Category Archives: Patents

Supreme Court Rules That Government is Not a “Person” Under the America Invents Act

ByCarissa T. Howard of Counsel at Houston Harbaugh

Federal law has allowed for third party requests for reexamination of an issued patent on the basis on prior art since the 1980s. Under the America Invents Act of 2011 (AIA), three review processes replaced what was then known as “inter partes reexamination.” These three review proceedings enable a “person” other than the patent owner to challenge the validity of a patent post-issuance: (1) “inter partes review,” §311; (2) “post-grant review,” §321; and (3) “covered-business-method review” (CBM review). As an alternative to or in connection with a patent litigation, an interested third party, an accused infringer, or any “person,” can request one of these types of reviews.

In Return Mail v. Postal Service, the Supreme Court held that “[t]he Government is not a “person” capable of instituting the three AIA review proceedings.” https://www.supremecourt.gov/opinions/18pdf/17-1594_1an2.pdf (June 10, 2019)

Return Mail sued the US Postal Service (part of the US Federal Government) for infringing its mail processing patent and Postal Service petitioned for CBM review under the AIA.  The PTO agreed that the patent claimed ineligible subject matter, and cancelled the claims. On appeal, the Federal Circuit affirmed. Now, the Supreme Court has reversed – holding that the Government is not a person under the statute and therefore cannot petition for AIA review.

Justice Sotomayor led the conservative majority joined by Chief Justice Roberts and Justices Thomas, Alito, Gorsuch and Kavanaugh.  Justice Breyer wrote in a dissent that was joined by Justices Ginsberg and Kagan.

The majority here started with its presumption that congressional statutes are not intended to bind or be directed to U.S. Government activity. Here, the court looked and did not find sufficient textual language to overcome that initial presumption.   In particular, the word “person” is used many times in the Patent Act (at least 18 times) and in several different ways.  There is basically no indication that this particular use of “person” was designed to include the U.S. Government. The majority also noted the awkwardness:

Finally, excluding federal agencies from the AIA review proceedings avoids the awkward situation that might result from forcing a civilian patent owner (such as Return Mail) to defend the patentability of her invention in an adversarial, adjudicatory proceeding initiated by one federal agency (such as the Postal Service) and overseen by a different federal agency (the Patent Office).

The dissent argued that the government-not-a-person presumption is rather weak and was overcome by the Patent Act.  In particular, the majority notes that Federal agencies are authorized to apply for patent protection — even though the statute states that a “person” shall be “entitled to a patent.” See 35 U. S. C. §§ 207(a)(1) and 102(a)(1).

Carissa T. Howard is an intellectual property attorney with over 16 years of experience, Carissa’s practice is focused in federal court intellectual property litigation, patent prosecution, trademark prosecution, intellectual property counseling, and contract drafting. She also has experience in intellectual property licensing and preparing due diligence, infringement and validity opinions. She can be reached at howardct@hh-law.com or 412-288-2213

Supreme Court Holds: AIA Does NOT Change Patent “On – Sale Bar” Doctrine

There has been a nagging question regarding the status of the on-sale bar ever since passage of the AIA in 2011. The Supreme Court has unanimously answered the question in the negative in the slip opinion in Helsinn Healthcare v. Teva No. 17–1229. Argued December 4, 2018—Decided January 22, 2019. See opinion here: https://www.supremecourt.gov/opinions/18pdf/17-1229_2co3.pdf

Justice Thomas wrote for the unanimous court to affirm the Federal Circuit ruling and the summary of same is here. Even a “secret sale” can trigger the bar. The Court framed the issue:

