Category: Supreme Court

Categories
Copyright Fair Use Supreme Court

Recap of the Supreme Court’s Google v. Oracle Opinion

a gavel lying on a desk in front of booksThe following post comes from Liz Velander, a recent graduate of Scalia Law and a Research Assistant at CPIP.

By Liz Velander

The Supreme Court finally reached a determination in the decade-long dispute between two of the biggest technology companies in the world, Google and Oracle. Many have long-awaited the Court’s decision in this case, as it had the potential to provide market certainty in the software industry through its copyrightability analysis. The Court ultimately declines to give that certainty by bypassing the copyrightability issue and choosing to base its holding on a fact-intensive fair use analysis. The Court does this so as to “not answer more than is necessary to resolve the parties’ dispute,” “given the rapidly changing technological, economic, and business-related circumstances.” It emphasizes that its holding is narrow, only applies to declaring code, and does not modify its prior cases on fair use. However, by framing its opinion this way, the Court provides new arguments for infringers to use in a fair use defense in the software sphere and beyond. For this reason, the Court’s decision is not as narrow as it sets out to be. It may lead to lower court decisions that broaden the fair use doctrine and limit the copyright protection given to software.

The Court’s decision broadens fair use by using the doctrine to loosen copyright protection for certain types of code, allowing for a more expansive reading of a “transformative use,” and giving great weight to the public benefit of the use. Before it engages in its fair use analysis, the Court states that “fair use can play an important role in determining the lawful scope of a computer program copyright, such as the copyright at issue here.” Fair use “can distinguish between expressive and functional features of computer code where those features are mixed.” It can also “focus on the legitimate need to provide incentives to produce copyrighted material while examining the extent to which yet further protection creates unrelated or illegitimate harms in other markets or to the development of other products.” The Court describes fair use as a “context-based check that can help to keep a copyright monopoly within its lawful bounds.”

To highlight the ability of fair use to accomplish these goals, the Court begins its analysis with the second statutory factor, “the nature of the copyrighted work.” The Court uses this factor to discuss issues that would have come up if it analyzed the copyrightability of Oracle’s material, such as the applicability of the merger doctrine. It then moves to “the purpose and character of the use,” where it adopts an expansive reading of what constitutes a “transformative use.” The biggest impact of the Court’s fair use analysis, however, will likely come from the great weight it gives to the public benefit of the use under the market effect factor. By using fair use to determine “the lawful scope of a computer program copyright,” the Court’s holding may inadvertently broaden the fair use doctrine.

The Nature of the Copyrighted Work

The Court begins its analysis with describing “the nature of the copyrighted work.” The copyright at issue protects a portion of Oracle’s Java SE platform, called declaring code. Java SE has three essential parts: (1) implementing code, (2) method calls, and (3) declaring code. Implementing code tells the computer how to execute the particular task the programmer asks it to perform. Method calls are commands that help the computer carry out the task by choosing the correct programs written in implementing code. The declaring code is how the method call actually locates and invokes the particular implementing code that it needs to instruct the computer how to carry out a particular task.

For each task, the specific method call entered by the programmer matches up with a specific declaring code inside Java SE. That declaring code provides both the name for each task and organizes them within Java SE’s library. In this sense, the declaring code and the method call form a link, allowing the programmer to draw upon the thousands of prewritten tasks, written in implementing code. Without that declaring code, the method calls entered by the programmer would not call up the implementing code.

In this case, Google did not copy the implementing code from Oracle’s Java SE platform; it copied the declaring code. The Court draws a “critical line” between the uncopied implementing code and the copied declaring code under this factor. On one hand is the innovative implementing code and on the other, user-centered declaring code. The Court explains that the writing of implementing code requires balancing considerations as to how quickly a computer can execute a task or the likely size of a computer memory. The Court says that this balancing is “the very creativity that was needed to develop the Android software for use not in laptops or desktops but in the very different context of smartphones.”

Declaring code, the Court says, embodies a different kind of “creativity” because it is user facing. It must be designed and organized in a way that is intuitive and understandable to developers so they can invoke it. As part of a user interface, declaring code differs from most computer code because “its use is inherently bound together with uncopyrightable ideas (general task division and organization) and new creative expression (Android’s implementing code).” For these reasons, the Court concludes that “the declaring code is, if copyrightable at all, further than are most computer programs (such as the implementing code) from the core of copyright.” Therefore, the Court finds that the second factor, “nature of the copyrighted work,” points in the direction of fair use.

The Purpose and Character of the Use

The Court explains that the inquiry into “the purpose and character” of the use turns in a large measure on whether the copying at issue was “transformative,” that is, whether it “adds something new, with a further purpose or different character.” The Court finds that, even though Google copied Oracle’s declaring code verbatim, its use was “transformative” because it furthered the development of software programs.

The Court explains that what Google did is known as “‘reimplementation,’ defined as the ‘building of a system . . . that repurposes the same words and syntaxes’ of an existing system.” Google “reimplemented” Oracle’s declaring code to allow programmers expert in the Java programming language to use the “task calling” system that they had already learned. By using the same declaring code, programmers using the Android platform can rely on the method calls that they are already familiar with to call up particular tasks. Then Google’s own implementing code carries out those tasks.

The Court concludes that Google’s copying was a transformative use. “Google’s purpose was to create a different task-related system for a different computing environment (smartphones) and to create a platform—the Android platform—that would help achieve and popularize that objective.” Such use is “consistent with the creative ‘progress’ that is the basic constitutional objective of copyright itself.” Therefore, the purpose and character of Google’s copying was transformative to the point at which this factor also weighs in favor of fair use.

The Amount and Substantiality of the Portion Used

 The Court says that the question here is whether the over 11,000 lines of code Google copied should be viewed in isolation or as one part of a considerably greater whole. On one hand, those lines of code amount to virtually all the declaring code needed to call up hundreds of different tasks. On the other hand, if one considers the entire set of software material in the Java SE platform, the quantitative amount copied was small (only 0.4 percent).

The Court decides to view Google’s copying as one part of a greater whole because the amount of copying was “tethered to a valid, and transformative, purpose.” It explains that Google did not copy the lines because of their creativity but because programmers had already learned to work with the Java SE platform, and it would have been difficult to attract programmers to build its Android smartphone system without them. It describes the portion of the declaring code used at “the key that [Google] needed to unlock the programmers’ creative energies. And it needed those energies to create and improve its own innovative Android systems.” For these reasons, the Court holds that this factor weighs in favor of fair use.

Market Effects

The fourth statutory factor focuses upon the “effect” of the copying in the “market for or value of the copyrighted work.” The Court explains that this requires a court to consider the copyright owner’s potential loss of revenue, the source of the loss, and the public benefits the copying will likely produce. As to the likely amount of loss, the Court states that Oracle was ill-positioned to enter the smartphone market, so the jury could have found that Android did not harm the actual or potential markets for Java SE. As to the source of the loss, the Court finds Android’s profitability has much to do with third parties’ (programmers’) investment in the Java programs and less to do with Oracle’s investment in creating the Java SE platform. It says that the Copyright Act does not protect third parties’ investment in learning how to operate a created work.

Finally, given programmers’ investments in learning the Java SE platform, to allow enforcement of Oracle’s copyright here would risk harm to the public by operating as a lock on innovation. “The result could well prove highly profitable to Oracle (or other firms holding a copyright in computer interfaces). But those profits could well flow from creative improvements, new applications, and new uses developed by users who have learned to work with that interface. To that extent, the lock would interfere with, not further, copyright’s basic creativity objectives.” The Court concludes that the uncertain nature of Oracle’s “ability to compete in Android’s market place, the sources of its lost revenue, and the risk of creativity-related harms to the public, when taken together, convince that this fourth factor—market effects—also weighs in favor of fair use.”

The Court ends its opinion by noting that “the fact that computer programs are primarily functional makes it difficult to apply traditional copyright concepts in that technical world.” While that is certainly true, the Court made its work more difficult by basing its opinion in fair use instead of analyzing the copyrightability of Oracle’s code in the first place.

Categories
Patentability Requirements Patents Supreme Court

Professor David Taylor on Patent Eligibility and Investment

The following post comes from Terence Yen, a 4E at Scalia Law and a Research Assistant at CPIP.

files labeled as "patents"By Terence Yen

In his new paper, Patent Eligibility and Investment, Professor David Taylor of the SMU Dedman School of Law explores whether the Supreme Court’s recent patent eligibility cases have changed the behavior of venture capital and private equity investment firms. The paper comes from CPIP’s Thomas Edison Innovation Fellowship program, and it was published in the Cardozo Law Review. The tables referenced in this summary should be credited to his paper, and readers are encouraged to read the original publication for a deeper understanding of his survey results.

Prof. Taylor explains that, since 2010, the Supreme Court has come out with several decisions that have shaken up our understanding of patent eligibility. Not only do the new standards set forth by the Court lack administrability, but they have also created confusion and have far reaching consequences that have drawn concern and criticism from inventors, scientists, lawyers, judges, and industry groups. In fact, these new standards have required lower courts to make determinations of eligibility that the judges themselves recognize as flawed.

As Prof. Taylor explains, the crux of the issue lies in the Supreme Court’s new patentability standard, which requires an inventive application of a newly discovered law of nature, a natural phenomenon, or an abstract idea beyond the mere practical application of such a discovery, as had been previously required. The result is that a scientist cannot obtain a patent for merely making a new discovery (e.g., the cure to cancer) and disclosing how to apply that discovery to advance the state of the world (e.g., treating a patient using the cure). The inventor must additionally include a disclosure of how to apply the new discovery in a new way, creating a double novelty requirement.

Prof. Taylor points to Ariosa Diagnostics v. Sequenom to illustrate some of the issues with this new standard. In Ariosa, scientists discovered that a pregnant woman’s bloodstream included genetic material from her unborn baby. Upon making this discovery, they used known techniques to create methods to use the material to identify fetal characteristics. These new methods were a significant improvement on prior ones, which required the invasive and risky process of taking samples from the fetus or placenta.

The inventors obtained a patent, but the Federal Circuit was forced to invalidate it because the claimed method did not include any inventive concept transforming this natural phenomenon into a patent-eligible invention. In his concurring opinion, Judge Linn condemned the Supreme Court standard, as it required the court to find that an otherwise meritorious invention was ineligible to obtain the protection it deserved. He particularly criticized the second part of the standard, the requirement of an “inventive concept”, which discounts “seemingly without qualification” any conventional or obvious steps in the process.

Many people have criticized this new two-part test and the additional requirement of an “inventive concept.” Indeed, Prof. Taylor previously condemned this standard as reflecting “a lack of understanding of the relevant statutory provisions, precedent, and policies already undergirding the patent statute.” In this new paper, Prof. Taylor seeks to understand how this has impacted investment decisions, and he begins to compile the data largely missing from the existing literature that would start to shed light on the matter.

To gather the relevant data, Prof. Taylor conducted a survey of 475 venture capital and private equity investors from at least 422 different firms representing the various early stages of venture capital funding: early, seed, middle, growth, expansion, and late investors. In general, he asked two types of questions:

    1. Whether the Supreme Court’s rulings on patent eligibility have impacted their decisions to invest in companies developing technology, and if so, how

 

  1. Indirect questions related to the same issue, such as asking about any changes to decisions to invest in companies over the relevant time period, and whether those changes relate to any decreased availability of patent protection

The tables below indicate the different stages of venture capital funding represented by the surveyed firms, as well as the variety of represented industries. The total percentages come out to over 100%, because most firms focused on multiple investment stages and industry areas. It should be noted that the survey questions related only to U.S. patents and only to financing activities in the United States.

