Table of Contents
N.D. Illinois upholds GUI claims under Alice (posted 05/07/15)
1. A method of placing a trade order for a commodity on an electronic exchange having an inside market with a highest bid price and a lowest ask price, using a graphical user interface and a user input device, said method comprising:
setting a preset parameter for the trade order displaying market depth of the commodity, through a dynamic display of a plurality of bids and a plurality of asks in the market for the commodity, including at least a portion of the bid and ask quantities of the commodity, the dynamic display being aligned with a static display of prices corresponding thereto, wherein the static display of prices does not move in response to a change in the inside market;
displaying an order entry region aligned with the static display prices comprising a plurality of areas for receiving commands from the user input devices to send trade orders, each area corresponding to a price of the static display of prices; and
selecting a particular area in the order entry region through single action of the user input device with a pointer of the user input device positioned over the particular area to set a plurality of additional parameters for the trade order and send the trade order to the electronic exchange.
In Trading Technologies International, Inc. v. CQG, Inc. and CQGT, LLC, the Northern District of Illinois found that claims drawn to a method of providing a graphical user interface (GUI) were patentable under 35 U.S.C. § 101.
The court rejected CQG's argument that the claims recite an abstract idea for placing orders for a commodity on an electronic exchange based on observed market information. Specifically, CQG argued that the elements recited in the claims, “merely perform basic functions relating to electronic commodity trading and updating market information using unidentified and generic computer components.”
Stated the court:
Neither the claims of the '304 patent nor the claims of the '132 patent are directed to solely “setting, displaying, and selecting” data or information that is visible on the GUI device. Rather, the claims are directed to solving a problem that existed with prior art GUIs, namely, that the best bid and best ask prices would change based on updates received from the market. There was a risk with the prior art GUIs that a trader would miss her intended price as a result of prices changing from under her pointer at the time she clicked on the price cell on the GUI. The patents-in-suit provide a system and method whereby traders mae playce orders at a particular, identified price level, not necessarily the highest bid or the lowest ask price because the invention keeps the prices static in position, and allows the quantities at each price to change.
Fed. Cir.: Claim terms to be consistently construed (posted 04/14/15)
In In re: 55 Brake LLC, the Federal Circuit held that the term, “plurality of sensors,” includes a vehicle motion sensor because claim 7 specifies, “wherein one of said plurality of sensors is a vehicle motion sensor.” The Federal Circuit reasons that:
a broader [than an embodiment described in the specification] reading of “plurality of sensors” to include a vehicle motion sensor, is reasonable in light of the plain language of the claims, the specification, and the overall object of the invention to “enable sensors to detect . . . potentially unsafe conditions in or around the vehicle . . . [and] to automatically control the brakes and/or other equipment” as appropriate.
The court further explained its reasoning in a footnote citing Phillips v. AWH Corp.: “In contrast to claims 7 and 9, claim 13 does not explicitly define a vehicle motion sensor as one of the plurality of sensors. But because claim terms are to be construed consistently throughout a patent, our reasoning above applies equally to claim 13.”
Supreme Court leaves in place CAFC's ruling on inability to compel co-owner to join suit (posted 03/31/15)
The Supreme Court denied certiorari in STC.UNM v. Intel Corp., in which the Federal Circuit upheld the lower court lack of standing dismissal for failure to join a necessary party. The factual background is interesting:
- An initial patent 5,705,321 ('321 patent) resulted from contributions of four people: Brueck, Saidi, and Chu, employed by the University of New Mexico (UNM), and Draper, employed by Sandia. The '321 patent claims technology similar to that of the asserted patent 6,042,998 ('998 patent).
- In mid-1996, the four inventors executed a joint assignment to UNM of the invention that issued as the '321 patent, but in October of 1996, UNM executed an assignment to Sandia to correct Draper's prior assignment to UNM which “was made in error.” This assignment explicitly transferred to Sandia “those rights and interests previously assigned to [UNM] by Bruce Draper . . . and to any and all Patents which may be issued thereon . . . and to any and all divisions, reissues, continuations, and extensions.”
- While '321 was pending Brueck and Saidi continued their research and filed an application leading to the instant '998 patent, which incorporated the '321 patent by reference but did not claim priority to any earlier-filed application.
- During prosecution of the '998 patent the PTO rejected the claims for double patenting over the '321 patent, and the rejection was overcome by UNM filing a terminal disclaimer, which stated that it was “the owner of record of a 100 percent interest in the instant application.”
- In 2002, UNM assigned its own interest in the '321 and '998 patents to STC, a wholly-owned licensing arm of UNM.
- In 2008, STC successfully petitioned the PTO to correct the inventorship of the '998 patent to include two more named inventors, Hersee and Malloy, who were employees of UNM at the time of the invention, and assigned their interests in the '998 patent to UNM. In addition, STC successfully sought a certificate of correction to indicate that the '998 patent is a continuation-in-part of the '321 patent.
- Although Sandia has an ownership interest in the '321 patent since October 1996, Sandia had never claimed any interest in the '998 patent. (In 2009, STC and Sandia entered into a royalty sharing agreement for the '321 patent that does not mention the '998 patent.)
