Metadata Could Help Independently Corroborate Inventor Testimony of Prior Conception
In Kolcraft Enterprises, Inc. v. Graco Children’s Products, Inc., Appeal Nos. 2018-1259, 2018-1260, inventor testimony of prior conception must be independently corroborated.
Kolcraft owns two design patents directed to children’s play equipment. Graco petitioned for inter partes review challenging both patents on several grounds, including obviousness based on a design patent. Following institution, Kolcraft filed a Patent Owner Response that included a partially redacted inventor declaration and exhibits. Seeking to establish prior conception, Kolcraft argued that at least one exhibit showed the relevant features. But neither the declaration nor the exhibits included specific dates of conception. Subsequently, Kolcraft provided Graco with an unredacted declaration that included the alleged conception dates. During depositions, one inventor testified that the dates in the declaration were based on metadata from the computer files associated with the declaration exhibits. Kolcraft did not submit the computer files to the Board and they were not part of the administrative record. The Board determined the inventor testimony of prior invention was not corroborated and that Graco’s obviousness reference was prior art.
The Federal Circuit affirmed. It held that inventor testimony of prior conception was not sufficiently corroborated because all supporting evidence depended solely on the inventors.
Federal Circuit Denies En Banc Review Regarding Eligibility of Medical Diagnostic Patents
In Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC, Appeal No. 2017-2508, the Federal Circuit voted 7-5 not to review en banc whether diagnostic claims are eligible for patent protection under § 101. The Federal Circuit’s denial of en banc review included eight different opinions, all of which indicate that the Supreme Court and/or Congress should intervene to clarify or modify the patent eligibility standards for medical diagnostic claims. Each of these opinions is summarized below:
Lourie (Joined by Reyna and Chen)
While expressing concerns with the current precedent, Judge Lourie concurred in the court’s decision not to rehear the case en banc because the Federal Circuit is bound by the Supreme Court’s decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc. (“Mayo”), which held that claims focused on detecting new and useful natural laws with conventional steps were patent ineligible. Judge Lourie suggested only claims directed to a natural law itself, not uses or detection of natural laws, should be excluded from patent eligibility.
Hughes (Joined by Prost and Taranto)
Judge Hughes indicated that Mayo prevents the Federal Circuit from reaching a different result from the panel’s majority, but describes the “bottom line for diagnostics patents” as “problematic” and invited the Supreme Court or Congress to further explicate the eligibility standards for diagnostics patents.
Dyk (Joined by Hughes, Joined in Part by Chen)
Judge Dyk stated that “[a]lthough Mayo’s framework is sound overall. . . the Mayo test for patent eligibility should leave room for sufficiently specific diagnostic patents” and called on the Supreme Court to reconsider the breadth of Mayo.
Judge Chen stated that the claims at issue do not appear to withstand Mayo’s scrutiny but would likely have been found patent eligible under the framework outlined by the Supreme Court in 1981 in Diamond v. Diehr (“Diehr”), where the claims are read “as a whole.” Judge Chen noted, however, that there is a serious question as to whether Diehr remains good law in view of Mayo, and encouraged the Supreme Court to resolve the question.
Moore (Joined by O’Malley, Wallach, and Stoll)
Judge Moore found that the claims at issue are distinguishable from Mayo and should be held eligible. Judge Moore noted that unlike in Mayo, where the claims recited nothing more than the natural law, the claims at issue here recite concrete steps that “specifically confine their reach to a specific application[.] “ Judge Moore discouraged additional en banc requests regarding diagnostic claims and encouraged parties to seek relief from the Supreme Court or Congress.
Newman (Joined by Wallach)
Judge Newman emphasized “the critical role of the patent system in achieving new diagnostic methods” and stated that “en banc review is needed to provide consistent and correct application of statute and precedent to methods of medical diagnosis.”
Stoll (Joined by Wallach)
Judge Stoll noted that every diagnostic claim before the Federal Circuit since Mayo has been found ineligible. According to Judge Stoll, Mayo’s principles “are not applicable to every individual diagnostic claim.” “Certain diagnostic claims, such as the ones at issue in this case, are so narrowly tailored that preemption is not a reasonable concern.” Judge Stoll wrote that the Federal Circuit was abdicating its responsibility by “consistently bypassing en banc review of a critical issue[.]”
Judge O’Malley stated that Federal Circuit precedent applies the Supreme Court’s holding in Mayo too broadly. Judge O’Malley further suggested that confusion regarding patent eligibility has been caused by the Supreme Court ignoring Congress’s direction to apply § 101 as written, and stated that “claims directed to uses of natural laws rather than the natural laws themselves would be eligible under § 101[.]” Judge O’Malley encouraged Congress to clarify that there should be no invention requirement read into § 101.
