On May 8, 2018, the USPTO announced its proposed rulemaking for claim construction standard in PTAB proceedings. The PTO proposed to amend the rules to require the PTAB to interpret the claims in IPR/PGR/CBM proceedings using the same standard as applied in federal district courts and the USITC, and to consider any prior claim construction determination concerning a term of involved claim in a civil action or ITC proceeding that is timely made in the PTAB proceeding. The proposed changes would replace the BRI standard with the claim construction standard used in federal district courts and would be consistent with the PTO's current approach for interpreting claims in an expired patent. Full text of the notice is available here.
On April 26, 2018, USPTO issued guidance on the impact of the Supreme Court's decision in SAS Institute Inc. v. Iancu on AIA trial proceedings. According to the guidance, PTAB will proceed as follows: (1) it will institute as to all claims or none; if it institutes a trial, it will institute on all challenges raised in the petition; (2) for pending trials in which panel instituted trial on all challenges raised in the petition, panel will continue with the proceeding in normal course; (3) for pending trial in which a panel instituted trial only on some of the challenges raised in the petition, panel will issue a supplemental order on all challenges raised in the petition, and take action to manage trial proceeding including permitting additional time, briefing, discovery and/or oral argument, depending on the stage of the proceeding.
Full text is available here.
On April 26, 2018, the Federal Register published USITC's updated rules governing Section 337 investigations. The final regulations contain 11 changes from the proposals. Among the most notable changes, the revised rules: (1) require that the notice of investigation specify in plain language the scope of the accused products or category of accused products that will be subject of the investigation in order to avoid disputes between the parties concerning the scope of the investigation; (2) formally establish 100-day proceeding to provide for expedited discovery, fact-finding, and determinations in an investigation if the commission, at institution, identifies a potentially investigation-dispositive issue; (3) clarify that the Commission may institute multiple investigations based on a single complaint where necessary for efficient adjudication; (4) allow the ALJ to sever an investigation into two or more investigations at any time prior to or upon thirty (30) days from institution, based upon either a motion by any party or upon the ALJ's own judgment that severance is necessary for efficient adjudication; and (5) bring the Commission's subpoena practice into closer conformity with FRCP.
The new rules go into effect for 337 investigations instituted 30 days after publication in the Federal Register. Full text of the amendments is available here.
On April 24, 2018, the U.S. Supreme Court issued its decisions in two much-awaited patent cases involving inter partes review. In Oil States, in a 7-2 decision, the Court held that inter partes reviews were constitutional under the public-rights doctrine. Oil States Energy Svcs., LLC v. Greene's Energy Group, LLC, 584 U.S. ___ (2018). In SAS, in a 5-4 decision, the Court held that the PTAB must decide the patentability of all the claims the petitioner has challenged in an inter partes review. SAS Inst. Inc. v. Iancu, 584 U.S. ___ (2018).
Oil States Energy Svcs., LLC v. Greene's Energy Group, LLC
In Oil States, petitioner Oil States Energy Services, LLC obtained a patent relating to technology for protecting wellhead equipment used in hydraulic fracturing. Oil States sued Greene's Energy Group, LLC for infringement and Greene's Energy challenged the validity in district court and also filed an IPR petition. The district court issued a claim construction order favoring Oil States while the PTAB concluded that the patented claims were invalid. Oil States appealed to the Federal Circuit challenging the PTAB decision and the constitutionality of IPR. While the appeal was pending, the Federal Circuit rejected the constitutionality of IPR in a separate case and summarily affirmed the PTAB's decision involving Oil States.
On appeal, the U.S. Supreme Court held that the inter partes review does not violate Article III. Writing for the majority, Justice Thomas reasoned that IPR falls squarely within the public-rights doctrine and that patents are "public franchises." According to the Court, IPR involves the same basic matter as the grant of a patent subject to the Board's authority and that the Court has recognized that franchises can be qualified in this manner. Addressing the petitioner's arguments, the Court found that the three decision recognizing patent rights are private property were decided under a different statutory scheme, historical practice where courts have adjudicated patent validity does not foreclose Congress from assigning matters governed by public-rights doctrine to the Executive, and that the similarities between the various procedures used in IPR and in courts does not lead to the conclusion that IPR violates Article III. The Court went on to to say that the holding is narrow and does not address whether patents are property for the purposes of Due Process Clause or the Takings Clause.
In his dissent, Justice Gorsuch joined by Chief Justice Roberts, stated that the decision signaled a retreat from Article III's guarantees that "suits at the common law, or in equity, or admiralty" must be heard by independent judges.
Full text of the Oil States opinion is available here.
SAS Institute Inc. v. Iancu
In SAS, petitioner SAS Institute sought an inter partes review of ComplementSoft's software patent alleging that all 16 of the claims were unpatentable. The Director instituted review of only claims 1 and 3-10 and denied review on the rest. At the end of litigaton, PTAB issued a final written decision finding claims 1, 3 and 5-10 to be unpatentable while upholding claim 4. PTAB's decision did not address the remaining claims on which the Director had refused review. SAS appealed to the Federal Circuit which affirmed the Board's decision and dismissed SAS's argument that 35 USC 318(a) required the Board to decide the patentability of every challenged claim in the petition. SAS filed a writ of certiorari.
On appeal, the U.S. Supreme Court, in a 5-4 decision, held that the Patent Office must decide the patentability of all of the claims the petitioner has challenged in an IPR instituted by the PTAB.
