UNITED STATES PATENT LAW WINTER 2015 UPDATE Presented by: Steven S. Rubin, Esq. Moritt Hock &...

UNITED STATES PATENT LAW WINTER 2015 UPDATE

Presented by:

Steven S. Rubin, Esq.Moritt Hock & Hamroff LLP

400 Garden City PlazaGarden City, New York 11530

[email protected]

Selection Process

• Cases (not statutes or bills)• Precedential• Sampling• Fed. Cir., Supreme Court• Affects our practice

– Lighting Ballast Control v. Philips Elecs. N. Am Corp.– Claim construction is reviewed de novo

• Not boring

Outline

• 101• 102• 103• 112

• 271– Infringement– Claim construction– Standing

Outline

• 101• 102• 103• 112


35 U.S.C. 101

• Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

CLS Bank v. Alice (Fed. Cir. May 10, 2013)

• Claims: computerized escrow system where third party handled risk that first party would not pay second party

• Method• CRM • System• Posture – Appeal of SJ ruling BEFORE Markman


• “Per Curiam” Holding (10 of 11 Judges):– Method and computer-readable media claims are not patent eligible under §101

• Additional holdings (when you count up judges):– Method, CRM and system claims stand or fall together for 101 analysis– 101 has statutory classes (process, machine, manufacture, composition) – Exceptions include law of nature, abstract idea natural phenomena– An application of one of the exceptions is OK– Application need meaningful limitations– Not insignificant post-solution activity– Tether, embody to a real world thing– Presumed valid so clear and convincing


Some clear rules• Statutory classes • Tie to something tangible• All claims can stand or fall

together

Cert. granted December 6, 2013

Alice v. CLS(Sup. Ct. June 19, 2014)

• Basically unanimous (concurrence on business methods)

• All claims use a computer• “Abstract” is an exception to 101• Monopoly on abstract idea would impede

innovation• All inventions apply an abstract idea


Test:• 1) Are the claims directed to an abstract idea?• 2) What else is added? Need “something more” that

“transforms” – Inventive concept


1) Directed to Abstract Idea?– Abstract idea of intermediated settlement• Fundamental economic practice long prevalent in

commerceSteve’s pyramid rule


2) Something more?– Generic computer implementation– Can’t just “apply”– Computer alone not enough– New and useful application of an idea– Technological environment is not enough


– Something more? (cont.)• Implementation of abstract concept of intermediated settlement

using generic computer• Each step is conventional and requires a generic computer to

perform generic computer functions• Claims do not improve the functioning of a computer• Hardware claims with “communications controller”, “data storage

unit”, are functional and generic. All computers would have this stuff.

Not patent eligible

101

What’s happened since Alice?

Software patent

Software patent

Software patent

Software patent

Software patent

Software patent

Software patentSoftware

patent

Software patent

PTO Guidelines

• Purpose instructions involving computer implemented abstract ideas

• Same analysis like laws of nature

• All types of claims

PTO Guidelines

• Examples of abstract ideas– Fundamental economic practices– Methods of organizing human

activities (a/k/a business methods)– Idea itself– Mathematical relationships/formulas

PTO Guidelines

• Significantly more (not eligible)– Apply it– Generic computer, generic

functions, performing well-understood, routine, and conventional activities

• Significantly more (eligible)– Improvements to another

technology or technical field– Improvements to the

functioning of the computer itself

– More than linking abstract idea to technological environment

Digitech Image Techs., LLC v. Electronics for Imaging, Inc. (Fed. Cir. July 11, 2014)

• After Alice v. CLS• Translate received color into one of many available

digital profiles• Output had different ranges of colors which meant

some distortion during conversion• Device dependent – calibrate color based on device• Device independent – translate into independent

color space and then translate further

Digitech Image Techs., LLC v. Electronics for Imaging, Inc.(Fed. Cir. July 11, 2014)

• Independent – so needs color space and device profile that describes properties of source and output devices

• Prior art independent looked at color properties of source and output

• Patent also looked at spatial properties and color properties of imaging device


• Claim directed to a “device profile” for describing properties of a device– First data for describing device dependent transformation

of color– Second data for describing device dependent

transformation of spatial information


• Claims not directed to tangible embodiment• Directed to information• Data in its ethereal, nonphysical form is simply

information that does not fall under any category of eligible subject matter

• Abstract idea• Process of organizing information through mathematical correlations

and not tied to specific structure or machine


• Process that employs mathematical algorithms to manipulate existing information to generate additional information

