Patent Defenses Q4 2020 Highlights
Do More in Markman: No Patentable Weight: Many litigants seek too little in Markman proceedings. One often neglected issue is whether language in the body of a patent claim has patentable weight.
“[P]rinted matter encompasses any information claimed for its communicative content, and the doctrine prohibits patenting such printed matter unless it is ‘functionally related’ to its ‘substrate,’ which encompasses the structural elements of the claimed invention.” “[T]he questions of whether certain claim elements are directed to printed matter and whether such printed matter is functionally related to other claim elements may properly be resolved during claim construction.” C R Bard (Fed. Cir. 11/10/20) (aff’g that “the content of the information conveyed by the claimed markers—i.e. that the claimed access ports are suitable for injection at the claimed pressure and flow rate—is printed matter not entitled to patentable weight,” but nevertheless vacating summary judgment of anticipation).
Inducing Acts Need Not Be Shown With Direct Evidence To Be Cause of Direct Infringement: Being a tort, causation is an element of inducement patent infringement. But it need not be shown by direct evidence.
“[W]hen the provider of an identical product knows of and markets the same product for intended direct infringing activity, the criteria of induced infringement are met.” GlaxoSmithKline (Fed. Cir. 10/02/20) (2-1) (rev’g grant of non-infringement JMOL where doctors already knew the (claimed) use of brand name drug, and generic marketed its drug as being comparable to brand name drug, despite generic having carved out that infringing use from its “skinny label” approval (later adding that use at FDA’s direction); rejecting trial court and dissent’s reasoning that plaintiff had failed to prove that defendant’s advertising was cause of any direct infringement).
A Defendant May Know It Is Infringing Even if the Patent Owner Has Stipulated to Non-infringement Under a (Later Overturned) Narrow Claim Construction: This is another case illustrating the inherent difficulty in asking a jury to decide whether the defendant knew it was infringing (for willfulness) or causing infringement (for indirect infringement). Such intent often turns on whether the defendant believed that the trial judge’s current (or, as in this case, former) claim construction is wrong, which is inherently problematic and not what a trial judge wants a jury to hear.
TecSec (Fed. Cir. 10/23/20) (rev’g D. Ct. grant of a motion in limine precluding evidence of inducement after date of reasonable narrow claim construction ruling (followed by stipulation of non-infringement) later reversed by Fed. Cir.; “[A] defendant may have the liability-supporting subjective state of mind even if a person could believe, with objective reasonableness (though wrongly), that the induced conduct was not infringing.”).
The Power of Comparable Patent License Agreements in Patent Damages Determinations: A patent owner can embrace a comparable patent license agreement to satisfy the apportionment requirement and then seek damages much higher than would have been paid under that comparable agreement.
Vectura (Fed. Cir. 11/19/20) (aff’g $89.7 MM damages award based on 3% royalty on total product sales based on expired license between parties covering same invention: “when a sufficiently comparable license is used as the basis for determining the appropriate royalty, further apportionment may not necessarily be required…. Built-in apportionment effectively assumes that the negotiators of a comparable license settled on a royalty rate and royalty base combination embodying the value of the asserted patent.” Permitting damages theory based on that that earlier license even though theory omitted the royalty cap present in earlier license, based allegedly on changed circumstances).
Where Did That Artificial (ANDA) Act of Infringement Take Place?: Under TC Heartland, a domestic corporation may be sued for patent infringement only in judicial districts in the state in which it is incorporated and those in which it has a regular and established place of business and an act of infringement has occurred. Where does the act of infringement associated with filing an Abbreviated New Drug Application occur?
Valeant Pharma. (Fed. Cir. 11/05/20) (“[I]n cases brought under 35 U.S.C. § 271(e)(2)(A) [Hatch-Waxman Act], infringement occurs for venue purposes only in districts where actions related to the submission of an Abbreviated New Drug Application (‘ANDA’) occur, not in all locations where future distribution of the generic products specified in the ANDA is contemplated.”).
Commonsense Check Before Filing a Patent Suit: We’ve all heard of trademark owners sending a cease and desist letter alleging that a competitor’s mark is confusingly similar, only to receive in response a counter demand to cease and desist use citing evidence that the competitor used its mark first. One patent-world corollary is a patent owner whose complaint cites a defendant’s manual for proof of infringement, without checking the prior-art versions of that manual (which described the same features):
WPEM (Fed. Cir. 12/09/20 (non-precedential) (aff’g fees award where infringement was based on features in version 11 of product manual but version 10 of same manual was prior art and described same features).
