Viewpoints

At Steinfl + Bruno, we take a different approach to how we observe our professional surroundings, thinking from the end to deliver the best possible work product. As patent designers, we challenge the traditional ways of viewing our environment, looking beyond what is given. We focus on taking a different point of view to get a deep understanding of how to protect the innovation. Our goal is that of thinking from the end so to provide the innovators with IP protection that can become an engine of growth for their operation, opening possibilities and always, always striving for excellence.

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S+B

Dec 12, 2017

What has Design to do with Patents and Innovation? EVERYTHING.

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S+B - December 12, 2017

What has Design to do with Patents and Innovation? EVERYTHING.

Design challenges assumptions. Design questions what is given. Design takes a different point of view. Design requires a deep understanding of how it works. Design seeks to constantly improve how it works. Design breaks barriers. Design opens possibilities. Design re-defines the existing. Design strives for excellence. Design is inherently innovative.

A patent designed to support the innovators’ needs and vision will have innovative power in itself and will become engine of growth for the innovators’ R&D and business.

Principles of Patent Design

 

Never Assume

Do not take the invention and the innovator for granted. Be aware that you need to learn and unlearn before drafting. Make room for the innovator’s vision.

Sharpen Your Insight

Use your knowledge to gain an accurate and deep understanding of the invention and the innovator. Understand what features are key to their inner workings and objectives.

Improve Functionality

Build a patent frame which operates on the invention’s and innovator’s key features to maximize their strengths and operability. Aim to remove limits and open possibilities.

Think from the End

Shape patent protection to fit the innovator’s ultimate goals. Don’t be afraid to ask questions and take a different point of view.

Strive for Excellence

Never settle for anything other than the best possible work product.

Patents

Oct 12, 2016

Patent cases in the Supreme Court’s October 2016 term

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Patents - October 12, 2016

Patent cases in the Supreme Court’s October 2016 term

The Supreme Court will decide two patent cases on the merits in the October 2016 term of the Court. These cases are:
1. Samsung Electronics Co. v. Apple, Inc., ___ U.S. ___, 136 S. Ct. 1453, 194 L. Ed. 2d 549 (March 21, 2016) (granting petition for certiorari “limited to Question 2 presented by the petition”); and
2. SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, ___ U.S. ___, 136 S. Ct. 1824, 194 L. Ed. 2d 829 (May 2, 2016) (granting petition for certiorari).
The Court heard oral argument in the Samsung case on October 11, 2016. The official transcript of the argument is available here. The question presented for review is “[w]here a patented design is applied only to a component of a product, should an award of infringer’s profits be limited to profits attributable to that component?” This is the case in which Samsung’s entire profits from selling its accused smartphones were awarded to Apple for infringing Apple’s design patents for the front face of the iPhone and its graphical user interface. We published a news item, about the case when the Supreme Court decided to grant review earlier in 2016. We published an earlier news item, about the billion-dollar jury verdict in favor of Apple.

The SCA Hygiene case is set for oral argument on November 1, 2016. The question presented for review is “[w]hether and to what extent the defense of laches may bar a claim for patent infringement brought within the Patent Act’s six-year statutory limitations period, 35 U.S.C. § 286.” We published a news item, about the Supreme Court’s decision earlier in 2016 to take this case up for review. We also published a news item, about the decision en banc of the U.S. Court of Appeals for the Federal Circuit in this case. The Federal Circuit decided that the affirmative defense of laches (due to unreasonable delay by the plaintiff in bringing suit) was available in patent infringement lawsuits despite the existence of a six-year statute of limitations for collecting damages due to patent infringement.

Patents

Oct 06, 2016

Inter partes review 6: Cuozzo at the Supreme Court

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Patents - October 06, 2016

Inter partes review 6: Cuozzo at the Supreme Court

The Supreme Court affirmed the judgment of the United States Court of Appeals for the Federal Circuit in a case concerning the conduct of inter partes review proceedings. Cuozzo Speed Technologies, LLC v. Lee, 579 U.S. ___, 136 S. Ct. 2131, 8195 L. Ed. 2d 423 (No. 15-446, June 20, 2016).

