April 2018

PTAB: Encrypting Financial Account No. Is Patent-Eligible

After a patent examiner in a business methods art unit rejects claims as patent-ineligible under 35 USC § 101 and the Alice test, what does it take for the PTAB to reverse? Here is an example of an ex parte appeal in which the PTAB deemed claims directed to encrypting a financial account number to present a technical solution that survived the Alice test.  Ex Parte Faith, Appeal 2016-008020, Application 12/778,638, Technology Center 3600 (PTAB March 30, 2018). The claims at issue recite encrypting a portion of a financial account number to generate a new account number and a “verification value” for the purpose of inhibiting fraud. The examiner had rejected the claims under 35 USC § 101 as allegedly directed to the unpatentable “abstract idea of determining account information based on mathematical analysis and ‘participating in a transaction.’” The examiner made the familiar allegation that the claims were simply directed to “mathematical relationships, organizing information through mathematical correlations, collecting and comparing known information, and organizing human activity or performing processes using pen and paper.” The exemplary independent claim is reproduced below. A method comprising: encrypting, using a processor, a first portion of a first account number, the first portion… Read More »PTAB: Encrypting Financial Account No. Is Patent-Eligible

Vague Development Agreement Allows Inventorship Challenge

Can vagueness in a development agreement allow standing to question inventorship of subsequently filed patents?  The Federal Circuit held in Gregory C. James v. j2 Cloud Services, LLC, No. 2017-1506 (Fed. Cir. 2018) that an agreement vague on IP assignment could confer standing for a party to challenge inventorship of a patent.               Plaintiff George James asserted a claim for correction of inventorship for U.S. Patent No. 6,208,638, claiming that he was the sole inventor of the patent. The ‘638 patent was filed listing two inventors, neither of whom are the Plaintiff, and Plaintiff alleged that the listed inventors asked the Plaintiff to develop the technology that would eventually become the ‘638 patent. A partnership entity, which included the Plaintiff, and one of the named inventors signed a Software Development Agreement (“SDA”) to develop software for JFAX, a company owned by the named inventors, that included assignment of copyright but did not mention patent rights. If Plaintiff succeeded at showing that he was the sole inventor (and thus sole owner), he could be entitled to damages for previous infringements, such as those sought by Defendant in a previous patent infringement lawsuit. The district court granted a FRCP 12(b)(1) motion to… Read More »Vague Development Agreement Allows Inventorship Challenge

Supreme Court Upholds IPRs in Oil States

On Tuesday, the Supreme Court released its opinion in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, holding that the inter partes review procedure does not violate Article III of the Constitution. The Court maintained the status quo, and IPRs are still a viable route for defending against or attacking a patent. The path to the Supreme Court began with an infringement suit. Oil States and Greene’s compete in supplying equipment for oil and gas extraction, and Oil States sued Greene’s for infringing U.S. Patent No. 6,179,053, which covers a wellhead for hydraulic fracturing. Greene’s—like many defendants—petitioned the Patent Trial and Appeal Board to institute an IPR and invalidate the ’053 patent. The PTAB did so, and the appeals climbed to the Supreme Court, winnowing to this Question Presented: “Whether IPRs violate the Constitution by extinguishing private property rights through a non-Article III forum without a jury.” In other words, is invalidating a patent the type of issue that must be heard by a court instead of an administrative agency? If so, must that court use a jury? (For additional background, check out my webinar discussing the briefing.) The Court answered “no” by a 7-2 margin, holding that… Read More »Supreme Court Upholds IPRs in Oil States

Berkheimer Prompts USPTO to Modify § 101 Exam Procedure

Following the Federal Circuit’s recent discussion in Berkheimer v. HP, Inc., of the requisite factual inquiry when applying the Alice/Mayo patent-eligibility test of 35 U.S.C. § 101, United States Patent and Trademark Office has issued a memorandum revising procedures examiners are to follow in formulating rejections for lack of subject matter eligibility and in evaluating applicants’ responses to such rejections.  Notably, the revised procedures list specific written support that a patent examiner must provide to support a finding, under step 2B of the Alice test, that “an additional element (or combination of elements) is not well-understood, routine or conventional.” (Emphasis added.) As a refresher, Manual of Patent Examination Procedure (MPEP) § 2106 sets forth a “subject matter eligibility test” as follows: Step 1: Is the claim outside any statutory category, i.e., not directed to a process, machine, manufacture or composition of matter? Step 2A: Is the claim directed to a judicial exception, i.e., a law of nature, a natural phenomenon, or an abstract idea? Step 2B: If the answer in Step 2A is yes, does the claim recite additional elements that amount to significantly more than the judicial exception? Step 1, of course, rarely comes into play, and what most… Read More »Berkheimer Prompts USPTO to Modify § 101 Exam Procedure

“A” Fabric Member is Limited to Single, Continuous Member

The Federal Circuit broke from the typical open-ended construction of “a” to mean “one or more,” and instead limited “a” to mean “one single, continuous member” in the nonprecedential opinion for Wonderland Nurserygoods, Co. v. Baby Trend, Inc. (Appeal Nos. 2017-1295 and 2017-1297; Decided April 19, 2018). A representative claim from the patent at issue (RE43,919) is as follows, with emphasis added: 1. A baby crib comprising: a bed frame structure including a plurality of upright tubes, each of which has a an inner tube wall, and an outer tube wall defining an outer contour shape of the upright tube, the inner tube wall defining a receiving hole, and the outer tube wall having an outwardly facing surface and a slit that extends along the length of said outer tube wall and that is in spatial communication with said receiving hole; a fabric member mounted on said bed frame structure to define a surrounding wall around said bed frame structure and delimit an enclosed space adapted to receive a baby; and a plurality of positioning posts mounted on said fabric member and inserted respectively into said receiving holes in said upright tubes, said fabric member being clamped between each of said upright… Read More »“A” Fabric Member is Limited to Single, Continuous Member