Table 1: Investment Stages of Respondents' Firms. Early stage, 59%. Seed stage, 45%. Middle Stage, 27%. Growth Stage, 22%. Expansion stage, 15%. Lat stage, 1%.

Table 2: Investment Industries of Respondents' Firms. Industry to percent. Software and the Internet, 70%. Medical Devices, 63%. Computer Electronics/Hardware, 61%. Biotechnology, 55%. Pharmaceutical, 54%. Communications, 53%. Energy, 49%. Semiconductors, 48%. Transportation, 47%. Construction, 42%.

The Findings

Overwhelmingly, investors reported that patent eligibility is an important consideration for their firms when deciding whether to invest in companies that are developing technology. In total, 74% agreed with this idea, while only 13% disagreed.

Table 7: Patent Eligibility Is an Important Consideration in Firm Decisions Whether to Invest in Companies Developing Technology. Response to percent. Strongly agree, 43%. Somewhat agree, 31%. Neither agree nor disagree, 13%. Somewhat disagree, 9%. Strongly disagree, 5%.

This led to the natural follow-up question: If the laws of patent eligibility make a patent unavailable for a certain technology, would the firm be less likely to invest in companies developing that technology? In response, 62% agreed that their firms would be less likely to invest given the unavailability of patents.

Table 8: Less Likely to Invest if Patent Eligibility Makes Patents Unavailable. Response to percent. Strongly agree, 23%. Somewhat agree, 39%. Neither agree nor disagree, 19%. Somewhat disagree, 13%. Strongly disagree, 7%.

The response changed slightly when the scenario was changed to one where the patent was merely more difficult to obtain. However, there was not a significant change from the response to the previous question, and respondents weighed in at 59% agreement.

Table 9: Less Likely to Invest if Patent Eligibility Makes Patents More Difficult to Obtain. Response to percent. Strongly agree, 19%. Somewhat agree, 40%. Neither agree nor disagree, 18%. Somewhat disagree, 17%. Strongly disagree, 5%.

From the data collected, it appears that investors in the medical device, biotechnology, and pharmaceutical industries tend to value patentability slightly more than investors in the software space. Additionally, early-stage investors seemed to value patent eligibility slightly more than their late-stage counterparts, though there was not a statistically significant difference reported between the different stages of investment. Prof. Taylor theorizes here that a larger sample size might indicate a more obvious trend.

Prof. Taylor notes one interesting statistic: those who were familiar with the Supreme Court’s recent eligibility decisions tended to value patent eligibility higher than those who were not familiar with the cases. This may indicate that the more aware an investor is of the recent opinions, the more they value the impact of those opinions. Prof. Taylor makes sure to note, however, that the data do not preclude the possibility that the more one knows about a subject, the more importance one places on one’s own knowledge of the subject. Additionally, patent eligibility did not appear to be the primary focus for investors. When compared with various other factors typically considered by investment firms, patent eligibility was consistently relegated to a lesser role. It is significant to note that the present survey focused on the availability of patents based only on patent eligibility.

Table 15: Factors Relied upon when Deciding to Invest in Companies Developing Technology: Weighted Mean. Factor to mean (1-9 scale). Quality of People, 7.77. Quality of Technology, 7.55. Size of Potential Market, 7.24. Availability of U.S. Patents, 5.31. First-Mover Advantage, 4.94. Availability of Foreign Patents, 3.72. Availability of Trade Secrets, 3.31. Availability of Copyrights, 3.13. Other, 2.03.

In general, investors indicated that the loss of patent protection would cause them to decrease their investments, though Prof. Taylor finds that this decreased investment would be more pronounced in some industries than others. As shown using weighted averages, the three industries with the greatest reported decrease would be the pharmaceutical, biotechnology, and medical device industries.

Table 18: Impact of Elimination of Patents on Investment Decisions: Responses. Industry to increase or decrease. Construction: Strongly Increase, 1%, Somewhat Increase, 5%, No Impact, 75%, Somewhat Decrease, 14%, or Strongly Decrease, 6%. Software and the Internet: Strongly Increase, 3%, Somewhat Increase, 10%, No Impact, 53%, Somewhat Decrease, 27%, or Strongly Decrease, 8%. Transportation: Strongly Increase, 2%, Somewhat Increase, 7%, No Impact, 53%, Somewhat Decrease, 31%, or Strongly Decrease, 7%. Communications: Strongly Increase, 2%, Somewhat Increase, 8%, No Impact, 48%, Somewhat Decrease, 32%, or Strongly Decrease, 10%. Energy: Strongly Increase, 2%, Somewhat Increase, 4%, No Impact, 49%, Somewhat Decrease, 30%, or Strongly Decrease, 15%. Computer/Electronics Hardware: Strongly Increase, 4%, Somewhat Increase, 6%, No Impact, 33%, Somewhat Decrease, 39%, or Strongly Decrease, 18%. Semiconductors: Strongly Increase, 4%, Somewhat Increase, 3%, No Impact, 33%, Somewhat Decrease, 34%, or Strongly Decrease, 27%. Medical Devices: Strongly Increase, 6%, Somewhat Increase, 3%, No Impact, 11%, Somewhat Decrease, 32%, or Strongly Decrease, 47%. Biotechnology: Strongly Increase, 7%, Somewhat Increase, 2%, No Impact, 14%, Somewhat Decrease, 22%, or Strongly Decrease, 55%. Pharmaceutical: Strongly Increase, 7%, Somewhat Increase, 1%, No Impact, 19%, Somewhat Decrease, 11%, or Strongly Decrease, 62%.

Next, Prof. Taylor explores the impact that the Supreme Court’s decisions have had on investment behaviors. The survey showed that 38% of investors were familiar with at least one of the patent-eligibility cases. About 40% of those knowledgeable investors indicated that the decisions had a negative effect on their firms’ existing investments, compared with 14% who indicated positive effects.

Table 21: Impact of Supreme Court's Eligibility Cases on Existing Investments. Response to percent. Very positive, 1%. Somewhat positive, 13%. No Impact, 46%. Somewhat negative, 33%. Very negative, 7%.

However, Prof. Taylor notes that these numbers represent only the static impact of the Supreme Court cases. Dynamic impact—meaning, the impact on future decision making—is likely the more important statistic. Interestingly, only one-third of investors indicated that the cases would impact their decisions on whether to invest in companies going forward, with no statistically significant difference based on industry or stage of funding.

Table 22: Have Any of the Supreme Court's Eligibility Cases Affected Firm Decisions Whether to Invest in Companies. Yes, 33%. No, 61%. Don't know, 6%.

With the numbers above representing investors with knowledge of the patent eligibility cases, it should be no surprise to learn that investors unfamiliar with the Supreme Court cases overwhelmingly responded that the decreased availability of patents had not impacted their firms’ changes in investment behavior.

Table 28: Has Decreased Availability of Patents Since 2009 Contributed to Your Firm's Change in Investments (Unknowledgeable Investors Only). Type of change to reply percentage. No change: Yes, 2%; No, 95%; Don't Know, 4%. Increased investments overall: Yes, 0%; No, 88%; Don't Know, 12%. Decreased investments overall: Yes, 14%; No, 82%; Don't Know, 5%. Shifted investments between industries: Yes, 4%; No, 84%; Don't Know, 12%.

Conclusion

While there were a wide variety of opinions from the many investors regarding the current state of patent eligibility, the general consensus was that the Supreme Court’s decisions have had a negative impact on patentability, leading to a potential decrease in a willingness to invest. This attitude was most prevalent in, but not limited to, the biotechnology and pharmaceutical industries.

As presented in his paper, Prof. Taylor’s survey provides the first empirical data on how the current state of patent eligibility has affected the attitude of investors. Like all surveys, however, it is susceptible to a certain degree of error caused by various unavoidable human characteristics. Even recognizing its limitations, this survey provides useful information that can be used to begin analyzing the question of whether the Supreme Court’s eligibility cases have impacted investment decision making, and it sheds light on an issue about which many experts in the field have become increasingly concerned.

Categories
Patents Supreme Court

CPIP Scholars Ask Federal Circuit to Fix Patent Eligibility Doctrine in Cleveland Clinic Appeal

files labeled as "patents"Last week, a group of CPIP scholars filed an amicus brief in Cleveland Clinic Foundation v. True Health Diagnostics, a case currently on appeal to the U.S. Court of Appeals for the Federal Circuit. The patents at issue cover diagnostic tests used to assess a person’s risk of developing cardiovascular disease. The U.S. Patent & Trademark Office initially found the claims to be unpatentable subject matter under Section 101; however, the claims were eventually allowed as new and unconventional applications of known laboratory techniques. Nevertheless, the district court held the claims unpatentable under Section 101, reasoning that they were ineligible under the Alice-Mayo test.

The amicus brief filed last week, written by CPIP’s David Lund and Adam Mossoff, points out that the diagnostic methods at issue are the very sort of innovations the patent system is meant to encourage. Moreover, given the factual conclusions that must be made in order to determine whether the claims are directed to a natural law or whether the laboratory techniques are routine and conventional, they argue that the procedural posture of the case—a motion to dismiss—precludes proper application of the Alice-Mayo test. They note that misapplication of the patent eligibility test continues to lead courts to reject patent protection for many meritorious inventions—as demonstrated in this very case. The amici urge the Federal Circuit to bring clarity and predictability to Section 101 doctrine by rejecting the district court’s conclusory assertions that were made without proper factual support.

The Summary of Argument from the amicus brief is copied below:

SUMMARY OF ARGUMENT

The district court’s decision in The Cleveland Clinic Foundation v. True Health Diagnostics, LLC, No. 17-cv-198, 2017 WL 3381976 (E.D. Va. Aug. 4, 2017), represents an improper application of 35 U.S.C. § 101. The parties address the relevant innovation covered by Cleveland Clinic’s patents, as well as the application of the Supreme Court’s and the Court of Appeals for the Federal Circuit’s § 101 jurisprudence; accordingly, amici offer additional insight concerning the legal and policy problems with the trial court’s decision: innovation in improving the assessment of a patient’s risk of developing cardiovascular disease is an invention that the patent system is designed to promote, and thus it should be eligible for patent protection. Barring a properly reasoned, factually-based determination that either a claimed method-of-treatment invention covers a law of nature or, under step two of the Alice-Mayo test, that it would be considered routine or ordinary by a person having skill in the art, a district court should not find claims to be ineligible subject matter under § 101 on a motion to dismiss. See Berkheimer v. HP Inc., __ F.3d at ___, No. 2017-1437 (Fed. Cir. 2018). The district court’s decision in this case conflicts with the Patent Act as an integrated statutory framework for promoting and securing innovation in the life sciences, as construed by both the Supreme Court and this court.

The Supreme Court has recognized that the plain meaning of the language of § 101 indicates that the scope of patentable subject matter is broad. See Diamond v. Chakrabarty, 447 U.S. 303, 315 (1980). This is why the Supreme Court consistently has held that “[t]he § 101 patent-eligibility inquiry is only a threshold test.” Bilski v. Kappos, 561 U.S. 593, 602 (2010). Accordingly, this “threshold test” is necessarily followed by the more exacting statutory requirements of assessing a claim as a whole according to the standard of a person having skill in the art as to whether it is novel, nonobvious, and fully disclosed as required by the quid pro quo offered to inventors by the patent system. Id.

