U.S. federal judge Leonie Brikema ruled that an Artificial Intelligence (AI) machine cannot be listed as an inventor on a US patent under current law. Stephen Thaler sued the USPTO after it denied his patent applications that listed an AI named DABUS as the inventor of a new type of flashing light and a beverage container based on fractal geometry. PTO denied the applications because a machine does not qualify as an inventor because it is not a person. In affirming the PTO's decision, Judge Brikema held that the definitions provided by Congress for "inventor" within the Patent Act referred to an "individual" and the statutory meaning is a natural person or a human being. While acknowledging Thaler's arguments based on policy considerations such as incentivizing innovation, the court reasoned that the ultimate decision would lie with Congress.
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On August 2, 2021, the USPTO issued its first Director review decisions subsequent to the Supreme Court decision in Arthrex and the PTO's implementation of an interim procedure whereby review of a PTAB final written decision in an inter partes, post-grant, or covered business method review may be initiated sua sponte by Director or requested by a party to a PTAB proceeding. The order in each of the cases (IPR2020-00081 and IPR2020-00320) denied the request for Director review and provided that "the PTAB's Final Written Decision in this case is the final decision of the agency."
The U.S. Supreme Court held that assignor estoppel applies only when the assignor's claim of invalidity contradicts explicit or implicit representations made in assigning the patent. Minerva Surgical, Inc. v. Hologic, Inc., No. 20-440 (June 29, 2021). Inventor Truckai assigned his invention--a device to treat abnormal uterine bleeding--to his company. The issued patent along with its portfolio patents was bought by Hologic. Truckai then developed an improved device and assigned it to Minerva Surgical. Hologic filed a continuation application that included a claim to encompass Truckai's improved device and the application issued as patent. Hologic sued Minerva and Minerva contended that the newly added claim was invalid under 112 for lack of written description. Hologic invoked doctrine of assignor estoppel.
The district court agreed that assignor estoppel barred Minerva's defense and the Federal Circuit affirmed in part. Minerva filed a writ. In a 5-4 decision, Justice Kagan reasoned that courts have long applied the doctrine of assignor estoppel to deal with inconsistent representations about patent validity. The Court also recognized limits to assignor estoppel: (1) assignment occurs before inventor can make warranty of validity to patent claims, e.g., employee assigning rights in future inventions (2) later legal development renders the warranty as irrelevant (3) post-assignment change in patent claims, e.g., inventor assigns patent application and later to broaden the scope of claims. Full text of the opinion is available here. On June 29, 2021, the USPTO issued guidance on interim Director review process in view of the Supreme Court's decision in US v. Arthrex. The PTO now provides a process by which a party can request review by the Director of PTAB final written decision. A party requesting such review must: (1) enter a Request for Rehearing by the Director into PTAB E2E; and (2) submit a notification of the Request for Rehearing by the Director to the Office by email to Director_PTABDecision_Review@uspto.gov copying counsel for all parties by email.
On June 21, 2021, in a plurality opinion, the U.S. Supreme Court ruled that what matters is that the Director have the discretion to review decisions rendered by APJs. U.S. v. Arthrex, No. 19-1434 (June 21, 2021). Smith & Nephew and ArthroCare Corp petitioned for inter partes review of a patent owned by Arthrex. A PTAB panel of 3 APJs concluded that the patent was invalid. On appeal to the Federal Circuit, Arthrex argued that the APJs were principal officers who must be appointed by the President with the advice and consent of the Senate, and therefore, their appointment by the Secretary of Commerce violated the Appointment Clause of the Constitution. The Federal Circuit held that the APJs were principal officers whose appointments were unconstitutional because neither the Secretary nor Director can review their decisions or remove them at will. As a remedy, the Federal Circuit invalidated the tenure protections of APJs who may be removed at will by the Secretary.
The question before the Supreme Court was whether the authority of APJs to issue decisions on behalf of the Executive Branch is consistent with the Appointments Clause of the Constitution. In a plurality opinion by CJ Roberts, the Court ruled that regardless of whether the Government is correct that at-will removal by the Secretary would cure the constitutional problem, review by the Director better reflects the structure of supervision within the PTO and the nature of APJs' duties. In vacating and remanding the case back to the Acting Director of the USPTO, the Court held that "because the source of the constitutional violation is the restraint on the review authority of the Director, rather than the appointment of APJs by the Secretary, Arthrex is not entitled to a hearing before a new panel of APJs." Full text of the opinion is available here. On May 3, 2021, the U.S. Supreme Court invited the Acting Solicitor General to file a brief in the cert petition filed by American Axle & Manufacturing. On July 31, 2020, in a decision written by Judge Dyk, the Federal Circuit held American Axle's patent invalid for patent ineligible subject matter. American Axle & Mfg, Inc. v. Neapco Holdings LLC, et al., No. 2018-1763 (Fed. Cir. July 31, 2020). American Axle sued Neapco alleging infringement of its patent directed to a method of manufacturing drive shaft assemblies by inserting a liner into a drive shaft to dampen certain vibrational modes. The parties filed cross-motions for summary judgment as to eligibility of the asserted claims and the district court held the asserted claims ineligible under Section 101. At step 1 of the Mayo/Alice analysis, the district court concluded that the asserted claims considered as a whole are directed to the mere application of Hooke's law. At step 2 of the Mayo/Alice analysis, the district court determined that the additional steps consist of well-understood, routine, conventional activity already engaged in by the scientific community and add nothing significant beyond the sum of their parts taken separately. American Axle appealed to the Federal Circuit. In affirming the decision, the Federal Circuit held that the asserted claims are directed to a natural law because it clearly invokes a natural law, and nothing more, to accomplish a desired result. In her dissent, Judge Moore stated that the majority's true concern was not that the asserted claims are directed to Hooke's law but rather the patentee's failure to precisely claim how to tune a liner to dampen both bending and shell mode vibrations. Full text of the Federal Circuit opinion is available here.
