05.08.18

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Court of Appeals for the Federal Circuit Continues to Deny Patents Based on Stricter Standards

Posted in America, Courtroom, Patents at 9:20 am by Dr. Roy Schestowitz

Justice based on self-reflection should come first (and no presumption of validity for patents, honesty from lawyers)

Man in window

Summary: As patent lawyers resort to further aggression and dirty tricks they risk alienating jurists, who are growingly hostile towards the patent maximalists and are nowadays embracing a more balanced approach towards patents

IT HAS been pretty pleasing to see what happened to the Court of Appeals for the Federal Circuit (CAFC) after Paul Redmond Michel and Mr. "Death Squads" Rader left it. No longer a patent extremists’ court or a patent trolls’ ally, CAFC nowadays instructs the USPTO regarding examination guidelines (which its rulings inspire).

CAFC’s actions upset nobody except a small group of patent extremists, who occasionally bash CAFC judges and demand their firing/resignation. It’s rather appalling to see. They do the same to USPTO officials who back reforms.

One such site, Watchtroll, wrote about an “Israeli pharmaceutical firm” the day before yesterday. It’s going back to court after Justices changed the national position/s on patents. The news is dated two days ago, but it speaks of something which happened more than 2 weeks ago. To quote:

On Thursday, April 20th, the Court of Appeals for the Federal Circuit issued a decision in Medinol Ltd. v. Cordis Corporation et. al. which vacated and remanded a lower court’s ruling that claims of patent infringement alleged by Israeli pharmaceutical firm Medinol were barred by the equitable defense of laches. The Federal Circuit’s decision comes after the U.S. Supreme Court overturned the Federal Circuit’s previous precedence on laches as an equitable defense in SCA Hygiene Products v. First Quality Baby Products, decided last year. The case was decided by a panel consisting of Circuit Judges Timothy Dyk, Jimmie Reyna and Kara Stoll.

Watchtroll is now back again to 01 Communique Lab, Inc. v Citrix Sys, which it revisited yesterday. This site is typically revisiting only CAFC cases of convenience (to the patent microcosm).

Covering a breach-of-contract case, Patently-O looks at the latest attempt to bring an AIA (patents) case to SCOTUS. “In its new petition for certiorari,” Patently-O wrote, “Alexsam argues that its breach-of-contract case should have never been removed to Federal Court.”

Patently-O has also just published this long post by Dennis Crouch about Energy Heating v Heat On-The-Fly, a case wherein the “Federal Circuit affirmed the lower court’s holding that Heat On-The-Fly’s U.S. Patent No. 8,171,993 is unenforceable due to inequitable conduct.”

Heres’s why:

Inequitable Conduct: In the failure-to-disclose context inequitable conduct requires clear and convincing evidence that “the applicant knew of … the prior commercial sale, knew that it was material, and made a deliberate decision to withhold it.” See Therasense. These issues are determined by the district court judge and given deference on appeal. Thus, an inequitable conduct finding should only be overturned when based upon a misapplication of law or based upon a clearly erroneous finding of fact.

Here, the patentee argued that the prior uses were “experimental” or at least he thought that they were. That argument was rejected since the prior uses included all elements of claim 1; that there were no notebooks or other experiment-like-paraphernalia; and that the uses were done openly without any attempt to hide the system or require confidentiality. (Linking these factors to Allen Engineering Corp. v. Bartell Industries, Inc., 299 F.3d 1336 (Fed. Cir. 2002)). Those elements were more than enough to overcome the experimental-use-defense.

Watchtroll too has just mentioned courts rendering patents unenforceable due to foul play. Notice the theme? We covered some more examples recently. These are typically CAFC cases and the judges aren’t tolerating patent aggression.

A couple of days ago we wrote about laughable ads from Cislo & Thomas LLP and here they go again with the headline “Federal Circuit Makes It More Difficult To Invalidate Patents Under Alice” (we already debunked these arguments about a dozen times over the past month). To quote Cislo & Thomas LLP:

As many patent attorneys and agents know, the landscape of business methods and software patent eligibility has changed since the 2014 ruling of Alice v. CLS Bank. Alice has made it significantly more difficult to patent software and business methods, but now the Federal Circuit made a ruling that will slow down the process of invalidating patents under Section 101.

The Federal Circuit found that a finding of patent eligibility under Section 101 and the Alice ruling involve “factual issues.” This means that lower district courts will have a more difficult time resolving Section 101 cases at the summary judgment stage because these factual issues are something that require a jury to decide.

Although they aren’t naming the case, they’re ‘pulling a Berkheimer’ — a relatively new trick of patent maximalists looking desperately for light at the end of the CAFC tunnel (sometimes even mocking judges over it, e.g. Judge Reyna).

At no point did CAFC say something against Section 101/Alice; a couple of successive rulings led to this USPTO consultation which was soon forgotten about because of Oil States (only days later).

The matter of fact is, CAFC remains Section 101/Alice-friendly and thus software patents-hostile. As Joseph Herndon reminds us this week, business methods aren’t considered patentable either. The “Federal Circuit affirmed the Patent Trial and Appeal Board’s (“Board”) determination that the claims are patent-ineligible under § 101,” he wrote. Here is the core part:

In an appeal from a rejection in initial examination of appellant Mark Eberra’s patent application, the Federal Circuit affirmed the Patent Trial and Appeal Board’s (“Board”) determination that the claims are patent-ineligible under § 101.

The patent application is entitled “Business Method for Opening and Operating a National Television Network” with serial number 12/230,058 (“the ’058 application”). The Examiner rejected all claims of the ’058 application as patent-ineligible under 35 U.S.C. § 101 and as anticipated under 35 U.S.C. § 102.

The Board initially affirmed the Examiner’s anticipation rejection without reaching the § 101 issue. Then, on rehearing, the Board affirmed the Examiner’s rejection under both § 101 and § 102. Mr. Eberra appealed and represented himself pro se.

So patents on business methods are so very weak that they’re probably not worth pursuing and the same goes for software patents. Except perhaps in the patent trolls’ breeding ground, the Eastern District of Texas (TXED/EDTX). Here’s an update from an TXED patent lawsuit, Salazar v HTC Corporation:

The court granted in part defendant’s motion to strike portions of the report of plaintiff’s technical expert for applying improper legal principles.

Such “improper legal principles” seem to match the theme we’ve been seeing at CAFC lately. Not only do patent lawyers attempt to come up with “scams” (and then SLAPP me for pointing it out) but they cheat in all sorts of other ways. How many judges will it take to signal to them that they’ll be dismissed with prejudice for that? How many rulings will we see along these lines?

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