Unfortunately, courts have been focusing on out-of-context statements in the Supreme Court’s recent § 101 cases that have led those courts to inexorably apply the two-step “Alice-Mayo test” in an unbalanced and legally improper manner. See Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014); Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012). Courts are dissecting claims into particular elements and then construing these elements in highly generalized terms with no evidentiary support. Thus, as happened in this case, a district court all too often merely asserts a conclusory finding that the claim— actually, specific elements dissected out of the claim as a whole—covers ineligible laws of nature or abstract ideas.

This has led lower courts to create an unduly stringent and restrictive patent eligibility test under the Alice-Mayo test, as evidenced by the district court’s decision in this case. This contradicts the Supreme Court’s decisions in Chakrabarty and Bilski that § 101 is only a threshold inquiry identifying broad statutory categories of patent-eligible inventions. This improper application of the Alice-Mayo test inevitably leads to § 101 rejections of patentable method inventions, as the district court in this case rejected an innovative invention in the bio-pharmaceutical sector that the patent system is designed to promote.

Furthermore, the improper treatment of the § 101 inquiry as a pure question of law requiring no evidentiary findings whatsoever, especially when the parties expressly dispute as to what a person having skill in the art would consider routine or ordinary, conflicts with the Supreme Court’s and this Court’s decisions that the application of the patentability requirements in the Patent Act present questions of law with underlying questions of fact. See Teva Pharm. USA Inc. v. Sandoz, Inc., 135 S.Ct. 831, 838 (2015) (claim construction); KSR v. Teleflex, 550 U.S. 398 (2007) (nonobviousness under § 103); Berkheimer, __ F.3d at ___, No. 2017-1437 (Fed. Cir. 2018) (patentable subject matter under § 101); Akzo Nobel Coatings, Inc. v. Dow Chem. Co., 811 F.3d 1334, 1343 (Fed. Cir. 2016) (indefiniteness under § 112); Alcon Research Ltd. v. Barr Labs., Inc., 745 F.3d 1180, 1188 (Fed. Cir. 2014) (enablement under § 112). This has sowed indeterminacy in patent eligibility doctrine, as inventors and companies in the innovation industries are left with little predictability concerning when or how courts will dissect claims and make conclusory assertions that they are patent ineligible under § 101.

To read the amicus brief, please click here.

Categories
Innovation Patent Law Supreme Court

CPIP Scholars File Amicus Brief Urging Consideration of Claimed Inventions as a Whole

U.S. Supreme Court buildingLast week, CPIP Senior Scholar Adam Mossoff and I filed an amicus brief on behalf of 15 law professors, including CPIP’s Devlin Hartline, Chris Holman, Sean O’Connor, Kristen Osenga, and Mark Schultz. We urge the Supreme Court to grant certiorari in TDE Petroleum v. AKM Enterprise and reaffirm that any analysis of an invention must be of the claimed invention as a whole.

Unfortunately, lower courts and the Patent & Trademark Office have been applying a test of patent eligibility that allows breaking up an invention into parts and then analyzing the parts separately. Sometimes, as in the case here, a court will completely ignore an element of the invention. This needs to be fixed. Any invention is defined by its entirety, not by its isolated parts.

As I discussed before, TDE Petroleum’s patent claims a method of operating an oil rig. Part of the method uses software. But as the claim discussed in our brief makes clear, the end result of the method is control of a physical well with a drill running inside the earth. However, the courts that have looked at this patent so far have only considered the function of certain software elements and pretend the oil rig is not important. Such unimpeded dissection of claims makes it easy to invalidate important patented innovation notwithstanding the contribution to the field.

The full amicus brief can be found here. In addition to showing that the claimed invention is a method of operating an oil rig, we show why the claim precisely parallels a claim to a method of molding rubber found patent eligible by the Supreme Court 36 years ago.

Categories
President Supreme Court

Intellectual Property Backgrounds of President Trump’s Potential Supreme Court Nominees

U.S. Supreme Court buildingBy Andrew Baluch[1] & Devlin Hartline

President Donald Trump will soon announce his nominee to fill the vacancy left at the Supreme Court by late Associate Justice Antonin Scalia. On September 23, 2016, the Trump campaign revealed that there are twenty-one candidates under consideration for the nomination.

Below is a summary of the intellectual property backgrounds of President Trump’s twenty-one potential Supreme Court nominees. The summary addresses judicial, legislative, and legal experience, as well as education and scholarly work. The summary includes data on each nominee’s intellectual property cases, whether decided as a judge or argued in private practice. Where appropriate, the summary also notes legislative bills that were co-sponsored by the nominee.

Click on the nominee’s name in the table below to jump down to their detailed summary.

 

SUMMARY OF INTELLECTUAL PROPERTY CASES
Cases Decided as Judge Cases Argued in Private Practice
No. Nominee Patent Trademark Copyright Trade Secret Patent Trademark Copyright Trade Secret
1 Blackwell, Keith 0 1 0 0 0 0 0 0
2 Canady, Charles 1 2 0 0 0 0 0 0
3 Colloton, Steven 2 9 1 0 0 0 0 0
4 Eid, Allison 0 0 0 1 0 0 0 0
5 Gorsuch, Neil 0 7 4 3 0 0 0 0
6 Gruender, Raymond 0 5 7 2 0 0 1 0
7 Hardiman, Thomas 1 6 5 3 0 0 0 0
8 Kethledge, Raymond 0 4 2 1 5 0 0 0
9 Larsen, Joan 0 0 0 0 0 0 0 0
10 Lee, Mike N/A N/A N/A N/A 1 0 0 0
11 Lee, Thomas 0 0 0 3 0 27 2 1
12 Mansfield, Edward 0 0 0 0 1 1 1 1
13 Moreno, Federico 3 15 9 3 0 0 0 0
14 Pryor, William 0 3 3 0 0 0 0 0
15 Ryan, Margaret 0 0 0 0 0 0 0 0
16 Stras, David 0 0 0 1 0 0 0 0
17 Sykes, Diane 4 5 8 2 0 0 0 0
18 Thapar, Amul 0 1 1 1 0 0 0 0
19 Tymkovich, Timothy 1 5 6 2 0 0 0 0
20 Willett, Don 1 0 0 0 0 0 0 0
21 Young, Robert 0 1 0 0 0 0 0 0

 

1. Keith R. Blackwell

 

Supreme Court of Georgia (2012 – present)

Prior Judicial Experience

Court of Appeals of Georgia (2010 – 2012)

Prior Legal Experience

Parker, Hudson, Rainer & Dobbs LLP; Assistant District Attorney, Cobb County, GA; Alston & Bird LLP; Law Clerk to Judge J.L. Edmondson (11th Circuit)

Education

JD, University of Georgia School of Law (1999); BA, University of Georgia (1996)

Intellectual Property Cases Decided as a Judge

Patent 0
Trademark 1 total (in favor of owner)
Copyright 0
Trade Secret 0

Intellectual Property Cases Argued in Private Practice

Patent 0
Trademark 0
Copyright 0
Trade Secret 0

Case: Kremer v. Tea Party Patriots, Inc., 314 Ga. App. 459 (2012)

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2. Charles T. Canady

 

Florida Supreme Court (2008 – present)

Prior Judicial Experience

Florida Second District Court of Appeal (2002 – 2008)

Prior Legislative Experience

U.S. Representative (R-FL) (1993 – 2001) (House Judiciary Committee); Florida House of Representatives (1984 – 1990)

Prior Legal Experience

General Counsel to Florida Governor Jeb Bush; Lane, Trohn, Clarke, Bertrand & Williams, PA; Holland & Knight

Intellectual Property Bills Co-Sponsored as U.S. Representative

Co-sponsored 13 bills involving intellectual property, including: 104th-H.R.1733, Patent Application Publication Act of 1995 (introduced); 104th-H.R.1127, Medical Procedures Innovation and Affordability Act (introduced); 104th-H.R.587, Biotechnological Process Patents (passed House); 104th-H.R.359, Patent Term Restoration (introduced)

Education

JD, Yale Law School (1979); BA, Haverford College (1976)

Intellectual Property Cases Decided as a Judge

Patent 1 total (in favor of malpractice defendant law firm and against client patentee)
Trademark 2 total (all in favor of owner)
Copyright 0
Trade Secret 0

Intellectual Property Cases Argued in Private Practice

Patent 0
Trademark 0
Copyright 0
Trade Secret 0

Cases: Larson & Larson, P.A. v. TSE Indus., Inc., 22 So. 3d 36 (Fla. 2009); Florida Virtual Sch. v. K12, Inc., 148 So. 3d 97 (Fla. 2014); Rooney v. Skeet’r Beat’r Of Sw. Florida, Inc., 898 So. 2d 968 (Fla. Dist. Ct. App. 2005)

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3. Steven M. Colloton

 

U.S. Court of Appeals for the Eighth Circuit (2003 – present)

Prior Judicial Experience

None

Prior Legal Experience

U.S. Attorney, Southern District of Iowa; Adjunct Lecturer, University of Iowa College of Law; Private Practice, Iowa; Associate Independent Counsel, Office of Independent Counsel Kenneth W. Starr; Assistant U.S. Attorney, Northern District of Iowa; Special Assistant to the Assistant Attorney General, Office of Legal Counsel; Law Clerk to Chief Justice William H. Rehnquist (U.S. Supreme Court); Law Clerk to Judge Laurence H. Silberman (D.C. Circuit)

Education

JD, Yale Law School (1988); BA, Princeton University (1985)

Intellectual Property Cases Decided as a Judge

Patent 2 total (all in favor of infringer)
Trademark 9 total (7 in favor of owner; 2 in favor of infringer)
Copyright 1 total (in favor of owner)
Trade Secret 0

Intellectual Property Cases Argued in Private Practice

Patent 0
Trademark 0
Copyright 0
Trade Secret 0

Cases: Andover Healthcare, Inc. v. 3M Co., 817 F.3d 621 (8th Cir. 2016); Schinzing v. Mid-States Stainless, Inc., 415 F.3d 807 (8th Cir. 2005); B & B Hardware, Inc. v. Hargis Indus., Inc., 716 F.3d 1020 (8th Cir. 2013); C.B.C. Distribution & Mktg., Inc. v. Major League Baseball Advanced Media, L.P., 505 F.3d 818 (8th Cir. 2007); Coca-Cola Co. v. Purdy, 382 F.3d 774 (8th Cir. 2004); Faegre & Benson, LLP v. Purdy, 129 F. App’x 323 (8th Cir. 2005); Gateway, Inc. v. Companion Prod., Inc., 384 F.3d 503 (8th Cir. 2004); Mid-State Aftermarket Body Parts, Inc. v. MQVP, Inc., 466 F.3d 630 (8th Cir. 2006); Sensient Techs. Corp. v. SensoryEffects Flavor Co., 613 F.3d 754 (8th Cir. 2010); Lovely Skin, Inc. v. Ishtar Skin Care Prod., LLC, 745 F.3d 877 (8th Cir. 2014); Pangaea, Inc. v. Flying Burrito LLC, 647 F.3d 741 (8th Cir. 2011); Capitol Records, Inc. v. Thomas-Rasset, 692 F.3d 899 (8th Cir. 2012)

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4. Allison H. Eid

 

Colorado Supreme Court (2006 – present)

Prior Judicial Experience

None

Prior Legal Experience

Solicitor General, State of Colorado; Associate Professor, University of Colorado School of Law; Arnold & Porter; Law Clerk to Justice Clarence Thomas (U.S. Supreme Court); Law Clerk to Judge Jerry E. Smith (5th Circuit)

