It’s Not Enough, But Every Journey Begins with One Step.
You can’t breath in space without oxygen. And these days, it can feel like Alice and the AIA sucked all the air out of the room for patentees. But there are signs of hope.
On Sept. 28, I took a deep breath of fresh air after a Federal Circuit reversed a ruling of the U.S. District Court (N.D. Cal.) in a precedential decision favoring AddyHart’s client Cooperative Entertainment, Inc.
SCOTUS’s warped analysis in Alice continues to demand that patent practitioners educate and support the Federal Circuit, the PTO, and the Congress—to restore confidence in the art and practice of invention.
Before writing his world-famous post-nuclear-apocalypse novel On the Beach in 1957, English novelist Nevil Shute—by then an emigré to Australia—published a novel called A Town Like Alice. Maybe you’ve seen the movie. It’s a well-made tale, and all ends well.
I’m optimistic about the court’s future approach to reviewing such decisions!
In Berkheimer v. HP on Feb. 8, the Court reversed summary judgment of ineligibility with respect to some of Berkheimer’s claims. This after having noted—hold your breath!— that whether a claim element is well-understood, routine, and conventional is a question of fact. Thanks: I needed that!
This Wednesday, Feb. 14, it happened again in Aatrix Software v. Green Shades, with the Court vacating a Rule 12 dismissal for lack of patent eligibility because of issues of claim construction and fact, which must be interpreted for Rule 12 in the light most favorable to the non-movant.
A Valentine for the Federal Rules of Civil Procedure! An approach based on the question of fact!
I hope these decisions mark the beginning of a broader recognition of the underlying facts related to patent eligibility and the proper procedure required for Rule 12 dismissal. And that they don’t just end up being two rare survivors in the carnage that has resulted from the Alice decision.
More detail in my piece on IPWatchdog.
MIMI
EI’s case is of substantial import to all inventors and patent holders, and the company is requesting amicus support. I hope readers will consider joining the fight.
A Federal Circuit panel affirmed the District Court’s decision to invalidate Evolutionary Intelligence’s patents, then denied a petition for rehearing and rehearing en banc. This despite EI’s having won several IPR challenges made by Apple, Twitter, and Yelp.
The positions are outlined in this Request for Amicus Support.riefs would be due on or around Nov. 22. Your notice to opponents would be due on or around Nov. 10.
Relevant Materials
Here is the District Court Decision holding EI’s patents not eligible, and the Federal Circuit Decision affirming the district court. Here are US Patent No. 7010536 and US Patent No. 7702682. Here’s the PTAB Decision upholding U.S. Patent No. 7010536.
Background
Since Alice, district courts have invalidated hundreds of patents on the pleadings. Such cancellations offer patent-holders no opportunity for fact-finding, claim-construction briefing, or any of the other usual protections offered in patent litigation. The result is significant devaluation of patent portfolios.
Evolutionary Intelligence v. Sprint Nextel concerns artificial intelligence inventions, directed to dynamically optimizing mobile search results and notifications according to spans of time and physical movements through space.
For example, the invention enables a person standing in a particular spot at, say, 7:00 am to know immediately the five closest restaurants currently serving breakfast. While this feature seems common now, the record shows this was “groundbreaking” when the patents were filed.
If you have any questions or wish further information, please contact me.
That’s the issue the U.S. Supreme Court will consider in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, et al., No. 16-712 (2017).
On August 31, Tabet DiVito & Rothstein filed an amicus brief on behalf of the American Intellectual Property Law Association (AIPLA) in that case. I drafted the brief in support of neither party, requesting that the Court confirm the constitutionality of the PTAB’s inter partes review process.
The brief argues that Congress’s creation of an adjudicatory process within the USPTO for the limited purpose of reviewing and, if necessary, cancelling improperly issued patents violates neither the Constitution’s separation of powers nor its Seventh Amendment guarantee of a right to a jury trial. The brief also acknowledges that, while not unconstitutional, the current implementation of PTAB procedures is not ideal and does not seem balanced. However, AIPLA recognizes that the PTAB has been willing to work with the bar to rectify imbalances.
Oil States v. Greene’s Energy has far-reaching implications for all types of post-grant review—as indeed for non-Article III courts. A date for argument is not yet scheduled.
MIMI
IPLAC’s brief supports Synopsys’s request for certiorari on yet another Federal Circuit decision that has further muddied the waters about Section 101 patent eligibility.
The brief recognizes that the U.S. district courts’ wide-ranging application of the two-step Alice test has eroded the necessary predictability in the law about what types of inventions remain patent-eligible.
The current lack of a settled rubric for determining patent eligibility under §101 means that some decisions on eligibility are based on analogies extrinsic to the claim language, while others, such as that in Synopsys v. Mentor Graphics, fail to credit anything but the claim language.
Our innovation economy cannot long endure a system that interprets claim language extrinsically only or intrinsically only on a whim. A continuing lack of settled law will result in an insurmountable barrier to patentees seeking protection for patent-eligible inventions.
Tabet DiVito & Rothstein filed IPLAC’s brief in support of the petition for certiorari on May 31, 2017.
MIMI
The brief supports the Federal Circuit interpretation of the general venue statute at 28 U.S.C. 1391 as providing a definition of “resides” applicable in the patent venue statute later in that chapter at 28 U.S.C. 1400(b).
