Rajan Law Office Blog - Rajan Law Office, LLC | Intellectual Property & Litigation

USPTO not entitled to attorney fees under 35 usc 145

7/27/2018

On July 27, 2018, in a 7-4 decision the en banc court of the Federal Circuit held that the American Rule prohibits courts from shifting attorneys' fees from one party to another absent Congress' specific and explicit directive and that the USPTO is not entitled to such fees under 35 USC 145. Nantkwest, Inc. v. Iancu, No. 16-1764 (Fed. Cir. July 27, 2018) (en banc).
In this case, the Examiner rejected an application directed to a method of treating cancer based on obviousness and the Board affirmed the decision. The applicant sought review in the district court (E.D. Va.) under 35 USC 145 and the court issued a summary judgment in favor of the USPTO. USPTO then sought reimbursement of expenses for the district court proceeding under Section 145 including attorneys fees of over $78,000. The district court denied the fees citing the American rule which requires each litigant to pay for his/her attorney's fees. On appeal, a Federal Circuit panel reversed the decision and the en banc court ordered review sua sponte.
The en banc court affirmed the district court's decision in a 7-4 decision. Writing for the majority, Judge Stoll reasoned that the word "expenses" does not include an implicit authorization to award attorneys fees under Section 145. According to the Court, the existence of several Patent Act provisions awarding attorneys fees demonstrates Congress' use of "specific and explicit" language in the Patent Act to shift fees when it so desired. Judge Prost, in her dissent joined by Judges Dyk, Reyna and Hughes, argued that the text of Section 145 imposing "all expenses" on the applicant displaces the American Rule.
Full text of the opinion is available here.

sovereign immunity challenges to IPR rejected

7/20/2018

Federal Circuit affirmed the PTAB's denial of a motion by Saint Regis Mohawk tribe to dismiss, on the basis of sovereign immunity, an IPR proceeding against patents that were assigned to the Tribe by Allergan. St. Regis Mohawk Tribe v. Mylan Pharm. Inc., Nos. 18-1638, -1639 (July 20, 2018). Allergan, owner of patents relating to Restasis product for alleviating symptoms of chronic dry eye, sued several generics including Mylan in E.D. Texas. Mylan filed an IPR challenging the patents and the PTAB instituted the IPRs. Prior to a scheduled oral hearing Allergan entered into an agreement transferring the patents to the Tribe. The Tribe then moved to terminate the IPRs asserting tribal sovereign immunity and the Board denied the motion.
On appeal, the Federal Circuit held that sovereign immunity cannot be asserted in IPRs. In affirming the Board's denials, the Court reasoned that IPR is neither a judicial proceeding instituted by a private party or an enforcement action brought by the federal government. According to the court, the "immunity does not apply where the federal government acting through an agency engages in an investigative action or pursues an adjudicatory agency action."
Full text of the opinion is available here.

IP5 launch new pct collaboration search and examination pilot

7/1/2018

On July 1, 2018, USPTO, EPO, JPO, KIPO, and SIPO (collectively, the "IP5") launched a new PCT Collaboration Search and Examination Pilot that allows examiners from all five offices to collaborate on the search and examination of a single international application. The result is an international search report and written opinion from the chosen international searching authority based on contributions from all participating offices. Applicants will have the benefit of search conducted by multiple examiners in different languages with no extra cost.

Patent owner eligible to recover lost foreign profits, rules US supreme court

6/22/2018

On June 22, 2018, in a 7-2 decision, the U.S. Supreme Court held that a patent owner may recover lost foreign profits under 35 USC 284 for infringement under Section 271(f)(2). WesternGeco LLC v. Ion Geophysical Corp., 585 U.S. __ (2018). WesternGeco LLC, owner of four patents relating to lateral-steering technology for surveying the ocean floor, performs surveys for oil and gas companies using its patented technology. ION Geophysical manufactured components in the US and shipped to companies abroad who combined them to create a competing system indistinguishable from WesternGeco. WesternGeco sued for patent infringement under Section 271(f)(1) and (f)(2). At trial, WesternGeco proved that it lost 10 contracts due to ION's infringement and the jury awarded damages of $12.5 million in royalties and $93.4 million in lost profits. The district court denied ION's post-trial motion to set aside the verdict and dismissed the arguments that 271(f) does not apply extraterritorially to lost profits. On appeal, the Federal Circuit reversed the award of lost-profits damages holding that Section 271(a) does not allow patent owners to recover for lost foreign sales. The Court granted cert, vacated the Federal Circuit's judgment and remanded it in light of its Halo Elec. v. Pulse Elec. decision. On remand, the Federal Circuit reinstated its decision regarding the extraterritoriality of Section 271(f). The Court again granted cert.
In his opinion, Justice Thomas acknowledged that there's a presumption against extraterritoriality of federal statutes but questions of extraterritoriality are determined using a two-step framework. The first step asks whether the presumption has been rebutted by a clear indication of extraterritorial application in the statutory text. The second step asks whether the case involves a domestic application of the statute, which is determined by identifying the statute's focus and asking whether the conduct relevant to that focus occurred in the U.S territory. If it did, then it's a permissible domestic application of the statute. In resolving this case under step two using the court's discretion, the Court reasoned that step one would require resolving difficult questions that do not change the outcome of the case but could have far-reaching effects in future cases.
Justice Thomas, citing the Court's decision in RJR Nabisco v. European Community, which found that conduct relevant to a statute's focus which occurs in the U.S. involves a permissible domestic application of the statute, even if other conduct occurred abroad. The Court found that the focus of Section 284, in a case involving infringement under Section 271(f), is on the act of exporting components from the U.S. and therefore, the focus is domestic conduct. Because ION's domestic act of supplying the components that infringed WesternGeco's patents, lost-profits damages that were awarded were a domestic application of Section 284.
In his dissenting opinion, joined by Justice Breyer, Justice Gorsuch agreed with the Federal Circuit's result in concluding that the Patent Act forecloses claim for lost profits because in their view the Act's terms prohibit the lost profits sought in the case whatever the general presumption against extraterritoriality applicable to all statutes might allow.