“We granted certiorari to determine whether, under the AIA, an inventor’s sale of an invention to a third party who is obligated to keep the invention confidential qualifies as prior art for purposes of determining the patentability of the invention. 585 U. S. ___ (2018). We conclude that such a sale can qualify as prior art.”
“Held: A commercial sale to a third party who is required to keep the invention confidential may place the invention “on sale” under §102(a). The patent statute in force immediately before the AIA included an on-sale bar. This Court’s precedent interpreting that provision supports the view that a sale or offer of sale need not make an invention available to the public to constitute invalidating prior art. See, e.g., Pfaff v. Wells Electronics, Inc., 525 U. S. 55, 67. The Federal Circuit had made explicit what was implicit in this Court’s pre-AIA precedent, holding that “secret sales” could invalidate a patent. Special Devices, Inc. v. OEA, Inc., 270 F. 3d 1353, 1357. Given this settled pre-AIA precedent, the Court applies the presumption that when Congress reenacted the same “on sale” language in the AIA, it adopted the earlier judicial construction of that phrase. The addition of the catchall phrase “or otherwise available to the public” is not enough of a change for the Court to conclude that Congress intended to alter the meaning of “on sale.” Paroline v. United States, 572 U. S. 434, and Federal Maritime Comm’n v. Seatrain Lines, Inc., 411 U. S. 726, distinguished. Pp. 5–9. 855 F. 3d 1356, affirmed.”

Posted by Henry M. Sneath, Esquire Co-Chair Litigation Practice Group and Chair of the IP Practice Group: Houston Harbaugh, P.C.  401 Liberty Avenue, Pittsburgh, Pa. 15222Sneath is also an Adjunct Professor of  Law teaching two courses; Trade Secret Law and the Law of Trademarks and Unfair Competition at Duquesne University School of Law. Please contact Mr. Sneath at 412-288-4013 or sneathhm@hh-law.com

From Relecura: Semiconductor Sensors. Building the Wave in IoT Development

As the Internet of Things (IoT) develops, there is an increasing need to “sense” changes in the atmospherics which surround semiconductors. In other words, the working chips must get smarter and smarter and have feel! Some of that AI feel in chips is being supplied by sensing chips – the layered structure of wafers of semiconductor material which can “sense” changes in the environment it is measuring or into which it is placed. Gas sensors are particularly important and patent applications for these devices are on the upswing internationally, with Sony and Samsung leading the way. See Relecura article at http://tinyurl.com/ybrojuq2
Edaphic Scientific describes a gas sensor’s performance as follows:  “Semiconductor gas sensors rely on a gas coming into contact with a metal oxide surface and then undergoing either oxidation or reduction. The absorption or desorption of the gas on the metal oxide changes either the conductivity or resistivity from a known baseline value. This change in conductivity or resistivity can be measured with electronic circuitry. Usually the change in conductivity or resistivity is a linear and proportional relationship with gas concentration. Therefore, a simple calibration equation can be established between resistivity/conductivity change and gas concentration.” http://tinyurl.com/y6ufz7vx
The IoT relies on smarter and smarter technology as it governs many things around us. Products will have this smarter and smarter technology and converting “sensing” into electronic circuitry will likely have a positive impact on performance, but will present new challenges as products fail and cause damage to person or property. How deep a dive will be required in products liability litigation for example when a “sensor chip” fails to sense. Sensor chips have been around for a while, but they are becoming tremendously sophisticated and integral to the virtual world in which we operate.

Posted by Henry M. Sneath, Esquire Co-Chair Litigation Practice Group and Chair of the IP Practice Group: Houston Harbaugh, P.C., 401 Liberty Avenue, Pittsburgh, Pa. 15222. Please contact Mr. Sneath at 412-288-4013 or sneathhm@hh-law.com

 

 

 

 

 

Top Patent Decisions in 2018 per Law 360

Pullback from Alice? In February, the Federal Circuit issued its decision in Berkheimer v. Hp, Inc. ( February decision )  and seemed to pull back from what some would say is the overuse and early use of the Alice decision to invalidate patents. Key holding is that the question of whether a patent contains ineligible subject matter may involve factual questions and that Motions to Dismiss and even Summary Judgment Motions may not be the proper forum for such invalidation decisions. Law 360 reports however, that there is still apparent division on the CAFC with regard to Alice and its progeny.