At the district court, Intel argued in a motion for summary judgment that the '998 patent was unenforceable for failing to comply with the common-ownership requirement of the terminal disclaimer. In response, STC contends that Sandia did in fact co-own the '998 patent since it issued by operation of the assignment, or alternatively, that Sandia obtained ownership of the '998 patent when it formally became a continuation-in-part of the '321 patent. Nevertheless, STC confirmed the prior assignment and assigned an undivided interest in each of the '321 and '998 patents to Sandia in 2011. The district court rejected STC's theories and granted partial summary judgment for Intel, reasoning that ownership rights must derive from inventorship and because Draper did not co-invent any claims of the '998 patent, he had no interest in the '998 patent to assign. Thus the court held that Sandia did not co-own the '998 patent with UNM or STC at any point prior to the 2011 assignment. The parties then cross moved on the issue of standing, given Sandia's co-ownership, which was granted by the district court.
STC argued before the Federal Circuit that Rule 19(that requires the court to compel joinder of co-inventor or co-owner of a patent “to bring before the court all persons deemed necessary to the suit.” However, the Federal Circuit held that the holding in Ethicon v. United States Surgical Corp 1) requires co-owners (ordinarily) to consent to the suit, and that this requirement was not dictum, but essential to the disposition of the case. In this case, Sandia did not affirmatively give up its right to refuse to join the suit (e.g., by signing an exclusive license arrangement or otherwise agreeing to join). Unless STC can secure Sandia's voluntary joinder, obtain the '998 and '321 patents outright, or become the exclusive licensee of Sandia's interest, STC cannot enforce the '998 patent in court.
Judge Newman's Dissent:
Judge Newman holds that the present ruling is contrary to Rule 19 as well as precedent. Stating in part:
By statute, “A patentee shall have remedy by civil action for infringement of his patent.” 35 U.S.C. §281. . . . Precedent establishes that all entities with the right to enforce the patent are necessary parties to an action for enforcement; the purpose is to shield the accused infringer from mulitple suits, as well as to resolve all potential claims efficiently and fairly. Entities with enforcement rights who do not voluntarily join in such suit “must” be joined involuntarily, as provided by FRCP 19(a) (“Required Joinder of Parties”).
Departing from this clear and compulsory procedure, the panel majority holds that co-owner Sandia cannot be involuntarily joined with the University in this infringement suit, thus preventing the University from enforcing the patent, for Sandia is a necessary party. That holding is not correct. When a party declines . . . to join . . . involuntary joinder is provided by Federal Rule 19. The panel majority's ruling . . . is contrary to law.
On March 30, 2015, the Supreme Court denied certiorari, leaving the Federal Circuit's panel decision in tact.
Fed. Cir. reverses BPAI's anticipation invalidation (posted 03/16/15)
In Vicor Corp. v. Synqor, Inc., the Federal Circuit reversed the BPAI's reversal of an Examiner's 102 rejection in an Ex parte reexamination. The prior art consisted of U.S. Patent 5,377,090 which incorporates by reference U.S. patent 5,274,539. The two patents issued from separate applications. The earlier '539 patent teaches that an isolation stage can use diodes as rectifiers, but in alternative embodiments, can use controlled rectifiers in place of the diodes. The later patent '090 teaches a single isolation stage having a plurality of regulation stages to produce a plurality of output D.C. voltages. The BPAI reversed the Examiner's rejection, finding that the combined reference did not teach a single embodiment that has an isolation stage that uses controlled rectifiers, followed by multiple regulation stages. The Federal Circuit reversed the BPAI, stating, “The incorporated teachings include Steigerwald '539's alternative embodiment, which teaches a substitution that takes place within the isolation stage.”
Fed. Cir. construes Octane (posted 02/25/15)
In Biax v. Invidia et al., the Federal Circuit, in a nonprecedential opinion, reversed a lower court's award of attorney's fees under the pre-Octane Fitness, Brooks “objectively baseless” standard. The Fed. Cir. cited Octane stating:
The Supreme Court rejected the Brooks Furniture standard, explaining that “there is no precise rule or formula for making” a determination as to whether a case is exceptional. It is a case-by-case determination based on considering the totality of teh circumstances. Such an exceptional case is “rare.” But, if the case “stands out from others with respect to the substantive strength of a party's litigating position . . . or the unreasonable manner in which the case was litigated,” it is “exceptional” under the meaning of the statute. Thus, objective reasonableness remains a relevant factor. [Emphasis added.]
In applying this construction of the Supreme Court opinion, the Federal Circuit found that the lower court misread expert testimony that was relied upon to conclude that Biax had no reasonable basis to assert infringement.
S.Ct. denies cert. on AIA Consitutionality (posted 02/25/15)
On February 23, 2015, the S.Ct. denied a petition for certiorari alleging that the America Invents Act is unconstitutional because of its first-to-file provisions.
Federal Circuit redefines "exhaustion" (posted 02/18/15)
In Helferich Patent Licensing v. NYTimes and JCPenney (Fed. Cir. 2015), the Federal Circuit found that content providers such as the New York Times must pay a patent royalty to Helfereich, who owns a patent for sending and receiving alerts to mobile phones, despite the fact that the manufacturer of the mobile phones at issue had already licensed the patents.