The Court heard argument (the argument’s audio is available here) on April 25, 2016 and less than two months later issued its judgment and opinion. Justice Breyer wrote the opinion for a unanimous Court with respect to parts I and III and for the Court for part II.

The Court addressed two issues in deciding the case. First, does 35 U.S.C. § 314(d) bar a court from considering whether the Patent Office wrongly determined to institute an inter partes review when it did so on grounds not specifically mentioned in a third party’s review request? The Court concluded that the first provision, though it may not bar consideration of a constitutional question, does bar judicial review of the kind of “mine-run” claim at issue in Cuozzo Speed Technologies, involving the Patent Office’s decision to institute inter partes review. (The Court sometimes uses the term “mine-run” when others likely would use the term “run of the mill.” The first time the Court did so was in Monroe v. Pape, 365 U.S. 167 (1961) (opinion for the Court written by Douglas, J.), and in forty-four cases since then).

The second issue is whether 35 U.S.C. § 316(a)(4) authorizes the Patent Office to issue a regulation stating that the agency, in inter partes review, shall construe a patent claim according to its broadest reasonable construction in light of the specification of the patent in which it appears. The Court concluded that the Patent Office was authorized to issue the regulation.
With respect to the first issue, Garmin’s petition for inter partes review asked the Patent Trial and Appeal Board (PTAB) to institute review of claim 17 of the Cuozzo patent. The PTAB ordered inter partes review of claims 10 and 14 as well and on the basis of the same prior art as for claim 17. The Patent Office argued that the claims 10, 14, and 17 were logically interlinked (claim 17 depends on claim 14 which in turn depends on claim 10) and “a petition need not simply repeat the same argument expressly when it is so obviously implied” even though 35 U.S.C. § 312 requires that a petition for inter partes review must identify, “in writing and with particularity, each claim challenged, the grounds on which the challenge to each claim is based.

The Court agreed, citing the language of 35 U.S.C. § 314(d), which states that the “determination by the [Patent Office] whether to institute an inter partes review under this section shall be final and nonappealable [emphasis added].” The Court also was persuaded by what it considered an important Congressional objective, namely, “giving the Patent Office significant power to revisit and revise earlier patent grants” which would be undercut if the “agency’s final decision could be unwound under some minor statutory technicality related to its preliminary decision to institute inter partes review.” Furthermore, “the existence of similar provisions in this, and related, patent statutes reinforces our conclusion,” namely the non-appealability of determinations concerning petitions for inter partes reexamination.

The Court noted that it applies a “strong presumption” in favor of judicial review when it interprets statutes, including statutes that may limit or preclude review. Nevertheless, the “No Appeal” provision’s language forbids an appeal that attacks a determination whether to institute review because it is “an ordinary dispute about the application of certain relevant patent statutes concerning the Patent Office’s decision to institute inter partes review.” Thus, “we emphasize that our interpretation applies where the grounds for attacking the decision to institute inter partes review consist of questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review.”

The Court left open appeals from determinations whether to institute review based upon disputes that are not ordinary. “[W]e need not, and do not, decide the precise effect of §314(d) on appeals that implicate constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond ‘this section.’” Thus, the Court does not categorically preclude review of a final decision where a petition fails to give “sufficient notice” such that there is a due process problem with the entire proceeding, nor does its interpretation enable the agency to act outside its statutory limits by, for example, canceling a patent claim for “indefiniteness under §112” in inter partes review. (A petition for inter partes reviews must be based only on a ground under 35 U.S.C. §§ 102 or 103 and only on the basis of prior art. 35 U.S.C. § 311(b).)

Justice Alito, joined by Justice Sotomayor, filed an opinion concurring in part but dissenting in part with respect to whether the Patent Trial and Appeal Board’s decision to institute inter partes review is subject to judicial review. The Court dismissed the argument in Justice Alito’s opinion that the “No Appeal” provision forbids only interlocutory appeals but permits review of the decision to grant a petition during a final appeal from a decision on the merits.