 

Reinforcement of TC Heartland: In BigCommerce, Inc. v Beyond, the CAFC once again answered the simple question of how many districts  can have proper venue for a case. Answer = 1. “Principal place of business” or “state where defendant is registered to do business.” See (” overturned “). CAFC overturned Texas District Court Judge Rodney Gilstrap in this decision and the erosion of seemingly automatic jurisdiction in the Eastern District of Texas continues. See other key decisions here from Law 360

Posted by Henry M. Sneath, Esq.                                             Shareholder and Director;                                                                                      Co-Chair of the Litigation Department;                                                    Chair of the IP Department;                                                                         Houston Harbaugh, P.C.  (www.hh-law.com)                                                    Pittsburgh, Pa.                                                                                                              Please contact Mr. Sneath at 412-288-4013 or sneathhm@hh-law.com

Confession: I Have a Blackberry (Blackberry Files Patent Suit!)

Blackberry is still in the hunt. I have one. I need the keyboard. Can’t  seem to make even my skinny fingers hit the virtual keyboard letters and numbers on an iPhone. I get teased by my kids. People on airplanes pull out their Blackberrys and say “Hey – you’re a dinosaur too.” However, look at Blackberry now flexing their patent muscles and suing Facebook, WhatsApp and Instagram. Take that big boys. Thanks to Steve Brachmann and IPWatchdog for bringing us the story at this link: http://tinyurl.com/y9drr6hk . Blackberry pleads pre-emptory claims that seek to avoid dismissal per §101 “Alice” defenses. This “getting ahead of 101” in pleading is becoming the rage in patent suits. Great article. Thanks IPWatchdog.

Posted by Henry M. Sneath, Esq. at HoustonHarbaugh P.C., Pittsburgh, Pa.    412-288-4013 or sneathhm@hh-law.com

Walmart USPTO Application for “Drone Pollinators” Published

Walmart has applied for a Drone Pollinator presented in the recently published application as “Systems and Methods for Pollinating Crops Via Unmanned Vehicles.” Here is Application # US2018/0065749 A1 at this link from FreshPatents.com:  http://images2.freshpatents.com/pdf/US20180065749A1.pdf
The PTO App abstract describes essentially the same process used by Bees, and scientists at Walmart, Harvard and many other institutions have been working to create an efficient way to pollinate many of the plants from which we get our food during the last two decades of declining bee populations. Here is a good article from Science Alert detailing and linking to some of the efforts to create a drone pollinator:   http://tinyurl.com/y93a7z7y  
Here is a photo of the Harvard latest edition drone “RoboBee” which allegedly cannot yet be remotely controlled. The Walmart patent claims such an ability. We will follow.

Posted by Henry M. Sneath, Esq. at HoustonHarbaugh, P.C. in Pittsburgh, Pa.
  Mr. Sneath can be contacted at 412-288-4013 or at: https://www.hh-law.com/professional/henry-m-sneath/ He chairs the IP Practice group at HoustonHarbaugh and is Co-Chair of the Litigation Practice Group.

Supreme Court Reverses Federal Circuit Interpretation of Patent Venue: TC Heartland Holding Overturned

Posted by:  Henry M. Sneath, Esq. – Chair of the Intellectual Property Practice Group at Pittsburgh, Pa. law firm Houston Harbaugh, P.C. Mr. Sneath is also an Adjunct Professor of Law at the Duquesne University School of Law teaching Trade Secret Law, Trademark Law and the Law of Unfair Competition. He may be contacted at sneathhm@hh-law.com or 412-288-4013. See Website www.hh-law.com .

The US Supreme Court overturned the Federal Circuit’s decision in TC Heartland v.  Kraft Foods and its longstanding interpretation of the patent venue statute and has reaffirmed that a corporation is a resident of the state in which it is incorporated. It had decided that question a long time ago, but the Federal Circuit and statutory changes to the general (non-patent) venue statutes had undermined the original decision of the Supreme Court in 1957 in Fourco Glass.  The court provided this analysis in TC Heartland:

“The patent venue statute,28 U. S. C. §1400(b), provides that ‘[a]ny civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.’ In Fourco Glass Co. v. Transmirra Products Corp., 353 U. S. 222, 226 (1957), this Court concluded that for purposes of §1400(b) a domestic corporation “resides” only in its State of incorporation.” 
In overturning the Fed. Cir. decision, the Court rejected the argument that 28 U.S.C. §1400 (patent venue statute) incorporates the broader definition of corporate “residence” contained in the general venue statute 28 U.S.C. 1391 as has been allowed by the Federal Circuit for years. This changes the longstanding practice of the Federal Circuit to interpret “residence” as being any state in which a defendant corporation simply conducts business. This interpretation has allowed unfettered forum shopping which generally results in shopping and filing in the Eastern District of Texas.

