08.26.18

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The Supreme Court (SCOTUS) is Not Changing US Patent Scope, But Cases Such as Ariosa v Illumina Are Interesting Nonetheless

Posted in America, Law, Patents at 9:42 pm by Dr. Roy Schestowitz

Illumina

Summary: Major reforms reinforced by SCOTUS (e.g. Alice against software patents, TC Heartland against patent trolls, Oil States in favour of mass invalidations on the cheap) are unchanged for the foreseeable future; we take stock of what’s coming next…

THE USPTO is not above the law. In fact, law is very much in the hands of US courts, such as the Federal Circuit or the Supreme Court, SCOTUS. Examiners at the USPTO receive guidelines, based on courts’ rulings — essentially rules by which to assess and judge patents/patent applications. They are not judges in the legal sense, but they judge applications and decide whether to award a patent.

“It is worth noting that none of these cases can impact patent scope, Patent Trial and Appeal Board (PTAB) inter partes reviews (IPRs), or the Leahy-Smith America Invents Act (AIA).”The difference between judgments and assessments (or a court ruling and examination) is profound; it’s important to distinguish between those two things because patent lawyers certainly conflate whenever it suits them, as we last noted yesterday. We shall revisit this subject again in a few hours.

A few days ago Alex Moss from the EFF (together with the R Street Initiative, which is typical) wrote about Ariosa v Illumina, which is an upcoming SCOTUS case concerning novelty. To quote:

There is room to debate what makes an invention patentable, but one thing should be uncontroversial: patentable inventions should actually be new. That’s what EFF and the R Street Initiative told the Supreme Court this week in an amicus brief urging it to grant certiorari and reverse the Federal Circuit’s decision in Ariosa v. Illumina [PDF]. We explained that the Federal Circuit’s decision is wrong on the law and bad for innovation, access to knowledge, and the patent system.

In Ariosa, the Federal Circuit departed from more than a century of case law to uphold a patent that claimed an “invention” that someone else had already described in a published patent application. According to the court, the description didn’t qualify as material that could invalidate the patent being challenged because it did not appear in the “claims”—the section specifying the legal boundaries of the applicant’s rights – but rather in the section of the patent application describing the nature and operation of the applicant’s work.

This case is not about patent scope (the aspect most cherished by us), but it’s still important. Watchtroll is meanwhile writing about amicus briefs striving to influence other cases dealt with by SCOTUS — something which we doubt will happen for several reasons outlined before.

It is worth noting that none of these cases can impact patent scope, Patent Trial and Appeal Board (PTAB) inter partes reviews (IPRs), or the Leahy-Smith America Invents Act (AIA). “The Supreme Court Should Say No to Patents That Take Old Ideas Away from the Public,” the EFF said, so it’s mostly about prior art. The latter is about medicine and it says that “the U.S. Supreme Court agreed to hear Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA Inc., on appeal from the Federal Circuit. The case will ask the Supreme Court to decide whether an inventor’s sale of an invention to a third party that is obligated to keep the invention confidential qualifies as prior art for purposes of determining the patentability of the invention under the terms of the Leahy-Smith America Invents Act (AIA).”

So this too deals with prior art. Hatch-Waxman ANDA is nowadays back in the headlines and 6 days ago at Watchtroll Theodore Chiacchio remarked on the Federal Circuit in relation to Hatch-Waxman:

When conducting an obviousness analysis, courts examine the scope and content of the prior art; the differences between the patent claims at issue and the prior art; the level of ordinary skill in the art; and relevant secondary considerations that may shed further light on the inquiry. Graham v. John Deere Co. Of Kansas City, 383 U.S. 1 17-18 (1966). One such so-called secondary consideration is the degree to which one or more commercial embodiments of the claimed invention has enjoyed success in the marketplace. Id. The rationale behind taking into account commercial success is, to the extent the claimed invention has been commercially successful (as reflected, for example, by strong sales and profits, gains in market share, and meeting and exceeding sales projections), the associated market demand would have led to development and marketing of the claimed invention sooner if the subject matter was in fact obvious (or so the thinking goes). Merck & Co., Inc. v. Teva Pharms. USA, Inc., 395 F.3d 1364, 1376 (Fed. Cir. 2005).

In order to establish that the commercial success factor supports a non-obviousness finding, the patentee must establish that a connection (or nexus) exists between the novel aspects of the patent claim(s) and the alleged commercial success. Id.; WesternGeco LLC v. ION Geophysical Corp., 889 F.3d 1308, 1330 (Fed. Cir. 2018). In other words, the patentee must show that the novel aspects of the claim(s) are driving sales and not aspects of the claim(s) that were known in the prior art. In re Huai-Hung Kao, 639 F.3d 1057, 1069 (Fed. Cir. 2011); WesternGeco, 889 F.3d at 1330. In cases brought pursuant to the Hatch-Waxman Act, while there are exceptions, it is most common that patent challengers’ arguments focus predominantly or entirely on an alleged lack of nexus given the substantial sales typically enjoyed by the brand-name drug products that are the subject of such litigation. Though it bears noting that the mere fact that a company is pursuing a generic version of a brand-name drug, by itself, does not support a “commercial success” finding. Galderma Labs., Inc. v. Tolmar, Inc., 737 F.3d 737, 740 (Fed. Cir. 2013).

WesternGeco v Ion Geophysical was mentioned by Chiacchio extensively, just as it was mentioned by Managing IP alongside TC Heartland — a case which limits litigation venue/s, especially for domestic (US) companies. The summary says:

Managing IP explores the foreseeable impact of the US Supreme Court’s rulings in WesternGeco v Ion Geophysical and TC Heartland v Kraft on patent damage awards

Thugs and liars from the U.S. Chamber of Commerce will lobby Congress regarding patents. As noted yesterday: “As part of its 2018 Driving Innovation Roadshow, the U.S. Chamber of Commerce Global Innovation Policy Center (GIPC) will host three intellectual property and innovation business roundtables in Minnesota and Illinois.” Members of Congress are specifically being targeted and lobbyists are bashing their own country, based on falsehoods, to push their agenda.

Based on another post from yesterday, the effect of Mayo (SCOTUS) on large pharmaceutical firms’ drugs has attracted further flirtations, e.g.:

Assessing the latest decisions on § 101 and their implications for branded pharmaceuticals;

Those are often critical drugs whose research and development was actually funded by taxpayers’ money. They just want price hikes, exploiting a monopoly that mostly harms poor countries. Does SCOTUS take such considerations into account? What magnitude do ethical factors have? Should competition be blocked? Should generics be banned?

Josh Landau’s (from the technology-centric CCIA) latest post on the bad approach of the ITC, which overzealously embargoes products when it should not and does not have to. Quoting the outline:

The International Trade Commission’s (ITC) basic function is to protect American industry against unfair foreign competition by prohibiting the importation of unfairly produced trade goods. That includes preventing the importation of goods that infringe a valid U.S. patent through what are called “exclusion orders.”

But that function is limited by the second part of its mission—a requirement that the ITC consider the impact of such protection on the American economy, American consumers, and public health and welfare. If ITC action excluding a product from importation would significantly harm the economy, consumers, or health and welfare, the ITC isn’t supposed to issue an exclusion order.

The ITC’s present practice has resulted in an all-or-nothing approach to remedies; either a product is excluded, or it isn’t. But the ITC has the power to tailor its remedies more narrowly.

As always, when it comes to patent law, embargo should be the very last resort if any resort at all. Embargoes benefit nobody except one monopoly. Recall what Microsoft did to TomTom less than a decade ago.

In summary, not much is changing in the US and that is a good thing. Software patents and trolls generally languish.

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