IP Intelligence

IP Intelligence

Insight on Intellectual Property

Supreme Court Denies Sequenom’s Petition for Certiorari

Supreme Court iStock_000008258486_LargeOn June 27, 2016, the U.S. Supreme Court, without comment, denied Sequenom’s petition for certiorari, leaving in place the Court’s previous rulings prohibiting the patenting of laws of nature and natural phenomenon.

Sequenom filed its writ of certiorari with the U.S. Supreme Court on March 21, 2016, asking the Court to provide clarification regarding the limits of 35 U.S.C. §101. Sequenom’s petition presented the following issue:

Whether a novel method is patent-eligible where

(1) a researcher is the first to discover a natural phenomenon,

(2) that unique knowledge motivates him to apply a new combination of known techniques to that discovery and

(3) he thereby achieves a previously impossible result without preempting other uses of the discovery. Continue Reading

Supreme Court Clarifies Test for Fee-Shifting in Copyright Cases

The Supreme Court on June 16 issued a unanimous ruling clarifying the test for awarding attorneys’ fees to successful copyright litigants.  The decision, in Kirtsaeng v. John Wiley & Sons, Inc., is sure to have lasting impact on how both plaintiffs and defendants weigh the risk of litigating a copyright case to completion.

BACKGROUND

The underlying facts are fairly straightforward.  Kirtsaeng was a Cornell graduate student who learned that foreign versions of certain textbooks were sold at lower prices than identical versions in the U.S.  Seeing an opportunity, Kirtsaeng bought lawful copies of the books overseas and then shipped them to the U.S., where he sold them for less than the publisher’s U.S. price, pocketing a nice profit.

John Wiley & Sons, a textbook publisher, sued Kirtsaeng for copyright infringement in the Southern District of New York.  Kirtsaeng argued that he was protected under the U.S. Copyright Act’s “First Sale” doctrine.  In general terms, that doctrine holds that once a copyright holder sells a copy of his work, that copy may be resold without restriction.  When the Kirtsaeng case was tried, the circuit courts were divided over whether the First Sale doctrine applied to copies of works first sold outside the U.S.  The Supreme Court had deadlocked 4-4 on the issue as recently as 2010.  Thus, the contrary positions advanced by Kirtsaeng and Wiley & Sons were both objectively reasonable. Continue Reading

High Court Relaxes Standards for Enhanced Damages in District Court Patent Litigation

On June 13, 2016, in a much-anticipated joint holding in Halo/Stryker, [1] the Supreme Court unanimously overturned the Federal Circuit’s rigid test for willful infringement under Seagate and conferred discretion on district courts, “narrowed” by nearly 200 years of judicial practice, to award enhanced damages to patent owners under 35 U.S.C. § 284 for “egregious cases of culpable behavior.” The High Court’s opinion was authored by Chief Justice Roberts, with Justices Breyer, Kennedy and Alito concurring.

Although the possibility of enhanced damages on a theory of willful infringement would strike fear into the heart of any accused infringer, the two-pronged test for willful infringement previously promulgated by the Federal Circuit proved challenging in practice for patent owners. The Seagate standard, as it was applied prior to the Supreme Court’s decision in Halo/Stryker, required the patent owner to prove that the accused infringer’s conduct was objectively and subjectively culpable, and it needed to do so by a heightened standard of clear and convincing evidence (compared with the preponderance of the evidence standard needed to prove patent infringement). With respect to the objective component, patent owners needed to show that the accused infringer’s defenses were objectively unreasonable – meaning that an accused infringer with effective legal counsel could avoid willful infringement by demonstrating, regardless of the defendant’s culpable pre-litigation conduct, that its defenses raised during the litigation were objectively reasonable. Continue Reading

First Post-Grant Review Written Opinions from PTAB Invalidate Two Patents for Livestock Valuation

The Patent Trial and Appeal Board (PTAB) issued its first written opinions based on a trial of the relatively new Post-Grant Review (PGR) proceeeding and genetic factors.

American Simmental Association (ASA) brought the petitions for review of the Leachman patents in response to a lawsuit filed by Leachman. ASA is an organization formed in 1968 with the stated mission of making cattle production more profitable by improving livestock production through advances in science and technology. Leachman Cattle of Colorado has the same stated philosophy, and traces its roots back to 1935, when the founders were college roommates at Ohio State University.