After the Federal Circuit declined to hear the case en banc in a 6-6 vote, American Axle filed its cert petition with the Supreme Court. On April 5, 2021, the U.S. Supreme Court held that Google's copying of the Java SE API which included only lines of code to allow programmers to create new and transformative program was fair use. Google LLC v. Oracle Am., Inc., No. 18-956 (April 5, 2021). Oracle owns the copyright in Java SE. In 2005, Google sought to build a new Android software platform for mobile devices and copied roughly 11,500 lines of code from Java SE program. The copied API allows programmers to create their own programs. Federal Circuit held that the copied lines were copyrightable and later, a jury found for Google on fair use. The Federal Circuit reversed concluding that Google's copying was not a fair use as a matter of law and prior to remand for a trial on damages, the Supreme Court granted cert.
The Court held that Google's copying of the Java SE API was a fair use. In a 6-2 opinion, Justice Breyer considered the four guiding factors in the Copyright Act's fair use provisions: (1) purpose and character of the use; (2) nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work. In finding fair use, the Court reasoned the following: (1) the copied lines of code are part of a user interface that provides a way for programmers to access prewritten computer code through the use of simple commands; (2) Google's limited copying of the API is a transformative use; (3) Google's copying of 11,500 lines of code was only 0.4% of the entire API; and (4) Google's Android platform is not a market substitute for Jave SE and the copyright holder would benefit from reimplementation of its interface into a different market. Full text of the opinion is available here. The Trademark Modernization Act of 2020 ("TMA") became law on December 27, 2020 and takes effect on December 27, 2021. The Act provides the following: (1) new procedures to remove registrations based on inaccurate claims of use in commerce--Letters of Protest; ex parte expungement; and ex parte reexam; (2) discretionary shortened response deadlines to office actions; and (3) rebuttable presumption of irreparable harm.
Letters of Protest: TMA expands existing Letter of Protest procedures to allow third parties to submit evidence of conflicting prior registration and evidence that applied-for mark is not actually in use for the goods/services and thereby challenge a trademark application during the examination stage. The current rules only allow Letters of Protest to issues of genericness, prior registrations, ongoing litigation, and examiner error in calculating priority under Paris Convention. Ex Parte Expungement: Under Section 16A of TMA, anyone may petition to expunge a registration, three years after its issuance and before expiration of 10years from registration date, where the trademark has never been used in commerce for specific goods/services listed in the registration. Party is required to provide evidence of "reasonable investigation" showing the registered mark was never used for the identified goods/services. Ex Parte Reexamination: Under Section 16B of TMA, any person may petition, no later than 5years after registration, to reexamine a registration on the basis that the mark was not in use in commerce with some or all of the goods/services in the registration as of the relevant date. The "relevant date" means the date when a use-based application was initially filed under Section 1(a), the date an amendment to allege use is filed under Section 1(c), or the date a statement of use is filed under Section 1(d). PTO Office Action Response Periods: Examiner will have the discretion to set office action response periods that are shorter than 6-month but no less than 60 days with the applicant having the flexibility to seek extensions. Rebuttable Presumption of Irreparable Harm: A trademark owner seeking injunctive relief is entitled to a rebuttable presumption of irreparable harm upon a finding of infringement or a likelihood of success on the merits. PTAB designates the following cases as precedential:
Sotera Wireless, Inc. v. Masimo Corp. (Dec. 1, 2020) and Snap, Inc. v. SRK Tech. LLC (Oct. 21, 2020) that apply the Fintiv factors. In Sotera, the decision explains that the petitioner's broad stipulation not to pursue in district court any ground that it raised, or could have raised, in the IPR weighs strongly in favor of institution. In Snap, the decision explains that a district court stay that would remain in place until an IPR final written decision weighs strongly in favor of institution. The Fintiv factors used to decide whether to deny institution under 35 USC 314(a) are: (1) whether the court granted a stay or evidence exists that one may be granted if a proceeding is instituted; (2) proximity of the court's trial date to Board's projected statutory deadline for a final written decision; (3) investment in parallel proceeding by court and parties; (4) overlap between issues raised in petition and in parallel proceeding; (5) whether petitioner and defendant in parallel proceeding are the same party; and (6) other circumstances that impact Board's exercise of discretion, including the merits. RPX Corp. v. Applications in Internet Time, LLC, IPR2015-01750, Paper 128 (Oct. 2, 2020), SharkNinja Operating LLC v. iRobot Corp., IPR2020-00734, Paper 11(Oct. 6, 2020), and Apple Inc. v. Uniloc 2017 LLC, IPR2020-00854, Paper 9 (Oct. 28, 2020). In RPX, the petitioner was time-barred because the petitioner's client was an unnamed real party-in-interest that had been served with an infringement complaint more than one year before filing the petition. In SharkNinja, decision held that while petitioners must identify any real parties-in-interest and must do so in good faith, the Board does not need to resolve a dispute regarding a possible real party-in-interest if it would not impact the Board's institution decision. In Apple, the decision applies the factors set forth in General Plastic to a copycat petition that the petitioner filed against the challenged patent after its first petition was denied institution. On Dec. 18, 2020, the USPTO published a Final Rule regarding burdens of persuasion on motions to amend in AIA trial proceedings before the PTAB. According to the Final Rule, the patent owner has the burden of showing that a motion to amend complies with statutory and regulatory requirements for such a motion, and the petitioner has the burden of showing unpatentability of substitute claims proposed in a motion to amend.
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Disclaimer: The content in this blog is solely for informational purposes and does not constitute legal advice.
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