Supreme Court reverses Circuit's rule for de novo claim construction (posted 01/20/15)
In Teva Pharmaceuticals USA Inc. v. Sandoz, Inc., the Supreme Court held that, when reviewing a district court's resolution of subsidiary factual matters made in the course of its construction of a patent claim, the Federal Circuit must apply a “clear error,” not a de novo, standard of review. Justice Breyer delivered the opinion of the Court.
The case comes to the Supreme Court on appeal by patent holder Teva from a Federal Circuit decision to invalidate a claim due to indefiniteness. Specifically, the Federal Circuit reversed a lower court ruling that the claim term, “molecular weight” referred to “peak average molecular weight” because that is what a skilled artisan would have understood at the time of the patent application. The Federal Circuit reached its invalidity determination based on de novo review of all aspects of the district court's claim construction, including subsidiary facts, in contravention of Federal Rule of Civil Procedure 52(a)(6) which states that a court of appeals “must not . . . set aside” a district court's “[f]indings of fact” unless they are “clearly erroneous.”
The Supreme Court held that:
“In some cases . . . the district court will need to look beyond the patent's intrinsic evidence and to consult extrinsic evidence in order to understand, for example, the background science or the meaning of a term in the relevant art during the relevant time period. In cases where those subsidiary facts are in dispute, courts will need to make subsidiary factual findings about that extrinsic evidence. These are the “evidentiary underpinnings” of claim construction that we discussed in Markman, and this subsidiary factfinding must be reviewed for clear error on appeal”
Justice Thomas, joined by Alito, dissented, arguing:
“Patents are written instruments, so other written instruments supply the logical analogy. [. . .] The classic case of a written instrument whose construction does not involve subsidiary findings of fact is a statute. [. . .] The construction of deeds, by contrast, sometimes involves subsidiary findings of fact. [. . .] The question we must ask, then, is whether the subsidiary findings underlying claim construction more closely resemble the subsidiary findings underlying the construction of statutes or those underlying the construction of contracts and deeds that are treated as findings of fact. [. . .] This, in turn, depends on whether patent claims are more like statutes or more like contracts and deeds. [. . .] For purposes of construction, contracts and deeds are less natural analogies for patents. [. . .] In granting a patent, the Government is acting not as a party to a bilateral contract binding upon itself alone, but instead as a sovereign bestowing upon the inventor a right to exclude the public at large from the invention marked out by his claims. [. . .]
“Because the skilled artisan inquiry in claim construction more closely resembles determinations categorized as 'conclusions of law' than determinations categorized as 'findings of fact,' I would hold that it falls outside the scope of Rule 52(a)(6) and is subject to de novo review.”
Patent invalidations after Alice
The Bilskiblog by Fendwick & West is reporting on invalidations citing Alice by the Federal Circuit and district courts:
At the Patent Office's Technology Center 3600, which covers finance, banking, health care, insurance, incentive programs and couponing, pricing, and business administration, “the allowance and issuance rate . . . has dramatically plummeted from about 47% pre-Alice to about 3.6% post-Alice.”
Writing Bilskiblog, author Robert R. Sachs further found:
“While business method patents (23) constituted the majority of the patents that were invalidated, the types of technologies ranged widely, including 3D computer animation (2), digital image management (7), document management (10), and medical records (2), database architecture (2), and networking (4). This suggests that the courts are aggressively expanding the zone of “abstract ideas” from the fundamental “building blocks” of “human ingenuity” that the Supreme Court has focused on in Alice, to just about any technological field.”
Sachs criticized the courts, led by the Federal Circuit, for ignoring or merely giving lip service preemption analysis, and relying on doctrines, such as the “mental steps” doctrine, which the Supreme Court never specifically endorsed.
N. D. Cal. interprets Alice (posted 01/06/15)
In Bascom Research LLC v. LinkedIn Corp. and Bascom Research LLC v. Facebook, Inc. (Opinion), Judge Illston of the Northern District of California federal court determined that a method and system to enable access to a document object (e.g., web pages) by allowing users to create link relationships between it and other document objects was directed to an abstract idea and therefore non-statutory subject matter. Stated the court (internal citations and quotations omitted):
Bascom’s patents similarly describe “an abstraction” having no particular concrete or tangible form. Allowing users to generate relationships between document objects and storing those relationships separately from the document objects simply describes the abstract idea of creating, storing and using relationships between objects. As defendants illustrate at length, the concept of establishing and using relationships between documents is a common, age-old practice. Courts have found similar “commonplace and time-honored practices” to be abstract ideas.
[. . .]
Notably, the concept of establishing, storing and using associations between documents can also be performed mentally. The Supreme Court and the Federal Circuit have generally considered such “mental processes” to be unpatentable. Bascom counters that its claims cannot be performed mentally because they require a computer network. However, “merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention.”