With respect to the second issue, Cuozzo argued that the Patent Office lacked the legal authority to issue its regulation requiring the agency, when conducting an inter partes review, to give a patent claim “its broadest reasonable construction in light of the specification of the patent in which it appears.” 37 C.F.R. § 42.100(b). (The Patent Office amended this regulation on April 1, 2016 to add this alternative:“[a] party may request a district court-type claim construction approach to be applied if a party certifies that the involved patent will expire within 18 months from the entry of the Notice of Filing Date Accorded to Petition.”) Cuozzo contended that the Patent Office should, like the courts, give claims their “ordinary meaning . . . as understood by a person of skill in the art.”

The Court, however, pointed out that the statute contains a provision that grants the Patent Office authority to issue “regulations . . . establishing and governing inter partes review under this chapter.” 35 U.S.C. § 316(a)(4). The Court held that this statute gives the Patent Office the legal authority to issue its broadest reasonable construction regulation. The Court interpreted Congress’ grant of rulemaking authority in light of the Court’s decision in Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 842 (1984).

The “Chevron deference” doctrine requires that when a statute is clear, an agency must follow the statute, but when a statute leaves a gap or is ambiguous, the Court typically interprets it as granting the agency leeway to enact rules that are reasonable in light of the text, nature, and purpose of the statute. The Court has “recognized a very good indicator of delegation meriting Chevron treatment in express congressional authorizations to engage in the process of rulemaking or adjudication that produces regulations or rulings for which deference is claimed.” United States v. Mead Corp., 533 U. S. 218, 229 (2001). The statute allows the Patent Office to issue rules “governing inter partes review,” 35 U.S.C . § 316(a)(4), and the broadest reasonable construction regulation is a rule that governs inter partes review.

The Court therefore found an express delegation of rulemaking authority, a “gap” that rules might fill, and “ambiguity” in respect to the boundaries of that gap. Applying Chevron deference, the Court concluded that that the regulation represented a reasonable exercise of the rulemaking authority that Congress delegated to the Patent Office.

Cuozzo and the Federal Circuit judges that dissented from the denial of en banc review argued that an inter partes review was like (or a surrogate for) patent litigation in the district courts because of similarities in procedure and the fact that a decision to cancel patent claims normally has the same effect as a district court’s determination of invalidity of patent claims. They argued the PTAB should apply the standard of construction of patent claims used in court, namely, the ordinary meaning construction. The Court disagreed with this argument because “in other significant respects, inter partes review is less like a judicial proceeding and more like a specialized agency proceeding” and the “purpose of the [inter partes review] proceeding is not quite the same as the purpose of district court litigation.”

In the examination of patent applications the broadest reasonable construction is properly employed to protect the public from overly broad claims and give the applicant a fair chance to draft a precise claim that will qualify for patent protection. Cuozzo argued that in inter partes review the broadest reasonable construction standard may help protect certain public interests, but the patent owner has no absolute right to amend any challenged patent claims. The Court was not impressed with this argument because “[t]he process however, is not as unfair as Cuozzo suggests. The patent holder may, at least once in the process, make a motion to do just what he would do in the examination process, namely, amend or narrow the claim.” That motions to amend claims in inter partes review proceedings are rarely granted “may reflect the fact that no amendment could save the inventions at issue, i.e., that the patent should have never issued at all” (at least with those claims).

Cuozzo also argued that the use of the broadest reasonable construction standard in inter partes review, together with use of an ordinary meaning standard in district court, might produce inconsistent results and cause added confusion. Thus, a district court may find a patent claim to be valid, and the agency may later cancel that claim. The Court agreed that this could happen but its possibility, however, has long been present in the patent system with its different tracks for the review and adjudication of patent claims. The different burdens of proof on the challenger in the courts as compared to inter partes review mean that “the possibility of inconsistent results is inherent to Congress’ regulatory design.”

Justice Thomas filed a concurring opinion in Cuozzo expressing his desire (expressed previously, see, e.g., Michigan v. Environmental Protection Agency, 576 U.S. ___, 135 S. Ct. 2699, 2712, 192 L. Ed. 2d 674 (2015) (Thomas, J. concurring)) that “this Court should reconsider that fiction of Chevron and its progeny.” He concurred in the judgment in Cuozzo, however, because he believed the Court effectively asked whether the rulemaking was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” in conformity with the Administrative Procedure Act, 5 U. S. C. § 706(2)(A).