Education

JD, University of Chicago Law School (1991); BA, Stanford University (1987)

Intellectual Property Cases Decided as a Judge

Patent 0
Trademark 0
Copyright 0
Trade Secret 1 total (dissenting in favor of infringer)

Intellectual Property Cases Argued in Private Practice

Patent 0 (but in 1 case analogizing to patent law for “full compensation” damages)
Trademark 0
Copyright 0
Trade Secret 0

Case: Acoustic Mktg. Research, Inc. v. Technics, LLC, 198 P.3d 96 (Colo. 2008)

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5. Neil M. Gorsuch

 

U.S. Court of Appeals for the Tenth Circuit (2006 – present)

Prior Judicial Experience

None

Prior Legal Experience

Principal Deputy to U.S. Associate Attorney General; Kellogg, Huber, Hansen, Todd & Evans; Law Clerk to Justice Byron R. White and Justice Anthony M. Kennedy (U.S. Supreme Court); Law Clerk to Judge David B. Sentelle (D.C. Circuit)

Education

DPhil, Oxford University (2004); JD, Harvard Law School (1991); BA, Columbia University (1988)

Intellectual Property Cases Decided as a Judge

Patent 0
Trademark 7 total (2 in favor of owner; 5 in favor of infringer)
Copyright 4 total (all in favor of infringer)
Trade Secret 3 total (2 in favor of owner; 1 in favor of infringer)

Intellectual Property Cases Argued in Private Practice

Patent 0
Trademark 0
Copyright 0
Trade Secret 0

Cases: Earthgrains Baking Companies Inc. v. Sycamore Family Bakery, Inc., 573 F. App’x 676 (10th Cir. 2014); Gen. Steel Domestic Sales, LLC v. Chumley, 627 F. App’x 682 (10th Cir. 2015); Lorillard Tobacco Co. v. Engida, 611 F.3d 1209 (10th Cir. 2010); Hargrave v. Chief Asian, LLC, 479 F. App’x 827 (10th Cir. 2012); Surefoot LC v. Sure Foot Corp., 531 F.3d 1236 (10th Cir. 2008); Utah Lighthouse Ministry v. Found. for Apologetic Info. & Research, 527 F.3d 1045 (10th Cir. 2008); Blehm v. Jacobs, 702 F.3d 1193 (10th Cir. 2012); Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063 (10th Cir. 2008); La Resolana Architects, PA v. Reno, Inc., 555 F.3d 1171 (10th Cir. 2009); Meshwerks, Inc. v. Toyota Motor Sales U.S.A., Inc., 528 F.3d 1258 (10th Cir. 2008); Russo v. Ballard Med. Prod., 550 F.3d 1004 (10th Cir. 2008); Storagecraft Tech. Corp. v. Kirby, 744 F.3d 1183 (10th Cir. 2014)

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6. Raymond W. Gruender

 

U.S. Court of Appeals for the Eighth Circuit (2004 – present)

Prior Judicial Experience

None

Prior Legal Experience

U.S. Attorney, Eastern District of Missouri; Thompson Coburn LLP; Assistant U.S. Attorney, Eastern District of Missouri; Lewis Rice & Fingersh

Education

JD, Washington University (1987); MBA, Washington University (1987), BA, Washington University (1984)

Intellectual Property Cases Decided as a Judge

Patent 0
Trademark 5 total (5 in favor of owner
Copyright 7 total (4 in favor of owner; 3 in favor of infringer)
Trade Secret 2 total (1 in favor of owner; 1 in favor of infringer)

Intellectual Property Cases Argued in Private Practice

Patent 0
Trademark 0
Copyright 1 total (amicus brief on behalf of U.S. Copyright Office)
Trade Secret 0

Cases: Dryer v. Nat’l Football League, 814 F.3d 938 (8th Cir. 2016); First Nat. Bank in Sioux Falls v. First Nat. Bank S. Dakota, 679 F.3d 763 (8th Cir. 2012); Jones v. W. Plains Bank & Trust Co., 813 F.3d 700 (8th Cir. 2015); Kforce, Inc. v. Surrex Sols. Corp., 436 F.3d 981 (8th Cir. 2006); Lovely Skin, Inc. v. Ishtar Skin Care Prod., LLC, 745 F.3d 877 (8th Cir. 2014); Pearson Educ., Inc. v. Almgren, 685 F.3d 691 (8th Cir. 2012); Pinnacle Pizza Co. v. Little Caesar Enterprises, Inc., 598 F.3d 970 (8th Cir. 2010); Strange Music, Inc. v. Anderson, 419 F. App’x 707 (8th Cir. 2011); United States v. Frison, 825 F.3d 437 (8th Cir.); United States v. Sweeney, 611 F.3d 459 (8th Cir. 2010); Warner Bros. Entm’t v. X One X Prods., 644 F.3d 584 (8th Cir. 2011); Warner Bros. Entm’t v. X One X Prods., 840 F.3d 971 (8th Cir. 2016); Wells Fargo Bank, N.A. v. WMR e-PIN, LLC, 653 F.3d 702 (8th Cir. 2011)

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7. Thomas M. Hardiman

 

U.S. Court of Appeals for the Third Circuit (2007 – present)

Prior Judicial Experience

U.S. District Court for the Western District of Pennsylvania (2003 – 2007)

Prior Legal Experience

Skadden, Arps, Slate, Meagher & Flom; Titus & McConomy LLP; Reed Smith LLP

Education

JD, Georgetown University Law Center (1990); BA, University of Notre Dame (1987)

Intellectual Property Cases Decided as a Judge

Patent 1 total (in favor of negligent law firm)
Trademark 6 total (5 in favor of owner; 1 in favor of infringer)
Copyright 5 total (3 in favor of owner; 2 in favor of infringer)
Trade Secret 3 total (1 in favor of owner; 2 in favor of infringer)

Intellectual Property Cases Argued in Private Practice

Patent 0
Trademark 0
Copyright 0
Trade Secret 0

Cases: Ackourey v. Sonellas Custom Tailors, 573 F. App’x 208 (3d Cir. 2014); Am. Bd. of Internal Med. v. Von Muller, 540 F. App’x 103 (3d Cir. 2013); Avaya Inc., RP v. Telecom Labs, Inc., 838 F.3d 354 (3d Cir. 2016); Boyle v. United States, 391 F. App’x 212 (3d Cir. 2010); Brand Mktg. Grp. LLC v. Intertek Testing Servs., N.A., Inc., 801 F.3d 347 (3d Cir. 2015); Dow Chem. Canada, Inc. v. HRD Corp., 587 F. App’x 741 (3d Cir. 2014); FedEx Ground Package Sys. v. Applications Int’l Corp., 2005 U.S. Dist. LEXIS 26651 (W.D. Pa. Nov. 4, 2005); Fishkin v. Susquehanna Partners, G.P., 340 F. App’x 110 (3d Cir. 2009); Groupe SEB USA, Inc. v. Euro-Pro Operating LLC, 774 F.3d 192 (3d Cir. 2014); Aslam v. Attorney Gen. of U.S., 404 F. App’x 599 (3d Cir. 2010); Sims v. Viacom, Inc., 544 F. App’x 99 (3d Cir. 2013); Singer Mgmt. Consultants, Inc. v. Milgram, 650 F.3d 223 (3d Cir. 2011); United States v. Diallo, 476 F. Supp. 2d 497 (W.D. Pa. 2007), aff’d, 575 F.3d 252 (3d Cir. 2009); William A. Graham Co. v. Haughey, 568 F.3d 425 (3d Cir. 2009); World Entm’t Inc. v. Brown, 487 F. App’x 758 (3d Cir. 2012)

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8. Raymond M. Kethledge

 

U.S. Court of Appeals for the Sixth Circuit (2008 – present)

Prior Judicial Experience

None

Prior Legal Experience

Bush Seyferth & Paige PLLC; Feeney Kellett Wienner & Bush PC; Counsel, Ford Motor Company; Honigman, Miller, Schwartz & Cohn LLP; Law Clerk to Justice Anthony Kennedy (U.S. Supreme Court); Judiciary Counsel to U.S. Senator Spencer Abraham (R-MI); Law Clerk to Judge Ralph B. Guy, Jr. (6th Circuit)

Education

JD, University of Michigan Law School (1993); BA, University of Michigan (1989)

Intellectual Property Cases Decided as a Judge

Patent 0
Trademark 4 total (3 in favor of owner; 1 in favor of infringer)
Copyright 2 total (1 in favor of owner; 1 in favor of infringer)
Trade Secret 1 total (in favor of infringer)

Intellectual Property Cases Argued in Private Practice

Patent 5 total (all on behalf of infringer/generic pharmaceutical company)
Trademark 0
Copyright 0
Trade Secret: 0

Cases: Kerr Corp. v. Freeman Mfg. & Supply Co., 2009 U.S. App. LEXIS 6342 (6th Cir. Ohio 2009); Sony/ATV Publ’g, LLC v. Marcos, 651 F. App’x 482 (6th Cir. 2016); L.F.P.IP, LLC v. Hustler Cincinnati, Inc., 533 F. App’x 615 (6th Cir. 2013); Nagler v. Garcia, 370 F. App’x 678 (6th Cir. 2010); R.C. Olmstead, Inc., v. CU Interface, LLC, 606 F.3d 262 (6th Cir. 2010); Taylor v. Thomas, 624 F. App’x 322 (6th Cir. 2015); In re Desloratadine Patent Litig., 502 F. Supp. 2d 1354 (U.S. Jud. Pan. Mult. Lit. 2007); PDL BioPharma, Inc. v. Sun Pharm. Indus., 2007 U.S. Dist. LEXIS 56948 (E.D. Mich. Aug. 6, 2007); Schering Corp. v. Caraco Pharm. Labs., Ltd., 2007 U.S. Dist. LEXIS 41020 (E.D. Mich. June 6, 2007); Sun Pharm. Indus. v. Eli Lilly & Co., 2008 U.S. Dist. LEXIS 35206 (E.D. Mich. Apr. 30, 2008); Sun Pharm. Indus. v. Eli Lilly & Co., 2008 U.S. Dist. LEXIS 46730 (E.D. Mich. June 16, 2008)

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9. Joan L. Larsen

 

Michigan Supreme Court (2015 – present)

Prior Judicial Experience

None

Prior Legal Experience

Adjunct Professor, University of Michigan Law School; Deputy Assistant Attorney General, Office of Legal Counsel; Visiting Assistant Professor, Northwestern University Pritzker School of Law; Sidley Austin LLP; Law Clerk to Justice Antonin Scalia (U.S. Supreme Court); Law Clerk to Judge David B. Sentelle (D.C. Circuit)

Education

JD, Northwestern University Pritzker School of Law (1993); BA, University of Northern Iowa (1990)

Intellectual Property Cases Decided as a Judge

Patent 0
Trademark 0
Copyright 0
Trade Secret 0

Intellectual Property Cases Argued in Private Practice

Patent 0
Trademark 0
Copyright 0
Trade Secret 0

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10. Michael S. Lee

 

U.S. Senator (R-UT) (2011 – present)

Prior Legislative Experience

None

Prior Legal Experience

Howrey LLP; Law Clerk to Justice Samuel A. Alito, Jr. (U.S. Supreme Court); General Counsel to Utah Governor Jon Huntsman; Assistant U.S. Attorney, District of Utah; Sidley Austin LLP; Law Clerk to Judge Samuel A. Alito, Jr. (3rd Circuit); Law Clerk to Judge Dee Benson (D. Utah)