Abstract Ideas Identified by Fed. Cir. Post Alice: Patent Defenses quotes what the Fed. Cir. has identified as the “abstract idea” to which patent claims are directed, in its 107 post-Alice opinions (thus not counting R. 36 affirmances) holding patent claims invalid or unpatentable under Alice. This is a useful listing to scan whenever assessing patent eligibility under Alice. Here are this quarter’s entries:
|Abstract Idea Decision||“Abstract Idea” To Which Claims Directed||Ruling|
|Netsoc (Fed. Cir. 12/31/20) (non-precedential) (Stoll, J.)||“automating the conventional establishment of social networks to allow humans to exchange information and form relationships”||aff’g R. 12(b)(6) [in two separate actions on related patents]
at least 2 claims
|Simio (Fed. Cir. 12/29/20) (Prost, CJ)||“using graphics instead of programming to create object-oriented simulations”||aff’g R. 12(b)(6)
at least 1 claim
|Adaptive Streaming (Fed. Cir. 12/14/20) (non-precedential) (Taranto, J.)||“collecting information and transcoding it into multiple formats”
“format conversion, from an incoming signal’s format to a variety of formats suited to different destination devices”
|aff’g R. 12(b)(6)
|Fast 101 PTY (Fed. Cir. 11/25/20) (non-precedential) (Chen, J.)||“an intermediated settlement system that employs a discount for early payment”||aff’g R. 12(b)(6)
|Gree (Fed. Cir. 11/19/20) (non-precedential) (Stoll, J.)||“creating and applying a template of positions of one or more game contents”||aff’g and rev’g PTAB PGR decision
17 claims (3 claims upheld under Step Two)
|Tenstreet (Fed. Cir. 10/19/20) (non-precedential) (Hughes, J.)||“collecting, organizing, and storing data on a conventional computer network”||aff’g R. 12(b)(6)
Patent Defenses Q3 2020 Highlights
Triggering Section 112(6/f) Interpretation Without Using “Means”
Post-Williamson (Fed. Cir. 06/16/15) (en banc), the following claim elements not using “means” have triggered interpretation under section 112(6/f) in the Federal Circuit:
- “determining a time when torque reaches a maximum”
- “customization module”
- “a mechanical control assembly … configured to …”
- “cheque standby unit”
- “a symbol generator connected to [a] CPU and [a] database for generating symbols on [a] touch screen display screen”
- “compliance mechanism”; and now …
- “logic to modify”:
- Egenera (Fed. Cir. 08/28/20) (aff’g construction of “logic to modify” as triggering Sec. 112(6/f). “Egenera does not explain how its ‘logic’—even assuming it connotes some possible structure in the general sense of software, firmware, or circuitry [as argued by the patentee]—amounts to ‘sufficient structure for performing [the modification] function.’”).
No Patentable Weight: Non-Structural Process or Source Restriction in Product Claim or Product Limitation
Neither the source of a product nor the process by which it is made has patentable weight (consequence) when comparing a product claim to the prior art unless that source or process affects the structure of the claimed product. This also is true of a composition or product recited in a method claim.
- Biogen (Fed. Cir. 09/28/20) (reinstating jury verdict of anticipation (by naturally occurring human interferon-β) of a method of treatment claim using “a recombinant polypeptide produced by a non-human host transformed by a recombinant DNA molecule.” “The recombinant origin of the recited composition cannot alone confer novelty on that composition if the product itself is identical to the prior art non-recombinant product.” Because “an old product is not patentable even if it is made by a new process,” it follows that “an old method of administration of an old product made by a new process is not novel and cannot be patented.”).
Judge Dyk has been a Federal Circuit Judge for 20 years. He recently sat by designation as a trial judge and construed the claim terms “antibody” and “antibody fragment” narrowly based on an apparent definition in the specification. The Federal Circuit reversed both claim constructions.
- Baxalta (Fed. Cir. 08/27/20) (rejecting narrow construction of “antibody,” despite it being supported by what in isolation appears to be a definition in the Spec., because it would exclude dependent claims and thus be “inconsistent with the plain language of the claims.” Rather than invalidate the dependent claims, their plain language “weighs heavily in favor of adopting” a broader construction of the independent claim.)
Nautilus “Indefiniteness”: Word Salads and Coined Terms
Two promising flags for a patent challenger studying a patent for possible indefiniteness challenges are coined terms in the claims not clearly defined in the specification and extreme examples of the patent drafter trying to avoid clear limits on the scope of the claims.
- IBSA Institut (Fed. Cir. 07/31/20) (aff’g indefiniteness of “half-liquid” based on review of Spec., prosecution history, extrinsic evidence (showing coined term) and inability of patent owner’s expert to explain boundaries of the term).
