Last week the Federal Circuit in Helsinn Healthcare v. Teva Pharmaceuticals clarified the scope of the on-sale bar rule under the America Invents Act (AIA). The on-sale bar in general means that a sale or an offer to sale of an invention more than one year prior to the effective filing date of a patent qualifies as prior art. The Federal Circuit held that 35 U.S.C. § 102 as revised in the AIA does not change the long-settled rule that a sale can invalidate an invention even if the sale does not disclose the details of the invention.
Ping Hu is an Associate based in our Boston office. His practice focuses on patent litigation and arbitration, IP transactions and due diligence, patent prosecution, and post-grant proceedings before the USPTO. He counsels clients in diverse technology areas such as electronic devices, medical technology and devices, mechanical devices, computer/network software and hardware, security software and systems, communication systems, mobile devices and applications, e-commerce applications and services, financial applications and services, business methods, and composite/polymer materials.
The Court of Appeals for the Federal Circuit (the Federal Circuit) has more recently been indicating to the Patent Trial and Appeal Board (the Board) the importance of explaining its reasoning when invalidating patent claims. The Federal Circuit’s decision in Icon Health and Fitness v. Strava, finding that the Board did not make requisite factual findings or provide adequate explanations, is the latest reminder from the Court.
Appellee Strava sought inter partes reexamination of U.S. Patent No. 7,789,800. The Examiner found certain claims obvious over various prior art references. The Board affirmed the Examiner’s rejection of all pending claims as obvious. Appellant Icon Health and Fitness appealed the rejection of twelve claims to the Federal Circuit. The Federal Circuit affirmed in part as to three of the twelve claims, but vacated and remanded in part as to the other nine, stating that the Board’s decision “contain[ed] no substantive discussion of the limitations at issue.” Continue Reading Federal Circuit Reminds PTAB to Explain its Reasoning
The America Invents Act (“AIA”) mandates that a Covered Business Method Review is available only for challenging the validity of covered business method patents. On November 21, 2016, the Federal Circuit ruled in Unwired Planet v. Google that the Patent Trial and Appeal Board (PTAB) had rendered this limitation “superfluous” by failing to apply the correct statutory definition of “covered business method patent.” Accordingly, the Federal Circuit vacated PTAB’s final written decision and remanded the case for a threshold determination of whether the challenged patent is a covered business method patent under the controlling statutory definition.
On October 9, 2013, Google petitioned for Covered Business Method (CBM) patent review of Unwired Planet’s U.S. Patent No. 7,203,752. On April 8, 2014, PTAB instituted CMB review (CBM 2014-00006), stating that, when determining whether the ’752 patent was a CBM patent, the proper inquiry is “whether the patent claims activities that are financial in nature, incidental to a financial activity, or complementary to a financial activity.” Applying this standard, PTAB determined that the ’752 patent was a CBM patent eligible for CBM review because the claimed invention could be used to facilitate advertising and therefore is incidental or complementary to a financial activity.
On October 19, 2016, the ITC instituted Investigation No. 1025, based on a complaint filed on May 26, 2016, by Silicon Genesis Corporation (SiGen), against Soitec, S.A. (Soitec). As part of the institution, the ITC ordered that the ALJ issue an early initial determination regarding whether SiGen “has satisfied the economic prong of the domestic industry requirement.” See 81 F.R. 73419 (Notice of Institution of Inv. No. 1025) (Oct. 25, 2016). This is now the fourth time the ITC has ordered the 100-Day program in an investigation, and in this case it appears that previous behavior by the complainant SiGen contributed to the order.
The Federal Circuit reaffirmed last week that the Patent Trial and Appeal Board’s (PTAB’s) decision to discontinue inter partes review (IPR) proceedings is not reviewable on appeal. In Medtronic, Inc. v. Robert Bosch Healthcare Systems, Inc., the Federal Circuit held that just as the PTAB’s initial decision whether to institute inter partes proceedings is not appealable in light of 35 U.S.C. §314(d) and the Supreme Court’s recent Cuozzo decision, neither is a subsequent decision to vacate that institution decision.