Intellectual Property Bills Co-Sponsored as U.S. Senator

Co-sponsored 6 bills involving intellectual property: 114th-S.2733, VENUE Act (introduced); 114th-S.1137, PATENT Act (introduced and voted yes); 113th-S.1720, Patent Transparency and Improvements Act of 2013 (introduced); 114th-S.328, A bill to amend the Trademark Act of 1946 to provide for the registration of marks consisting of a flag, coat of arms, or other insignia of the United States, or any State or local government (introduced); 113th-S.1816, A bill to amend the Trademark Act of 1946 to provide for the registration of marks consisting of a flag, coat of arms, or other insignia of the United States, or any State or local government (introduced); 113th-S.517, Unlocking Consumer Choice and Wireless Competition Act (became law)

Education

JD, Brigham Young University Law School (1997); BS, Brigham Young University (1994)

Intellectual Property Cases Decided as a Judge

Patent N/A
Trademark N/A
Copyright N/A
Trade Secret N/A

Intellectual Property Cases Argued in Private Practice

Patent 1 total (on behalf of infringer Deutsche Bank)
Trademark 0
Copyright 0
Trade Secret 0

Case: Island Intellectual Prop. LLC v. Deutsche Bank Trust Co. Americas, 2012 U.S. Dist. Ct. Briefs LEXIS 15212 (S.D.N.Y. Feb. 10, 2012)

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11. Thomas R. Lee

 

Utah Supreme Court (2010 – present)

Prior Judicial Experience

None

Prior Legal Experience

Deputy Assistant Attorney General, Civil Division; Rex & Maureen Rawlinson Professor of Law, J. Reuben Clark Law School, Brigham Young University; Howard, Phillips & Anderson LLC; Parr Brown Gee & Loveless, PC; Law Clerk to Justice Clarence Thomas (U.S. Supreme Court); Law Clerk to Judge J. Harvie Wilkinson, III (4th Circuit)

Scholarly Articles on Intellectual Property

Thomas R. Lee, et. al., An Empirical and Consumer Psychology Analysis of Trademark Distinctiveness, 41 Ariz. St. L.J. 1033 (2009); Thomas R. Lee, et. al., Sophistication, Bridging the Gap, and the Likelihood of Confusion: An Empirical and Theoretical Analysis, 98 Trademark Rep. 913 (2008); Thomas R. Lee, et. al., Trademarks, Consumer Psychology, and the Sophisticated Consumer, 57 Emory L.J. 575 (2008); Thomas R. Lee, Demystifying Dilution, 84 B.U. L. Rev. 859 (2004); Thomas R. Lee, Eldred v. Ashcroft and the (Hypothetical) Copyright Term Extension Act of 2020, 12 Tex. Intell. Prop. L.J. 1 (2003); Thomas R. Lee, et. al. “To Promote the Progress of Science”: The Copyright Clause and Congress’s Power to Extend Copyrights, 16 Harv. J.L. & Tech. 1 (2002); Thomas R. Lee, In Rem Jurisdiction in Cyberspace, 75 Wash. L. Rev. 97 (2000) (proposing an “in rem” solution to the problem of cyberpiracy)

Education

JD, University of Chicago Law School (1991); BA, Brigham Young University (1988)

Intellectual Property Cases Decided as a Judge

Patent 0
Trademark 0
Copyright 0
Trade Secret 3 total (all in favor of owner)

Intellectual Property Cases Argued in Private Practice

Patent 0
Trademark 27 total (all on behalf of owner)
Copyright 2 total (1 on behalf of owner; 1 on behalf of infringer)
Trade Secret 1 total (on behalf of infringer)

Cases: InnoSys, Inc. v. Mercer, 364 P.3d 1013 (Utah 2015); Legacy Res., Inc. v. Liberty Pioneer Energy Source, Inc., 322 P.3d 683 (Utah 2013); USA Power, LLC v. PacifiCorp, 372 P.3d 629 (Utah 2016)

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12. Edward M. Mansfield

 

Iowa Supreme Court (2011 – present)

Prior Judicial Experience

Iowa Court of Appeals (2009 – 2011)

Prior Legal Experience

Belin Lamson McCormick Zumbach & Flynn, PC; Lewis Roca Rothgerber Christie LLP; Adjunct Professor, Drake University Law School; Law Clerk to Judge Patrick Higginbotham (5th Circuit)

Education

JD, Yale Law School (1982); BA, Harvard University (1978)

Intellectual Property Cases Decided as a Judge

Patent 0
Trademark 0
Copyright 0
Trade Secret 0

Intellectual Property Cases Argued in Private Practice

Patent 1 total (on behalf of owner)
Trademark 1 total (on behalf of infringer)
Copyright 1 total (on behalf of infringer)
Trade Secret 1 total (on behalf of owner)

Cases: Kemin Foods, L.C. v. Pigmentos Vegetales del Centro S.A. de C.V., 384 F. Supp. 2d 1334 (S.D. Iowa 2005), aff’d, 464 F.3d 1339 (Fed. Cir. 2006); Amerus Group Co. v. Ameris Bancorp, 2006 U.S. Dist. LEXIS 32722 (S.D. Iowa May 22, 2006); Ryan v. Editions Ltd. West, Inc., 2016 U.S. Dist. LEXIS 131652 (N.D. Cal. Sept. 23, 2016); Midwest Oilseeds, Inc. v. Limagrain Genetics Corp., 2002 U.S. Dist. LEXIS 28698 (S.D. Iowa Nov. 8, 2002)

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13. Federico A. Moreno

 

U.S. District Court for the Southern District of Florida (1990 – present)

Prior Judicial Experience

Eleventh Judicial Circuit of Florida (1987 – 1990); Miami-Dade County Court (1986 – 1987)

Prior Legal Experience

Thornton, Rothman & Moreno, PA; Assistant Federal Public Defender, Southern District of Florida; Rollins, Peeples & Meadows, PA

Education

JD, University of Miami School of Law (1978); BA, University of Notre Dame (1974)

Intellectual Property Cases Decided as a Judge

Patent 3 (1 in favor of owner; 2 in favor of infringer)
Trademark 15 (11 in favor of owner; 4 in favor of infringer)
Copyright 9 (7 in favor of owner; 2 in favor of infringer)
Trade Secret 3 (2 in favor of owner; 1 in favor of infringer)

Intellectual Property Cases Argued in Private Practice

Patent 0
Trademark 0
Copyright 0
Trade Secret 0

Cases: Allegiance Healthcare Corp. v. Coleman, 232 F. Supp. 2d 1329 (S.D. Fla. 2002); Biotanic, Inc. v. Vazquez, 2010 U.S. Dist. LEXIS 69048 (S.D. Fla. July 7, 2010); Burger King Corp. v. Weaver, 33 F. Supp. 2d 1037 (S.D. Fla. 1998); Carnival Corp. v. SeaEscape Casino Cruises, Inc., 74 F. Supp. 2d 1261 (S.D. Fla. 1999); Coach Servs. v. 777 Lucky Accessories, Inc., 2010 U.S. Dist. LEXIS 67739 (S.D. Fla. June 16, 2010); Davis v. Raymond, 2013 U.S. Dist. LEXIS 68392 (S.D. Fla. May 13, 2013); Erika Boom & Belly & Kicks I, LLC v. Rosebandits, LLC, 2013 U.S. Dist. LEXIS 158528 (S.D. Fla. Nov. 5, 2013); CEyePartner, Inc. v. Kor Media Group LLC, 2013 U.S. Dist. LEXIS 98370 (S.D. Fla. July 15, 2013); Fuentes v. Mega Media Holdings, Inc., 721 F. Supp. 2d 1255 (S.D. Fla. 2010); HFuentes v. Mega Media Holdings, Inc., 2011 U.S. Dist. LEXIS 5298 (S.D. Fla. Jan. 20, 2011); Gapardis Health & Beauty, Inc. v. Pramil S.R.L. (ESAPHARMA), 2007 U.S. Dist. LEXIS 98005 (S.D. Fla. May 23, 2007); Gen. Cigar Holdings, Inc. v. Altadis, S.A., 205 F. Supp. 2d 1335 (S.D. Fla.); Glob. Innovation Tech. Holdings, LLC v. Acer Am. Corp., 634 F. Supp. 2d 1346 (S.D. Fla. 2009); Greenberg v. Miami Children’s Hosp. Research Inst., Inc., 264 F. Supp. 2d 1064 (S.D. Fla. 2003); MHermosilla v. Octoscope Music, LLC, 2010 U.S. Dist. LEXIS 129469 (S.D. Fla. Dec. 3, 2010); Icon Health & Fitness, Inc. v. IFITNESS, Inc., 2012 U.S. Dist. LEXIS 46824 (S.D. Fla. Apr. 2, 2012); Inmuno Vital, Inc. v. Golden Sun, Inc., 49 F. Supp. 2d 1344 (S.D. Fla. 1997); HLorentz v. Sunshine Health Prods., 2010 U.S. Dist. LEXIS 100985 (S.D. Fla. Sept. 23, 2010); Milk Money Music v. Oakland Park Entm’t Corp., 2009 U.S. Dist. LEXIS 121661 (S.D. Fla. Dec. 10, 2009); NPA Assocs., LLC v. Lakeside Portfolio Mgmt., LLC, 2014 U.S. Dist. LEXIS 22805 (S.D. Fla. Feb. 22, 2014); Platypus Wear, Inc. v. Clarke Modet & Co., 515 F. Supp. 2d 1288 (S.D. Fla. 2007); Polvent v. Global Fine Arts, Inc., 2014 U.S. Dist. LEXIS 130936 (S.D. Fla. Sept. 18, 2014); Promex, LLC v. Perez Distrib. Fresno, Inc., 2010 U.S. Dist. LEXIS 90677 (S.D. Fla. Sept. 1, 2010); Setai Hotel Acquisitions, LLC v. Luxury Rentals Miami Beach, Inc., 2016 U.S. Dist. LEXIS 171396 (S.D. Fla. Dec. 9, 2016); TNT USA, Inc v. TrafiExpress, S.A. de C.V., 434 F. Supp. 2d 1322 (S.D. Fla. 2006); SValeant Int’l (Barb.) SRL v. Watson Pharms., Inc., 2012 U.S. Dist. LEXIS 193254 (S.D. Fla. July 6, 2012); Valeant Int’l (Barbados) SRL v. Watson Pharms., Inc., 2011 U.S. Dist. LEXIS 128742 (S.D. Fla. Nov. 7, 2011); Valoro, LLC v. Valero Energy Corp., 2014 U.S. Dist. LEXIS 110554 (S.D. Fla. Aug. 11, 2014); Y.Z.Y., Inc. v. Azmere USA Inc., 2013 U.S. Dist. LEXIS 192674 (S.D. Fla. Oct. 16, 2013)

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14. William H. Pryor, Jr.