- “Showing that a skilled artisan cannot recognize the scope of a claim term with reasonable certainty requires showing considerably less uncertainty than showing that a skilled artisan could not understand the claim term. The latter is closer to the ‘insolubly ambiguous’ standard rejected by Nautilus.” IQASR (Fed. Cir. 09/15/20) (non-precedential) (aff’g coined term “magnetic fuzz” indefinite where Spec. provided “multiple layers of definitions [which] are all open-ended and non-limiting” amounting to a “word salad of inconsistent indirect definitions and examples”).
One’s contribution to an invention may qualify the contributor as co-inventor even when that contribution is prior art to the claimed invention.
- Holding “categorically that research made public before the date of conception of a total invention cannot qualify as a significant contribution to conception of the total invention … would ignore the realities of collaboration, especially that collaboration generally spans a period of time and may involve multiple contributions.” Dana-Farber (Fed. Cir. 07/14/20) (aff’g that two researchers who had shown expression of PD-L1 in human tumors and that PD-L1 expression causes tumor growth, qualified as co-inventors even though they did not participate in in vivo studies and even though claims allowed over provisional application of one of them).
Damages: The Comparable-Licenses End Run around Apportionment Requirement
Apportioning the defendant’s revenues to the patented alleged invention often trips up patentees seeking damages awards. One end-run is to rely on allegedly comparable licenses and argue that those licenses took apportionment into account.
- Bio-Rad (Fed. Cir. 08/03/20) (aff’g nearly $24 Million damages award where expert testified that 15% royalty rate included apportionment, and that comparable license agreements were between competitors for similar technologies and the relative importance of that technology to the particular license (e.g., “the proportion of licensed/unlicensed features”) was similar to the hypothetical negotiation. “[T]here is no blanket rule of quantitative apportionment in every comparable license case.”).
Results, Effects and Functions—Without Reciting How They Are Achieved or Performed—Are Patent Ineligible
- There are “two different ‘how’ requirements in patent law. The first such requirement, that of eligibility, is that the claim itself (whether by its own words or by statutory incorporation of specification details under section 112(f)) must go beyond stating a functional result; it must identify ‘how’ that functional result is achieved by limiting the claim scope to structures specified at some level of concreteness, in the case of a product claim, or to concrete action, in the case of a method claim.” American Axle (Fed. Cir. 07/31/20) (2-1) (aff’g Summ. J. that some method-of-manufacturing claims are directed to a natural law. “What is missing is any physical structure or steps for achieving the claimed result. The focus of the claimed advance here is simply the concept of achieving that result, by whatever structures or steps happen to work.”).
102 “Abstract Idea” Articulations in Federal Circuit Opinions
For each of the 102 post-Alice Federal Circuit opinions holding a patent claim to be directed to an abstract idea, Patent Defenses quotes that abstract idea in a table whose entries this quarter are reproduced below:
|Abstract Idea Decision||“Abstract Idea” To Which Claims Directed||Ruling|
|Salwan (Fed. Cir. 09/08/20) (non-precedential) (per curiam)||“organizing human activity with respect to medical information”||aff’g Summ. J. in § 145 action re ex parte app. claims
at least 1 claim
|American Axle (Fed. Cir. 07/31/20) (2-1) (Dyk, J.) (reissued op.)||“Hooke’s law”||aff’g Summ. J.
|Western Express (Fed. Cir. 07/14/20) (non-precedential) (per curiam)||“method of funds transfer using a payment card”||aff’g R. 12(b)(6)|
|In re Zunshine (Fed. Cir. 07/08/20) (non-precedential) (per curiam)||“reducing food intake to achieve weight loss and snacking to curb hunger”||aff’g rejection ex parte appln. claims
|Data Scape (Fed. Cir. 07/01/20) (non-precedential) (Chen, J.)||“selective data storage, transfer, and processing”||aff’g R. 12(b)(6)
at least 3 claims
|Braemar (Fed. Cir. 07/01/20) (non-precedential) (Lourie, J.)||“collecting, classifying, and filtering data”||aff’g R. 12(c)
at least 2 claims
|CardioNet II (Fed. Cir. 07/01/20) (non-precedential) (Lourie, J.)||“collecting, analyzing, and displaying data”||aff’g R. 12(c)
at least 2 claims
Patent Defenses Q2 2020 Highlights
Disclosure-Dedication: Disclosing Unclaimed Alternative Shields It from Equivalents Infringement, Which Can Be Decided on the Pleadings:
When a specification discloses unclaimed matter as an alternative to a claim limitation, for serving the same purpose as the claim limitation, this creates a matter-of-law bar to equivalents infringement by that unclaimed alternative. This defense can be won on the pleadings.
