shutterstock_197051783On Tuesday, April 26, 2016, the Federal Circuit issued an order denying a petition filed by Merck & Cie for rehearing en banc of an Inter Partes Review (“IPR”) final written decision by the Patent Trial and Appeal Board holding several Merck patents invalid as obvious.  Merck & Cie v. Gnosis S.P.A. et al., Case No. 2014-1779 (Fed. Cir., Apr. 26, 2016).  While sympathetic to the challenge that a patentee faces in defending patent validity on appeal under the lower “substantial evidence” standard, the Court affirmed its December 2015 ruling in Merck & CIE v. Gnosis S.P.A. et al., Case No. 2014-1779 (Fed. Cir., Dec. 17, 2015) that the “substantial evidence” review standard applies to post-grant review decisions by the Board.

In reaching its decision, the Court found itself bound by its In re Gartside precedent requiring that agency factual findings are to be reviewed for “substantial evidence.”  Writing for the Court majority, Judge O’Malley explained that applying the “substantial evidence” standard to Board decisions is dictated by 5 U.S.C. § 706 of the Administrative Procedure Act and the U.S. Supreme Court’s ruling in Dickinson v. Zurko, 527 U.S. 150 (1999) that a more searching review for “clear error” applies only to “court/court” review and not “court/agency” review.  Under the “substantial evidence” standard, the Court only inquires whether the agency could have reasonably made its decision as opposed to correctly made the decision given relevant evidence.

Continue Reading Between a Rock and a Hard Place: Federal Circuit Says Its Required to Accord the PTAB Deference Until Instructed Otherwise by SCOTUS or Congress

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 (CBmortgage-processing-patent-usptoM) 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

As 2016 begins and IP strategies are being developed for the new year, it is a good time to reflect on what IP issues were prominent in 2015.  According to the many readers of Global IP Matters, hot topics included navigating the waters of U.S. patent prosecution, analyzing Federal Circuit appeals from the International Trade Commission, and handling Japanese patent oppositions.

Here are 2015’s top 5 most popular blog posts at Global IP Matters:

  1. RCEs and the New USPTO Patent Term Adjustment Rules – This post discusses U.S. Patent and Trademark Office (USPTO) rules for Patent Term Adjustment for patents where a request for continued examination (RCE) was filed during prosecution. In general, the first new rule, effective January 9, 2015, provides that applicants are entitled to B-Delay between allowance and issuance, and the second new rule, effective March 10, 2015, creates a new type of applicant delay when an RCE is filed after allowance.
  1. Suprema v. ITC: En Banc Federal Circuit Overturns Panel Decision, Finds ITC Has Jurisdiction Over Induced Infringement of Method Claims – This decision is particularly important for cases involving the software and high tech industries, which often rely heavily on induced infringement allegations. This blog post provides a detailed breakdown of the Federal Circuit’s opinion.
  1. Prepare for the Japanese Patent Opposition System Coming Soon – In advance of Japanese Patent Act revisions effective May 14, 2015, this post provided an overview of the changes and indicated how parties may wish to begin preparing and considering being more aggressive in monitoring competitors’ Japanese patent applications and allocating resources to file oppositions in Japan.
  1. Understanding Post-AIA Power of Attorney Procedures – Although the America Invents Act (AIA) implemented changes affecting Powers of Attorney in U.S. patent applications on September 16, 2012, pre-AIA Powers of Attorney are still relevant for many pending applications filed before that date. This post discusses in simple terms how Power of Attorney can be properly established before the USPTO in pre-AIA and post-AIA cases.
  1. ClearCorrect v. ITC: Federal Circuit Hears Argument in Case Which Will Decide Whether ITC Has Jurisdiction Over Digital ImportsClearCorrect v. International Trade Commission decided whether the ITC has power to exclude intangible items imported digitally rather than physically. This post summarizes the case’s intense oral arguments. (Global IP Matters later covered the case’s decision that overturned the ITC’s opinion.)

Fed-Circuit-300x99In Ethicon Endo-Surgery, Inc. v. Covidien LP, a 2-1 panel split of the Federal Circuit held that neither the American Invents Act (“AIA”) nor the Constitution precludes the same panel of the Patent Trial & Appeal Board (“PTAB” or “Board”) from both deciding whether to institute an inter partes review (“IPR”) of a challenged U.S. Patent and making the final patentability determination in that IPR.