Patents

Oct 06, 2016

Inter partes review 7: Motions to amend study and cases

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Patents - October 06, 2016

Inter partes review 7: Motions to amend study and cases

The United States Patent and Trademark Office (USPTO) has studied how the Patent and Trial and Appeal Board (PTAB) has decided motions to amend the claims in inter partes review proceedings. The report of the study is dated April 30, 2016 and is available here. The study shows that the PTAB rarely grants such motions at trial. This was a point made by Cuozzo Speed Technologies, LLC in the eponymous case decided by the Supreme Court on June 20, 2016. (Cuozzo submitted a brief that claimed the TTAB granted only five out of 86 motions to amend that it had decided as of June 30, 2015.)

The study concluded that the TTAB had conducted 192 trials of inter partes review proceeding in which the patent owner filed motions to amend the claims. Due to settlement, original claims being held patentable, and the motions being solely to cancel claims (easily granted), the TTAB actually decided motions to amend in 118 trials. Two of those motions were granted and four granted in part. The TTAB therefore denied ninety-five percent of the motions to amend.

The Federal Circuit recently decided for the first time that the PTAB was wrong to deny a motion to amend the claims. In Veritas Techs. LLC v. Veeam Software Corp., ___ F.3d ___, 2016 U.S. App. LEXIS 15978 (Fed. Cir. August 30, 2016) the court vacated the PTAB’s denial of the patent owner’s motion to conditionally amend the claims because the Board’s decision was “arbitrary, capricious, or otherwise not in accordance with the law” under the Administrative Procedures Act (specifically, 5 U.S.C. § 706(2)(A)).

The standards for motions to amend the claims in inter partes review actions, and how the PTAB should act if the patent challenger does not contest such a motion or does so inadequately, are the subject of a rehearing en banc by the Federal Circuit. In re Aqua Products, Inc., 2016 U.S. App. LEXIS 14862, 119 U.S.P.Q. 2d (BNA) 1882 (Fed. Cir. August 12, 2016)(vacating the panel opinion reported at 823 F.3d 1369 (Fed. Cir. May 25, 2016) and granting motion for rehearing en banc). The questions for briefing are:

  • When the patent owner moves to amend its claims under 35 U.S.C. § 316(d), may the PTO require the patent owner to bear the burden of persuasion, or a burden of production, regarding patentability of the amended claims as a condition of allowing them? Which burdens are permitted under 35 U.S.C. § 316(e)?
  • When the petitioner does not challenge the patentability of a proposed amended claim, or the Board thinks the challenge is inadequate, may the Board sua sponte raise patentability challenges to such a claim? If so, where would the burden of persuasion, or a burden of production, lie?

Patents

Oct 06, 2016

Supreme Court overrules Seagate Test for awarding enhanced damages

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Patents - October 06, 2016

Supreme Court overrules Seagate Test for awarding enhanced damages

The Supreme Court reversed the United States Court of Appeals for the Federal Circuit on the issue of when to award enhanced damages in patent infringement cases. Halo Electronics, Inc. v. Pulse Electronics, Inc., ___ U.S. ___, 136 S. Ct. 1923, 195 L. Ed. 2d 278, 118 U.S.P.Q. 2d (BNA) 1761 (No. 14-1513, June 13, 2016).

This decision concerns two patent infringement cases that were linked for argument on February 23, 2016. The Federal Circuit affirmed the district court’s decision to not grant enhanced damages in Halo Electronics, Inc. v. Pulse Electronics, Inc. and vacated the district court’s decision to award enhanced damages in Stryker Corp. v. Zimmer, Inc. The oral argument audio is available here.

Chief Justice Roberts wrote for a unanimous Court.

The Court’s opinion began with a survey of the history of enhanced damages in patent infringement cases from as far back as 1793. The Court then provided a description of the test of the United States Court of Appeals for the Federal Circuit for deciding when a district court may enhance damages under 35 U.S.C. § 284 (“the court may increase the damages up to three times the amount found or assessed”). This test is known by the name of the Federal Circuit case in which it was established, to wit: In re Seagate Technology, LLC, 497 F.3d 1360 (2007) (en banc).