- Eagle Pharm. (Fed. Cir. 05/08/20) (aff’g Rule 12(c) dismissal of complaint asserting DOE infringement on theory that the ethanol in accused product is insubstantially different from the propylene glycol in the claimed composition, because ethanol was disclosed in Spec. as alternative, and Spec. did not describe distinct categories of formulations that contain different ingredients and work in different ways).
Method Steps May Trigger Sec. 112(f) Construction:
Under Williamson, more attention now is paid to whether apparatus claim elements not saying “means” nevertheless trigger sec. 112(f) construction. But relatively little attention is given to whether method-claim steps trigger sec. 112(f) construction. Albeit non-precedential, this quarter a panel affirmed that a method step triggered sec. 112(f) and was indefinite for lack of specification disclosure of corresponding acts. For more on this topic, search “step plus function” in Patent Defenses.
- Dionex (Fed. Cir. 05/06/20) (non-precedential) (in interference, aff’g method claim step in issued patent (“controlling the valve to switch among predetermined valve positions to transfer the sample loop between a low pressure and a high pressure”) triggers sec. 112(f) (and is indefinite) based on expert testimony “that the claim term would not connote acts to a person of skill sufficient to perform the recited function”).
Alice in Chaos Land: Patent Office and Federal Circuit Apply Two Different Patent-Eligibility Standards:
The Patent Office’s Patent Eligibility Guidance issued and amended in 2019, cites scores of Federal Circuit precedents applying three categories of patent-ineligible “abstract ideas” under Alice, but omits two well-established categories: 1. Collecting, analyzing, classifying, organizing, filtering, storing, manipulating and/or displaying information, and 2. Results achieved and functions performed without reciting particular ways (i.e., particular structures and acts) to achieve or perform them.
Confirming an earlier non-precedential decision, the Federal Circuit in a precedential decision this quarter ruled that it is not bound by this USPTO Guidance. In re Rudy (Fed. Cir. 04/24/20) (aff’g ex parte rejection of claims).
This quarter, the Federal Circuit issued 14 opinions holding claims patent ineligible under the abstractness exclusion, and two holding claims eligible. Search Patent Defenses for “Abstract-Idea Decision.” Many applied one or both categories of abstract idea that the USPTO omitted from its Guidance.
Consequences of a Stipulated Dismissal with Prejudice without Fact Findings:
Even when a stipulated dismissal with prejudice lacks any findings by the Court, it has substantial consequences for claim preclusion, Kessler preclusion and the right to seek attorney fees:
- In re PersonalWeb (Fed. Cir. 06/17/20) (aff’g that action against Amazon.com customers’ use of certain features of Amazon S3 storage barred under claim preclusion (for pre-dismissal acts) and Kessler doctrine (for post-dismissal acts) by earlier stipulated dismissal with prejudice (without fact findings) of separate action against Amazon targeting overlapping features of same S3 product).
- Keith (Fed. Cir. 04/07/20) (remanding denial of attorney fees; stipulated dismissal with prejudice may constitute “judgment” for purposes of Fed. R. Civ. P. 54(d) motion for attorney fees).
- Mossberg (Fed. Cir. 04/13/20) (aff’g denial of fees award for lack of prevailing party where action voluntarily dismissed without prejudice, before any Answer filed, after claims cancelled in PTAB proceeding; grant of stay pending successful reexamination proceedings at the PTAB was not the judicial imprimatur required for prevailing party status).
Explaining Constitutional Standing vs. Statutory Standing:
The law and terminology in this area have been in flux and can be confusing. A clear explanation of some of the different requirements of Article III Constitutional standing versus “statutory standing” (also sometimes referred to as “prudential standing”) is found in a recent dissenting opinion of Judge Reyna.
- Schwendimann (Fed. Cir. 05/13/20) (Reyna, J., dissenting op.) (Art. III standing (that the plaintiff owns some exclusionary rights in the patent) separate and apart from statutory standing (that the plaintiff owns substantially all exclusionary rights in the patent), and unlike statutory standing cannot be cured after the complaint is filed.)
Offering for Sale a Product Sometimes Puts a Method on Sale:
- “A product and methods of using that product ‘may approach each other so nearly that it will be difficult to distinguish the process from the function of the apparatus.’ In that circumstance, where a product ‘embodie[s] essential features of [the] patented invention,’ a sale of the product is tantamount to a sale of the process performed by that product and thus creates an on-sale bar to the process claims as well.” BASF (Fed. Cir. 04/08/20) (rev’g Summ. J. of on sale bar).