Tag Archives: patent



May 6 / Patent

McRO v. Activision Blizzard: Software Patents in a Post-Alice World

By: Matt Wilk

 

Background: Alice Corp. v. CLS Bank International.

Alice Corporation owned four patents disclosing a computer-implemented, electronic escrow service for facilitating financial transactions.  CLS Bank sued Alice, seeking a declaratory judgment that their patents were invalid, and therefore unenforceable, as they did not meet the requirements for patentable subject matter under 35 U.S.C. § 101. They further sought a declaratory judgment that they had not infringed Alice’s patents.

Section 101 allows any individual who “invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof,” to obtain a patent protecting that invention or discovery.[1]  In Bilski v. Kappos, the United States Supreme Court allowed business method patents to fall within the definition of a “process”, and stated that while not the exclusive test, the machine-or-transformation test could be a useful tool in determining the eligibility of process patents.[2]

In view of the above, the district court agreed with CLS Bank, stating that a method “directed to an abstract idea of employing an intermediary to facilitate simultaneous exchange of obligations in order to minimize risk” is a “basic business or financial concept,” and would not be patentable under 35 U.S.C. § 101.  Further, the court reasoned that a “computer system merely ‘configured’ to implement an abstract method is no more patentable than an abstract method that is simply ‘electronically’ implemented.”[3]

On appeal, the United States Court of Appeals for the Federal Circuit first reversed the lower court, stating that inventions like Alice’s are patentable under § 101 unless it is “manifestly evident” that the claims are about an abstract idea; that is, “the single most reasonable understanding is that a claim is directed to nothing more than a fundamental truth or disembodied concept, with no limitations in the claim attaching that idea to a specific application.”[4]  CLS Bank then petitioned for an en banc rehearing. Upon this rehearing, the Federal Circuit vacated the earlier decision with a plurality affirming the district court’s decision that Alice’s claims were unpatentable under § 101, but did not agree upon a standard for judging patentability of computer-implemented systems.  Alice then petitioned the Supreme Court to grant certiorari.

In 2014, in a unanimous decision, the United States Supreme Court heard Alice Corp. v. CLS Bank International and held Alice’s patents were invalid because they claimed unpatentable subject matter.[5] The Court reasoned that the patent claims at issue were drawn to an abstract idea and that implementing those claimed methods on a computer is unpatentable.[6] The Court’s relatively narrow holding essentially rendered so-called “business methods” unpatentable. However, the Court’s decision suggested that software-based inventions that “improve the functioning of the computer itself” or “effect an improvement in any other technology or technical field” would likely be patentable subject matter.[7]

In reaching their decision, the Supreme Court developed a two-step test to distinguish patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.[8]  The first step of the test is to determine whether the claims at issue are directed to one of the patent-ineligible concepts stated above.  If so, the court moves to the second step and asks “what else is there in the claims before us?”[9]  To answer this question, the court considers the elements of each claim both individually and “as an ordered combination” to determine whether the additional elements “transform the nature of the claim” into a patent-eligible claim.[10]

 

Current Case: McRO v. Activision Blizzard

McRO Corp. is the owner of two patents that describe a computerized process for “automated rules-based use of morph targets and delta sets for lip-synchronized three-dimensional animation” that was an improvement over methods previously used in the industry.[11]  McRO alleges that a group of defendants, including Activision Publishing, Inc., (hereinafter, “Activision defendants”) directly or indirectly infringed these two patents by employing automated lip-synchronization methods in developing computer and/or video games. Thus, McRO filed suit under 35 U.S.C. § 271.  The Activision defendants motioned for summary judgment, claiming that the McRO patents are directed to unpatentable subject matter, and are therefore invalid, citing Alice.  The Activision defendants argued that the McRO patents cover “the abstract idea of rules-based synchronization of animated mouth movement.”[12]

The United States District Court for the Central District of California began its analysis in stating, “facially, these claims do not seem directed to an abstract idea. They are tangible, each covering an approach to automated three-dimensional computer animation, which is a specific technological process.”[13]  However, the court went on to invalidate McRO’s patents because the claims “recite(d) tangible steps, but the only new part of the claim (was) an abstract idea.”[14]  Presently, McRO has appealed to the Federal Circuit because they believe the district court erred in holding that the claimed “method for automatically animating lip synchronization and facial expression of three- dimensional characters,” covers “abstract ideas” that are not patent-eligible under 35 U.S.C. §101.[15]  They argue that the claims in question satisfy the two-step test for patent-eligibility under §101 set forth by the Supreme Court in Alice and that the district court deviated from this test and applied a novel one of its own creation.[16]

 

Analysis

Tim Molino, Policy Director for The Software Alliance, believes the Federal Circuit should reverse the district court’s decision because he believes that the district court reversed the steps of Alice and collapsed them into a single inquiry.[17] Instead of first determining if the claims were directed to abstract ideas and then assessing if the claims’ “additional elements” add significantly more to the idea, the court picked apart all of the elements that were known in the prior art to attempt to discover a “point of novelty” in the claims.[18] Molino believes that the McRO claims describe “(a) concrete, real-world innovation that solves the difficult problem of accurately replicating the human face and speech in CGI and animation,” and should therefore qualify as patentable subject matter.[19]

Molino also believes that the district court misinterpreted the second step of Alice.  Instead of analyzing all additional elements adding to the initial abstract idea, the court believed that only novel elements should be considered for the “significantly more” analysis.[20]  In using this standard, the court, unsurprisingly, read out the additional elements of the claims because they lacked novelty, leaving just the abstract idea that fails the “significantly more” test.[21]

Further, the district court’s holding appears to directly conflict with that of the United States Supreme Court in KSR Int’l Co. v. Teleflex, Inc.  In a unanimous decision, in KSR, the Supreme Court acknowledged that in certain situations, “a patent composed of several elements is not proved obvious merely by demonstrating that each of its elements was, independently, known in the prior art.”[22]  The Court implemented a new test to determine if such combination patents are obvious under 35 U.S.C. § 103, asking, from the point of view of one of ordinary skill in the art, if the combination is predictable, whether there is a reason to combine the components, or whether it was obvious to try the combination.[23]  In the present case, it appears that the district court ignored the aforementioned standard and simply held the claims at issue invalid because their individual components had been disclosed in the prior art.