The Court concludes that Bascom’s patents are comparable to other computer-based patents involving the creation and organization of data that have been invalidated after Alice. Establishing relationships between document objects and making those relationships accessible is not meaningfully different from classifying and organizing data. In Digitech Image Technologies, LLC v. Electronics for Imaging, Inc., the Federal Circuit invalidated a patent describing a “device profile” comprised of two sets of data (color information and spatial information) used to render a digital image. The court found that the method described in the patent claims was an abstract idea “because it describes a process of organizing information through mathematical correlations and is not tied to a specific structure or machine.” “Without additional limitations, a process that . . . manipulate[s] existing information to generate additional information is not patent eligible.” Even Helios, upon which Bascom relies, suggested that the claims at issue may have described an abstract idea by encompassing “the ubiquitous use of the Internet or computers generally.”
Federal Circuit Limits Alice (posted 01/04/15)
In a panel decision of the Federal Circuit in DDR Holdings v. National Leisure Group et al., Judge Chen, joined by Judge Wallach, distinguished from Ultramercial and Alice, DDR's claims to a hybrid web page having the look and feel of a host web site with content of a 3rd party merchant website, stating:
”. . . these claims stand apart because they 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. Instead the claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.“
Judge Mayer dissented, arguing that the claims, “simply describe an abstract concept–that an online merchant's sales can be increased if two web pages have the same 'look and feel'–and apply that concept using a generic computer.” Mayer further stated:
“DDR’s patents are long on obfuscation but short on substance. Indeed, much of what they disclose is so rudimentary that it borders on the comical. For example, the patents explain that two web pages are likely to look alike if they are the same color, have the same page layout, and display the same logos. The recited computer limitations, moreover, are merely generic. The claims describe use of a “data store,” a “web page having a link,” and a “computer processor,” all conventional elements long-used in e-commerce. Because DDR’s claims, like those at issue in Alice Corporation v. CLS Bank International, 'simply instruct the practitioner to implement [an] abstract idea . . . on a generic computer,' they do not meet section 101” (internal citations omitted).
Delaware district judge amps up Alice
1. A distributed system for accessing and distributing electronic documents using electronic document references, the distributed system comprising:
a) a database of electronic documents and electronic document references stored in a first memory having a first capacity, each electronic document having an associated document reference identifying a location of the electronic document in the first memory, each electronic document having a first memory requirement for storage greater than a second memory requirement for storage of the associated electronic document reference;
b) a distributed document handling subsystem coupled to the database, the document handling subsystem including a transceiver for transmitting an electronic document reference without its associated electronic document at a first location and receiving the electronic document reference without its associated electronic document at a second location, the distributed document handling subsystem responding to receipt of the electronic document reference by producing a copy of the associated electronic document at a third location;
c) a portable electronic document reference transport device for transporting the electronic document reference without its associated electronic document, the portable electronic document reference transport device being physically separate from the first memory and the distributed document handling subsystem, the portable electronic document reference transport device including a second memory for storing the electronic document reference without its associated electronic document, the second memory having a capacity significantly less than the capacity of the first memory, the portable electronic document reference transport device including a transceiver for receiving the electronic document reference without its associated electronic document at the first location and transmitting the electronic document reference without its associated electronic document at the second location.
Law360 is reporting that a Delaware district judge (Judge Robinson) invalidated on summary judgment two patents as “abstract” in accordance with Alice. The claims are directed to a method for accessing documents using a memory-constrained device. This is the first time that I’ve seen a claim to something other than some business method-like invention invalidated as abstract. The judge dismisses the claims as doing, “nothing more than describe the contours of the cataloging process.” This will possibly be an opportunity for the Federal Circuit to identify the limits of Alice.
S.Ct. grants Commil's petition for cert. on question 1 in petition (12/08/14)
There have so far been two trials between Cisco and Commil. In the first trial, the jury found the Commil patent to be valid and directly infringed; validity has been upheld by the Federal Circuit. However, after Cisco's representatives in the first trial repeatedly used prejudicial and anti-Semitic language (Commil is based in Israel and the inventors of the subject patent are Israeli) the trial judge ordered a new trial on just the issues of induced infringement and damages. In the second trial, the jury returned a $63.7 million verdict against Cisco, which, in 2013, a divided Federal Circuit panel, in Commil USA LLC v. Cisco Systems, Inc., reversed, because “the district court erred in preventing Cisco from presenting evidence during the second trial of its good-faith belief of invalidity to rebut Commil's allegations of induced infringement.” The Federal Circuit panel held:
“It is axiomatic that one cannot infringe an invalid patent. [. . .] Accordingly, one could be aware of a patent and induce another to perform the steps of the patent claim, but have a good-faith belief that the patent is not valid. Under those circumstances, it can hardly be said that the alleged inducer intended to induce infringement. Thus, a good-faith belief of invalidity is evidence that may negate the specific intent to encourage another’s infringement, which is required for induced infringement.”
J. Newman dissented from the panel decision. Newman's dissent was cited in Judges Rayna's dissent to the denial of a request for an en banc. rehearing (which was joined by Rader, Newman, Laurie, and Wallach). Newman argued:
“A defendant's ultimate liability for induced infringement, as for direct infringement, is subject to various defenses including patent invalidity and uneforceability. However, whether there is infringement in fact does not depend on the belief of the accused infringer that it might succeed in invalidating the patent. Such a belief, even if held in good faith, does not negate infringement of a valid and enforceable patent. This rule applies, whether the infringement is direct or indirect. My colleagues err in holding that ‘evidence of an accused inducer's good-faith belief of invalidity may negate the requisite intent for induced infringement.’