Broad Claim Language and Unpredictability in the Art Lead to Non-Enablement
In Enzo Life Sciences, Inc. v. Roche Molecular Systems, Inc., Appeal Nos. 2017-2498, -2499, -2545, -2546, broad patent claims were invalid as not enabled because the relevant art was unpredictable and practicing the full scope of the claims would require undue experimentation.
Enzo filed suits alleging infringement of the ’180 Patent by Roche, Becton Dickinson, and Abbott, and infringement of the ’405 Patent by Abbott alone. Both patents relate to the use of non-radioactively labeled polynucleotides in nucleic acid hybridization and detection applications. The district court granted summary judgment, holding that the asserted claims of the ʼ180 Patent and ’405 Patent were not enabled. Enzo appealed.
The Federal Circuit analyzed whether the ‘180 Patent specification enabled the creation of a labeled probe that is both hybridizable and detectable upon hybridization, as the asserted claims required. The court noted that the scope of the claims was “quite broad” and “encompasses all phosphate-labeled polynucleotides that are hybridizable and detectable,” placing “almost no limitations on the structure of the claimed polynucleotide,” and providing only “broad categories” of labels to be used. The court noted that the specification’s guidance on how such variables would affect the claimed probes was sparse, and that at the time of the invention, the art was highly unpredictable. Although Enzo argued that the ’180 Patent disclosed a working example, the court found the example to be a “paper” example which was never actually tested. Further, the court explained that even if the paper example worked, each labeled “polynucleotide would need to be tested,” so “undue experimentation would still be required with regard to the many other embodiments of the claims based on the number of possible embodiments and the unpredictability in the art.” As to the ’405 Patent, the court stated that since the claims were broader than those of the ’180 Patent, they were invalid as not enabled for the same reasons. Thus, the Federal Circuit affirmed.
Federal Circuit Rejects Written Description Analysis That Ignored Relevant Factors
In In Re: Global IP Holdings LLC, Appeal No. 2018-1426, a written description support for a claimed genus depends on the criticality or importance of the expressly disclosed species and the predictability of the relevant technology.
Global IP Holdings, LLC (Global) owns U.S. Patent No. 8,690,233 directed to carpeted automotive vehicle load floors. The ’233 patent claims a load floor with thermoplastic skins and a thermoplastic cellular core. Global filed a reissue application seeking to broaden the claims, replacing the term “thermoplastic” with “plastic.” Global submitted a declaration stating that use of plastic other than thermoplastic for vehicle load floors was known in the art at the time of the invention.
The Examiner rejected the claims, arguing that the change from “thermoplastic” to “plastic” introduced new matter. Global argued that disclosure of thermoplastic (species) supported the claiming of plastics (genus) since (1) the type of plastic used was not critical to the invention and (2) plastics other than thermoplastics were a predictable option. The Board affirmed the examiner’s rejection, finding that “regardless of the predictability of results of substituting alternatives, or the actual criticality of thermoplastics in the overall invention, [Global’s] Specification, as a whole, indicates to one skilled in the art that the inventors had possession only of the skins and core comprising specifically thermoplastic.” Global appealed.
The Federal Circuit found that the Board applied an incorrect legal standard. The court held that the level of detail required to satisfy the written description requirement varies depending on the “predictability of the relevant technology,” among other factors. Further, the court held that “criticality or importance of the expressly disclosed species may be relevant to whether an inventor had possession of a claimed genus.” Because the Board failed to evaluate these factors, the Federal Circuit vacated the Board’s decision and remanded with instructions for the Board to address them.
Standing to Appeal IPR Denied Where Petitioner Failed to Provide Evidence of Competitive Harm and Economic Loss
In General Electric Co. v. United Technologies Corp., Appeal No. 2017-2497, a petitioner who loses an IPR must proffer specific evidence of competitive injury or economic loss to establish Article III standing to appeal to the Federal Circuit.
General Electric (“GE”) petitioned for inter partes review (“IPR”) of a patent on geared-fan airplane engines owned by United Technologies Corporation (“UTC”). The Board rejected GE’s arguments and found the claims not obvious in view of the prior art. GE appealed.
At the Federal Circuit, UTC moved to dismiss GE’s appeal because GE lacked Article III standing. The Federal Circuit ordered UTC to brief the issue in its responsive appellate brief. The Federal Circuit allowed both sides to submit new evidence regarding GE’s alleged injury-in-fact caused by the challenged patent.