• Method of calculating using a mathematical formula• No structure here used to perform steps

Not patent eligible

Buysafe v. Google(Fed. Cir. September 3, 2014)

• Steps for guaranteeing a party’s performance of an online transaction


1. A method, comprising:

receiving, by at least one computer application program running on a computer of a safe transaction service provider, a request from a first party for obtaining a transaction performance guaranty service with respect to an online commercial transaction following closing of the online commercial transaction;

processing, by at least one computer application program running on the safe transaction service provider computer, the request by underwriting the first party in order to provide the transaction performance guaranty service to the first party,

wherein the computer of the safe transaction service provider offers, via a computer network, the transaction performance guaranty service that binds a transaction performance guaranty to the online commercial transaction involving the first party to guarantee the performance of the first party following closing of the online commercial transaction.


• Judgment on the pleadings• Three ineligible categories (law of nature, natural

phenomena, abstract idea)• Bad: contractual relations, fundamental economic

practice long prevalent in system of commerce• Generic computer implementation


• Given the “new” Supreme Court authority and the “simplicity” of the case

• Transaction performance guarantee – The History and Economics of Suretyship (1927)– Long familiar commercial transactions

Not patent eligible

Ultramercial v. Hulu(Fed. Cir. November 14, 2014)

• Method for monetizing and distributing

copyrighted works over the Internet• 11 steps in the claim• District Court granted failure to state a claim

FRCP 12(b)(6)


• Abstract idea

– advertisement as an exchange for currency• List of steps have no particular concrete or tangible form• Implement the idea with routine, conventional activity• Use of the Internet was insufficient• Machine or transformation (Bilski) can be used for second step in Alice• Does not work if tied to a general purpose computer• Need to tie to a novel machine• Adding a computer to otherwise conventional steps does not make eligible

Not patent eligible


• Concurrence– 101 is threshold, jurisdictional– Failure to recite is a basic deficiency (Twombly)– This will provide a tool for clearing the patent thicket,

weeding out patents that stifle innovation– No presumption of validity for 101 because PTO used

wrong test– No patents on business or law

DDR Holdings v. Hotels.com(Fed. Cir. December 5, 2014)

• Upon accessing hyperlink, instead of going to merchant’s web page, generate composite web page– Product information– Host website’s look and feel– Retain visitor traffic


• What is the “abstract idea” here?

Examples of abstract ideas:– Mathematical algorithm– Fundamental economic and conventional business practices– Intermediated settlement– Using advertising as currency– Transaction performance guarantee– Generating insurance policy related tasks– Managing stable value protected life insurance policy


• Abstract idea?– Business challenge, but specific to the Internet– Precise nature of the abstract idea not straightforward,

expressed in numerous ways– The claim do not merely recite the performance of some

business practice known from the pre-Internet world along with the requirement to perform it on the Internet


• Dissent said “store within a store”• Not appropriate because ephemeral nature of Internet “location”, near

instantaneous transport between locations, problems not present in brick and mortar context

• Steps here override routine and conventional sequence of events• Computer network does not operate in the normal, expected manner• Not merely a routine or conventional use of the Internet • Does not preempt idea of increasing sales by making two web pages look the

same • Not applying a known business process to a particular technology environment

Patent eligible

Patent Eligibility Cheat Sheet

• Significant post solution activity – recite in preamble and then again at end of claim – like a whereby clause

• Means plus function claim• Specific computer – magic box (“fixing the problem module”) 112,6?• Some claims cover not all available embodiments• Avoid describing a phenomena (Prometheus)• Application of law of nature or abstract idea• Tie to problem and solution to a machine, avoid “disembodied”• Human brain, pen is bad – add necessary outputs like display or speakers?• Flow charts• Avoid “software”, software is not patentable without the hardware, software

in the specification is bad, instructions executable by a processor• Combine, interact multiple hardware elements• “Transform” • Extra thought – make claims hard to simply characterize as abstract

concepts– This case is about…– This application is directed to…

Outline

• 101• 102• 103• 112


Suffolk Techs., LLC v. AOL Inc.752 F.3d 1358 (Fed. Cir. May 2014)

• Newsgroup• Question presented, student posted answer (“Post”)• Post anticipated• Was Post a “publication”?

