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05.28.18

Supreme Court Justices and 35 U.S.C. § 101 Are Fixing the USPTO, Voiding ‘Fake Patents’

Posted in America, Courtroom, Law, Patents at 9:09 am by Dr. Roy Schestowitz

The patent trolls’ lobby (IAM) focuses on the few and rare ‘success stories’ of patent litigation

Sonos and IAM
“If you muscht ask…” (they don’t even say how much they got paid!)

Summary: With the demise of the Eastern District of Texas (as litigation venue) and the demise of software patents we’re starting to see the USPTO going back to the original purpose of patent systems

THE PATENT news is still awash with/dominated by Apple news (the Samsung verdict). It’s about design patents, which are notorious for all sorts of reasons.

There’s some good news, however… it’s not some breaking/overnight news but part of a long, arduous process. Patent scope is being narrowed in the US, owing to a large degree to the Justices at SCOTUS. They may be doing some terrible things to civil rights, copyright law and so on. When it comes to patents, however, we couldn’t ask for more. They typically just ‘get’ it these days…

The patent maximalist Richard Lloyd (IAM) keeps whining about it. His blog posts are typically rants about the US patent system/courts and he lobbies Iancu. A few days ago, for a change, Lloyd wrote about a patent settlement. It’s about a ‘fossil’ of a company, Sonos, which resorted to patent aggression a while back (like many other dying companies, this one being private with only one store left). Lloyd wrote:

Sonos, the connected speaker company, announced last week that it had reached a settlement with Denon, so drawing a line under almost four years of litigation. Although the terms of the agreement remained confidential, it’s fair to say that the run of things in court has largely gone Sonos’s way since it sued D&M Holdings (an investment company that owned Denon) in US district court for alleged infringement of at least four of its patents. Late last year Sonos scored a key victory in a jury trial which ruled that three of its patents in suit were valid

So after “almost four years of litigation,” which must have cost a fortune, one small company compelled another small company to pay (maybe zero). It did not even win the case! The patents weren’t upheld. It’s merely a settlement. One can bet that the biggest winner in this whole affair was the legal team (i.e. lawyers). No wonder “the agreement remained confidential”; the numbers are probably laughable and pathetic, so we expect Sonos to use this secrecy to go after other companies, demanding ‘protection’ money based on imaginary assertions/claims. Apple and other companies have been doing the same thing for nearly a decade.

Nice ‘success story’ you got there, Mr. Lloyd!

Moving on, a PTAB case was covered yesterday by Watchtroll. It’s actually an appeal to the Federal Circuit and as a bit of background, “Mallinckrodt owns the ’112 patent, which is directed to methods of distributing nitric oxide cylinders for pharmaceutical operations. Praxair petitioned for inter partes review of claims 1-19 of the ’112 patent, which the Board instituted. The Board held that claims 1-8 and 10-19 would have been obvious over four prior art references. However, claim 9 survived. Praxair appealed from the Board’s decision regarding claim 9, and Mallinckrodt cross-appealed regarding claims 1-8 and 10-11.”

This ought to have been enough to undermine the patent as a whole.

“The Board also found “compelling” Mallinckrodt’s evidence of secondary considerations that “patients were not excluded” from an INOT22 study,” Watchtroll continued, “despite the known relationship between the nitric oxide treatment and pulmonary edema for patients with LVD. However, because the Court concluded that claim 9 requires administering nitric oxide to patients with LVD, Mallinckrodt’s evidence of secondary considerations regarding the failure of researchers to exclude such patients from the INOT22 study lacked sufficient nexus to the claim. Both the Board’s findings regarding the differences between the prior art and claim 9 and its findings on secondary considerations depended on an incorrect interpretation of that claim. Thus, the Court reversed the Board’s decision that claim 9 is not unpatentable as obvious.”

Notice double negation there (“not unpatentable”); this is never helpful and the Supreme Court recently did this also (it got called out on it). Speaking of the Supreme Court and style, several prominent people have complained about the English of the Trump-appointed (and nominated) Neil Gorsuch. He became a Justice last year, he has served for quite some time since, and Dennis Crouch still cannot spell his surname correctly; he wrote “Gorsach” a few days ago. We find it funny because Crouch ought to know better; we guess that after all this time he still doesn’t know who runs the highest court. The post is about 35 U.S.C. § 101, which pertains to many things including software patents. To quote:

The petition asks the following questions:

Does 35 U.S.C. § 282 allow for challenges to a patent’s validity based on patent eligibility under 35 U.S.C. § 101?