Under the AIA, an IPR validity challenge can hinge on two major determinations: whether to institute a requested IPR trial, and, if the IPR is instituted, whether the challenged claims were proven unpatentable during that IPR trial. Under the United States Patent and Trademark Office’s (“PTO”) current implementation of the AIA, both of these determinations are typically made by the same Board panel of three Administrative Law Judges.

Consistent with that implementation, when Covidien petitioned the PTO for inter partes review of Ethicon patent claims, the same Board panel decided to institute the IPR and then issued a final written decision finding the challenged Ethicon patent claims unpatentable.

Continue Reading USPTO Implementation of AIA Does Not Violate Due Process: Federal Circuit Affirms the PTAB Panel Determining Institution of an IPR can also Issue the Final Written Decision

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. Crowd Funding Image

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.

Continue Reading Crowdfunding and IP in Health and Biotech Start-ups (Part 3): Potential Dangers

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.

Continue Reading Newsflash, Politico: ‘Patent Death Squad’ Alive and Well

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:

Continue Reading Fed Circuit Reverses PTAB Decision in IPR Proceeding

U.S. patent applications filed after March 16, 2013, when the “First-Inventor-to-File” portion of the America Invents Act (AIA) took effect, have started to be published.  Thus, it is a good time for applicants to consider filing U.S. patent applications that can be patentable over applications that otherwise would be considered prior art.  The AIA provides for such a prior art exception in 35 U.S.C. § 102, although it comes with drawbacks and risks that applicants may generally wish to avoid, as discussed further below.

Continue Reading Does the AIA Have a Prior Art Exception You Can Use?

Applicants identified upon a U.S. patent application’s filing can impact the ownership rights to the patent application throughout prosecution.  Prior to implementation of relevant aspects of the America Invents Act (AIA) on September 16, 2012, patent application Applicants could only be Inventors.  Conversely, applications filed on or after September 16, 2012 can have Inventors or Assignees as Applicants.  The choice of Applicant – Inventors or Assignees – upon filing in post-AIA applications affects how Power of Attorney can be properly established before the U.S. Patent and Trademark Office (USPTO).

Pre-AIA patent applications filed before September 16, 2012 can have Power of Attorney granted by Inventors or Assignees under Rule 32, provided that the requirements of Rule 3.73 are satisfied.  In contrast, post-AIA applications filed on or after September 16, 2012 can be filed with Inventors or Assignees as the Applicant, with Rule 32 requiring a Power of Attorney to be signed by either the “Applicant” or “Patent Owner.”  However, an Assignee only becomes the patent owner after the application issues as a patent.  Thus, in order to take over prosecution in a post-AIA application, the Assignee must either initially be listed as or later formally established to be the Applicant for Power of Attorney to be granted on behalf of the Assignee.

Continue Reading Understanding Post-AIA Power of Attorney Procedures

Last March, the USPTO experienced an enormous spike in the typical number of application filings per week, as numerous US provisional and non-provisional patent applications were filed in advance of the March 16, 2013 effective date for the “First to File” provisions of the America Invents Act (AIA).

Thus, a large number of provisional applications are due for conversion in the coming days.  As you are preparing your applications for conversion and/or foreign filing, there are few things to keep in mind to make sure your filings go smoothly:

  • Anticipate that there will be a serious strain on the electronic filing systems at the USPTO and be prepared for unexpected delays and outages.  Alerts about the current status of the electronic filing systems of the USPTO can be found at:

  • Have an emergency plan in place in case you cannot file electronically.  Ensure everyone on your staff is familiar with alternative means for filing US nonprovisional and PCT applications.  Locate your closest Post Office and have additional supplies ready for paper filing, if necessary.
  •  Arrange to have multiple methods available to pay all necessary filing fees:
    • If you have a Deposit Account, be sure to replenish it as often as possible to ensure sufficient funds are available for your daily filings
    • If you are using a credit card to pay for filings, check that your available balance can accommodate all filings

Good luck!