In 2014, Leachman sued ASA, claiming that its Feeder Profit Calculator infringed Leachman’s patents. Leachman had previously attempted to negotiate a license with ASA, but ASA refused. The filing of the suit gained little national attention, but was reported on by Progressive Cattlemen as causing a stir within the industry. http://www.progressivecattle.com/news/industry-news/6320-leachman-patent-lawsuit-stirs-debate-at-bif (July 12, 2014). Continue Reading

Apportioning for the Standard When Valuing Standards-Essential Patents

Commonwealth Scientific and Industrial Research Organisation (CSIRO), a national research organization of Australia, recently filed a petition for certiorari with the Supreme Court. CSIRO presents the following question: Is the Federal Circuit’s promulgation of rigid legal rules to control the weight to be given by the trier of fact to evidence of patent infringement damages proper under 35 U.S.C. § 284?[1]

HISTORY OF THE CASE

CSIRO owns U.S. Patent No. 5,487,069 (the ’069 patent), which covers technology designed to solve the problem of multipath interference in wireless communications.[2] The ’069 patent was incorporated into several of the 802.11 series of wireless communication standards, including 802.11a and 802.11g.[3] CSIRO initially agreed to license the ’069 patent on reasonable and nondiscriminatory (RAND) terms during the 802.11a standardization process, but repeatedly refused related requests for future iterations of the standard.[4] In the past several years, CSIRO has enforced the ’069 patent in litigation, including against Cisco Systems, Inc. (Cisco). Cisco eventually stipulated to validity and infringement, and the court determined a reasonable royalty chart after a bench trial based on sales volume and brand ranging from $0.60 per Wi-Fi product to $1.90 per Wi-Fi product.[5] Continue Reading

Court Decides that ANDA Approved Before Patent Issued Cannot Infringe 35 U.S.C. § 271(e)(2)(A)

Although the Hatch-Waxman Act was passed by Congress decades ago, it still produces new questions. Despite vigorous argument by the patent owner, a district court dismissed a count alleging that the ANDA-filer infringed under 35 U.S.C. § 271(e)(2)(A), leaving in place the unchallenged count for infringement under § 271(a). Ferring B.V. v. Actavis, Inc., Civil Action No. 15-4222 (D.N.J. May 26, 2016).

The FDA approved Ferring’s NDA for tranexamic acid formulations on November 13, 2009. Defendant Watson Laboratories filed its Abbreviated New Drug Application (ANDA) on July 23, 2010, seeking FDA approval to market generic tranexamic acid. The United States Patent and Trademark Office published Ferring’s patent application on May 7, 2012, but it did not issue the patent until June 23, 2015, three and a half years after the FDA approved Watson’s ANDA and Watson began marketing its generic product on January 3, 2013. After Ferring filed its complaint alleging infringement under § 271(e)(2)(A) and seeking damages under § 271(a) for Watson’s sale of its generic product, the defendants moved to dismiss the claim for infringement under § 271(e)(2)(A) under Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction and 12(b)(6) for failure to state a claim. The court denied the motion under Rule 12(b)(1) and granted the motion under Rule 12(b)(6).

The court first addressed the motion to dismiss for lack of subject matter jurisdiction. Relying on the Federal Circuit’s holding in AstraZeneca Pharms. LP v. Apotex Corp., 669 F.3d 1370, 1377 (Fed. Cir. 2012) that “the requirements for jurisdiction in the district courts are met once a patent owner alleges that another’s filing of an ANDA infringes its patent under § 271(e)(2), and this threshold jurisdictional determination does not depend on the ultimate merits of the claims,” the court denied the motion to dismiss for lack of subject matter jurisdiction because “Plaintiffs have alleged that Defendants’ ANDA infringes . . ., no matter the merits of Plaintiffs’ claim.”  Continue Reading

New Changes to European Trademark Prosecution

As of March 23, 2016, the “Community Trade Mark” (CTM) is going by a new name: the “European Union Trade Mark” (EUTM),  reflecting the evolution of the European Community into the European Union. By force of Regulation No. 2015/2424, the Office for Harmonization in the Internal Market (OHIM), the body responsible for administering the European trademark regime, will now be called the European Union Intellectual Property Office (EUIPO). EU member states will have three years to implement the new EU trademark directive into their national laws.

The changes to the EU trademark regime are not merely cosmetic. Substantive changes include the following:

  • Marks are no longer required to be “capable of being represented graphically.” Instead, marks must be capable of “being represented on the Register of European Union trade marks, . . . in a manner which enables the competent authorities and the public to determine the clear and precise subject matter of the protection afforded to its proprietor.” For example, smells and sounds may now be protected.
  • All goods and services to be offered under the mark must be clearly identified in the application. Checking a box for a particular Nice Classification heading will no longer claim all goods and services that might be thought to fall within that class. Because of this change, owners of existing registrations applied for before June 22, 2012, will have until September 24, 2016, to file a declaration stating the intended class of goods and services. Absent such a filing, the registration will only be valid for goods and services that are clearly covered by the literal meaning of the indications included in the heading of the relevant Nice Classification. Continue Reading

USPTO Memo re Enfish v. Microsoft

The word patent highlighted in a dictionary

This is an update to my recent article about the Federal Circuit’s decision in Enfish v. Microsoft.