 

U.S. Court of Appeals for the Eleventh Circuit (2004 – present)

Prior Judicial Experience

None

Prior Legal Experience

Commissioner, U.S. Sentencing Commission; Visiting Professor, University of Alabama School of Law; Attorney General, Alabama; Deputy Attorney General, Alabama; Adjunct Professor, Samford University, Cumberland School of Law; Walston, Stabler, Wells, Anderson & Bains; Cabaniss, Johnston, Gardner, Dumas & O’Neal; Law Clerk to Judge John M. Wisdom (5th Circuit)

Education

JD, Tulane University School of Law (1987); BA, Northeast Louisiana University (1984)

Intellectual Property Cases Decided as a Judge

Patent 0
Trademark 3 total (all in favor of owner)
Copyright 3 total (all in favor of infringer)
Trade Secret 0

Intellectual Property Cases Argued in Private Practice

Patent 0
Trademark 0
Copyright 0
Trade Secret 0

Cases: ADT LLC v. Alarm Prot. Tech. Florida, LLC, 646 F. App’x 781 (11th Cir. 2016); Genesys Software Sys. v. Ceridian Corp., 2016 U.S. App. LEXIS 20914 (11th Cir. Nov. 22, 2016); Jysk Bed’N Linen v. Dutta-Roy, 810 F.3d 767 (11th Cir. 2015); Latele TV, C.A. v. Telemundo Communs. Group, LLC, 2016 U.S. App. LEXIS 20345 (11th Cir. Fla. May 26, 2016); Navellier v. Fla., 2016 U.S. App. LEXIS 21473 (11th Cir. Fla. Dec. 1, 2016); Singleton v. Dean, 611 F. App’x 671 (11th Cir. 2015); Sovereign Military Hospitaller Order of Saint John of Jerusalem of Rhodes & of Malta v. Florida Priory of the Knights Hospitallers of the Sovereign Order of Saint John of Jerusalem, Knights of Malta, The Ecumenical Order, 809 F.3d 1171 (11th Cir. 2015)

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15. Margaret A. Ryan

 

U.S. Court of Appeals for the Armed Forces (2006 – present)

Prior Judicial Experience

None

Prior Legal Experience

Wiley Rein LLP; Bartlit Beck Palenchar & Scott LLP; Cooper Carvin & Rosenthal; Law Clerk to Justice Clarence Thomas (U.S. Supreme Court); Law Clerk to Judge J. Michael Luttig (4th Circuit); Judge Advocate, U.S. Marine Corps

Education

JD, Notre Dame Law School (1995); BA, Knox College (1985)

Intellectual Property Cases Decided as a Judge

Patent 0
Trademark 0
Copyright 0
Trade Secret 0

Intellectual Property Cases Argued in Private Practice

Patent 0
Trademark 0
Copyright 0
Trade Secret 0

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16. David R. Stras

 

Minnesota Supreme Court (2010 – present)

Prior Judicial Experience

None

Prior Legal Experience

Professor, University of Minnesota Law School; Faegre & Benson LLP; Sidley Austin Brown & Wood; Law Clerk to Justice Clarence Thomas (U.S. Supreme Court); Law Clerk to Judge J. Michael Luttig (4th Circuit); Law Clerk to Judge Melvin Brunetti (9th Circuit)

Education

JD, University of Kansas School of Law (1999); MBA, University of Kansas (1999); BA, University of Kansas (1995)

Intellectual Property Cases Decided as a Judge

Patent 0
Trademark 0
Copyright 0
Trade Secret 1 total (in favor of owner)

Intellectual Property Cases Argued in Private Practice

Patent 0
Trademark 0
Copyright 0
Trade Secret 0

Case: Seagate Tech., LLC v. W. Digital Corp., 854 N.W.2d 750 (Minn. 2014)

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17. Diane S. Sykes

 

U.S. Court of Appeals for the Seventh Circuit (2004 – present)

Prior Judicial Experience

Wisconsin Supreme Court (1999 – 2004); Wisconsin Circuit Court, Milwaukee County (1992 – 1999)

Prior Legal Experience

Whyte Hirschboeck & Dudek SC; Law Clerk to Judge Terence T. Evans (E.D. Wis.)

Education

JD, Marquette University Law School (1984); BS, Northwestern University (1980)

Intellectual Property Cases Decided as a Judge

Patent 4 total (3 in favor of owner; 1 in favor of infringer)
Trademark 5 total (2 in favor of owner; 3 in favor of infringer)
Copyright 8 total (4 in favor of owner; 4 in favor of infringer)
Trade Secret 2 total (all in favor of infringer)

Intellectual Property Cases Argued in Private Practice

Patent 0
Trademark 0
Copyright 0
Trade Secret 0

Cases: Allan Block Corp. v. Cty. Materials Corp., 512 F.3d 912 (7th Cir. 2008); Bell v. Lantz, 825 F.3d 849 (7th Cir. 2016); Cent. Mfg., Inc. v. Brett, 492 F.3d 876 (7th Cir. 2007); Chicago Bldg. Design, P.C. v. Mongolian House, Inc., 770 F.3d 610 (7th Cir. 2014); Coach, Inc. v. DI DA Imp. & Exp., Inc., 630 F. App’x 632 (7th Cir. 2016); Consumer Health Info. Corp. v. Amylin Pharm., Inc., 819 F.3d 992 (7th Cir.); Edgenet, Inc. v. Home Depot U.S.A., Inc., 658 F.3d 662 (7th Cir. 2011); Furkin v. Smikun, 237 F. App’x 86 (7th Cir. 2007); Georgia-Pac. Consumer Prod. LP v. Kimberly-Clark Corp., 647 F.3d 723 (7th Cir. 2011); Grigoleit Co. v. Whirlpool Corp., 769 F.3d 966 (7th Cir. 2014); Hecny Transp., Inc. v. Chu, 430 F.3d 402 (7th Cir. 2005); Hyson USA, Inc. v. Hyson 2U, Ltd., 821 F.3d 935 (7th Cir. 2016); Kelley v. Chicago Park Dist., 635 F.3d 290 (7th Cir. 2011); Mostly Memories, Inc. v. For Your Ease Only, Inc., 526 F.3d 1093 (7th Cir. 2008); nClosures Inc. v. Block & Co., 770 F.3d 598 (7th Cir. 2014); Schrock v. Learning Curve Int’l, Inc., 586 F.3d 513 (7th Cir. 2009); Specht v. Google Inc., 747 F.3d 929 (7th Cir. 2014); Waterloo Furniture Components, Ltd. v. Haworth, Inc., 467 F.3d 641 (7th Cir. 2006); Wisconsin Alumni Research Found. v. Xenon Pharm., Inc., 591 F.3d 876 (7th Cir. 2010)

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18. Amul R. Thapar

 

U.S. District Court for the Eastern District of Kentucky (2008 – present)

Prior Judicial Experience

None

Prior Legal Experience

U.S. Attorney, Eastern District of Kentucky; Assistant U.S. Attorney, Southern District of Ohio; General Counsel, Equalfooting.com; Assistant U.S. Attorney, District of Columbia; Trial Advocacy Instructor, Georgetown University Law Center; Adjunct Professor, Vanderbilt University Law School; Adjunct Professor, University of Virginia School of Law; Adjunct Professor, Northern Kentucky University, Chase College of Law; Williams & Connolly; Squire Sanders & Dempsey; Adjunct Professor, University of Cincinnati College of Law; Law Clerk to Judge Nathaniel R. Jones (6th Circuit); Law Clerk to Judge S. Arthur Spiegel (S.D. Ohio)

Education

JD, University of California, Berkeley, Boalt Hall School of Law (1994); BS, Boston College (1991)

Intellectual Property Cases Decided as a Judge

Patent 0
Trademark 1 total (in favor of infringer)
Copyright 1 total (in favor of owner)
Trade Secret 1 total (in favor of owner)

Intellectual Property Cases Argued in Private Practice

Patent 0
Trademark 0
Copyright 0
Trade Secret 0

Cases: Duty Free Americas, Inc. v. Estee Lauder Companies, Inc., 797 F.3d 1248 (11th Cir. 2015); Fastenal Co. v. Crawford, 609 F. Supp. 2d 650 (E.D. Ky. 2009); Rich & Rich P’ship v. Poetman Records USA, Inc., 714 F. Supp. 2d 657 (E.D. Ky. 2010)

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19. Timothy M. Tymkovich

 

U.S. Court of Appeals for the Tenth Circuit (2003 – present)

Prior Judicial Experience

None

Prior Legal Experience

Hale Hackstaff Tymkovich, LLP; Colorado Solicitor General; Davis Graham & Stubbs; Bradley Campbell Carney & Madsen; Law Clerk to Justice William H. Erickson (Colo. Supreme Court)

Education

JD, University of Colorado School of Law (1982); BA, Colorado College (1979)

Intellectual Property Cases Decided as a Judge

Patent 1 total (in favor of owner)
Trademark 5 total (4 in favor of owner; 1 in favor of infringer)
Copyright 6 total (1 in favor of owner; 5 in favor of infringer)
Trade Secret 2 total (1 in favor of owner; 1 in favor of infringer)

Intellectual Property Cases Argued in Private Practice

Patent 0
Trademark 0
Copyright 0
Trade Secret 0

Cases: Australian Gold, Inc. v. Hatfield, 436 F.3d 1228 (10th Cir. 2006); Celebrity Attractions, Inc. v. Okla. City Pub. Prop. Auth., 2016 U.S. App. LEXIS 15244 (10th Cir. Aug. 19, 2016); Cellport Sys., Inc. v. Peiker Acustic GMBH & Co. KG, 762 F.3d 1016 (10th Cir. 2014); Enter. Mgmt. Ltd., Inc. v. Warrick, 717 F.3d 1112 (10th Cir. 2013); La Resolana Architects, PA v. Clay Realtors Angel Fire, 416 F.3d 1195 (10th Cir. 2005); Sportsmans Warehouse, Inc. v. LeBlanc, 311 F. App’x 136 (10th Cir. 2009); Stan Lee Media, Inc. v. Walt Disney Co., 774 F.3d 1292 (10th Cir. 2014); Stan Lee Media, Inc. v. Walt Disney Co., 2015 U.S. App. LEXIS 16055 (10th Cir. May 26, 2015); Storagecraft Tech. Corp. v. Kirby, 744 F.3d 1183 (10th Cir. 2014); Team Tires Plus, Ltd. v. Tires Plus, Inc., 394 F.3d 831 (10th Cir. 2005); Tomelleri v. MEDL Mobile, Inc., 657 F. App’x 793 (10th Cir. 2016); United States v. Shengyang Zhou, 717 F.3d 1139 (10th Cir. 2013); Utah Lighthouse Ministry v. Found. for Apologetic Info. & Research, 527 F.3d 1045 (10th Cir. 2008); Vail Assocs., Inc. v. Vend-Tel-Co., 516 F.3d 853 (10th Cir. 2008)

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20. Don R. Willett

 

Supreme Court of Texas (2005 – present)

Prior Judicial Experience

None

Prior Legal Experience

Deputy Texas Attorney General; Deputy Assistant Attorney General, Office of Legal Policy; Special Assistant to the President and Director of Law and Policy, President George W. Bush; Domestic Policy and Special Projects Adviser, Bush-Cheney 2000 Presidential Campaign; Director of Research and Special Projects, Governor George W. Bush; Haynes & Boone, LLP; Law Clerk to Judge Jerre S. Williams (5th Circuit)

Education

JD, Duke University School of Law (1992); BBA, Baylor University (1988)

Intellectual Property Cases Decided as a Judge

Patent 1 (dissenting in favor of state-court jurisdiction for patent negligence suits – a view ultimately adopted by the U.S. Supreme Court)
Trademark 0
Copyright 0
Trade Secret 0

Intellectual Property Cases Argued in Private Practice

Patent 0
Trademark 0
Copyright 0
Trade Secret 0

 

Case: Minton v. Gunn, 355 S.W.3d 634 (Tex. 2011)

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21. Robert P. Young, Jr.