If the district court’s decision is affirmed, it would create a tremendous problem for future patent applications.  Advances in software technology generally arise from building upon what is known in the prior art.[24]  If patent examiners are allowed to disregard every element that has been previously disclosed in the prior art when assessing patentability under § 101, it will be nearly impossible to patent any software inventions, as the only elements remaining in the claims will be abstract ideas, which will be rejected as unpatentable.  Molino urges the Federal Circuit to nip this problem in the bud by overruling the district court’s erroneous conclusion and providing guidance regarding the correct application of the Alice test.[25]

Affirming the district court’s decision could create severe consequences for software patent owners and future applicants. Patents with claims related to implementing abstract ideas appear to be unsafe.  Additionally, it is foreseeable that the ramifications of this decision could spread outside of the software industry and, for example, into biotechnology, where abstract algorithms are frequently used in pharmaceuticals to optimize drug delivery effectiveness. This would unpatentable in light of the current state of McRO.

In conclusion, the district court’s decision incorrectly applied the Alice test. In doing so, the court created a higher bar of patentability under § 101 for software patents than intended in Alice. Additionally, the district court’s conclusion seems to contradict the Supreme Court’s obviousness test described in KSR.  For these reasons, I expect the Federal Circuit to reverse the current holding in McRO v. Activision Blizzard.

 


 

[1] 35 U.S.C. § 101

[2] Bilski v. Kappos, 561 U.S. 593, 607-12 (2010).

[3] CLS Bank Int’l v. Alice Corp. Pty. Ltd, 768 F. Supp. 2d 221, 242-255 (D.D.C. 2011), rev’d, 685 F.3d 1341 (Fed. Cir. 2012) reh’g en banc granted, opinion vacated, 484 F. App’x 559 (Fed. Cir. 2012) and aff’d, 717 F.3d 1269 (Fed. Cir. 2013) aff’d, 134 S. Ct. 2347, 189 L. Ed. 2d 296 (2014).

[4] CLS Bank Int’l v. Alice Corp. Pty. Ltd, 685 F.3d 1341, 1352 (Fed. Cir. 2012) reh’g en banc granted, opinion vacated, 484 F. App’x 559 (Fed. Cir. 2012).

[5] Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347, 2355 (2014).

[6] Id.

[7] Tim Molino, Despite Alice Corp, McRO’s Software Patents Should be Seen as Eligible under Section 101

[8] Alice Corp. Pty. Ltd. v. CLS Bank Int’l

[9] Alice Corp. Pty., 134 S. Ct. at 2355.

[10] Id.

[11] Molino, supra.

[12] Ruling on Defendant’s Motion for Judgment, 12.

[13] Id.

[14] Id.

[15] Brief for Plaintiff-Appellant McRO, Inc., 1.

[16] Id. 28-32.

[17] Molino, supra.

[18] Id.

[19] Id.

[20] Id.

[21] Id.

[22] KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 418 (2007)

[23] Id. 417, 421.

[24] Molino, supra.

[25] Id.

May 1 / Patent

Patent Reissue: Uses and Strategy (Part III)

By: Steve Petkovsek

This is the final post of a three-part series on patent reissue. Part 1 can be found here. Part 2 can be found here.

Part 1 of this series gives a basic overview of recapture, its statutory basis, and notes some of the changes to the treatment of inequitable conduct post-AIA (America Invents Act). [1]  Part 2 discusses how the court has interpreted limitations such as recapture doctrine and intervening rights. It also covers some general strategies on how to use reissue effectively. Part 3 compares patent reissue to other post-grant proceedings a prosecutor may have in his or her arsenal in both a legal and practical context.

 

PART 3-  REISSUE, REEXAMINATION, AND SUPPLEMENTAL EXAMINATION

Part 3 compares patent reissue to other post-grant proceedings a prosecutor may have in his or her arsenal  in both a legal and practical context. It focuses on reissue, reexamination, and supplemental examination.

Reissue vs. Reexamination

There are several major differences between reexamination and reissue. As a patent holder, the only kinds of post-grant proceedings available are reissue, ex parte reexamination, or supplemental examination. As a third party wishing to challenge a patent, reissue is not an option. However, there are some circumstances in which a third party may get involved in reissue proceeding or try to prevent it entirely by initiating other kinds of reexamination, such as inter partes review or post-grant review. Each type of proceeding has a different scope, potentially different consequences, and can vary in length and cost.

The closest analogue to reissue is ex parte reexamination. Both types of proceeding cover any patent and can be initiated by the patent holder, though a third party can also force an ex parte reexamination. While reissue can only be filed before the patent expires, it is possible to have an ex parte reexamination within six years after the patent expires due to past damages.[2] However, ex parte reexamination may only occur when a substantial new question of patentability is presented, or what a “reasonable examiner would find important in determining the patentability of the claims,” regarding 35 U.S.C. §§ 102 and 103 issues.[3] This question can only arise based on patents and publications. Thus, the patentee may only amend claims in an ex parte reexamination, though it is possible to broaden claims. Reissue is far broader and allows the patentee to cure a wider range of defects, as long as the patent is considered at least partly invalid though error. Neither proceeding creates estoppel concerns, though prosecution evidence from either proceeding may later be used in litigation. Interestingly, the same examiner who handled the original patent must handle the reissue proceeding, but a different examiner handles the ex parte proceeding. Reissue can also cause a stay in litigation, while an ex parte proceeding will probably have no effect on litigation, as it can be filed anonymously. In both cases, intervening rights can occur if claims are broadened.