Suffolk Techs., LLC v. AOL Inc.752 F.3d 1358 (Fed. Cir. 2014)

• Public accessibility is the touchstone in determining whether a reference was a printed publication

• Publicly accessible– document has been disseminated or otherwise made

available– to the extent that persons interested and ordinarily skilled

in the subject matter– exercising reasonable diligence, can locate it

Suffolk Techs., LLC v. AOL Inc.752 F.3d 1358 (Fed. Cir. 2014)

• Record showed those of ordinary skill were the people who looked at the newsgroup

• Groups were organized in a hierarchical manner so a person interested could easily locate

• And need not be searchable if disseminated:– poster board displayed for several days– paper delivered orally and six copies of the paper were distributed– Here, dialogue with newsgroup was purpose of posting

• 6 responses

Publication

Outline

• 101• 102• 103• 112


KSR v. Teleflex(Sup. Ct. 2007)

• Not explicitly shown in 1 reference• Chocolate, peanut butter• Any new circuit – see circuit textbook, inductors,

capacitors, etc.• What test does one use when faced with multiple

references?



Claim 4• Adjustable pedal sensor in assembly• Electronic throttle control• On support


• Scope and content of prior art• Differences between prior art and claims• Level of skill of POSA• Secondary consideration– Commercial success, long felt unresolved need, failure of

others


• Use “expansive and flexible approach”• The test: Is there apparent reason to combine known

elements in fashion claimed by patent at issue?


• Things to consider:– Patent for combination that only unites old elements

with no change in their respective functions is obvious– Design incentives – Market forces– Interrelated teachings of multiple patents– Precise teaching not required


• Not to advances “without real innovation, ordinary innovation not enough”

• Known problem may produce obvious solution• Any need or problem in field of endeavor• Techniques used in related fields• Look at “common sense” – bad facts?


• Patent filing strategy– Prior art search– Background description,

avoid marketplace incentives– Supporting affidavits

• Litigation strategy– Careful when characterizing

POSA

• Due diligence in technology transfer– Market research regarding

marketplace motivators


In re Raymond Giannelli(Fed. Cir. January 2014)

BPAI Appeal• Row exercise

machine• Pull from first

to second position in a linear path

Cited Art• Pushing machine• Could face

backward• Did not

show that

could not be

used in claimed manner

In re Raymond Giannelli

• PTO has initial burden to prove obviousness

• “Adapted to” in claims – here meant designed or constructed to

• Is cited art “made to” allow the use to perform rowing by pulling

• No handles to be pulled• Mere capability of pulling the

handles is not proper inquiry• Was it obvious to modify

prior art apparatus to arrive at claims?

• Test: – NOT could be performed– Obvious to modify

• Some fun quotes:– Physical capability alone does not render obvious that

which is contraindicated– A chest press machine is not a rowing machine

In re Raymond Giannelli

Outline

• 101• 102• 103• 112


Nautilus v. Biosig Instruments(Sup. Ct. June 2, 2014)

• 35 U.S.C. 112, 2 – “particularly pointing out and distinctly claiming the subject matter”

• Heart rate monitor• Cylindrical bar• Electrodes in “spaced

relationship”

• Trying to mask out electromyogram (EMG) signals from desired electrocardiograph (ECG) signals

• During a reexamination, declaration said patent informed a POSA how to configure the electrodes


• Federal Circuit– Test for indefiniteness

• not amenable to construction, • insolubly ambiguous

– Certain inherent parameters of the claimed apparatus sufficient to understand metes and bounds of “spaced relationship”

– Not greater than width of hands and not so small so as to merge two electrodes


• Supreme Court– Definiteness evaluated from a POSA– At the time of filing– In light of specification and prosecution history– Inherent limitations of language– Must provide clear notice of what is claimed and what is

open to the public



• Insolubly ambiguous is not enough• Test– viewed in light of specification and prosecution history,

claims must inform those skilled in the art about the scope of the invention with reasonably certainty

• More than insolubly ambiguous

Claims indefinite

Outline

• 101• 102• 103• 112


Limelight Networks v. Akamai(Sup. Ct. June 2, 2014)

• 271 (b)• (b) Whoever actively

induces infringement of a patent shall be liable as an infringer.

• (a) Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.