 

Michigan Supreme Court (1999 – present)

Prior Judicial Experience

Michigan Court of Appeals (1995 – 1999)

Prior Legal Experience

General Counsel, AAA Michigan; Dickinson, Wright, Moon, Van Dusen & Freeman

Education

JD, Harvard Law School (1977); BA, Harvard College (1974)

Intellectual Property Cases Decided as a Judge

Patent 0
Trademark 1 total (in favor of owner)
Copyright 0
Trade Secret 0

Intellectual Property Cases Argued in Private Practice

Patent 0
Trademark 0
Copyright 0
Trade Secret 0

Case: Citizens Ins. Co. v. Pro-Seal Serv. Grp., Inc., 477 Mich. 75 (2007)

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[1] Professorial Lecturer in Law, George Washington University Law School. The author would like to thank Intellectual Ventures for its invaluable research support.

Categories
Administrative Agency Commercialization Copyright Copyright Licensing Infringement Innovation Internet Legislation Supreme Court Uncategorized

Letter on FCC Set-Top Box Regulation Once Again Confuses the Issue

Washington, D.C. at nightLast week, a group of law professors wrote a letter to the acting Librarian of Congress in which they claim that the current FCC proposal to regulate cable video navigation systems does not deprive copyright owners of the exclusive rights guaranteed by the Copyright Act. The letter repeats arguments from response comments they  filed along with the Electronic Frontier Foundation (EFF), accusing the Copyright Office of misinterpreting the scope of copyright law and once again bringing up Sony v. Universal to insist that copyright owners are overstepping their bounds. Unfortunately, the IP professors’ recurring reliance on Sony is misplaced, as the 30-year-old case does not address the most significant and troubling copyright violations that will result from the FCC’s proposed rules.

In 1984, the Supreme Court in Sony held that recording television shows on a personal VCR was an act of “time-shifting” and therefor did not constitute copyright infringement. The court also ruled that contributory liability requires knowledge, and such knowledge will not be imputed to a defendant based solely on the characteristics or design of a distributed product if that product is “capable of substantial noninfringing uses.” But while this precedent remains good law today, it does not apply to the real concerns creators and copyright owners have with the FCC’s attempt to redistribute their works without authorization.

The FCC’s proposed rules would require pay-TV providers to send copyrighted, licensed TV programs to third parties, even if the transmission would violate the agreements that pay-TV providers carefully negotiated with copyright owners. A different group of IP scholars recently explained to the FCC that by forcing pay-TV providers to exceed the scope of their licenses, the proposed rules effectively create a zero-rate compulsory license and undermine the property rights of creators and copyright owners. The compulsory license would benefit third-party recipients of the TV programs who have no contractual relationship with either the copyright owners or pay-TV providers, depriving creators and copyright owners of the right to license their works on their own terms.

This unauthorized siphoning and redistribution of copyrighted works would occur well before the programming reaches the in-home navigational device, a fact that the authors of the recent letter to the Librarian of Congress either don’t understand, or choose to ignore. Creators and copyright owners are not attempting to “exert control over the market for video receivers,” as the letter suggests. The manufacture and distribution of innovative devices that allow consumers to access the programming to which they subscribe is something that copyright owners and creators embrace, and a thriving market for such devices already exists.

As more consumers resort to cord cutting, countless options have become available in terms of navigational devices and on-demand streaming services. Apple TV, Roku, Nexus Player and Amazon Fire Stick are just a few of the digital media players consumers can choose from, and more advanced devices are  always being released. But while the creative community supports the development of these devices, it is the circumvention of existing licenses and disregard for the rights of creators to control their works that has artists and copyright owners worried.

Sony has become a rallying cry for those arguing that copyright owners are attempting to control and stymie the development of new devices and technologies, but these critics neglect the substantial problems presented by the transmission of digital media that Sony couldn’t predict and does not address. In the era of the VCR, there was no Internet over which television was broadcast into the home. In 1984, once a VCR manufacturer sold a unit, they ceased to have any control over the use of the machine. Consumers could use VCRs to record television or play video cassettes as they pleased, and the manufacturer wouldn’t benefit from their activity either way.

The difference with the current navigation device manufacturers is that they will receive copyrighted TV programs to which they’ll have unbridled liberty to repackage and control before sending them to the in-home navigation device. The third-party device manufacturers will not only be able to tamper with the channel placement designed to protect viewer experience and brand value, they will also be able to insert their own advertising into the delivery of the content, reducing pay-tv ad revenue and the value of the license agreements that copyright owners negotiate with pay-TV providers. The FCC’s proposal isn’t really about navigational devices, it’s about the control of creative works and the building of services around TV programs that the FCC plans to distribute to third parties free of any obligation to the owners and creators of those programs.

The authors of the letter conflate two distinct issues, misleading influential decision makers that may not be as well versed in the intricacies of copyright law. By stubbornly comparing the copyright issues surrounding the FCC’s proposed rules to those considered by the Supreme Court in Sony, they craftily try to divert attention away from the real matter at hand: Not what consumers do with the creative works they access in the privacy of their own homes, but how those works are delivered to consumers’ homes in the first place.

It’s curious that after many rounds of back-and-forth comments discussing the FCC’s proposal, proponents of the rules still refuse to address this primary copyright concern that has been continuously raised by creators and copyright owners in corresponding comments, articles, and letters (see also here, here, here, and here). Perhaps the authors of the recent letter simply do not grasp the real implications of the FCC’s plan to seize and redistribute copyrighted content, but given their years of copyright law experience, that is unlikely. More probable is that they recognize the complications inherent in the proposal, but do not have a good answer to the questions raised by the proposal’s critics, so they choose instead to cloud the issue with a similar-sounding but separate issue. But if they truly want to make progress in the set-top box debate and clear the way for copyright compliant navigational devices, they’ll need to do more than fall back on the same, irrelevant arguments.

Categories
Biotech High Tech Industry History of Intellectual Property Innovation Intellectual Property Theory Inventors Legislation Patent Law Patent Litigation Patent Theory Patentability Requirements Software Patent Supreme Court Uncategorized

Federal Circuit Brings Some Clarity and Sanity Back to Patent Eligibility Doctrine

By Adam Mossoff and Kevin Madigan

closeup of a circuit boardFollowing the Supreme Court’s four decisions on patent eligibility for inventions under § 101 of the Patent Act, there has been much disruption and uncertainty in the patent system. The patent bar and most stakeholders in the innovation industries have found the Supreme Court’s decisions in Alice Corp. v. CLS Bank (2014), AMP v. Myriad (2013), Mayo Labs v. Prometheus (2012), and Bilski v. Kappos (2010) to be vague and doctrinally indeterminate. Given the moral panic about the patent system that has been created as a result of ten years of excessive lobbying in D.C. for legislation that weakens patent rights, judges have responded to the excessive discretion they have under these cases by invalidating whole swaths of patented innovation in the high-tech, biotech, and pharmaceutical industries. The Patent Office is also rejecting patent applications at record levels, even for traditional inventions outside of high-tech and life sciences directly affected by the recent § 101 case law.

In Sequenom v. Ariosa, the Supreme Court had the opportunity to bring some clarity to the law of patent eligibility and to reign in some of the judicial and Patent Office excesses, but unfortunately it rejected this opportunity when it denied Sequenom’s cert petition this past June. Fortunately, the Court of Appeals for the Federal Circuit is now taking the lead in providing some much-needed legal guidance on patent eligibility to the inventors and companies working in the innovation industries. In two recent decisions, Enfish v. Microsoft and Rapid Litigation Management v. CellzDirect, the Federal Circuit has set forth some important doctrinal guideposts for defining what counts as a patent-eligible invention. Not only do these two decisions bring some reason and clarity back to the law of patent eligibility under § 101, they provide important doctrinal insights on how stakeholders may wish to address this problem if they ultimately choose to seek relief in Congress.

Enfish and the Patentability of Computer-Implemented Inventions (a/k/a “Software Patents”)

At the time it was decided, some commentators believed that the Alice decision was a directive from on high that most, if not all, computer software programs were not patentable inventions. This was a surprising claim if only because the Alice Court did not once use the phrase “software” in its entire opinion. Of course, “software patent” is not a legal term in patent law; the proper term is “computer-implemented invention,” as used by the Alice Court, and so the Court may have been only avoiding vague rhetoric from the patent policy debates. More important, though, this claim about Alice contradicts the Court’s opinion in Bilski just four years earlier, when the Court warned the Federal Circuit not to adopt a bright-line rule that limited § 101 to only physical inventions of the “Industrial Age,” because this created unnecessary and innovation-killing “uncertainty as to the patentability of software.”

Unfortunately, the ambiguities in Alice and in the Court’s prior patentable subject matter decisions, such as Mayo, left enough discretionary wiggle room in applying the generalized patent-eligibility test to permit judges and patents examiners to wage war on computer-implemented inventions. They thus made real again in the twenty-first century Justice Robert Jackson’s famous observation in 1949 that “the only patent that is valid is one which this Court has not been able to get its hands on.” Jungersen v. Ostby & Barton Co., 335 U.S. 560, 572 (1949) (Jackson, J., dissenting). As one commentator remarked several months after Alice was decided, “It’s open season on software patents.” The data over the next several years has borne out the truth of this statement.

The key argument against patents on computer-implemented inventions, such as key components of word processors, programs that run internet searches (like the patented innovation that started Google), and encryption software, is that such inventions are inherently “abstract.” The judicial interpretation of § 101 has long maintained that abstract ideas, laws of natural, and natural phenomena are unpatentable discoveries. In Alice, for instance, the Court held that a complex software program for extremely complex international financial transactions was an “abstract idea” and thus unpatentable under § 101. But beyond claims that something long known is “abstract,” the Court has failed to define with precision what it means for a discovery to be abstract. With little to no specific guidance from the Alice Court, it is no wonder that judges and examiners have succumbed to the recent moral panic about patents and declared “open season” on patents covering computer-implemented inventions.

In this context, the Federal Circuit’s decision in Enfish v. Microsoft is extremely important because it ends the unreasoned, conclusory “I know it when I see it” rejections of patents as “abstract” by judges and examiners.

In Enfish, the Federal Circuit reversed a trial court’s summary judgment that a patent on a computer-implemented invention was an unpatentable abstract idea. The patent covered a type of database management system on computers, a classic incremental innovation in today’s digital world. In its decision, the trial court dissected the invention down into the most basic ideas in which all inventions can be reframed as representing; for example, methods of using internal combustion engines can easily be reframed in terms of the basic laws in thermodynamics. In this case, the trial court asserted that this patent on a computer-implemented invention covered merely the “abstract purpose of storing, organizing, and retrieving” information. The trial court thus easily concluded that the invention was merely “abstract” and thus unpatentable.

The Federal Circuit rejected the trial court’s conclusory assertion about the invention being “abstract” and further held that such assertions by courts are a legally improper application of § 101. With respect to the patent at issue in this case, Judge Todd Hughes’ opinion for the unanimous panel found that

the plain focus of the claims is on an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity. Accordingly, we find that the claims at issue in this appeal are not directed to an abstract idea within the meaning of Alice.

More important, the Enfish court cautioned courts against the methodological approach adopted by the trial court in this case, in which “describing the claims at such a high level of abstraction and untethered from the language of the claims all but ensures that the exceptions to § 101 swallow the rule.” The court recognized that adopting a “bright-line” rule that computer-implemented inventions—the “software patents” decried by critics today—are necessarily “abstract” runs counter to both § 101 and the recent Supreme Court cases interpreting and applying this provision: “We do not see in Bilski or Alice, or our cases, an exclusion to patenting this large field of technological progress.”