Reissue thus has several advantages to an ex parte proceeding. It is the only way to cleanse a patent of defects other than prior art defects. Inconsistent or troublesome language can be clarified, even in the specification, which allows the patentee to clean up a patent in preparation for a particular litigation. Since errors no longer must be without deceptive intent, a patentee may attempt to make changes which may have not been considered errors at the time of the original issuance. For example, a patentee may wish to tweak the scope of the original claims and specification to more closely cover the new product of a competitor before seeking to extract a license. More prior art can be considered in reissue (and thus be subject to a presumption of validity) than during ex parte reexamination, which is limited to review of patents and printed publications. A patentee may also file continuations, divisional applications, or requests for continued examination during a reissue proceeding, none of which are available in an ex parte proceeding. A patentee can abandon the reissue proceeding if he or she does not like the outcome, while ex parte proceedings cannot be abandoned.[4] Finally, reissue is more predictable than ex parte review, where the examiner may find entirely new prior art and force an unexpected narrowing of the claims.[5]

However, reissue does have several disadvantages to ex parte reexamination for a patentee. Aside from admitting a defect in the patent, the biggest disadvantage is that the entire patent is reopened to prosecution; this means that there is no limited review, and it is possible to lose a battle which had been already won. For example, the original claims will not be examined for compliance with 35 U.S.C. §112, though new and amended claims are anyway. This is mitigated by the fact that the same examiner who allowed the original claims will review the reissue application. Second, ex parte proceedings are more nimble; it is more appropriate to use ex parte proceedings when trying to only gain a presumption of validity over new prior art, possibly without having to change the claims. No oath is required from inventors, which may be a large savings in time and money, as defective oaths have plagued a large majority of reissue applications (upwards of 70%) and can delay the proceedings a year or more.[6] A savvy patentee can keep ex parte proceedings private from competitors, and convince an examiner to allow claims over new prior art without creating additional prosecution history.[7] In this way, a favorable certificate of reexamination can buttress a patent’s presumption of validity in later litigation. Notably, a prior advantage to ex parte reexamination was that there did not need to be an admission of error without deceptive intent, but this advantage has disappeared post-AIA. Thus, ex parte reexamination is the best tool for preempting prior art issues which would otherwise be addressed during litigation.

A third party has limited involvement in both reissue and ex parte reexamination, but still has some options during each proceeding. A third party can anonymously initiate an ex parte proceeding by sending a requester to the USPTO containing relevant prior art and arguments for invalidity. This can be a useful way to preempt a full reissue by a patentee and can force the patentee to narrow claims in a forum where the patentee cannot adjust the specification or request continued examination. Ex parte reexamination can also create intervening rights for a client. It also puts the patentee in front of a fresh examiner. However, the scope of review is limited to prior art issues, and, other than introducing the issue, a third party has no further involvement. This is still more involvement than a third party can achieve during a reissue process, where the third party’s only involvement is via a protest under 37 C.F.R. § 1.291. However, both these strategies may (but do not necessarily) result in an estoppel which can prevent the issue from being raised again during litigation.[8] Courts will even look with disfavor on issues that could have been raised during reexamination by a third party but were not, so the strategy of saving relevant prior art for subsequent litigation might not succeed.[9] A third party (or patent owner) may find himself bound by the findings and limitations of the USPTO without further changes by the court in both reissue protests and ex parte reexamination.

Reissue vs. Supplemental Examination

A second alternative to reissue is supplemental examination under 35 U.S.C. § 257. This can also only be initiated by the patent owner, and can be requested at any time after issuance or any patent.[10] This type of reexamination invites the USPTO to consider or reconsider or correct information relevant to the patent which was missed entirely or improperly reviewed during prosecution. After doing so, this information cannot subsequently be used to invalidate the patent and the patent cannot be rendered unenforceable based on the reviewed information.[11] This covers any issue of patentability, including issues of 35 U.S.C. §§ 101, 112, or inequitable conduct. A supplemental examination can cover any information relevant to the patent, so it has a larger scope than either reissue or ex parte reexamination; the AIA does not put a limit on the kind of information which can be reviewed. It can be initiated any time before a patent expires.[12] This gives the patent holder a quick way (three months timeframe) to clarify information regarding her patent and prepare for litigation.

Supplemental examination holds several advantages over reissue. First, the AIA specifically states that supplemental examination cannot render a patent invalid or unenforceable. The worst case scenario, if the relevant information is a substantially new question of patentability, is an ex parte reexamination considering the specified references or material. Second, since the rules on inequitable conduct have yet to be fully tested in court, supplemental examination can be used to cure information that would otherwise bring up issues of inequitable conduct.  Third, a patent owner need not admit a defect in the patent itself. Fourth, if no new issues of patentability are raised, the examination ends and the patentee is fully immune from any of the reviewed information. Thus, supplemental review works well when the patentee is confident that no new issue of patentability will be raised. It is quick and can be used to narrow issues during enforcement.[13]

However, reissue is preferable when the patentee is aware of a defect or is unsure about the effect on patentability of the new information. If issues of patentability or validity of claims do occur, reissue allows the patentee to access the full suite of prosecution options, such as requests for continued examination or the ability to file divisional applications. Supplemental examination is more expensive than reissue, even when no ex parte proceeding results. The patent owner cannot stop ex parte examination if supplemental review finds a substantial new question of patentability, wherease the patent owner can abandon reissue at any time. Thus, reissue, though much slower than supplemental examination, is far more flexible and it allows the patentee to make changes that the patentee knows are necessary.[14] It is a better avenue to take to cure a patent of known defects before asserting it.

Conclusion

As stated above, reissue is useful mostly when there is a clear problem with an issued patent. It is a longer, but safer route to make changes to a patent than other forms of post issue reexamination. Since a patentee no longer must declare that an error occurred without deceptive intent, reissue has been opened to cure a wider array of problems which might otherwise have required an admission of inequitable conduct. However, this area has yet to be tested by a court in issues other than disclosing known prior art, so it is wise to use other methods, such as supplemental examination, to cure other defects where inequitable conduct may have arisen.

 


 

[1] Leahy-Smith America Invents Act, Pub. L. No. 112–29, 125 Stat. 28.