The Seagate test has two parts: the patent owner must first show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent and second, the patent owner must demonstrate, again by clear and convincing evidence, that the risk of infringement “was either known or so obvious that it should have been known to the accused infringer.” Furthermore, an award of enhanced damages is subject to trifurcated appellate review: the result of the first step is reviewed de novo, the result of the second step is reviewed for substantial evidence, and the ultimate decision to award enhanced damages is reviewed for abuse of discretion.

The Court pointed out that “[e]nhanced damages are as old as U. S. patent law” and held that the Seagate test is not consistent with 35 U.S.C. § 284 because it is “unduly rigid, and it impermissibly encumbers the statutory grant of discretion to district courts,” and “can have the effect of insulating some of the worst patent infringers from any liability for enhanced damages” because it “excludes from discretionary punishment many of the most culpable offenders, such as the ‘wanton and malicious pirate’ who intentionally infringes another’s patent—with no doubts about its validity or any notion of a defense—for no purpose other than to steal the patentee’s business.” Thus, ”[u]nder Seagate, a district court may not even consider enhanced damages for such a pirate, unless the court first determines that his infringement was “objectively” reckless. In the context of such deliberate wrongdoing, however, it is not clear why an independent showing of objective recklessness—by clear and convincing evidence, no less—should be a prerequisite to enhanced damages.”

The Court referred to its decision in Octane Fitness, LLC v. Icon Health & Fitness, Inc., 572 U.S. ___, 134 S. Ct. 1749, 1755, 188 L. Ed. 2d 816 (2014), in which the Court “rejected a [similar two-part] test [for deciding whether to award attorney’s fees] on the ground that a case presenting ‘subjective bad faith’ alone could ‘sufficiently set itself apart from mine-run cases to warrant a fee award.”

Patents

May 06, 2016

Inter partes review 4: Burden of proof

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Patents - May 06, 2016

Inter partes review 4: Burden of proof

The party challenging the validity of patent claims in an inter partes review (IPR) proceeding must prove its case by a preponderance of the evidence (which means “more likely than not”). This burden of proof is lower than the “clear and convincing” standard for proving a patent claim is invalid in a district court lawsuit. The recent case of Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., ___ F.3d ___, 2016 WL 1128083 (Fed. Cir. March 23, 2016) illustrates the difference.

Automated Creel Systems, Inc. (ACS) sued Shaw Industries Group, Inc. (Shaw) for infringement of ACS’s U.S. Patent no. 7,806,360, which relates to “creels” for supplying yarn and other stranded materials to a manufacturing process.  ACS voluntarily dismissed the action without prejudice.  “Without prejudice” means that ACS retained the right to sue Shaw later for infringement of the ‘360 patent.

Shaw ultimately filed two petitions for IPR with respect to the claims of the ‘360 patent.  Shaw presented a number of grounds for invalidation of each claim.  The Patent Trial and Appeal Board (PTAB) instituted two IPR proceedings on a subset of the grounds presented for invalidation (we will discuss “redundancy” in a related post).  The PTAB consolidated the proceedings and concluded that Shaw (1) had not shown by a preponderance of the evidence that the “interposing claims” were unpatentable, and (2) had shown by a preponderance of the evidence that the “non-interposing claims” (including claim 4) were unpatentable.

The preponderance of the evidence standard is used by the PTAB in contested proceedings.  See 37 C.F.R. 42.1(d) (“The default evidentiary standard [in a proceeding before the PTAB] is a preponderance of the evidence”).  The Federal Circuit accepted this standard without question when considering, for example, “Shaw’s challenges to the Board’s determination that Shaw had not shown by a preponderance of the evidence that the interposing claims would have been obvious over Munnekehoff or Barmag in view of Ligon.”  The court reviews the Board’s ultimate conclusion of obviousness de novo and its factual findings for substantial evidence.

The court decided to vacate the PTAB’s decision that Shaw had not shown that the “interposing claims” were unpatentable because the decision was ambiguous as to a finding about what the Munnenkehoff reference disclosed.  The court remanded to the PTAB to reconsider its decision on this issue.

