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 Albeit non-precedential, this quarter a panel affirmed that a method step triggered sec. 112(f) and was indefinite for lack of specification disclosure of corresponding acts.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 Cir. 05/06/20) (non-precedential) (in interference, aff’g method claim step in issued patent (“controlling the valve to switch among predetermined valve positions to transfer the sample loop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Confirming an earlier non-precedential decision, the Federal Circuit in a precedential decision this quarter ruled that it is not bound by this USPTO Guidance.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).
Patent Defenses Q1 2020 Highlights
Ct.: Receiving Information Is Not Enough For “Actual Knowledge”:
- Patent Defenses reviews non-patent S. Ct. decisions for reasoning that might apply to substantive patent defenses. “Actual knowledge” is an element of indirect patent infringement and willful infringement. In February, the S. Ct. distinguished having “actual knowledge” of information from having merely received the information. Intel Corp. (U.S. 02/26/2020) (giving “actual knowledge” in ERISA statute its plain meaning: “to have ‘actual knowledge’ of a piece of information, one must in fact be aware of it,” not merely “what he should actually know,” and not simply having been sent the information: “if a plaintiff is not aware of a fact, he does not have ‘actual knowledge’ of that fact however close at hand the fact might be”).
Mixed Bag of Decisions on What Claim Language Triggers Sec. 112(6/f):
- No: “Digital processing unit … performing” does not trigger Sec. 112(6/f), for the (odd) reason that it serves as a placeholder for a CPU or general-purpose computer (which other precedents indicate is insufficient). Samsung (Fed. Cir. 02/04/20) (rev’g PTAB ruling; “the term ‘digital processing unit’ clearly serves as a stand-in for a ‘general purpose computer’ or a ‘central processing unit,’ each of which would be understood as a reference to structure in this case, not simply any device that can perform a particular function”);
- Yes: A method step triggered Sec. 112(6/f). Intelligent Automation (Fed. Cir. 01/30/20) (non-precedential) (aff’g that “determining a time when torque reaches a maximum” triggers Sec. 112(6/f) in method claim (which neither party disputed), and that “a control circuit for determining a time when torque reaches a maximum” in system claim triggers Sec. 112(6/f), because “control circuit” does not “provide enough description of the structure to render the limitation structural, rather than functional”).
More Life Sciences Claims Survive Mayo Challenge:
Two precedential decisions reversed patent ineligibility rulings:
- Illumina (Fed. Cir. 03/17/20) (2-1) (rev’g Summ. J. of Sec. 101 invalidity; claims “are directed to methods for preparing a fraction of cell-free DNA that is enriched in fetal DNA,” not the natural phenomenon “that cell-free fetal DNA tends to be shorter than cell-free maternal DNA in a mother’s bloodstream”);
- Boehringer (Fed. Cir. 03/16/20) (rev’g partial R. 12(c) judgment of ineligibility; “claims are directed to a particular method of treatment,” not a natural law regarding how certain compounds were metabolized).
Some Indefinite Patent Claims May Be Unpatentable Over Prior Art:
This point matters because the PTAB may believe that an issued patent claim is indefinite, but cannot then rule it unpatentable for indefiniteness. Once Nautilus eliminated the “amenable to construction” test for indefiniteness, it was obvious that a claim may be both construed (and declared unpatentable over prior art) and be indefinite. But there is old pre-Nautilus Fed. Cir. dictum to the contrary, which some PTAB panels continued to cite even post Nautilus. Hopefully this decision will end that:
- Samsung (Fed. Cir. 02/04/20) (the PTAB “may analyze the patentability of a claim even if that claim is indefinite under the reasoning of IPXL” as it may be “invalid for obviousness, regardless of whether it is treated as being directed to an apparatus or a method”).
Ceasing Sales of Unmarked Patented Product Does Not Lift Continuing Limitation on Sec. 287 Damages:
What if a patent owner sells a widget in the U.S. the day after its patent issues, without marking the patent number on the widget, never sells another patented product, and then six years later sues for six years of infringement of an apparatus claim in the patent, without any advance notice to the infringer? Sec. 287 “continues to limit damages after a patentee or licensee ceases sales of unmarked products.” Arctic Cat II (Fed. Cir. 02/19/20) (aff’g denial of pre-complaint damages where license expressly stated that licensee had no duty to mark, and licensee sold unmarked patented products, ceasing such sales possibly before complaint filed).
Broadening Reach of ITC:
- Some who thought they were immune from ITC proceedings because they are downstream of the actual “importer,” may be in for a surprise. Comcast (Fed. Cir. 03/02/20) (aff’g ITC finding that respondent (which is not importer of record) imported set-top boxes for purposes of Sec. 337 where it causes the products to enter the U.S. by placing orders therefor, specifies the functions and software, restricts sales of the products to others, and the products work only on respondent’s network).
- So too for parties who took solace in the imported component being only a small part of the patent-claimed system. Comcast (Fed. Cir. 03/02/20) (aff’g ITC finding of violation and exclusion order based on respondent inducing infringement by importing product (set-top boxes) that infringed only when used with respondent’s domestic servers and customer’s mobile devices).