Although the Supreme Court in 1957 held that the two statutes worked independently, Congress changed the law in 1988 by adding to the general venue statute the language “for purposes of venue under this chapter.” In 2011, Congress rewrote section 1391(b) to provide a definition of “resides” specifically applicable “for all venue purposes.”
The Association recognizes there may be problems with the current venue rules, but suggests these current rules are better than a return to the antiquated patent venue rules of the mid-20th century, as espoused by Petitioner. If changes are needed, they should come from Congress.
TDR filed the brief on AIPLA’s behalf on February 6. Argument is set for March 27, 2017.
MIMI
Norris’ article of October of 2013, “Extracting a Toll From a Patent ‘Troll’,” offers a good and detailed summary (as good as it gets in mainstream media) of the issues at stake in Octane, now up for Supreme Court review.
But it leaves open the most important question. As right as it appears on its face, introducing a predicate for the award of attorney fees to the winner in a litigation amounts to a strong disincentive even to justified litigation. It’s a slippery slope.
Who wants to slip on a running machine?
MIMI
I am. I thought there would be some—though maybe negligible—situation where the district court was forced to rely on extrinsic evidence, such as expert testimony. And the district court’s decision with respect to that evidence would be reviewed for clear error.
Sure, it would be a rare situation where the construction of a patent claim term actually turned on the court’s decision on this extrinsic information. But nonetheless, haven’t we all seen this rare situation at least once?
I was looking forward to analyzing cases for these rare situations. After all, isn’t the decision in Lighting Ballast just a continuation of the legal fiction of Cybor?
MIMI
From the day of its inception in October of 1982, the role and rulings of the U.S. Court of Appeals for the Federal Circuit, a court of limited subject matter jurisdiction but a nationwide reach, have been the subject of much debate.
One thing, however, is beyond debate: the Court’s decisions have shaped the landscape of innovation and will continue to. Due in part to changes made by the America Invents Act, but also due to changes in our reliance on science and technology, the Federal Circuit’s effect on business and our economy will continue to grow.
It’s part of the mandate of the Federal Circuit to adjudicate in the wide range of patent cases brought before it. And in an era where patent portfolios have become global economic weapons, based on the volume of cases being brought before the Patent Trial and Appeals Board (PTAB) of the USPTO, it seems inevitable that the workload of the Federal Circuit will only grow. The importance of its decisions also will increase.
By the time a case makes it to oral hearing before CAFC, the legal issues should have been laid out by both sides—even if the direction of a future ruling is not. Once a ruling is made, however, its ramifications for the business world often become a matter for debate.
My blog FederalCircuitBusiness.com was established to discuss the work of the CAFC and the effect of the Court’s decisions on business. I conceived of it as a place for discussion about the CAFC’s activities and direction, and on the ramifications of those decisions in the business world. The blog talks to these issues—and I welcome dialogue and discussion. IP law and business is my subject. The Federal Circuit provides my focus.
No one makes expensive decisions about the direction of their IP without considering the business ramifications. American business depends on innovation—and the protection of that innovation. Ideas are our currency. Successfully fostering intellectual property not only has a positive impact on America’s corporations, but also promises more jobs, better lifestyles, and increased tax revenues. So it’s necessary to talk about legal issues in business terms.
My subject matter will necessarily vary with the docket and the news. For example, it’s fashionable right now to beat up on NPEs—so-called patent trolls. While that topic appears compelling, drawing a line that helps define what is and is not a “troll” is difficult if not impossible.
And I’m not sure it should be at the top of our list of concerns. More important is how our courts and the CAFC handle the sheer volume of cases to come, whether originating in the USPTO or the ITC, whether filed by an NPE or by a manufacturing entity, in an era when Google, Apple, IBM and others have portfolios of literally hundreds of thousands of patents they can assert—or that may someday be owned by a non-practicing proxy.
What about the complexities that arise from the impact of technology on the development of new business methods? Where does obviousness end and innovation begin? Why shouldn’t a software programmer who works through a business machine—a computer and its software—not be accorded the same status as an inventor who engineers a supposedly new business machine, even though the latter still relies on computer processing? Is a method more than just a wrinkle in code?
And when is a different type of code, composed of chemicals and protein strings in a Petri dish, rightly deemed to have become inventio ab nulla instead of derivative of a chemical compound that occurs de rerum natura—in human genetic code?
My blog ventures commentary on cases like these and others. From smartphones to precision steel bearings, from standard essential patents to estoppel, from inequitable conduct to claim construction, I seek to offer insights on the effect on the Federal Circuit of today’s IP wars, and discuss the effects of its rulings.
This is the focus of FederalCircuitBusiness.com, a place for commentary on the battles relating to America’s intellectual property. We welcome both legal and business contributors who can weigh-in on the complex (and highly litigious!) environment for America’s intellectual property.
Seeds need fertile soil in which to grow. To ensure future harvests and sustain its business ecosystem, America must foster and encourage entrepreneurship and innovation. Patent law and intellectual property protections hope to do that, but developments and judgments don’t always seem to help us achieve that objective. I’ll examine why, and I hope you’ll join the conversation.
MIMI