[. . .]
“Validity of the Commil patent was sustained by the jury, sustained by the district court, and sustained by this court. Whatever Cisco's ‘belief’ as to invalidity of the patent, this belief is irrelevant to the fact and law of infringement. A belief of invalidity cannot avoid liability for infringement of a patent whose validity is sustained. The panel majority's contrary holding is devoid of support in law and precedent.”
Oral Arguments at Supreme Court:
At the Supreme Court:
The Supreme Court granted Commil's petition for cert. but limited to question 1: ”[w]hether the Federal Circuit erred in holding that a defendant's belief that a patent is invalid is a defense to induced infringement under 35 U.S.C. § 271(b).“
The Supreme Court previously denied Cisco's cross-petition seeking review of Circuit's decision to remand for a retrial only on the issue of induced patent infringement and not also on the “related” question of patent invalidity. Cisco argued that the Seventh Amendment requires that all issues be retried “unless it clearly appears that the issue to be retried is so distinct and separable from the others that a trial of it alone mayh be had without injustice.”
Ultramercial III: Federal Circuit Toes the Line (11/14/14)
Ultramercial seeks en banc review.
In the CAFC’s second look at Ultramercial v. Hulu this time with the benefit of Allice v. CLS Bank, the Court held that an 11-step method of forcing users to view a commercial in order to access media content is a non-statutory abstract idea.
Stated the court:
“. . . we do not purport to state that all claims in all software-based patents will necessarily be directed to an abstract idea. Future cases may turn out differently. But here, the '545 claims are indeed directed to an abstract idea, which is, as the district court found, a method of using advertising as an exchange or currency. We do not agree with Ultramercial that the addition of merely novel or non-routine components to the claimed idea necessarily turns an abstraction into something concrete. In any event, any novelty in implementation of the idea is a factor to be considered only in the second step of the Alice analysis.”
The court further stated:
“None of the eleven individual steps, viewed ‘both individually and “as an ordered combination,”’ transform the nature of the claim into patent-eligible subject matter. [citation omitted.] The majority of those steps comprise the abstract concept of offering media content in exchange for viewing an advertisement. Adding routine additional steps such as updating an activity log, requiring a request from the consumer to view the ad, restrictions on public access, and use of the Internet does not transform an otherwise abstract idea into patent-eligible subject matter. Instead, the claimed sequence of steps comprise only ‘conventional steps, specified at a high level of generality,’ which is insufficient to supply an ‘inventive concept.’”
In Judge Mayer’s concurrence, he emphasized, “. . . Alice Corporation v. CLS Bank International. . . , for all intents and purposes, set out a technological arts test for patent eligibility. Because the purported inventive concept in Ultramercial’s asserted claims is an entrepreneurial rather than a technological one, they fall outside section 101” (emphasis added).
Federal Circuit applies Benson, Alice, in holding bingo patent non-statutory (08/27/14)
(a) a computer with a central processing unit (CPU) and with a memory and with a printer connected to the CPU;
(b) an input and output terminal connected to the CPU and memory of the computer; and
(c) a program in the computer enabling:
(i) input of at least two sets of Bingo numbers which are preselected by a player to be played in at least one selected game of Bingo in a future period of time;
(ii) storage of the sets of Bingo numbers which are preselected by the player as a group in the memory of the computer;
(iii) assignment by the computer of a player identifier unique to the player for the group having the sets of Bingo numbers which are preselected by the player wherein the player identifier is assigned to the group for multiple sessions of Bingo;
(iv) retrieval of the group using the player identifier;
(v) selection from the group by the player of at least one of the sets of Bingo numbers preselected by the player and stored in the memory of the computer as the group for play in a selected game of Bingo in a specific session of Bingo wherein a number of sets of Bingo numbers selected for play in the selected game of Bingo is less than a total number of sets of Bingo numbers in the group;
(vi) addition by the computer of a control number for each set of Bingo numbers selected for play in the selected game of Bingo;
(vii) output of a receipt with the control number, the set of Bingo numbers which is preselected and selected by the player, a price for the set of Bingo numbers which is preselected, a date of the game of Bingo and optionally a computer identification number; and
(viii) output for verification of a winning set of Bingo numbers by means of the control number which is input into the computer by a manager of the game of Bingo.
In Planet Bingo v. VKGS, the Federal Circuit panel (Hughes, Taranto, Bryson) reviewed and unanimously upheld a lower court's determination on summary judgment that a bingo management system is “abstract.” Among the justifications for this ruling:
- “The district court correctly concluded that managing the game of bingo 'consists solely of mental steps which can be carried out by a human using pen and paper.'”
- Like the claims at issue in Benson, not only can these steps be 'carried out in existing computers long in use,' but they also can be 'done mentally.' 409 U.S. at 67.”