“We conclude that the amendments to §1391 did not modify the meaning of §1400(b) as interpreted by Fourco. We therefore hold that a domestic corporation “resides” only in its State of incorporation for purposes of the patent venue statute.” Justice Thomas authored the court’s opinion.

The big question is whether this will indeed reduce or eliminate the monopoly held by Texas on patent cases and whether it will simply shift it to Delaware where many corporations are incorporated. The court may take additional action or so too may the US Congress to prevent that simple shifting of venues from Texas to Delaware.

See the Opinion in TC Heartland v. Kraft Foods here: https://www.supremecourt.gov/opinions/16pdf/16-341_8n59.pdf

Henry Sneath 412-288-4013 and sneathhm@hh-law.com

Supreme Court Kills Laches Defense to Patent Infringement

by: Picadio Sneath Miller & Norton, P.C. 

Supreme CourtOn March 21, 2017, the US Supreme Court, in a 7-1 decision in SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, Case No. 15-927, held that the equitable defense of laches no longer can be used as a defense to a claim of patent infringement. Justice Alito delivered the majority opinion, with Justice Breyer dissenting.

Laches is an equitable doctrine that bars a patent owner’s claim for damages in a patent infringement lawsuit if the patent owner waits an unreasonable amount of time before bringing suit against the accused infringer and that delay prejudices the accused infringer’s defense. This defense has existed for decades and its contours were defined by the Federal Circuit in its A.C. Aukerman Co. v. R. L. Chaides Construction Co., 960 F.2d 1020 (Fed. Cir. 1992) (en banc) decision.

However, with the Supreme Court’s decision in Petralla v. Metro-Goldwyn-Mayer, Inc., 572 U.S. ___ (2014) decision that held that laches cannot bar a claim for damages for copyright infringement within the 3-year statute of limitations, the Court decided to address whether laches can still be a defense to a claim for damages for patent infringement.

In considering this, the Court looked to the history of laches-type defenses, and concluded that they exist as a judicially-created defense by courts of equity when there were no statutes of limitation.  However, “[w]hen Congress enacts a statute of limitations, it speaks directly to the issue of timeliness and provides a rule for determining whether a claim is timely enough to permit relief.” Therefore, because Congress created a 6-year statute of limitations for patent infringement, courts cannot override that statute of limitations with an equitable laches defense. Accordingly, the Court held that the laches defense is no longer applicable in patent infringement lawsuits.

The dissent and appellee pointed out that the patent statute of limitations is unusual and warrants the continuance of the laches defense. The limitations period for a patent infringement claim does not begin to accrue from the point of infringement or the point at which a patent owner has a “complete and present cause of action.” Rather, the limitations period works backwards from the time of the filing of the lawsuit–it only limits a patent owner’s ability to collect damages to the period 6 years before the filing of the lawsuit. In other words, it does not matter if the patent owner knows of the infringement for a period longer than the limitations period (e.g., 10 years ago), but chooses not to file suit until today. Under the patent statute, the patent owner can still bring suit, but it will only be limited to damages occurring in the prior 6 years. This statute of limitations is unlike virtually every other statute of limitations, which would bar such an untimely claim. The majority rejected this distinction out of hand without a clear explanation.

The dissent also pointed out that the majority’s decision creates a significant disincentive for patent owners (especially ones that do not compete with the accused infringer) to act quickly upon learning of infringement. Without the laches defense, a patent owner can sit back and wait until the time at which the most damages have occurred and then file suit. Previously, such a tactic would have run a significant risk that a court might uphold a laches defense and bar any recovery.

The dissent also argued that the majority’s reliance on Petralla is not warranted because of the significant differences between copyright and patent law. With copyrights, the owner must prove copying, whereas patent infringement is a strict liability offense. Therefore, delay will tend to work to the disadvantage of a copyright owner because the evidence of copying may tend to fade with time. On the other hand, a patent owner does not have to prove copying, so the passage of time tends to work in the patent owner’s favor. For example, evidence of prior art or the state of the art at the time of the patent application may become lost with time, which would make it harder for an accused infringer to successfully argue that the patented invention was obvious or anticipated.