The lesson from ACS v. Shaw and similar cases is that the petitioner for IPR faces the lowest possible burden of proof in the final determination.  The situation in a district court case is different.  The Supreme Court confirmed in the case of Microsoft Corp. v. i4i Ltd. Partnership, 564 U.S. ___, 131 S. Ct. 2238 (2011) that a defense of patent invalidity must be proved by “clear and convincing evidence.” The lower standard of proof is an appealing feature of IPR proceedings for parties that are threatened by a patent.

Patents

May 06, 2016

Inter partes review 5: Redundancy

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Patents - May 06, 2016

Inter partes review 5: Redundancy

In our fourth story on inter partes review (IPR) we discussed Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., ___ F.3d ___, 2016 WL 1128083 (Fed. Cir. March 23, 2016). In addition to illustrating the standard of evidence applied in such proceedings, the United States Court of Appeals for the Federal Circuit held that it lacks the power to review decisions of the Patent Trial and Appeal Board (PTAB) to grant petitions for IPR on some grounds but not others.

The court decided, on appeal by Shaw, that “[w]e have no authority, however, to review the Board’s decision to institute IPR on some but not all grounds” and thus “[w]e thus lack jurisdiction to review the Board’s decision not to institute IPR on the Payne-based ground, which includes its decision not to consider the Payne-based ground in its final written decision.”  The reason is that the court lacks jurisdiction to “review the Board’s decisions instituting or denying IPR.”

The court was not happy with the way the PTAB made its decision because the PTAB did not make any specific findings that the ground was “redundant” of the other two grounds and the PTAB’s decision did not make the proceeding more efficient, “particularly given that the Payne-based ground was alleged anticipation by a single reference while the two instituted grounds were alleged obviousness over combinations of references.”

The court had “no authority, however, to review the Board’s decision to institute IPR on some but not all grounds” because “‘[d]enial of a ground is a Board decision not to institute inter partes review on that ground.’  37 C.F.R. §42.108(b).”

Shaw also petitioned for a writ of mandamus to have the Payne-based ground considered if its appeal failed.  “Shaw’s argument is predicated on its concern that the statutory estoppel provisions would prevent it from raising the Payne-based ground in future proceedings.”  In brief, the court denied the writ because the statutory estoppel of 35 U.S.C. § 315(e) did not apply.  That statute reads as follows: “[t]he petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not request or maintain a [proceeding before the Office, a civil action under 28 U.S.C. § 1338, or an International Trade Commission proceeding] with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review.”  The word “during” in the statute was key because “Shaw did not raise—nor could it have reasonably raised—the Payne-based ground during the IPR” even though it did in its petition for an IPR.

The court concluded: “[t]he plain language of the statute prohibits the application of estoppel under these circumstances.  In light of our construction of the statute, mandamus is not warranted.”

Patents

May 06, 2016

Design patent: Award of profits

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Patents - May 06, 2016

Design patent: Award of profits

Smartphone makers have been suing each other for infringement of patents and trade dress. In particular, Apple, Inc. and Samsung Electronics Co., Ltd. have sued each other in the United States District Court for the Northern District of California with several trips to the United States Court of Appeals for the Federal Circuit. One of the cases has now reached the Supreme Court on the issue of how to award the infringer’s profits in design patent infringement.

The district court then denied Samsung’s post-trial motions to overturn the jury’s infringement, dilution, and patent validity findings and upheld $639,403,248 in damages.  That court also ordered a partial retrial on the remainder of the damages.  The jury in the partial retrial awarded Apple $290,456,793 and the district court denied Samsung’s post-trial motion to overturn the award of those damages.  The total damages awarded in the final judgment were $929,860,041 exclusive of interest.

On appeal, the United States Court of Appeals for the Federal Circuit decided to affirm the jury’s verdict on the design patent infringements, the validity of two utility patent claims, and the damages awarded for the design and utility patent infringements.  The Federal Circuit reversed the jury’s findings that the asserted trade dresses are protectable and vacated the jury’s damages awards against the Samsung products due to trade dress dilution.  The court remanded for further proceedings consistent with its opinion.  Apple Inc. v. Samsung Electronics Co., Ltd., 786 F.3d 983 (Fed. Cir. 2015).  The Federal Circuit panel therefore directed entry of a final judgment awarding damages and infringer’s profits for the design and utility patent infringement.