The Federal Circuit held GE lacked standing because it failed to establish injury-in-fact. GE argued that it was injured because the patent caused GE (1) competitive harm, (2) economic loss, and (3) the Board’s decision would estop GE from challenging the patent in the future. In support of its competitive harm and economic loss arguments, GE submitted an employee declaration that the patent prevented GE from using its 1970’s engine technology as a model for developing new engines. GE also submitted evidence that Boeing had once asked GE to bid on a contract, causing GE to conduct research that “would potentially implicate” UTC’s patent. The Federal Circuit held this evidence was insufficient to establish injury-in-fact because GE did not assert that it practiced the patent, that it had actually refrained from developing technology because of the patent, or lost bids because of the patent. The competitor standing doctrine did not separately establish standing because the Board’s decision did not alter the status quo in the commercial airplane industry. The Federal Circuit rejected GE’s estoppel argument because it previously held that estoppel is not an injury-in-fact.
A Claimed Method Fails to Satisfy Written Description if it is Not Described as a Whole
In Quake v. Lo, Appeal Nos. 2018-1779, -1780, -1782, a claimed method must be expressly described as a whole in order to satisfy the written description requirement.
Dr. Quake and Dr. Lo separately filed patent applications claiming a method for determining the presence of a chromosomal abnormality in fetuses using random massively parallel sequencing (“MPS”) method. Both Quake and Lo requested interferences to determine who first invented the method. The PTAB agreed with Lo’s argument that four claims of Quake’s patent are unpatentable for lack of written description, and Quake appealed. The Federal Circuit vacated and remanded the decision. On remand, the PTAB found that the disclosures in Quake’s specification were insufficient to demonstrate that the inventors were in possession of the random MPS method, and again found Quake’s claims unpatentable.
The Federal Circuit affirmed the PTAB’s decision. Quake’s specification only expressly describes detection to target sequences, and MPS is discussed in only two paragraphs. The first paragraph refers to a separate patent application discussing MPS, but the teachings of that application could be used in either random or targeted MPS. The second paragraph refers to “random sequence information,” but it does so in the context of identifying chromosomes through targeted MPS, not random. The Federal Circuit determined that substantial evidence supports the PTAB’s finding that those two paragraphs together are not adequate to convey using random MPS to determine chromosomal abnormality, and held that Quake’s patent does not meet the written description requirement.
Federal Circuit Rejects Claim Construction That Improperly Narrowed the Claim
In Cisco Systems, Inc. v. TQ Delta, LLC, Appeal No. 2018-1806, the Federal Circuit held that it is improper to read limitations from a preferred embodiment described in the specification into claims without any clear indication that the patentee intended the claims to be so limite
Cisco Systems, Inc. (“Cisco”) and ARRIS Group, Inc. (“Arris”) sought inter partes review of TQ Delta’s patent directed to a method to manage the power of a transceiver in sleep mode and to wake up the transceiver from sleep mode. The Board construed the term “synchronization signal” to mean “a signal allowing synchronization between the clock of the transmitter of the signal and the clock of the receiver of the signal.” Using this construction, the Board found that the claims were not unpatentable over the prior art.
The Federal Circuit reversed, holding that the Board construed the terms too narrowly to the clock-based embodiment, excluding “frame synchronization.” The Federal Circuit stated that the patent’s claims and specification teach that “synchronization signal” is not limited to describing what the signal must synchronize or a particular type of synchronization (i.e., clock-based). The Federal Circuit determined that “synchronization signal” simply means “used to establish or maintain a timing relationship between transceivers between the transmitter of the signal and the receiver of the signal,” which includes frame synchronization. Accordingly, The Federal Circuit vacated the Board’s decision and remanded for the Board to consider Appellants’ unpatentability challenges under the new claim construction.
Federal Circuit Holds Adequate Notice of PTAB’s Claim Construction Provided through Oral Hearing
In TQ Delta LLC v. Dish Network LLC, Appeal No. 2018-1799, the rights of parties in an IPR are not violated when the PTAB provides adequate notice of the PTAB’s understanding of the claim construction during the oral hearing.
Dish Network (“Dish”) petitioned for inter partes review of a patent owned by TQ Delta, LLC (“TQ Delta”) which describes a method to manage the power of a transceiver in sleep mode and to wake up the transceiver from sleep mode. The PTAB found the claims were obvious. TQ Delta appealed, arguing in part that the PTAB violated its rights by changing course to a new claim construction in the Final Written Decision.
The Federal Circuit found that the PTAB did not violate TQ Delta’s rights. The Federal Circuit determined that the PTAB did not “change course” because the PTAB did not construe the term in its Decision to Institute. Additionally, the Federal Circuit found that TQ Delta had notice of the PTAB’s interpretation of the term from the PTAB’s questions during the Oral Hearing, where it was given the opportunity to respond. The Federal Circuit also affirmed the PTAB’s claim construction, finding support for the PTAB’s construction in the surrounding claims and specification. The Federal Circuit further affirmed the PTAB’s finding of obviousness.