As a practical matter, the laches defense was not often successful for accused infringers, but it created an important check against patent owners and encouraged them to timely bring lawsuits when they believed that their patent rights were infringed. It will be interesting to see how patent owners behave now that this check has been eliminated.

Fed Circuit Reverses Finding of Indefiniteness of “Visually Negligible” Term

by: Robert Wagner, intellectual property attorney at the Pittsburgh law firm of Picadio Sneath Miller & Norton, P.C. ()

Inventors often use generalized language in patent claims when they are dealing with concepts that are not easy to quantify. This generalized language can create issues in litigation, when a defendant argues that the claims are so imprecise as to be indefinite. The Federal Circuit recently addressed such an issue in Sonic Technologies Co., Ltd. v. Publications International, Ltd. (Case No. 2016-1449). In that decision, the Court, in a unanimous opinion written by Judge Lourie, held that the trial court erred when it concluded that the term “visually negligible” rendered the claim indefinite.

Background

Sonic Technologies owned a patent that described a system and method for using a “graphical indicator” to encode information on the surface of an object that could be read by an “optical device.” Sonic recognized that such a general concept was not new–for example bar code readers have been in existence for decades–but the novel twist was that the “graphical indicator” was essentially imperceptible to the naked eye. The claims required that the “graphical indicator” be “visually negligible.”

16-1449-opinion-1-3-2017-1

Defendants argued that the term “visually negligible” was too subjective and did not provide reasonable guidance on its meaning. Sonix argued that the term was sufficiently definite in light of the specification, which discussed how the “graphical indicator” did not interfere with an observer’s view of item, in contrast with a bar code, which obscures the content below it.

The trial court agreed with defendants and found that the term “visually negligible” was indefinite and the claims were invalid. Sonic appealed to the Federal Circuit, which reversed, finding that the term was sufficiently definite.

indefiniteness standard

Under 35 U.S.C. § 112, ¶ 2, the claims of a patent must particularly point out and distinctly claim the subject matter of the invention. Supreme Court precedent requires that “a patent’s claims, viewed in light of the specification and prosecution history, inform those skilled in the art about the scope of the invention with reasonable certainty.” (citing Nautilus v. Biosig Instruments, Inc., 134 S.Ct. 2120 (2014)) Because, absolute precision is not required to meet this standard, courts frequently have allowed more generalized language, especially where the specification provides guidance in interpreting the language.

The Federal Circuit looked at the prior cases and concluded that “visually negligible” was not so uncertain as to render the claims indefinite. It contrasted other cases that dealt with terms that were purely subjective, such as “aesthetically pleasing,” with this one. The specification indicated that an indicator was “visually negligible” when it could not readily be seen by the naked eye and provided examples of such indicators. This specificity was sufficient in the Federal Circuit eyes. Moreover, the Court looked to the extension prosecution history (with multiple reexaminations), which indicated that the Patent Office was able to determine the meaning and scope of the term without issue.

The Court ultimately concluded:

Our holding in this case does not mean that the existence of examples in the written description will always render a claim definite, or that listing requirements always provide sufficient certainty. Neither does the fact that an expert has applied a contested claim term without difficulty render a claim immune from an indefiniteness challenge. As always, whether a claim is indefinite must be judged “in light of the specification and prosecution history” of the patent in which it appears. . . . We simply hold that “visually negligible” is not a purely subjective term and that, on this record, the written description and prosecution history provide sufficient support to inform with reasonable certainty those skilled in the art of the scope of the invention. The examiner’s knowing allowance of claims based on the term that is now questioned, plus the acceptance of the term by both parties’ experts, force us to the conclusion that the term “visually negligible” is not indefinite. Accordingly, we reverse the district court’s conclusion that the asserted claims are invalid as indefinite.