- The claims are similar to the claims at issue in Bilski v. Kappos and Alice, which the Supreme Court held were directed to abstract ideas.
- Managing a game of bingo “is similar to the kind of “organizing human activity” at issue in Alice.”
In response to Planet Bingo's argument that in real world use thousands if not millions of preselected Bingo numbers are handled by the claimed computer program making it impossible for the invention to be carried out manually, the court stated:
“But the claimed inventions do not require as much. At most, the claims require 'two sets of Bingo numbers,' 'a player,' and 'a manager.' We need not, and do not, address whether a claimed invention requiring many transactions might tip the scales of patent eligibility, as the claims fall far short of capturing an invention that necessarily handles 'thousands, if not millions' of bingo numbers or players.” (Emphasis added and internal citations removed.)
Supreme Court holds its "nose of wax" and extends "Abstract Idea" to systems (06/19/14)
In Alice Corporation v. CLS Bank, the Supreme Court held that a method of mitigating settlement risk, including steps of creating shadow records for each counterparty in a transaction, obtaining start-of-day balances based on real-world accounts, adjusting the shadow records as transactions are entered, and issuing end-of-day instructions to exchange institutions, using a computer, or a computer system for implementing the method, is an “abstract idea” and therefore not patentable under 35 U.S.C. § 101. The Court further held that,“ [t]his court has long 'warn[ed] . . . against' interpreting § 101 'in ways that make the patent eligibility “depend simply on the draftsman's art.”'” Quoting Mayo quoting Flook, “The concept of patentable subject matter under §101 is not 'like a nose of wax, which may be turned and twisted in any direction. . . .' Holding that the system claims are patent-eligible would have exactly that result.”
Sotomayor, joined by Gisburg and Breyer, concurred but focused on the invention being related specifically to business-methods, which they characterize as “processes for organizing human activity” which “[n]ever had been patentable.”
Some observations regarding Alice v CLS oral arguments (04/02/14)
Some interesting stuff in the transcript of arguments in Alice v CLS Bank before the Supreme Court. The court struggles to articulate how claims that could easily have been rejected under KSR obviousness analysis are unpatentable business method claims under 101.
- Oral Arguments: Audio (MP3) Stream:
Supreme Court reduces inducement (06/02/14)
In Limelight Networks v. Akamai Technologies (cached), the Supreme Court reversed the Federal Circuit's expansion of the applicability of inducement, which previously held a party can be liable for inducement if no single party performs all the steps in a patented method. The Supreme Court reverses, stating that the “Federal Circuit's analysis fundamentally misunderstands what it means to infringe a method patent. […] …under this court's case law, the patent is not infringed unless all the steps are carried out. This principle follows ineluctably from what a patent is.., and a patentee's rights extend only to the claimed combination of elements, and no further. …there has simply been no infringement of the method in which respondents have staked out an interest, because the performance of all the patent's steps is not attributable to any one person. And as both the Federal Circuit and respondents admit, where there has been no direct infringement, there can be no inducement…under §271(b).”
This ruling presumed that Federal Circuit was correct in it's interpretation of direct infringement under § 271(a) in Muniauction, Inc. v. Thomson Corp., 532 F. 3d 1318 (2008), which states that “the proposition that direct infringement requires a single party to perform every step of the method.” The Supreme Court remanded to the Federal Circuit whether that rule is correct. The Supreme Court held open the door for the Federal Circuit to say that a party could be liable for direct infringement even though they don’t personally perform all the steps. If so, this ruling by the Supreme Court would be moot.
~UPDATE~ 05/14/15 - On remand, the Federal Circuit upheld the lower court ruling vacating the jury award because there was no direct infringement, and therefore there could be no inducement. Judge Moore dissented, stating:
Today the majority holds that the actions of multiple parties can only result in direct infringement of a method claim in three circumstances: in a principal - agent relationship, in a contractual arrangement, or in a joint enterprise functioning as a form of mutual agency. It divorces patent law from mainstream legal principles by refusing to accept that § 271(a) includes joint tortfeasor liability. The majority’s rule creates a gaping hole in what for centuries has been recognized as an actionable form of infringement. It claims that this result is mandated by the statute. I do not agree.
Congress codified existing common law joint tortfeasor principles in §§ 271(a), (b), and (c). Section 271(a) covers direct infringement, which occurs when all the steps of the method are performed either by a single entity or multiple entities acting in concert or collaboration, jointly, or under direction or control. This does not extend to arms-length actors who unwittingly perform a single step — there must be concerted action to achieve a common goal. The plain language of § 271(a), and in particular Congress’ decision to make liable “whoever . . . uses . . . any patent ed invention,” expressly includes joint tortfeasor concerted action. To conclude otherwise renders the statute’s use of the word “whoever” internally inconsistent. There is no question that §§ 101, 161, and 171, which state “whoever invents,” includes the concerted action of multiple inventors each playing a part in the conception of the patented invention. Likewise “whoever uses” includes the concerted action of multiple parties each playing a part in using the patented process. The majority’s single entity rule is judicial fiction which upsets the settled expectations of the inventing and business community. I respectfully dissent from the majority’s construction which is inconsistent with the plain language of the statute, renders the statute internally inconsistent, and creates a gaping hole in infringement which no one even attempts to justify.