Later, the Federal Circuit vacated the district court’s decision to deny Apple’s motion for a permanent injunction against infringement by Samsung.  Apple Inc. v. Samsung Electronics Co., Ltd., 801 F.3d 1352 (Fed. Cir. 2015), petition for en banc review granted and panel opinion to be modified and superseded on rehearing, 808 F.3d 517 (Fed. Cir. 2015), petition for rehearing en banc denied, 808 F.3d 518 (Fed. Cir 2015).  The superseding panel opinion on the permanent injunction is reported at 809 F.3d 633 (Fed. Cir. 2015).  (Apple Inc. v. Samsung Electronics Co. Ltd., ___ F.3d ___ (Fed. Cir. February 26, 2016) involves appeals from a separate case involving patents not mentioned in the 2015 decision reported at 786 F.3d 983.)

Samsung petitioned the Supreme Court for a grant of certiorari.  Samsung Electronics Co., Ltd. v. Apple Inc., docket no. 15-777.  The Court granted certiorari on March 21, 2016, limited to the following issue: “[w]hether, where a design patent is applied to only a component of a product, an award of infringer’s profits should be limited to those profits attributable to the component.”

Limitation of an award of the infringer’s profits to the profits due to the design of a “component” of an article as opposed to the total profits on the article is called “apportionment.”  The Federal Circuit rejected apportionment based on its case law, in particular Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1441 (Fed. Cir. 1998), in which it held that Congress made the decision to award the infringer’s total profit on the article when it enacted the design patent damages statute, codified at 35 U.S.C. § 289 (“shall be liable to the owner [of the infringed design patent] to the extent of his total profit”).  The articles are the accused Samsung smartphones and the outer cases of the smartphones are not sold separately from the electronics inside them.  Samsung’s objection to the Federal Circuit’s case law is understandable given the value of the electronics in the smartphones.

The Apple Inc. v. Samsung case has not yet been set for argument.  It should be heard during the Court’s next term, which begins as always on the first Monday in October (October 3, 2016).

Patents

May 06, 2016

Laches: Supreme Court to decide

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Patents - May 06, 2016

Laches: Supreme Court to decide

The Supreme Court has taken up the issue of whether the equitable defense of laches may apply to claims brought within the six-year statutory limitations period for patent infringement. SCA Hygiene Products Aktiebolag, v. First Quality Baby Products, LLC, No. 15-927 (petition for certiorari granted May 2, 2016).

The question in SCA Hygiene Products is: “[w]hether and to what extent the defense of laches may bar a claim for patent infringement brought within the Patent Act’s six-year statutory limitations period, 35 U.S.C. § 286.”

The en banc Federal Circuit “conclude[d] that Congress codified a laches defense in 35 U.S.C. § 282(b)(1) that may bar legal remedies” and therefore “Congress settled that laches and a time limitation on the recovery of damages can coexist in patent law.”  The action of Congress therefore distinguished patent law from copyright law, in which the Supreme Court decided that laches is not available within the limitations period.  See Petrella v. Metro- Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014).  The Court will determine whether its decision in the realm of copyright law is applicable in that of patent law.

The Court has not yet set SCA Hygiene Products case for argument.  The case should be heard in the Court’s October 2016 term.  The Court has not yet acted on the petition for certiorari in Medinol Ltd. v. Cordis Corp., no. 15-998, which presents the same question.

Patents

Apr 03, 2016

Inter partes review 2: Constitutional

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Patents - April 03, 2016

Inter partes review 2: Constitutional

The United States Court of Appeals for the Federal Circuit decided that inter partes review does not violate sections of the U.S. Constitution. MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284 (Fed. Cir. 2015).

Hewlett Packard Co. petitioned for inter partes review of claims 7, 11, 19, and 21 of MCM’s U.S. patent 7,162,549 under 35 U.S.C. § 311, asserting that those claims were anticipated by, or obvious over, five prior art references.  The Patent Trial and Appeal Board (Board or PTAB) decided that these patent claims were obvious over the prior art and therefore invalid.