En Banc Federal Circuit Clarifies On Sale Bar Standard

by: Robert Wagner, intellectual property attorney at the Pittsburgh law firm of Picadio Sneath Miller & Norton, P.C. ()

Federal CircuitIn The Medicines Co. v. Hospira, Inc. (Nos. 2014-1469 and 2014-1504), the Federal Circuit issued an en banc decision clarifying when a product made pursuant to a “product-by-process” claim is on sale for purposes of 35 U.S.C. § 102(b) under the pre-AIA standards. In a decision written by Judge O’Malley, the Court held that to be on-sale, the product must have been the subject of a commercial sale or offer for sale that bears the “general hallmarks” of a sale under § 2-106 of the UCC.

Background

The case involved an Abbreviated New Drug Application in which Hospira sought FDA approval to sell a generic drug before expiration of two of the patents-in-suit, which claim pH-adjusted pharmaceutical batches of a drug product used to prevent blood from clotting. The patents arose out research involving a similar drug not covered by the patents.

In late 2006 MedCo paid a company (Ben Venue) to manufacture three batches of the drug according to the patented process. The three batches were manufactured by the end of 2006 and had a value of over $20 million (even though it cost substantially less to manufacture them). The three batches were placed in quarantine pending FDA approval. The batches were finally released from quarantine in August 2007, which was after the July 27, 2007 critical date.

Hospira claimed that the patents were invalid under § 102(b) for being on-sale prior to the critical date because of the contract between MedCo and Ben Venue to manufacture the three batches. The district court disagreed, finding that the MedCo-Ben Venue sale was a contract for manufacturing services, and not a commercial sale under § 102(b).

The three-judge panel of the Federal Circuit reversed, finding that the contract did trigger the on-sale bar. The entire Federal Circuit then took up the issue en banc to clarify the on-sale bar standard. The en banc Federal Circuit determined that there was no invalidating prior sale for purposes of § 102(b).

Federal Circuit Clarifies On-Sale Bar Standard

Whether the on-sale bar applies is a question of law based on factual findings, so the lower court’s factual findings were reviewed with deference, but the ultimate legal question was reviewed de novo by the Federal Circuit.

The Court traced the history of the on-sale bar and how it was first codified in the Patent Act of 1836, before its final incarnation (for purposes of these patents) in the Patent Act of 1952. Under § 102(b) an inventor is not entitled to a patent if the invention was on sale in the United States more than one year prior to the date of the patent application.

In Pfaff v. Wells Electronics, Inc., 525 U.S. 55 (1998), the Supreme Court clarified the proper analysis of the on-sale bar, and held that courts should employ a two-part test: (1) was the claimed invention the subject of a commercial offer for sale, and (2) was it ready for patenting at that time? Ready for patenting means either it was reduced to practice or there were sufficient drawings or descriptions to allow one or ordinary skill in the art to practice the invention.

The en banc Federal Circuit focused on the first prong of the Pfaff test–was the invention the subject of a commercial offer for sale? The Court determined that it must answer this question by looking what those in the commercial community would understand as being a sale or offer for sale, and that the UCC was a good resource for answering that question.

Under the UCC, “[a] sale is a contract between parties to give and to pass rights of property for consideration which the buyer pays or promises to pay the seller for the thing bought or sold.” Under this standard, the Federal Circuit did not consider MedCo’s contract with Ben Venue to be a commercial sale because (1) only manufacturing services were sold to MedCo, not the invention, (2) the inventor retained title to the invention and Ben Venue was not entitled to sell the product to others, and (3) stockpiling standing alone does not trigger the on-sale bar.

Here, the patents claimed a product by process, not the process itself. So, the contract to manufacturing the drug was not a contract to purchase the product itself. The Court also found meaningful that Ben Venue lacked title to the batches–MedCo always maintained title in them. Without a transfer a title, the Court was disinclined to find that a sale of a product had occurred. In addition, MedCo and Ben Venue had a confidentiality agreement. While not conclusive, this factor also weighed in favor of the Court finding that a sale had not occurred. Finally, the Court did not find that stockpiling a product was sufficient activity to trigger the on-sale bar because that activity fell into the category of actions that amount to preparations for sales.

Conclusion

Taken together, the Federal Circuit found that there was no commercial offer for sale or sale for purposes of § 102(b) under the pre-AIA standard. This decision will provide some additional clarity and direction for what constitutes a potentially invalidating sale of goods.

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