Supreme Court un-defines "definiteness" (06/02/14)
- Federal Circuit's Oral Arguments on Remand recorded January 7, 2015.
In Nautilus v. Biosig Instruments (cached), the Supreme Court vacated and remanded to the Federal Circuit its reversal and remand of the district court's conclusion that that the phrase “spaced relationship” of electrodes of a heart rate monitor was indefinite. (If the electrodes touched, then that would short the circuit, and the heart rate of a person holding the sensor could not be determined.) The Supreme Court specifically overturns Federal Circuit precedent stating that, a claim is indefinite “only when it is 'not amenable to construction' or 'insolubly ambiguous'” 2). Instead, the Supreme Court holds that § 112 ¶2 requires:
“that a patent's claims, viewed in light of the specification and prosecution history, inofrm those skilled in the art about the scope of the invention with reasonable certainty. The definiteness requirement, so understood, mandates clarity, while recognizing that absolute precision is unattainable. The standard we adopt accords with opinions of this Court stating that “the certainty which the law requires in patents is not greater than is reasonable, having regard for their subject matter.” [Citations omitted].”
Supreme Court denies cert. in Baxter (05/20/14)
In Baxter Corp. v. Fresenius USA Inc., the Federal Circuit allowed a PTO Reexamination proceeding to declare a patent invalid even after a district court found it valid and infringed. In effect, the Federal Circuit allowed the PTO administrative ruling to overrule the district court. Today, the Supreme Court denied a certiorari petition filed by Baxter to appeal that Federal Circuit decision.
Supreme Court rejects "objectively baseless" standard in awarding attorney fees (04/29/14)
In Octane Fitness v. Icon Health & Fitness, stating that the Federal Circuit's framework for implementing of 35 U.S.C. § 285 is “unduly rigid, and it impermissibly encumbers the statutory grant of discretion to courts,” The Supreme Court unanimously holds that:
an “exceptional” case in § 285 “is simply one that stands out from others with respect to the substantive strength of a party's litigating positoin (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated. District courts may determine whether a case is “exceptional” in the case-by-case exercise of their discretion, considering the totality of the circumstances. As in the comparable context of the Copyright Act, ”'[t]here is no precise rule or formula for making these determinations,' but instead equitable discretion should be exercised 'in light of the considerations we have identified.'“ Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994).
In Highmark v. Allcare Health Management System, the Supreme Court restates its view in Octane that the determination whether a case is “exceptional” under §285 is a matter of discretion, and therefore the Federal Circuit must defer to the district court's ruling on fee-shifting except where the district court abused its discretion. Stated the court: “We therefore hold that an appellate court should apply an abuse-of-discretion standard in reviewing all aspects of a district court's §285 determination. Although questions of law may in some cases be relevant to the §285 inquiry, that inquiry generally is, at heart, 'rooted in factual determinations,' Cooter, 496 U.S. at 401.”
Privity by way of indemnity obligation may start IPR clock (01/27/14)
In Atlanta Gas Light Company v. Bennett Regulator Guards Inc., the PTAB ruled that, because a privity between an indemnified party and its indemnitor does not begin until the indemnitor's obligation manifests by the indemnified party being sued, the one-year IPR clock did not run out. This suggests that the one-year clock will begin with respect to an indemnitor party upon the indemnified party being sued.
Exceptional "exceptional case" case (12/30/13)
Some key findings:
- Actual knowledge of objective baselessness of the plaintiff's claims are not required for the case to be exceptional.
- The court should not conclude that a case is not exceptional simply upon a finding that there is a lack of proof of subjective bad faith. Quoting Highmark Inc. v. Allcare Health Management, the Court states, “subjective bad faith only requires proof that the “lack of objective foundation for the claim 'was either known or so obvious that it should have been known' by the party asserting the claim.”
- Both subjective bad faith and objective baselessness is needed, but a finding of subjective bad faith can be arrived at by “a wide variety of proofs.” The court did not provide specific examples, but concludes with, “the retention of the subjective bad faith requirement may prove to have little effect on this case, as well as many that follow” (emphasis added).
- Bad faith and objective baselessness must be proved by clear and convincing evidence; the court notes that circuits are split on this matter.
- The court addressed criticism regarding fee shifting directly, noting that fee shifting is appropriate in circumstances other than bad faith/objective baselessness, noting prior decisions where exceptionality was found “where there has been willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, conduct that violates Federal Rule of Civil Procedure 11, or like infractions” and reiterated that “[l]itigation misconduct and unprofessional behavior may suffice, by themselves, to make a case exceptional under § 285.”
In a concurring opinion, Judge Rader argued that the law should be changed to provide that objective baselessness be sufficient to support fee shifting, and that proof by a preponderance of the evidence should suffice. Judge Rader also supported a return to the “original standard” for exceptional cases, wherein “interests of the patentee and alleged infringer are adequately taken into account in the required evaluation of the totality of the circumstances.” Under standard, prior to 2005 when it was changed by Brooks Furniture, exceptional cases were found by “willful or intentional infringement, . . . vexatious or unjustified litigation, or other misfeasant behavior” was sufficient, and “unprofessional behavior was also found to be relevant to the award of attorneys' fees, and . . . suffice[d], by itself, to make a case exceptional.”
