IP Law Bulletin

In recognition of the high interest level in the program, the PTO recently announced it is increasing the annual limit on Track One Prioritized Examinations from 10,000 to 12,000, effective September 3, 2019, to prevent exceeding the limit this fiscal year, which concludes on September 30. 12,000 will be the new limit going forward as well.

Decisions by the Supreme Court and the Federal Circuit over the past decade have wrestled with the question that 35 U.S.C. §101 was intended to answer: What is eligible for patent protection? The text of §101 says a patent can be granted for “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” Though this text has changed very little since it was first written in 1793, the courts have established a number of judicially created exceptions, and exceptions to those exceptions. This has created a growing difficulty and uncertainty in applying §101 to modern technologies, especially those implemented by computer systems. 

Bob Dylan famously sang that “[y]ou don’t need a weatherman to know which way the wind blows,” and we don’t need a weatherman to tell us that the wind now blows differently at the United States Patent and Trademark Office (USPTO). On January 7, 2019, the USPTO released revised subject matter eligibility examination guidance (“Guidance”), foreshadowed by USPTO Director Iancu last fall. The Guidance is noteworthy both for raising the bar in examination procedure and, we think, for signaling the Office’s intent to rein-in the application of subject matter ineligibility analysis (“lest it swallow all of patent law” – Alice). We anticipate a reduction in subject matter eligibility rejections because the Guidance makes it more difficult for examiners to reject claims as being directed to unpatentable subject matter under 35 U.S.C. §101.   

Taking into account what constitutes a disclosure, we can see the following guiding principles and trends emerging:

The issue of public disclosure is a frequent concern for inventors looking to obtain patent protection. While it may often be safest to wait until at least a provisional patent application is filed before having any discussion regarding the invention with a third party, it is often not practical. Is the idea of waiting to discuss with a third party until a patent application is filed an overly cautious practice? Consideration of what actually constitutes a public disclosure and the factors that courts take into account illustrate that avoiding any and all discussion of the invention may not be necessary.

Since the Supreme Court’s decision in Alice Corp. v. CLS Bank in 2014, there has been an increasing trend in district courts granting pretrial dispositive motions to effect early dismissal of patent infringement cases under 35 U.S.C. § 101. Last month, however, the Federal Circuit issued two patent-friendly decisions that preclude such early dismissal when there are factual disputes that underlie the ultimate legal conclusion of patent eligibility under 35 U.S.C. § 101. 

On May 22, the U.S. Supreme Court issued an important and long-awaited Opinion in TC Heartland LLC v. Kraft Foods Group Brands LLC, a case that centered on where a patent infringement suit can be filed. In a resounding 8-0 decision, the Supreme Court put an abrupt end to the decades-old practice of forum shopping in patent cases.

For almost 30 years, patent venue law allowed patent owners to file infringement suits in federal judicial districts in which the accused infringer is subject to the district court’s personal jurisdiction. This flexibility opened the doors to a patent owner’s home court and to distant courts that are perceived to be friendly to patent owners. Observers believe that this flexibility was being abused, especially by non-practicing entities or “patent trolls.” Non-practicing entities generate revenue by licensing and enforcing their patents as opposed to making or selling their own products.

On March 27, 2017, the U.S. Supreme Court heard oral argument in TC Heartland v. Kraft, a case that centers on where patent infringement lawsuits can be filed.

Key Takeaways

• If the Supreme Court sides with TC Heartland, patent infringement hotbeds like the Eastern District of Texas would likely see a drastic reduction in filings because cases would be limited to the state of incorporation of the defendant, or where the defendant has committed acts of infringement and has a regular and established place of business.
• Because many corporations select Delaware as their state of incorporation, a ruling in favor of TC Heartland would likely cause a sharp increase in patent infringement filings in that district.
• Switching the heavy patent infringement case load from the Eastern District of Texas to the District of Delaware will not solve TC Heartland’s concern about one judicial district handling a disproportionate majority of patent infringement cases.
• If the Supreme Court sides with Kraft Foods, the status quo will be maintained and patent owners will have flexibility in selecting venue for infringement actions.