PTAB Designates informative order on motion to amend

6/1/2018

On June 1, 2018, PTAB designated a new informative order on motions to amend and de-designated two prior precedential decisions. The new informative order provides guidance on motion to amend in AIA trials. Western Digital Corp. v. SPEX Techs., Inc., IPR2018-00082, -00084 (PTAB Apr. 25, 2018) (Paper 13). According to the order, (1) motion to substitute claims is contingent and will be considered only if a preponderance of evidence establishes that original claim it replaces is unpatentable; (2) burden of persuasion will be on petitioner to show by a preponderance of evidence that proposed substitute claims are unpatentable and the Board determines based on the entire record including petitioner's opposition; (3) patent owner must propose a reasonable number of substitute claims if it presents more than one substitute claim per challenged claim; (4) motion to amend responds to ground(s) of unpatentability including potential 101 or 112 issues, in addition to any 102 or 103, and a proper substitute claim must narrow the scope of challenged claim it replaces; (5) substitute claims may not enlarge the scope of claims in the challenged patent or introduce new subject matter; (6) a claim listing, reproducing each proposed substitute claim, is required; (7) motion to amend and opposition to motion are limited to 25 pages and patent owner's reply is limited to 12 pages; and (8) all parties have a duty of candor, and information about an added limitation may be material and patent owner should consider each added limitation when considering its duty of candor.
Full text of informative order is available here.

uspto proposed rules to mandate e-filing of trademark applications

5/30/2018

On May 30, 2018, the USPTO proposed rules to mandate e-filing of trademark applications based on Section 1 and Section 44 of the Lanham Act, and to require the designation of an e-mail address for receiving USPTO correspondence. The proposed rule also requires e-filing of all submissions including responses to Office Actions, maintenance declarations, renewal applications, international applications, subsequent designations, and direct filings with the USPTO relating to extensions of protection through the international registration system. More details are available here.

apple awarded $533M in damages for design patent infringement

5/24/2018

On May 24, 2018, a California jury awarded Apple $533M in damages for design patent infringement by Samsung. Apple Inc. v. Samsung Elec. Co., No. 11-cv-01846 (N.D. Cal.). Apple asserted three design patents and a number of utility patents relating to iPhones and iPads against Samsung. The design patents cover ornamental features of smart phone devices including their shape and graphical user interface. After jury trials in 2012 and 2014, Apple was awarded $399M in damages for design patents infringement. The Federal Circuit upheld the damages in 2015 and the U.S. Supreme Court reversed it in 2016. In reversing and remanding the case, the Supreme Court held that in a multicomponent product, the relevant "article of manufacture" for arriving at a Section 289 damages need not be the end product sold to the consumer but may be only a component of that product.
A new trial on damages was held on May 14-18, 2018. The district court adopted a test formulated by the U.S. Solicitor General during the Supreme Court proceedings. The district court instructed the jury to consider the following four factors: (1) the scope of the claimed design in the patent including the drawings and written description; (2) the relative prominence of the design within the infringing product as a whole; (3) whether the design is conceptually distinct from the product as a whole; and (4) the physical relationship between the patented design and the rest of the product, including whether the design pertains to a physically separable, separately sold, or separately manufactured component. The jury then awarded $533M to Apple in design patent damages. The jury verdict form breaks down the damages among 16 Samsung smartphones without any details on the article of manufacture. Apple sought $1B in total lost profits while Samsung urged the jury to limit damages to $28M based on the infringing components.

uspto proposes rule changes to claim construction standard in ptab proceedings

5/8/2018

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.

uspto issues guidance on aia trial proceedings, post-sas

4/26/2018

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.

usitc updates section 337 rules

4/26/2018

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.