In addition, and in close alignment with the first question, is it proper to find patents invalid under 35 U.S.C. § 101 after full examination before the U.S. Patent and Trademark Office in response to 12(b)(6) challenges when they are presumed valid under 35 U.S.C. § 282?

Is it proper to grant a Rule 12(b)(6) motion to dismiss when the record contains unrebutted factual evidence that the invention is patent-eligible under § 101?

Don’t expect the Supreme Court to bother with 35 U.S.C. § 101; it has had many opportunities since Alice and it always turns these down. Three days ago Marc J. Rachman and Devin A. Kothari (Davis & Gilbert) wrote about patents and the Supreme Court, asserting that the “Supreme Court Seeks To Curb The Worst Abuses Of The Patent System,” notably in litigation. To quote:

Congress, commentators and a wide variety of industry leaders have long noted that the patent system was broken. Besieged by a tide of weak patents and baseless patent troll litigations, these stakeholders argued that the current patent climate incentivized the weaponization of patent rights, thereby raising operational and legal costs and stifling innovation.

In 2017, the Supreme Court responded by taking aim at some of the worst abuses of the patent system in two landmark cases. The first, TC Heartland v. Kraft Foods, addressed the issue of venue. Hoping to limit the aggressive forum shopping of plaintiffs – which often led to an outsized number of cases in plaintiff-friendly places like the Eastern District of Texas – the Supreme Court held that venue is only proper in a patent case in the state where the defendant is incorporated or where it has a regular and established place of business. In narrowing the proper avenues for bringing suit, the Court reduced any home-field advantage for patent trolls.

In Impression Products v. Lexmark Int’l, the Supreme Court rejected Lexmark’s efforts to prohibit purchasers of printer ink cartridges from refilling and reselling them. The Supreme Court found these restrictions to be a violation of the “first sale” doctrine, which protects downstream users of a product by exhausting a patent owner’s rights in a product after it is first sold, thereby narrowing the field of legitimate patent defendants, and giving peace of mind to retailers and consumers.

On the subject of Alice, see what Donald Zuhn wrote about Genetic Veterinary Sciences, Inc. v LABOklin GmbH (Eastern District of Virginia) the other day. It’s yet another one of those many cases where Alice works its magic because “claims 1-3 of U.S. Patent No. 9,157,114, which is assigned to Defendant University of Bern, are invalid under 35 U.S.C. § 101.”

To quote some relevant bits:

Earlier this month, in Genetic Veterinary Sciences, Inc. v. LABOklin GmbH, Senior District Judge Henry Coke Morgan, Jr. of the U.S. District Court for the Eastern District of Virginia granted a motion for judgment as a matter of law under Rule 50 of the Federal Rules of Civil Procedure filed by Plaintiff Genetic Veterinary Sciences, Inc. (doing business as Paw Prints Genetics) that claims 1-3 of U.S. Patent No. 9,157,114, which is assigned to Defendant University of Bern, are invalid under 35 U.S.C. § 101. Genetic Veterinary Sciences (“GVS”) had initiated the dispute between the parties by filing a complaint for declaratory judgment of invalidity and noninfringement of the ’114 patent.

[...]

In assessing the patent eligibility of claims 1-3 of the ’114 patent, the District Court noted that the analysis follows the two-step framework set forth by the Supreme Court in Alice Corp. Ptv. Ltd. v. CLS Bank Int’l (2014). Pursuant to that framework, courts first determine whether the claims at issue are directed to a patent-ineligible concept, and if so, then consider the elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the claim into a patent-eligible application. The District Court noted that this second step “represents a ‘search for an ‘inventive concept”—i.e., an element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.’”

This is a district court; these tend to be even less strict than the Federal Circuit, so this is noteworthy. Also from a district court there’s this update on Magna Electronics, Inc. v Valeo, Inc. et al, stating that “[t]he court granted defendant’s motion to compel further interrogatory responses regarding conception and reduction to practice.”

We certainly hope that, over time at least (the long run), courts as low as these and even the patent office will sympathise with defendants (merely being accused) rather than self-acclaimed ‘inventors’; many patent applicants are charlatans or people who overestimate the importance of their ideas, seeking a monopoly on these ideas while relying on examiners’ benefit of the doubt and/or profit motive.

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