Full text of the SAS opinion is available here.
On April 19, 2018, the USPTO issued a memorandum to address changes in patent examination procedure in light of the Federal Circuit's decision in Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018). In Berkheimer, the Federal Circuit held that the question of whether certain claim limitations represent well-understood, routine, conventional activity is a question of fact; the court reaffirmed this standard in subsequent cases regarding judgment on the pleadings and judgment as a matter of law.
USPTO now requires an examiner to conclude that an element or combination of elements represent well-understood, routine, conventional activity only when the element(s) is widely prevalent or in common use in the relevant industry. This determination is distinct from patentability over 102/103 prior art. The examination procedure now requires: (1) a citation to an express statement in the specification or to a statement made by an applicant during prosecution that demonstrates the well-understood, routine, conventional nature of the additional element(s); it cannot be based on the fact that the specification is silent with respect to describing such element; (2) a citation to one or more court decisions noting the well-understood, routine, conventional nature of the additional element(s); (3) a citation to a publication (book, manual, review article, or other source); (4) statement that the examiner is taking official notice of the well-understood, routine, conventional nature of the additional element(s); this option should be used only when the examiner is certain based upon his/her personal knowledge.
Full text of the memo is available here.
On Feb. 8, 2018, the Federal Circuit held that the question of whether certain claim limitations represent well-understood, routine, conventional activity is a question of fact. Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018). In Berkheimer, invention relates to digitally processing and archiving files in a digital asset management system. The specification explains that the system eliminates redundant storage of common text and graphical elements, which improves efficiency and reduces storage costs. The Federal Circuit held that the claims are directed to abstract ideas but claims 4-7 contain limitations directed to purported improvements described in the specification, which raises genuine issues of material fact as to whether the purported improvements are more than well-understood, routine, conventional activity previously known in the industry. The court reversed the lower court's summary judgment as to claims 4-7 and remanded for further fact finding as to the eligibility of those claims; the court however held claims 1-3 and 9 to be ineligible because they did not include limitations that realize the purported improvements. In its ruling, the court cautioned that the mere fact that something is disclosed in the prior art does not mean it was well-understood, routine, conventional activity or element.
Full text of the opinion is available here.
On Jan. 11, 2018, the PTAB designated two decisions as informative involving 35 USC 315(b). Luv N' Care, Ltd. v. McGinley, IPR2017-01216 (PTAB Sept. 18, 2017) (Paper 13), Amneal Pharm., LLC v. Endo Pharm., Inc., IPR2014-00360 (PTAB June 27, 2014) (Paper 15). In Luv N' Care, the Board denied institution because payment was not received until after the date the petition was filed and the petitioner failed to show good cause for waiving the fee requirement. In Amneal Pharma, the Board determined that the petition was timely filed under 35 USC 315(b) because filing a motion to amend the complaint in district court, with an amended complaint attached, does not constitute service.
Full text of the decisions are available here.
On Jan. 8, 2018, the en banc court of the Federal Circuit held that the time-bar determinations under 35 USC 315(b) are appealable and overruled the court's 2015 ruling in Achates. Wi-Fi One, LLC v. Broadcom Corp., Nos. 2015-1944, -1945, -1946 (Fed. Cir. Jan. 8, 2018) (en banc) According to the Court, there was no clear and convincing indication of congressional intent barring judicial review of USPTO's action denying institution of inter partes review that are filed more than one year after the petitioner is served with a complaint for patent infringement.
Full text of the opinion is available here.
On Nov. 20, 2017, the Federal Circuit reversed the lower court's judgment of invalidity for indefiniteness on the grounds that the intrinsic or extrinsic evidence failed to support indefiniteness. BASF Corp. v. Johnson Matthey Inc., No. 2016-1770 (Fed. Cir. Nov. 20, 2017). BASF, owner of patent directed to systems for performing catalytic conversion of nitrogen oxides in exhaust gas streams, sued Johnson Matthey for infringement. The district court held that the asserted patent was invalid because the "effective to catalyze" language is indefinite and accordingly, entered a judgment of invalidity of all claims.
On appeal, BASF argued that the "composition...effective to catalyze" has a plain and ordinary meaning and it is not indefinite because a person of ordinary skill in the art would understand it to be "composition capable of catalyzing" based on the specification. Johnson Matthey argued that the "effective to catalyze" is indefinite because the language is functional and there are limitless number of materials that can catalyze ammonia oxidation or SCR reactions.
In reversing the district court's judgment, the Federal Circuit reasoned that the Nautilus standard of "reasonable certainty" does not preclude defining a claim term by its function, that the specification provides exemplary material compositions that are effective to catalyze, and that objective tests to determine the effectiveness of the catalysts were available and well known at the time. Based on the intrinsic and extrinsic evidence, the Federal Circuit held that the claims of the asserted patent were not indefinite.
On Nov. 16, 2017, the USPTO issued new procedures for cases remanded from the Federal Circuit. The Standard Operating Procedure (SOP) provides guidance for panels in preparing for remand meetings and guidance to parties on remand procedures. The potential topics for such remand meetings may include the procedural history, issues on remand, any contemplated procedures for the proceedings on remand, and policy considerations. The SOP suggests parties in remanded trial cases are to contact the Board within 10 days and encourages parties to seek agreement on, among others, additional briefing, length of briefing, subject matter limitations on briefing, and briefing schedule. Full text is available here.
Disclaimer: The content in this blog is solely for informational purposes and does not constitute legal advice.