CAFC: Alice Not a Change in Law Preventing Issue Preclusion

A Federal Circuit panel (Judges Lourie, Newman, and Reyna) has rejected a district court’s statement that Alice Corp. v. CLS Bank Int’l., was “an intervening change in the law” that would “exempt a potential application of issue preclusion.”  However, after finding that patent-eligibility was not previously litigated, the court held that issue preclusion did not prevent a determination that claims directed to “’auto-verification’ of a voter’s ballot” are patent-ineligible under 35 U.S.C. § 101.  Voter Verified, Inc. v. Election Systems and Software, LLC., No. 2017-1930 (Fed. Cir. April 20, 2018) (precedential). The patent at issue was U.S. RE40449, directed to a voting system including “auto-verification whereby the voter has the opportunity and the responsibility to inspect the computer-printed ballot with his or her votes.” The procedural history of the prior litigation involving this patent, which has 94 claims, was complex.  Saliently, a district court had entered summary judgment of non-infringement of claims 1-93, and invalidity under 35 U.S.C. § 112, of claim 94.  The first district court also entered summary judgment “concluding that all the claims of the ’449 patent, except for claim 94, were not invalid under §§ 101 and 112, because Election Systems failed to present any arguments… Read More »CAFC: Alice Not a Change in Law Preventing Issue Preclusion

Prosecution History Crucial for Claim Interpretation of “Remote”

The Federal Circuit has again highlighted the importance of prosecution history for patent claim interpretation. In Baker v. Microsoft Corp., No. 2017-2357 (Fed. Cir. Apr. 9, 2018) the Federal Circuit upheld a district court claim interpretation and grant of summary judgement of non-infringement of US Patent 5,486,001. Defendant Microsoft manufactures and sells various computing devices, peripheral devices, and software. For example, Microsoft sold a computer system that included a camera as a peripheral device. Plaintiff Baker owns the ‘001 patent. The ‘001 patent is directed towards a “Personalized Instructional Aid.” The ‘001 patent describes a system designed to provide feedback to a user regarding their body movement, e.g., the way the user swings a golf club. The system captures image signals of user movements at one location, compares the image signals with prestored image signals and generates instruction signals based on the comparison at a second “remote” location, and transmits the instruction signal to the first location for display. Baker amended the claims of the ‘001 patent during prosecution to include limitations directed to performing the method steps at various locations. Exemplary claim 1 of the ‘001 patent recites: A method for providing an instructional aid for assisting a person… Read More »Prosecution History Crucial for Claim Interpretation of “Remote”

Controlling Subscription Entertainment Not Patent Eligible

Affirming a motion to dismiss, the Federal Circuit found claims from four patents, directed to “electronic means of increasing user control over subscription entertainment content,” patent-ineligible under the Mayo/Alice test and 35 U.S.C. § 101. Maxon, LLC, v. Funai Corporation, Inc., (Fed. Cir. April 9, 2018) (non-precedential). The patents-in-suit were U.S. patents 8,989,160; 7,489,671 7,489,671; 7,486,649; and 7,171,194. The court reproduced claim 8 of the ‘160 patent as representative. An audio-video device capable of sharing services with a plurality of other devices within a personal network, the audio-video device comprising: a computer-readable medium having storage for a first address corresponding to the audio-video device, a second address corresponding to the personal network, and a third address corresponding to a service provider network; input/output logic configured to receive from a user a desired change to a service capable of being provisioned to the audio-video device from at least one service available generally to the personal network; a processor in communication with the computer-readable medium and the input/output logic, the processor programmed to prepare an inbound signaling word comprising at least the first address and payload data representing the desired change to the service capable of being provisioned to the audio-video device… Read More »Controlling Subscription Entertainment Not Patent Eligible

Coffin Patent Lives on after IPR

The Federal Circuit agreed with the Patent Trial & Appeal Board that the claim language “form a casket body” was a structural limitation, not an intended use, and affirmed the final written decision of PTAB finding that the inter parte review petitioner failed to demonstrate that the claims were unpatentable.  Matthews International Corp. v. Vandor Corp. (Fed. Cir., decided March 27, 2018). The patent at issue is US8,104,151 and claim 1 reads as follows, with emphasis added: 1. A casket arrangement having a first configuration and a second configuration, comprising: a bottom panel formed of a pliable material; side panels formed intrinsically with the bottom panel of the pliable material, each side panel including a lower section and an upper section foldably attached thereto, the lower section extending vertically upward from the bottom panel, the upper section in the first configuration extending upward from the lower section and in the second configuration extending in a direction other than vertically upward from the lower section; end panels formed intrinsically with the bottom panel of the pliable material, each end panel including a lower end panel, and an upper end panel, the lower end panel extending vertically upward from the bottom panel… Read More »Coffin Patent Lives on after IPR