- Hal Wegner's take: “The majority provided a detailed analysis of the history of Section 285 and may have, but for constraint against a panel deviating from binding precedent, gone further to reduce the bar to establish liability for Section 285 attorneys’ fees.”
- I think this case marks a step along a path of liberalizing the standard for exceptional cases by the Federal Circuit. Although not explicitly stated, I think the effect of this decision is that the Federal Circuit is instructing districts to infer subjective bad faith on the basis of objective baselessness. That is, if the plaintiff should have known the case was objectively baseless, then plaintiff exercised bad faith by bringing the case in the first place, and fee shifting is justified.
Fed. Cir. defines "New Grounds" (10/22/13)
The CAFC may provide guidance in its decision In re Lutz Biedermann and Jurgen Harms.
In this case, the PTAB (then referred to as the BPAI) upheld the Examiner's rejection of the same claims on the same art and the same statutory basis, but provided a different rationale, relying on new facts, than the rationale provided and facts identified by the Examiner. The Appellant requested a rehearing, arguing that the Board issued a new ground of rejection. But the Board denied the rehearing and affirmed the examiner's rejection.
Judges Moore, Linn, and O'Malley remanded to the PTAB, stating that: “The articulated reasoning and factual underpinnings of an examiner's rejection are, thus, essential elements of any stated ground of rejection to which applicants are entitled to notice and a fair opportunity to respond” (emphasis added). The court quoted Leitham, 661 F.3d 1316:
[W]hile “the Board need not recite and agree with the examiner's rejection in haec verba to avoid issuing a new ground of rejection,” ”[m]ere reliance on the same statutory basis and the same prior art references, alone, is insufficient to avoid making a new ground of rejection when the Board relies on new facts and rationales not previously raised to the applicant by the examiner. This court's predecessor long acknowledged the right of the Board to make additional findings of fact based upon the Board's own knowledge and experience to fill in the gaps that might exist in the examiner's evidentiary showing. But the Board's power to do so is construed narrowly and when reliance upon such facts changes the thrust of the rejection, the Board's action does everything but cry out for an opportunity to respond.”
Fed. Cir. muddles 101 analysis
In CLS Bank Internat'l v. Alice Corp., the Fed. Cir. issued seven different opinions with the majority opinion by Lourie, Dyk, Prost, Reyna, and Wallach holding that Section 101 subject matter determinations must be made on a case-by-case basis. Stated the court: “Bright line rules may be simple to apply, but they are often impractical and counterproductive when applied to § 101” (Op. p. 17). Instead, the court held that the following analysis should be followed:
- First, determine whether the claimed invention fits within one of the four statutory classes set out in § 101.
- If so, then do any of the judicial exceptions apply, one of which is “abstractness.” The court acknowledges that “deciding whether or not a particular claim is abstract can feel subjective and unsystematic, and the debate often trends toward the metaphysical, littered with unhelpful analogies and generalizations” but explains “abstractness” only by way of the examples presented by precedents.
- Next analyze for preemption: With the pertinent abstract idea identified, the balance of the claim can be evaluated to determine whether it contains additional substantive limitations that narrow, confine, or otherwise tie down the claim so that, in practical terms, it does not cover the full abstract idea itself.
In her dissent, J. Newman found:
In deciding to rehear the patent dispute between CLS Bank and Alice Corporation, the en banc court undertook to remedy distortions flowing from inconsistent precedent on section 101. This remedial effort has failed. This failure undoubtedly reflects the difficulty of the question; I suggest that it also demonstrates that an all-purpose bright-line rule for the threshold portal of section 101 is as unavailable as it is unnecessary. Experience over two centuries of United States patent law supports this conclusion.
- Supreme Court grants cert 12/06/13. Briefs on Certiorari:
- Sep 4 2013 Petition for a writ of certiorari
- Oct 4 2013 Brief amicus curiae of Dale R. Cook
- Oct 7 2013 Brief amicus curiae of Sigram Schindler Beteiligungsgesellschaft mbH
- Oct 7 2013 Brief amici curiae of Professor Lee Hollaar, and Peter K. Trzyna in support of neither party
- Oct 7 2013 Brief amici curiae of Students of Patent Law
- Nov 19 2013 Reply of petitioner Alice Corporation Pty. Ltd.
- Briefs on Substance
- Jan 21 2014 Brief of Petitioner Alice Corporation Pty. Ltd.
BPAI judges "storage medium" per say statutory (old news)
In In Ex Parte Hu, rendered February of 2012, the BPAI held that a claim to a “storage medium” is per se statutory, even without “non-transient” verbiage. Stated the panel:
“We find that the computerreadable storage medium is directed to a tangible storage medium, which can be read by a computer. While a computer-readable medium is broad enough to encompass both tangible media that store data and intangible media that carry a transitory, and propagating signal containing information, a computer readable storage
medium is distinguished therefrom as it is confined to tangible media for storing data.