[2] Perez, Eugene T., Chart Summarizing Different Post-Grant Proceedings (2014)   http://www.postgrantproceedings.com/tools/PGR_Chart.html

[3] Emery, David P., Reissue and Reexamination of Patents, 15-21 (2008).

[4] Emery at 15-21.

[5] Id. at 15-27.

[6] McKeown, Scott A., Defective Oaths Plague Patent Reissue Filings, (November 24, 2010),  http://www.patentspostgrant.com/lang/en/2010/11/defective-oaths-plague-patent-reissue-filings

[7] Emery at 15-10.

[8] Emery at 15-26.

[9] Id.

[10] Matlis, Naphtali Y., Reissue v. Supplemental Examination (2014), http://www.postgrantproceedings.com/topics/Article-NYM_Reissue_v_Supplemental_Exam.html.

[11] See 35 U.S.C. § 257(a),(c).

[12]Perez, Eugene T., Chart Summarizing Different Post-Grant Proceedings (2014), http://www.postgrantproceedings.com/tools/PGR_Chart.html

[13] Matlis, Naphtali Y., Reissue v. Supplemental Examination (2014), http://www.postgrantproceedings.com/topics/Article-NYM_Reissue_v_Supplemental_Exam.html.

[14] Id.

April 29 / Patent

Patent Reissue: Uses and Strategy (Part II)

By: Steve Petkovsek

This is the second post of a three-part series on patent reissue. Part 1 can be found here. Part 3 can be found here.

Part 1 of this series gives a basic overview of recapture, its statutory basis, and notes some of the changes to the treatment of inequitable conduct post-AIA (America Invents Act).[1]  Part 2 discusses how the court has interpreted limitations such as recapture doctrine and intervening rights. It also covers some general strategies on how to use reissue effectively. Part 3 compares patent reissue to other post-grant proceedings a prosecutor may have in his or her arsenal in both a legal and practical context.

 

PART 2- LIMITATIONS ON REISSUE: RECAPTURE DOCTRINE AND INTERVENING RIGHTS

Part 2 discusses how the court has interpreted limitations such as recapture doctrine and intervening rights. It also covers some general strategies on how to use reissue effectively.

The language of the original claims and original prosecution record limit to what extent a patent’s claims can be changed during reissue, which is a doctrine known as recapture. There is a three-step approach taken by courts to analyze recapture, which has not been changed by the AIA.[2] If the answer to a question is no, then recapture is not present and the analysis ends. The approach is as follows:

  1. Is the proposed reissue claim broader than the underlying patent claim?
  2. Are the broader aspects related to the surrendered subject matter?
  3. Has surrendered subject matter crept into the reissue claim?

A claim is broadening under the first inquiry if any limitation present in the original claims is no longer required, even if the claim is narrower in other respects.[3] Thus, if the new claims cover any conceivable product, process, etc. which would have not infringed the original patent, the claims are broadening. A new claim must be broader than each and every original claim of the patent to be broadening during reissue.[4] A new category of invention is generally broadening but not necessarily so if the new category contains all of the limitations of the original claim. Finally, broadening subject matter can be added within two years of original issuance only.

If broadening is present, it must be related to surrendered subject matter for recapture to apply. Subject matter is considered “surrendered” if a limitation was relied upon for allowance. Evidence can be from anywhere in the prosecution history, including amendments or even argument. If no limitation was necessary for allowance, there is no surrender and no recapture. If surrender does exist, the examiner must determine that the broadening occurred in the same area of subject matter. Importantly, the focus of analysis of this second step is on the subject matter surrendered during the original application in the context of the original claims and not subsequent amendments.

The third question determines whether the reissued claims are materially narrowed in other respects to compensate for the broadening in the area of surrender. This analysis takes place in two parts. First, the reissue claim is compared to any claims canceled or amended during prosecution of the original application, and if the claim is as broad as or broader than a claim which was cancelled or amended to define over the art, recapture applies. Second, if a reissue claim omits any limitation which was added or argued during the original prosecution to overcome prior art, recapture applies, even if the claim is accompanied by other limitations making the reissue claim narrower than the patent claim in other aspects.[5] However, recapture does not always apply if the limitation is merely broadened; if it materially narrows relative to the original claim, recapture does not apply.[6] This approach ensures that a patentee is unable to reclaim what was deliberately surrendered while allowing room for error.[7] Thus recapture doctrine allows for some flexibility in broadening claims, allowing patentees to recoup what should have been claimed while still preventing them from arguing identical issues a second time.

The second half of the reissue statue is in 35 U.S.C. § 252, which describes what rights a reissued patent gives with respect to the original patent and where these rights are limited. The original patent is surrendered, and the reissued patent takes its place with the same expiration date as the original. The reissue is treated as if it were the original patent in its amended form for any causes of action after the date of reissuance. Pending causes of action based on substantially unchanged claims are also not affected, and damages can be collected from as early as the original date of issuance. Thus, reissuance is a valid way to shore up a patent’s claims for litigation without running the risk of losing damages.

However, if a claim has been substantially changed, it is possible that a potential infringer has gained intervening rights. These rights, known as absolute intervening rights, allow the infringer to continue to sell, offer for sale, use, or purchase the product without a license despite the new claims, but do not allow the infringer to continue to make or import the infringing product. Intervening rights usually occur where a reissue claims are broader in some respect than the original claims. The rights may be granted to one who did not infringe the original claims but has become an infringer due to the reissue. They may not occur where the language of a claim has not been amended.[8] Intervening rights may also be granted if an intentional infringer knew of the patent but had a good defense to infringement under the original claims, such as a piece of invalidating prior art.[9] This question is settled in litigation, and reissue prosecution history may be a factor if the prior art in question was addressed. Since intervening rights work on reliance rationale, if an infringer has made substantial preparations prior to the reissuance, the infringer might be granted not only the basic intervening rights but also equitable intervening rights, which include the ability to make and import the infringing product. This is the case as long as there was actual reliance on the scope of the original claims, and the term is determined as a matter of equity on a case-by-case basis.[10]

Strategies of Reissue Generally

Reissue is best used to cure a substantial error in a patent which might cause it to be invalid, and thus it should be used either when it is the only option available or when a patentee wishes to make multiple corrections to a patent at the same time. This is because the patentee must necessarily admit a defect in the patent and put the entire issued patent at risk for a second time. However, it is the only way to change the specification or drawings of a patent after it has issued. All prosecution options are on the table, so a patentee can file divisional applications and request for continued examination, a less limited appeal than through reexamination proceedings. The reissue application can be abandoned at any time.

