June 2014

New Patent Prosecution Standard? USPTO Provides Preliminary Post-Alice Corp. Guidelines for Evaluating Patent-Eligibility

In the wake of Alice Corp. v. CLS Bank Int’l., the U.S. Patent and Trademark Office has issued “preliminary instructions effective today to the Patent Examining Corps relating to subject matter eligibility of claims involving abstract ideas, particularly computer-implemented abstract ideas, under 35 U.S.c. § 101.”  At the same time, the USPTO is clearly struggling with a challenge noted by many: “Alice Corp. neither creates a per se excluded category of subject matter, such as software or business methods, nor imposes any special requirements for eligibility of software or business methods.”  The one clear conclusion from Alice Corp. is that the two-part analysis of Mayo Collaborative Services v. Prometheus Laboratories, Inc., is the analysis to be applied to Section 101 questions, regardless of whether the claims are drawn to a law of nature, abstract idea, process, and/or apparatus.  So in light of single analysis that is now to be applied, and in light of the inherent vagueness that remains in that analysis, how should applicants and prosecutors pursuing software and business method claims before the USPTO proceed? The two-part analysis for patent-eligibility mandated by the Supreme Court, and immediately adopted by the USPTO is, on its face, simple.  First, “[d]etermine… Read More »New Patent Prosecution Standard? USPTO Provides Preliminary Post-Alice Corp. Guidelines for Evaluating Patent-Eligibility

Patent Practice Lessons from Alice Corp. v. CLS Bank

No one expected the U.S. Supreme Court to hold that claims directed to “financial matters and risk management” were patent-eligible in Alice Corp. v. CLS Bank Int’l., No. 13-298 (June 19, 2014).  Indeed, the Court did not so hold.  Now that we have the Court’s decision, if you scroll down you will see that I have provided some specific thoughts on future software and business methods patent practice. But before getting to specific practice tips, one might consider some background.  The justices were unanimous that Alice Corp.’s asserted patent claims recited unpatentable subject matter under 35 U.S.C. § 101.  The real question of Alice, which we can now answer, was how the justices would go about striking down Alice Corp.’s patent claims directed to computerized systems and methods “applied to financial matters and risk management.”  Would a new standard be articulated, or a new direction in the law charted? The answer to these questions is a resounding “no.”  The Court here simply applied the “abstract idea” test, such as was stated in Mayo v. Prometheus: (1) are the patent claims drawn to an abstract idea and, (2) if so, is there anything else in the claims as an inventive concept that… Read More »Patent Practice Lessons from Alice Corp. v. CLS Bank

Avoid Indefiniteness: Define Claim Terms

The Federal Circuit has held that a patent claim term construed under 35 U.S.C. § 112 is indefinite where, although the claim term encompassed a concept that was well known in the art, that concept was embodied by a class of algorithms, and therefore it was unclear what specific algorithm was contemplated.  Triton Tech of Texas, LLC v. Nintendo of America, Inc., 2013-1476 (June 13, 2014).  Coming on the heels of the U.S. Supreme Court’s decision in Nautilus, Inc. v. Biosign Instruments, Inc., this decision reinforces the advisability of erring in the direction of defining claim terms, no matter how well known or understood they would seem to be. U.S. Patent No. 5,181,181 included claims reciting in part “integrator means associated with said input device for integrating said acceleration signals over time to produce velocity signals for linear translation.”  The district court had found that a broad reference to “numerical integration” in the disclosure was not by itself “a sufficient disclosure,” reasoning that “[n]umerical integration” was “not a single algorithm, but rather a whole class of algorithms that can be used to calculate definite integrals.”  The Federal Circuit agreed that this was a basis for finding the claims indefinite. The… Read More »Avoid Indefiniteness: Define Claim Terms

Ninth Circuit Affirms Inapplicability of Copyright First Sale Doctrine to Restrictive Software License

The Ninth Circuit has affirmed a district court decision (reported in this blog) holding that a restrictive software license is not a “sale” for purposes of the federal copyright laws, and that the license could not be used to assert a defense to copyright infringement based on the first sale doctrine.  Adobe Systems Inc. v. Anthony Kornrumpf, No. 12-16616 (9th Cir. June 2, 2014). The operative paragraph of the court’s per curiam three-paragraph opinion explained that, after its de novo review, the Ninth Circuit determined that: The district court did not err in its application of Vernor v. Autodesk, Inc., 621 F.3d 1102, 1111 (9th Cir. 2010), to Dell’s and HP’s acquisition of copies of Adobe software products. The original equipment manufacturer contracts specified that Dell and HP were granted licenses, significantly restricted Dell’s and HP’s ability to transfer the software and imposed notable use restrictions. A transfer of software products under these circumstances constitutes a license rather than a sale. See Apple Inc. v. Psystar Corp., 658 F.3d 1150, 1159 (9th Cir. 2011); MDY Indus., LLC v. Blizzard Entm’t, Inc., 629 F.3d 928, 938-39 (9th Cir. 2010), as amended; Vernor, 621 F.3d at 1111-12.