The Federal Circuit refused to review the Director’s decision to grant inter partes review.  The court followed its case law interpreting 35 U.S.C. § 314(d)(“[t]he determination . . . whether to institute an inter partes review under this section shall be final and nonappealable”).  The court observed that “[w]e have held that a patent owner cannot appeal the Board’s decision to institute inter partes review, even after a final decision is issued.  In re Cuozzo Speed Techs., 793 F.3d 1268, 1273–74 (Fed. Cir. 2015).”  The court specifically relied on Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652, 658 (Fed. Cir. 2015), in which “we held that ‘§ 314(d) prohibits this court from reviewing the Board’s determination to initiate inter partes review proceedings based on its assessment of the time-bar of § 315(b).’”  Thus, Achates controls and “review of whether the PTO properly instituted inter partes review is forbidden by § 314(d).”

The Federal Circuit did review MCM’s claims that inter partes reviews violated the U.S. Constitution.  MCM’s position was that “any action revoking a patent must be tried in an Article III court with the protections of the Seventh Amendment.“  The court disagreed.

The court reviewed the Supreme Court’s and the court’s own case law and concluded that Congress has the power to delegate disputes over “public rights” to non-Article III courts, such as the PTAB.  Patents are “public rights” because they derive from a federal regulatory scheme, and resolution of disputes concerning them by an expert government agency is deemed essential to a limited regulatory objective within the agency’s authority.  The court observed that “[t]here is notably no suggestion that Congress lacked authority to delegate to the PTO the power to issue patents in the first instance.  It would be odd indeed if Congress could not authorize the PTO to reconsider its own decisions.”

The right to a jury established by the Seventh Amendment does not apply to administrative agencies.  “Here, when Congress created the new statutory right to inter partes review, it did not violate the Seventh Amendment by assigning its adjudication to an administrative agency.”  The court concluded that “[b]ecause patent rights are public rights, and their validity susceptible to review by an administrative agency, the Seventh Amendment poses no barrier to agency adjudication without a jury.”  Accordingly, “we reject MCM’s argument that inter partes review violates Article III and the Seventh Amendment, and we affirm the Board’s decision that claims 7, 11, 19, and 21 of the ‘549 patent would have been obvious over the prior art.”

Patents

Apr 03, 2016

Inter partes review 3: Substitute claims

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Patents - April 03, 2016

Inter partes review 3: Substitute claims

The Patent Trial and Appeal Board (PTAB) issued final written decisions in two inter partes review proceedings that cancelled the challenged claims of U.S. patents 7,057,026 and 8,158,346 and denied entry of substitute claims. The United States Court of Appeals for the Federal Circuit affirmed the decisions in Illumina Cambridge Ltd. v. Intelligent Bio-Systems, Inc., ___ Fed. Appx. ___, 2016 WL 363498 (Fed. Cir. January 29, 2016) (non-precedential). The Illumina case illustrates how the ability of the patent owner to offer claims to substitute for the challenged claims is limited.

The statute allows the patent owner to file only one motion as of right to cancel challenged claims and propose a “reasonable number” of substitute claims for each challenged claim.  35 U.S.C. § 316(d)(1).  Additional motions are permitted at the joint request of the patent owner and the patent challenger, such as in a settlement.  35 U.S.C. § 316(d)(2).

Pursuant to authorization granted by 35 U.S.C. §§ 316(a)(4) and (9), the U.S. Patent and Trademark Office issued regulation 37 C.F.R. § 42.20 concerning procedures before the PTAB.  Subsection (a) requires that “[r]elief, other than a petition requesting the institution of a trial, must be requested in the form of a motion” and subsection (c) requires “[t]he moving party has the burden of proof to establish that it is entitled to the requested relief.”

The Illumina court observed that “[f]or a motion to amend during an inter partes review proceeding, the patentee bears the burden of showing that its proposed substitute claims are patentable over the prior art of record.”  It cited its recent cases concerning the regulation discussed above, namely, Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1306-08 (Fed. Cir. 2015) and Prolitec, Inc. v. ScentAir Techs., Inc., 807 F.3d 1353, 1363-64 (Fed. Cir. 2015).

Thus, in an inter partes review the patent owner effectively has only one chance to propose substitute claims.  The patent owner then bears the burden of proving that the substitute claims are patentable over the art of record.  This is the reverse of the normal procedure for examination of patent applications, in which the examiner has the burden of showing that the proposed claims are unpatentable.