One strategic way to use reissue is to add claims of narrower scope in order to hedge against invalidity. This practice was expressly allowed by the Federal Circuit in In Re Tanaka.[11] There is no need to amend the broader claims of the originally issued patent; especially if the claims are added within two years of the original issue date, there will be no need to argue that they are not broadening.[12] Adding narrower claims also avoids the possibility of creating intervening rights to a competitor. However, an error in conduct must still be demonstrated in addition to the error in the patent. In Tanaka, the error was a misunderstanding of U.S claiming process by the foreign attorney.[13] However, under the AIA, the USPTO will not make an inquiry into the origin of the error other than its sufficiency, so the patentee has an increased amount of flexibility in this respect as compared to prior cases.[14]

Other strategic reasons to file for reissue include attempting to tailor claims to a new invention of a competitor or, for pre-AIA patents, attempting to provoke an interference with a third party patent holder.[15]  The patentee must be careful not to create intervening rights if attempting to broaden claims. If the only issue is a potentially invalidating piece of prior art, a patentee should forgo reissue and either wait for litigation on the issue or attempt to resolve it via an ex parte reexamination proceeding, as described below.

Patent reissue can sometimes be a great mechanism to prepare for litigation, licensing negotiations, or other assertions of a patent. But patent reissue, of course, is not the only option. Practical concerns like cost or time constraints may require that other post-grant avenues are pursued. Part 3 will compare patent reissue to other post-grant proceedings a prosecutor may have in her arsenal both in a legal and practical context.

 

Appendix[16]

Patent Reissue Pic

 


 

[1] Leahy-Smith America Invents Act, Pub. L. No. 112–29, 125 Stat. 28.

[2] MPEP § 1412.02.

[3] See MPEP § 1412.03

[4] There is a special case for biological claims which qualify for pre-AIA 35 U.S.C. 103(b) in this regard. See MPEP § 1412.02 II for details.

[5] MPEP § 1412.02.

[6] See In re Youman, 679 F.3d 1335, 102 USPQ2d 1862 (Fed. Cir. 2012)).

[7] See id.

[8] See Marine Polymer Technologies, Inc. v. HemCon, Inc., No. 2010-1548, slip op. at 26 (Fed Cir. March 15, 2012) (en banc).

[9] Emery, David P., Reissue and Reexamination of Patents, 15-19 (2008).

[10] In re Slimfold Mfg. Co. v. Kinkead Industries, Inc., 1 USPQ2d 1563 (Fed. Cir. 1987).

[11] See In re Tanaka, 640 F.3d 1246, 1250 (Fed. Cir. 2011).

[12] Marion, Michael B., In Re Tanaka (2014), http://www.postgrantproceedings.com/patent_modification/Article-In_re_Tanaka.html.

[13] See In re Tanaka, 640 F.3d at 1247-48.

[14] See Hewlett-Packard Co. v. Bausch & Lomb, Inc., 882 F.2d 1556, 1564 (Fed. Cir. 1989).

[15] Emery, David P., Reissue and Reexamination of Patents, 15-21(2008).

[16] MPEP § 1412.02

April 27 / Patent

Patent Reissue: Uses and Strategy (Part I)

By: Steve Petkovsek

This is first post of a three-part series on patent reissue. Part 2 can be found here. Part 3 can be found here.

Part 1 of this series gives a basic overview of recapture, its statutory basis, and notes some of the changes to the treatment of inequitable conduct post-AIA (America Invents Act). [1]  Part 2 discusses how the court has interpreted limitations such as recapture doctrine and intervening rights. It also covers some general strategies on how to use reissue effectively. Part 3 compares patent reissue to other post-grant proceedings a prosecutor may have in his or her arsenal in both a legal and practical context.

 

PART 1: INTRODUCTION TO REISSUE- STATUTORY BASIS

This is Part 1 of a three-part series on patent reissue. It will introduce the reissue statute, discuss some basic uses, and cover some limitations to reissue use. It will also cover post-AIA (America Invents Act) treatment of inequitable conduct in the reissue context. [2]

Introduction

After a U.S. Patent has issued, the patentee gains legally enforceable exclusive rights as defined by the claims in the patent. However, though the allowed claims enjoy a presumption of validity in subsequent litigation, a patentee should carefully scrutinize his or her patent for defects before attempting to assert those claims via litigation or offers to license. While a patentee surely puts forth the best efforts to find prior art and properly draft a patent during initial prosecution, it is simply cost prohibitive to be absolutely thorough in this regard, particularly since many patents will never be asserted. Furthermore, it is possible that a new understanding of the invention or simply a misunderstanding by the drafting attorney come to light post-issuance, which may result in an improperly defined invention and invalid claims. One method to address these concerns is through patent reissue.

Patent reissue allows the patentee to re-prosecute his or her patent and cure any defects that have been found post-issuance in the claims or specification. This can be done to: gain a presumption of validity over new prior art, correct inconsistencies in claim language, fix inventorship or drawing errors, or broaden or narrow claims. However, there are drawbacks; an owner must admit his or her patent has a defect and the entire patent is reopened for prosecution, not just the desired amendments.  Also, prior to the America Invents Act (AIA), reissue was limited to cases where the patent owner had acted without deceptive intent in prosecution. [3] The AIA eliminated all deceptive intent requirements from the Patent Statute and thus reissue, opening reissue as an avenue to cure prosecution defects even (arguably) if they were a result of admittedly deceptive intent (for example, non-disclosure of known prior art).[4] In this three part series, I will analyze the patent reissue statute, illustrate how subsequent court decisions have interpreted it, and give strategic suggestions on when to use patent reissue instead of other types of post-grant reexamination, such as inter partes and ex parte review.