• Patent claims require tagging files to be stored• Defendant Limelight requires customers to tag files • Can inducement to infringe 271(b) exist without

direct infringement 271(a)?• Fed. Cir. divided said yes– “Infringement” is not defined and not limited to 271(a)– Test is: 1) Knew of patent 2) induced performance 3) performed


• Supreme Court “The Federal Circuit’s analysis fundamentally misunderstands what it means to infringe a method patent.”

• Each step must be carried out to infringe• Performance of all the steps in the claim cannot be attributable to one person• Otherwise could pay another to do one step and be liable for inducing• 271(f) proves congress knows how to create liability for not direct infringement• (f)(1) Whoever without authority supplies or causes to be supplied in or from the United

States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.


• Because performance of all the claimed steps cannot be attributed to a single person, direct infringement never occurred

• Limelight cannot be liable for inducing infringement that never came to pass

• How to avoid infringement: – divide performance of a method patent’s steps with another

whom the defendant neither directs nor controls


• Is it over?– Cert on question: if no 271(a), can there be 271(b)?– Fed Cir Muniauction case said need control or direction of all

actors handling claimed steps for infringement– Here, no all actors controlled so no direct infringement under 271(a)– No 271(a), then no 271(b)– But, suppose Miniauction is overruled/modified so that control or direction is not

needed for 271(a)…– Supreme Court said decision not based on 271(a) and maybe Fed. Cir. Wants to

revisit Miniauctin

Muniauction v. Thomson(Fed. Cir. 2008)

• Patent on auction for original issuer municipal bonds over the Internet

• Issuer offers bonds, underwriters bid, all using a browser

• Steps performed by different entities: at least one step by bidder, rest by auctioneers system

• Direct infringement by auctioneer?

Muniauction v. Thomson(Fed. Cir. 2008)

• For direct infringement– Single party must perform every claimed step– If multiple parties:

• Must be control or direction over the entire process such that every step is attributable to the controlling party (“mastermind”)

• Arms-length cooperation is not enough• Law would hold accused direct infringer vicariously liable for

acts committed by another required to complete infringement


• Is it over?– Cert on question: if no 271(a), can there be 271(b)?– Fed. Cir. Muniauction case said need control or direction of all actors

handling claimed steps for infringement– Here, not all actors controlled so no direct infringement under 271(a)– No 271(a), then no 271(b)– But, suppose Muniauction is overruled/modified so that control or

direction is not needed for 271(a)…– Supreme Court said decision not based on 271(a) and maybe Fed. Cir.

wants to revisit Muniauction

Outline

• 101• 102• 103• 112


Because you know sometimes words have two meanings

Golden Bridge Technology v. Apple, et al.(Fed. Cir. July 14, 2014)

• Dispute over interpretation of transmission of a “preamble” in ‘267 patent

• ‘267 patent was asserted in a prior litigation • Stipulated claim construction in prior litigation• New claims sought during re-examination of ‘267• During reexamination, IDS submitted for ‘267

– IDS included the claim construction with adverse construction for “preamble”

• Claim construction (Phillips v. AWH)– Give claim terms plain and ordinary meaning to a POSA– Read in context of the specification and prosecution history– Exceptions:

• Patentee sets out a definition and acts as lexicographer• Patentee disavows full scope of claim term in specification or

prosecution


• Submission of a stipulated construction is a disclaimer• Not a “typical IDS”

– Own stipulated construction – Context of particular patents in a reexamination– Clear and unmistakable assertion by patentee of meaning of term– Does not matter that stipulation was in documents accompanying the IDS– Stipulation in IDS documents is the same as applicant’s remarks in the IDS

itself

• Could have rescinded by notifying PTO that applicant sought a construction different form that stipulated

Documents in an IDS could be a disclaimer


H-W Tech. v. Overstock.com (Fed. Cir. July 11, 2014)

• “User”• Phillips– Intrinsic: claim language, specification, prosecution history– Then extrinsic: expert testimony, dictionaries, treatises

“User” could be a thing• Dictionary

“User” limited to human• Intrinsic support

– Claims – Specification

• Extrinsic– Expert testimony


• Some other holdings– Method limitations in apparatus

claim– Indefinite because unclear when

infringement occurs

Claim 17: Tangible computer readable medium with computer program. . . wherein said user selects one of said variety of offers


X2Y Attenuators v. ITC et al.(Fed. Cir. July 7, 2014)