Bosch sued Cardiocom (a subsidiary of Medtronic) in 2013 for infringing two Bosch patents. Cardiocom then filed petitions for inter partes reviews of the Bosch patents, which the PTAB denied in January 2014. Medtronic then filed three more petitions seeking inter partes reviews of the same Bosch patents, listing Medtronic as the sole real party in interest. The PTAB instituted the proceedings but allowed Bosch discovery regarding Cardiocom’s status as a real party in interest. Based on the discovery, the PTAB granted Bosch’s motion to terminate the proceedings because Medtronic failed to name Cardiocom as a real party in interest as required by 35 U.S.C. §312(a)(2).
The Federal Circuit relied on Nautilus to preserve functional language of a method claim in a decision published last Friday. In Cox Comm, Inc. v. Sprint, No. 2016-1013, the Federal Circuit held that the term “processing system” did not render the asserted claims indefinite. The Federal Circuit relied on novel considerations to reach this conclusion. The Federal Circuit stated that because the term “processing system” “play[ed] no discernable role in defining the scope of the claims,” it was difficult to find the claims indefinite.
Software patents have been facing intense scrutiny under 35 U.S.C. § 101 for subject matter eligibility since the U.S. Supreme Court’s Alice v. CLS Bank decision in 2014. In the last two years, the patent ecosystem (including USPTO examiners, PTAB, U.S. district courts, and the Federal Circuit) is generally considered unfavorable and sometimes hostile to software patents.
However, a new hope may have arisen lately. Last month, we reported that the Federal Circuit upheld validity of a software patent under § 101 in its Enfish v. Microsoft decision on May 12, 2016 [click here]. This is only the second time since the Alice decision in 2014 that a software patent has won at the Federal Circuit in terms of § 101 subject matter eligibility.
In Enfish the Federal Circuit held that claims directed to software, as opposed to hardware, are not inherently abstract and should not automatically fail the first step of the Alice analysis. The Federal Circuit clarified that the proper test should be “whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea, even at the first step of the Alice analysis.” The Federal Circuit then found the claims in the Enfish patents about “self-referential” database tables to be directed to “a specific improvement to the way computers operate” and therefore not abstract ideas.
Patent owners continue to face an uphill battle at the Patent Trial and Appeal Board. According to U.S. Patent Office statistics as of December 31, 2015, a majority (72%) of the 529 Inter Partes Reviews (IPR) proceeding to trial and receiving Final Written Decisions ended in all examined claims being invalidated. The story is worse for Covered Business Method (CBM) patent post-grant reviews, where 81% of the 69 CBM proceedings receiving Final Written Decisions as of December 31, 2015 found all examined claims unpatentable. And the trend continues, with the Board issuing last week a Final Written Opinion invalidating all examined claims of a mortgage processing patent as unpatentable for failing to claim patent eligible subject matter.
In E-Loan, Inc. v. IMX, Inc., CBM2015-00012 (Paper No. 19), Petitioner E-Loan sought CBM review of claims 7, 8, 26, and 27 of U.S. Patent No. 5,995,947 (“the ’947 Patent”) under 35 U.S.C. §101. The ’947 Patent describes a method and system for loan processing, such as making and trading loan applications. Claims 7 and 8 recite a method of processing loan applications involving maintaining a database of pending loan applications and their statuses at a database server, where each party to a loan can search and modify that database consistent with their role in the transaction by sending requests to the server from a client device. The role may include a lender and the client device may include a lender station associated with at least one lender, where the lender can search the database for desired loan types, bid on loan applications and receive notification when a bid is accepted. Claims 26 and 27 are directed to a system having a database, a transaction server, a lender station, and a message notifying the lender that perform the steps recited in claims 7 and 8. Continue Reading USPTO “Forecloses” on Mortgage Processing Patent under Alice
Yesterday the Federal Circuit ruled in MCM Portfolio LLC v. Hewlett-Packard Company (here) that vesting the Patent Office with power to take back previously-conferred patent rights through inter partes review does not violate Article III or the Seventh Amendment. According to Judge Dyk:
“Congress created the PTO … and saw powerful reasons to utilize [its] expertise … for an important public purpose—to correct the agency’s own errors in issuing patents in the first place. Reacting to ‘a growing sense that questionable patents are too easily obtained and are too difficult to challenge,’ Congress sought to ‘provide a more efficient system for challenging patents that should not have been issued’ and to ‘establish a more efficient and streamlined patent system that will improve patent quality and limit unnecessary and counterproductive litigation costs.’… It would be odd indeed if Congress could not authorize the PTO to reconsider its own decisions.”