Patent Reissue Statute: 35 U.S.C. §§251-52

The statutory basis for patent reissue is found in 35 U.S.C. §§251 and 252, the Rules of Practice in 37 CFR §1.171 et seq. and §1.291, and Chapter 1400 of the MPEP.[5] A patent owner has a right to file for a reissuance; the USPTO does not have discretion to reject such a filing if statutory conditions under Section 251 are met. Since reissue is essentially an agreement to re-prosecute an erroneous patent, the same procedures are used as for regular examination under 35 U.S.C. §§132 and 133. The patent owner can also appeal under 35 U.S.C. §134 or seek court review under 35 U.S.C. §§141-145. Protest by third parties is still allowed under 37 C.F.R. § 1.291, and a third party can submit a protest but, unlike other forms of reexamination, a third party has no right to participate in consideration or appeal decisions made by the USPTO during reissue.

Section 251 describes when patent reissue is appropriate. First, it describes what kinds of errors are correctable with reissue proceedings.  Also, a patentee may request several reissued patents for distinct and separate parts of the thing patented.  However, claims in any reissued patent must be directed toward the same invention as the original patent, and some indication must exist in the original patent specification that the patentee considered the subject matter claimed in the reissue patent application to be his or her invention.[6] This is a factual inquiry confined to objective intent manifested by the original patent.[7]  Merely finding that the subject matter was not an object of the original patent, not in the drawings, or not claimed is not sufficient for rejection under the “original patent” clause of Section251.[8] A person having ordinary skill in the art (PHOSITA) must determine that the disclosure of the original patent was an insufficient basis for the new claims absent a showing of intent by the patentee to otherwise narrow the invention. Additionally, Section 251 allows either the inventors or the assignee of the entire interest to file for reissue, but if the application seeks to enlarge the scope of the claims of the original patent, the reissue must be filed in the name of the inventors only. This is because only the inventors can declare a broader concept to actually be their invention.  The reissue application must contain the entire original patent with changes notated properly and claims appropriately numbered.[9] Each claim amendment must have an explanation supporting it. Last, 35 U.S.C. §251 only allows the broadening of claims of the original patent within two years of its issuance.

Only certain types of errors in a patent are correctable under Section 251, and the USPTO has required strict adherence to the literal wording of the statute in this regard.[10] Section 251 requires that:

“the patent, through error, [be] deemed wholly or partly inoperative or invalid by reason of a defective specification or drawing or by the patentee claiming more or less than he had a right to claim.”[11]

Thus, errors must be substantive in nature. The most common reason to reissue is to amend claims. This may be necessary when additional prior art is discovered, prior art is misunderstood, a claim is ambiguous and difficult to enforce, a claim reads upon an excessive number of inoperative embodiments, the invention scope is misunderstood by a drafting attorney, an element of the invention is missing from the claims, or other errors of this sort.[12] Other common errors which can be corrected via reissue are inaccuracies discovered in the disclosure (such as a mistake in the specification or drawings), a mistake or failure in claiming foreign priority or priority of an earlier filed U.S. application, or a mistake regarding inventorship. In essence, reissue was designed to give patentees some maneuverability if a mistake was made in good faith while drafting the patent which went overlooked by the examiner and patentee. Furthermore, the changes made to reissue by the AIA have increased the utility of reissue.

Not all errors which render a patent invalid can be corrected via reissue. This includes errors that could not be corrected in the original patent application, such as a lack of enablement, improper derivation, or a failure to disclose and claim 35 U.S.C. §101 patentable subject matter. Reissue cannot be used to simply reword claims which have the same scope as the originals; the change must be substantive. Procedural mistakes made during prosecution are also beyond the scope of reissue. For example, a failure to file a divisional application directed to nonelected claims has been repeatedly held not to be correctable by reissue.[13]

Finally, post AIA, the patentee no longer needs to declare in the accompanying oath that the error occurred without deceptive intent.[14] The oath still requires sound reasoning for filing a reissuance, i.e. that the patentee believes the original patent to be wholly or partially inoperative for a correctable reason, but no justification must be given as to why the error arose. This opens the door for a more strategic use of reissue without worrying about accusations of inequitable conduct.  Inequitable conduct, which remains a defense against patent infringement, has been defined as a failure to submit known prior art, a failure to explain references in a foreign language, misstatements of fact, and mis-description of inventorship.[15] Inequitable conduct was recently made harder to show in Therasense, Inc. v. Becton, Dickinson & Co., and now must be established as but-for materiality as to the patentability of the application.[16] A patent owner may now admit a defect in a patent that would have previously been an admission of inequitable conduct, which in this case was including an omitted prior art reference. However, since the reference is considered in reissue, according to Therasesne, the previous omission is not but-for materiality if the claims in question survive reissue.[17] The Federal Circuit has not addressed other kinds of inequitable conduct yet, so it is wise to avoid attempting to cure such defects with reissue until a ruling has been made. Until then, a better choice might be supplemental examination.[18]

The purpose and statutory limitations of patent reissue are fairly straightforward. However, as the court has interpreted these rules, it has imposed other limits. Part 2 will discuss how the court has interpreted limitations such as recapture doctrine and intervening rights.

 


 

[1] Leahy-Smith America Invents Act, Pub. L. No. 112–29, 125 Stat. 28.

[2] Id.

[3] Id.

[4] Id.

[5] Emery, David P., Reissue and Reexamination of Patents, 15-3 (2008).

[6] Id..

[7] In re Amos, 953 F.2d 613, 618, 21 USPQ2d 1271, 1274 (Fed. Cir. 1991) (quoting In re Rowand, 526 F.2d 558, 560, 187 USPQ 487, 489 (CCPA 1975)).

