Earlier this week, the Federal Circuit in Circuit Check Inc. v. QXQ, Inc. clarified the standard by which a reference may be considered prior art for the purposes of an obviousness determination. See No. 2015-1155, Slip. Op. (Fed. Cir. July 28, 2015). This opinion may be useful for parties asserting patent infringement because it has the potential to reduce the scope of prior art available to an accused infringer alleging obviousness of an asserted patent.
In order for a reference to be considered prior art for the purposes of an obvious determination, the reference must be analogous. Id. at 6 (citing Wang Labs., Inc. v. Toshiba Corp., 993 F.2d 858, 864 (Fed. Cir. 1993). In Circuit Check Inc., the Federal Circuit explained that just because something “is within the common knowledge of humankind does not mean that … [it] is analogous art.” Id. at 7. “Rather, the [pertinent] question is whether an inventor would look to this particular art to solve the particular problem at hand.” Id.
Yesterday the Patent Trial and Appeal Board (“Board”) added a recent order to its list of Representative Orders, Decisions, and Notices. See MasterImage 3D, Inc. v. RealD Inc., IPR2015-00040, Paper 42 (PTAB July 15, 2015). The Representative Order in MasterImage concerns motions to amend and elaborates on the Patent Owner’s burden to set forth a prima facie case of patentability of narrower substitute claims in a motion to amend as originally set forth in Idle Free Systems, Inc. v Bergstrom, Inc., IPR2012-00027, Paper 26 (PTAB June 11, 2013).
The panel in Idle Free indicated that a patent owner must show that its proposed substitute claims are patentably distinct over the “prior art of record” and “prior art know to the patent owner.” Id. at 7. In MasterImage, the Board issued an order clarifying the meaning of both phrases. MasterImage at 4. The MasterImage panel explained that “prior art of record” refers to any material art (i) in the prosecution history of the challenged patent, (ii) in the current proceeding (including art asserted in grounds on which the Board did not institute review) and (iii) in any other proceeding before the Office involving the challenged patent. Id. at 1.
The Board further held that “prior art known to the patent owner” “should be understood as no more than the material prior art that the Patent Owner makes of record in the current proceeding pursuant to its duty of candor and good faith to the Office under 37 C.F.R. § 42.11, in light of a Motion to Amend.” Id. at 2. According to the panel, a patent owner should focus its patentability analysis on the limitation(s) that each new claim adds to the original claim(s): “Because a proposed substitute claim is considered after the corresponding patent claim is determined unpatentable, Patent Owner’s addition of a limitation to render the claim as a whole patentable places the focus, initially, on the added limitation itself.” Id. The Board noted that information relating to one or more added limitations can still be “material” even if it isn’t directed to one or more of the elements of the original claims. Id. (citing VMWare, Inc. v. Clouding Corp., Case IPR2014-01292, slip op. at 2 (PTAB Apr. 7, 2015) (Paper 23)).
The Representative Order concluded by reinforcing that even though the burden of production shifts to the petitioner following a patent owner’s prima face case of patentability, the ultimate burden of persuasion remains with the patent owner to demonstrate the patentability of the substitute claims. Id. at 3.
On June 26, 2015, the ITC handed down its Commission Opinion in Certain Loom Kits for Creating Linked Articles, Inv. No. 337-TA-923, Comm’n Op. (Feb. 3, 2015) (hereinafter “Loom Kits ”), granting a general exclusion order. In its opinion, the Commission provided express rulings on what does and does not count towards the establishment of the economic prong of the domestic industry requirement under 19 U.S.C. § 1337(a)(3)(C).
The complainant in the investigation is Choon’s Design, LLC, which was founded by the sole inventor of the patent-at-issue, Mr. Ng, to protect its loom kit product for children. Id. at 1. After Mr. Ng’s product became successful, many similar products appeared on the market. Mr. Ng made numerous attempts to halt the sale of the knockoffs—filing “nine lawsuits against multiple piece loom kits,” sending “multiple cease and desist letters,” and “161 advisory letters to 161 U.S. malls informing them of the infringement problems,” and registering the “RAINBOW LOOM” trademark and copyright. Loom Kits, Init. Det., Order No. 13, at 47-48 (Feb. 3, 2015). Yet, after these efforts were insufficient, Mr. Choon filed an ITC investigation seeking a general exclusion order. Id. at 1.
The Federal Circuit’s recent en banc opinion in Williamson v. Citrix Online, LLC, 2015 U.S. App. LEXIS 10082, *2 (Fed. Cir. June 16, 2015) (Williamson II) may result in courts finding that more claims include “means-plus-function” claim elements, which could significantly affect the scope and validity of those claims. As a result of Williamson II, the Federal Circuit has weakened the “presumption” that claim elements lacking the term “means” fall outside the means-plus-function analysis. Continue Reading
On June 23, 2015, the Federal Circuit affirmed the finding of the U.S. District Court for the Northern District of California (“District Court”) dismissing the complaints in four related actions for infringement of U.S. Patent No. 7,707,505 (the ‘505 Patent) on the ground of patent ineligibility under 35 U.S.C. §101. See Internet Patents Corp. v. Gen. Auto. Ins. Servs., Inc., 29 F. Supp. 3d 1264 (N.D. Cal. 2013) (“Dist. Ct. Op.”). Continue Reading
This is the third in a 3-part series about the use of crowdfunding in health and biotech start-ups. We started with the story of a tech start-up which set records for funding through a Kickstarter campaign, triggering the interest of entrepreneurs in capital- intensive industries. Part 2 discussed the JOBS Act and the government’s attempt to overcome regulatory hurdles facing companies which want to use crowdfunding to raise equity investment capital. Part 3 addresses some Potential Dangers inherent in the system of crowdfunding being devised. We hope you find the series educational and invite you to contact the authors with questions.