In a memo to the Patent Examining Corps dated May 19, 2016, Deputy Commissioner Robert Bahr said that the Enfish decision provides “additional information and clarification on the inquiry for identifying abstract ideas.” The gist of the memo is that when performing an analysis of whether a claim is directed to an abstract idea, examiners should continue to determine if the claim recites a concept similar to concepts previously found abstract by the courts. In addition, the fact that a claim is directed to an improvement in computer-related technology can demonstrate that the claim does not recite a concept similar to previously identified abstract ideas.

Of importance to applicants and practitioners in the software field, the memo noted that to make the determination of whether the Enfish claims were directed to an improvement in existing computer technology, the court looked to the teachings of the specification; specifically, the court identified the specification’s teachings that the claimed invention achieves other benefits over conventional databases, such as increased flexibility, faster search times and smaller memory requirements. It was noted that the improvement does not need to be defined by reference to “physical” components, but instead could be defined by “logical structures and processes.”

I believe that software patents can be strengthened against Alice attacks by including descriptions of structural (as opposed to functional) features of the inventive software. Such structural features can include “program structures” and “data structures.” Examples of program structures include structures such as program loops, neural network and other architectural aspects. Data structures can include trees, graphs, link lists, arrays, etc. These structures can be effectively used to constrain the claim scope sufficiently to avoid invalidation based on the abstract idea exception.

For further reading on the use of structural claim limitations in software patents, see my article here.

Comparing the Defend Trade Secrets Act and the Uniform Trade Secrets Act

trade secrets text - file cabinet label, bronze holder against grunge and scratched wood

As we have previously discussed on the blog, President Obama signed the Defend Trade Secrets Act (DTSA) into law on May 11, 2016. Fortunately, while the law has many new components that businesses need to consider, parts of the DTSA are derived from the Uniform Trade Secrets Act (UTSA). The UTSA has been adopted, in various forms, by 47 states to date. Therefore, there is a large body of state law that has developed on the UTSA that may be applicable to the DTSA. This latest blog entry in our series on the DTSA analyzes some of the differences and similarities between the DTSA and UTSA, specifically the acts’ “trade secrets” and “misappropriations” definitions and their statutes of limitations.

I. “Trade Secret” Definition

The UTSA and DTSA have similar but slightly different definitions of “trade secrets”:

UTSA Trade Secret Definition

§ 1(4) “Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that:

(i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and

(ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

DTSA Trade Secret Definition

18 U.S.C. § 1839(3) as amended by § 2(b)(1) of DTSA

(3) the term “trade secret” means all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if—

(A) the owner thereof has taken reasonable measures to keep such information secret; and

(B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by another person who can obtain economic value from the disclosure or use of the information;

Continue Reading

Supreme Court to Consider Patent Laches in Wake of Copyright Laches Decision

When we last discussed patent laches here, the Federal Circuit had voted to rehear, en banc, SCA Hygiene Products’ patent infringement claim, which invoked a laches defense. At that time, the Supreme Court had recently decided in Petrella v. Metro-Goldwyn-Mayer, Inc.[1] that laches was not a defense to a copyright infringement claim brought within the codified statute of limitations. The en banc Federal Circuit subsequently ruled in SCA Hygiene last September that, despite Petrella’s copyright holding, laches is still a viable bar to legal relief in patent cases.

Laches is an equitable defense to a claim that is available if an unreasonable delay in asserting the claim has unfairly prejudiced the party being sued. In the patent infringement context, this might include a patentee’s allowing damages to accrue before bringing a patent infringement suit against an infringer that might have otherwise stopped infringing had it been notified in a timely manner. Laches is a common-law defense that has long been available to alleged infringers, but the Supreme Court has decided to consider whether the Federal Circuit correctly ruled that it applies to bar legal damages in the patent context despite the Court’s holding in Petrella.

In Aukerman,[2] the en banc Federal Circuit had previously ruled that laches does apply as a defense to a claim for patent infringement damages. The question presented in the SCA Hygiene case is as follows: “Whether and to what extent the defense of laches may bar a claim for patent infringement brought within the Patent Act’s six-year statutory limitations period, 35 U.S.C. § 286.” Continue Reading