[8] MPEP §1412.01.

[9] See 37 C.F.R. § 1.173(b).

[10] Emery at 15-4.

[11] 35 U.S.C. § 251(a).

[12] Emery, David P., Reissue and Reexamination of Patents, 15-5 (2008).

[13] MPEP § 1412.01 I.

[14] See 37 C.F.R. § 1.175.

[15] Matlis, Naphtali Y., Reissue v. Supplemental Examination (2014), http://www.postgrantproceedings.com/topics/Article-NYM_Reissue_v_Supplemental_Exam.html.

[16] See Therasense, Inc. v. Becton, Dickinson & Co., 99 U.S.P.Q.2d 1065 (Fed. Cir. 2011).

[17] Matlis, Naphtali Y., Reissue v. Supplemental Examination (2014), http://www.postgrantproceedings.com/topics/Article-NYM_Reissue_v_Supplemental_Exam.html.

[18] See Reissue v. Reexamination, supra at 11.

March 18 / Patent

Teva Pharm. USA, Inc. v. Sandoz, Inc.

Teva Pharm. USA, Inc. v. Sandoz, Inc.:  In-Line or Out of Sync?

By: Claire Wagner 

The Supreme Court issued its opinion in the case of Teva Pharmaceuticals v. Sandoz on January 20, 2015.[1]  To an outsider to patent proceedings, the decision in Teva is simply an affirmation by the Supreme Court that findings of fact are to be left to the lower courts, which cannot be overturned on appeal unless they are clearly erroneous.[2] The decision is one rendered consistently with the balance continuously observed by the courts: allowing appellate courts to decide questions of law, and giving lower courts deference on questions of fact.   The decision in Teva corrected an anomaly that existed in patent litigation that was not prevalent elsewhere and thus increased the consistency of the judicial system as a whole.[3]

Background and Immediate Effect

Many patent cases hinge on the claim construction hearing, or Markman hearing, during which the judge determines the relative definiteness and clarity of the claim in question.[4]  On its face, Markman hearings appear to blend questions of law and evidentiary fact.  The judge determines the contents and clarity of the patent claim in question, which the Supreme Court has identified as a question of law.[5]  However, this question of law is inherently comprised of a fact-intensive inquiry, evaluated and decided by “the Court” rather than a jury.[6]

Prior to Teva, the result of a district court’s Markman hearing could be overturned on appeal: the Federal Circuit employed a de novo standard of review for the entire hearing, including questions of evidentiary facts.[7]  The theory supporting this was that the question in dispute during a Markman hearing is essentially one of law, not fact.[8]  Therefore, the results of the hearing, including evidentiary fact supporting the claim construction, could be overturned during an appeal.  However, in the Teva decision, the Federal Circuit must exercise deference to the district court on questions of evidentiary fact: a question that can only be overturned if it is clearly wrong, thereby aligning to the Federal Rules of Civil Procedure 52(a)(6).[9]

The Ramifications: Benefits

This decision by the Supreme Court returns the duty of interpreting claim construction to district court judges.  These judges are closest to the claims in question, and have the greatest ability to discover information that will lead to the most accurate representation of a patent claim.[10]  However, because these decisions may not be appealed unless they are clearly erroneous, there is a risk that patents may be construed or interpreted differently, depending on the district court in which they are interpreted.[11]  This may lead to a perception that the exercise of forum selection is being used in order to obtain a favorable verdict.[12]

The Ramifications: Consequences

Teva also undermines the ability of the Federal Circuit to serve as a national body, which consistently sets the direction for patent construction.[13]  The Federal Circuit has a reputation for overturning a great number of construction claims.[14]  While the Teva decision may reduce the overturn rate, the Federal Circuit will also lose its place as the singular standard for claim construction by allowing the law of claim construction to develop organically and discretely at a district level.

Teva may also place a greater emphasis on original claim construction during the patent filing phase, encouraging patents to be filed with increased specificity and clarity.[15]  This may make the patents less susceptible to litigation, but also limits the scope and breadth of the patent’s grant.[16]  Alternatively, Teva may increase the scope and intensity of traditional Markman hearings, turning them into protracted “battles of the experts,” and placing a higher cost on the initial litigation hearings than previously experienced.[17]

 


 

[1] Teva Pharm. Inc. v. Sandoz Inc., 135 S. Ct. 831 (2015).

[2] Supreme Court Holds That Certain Aspects of Claim Construction Decisions Merit Deference on Appeal, IPcopy, (February 27, 2015), https://ipcopy.wordpress.com/2015/01/22/supreme-court-holds-that-certain-aspects-of-claim-construction-decisions-merit-deference-on-appeal/ .

[3] Mann, Ronald, Opinion Analysis: Court moves to reign in Federal Circuit control over district court claim construction, SCOTUSblog, (March 11, 2015), http://www.scotusblog.com/2015/01/opinion-analysis-court-moves-to-rein-in-federal-circuit-control-over-district-court-claim-construction/ .

[4] Markman v. Westview Instruments Inc., 517 U.S. 370, 372 (1996).

[5] Id. at 390.

[6] Id. at 390.

[7] Supra 3.

[8] Markman, 517 U.S. at 390.

[9] Teva, 135 S. Ct. at 835.

[10] Supra 2;  Paredes, J. Peter, Teva v. Sandoz: the new standard of review in claim construction, Lexology, (March 11, 2015) http://www.lexology.com/library/detail.aspx?g=685688d7-50f4-447e-9095-4b917923cc9f .

[11] Supra 2.

[12] Supra 2.

[13] Supra 11.

[14] Supra 2.

[15] Yonan, Daniel E. and Jon E. Boljesic, Practice considerations post Teva v. Sandoz, Lexology, (March 11, 2015), http://www.lexology.com/library/detail.aspx?g=786728a4-9436-4925-9045-8f33fa7be451

[16] Supra 15.

[17] Supra 15.