PART III: First, the JOBS Act requires the SEC to issue complex implementing rules prior to crowdfunding becoming a reality. For any startup seeking funding through a crowdfunding source, the rules proposed by the SEC under the Act demand detailed disclosures regarding the company. The company must also describe exactly how the securities it is offering are being valued. Additionally, the Act requires ongoing, annual financial reports from the company after any successful crowdfunding campaign. These facts alone may scare off some entrepreneurs.
This is the second in a 3-part series about the use of crowdfunding in health and biotech start-ups. We started with the story of a tech start-up which set records for funding through a Kickstarter campaign, triggering the interest of entrepreneurs in capital- intensive industries (Part 1: The Beginning). Part 2 discusses the JOBS Act and the government’s attempt to overcome regulatory hurdles facing companies which want to use crowdfunding to raise equity investment capital. Part 3 will address some Potential Dangers inherent in the system of crowdfunding being devised. We hope you find the series educational and invite you to contact the authors with questions.
PART 2: he US government began to address these investment challenges through the Jumpstart Our Business Startups Act (JOBS Act) in April 2012. While companies like Kickstarter allow startups to sell products or services, the JOBS Act envisions companies actually selling equity in themselves through crowdfunding campaigns. Certain provisions of the JOBS Act allow investments by accredited investors, and Title III of the JOBS Act anticipates allowing large numbers of non-accredited individuals to invest in startup companies. Rules proposed by the Securities and Exchange Commission (SEC) to implement the Title III crowdfunding provisions of the JOBS Act were expected by the end of 2013, but they have continually been delayed. Expectations now place release of the rules at the end of 2015.
Politico, the popular political journalism publication, recently ran the story “Patent Reform Advocates: PTO Process Not Patent ‘Death Squad.’” The story was based on a blog post by patent reform advocate Unified Patents. Politico reported Unified Patents’ proclamation that the Patent Trial and Appeals Board (“PTAB” or “Board”) has ruled valid 62% of challenged claims. But this figure is misleading at best and even conflicts with data published by the USPTO.
Unified Patents is no mere patent reform advocate. Rather, the company exists to capitalize on the review processes put into play by certain provisions of the Leahy-Smith America Invents Act (“AIA”). Founded in 2012 – the same year that those provisions of the AIA went into effect – Unified Patents’ business model is to target non-practicing entities (“NPEs”) with inter partes review (“IPR”) proceedings. A stated goal of the company is to “zealously fight invalid patents” (see Unified Patents’ website). With respect to IPRs, patent reform advocates have remarked “how valuable it is to have [the AIA review] processes in place” (attributed to Beth Provenzano of United for Patent Reform).
In fact, Unified Patents has done more than simply remark on patent reform; it was a petitioner in 21 IPR proceedings, according to the USPTO’s publicly-available PTAB trial data. Of those 21 petitions, Unified Patents failed to have IPRs instituted on ten petitions and institution has not yet been determined for nine additional petitions. Of the two instituted decisions, only one has reached decision. Not surprisingly, the Board found all claims unpatentable.
On June 16, the Federal Circuit issued its first-ever reversal of a Patent Trial and Appeal Board decision in an America Invents Act post-grant proceeding. The opinion, drafted by Chief Judge Prost and joined by CAFC Judge Lourie and E.D. Tex. Judge Gilstrap, provides considerable guidance on claim construction and claim amendments in practice before the PTAB.
The case is Microsoft Corp. v. Proxyconn, Inc., No. 2014-1542 and 1543. It reached the Federal Circuit after Proxyconn asserted U.S. Patent No. 6,757,717 against Microsoft in the Central District of California, and Microsoft initiated two separate inter partes review proceedings against the patent (IPR2012-00026 and IPR2013-00109). The PTAB joined the two IPRs and granted review on certain claims. In its final written decision, the PTAB found all but one reviewed claim unpatentable and denied Proxyconn’s motion to amend its claims. Both parties appealed. The Patent Office intervened in support of the PTAB’s position.
The Federal Circuit vacated certain portions of the final written decision, holding that the PTAB’s claim constructions exceeded the “broadest reasonable interpretation” standard. The PTAB’s denial of Proxyconn’s motion to amend was not disturbed. Here are some key takeaways from the case:
On June 15, 2015, the United States Patent and Trademark Office (“USPTO”) issued Notice in the Federal Register announcing a new pilot program, the Expedited Patent Appeal Pilot. Under the program an appellant may have an ex parte appeal to the Patent Trial and Appeal Board (“Board”) accorded special status if the appellant withdraws the appeal of another application in which an ex parte appeal is also pending before the Board. According special status is a procedure under which an application is advanced out of turn. A stated goal of the Expedited Patent Appeal Pilot is to reduce the backlog of appeals pending before the Board. The pilot program also will allow appellants having multiple ex parte appeals pending before the Board to have greater control over the priority with which their appeals are decided. Petitions can be filed to participate in the pilot program until June 20, 2016, or until 2,000 petitions are granted, whichever occurs first.