• Structure to reduce parasitic capacitance• “Sandwich configuration”• Spec: sandwich configuration is

– “an essential element among all embodiments”– Universal to all embodiments

• Clear disavowal– Labeling an element as essential– Words or expressions of manifest exclusion or

restriction

“wherein said second shielded electrode portion is physically shielded from said fourth shielded electrode portion by said third shielding electrode portion”

• Language in related cases can be disavowal• In particular, if other case incorporated by reference,

disclaimer in other matter becomes part of the asserted patent

X2Y Attenuators v. ITC et al.(Fed. Cir. July 7, 2014)

Outline

• 101• 102• 103• 112


STC.UNM v. Intel(Fed. Cir. June 6, 2014)

UNM (University of New Mexico)• Inventors 1, 2 and 3

Sandia• Inventor 4 (Draper)

5,705,321

Invention 1

Assignment from “employees of University of New Mexico”, includes continuations

UNM DraperRights

Sandia

Invention 2 CIP of 1

6,042,998Double

Patenting

Terminal DisclaimerClaim of 100% ownership by UNM, patents will be commonly owned

STC

• ‘998 (second application) asserted• Sandia claimed no ownership in ‘998 but ownership of ‘321• Intel said unenforceable because not identical ownership• STC then said ‘998 co-owned because of Draper assignment and CIP status• Abundance of caution further assignment of undivided interest in both ‘321

and ‘998 to Sandia to cure identical ownership/terminal disclaimer issue• Sandia did not want to join the suit• District court dismissed for lack of standing

– Co-owner must join all other co-owners


• Fed. Cir.– Patent co-owner seeking to maintain an infringement action must join all

other co-owners– But what about F.R.C.P. 19(a)?– Does not trump patent law that requires consent to joinder from all co-

owners– Partner co-owner can deprive fellow co-owner of right to sue in the

future by granting license or refusing to voluntarily join– Co-owner cannot grant release of another co-owner’s right to accrue past

damages


F.R.C.P. 19(a)

(a) Persons Required to Be Joined if Feasible.(1) Required Party. A person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined as a party if:(A) in that person's absence, the court cannot accord complete relief among existing parties; or(B) that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may:(i) as a practical matter impair or impede the person's ability to protect the interest; or(ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.(2) Joinder by Court Order. If a person has not been joined as required, the court must order that the person be made a party. A person who refuses to join as a plaintiff may be made either a defendant or, in a proper case, an involuntary plaintiff.

35 U.S.C. 262vs.

• In the absence of any agreement to the contrary, each of the joint owners of a patent may make, use, offer to sell, or sell the patented invention within the United States, or import the patented invention into the United States, without the consent of and without accounting to the other owners.

F.R.C.P. 19(a) vs. 35 U.S.C. 262


• Fed. Cir.– Patent co-owner seeking to maintain an infringement action much join all

other co-owners– But what about FRCP 19(a)?– Does not trump patent law that requires consent to joinder from all co-

owners– Patent co-owner can deprive fellow co-owner of right to sue in the future

by granting license or refusing to voluntarily join– Co-owner cannot grant release of another co-owner’s right to accrue past

damages

35 U.S.C. 262

• Rules of procedure must give way to substantive patent rights

• The right of a patent co-owner to impede an infringement suit brought by another co-owner is a substantive right that trumps the procedure rule for involuntary joinder under Rule 19(a)


• Exceptions:– If patentee has granted an exclusive license, he has a

relationship of trust with the licensees and can be involuntarily joined as plaintiff in licensee infringement suit

– Can waive right to refuse to join by contract


• Generally comes up where party waived rights• Here Sandia maintained rights• Because Sandia has not voluntarily joined and no exception, STC

lacks standing• STC can’t enforce, likely can’t license

– That’s what happens when each co-owner is at the mercy of other co-owners

– Rule requiring participation of co-owners helps ensure that co-owner would not subject infringer to different suits on the same patentAvoid co-ownership


• Dissent– Necessary party– Compulsory joinder makes sense here


Outline

• 101• 102• 103• 112


Avoid software, abstract

Publication is accessible to interested publicMust be obvious to modify not capableClear to a POSA

Need direct infringement for inducement

Philips: Intrinsic, clear disavowalIDS

Avoid co-ownership

Steven S. Rubin, Esq.Moritt Hock & Hamroff LLP

[email protected]

Questions? Thank you.

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