Aesthetic Appeal Does Not Render Patent Invalid
In Automotive Body Parts Association v. Ford Global Technologies, LLC, Appeal No. 2018-1613, aesthetic appeal is not an invalidating form of functionality for design patents; patent exhaustion and repair doctrines apply equally to utility patents and design patents.
ABPA, an association of auto body part companies, filed a declaratory judgement action against Ford seeking to invalidate design patents covering vehicle hood and headlight designs. According to ABPA, consumers prefer replacement parts that restore the original appearance of the vehicle. ABPA argued that Ford’s design patents were invalid, because aesthetic appeal rendered the designs functional. ABPA also argued that Ford’s design patents were unenforceable under the doctrines of exhaustion and repair, and could not bar sales of replacement auto body parts that look like Ford’s original patented parts. The district court denied ABPA’s motion for summary judgment and sua sponte entered summary judgement in favor of Ford.
The Federal Circuit affirmed. On invalidity, the Court reasoned that the statutory basis and economic value of design patents derives from aesthetic appeal. If aesthetic appeal were functional so as to invalidate a design patent, that would gut the principles underlying design patents. The Court declined to extend the concept of aesthetic functionality in trademark law to design patents. The Court also explained that the exhaustion and repair doctrines apply only to authorized sales of the components actually sold. The repair doctrine does not allow wholesale replacement of component parts that are themselves protected by patent. Also, exhaustion does not apply to the unauthorized replacement parts manufactured by third parties.
Patent Claims Reordering Conventional Steps May Be Ineligible Under § 101
In Solutran, Inc v. Elavon, Inc., Appeal Nos. 2019-1345, -1460, method claims directed to performing conventional steps in a new order may be insufficient to render claims patent eligible under § 101.
Solutran sued Elavon for patent infringement. The patent claims covered a method for processing paper checks, which comprised the following steps in sequence: a) receiving a data file with information from the checks, but not including images of the checks; b) crediting a merchant’s account; c) creating digital images of the checks; and d) using a computer to match the digital images to the data file. Elavon moved for summary judgment, claiming that the patent was directed to an abstract idea under § 101. The district court denied Elavon’s motion, and affirmatively held the claims to be patent eligible, finding that the claims focused on the physical processing and transporting of paper checks. After entry of final judgment of infringement, Elavon appealed.
The Federal Circuit reversed, finding under Alice step one that the claims were directed to the abstract idea of “crediting a merchant’s account as early as possible while electronically processing a check.” The Federal Circuit explained that the physicality of the paper checks being processed and transported is not enough to exempt the claims from being directed to an abstract idea, since the claims recite conventional actions in a generic way and do not improve any underlying technology. Under Alice step two, the Federal Circuit did not find an inventive concept sufficient to render the claims patent eligible. The Federal Circuit noted that the patent specification described each individual step of the claims as conventional and explained that reordering conventional steps was insufficient to constitute an inventive concept.
IPRs of Pre-AIA Patents are not Unconstitutional Takings
In Celgene Corporation v. Peter, Appeal Nos. 2018-1167, -1168, -1169, the Federal Circuit determined that retroactive application of IPR proceedings to pre-AIA patents is not an unconstitutional taking under the Fifth Amendment.
The Coalition for Affordable Drugs VI LLC (“CFAD”) requested Inter Partes Review of two patents owned by Celgene Corporation (“Celgene”). The patents at issue described and claimed methods for delivering a drug to patients in a way that prevents the occurrence of adverse side effects. The Board held that all challenged claims were unpatentable as obvious. Celgene appealed the Board’s decisions, arguing that the Board erred in its obviousness findings. Additionally, although it did not raise the argument before the Board, Celgene argued on appeal that the retroactive application of IPRs to patents filed pre-AIA is an unconstitutional taking.
The Federal Circuit affirmed the Board’s decisions regarding obviousness for both patents. In deciding to reach the constitutional issue, the Federal Circuit used its discretion to reach issues raised for the first time on appeal in exceptional cases. The Federal Circuit then held that the retroactive application of IPR proceedings to pre-AIA patents is not an unconstitutional taking. The Federal Circuit explained that IPRs do not differ significantly enough from the pre-AIA review mechanisms for reevaluating the validity of issued patents to effectuate a taking. Specifically, the Federal Circuit explained that there are more significant similarities than differences between pre-AIA review mechanisms and IPRs, namely: the substantive grounds for review, the standard of proof, and the broad claim construction standard. The Federal Circuit also noted these procedures shared the same purpose of reexamining an earlier agency decision. While the Federal Circuit acknowledged some procedural differences between IPRs and pre-AIA reexaminations, it explained that there is no vested right in any given mode of procedure. Thus, because patent owners have had the expectation that the PTO could reconsider the validity of issued patents for nearly forty years, it held that IPRs do not constitute an unconstitutional taking.