IP Law Bulletin

On June 12, 2017, the U.S. Supreme Court granted certiorari in Oil States Energy Services LLC v. Greene’s Energy Group, LLC to decide whether the AIA (America Invents Act) patent review program for challenging the validity of issued patents is constitutional. Specifically, the Court will decide the question of “whether inter partes review – an adversarial process used by the Patent and Trademark Office (PTO) to analyze the validity of existing patents – violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.”

Earlier this year, we discussed the potential ramifications of the December 2015 amendments to the Federal Rules of Civil Procedure on the pleading standard of infringement following the decision in Rembrandt Patent Innovations LLC v. Apple Inc. In Rembrandt, the U.S. District Court in the Northern District of California applied the Twombly/Iqbal standard of pleading to infringement contentions following the abrogation of Rule 84 of the Federal Rules of Civil Procedure and Form 18.

Almost a decade has elapsed since the Supreme Court’s decision in KSR Int’l Co. v. Teleflex, Inc. altered the law of patent obviousness. In reversing the judgment of the Federal Circuit, the Court in KSR limited the “teaching, suggestion, motivation” test and loosened the standards that both courts and the USPTO use to assess validity under 35 U.S.C. § 103. In particular, the Court expressly rejected the application of any inflexible obviousness rule that excluded consideration of, among other things, common sense.

The Federal Circuit, however, recently confirmed that common sense alone cannot suffice to establish obviousness. In Arendi S.A.R.L. v. Apple, Inc., the court held that the Patent Trial and Appeal Board (the PTAB) erred when it used common sense to supply a missing limitation in the prior art to arrive at the claimed invention. Not only is this case surprising in that factual findings of the PTAB are rarely overturned on appeal, but it also marks some constraints on the broad obviousness standard articulated in KSR.

In view of the U.S. Supreme Court’s decisions in Alice, Myriad, and Mayo, the United States Patent and Trademark Office (USPTO) has issued a series of guidance documents on patent subject matter eligibility under 35 U.S.C. § 101. These documents are collected on the Subject Matter Eligibility page of the USPTO website. The USPTO’s “May 2016 Subject Matter Eligibility Update” (88 Fed. Reg. 27381), announced the newest in this series of guidance, including new life science examples, a memorandum to the patent examining corps with instructions on formulating subject matter eligibility rejections, an index of eligibility examples, and an appendix of subject matter eligibility court decisions.

Earlier this month, the Federal Circuit revisited the issue of inventorship disputes and iterated in a nonprecedential opinion that proving nonjoinder of inventors in an issued patent is a difficult threshold for a challenger to meet. In doing so, the Federal Circuit affirmed the district court holding that the challenge to correct inventorship of two issued patents was not supported by evidence that rose to the “clear and convincing” standard required to prevail on a 35 U.S.C. § 256 claim.

To date, the Supreme Court has granted certiorari (commonly referred to as cert) to five patent-related cases this term, which will result in three oral arguments likely to be decided before the end of the term. Two of the cases were consolidated into a single argument, while another case was subject to a Grant-Vacate-and-Remand (GVR) order, meaning the previous decision by the United States Court of Appeals for the Federal Circuit (CAFC) has been vacated by the Supreme Court and the case must be reconsidered by the CAFC. There are also over 20 pending Petitions for Writ of Certiorari, which may result in additional patent matters being heard by the Court this term.

The Federal Circuit’s recent decision in UltimatePointer v. Nintendo (Fed. Cir. Mar. 1, 2016) provides a reminder of the need to use caution when drafting a claim that could be read to cover both a device and a method of use.

UltimatePointer is the assignee of U.S. Patent No. 8,049,729 (the ‘729 patent), which is generally directed to a handheld pointing device that can be used to control the cursor on a projected computer screen, thereby improving a presenter’s ability to control the cursor while making a presentation to an audience. UltimatePointer asserted several claims of the ‘729 patent against Nintendo, with Nintendo’s Wii remote being the accused product. A key issue in the litigation was whether the asserted claims were invalid for impermissibly reciting both a device and a method in the same claim.

Most patent owners are aware that under 35 U.S.C. § 154(d), publication of a United States patent application confers provisional rights to the patent owner. The provisional rights allow an owner to collect damages for infringement of issued claims dating back to the date of publication provided that the claims are substantially similar to the claims that are included in the published application. It can often be difficult for a patent owner to prove that issued claims are substantially similar to published claims. However, even if a patent owner is able to prove claim similarity from publication to issuance, a further obstacle to collect pre-issuance damages was solidified by the Federal Circuit recently in Rosebud LMS v. Adobe Systems—the statutory requirement of actual notice. In the recent Federal Circuit decision, the Court found that constructive notice was insufficient to meet the actual notice requirement under 35 U.S.C. § 154(d), and that instead a patent owner must prove the infringer was actually aware of the patent at issue.

Patent owners recently received a favorable decision regarding exhaustion of patent rights from the en banc Federal Circuit.  The case, Lexmark International, Inc., v. Impression Products, Inc., concerns aftermarket print cartridge sales and the issue of whether Lexmark’s patent rights are exhausted by (1) sales within the U.S., despite the inclusion of a single-use/no-resale restriction, and (2) sales outside the U.S.  The Federal Circuit considered the case en banc to determine whether Supreme Court rulings in Quanta Computer, Inc., v. LG Electronics, Inc., and Kirtsaeng v. John Wiley & Sons, Inc. (see prior Nutter commentary here and here), had any effect on the previously-controlling Federal Circuit precedent.  Ultimately, the Federal Circuit distinguished the Supreme Court rulings and found for Lexmark based on the previously-controlling precedent.

On December 22nd the Court of Appeals for the Federal Circuit issued its sua sponte en banc In re Tam decision regarding the constitutionality of the “disparaging” marks bar under Section 2(a) of the Lanham Act.  A Federal Circuit panel previously upheld a Trademark Trial and Appeal Board (the TTAB) decision affirming the refusal under the disparaging marks provision of Section 2(a) of a trademark application for the mark "THE SLANTS." Would a “substantial composite” of Asians find the phrase THE SLANTS disparaging?  The answer was “yes”, as detailed in our earlier blog posting on this case.  Judge Moore, writing for the Federal Circuit panel in initially affirming the appeal decision, however, raised the question as to whether the court should consider the constitutionality issues about the registration standard raised by Mr. Tam on an en banc basis.  Her peers agreed to do so.