IP Law Bulletin

Recently the Federal Circuit, sitting en banc, upheld the International Trade Commission’s (ITC) interpretation of 19 U.S.C. § 1337 to allow the ITC to prevent goods from being imported into the United States when the infringement does not occur until after importation. Although the panel was split 6-4, the primary practical justification for the majority’s decision stemmed from the determination that if the decision came out the other way, it would effectively make § 1337, and thus ITC cases, inapplicable to any induced infringement claims, as well as potentially all method claims. The case involved the importation of fingerprint scanning devices by the Korean company Suprema, Inc., which were then combined with software by Suprema’s American business partner Mentalix, Inc., before the scanners were actually sold in the U.S. The sole claim of the plaintiff Cross Match Technologies, Inc. that was at issue in the en banc appeal (claim 19) was directed to a method for capturing and processing a fingerprint image.

The Supreme Judicial Court for the Commonwealth of Massachusetts (SJC) will decide an important legal malpractice case arising from an alleged conflict of interest that occurred during the prosecution of two patent applications. This decision will affect patent applicants and practitioners in Massachusetts, and courts in other states may look to this decision when analyzing alleged conflicts of interest in the patent prosecution context. Nutter recently filed an amicus brief on behalf of the Boston Patent Law Association (BPLA) on this issue. The BPLA argues that the adoption of a new conflict of interest rule that would prevent a patent practitioner from representing applications filed by competitors on “similar inventions” would create a great deal of uncertainty for both applicants and patent practitioners. Further, if this blanket rule were adopted, applicants might attempt to monopolize the marketplace for lawyers with specific expertise in order to gain a competitive advantage.

Summary: Two recent Federal Circuit cases serve as a reminder that the means-plus-function doctrine should be at the forefront of practitioners’ minds when drafting or evaluating patent claims, particularly in the case of computer-implemented inventions. These cases also demonstrate yet another weapon for invalidating functionally-claimed software patents.

Arguing that its invalidated diagnostic patent claims were “collateral damage in what is properly a war on frivolously broad claims directed to things like correlation tables and actual strands of human DNA,” on August 13, 2015, Sequenom petitioned the Federal Circuit for an en banc review of its June 12 holding in Ariosa Diagnostics, Inc. v. Sequenom, Inc. In that strikingly sweeping decision, a Federal Circuit panel invalidated U.S. Patent 6,258,540 (the ’540 patent) as being directed to ineligible subject matter. Sequenom now warns that the panel decision “reads recent Supreme Court precedent to create an existential threat to patent protection for an array of meritorious inventions” beyond those in the personalized medicine and diagnostics industries:

If this Court does not step in and draw this line, the panel’s rule threatens to swallow many more meritorious inventions along with this one. The core of nearly every major innovation is the discovery of a fact about the natural world that motivates inventors to combine existing techniques to achieve new practical results.

On August 19, 2015, the U.S. Patent and Trademark Office (USPTO) released a set of proposed rule changes that affect the post-issuance patent review proceedings governed by the Patent Trial and Appeal Board (PTAB). As noted in a blog post announcing the release, this is the second iteration of rule changes concerning the America Invents Act (AIA)-created inter partes review (IPR), post-grant review (PGR), and transitional program for covered business method patents (CBM)—the first included a few “quick fixes” enacted earlier this year. While the proposed changes have no effect until a final rulemaking in the future, the USPTO encourages practitioners to review the developments and, if inspired, participate in the comment period that is open until October 19, 2015.

In the recent Federal Circuit decision in Circuit Check v. QXQ Inc., the Court discusses the bounds of analogous art when considering the scope and content of the prior art in an obviousness determination. In making the determination whether a claim is obvious, the fact finder is required to decide, among other things, the scope and content of the prior art. This is because not every potential disclosure that pre-dates the invention can be considered prior art; the disclosure must be analogous to the claimed invention. It is well-established that the test for whether prior art is analogous is “if it is from the same field of endeavor or if it is reasonably pertinent to the particular problem the inventor is trying to solve.” The Federal Circuit used the Circuit Check decision to iterate that there are indeed limits to determining what is “reasonably pertinent” to the particular problem the inventor is trying to solve.

On July 30, 2015, Drew Hirshfeld was appointed to the position of Commissioner for Patents for the United States Patent and Trademark Office (USPTO).  Mr. Hirshfeld reports directly to Michelle Lee, the Director of the USPTO, and according to the USPTO website, he “is responsible for managing and directing all aspects of this organization which affect administration of patent operations, examination policy, patent quality management, international patent cooperation, resources and planning, and budget administration.”

Summary: In Kimble v. Marvel Enterprises, Inc. 576 U.S. __ (2015), the Supreme Court relied on stare decisis, declining to overrule its 1964 Brulotte v. Thys Co. decision and holding that a patent owner cannot charge royalties for the use of an invention after the patent expires. Justice Kagan’s June 22, 2015 opinion affirmed the appellate court’s decision and maintains the status quo for patent licensing practice. As before, licensors should steer clear of Brulotte’s ban on post expiration royalties. However, the parties can use other intellectual property that is likely to live well beyond an underlying patent (e.g., trademark, trade secret) and other financial tools (e.g., amortization, partnering) to reach a competitive, mutually beneficial, and enforceable license agreement that exists beyond the life of the underlying patent.

Summary: The USPTO announced a year-long program aimed at reducing the backlog of pending ex parte patent appeals. An ex parte patent appeal is an appeal to the Patent Trial and Appeal Board typically made by applicants after receiving a final rejection from an examiner and failing to reach agreement on the allowability of the patent application. Currently, the average time to receive a final decision on an ex parte appeal is between 2 to 3 years. Under the new program, an applicant/appellant can have one appeal finally decided within 6 months of entering the program if the applicant willingly withdraws a second appeal. The applicant can contemporaneously file an RCE for the withdrawn appeal to keep the subject matter of the application alive.