June 8 / All Articles, Patent

The Disruption Of The U.S. Constitutional Symmetry Of Intellectual Property To Gain Conformity With An International Property Framework: A Road To A Global Market Or A Tripping Point To The Gradual Collapse Of The U.S. Economy?

In a spectrum of governments that range from totalitarian (dictator or communism) to tribal (without any central government), there is a unique form that provides a symmetrical balance between the government and the independent inventor; this symmetrical balance produces technological advancement.1 Once this symmetrical balance is discovered, it allows independent inventors to have secure and unchangeable protection from the federal government that facilitates the courage and mentality to take risks of time, effort and wealth. The willingness of free inventors to take a chance on the free market without government intervention but with inventor controlled government exclusionary protection should be the goal of every patent law system. At one time the United States (U.S.) government held this precise symmetrical balance.2

The global harmonization of U.S. patent law has initiated a process of destroying that unique, symmetrical, Constitutional balance that fostered the greatest two hundred year period of technical advancement the world has ever known. The goal of the U.S. government has now been shifted to transform the U.S. patent law system into one of many uniform multinational global patent law systems; the implementation of this new international intellectual property framework began in 1995 through the Uruguay Round Agreements Act (URAA). A fixed and secure rule (over a hundred years of law) of having a fixed patent term was toppled for a 20-year floating patent term. This change ended the confidence of the financial world in a 17-year fixed term that allowed the investor a more secure rate of return on a high-risk investment. The American Inventors Protection Act of 1999 (AIPA) patched the four-year blunder by making the 17-year patent term recoverable through extensions.

However, the AIPA was used as a second global harmonization implementation against the U.S. patent law system. The AIPA now forces U.S. inventors and financial investors who want to test the value of their inventions in foreign markets to publish the application within 18-months of filing corresponding to the Patent Cooperation Treaty (PCT) 18-months of filing publication rule.

Between 1995 and 1999, the U.S. economy began to stagnate and crumble; between 1999 and 2003, the U.S. economy has continued to fall at an alarming and progressive downward rate.

Given the fact that the 20-year floating patent term was a horrific mistake in terms of the U.S. Constitution and the U.S. economy, will the 18-month publication rule start the U.S. on the road to a global market or continue on past the URAA tripping point to the gradual collapse of the U.S. economy?3

 

John C. Hughs*


October 31 / All Articles, Patent

Foreseeability As A Bar To The Doctrine Of Equivalents

The common-law doctrine of equivalents extends a patent’s protection to cover certain similar devices that do not literally infringe on the patent’s claims. [1] It is an equitable doctrine meant to protect patentees against devices whose elements perform substantially the same functions, in substantially the same ways, with substantially the same results as the patentee’s claimed elements (the “function-way-result” test). [2] Absent this doctrine, competitors could easily subvert the monopoly protection granted by a patent simply by substituting an unclaimed equivalent for a claimed element, thereby skirting liability for literal infringement. Such a loophole would severely threaten the patent system by “convert[ing] the protection of the patent grant into a hollow and useless thing.” [3] Courts have justified the doctrine as necessary to insulate a patentee from the limits inherent in using language to describe inventions. [4]

 

Broad application of the doctrine of equivalents can, however, create uncertainty as to how substantial an improvement a competitor must make to avoid non-literal infringement. [5] Normally, a patent’s claims set out the “metes and bounds” of the invention, just as a deed does for real property. [6] The claims serve a dual purpose: they both define and provide public notice of what the patent protects (and, by implication, what it does not). Both functions stimulate innovation in different ways. The definitional, or protective, function defines what aspects of the invention patent law will protect and, therefore, is the principal incentive for inventors to seek patents. The public-notice function encourages innovation by allowing competitors to make incremental improvements without fear of infringing on the claims of existing inventions. Typically, emphasizing the protective function promotes the investment necessary for breakthrough inventions, whereas emphasizing the public-notice function promotes improvements to existing technologies. [7] Uncertainty as to whether a patent’s claims cover an improvement can chill innovation by exposing the would-be improver to potential liability for infringement under a claim of equivalency. The doctrine of equivalents emphasizes the protective function of patents over the public-notice function because its added protection means that competitors cannot rely solely on the literal claim language to avoid creating infringing variants.

 

The courts created another rule, prosecution history estoppel, to cabin the expansion of protection that the doctrine of equivalents provides. Prosecution history estoppel prevents a patentee from claiming the equivalents that it surrendered during the prosecution of its patent. [8] Estoppel arises in such situations because a patentee disclaimed an equivalent to obtain its patent; it would be improper to permit the patentee to re-establish rights to the same equivalent through the doctrine of equivalents. Prosecution history estoppel also helps reinforce the public-notice function by permitting competitors to rely on the public patent prosecution record to help determine what the patentee has disclaimed. [9]

 

Both the U.S. Court of Appeals for the Federal Circuit and the U.S. Supreme Court have grappled with articulating the factual situations in which a patent’s specification and prosecution history precludes the added protection the doctrine of equivalents affords. The judges of the Federal Circuit hold a broad range of opinions on this issue, and the Supreme Court has had to issue repeated guidance to them.

 

Several opinions in these cases suggest that a patentee should not be able to invoke the doctrine of equivalents to obtain protection from equivalents that one skilled in the art would have reasonably foreseen before the patent issued. Federal Circuit Judge Rader, in particular, is a strong advocate of such a “foreseeability bar.” [10] The United States and the Institute of Electrical and Electronics Engineers (IEEE) also advanced the idea in their amici briefs to the Supreme Court in Festo Corp. v. Shoketsu Kinzoku Kogyu Kabushiki Co., the Court’s latest case involving the issue. [11] The Court’s opinion in that case also appears to limit the doctrine’s reach in cases involving amended claims to cover only those complained-of equivalents that were not foreseeable when the patentee amended its claims.

 

This paper examines a series of cases related to the applicability of foreseeability to the doctrine of equivalents. [12] It then attempts to synthesize the current state of the law in the area, and analyzes arguments for and against adopting a foreseeability rule.

 

Jeremy T. Marr*