in the patent dance. Yesterday’s decision holds that the requirement applies to applicants in both situations, and reiterated that the notice may be effectively given only after the FDA approves the biosimilar application. Continue Reading

CAFC Hands Down Significant § 101 Decision in Bascom Global Internet

In Bascom Global Internet v. AT&T Mobility LLC, Bascom Global sued for infringement of US Patent No. 5,987,606, titled “Method And System For Content Filtering Information Retrieved From An Internet Computer Network,” November 16, 1999 (the ’606 patent). The defendant moved to dismiss the complaint under Rule 12(b)(6), and the motion for dismissal was granted on the ground that the claims of the ’606 patent are ineligible as a matter of law under 35 U.S.C. § 101. In what could become a highly impactful decision, the Federal Circuit vacated and remanded the district court’s order dismissing the complaint.

This is only the third time that the Federal Circuit has held software claims patent eligible since the Supreme Court’s Alice decision (the first two were DDR and Enfish). Although these three cases have some common themes, they provide different paths to patent eligibility. Of the three decisions, Bascom may be the most generally applicable. Judge Chen wrote for the court, joined by Judge O’Malley. Judge Newman concurred, writing separately on her views of how to harmonize litigation on patentability and eligibility.

Background

The ’606 patent describes and claims a system for filtering Internet content. The patent describes its filtering system as a novel advance over prior art computer filters, in that no one had previously provided customized filters at a remote server. The claimed filtering system is located on a remote ISP server that associates each network account with (1) one or more filtering schemes and (2) at least one set of filtering elements from a plurality of sets of filtering elements, thereby allowing individual network accounts to customize the filtering of Internet traffic associated with the account. For example, one filtering scheme could be a word-screening type filtering scheme, and one set of filtering elements (from a plurality of sets) could be a master list of disallowed words or phrases together with an individual list of words, phrases or rules. Continue Reading