Inter Partes Review Barred by Real Party in Interest Requirement

The USPTO’s Patent Trial and Appeal Board (PTAB) has dismissed RPX Corporation’s multiple petitions for inter partes review (IPR) of four patents owned by Virnetx, Inc., holding that Apple, Inc., whose ability to bring the IPR petitions was time-barred, was the real party in  interest.  RPX Corp. v. Virnetx, Inc., Cases IPR2014-171 to 177 (PTAB June 5, 2014). The applicable statute, 35 U.S.C. § 315(b), states in relevant part that: (b) Patent Owner’s Action.— An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent. The PTAB had earlier held that Apple’s petitions seeking IPR proceedings against Virnetx’s patents were time barred.  There was no dispute that “that RPX filed [IPR] requests against the Virnetx Patents pursuant to a newly created program in which Apple . . . in October 2013, paid RPX a sum of $500,000, among other things, to file IPR reviews.”  Further, Apple had tried to join IPR proceedings initiated by New Bay Capital (NBC), but those proceedings had been terminated at… Read More »Inter Partes Review Barred by Real Party in Interest Requirement

Should Nautilius v. Biosign Instruments Change How Patent Applications Are Drafted?

A patent claim is invalid for indefiniteness if it cannot be construed by one of ordinary skill in the art with “reasonable certainty,” the U.S. Supreme Court has unanimously held in Nautilus, Inc. v. Biosign Instruments, Inc., No. 13–369 (June 2, 2014).  The Court thus replaced the Federal Circuit’s “insolubly ambiguous” standard, which risked creating an “innovation-discouraging ‘zone of uncertainty.’” The question in this case was the meaning of the term “spaced relationship” in the recitation in claim 1 of U. S. Patent No. 5,337,753 of “a first live electrode and a first common electrode mounted on said first half in spaced relationship with each other.”  The District Court had granted Nautilus’ motion for summary judgment of invalidity under 35 U.S.C. § 112, second paragraph, saying that an appropriate spacing for electrodes could not be determined from the claim.  The Federal Circuit reversed, saying that the phrase was not “insolubly ambiguous” because an appropriate spacing of the electrodes — not greater than a width of a user’s hands — could be divined from the intrinsic evidence, i.e., the specification and the file history, including a re-examination proceeding. Balancing the competing concerns of allowing innovation to be protected while not stifling… Read More »Should Nautilius v. Biosign Instruments Change How Patent Applications Are Drafted?

Attorneys’ Fees Awarded in Light of Octane Fitness

A plaintiff had licensed a patent to defendants, including a right to sub-license, but excluded certain uses of the claimed method.  The plaintiff then sued the defendants based on those excluded uses.  The defendants were awarded attorneys’ fees under 35 U.S.C. § 285 where, among other things, the plaintiff had attempted to enforce the patent beyond what the plaintiff knew was the patent’s proper scope.  Home Gambling Network, Inc. v. Piche, No. 2:05-CV-610-DAE (D. Nev. May 21, 2014).  In awarding fees, the court took note that, after Octane Fitness, LLC v. Icon Health & Fitness, Inc., No. 12-1184, 134 S. Ct. 1749, 188 L. Ed. 2d 816 (Apr. 29, 2014), the standard for making a fee award was relaxed, no longer requiring a proof by clear and convincing evidence, or of subjective baselessness or objective bad faith.  Instead, the court used its discretion in awarding fees. The court succinctly set forth the relevant facts: On September 30, 2013, this Court granted Defendants’ Motion for Summary Judgment in its entirety, dismissing all of Plaintiffs’ claims. (Dkt. # 333.) In relevant part, the Court concluded that (1) there was no liability under 35 U.S.C. § 271(a) because at least one of the… Read More »Attorneys’ Fees Awarded in Light of Octane Fitness

Usenet Post Qualifies as “Printed Publication” Prior Art

A post to an Internet newsgroup nine months before the priority date of U.S. Patent No. 6,081,835 qualified as a “printed publication” that could be used as invalidating prior art.  Suffolk Technologies, LLC v. AOL, Inc., No. 2013-1392 (Fed. Cir. May 27, 2014).  This holding was one of the bases on which the Federal Circuit upheld the district court’s grant of summary judgment in the defendant’s favor. Following a claim construction, the district court had held that claims 1, 7, and 9 of the ’835 patent were anticipated by the Usenet post.  Suffolk, the patent owner, had further stipulated, prior to bringing this appeal, that claim 6 was anticipated in light of the district court’s claim constructions. The Federal Circuit, in an opinion by Judge Prost, upheld the district court’s claim constructions, and then turned to the question of whether the Usenet post (the “Post”) was a printed publication, and if so, whether the Post was sufficiently reliable to be held to anticipate the ’835 patent claims.  Suffolk argued that the Post was not “printed publication” prior art because “the Post’s audience was not those of ordinary skill in the art and locating the Post would be too difficult.” Suffolk’s… Read More »Usenet Post Qualifies as “Printed Publication” Prior Art