Further confirming that Enfish represents an important step forward in how courts properly secure technological innovation in the high-tech industry, the Federal Circuit relied on Enfish in its recent decision in BASCOM Global Services Internet Inc v AT&T Mobility LLC. Here, the Federal Circuit again rejected the trial court’s dissection of a patent claim covering a software program used on the internet into an “abstract” idea of merely “filtering content.” The BASCOM court emphasized that courts must assess a claim as a whole—following the Alice Court’s injunction that courts must assess a patent claim as “an ordered combination of elements”—in determining whether it is a patentable invention under § 101. As numerous patent scholars explained in an amicus brief filed in support of Sequenom in its failed cert petition before the Supreme Court, requiring a court to construe a “claim as a whole” or “the invention as a whole” is a basic doctrinal requirement that runs throughout patent law, as it is essential to ensuring that patents are properly evaluated both as to their validity and in their assertion against infringers.

CellzDirect and the Patentability of Discoveries in the Bio-Pharmaceutical Industry

The high-tech industry is not the only sector of the innovation industries that has been hit particularly hard by the recent §101 jurisprudence. The biotech and pharmaceutical industries have also seen a collapse in the proper legal protection for their innovative discoveries of new therapeutic treatments. One recent study found that the examination unit at the Patent Office responsible for reviewing personalized medicine inventions (art unit 1634) has rejected 86.4% of all patent applications since the Supreme Court’s decision in Mayo. Anecdotal evidence abounds of numerous rejections of patent applications on innovative medical treatments arising from extensive R&D, and the most prominent one was the invalidation of Sequenom’s patent on its groundbreaking innovation in prenatal diagnostic tests.

In this light, the decision on July 5, 2016 in Rapid Litigation Management v. CellzDirect is an extremely important legal development for an industry that relies on stable and effective patent rights to justify investing billions in R&D to produce the miracles that comprise basic medical care today. In CellzDirect, the trial court found unpatentable under § 101 a patent claiming new methods for freezing liver cells for use in “testing, diagnostic, and treating purposes.” The trial court asserted that such a patent was “directed to an ineligible law of nature,” because scientists have long known that these types of liver cells (hepatocytes) could be subjected to multiple freeze-thaw cycles.

In her opinion for a unanimous panel, Chief Judge Sharon Prost held that the method in this case is exactly the type of innovative process that should be secured in a patent. Reflecting the same methodological concern in Enfish and BASCOM, the CellzDirect court rejected the trial court’s dissection of the patent into its foundational “laws of nature” and conventional ideas long-known in the scientific field:

The claims are simply not directed to the ability of hepatocytes to survive multiple freeze-thaw cycles. Rather, the claims of the ’929 patent are directed to a new and useful laboratory technique for preserving hepatocytes. This type of constructive process, carried out by an artisan to achieve “a new and useful end,” is precisely the type of claim that is eligible for patenting.

In other words, merely because a patentable process operates on a subject matter that constitutes natural phenomena does not mean the patent improperly claims either those natural phenomena or the laws of nature that govern them. To hold otherwise fails to heed the Mayo Court’s warning that “all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas,” and thus to dissect all patents down into these unpatentable foundations would “eviscerate patent law.” The CellzDirect court was explicit about this key methodological point in evaluating patents under § 101: “Just as in [the industrial process held valid by the Supreme Court in] Diehr, it is the particular ‘combination of steps’ that is patentable here”—the invention as a whole.

Conclusion

The U.S. has long prided itself as having a “gold standard” patent system—securing to innovators stable and effective property rights in their inventions and discoveries. As scholars and economic historians have long recognized, the patent system has been a key driver of America’s innovation economy for more than two hundred years. This is now threatened under the Supreme Court’s § 101 decisions and the “too broad” application of the Court’s highly generalized patent-eligibility tests to inventions in the high-tech and bio-pharmaceutical sectors. The shockingly high numbers of rejected applications at the Patent Office and of invalidation of patents by courts, as well as the general sense of legal uncertainty, are threatening the “gold standard” designation for the U.S. patent system. This threatens the startups, new jobs, and economic growth that the patent system has been proven to support. Hopefully, the recent Enfish and CellzDirect decisions are the first steps in bringing back to patent-eligibility doctrine both reason and clarity, two key requirements in the law that have been sorely lacking for inventors and companies working in the innovation economy.

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Administrative Agency Biotech High Tech Industry Innovation Intellectual Property Theory Inventors Legislation Patent Law Patent Litigation Patent Theory Software Patent Statistics Supreme Court Uncategorized

The One Year Anniversary: The Aftermath of #AliceStorm

The following post, by Robert R. Sachs, first appeared on the Bilski Blog, and it is reposted here with permission.

It’s been one year since the Supreme Court’s decision in Alice Corp. v. CLS Bank. On its face the opinion was relatively conservative, cautioning courts to “tread carefully” before invalidating patents, and emphasizing that the primary concern was to avoid preemption of “fundamental building blocks” of human ingenuity. The Court specifically avoided any suggestion that software or business methods were presumptively invalid. But those concerns seem to have gone unheeded. The Court’s attempt to side step the tricky problem of defining the boundary of an exception to patent eligibility—”we need not labor to delimit the precise contours of the ‘abstract ideas category in this case'”—has turned into the very mechanism that is quickly “swallow[ing] all of patent law.” The federal courts, the Patent Trial and Appeal Board, and the USPTO are using the very lack of a definition to liberally expand the contours of abstract ideas to cover everything from computer animation to database architecture to digital photograph management and even to safety systems for automobiles.

Let’s look at the numbers to present an accurate picture of the implications of the Supreme Court’s decision. My analysis is a data-driven attempt to assess the implications of Alice one year out. It is with an understanding of how the Supreme Court’s decision is actually playing out in the theater of innovation that we can better project and position ourselves for what the future holds.

Alice at Court

Table 0 Fed Courts

As of June 19, 2015 there have been 106 Federal Circuit and district court decisions on § 101 grounds, with 76 decisions invalidating the patents at issue in whole or in part. In terms of patents and claims, 65% of challenged patents have been found invalid, along with 76.2% of the challenged claims.

The success rate of motions on the pleadings (including motions to dismiss and judgments on the pleadings) is extremely impressive: 67% of defense motions granted, invalidating 54% of asserted patents. There has never been a Supreme Court ruling that the presumption of validity does not apply to § 101—only the Court’s use of the originally metaphorical notion that eligibility is a “threshold” condition. Given that, and the general rule that to survive a motion to dismiss the patentee (historically) need only show that there was a plausible basis that the complaint states a cause of action— there is a plausible basis that the patent claim is not directed to an abstract idea, law of nature, or natural phenomena. One would be forgiven for thinking, as did former Chief Judge Rader in Ultramercial, LLC v. Hulu, LLC that a “Rule 12(b)(6) dismissal for lack of eligible subject matter will be the exception, not the rule.” Apparently the rules change in the middle of the game.

Turning specifically to the Federal Circuit, the numbers are stark:

Table 00Fed Circuit

Of the 13 decisions, 11 are in software or e-commerce and only two are in biotech. The one case where the court held in favor of the patentee, DDR Holdings, LLC v. Hotels.com, L.P. appeared to offer a narrow avenue for patentees to avoid invalidation. However, only nine district court opinions have relied upon DDR to find patent eligibility, with over 30 court opinions distinguishing DDR as inapplicable. Even more interesting is the fact that in DDR the Federal Circuit essentially held that creating a website that copies the look and feel of another website is patent eligible. In the Silicon Valley, that’s called phishing, and it’s not a technology in which most reputable companies invest.

Alice at the Office

The impact of Alice is similarly impacting practitioners before the USPTO. In December, 2014 the Office issued its Interim Guidance on Patent Subject Matter Eligibility, providing guidance to patent examiners as to how to apply the Alice, Mayo, and Myriad decisions along with various Federal Circuit decisions, to claims during prosecution. Importantly, the Guidance noted that “the Supreme Court did not create a per se excluded category of subject matter, such as software or business methods, nor did it impose any special requirements for eligibility of software or business methods,” and it reminded examiners that “Courts tread carefully in scrutinizing such claims because at some level all inventions embody, use, reflect, rest upon, or apply a law of nature, natural phenomenon, or abstract idea.” Alas, most patent examiners are acting as if the patent applications before them are the exceptions to these cautionary instructions.

With the assistance of Patent Advisor, I compiled a dataset of almost 300,000 office actions and notice of allowances sampled in two week periods during 2013, 2013, 2014 and early 2015, and all actions during March, April and May 2015, across all technology centers:

Table0 Number of Apps

About 100,000 actions were notices of allowances, leaving about 200,000 office actions. Each office action was coded as to whether it included rejections under §§ 101, 102 and 103. For each office action the art unit and examiner was identified as well, and the status of the application (abandoned, pending or patented) as of the date that the data was obtained. I then analyzed the data for office actions rejections based on § 101, allowance rates, and examiner rejection rates. Here’s what I found.

Percent of all Actions with § 101 Rejections

Table2

Here, we have the percentage of all actions in each period that received a § 101 rejection, considering both rejections issued and notices of allowances. The black line separates pre-Alice from post-Alice data. For example, in TC 1600, the biotech area, in January, 2012 6.81% of all actions issued (counting both office actions and notices of allowances) were office actions with § 101 rejections; by May 2015 that percentage almost doubled to 11.86% of actions.

Overall, data shows that in 2012 subject matter rejections were mainly in the computer related Tech Centers (2100, 2400) and began declining thereafter, while escalating in biotechnology (1600) and so-called “business methods” Tech Center, TC 3600, following Mayo and Alice. Other technology centers such as semiconductors and mechanical engineering had essentially low and constant rejection rates. But that’s not because there are no software patents in these technology centers: you find plenty of software patents in these groups. Rather, my view is that it is because examiners in these groups treat software patents as they do any other technology.

The rejection rates in Tech Center 3600 in the 30-40% range are higher than any other group, but they also mask what’s really going on, since TC 3600 covers more than business methods. Tech Center 3600 has nine work groups:

Percent of all Actions with § 101 Rejections in TC 3600 Work Groups

Table3 Ecomm Rej

In TC 3600 most of the work groups handle good old-fashioned machines and processes, such as transportation (3610), structures like chairs and ladders (3630), airplanes, agriculture, and weapons (3640), wells and earth moving equipment (3670), etc. Three work groups handle e-commerce applications: specifically, 3620, 3680 and 3690. Here we see that these groups have significantly higher § 101 rejections than the rest of TC 3600. But let’s drill down further.

Each of work groups 3620, 3680 and 3690 have between five and 10 individual art units that handle specific types of e-commerce technologies, but they are not all under the same work group. For example business related cryptography is handed by both art units 3621 and 3685; healthcare and insurance is handled by art units 3626 and 3686; operations research is handled in 3623, 3624, 3682 and 3684. If we consolidate the data according to technology type and then look at rates of § 101 rejections we get the following:

Percent of all Actions with § 101 Rejections in E-Commerce Art Units by Technology Type

Table3 Ecomm Rej

What’s going on? After Bilski in 2010, the § 101 rejections were running between 17% and 50%. Not great but tolerable since these were mostly formal and were overcome with amendments adding hardware elements (“processor,” “memory”) to method claims or inserting “non-transitory” into Beauregard claims.

But after Alice, everything changed and § 101 rejections started issuing like paper money in a hyperinflation economy. If your perception as a patent prosecutor was that the every application was getting rejected under § 101, this explains your pain. Here’s another view of this data, in terms of actual number of § 101 rejections per sample period:

Number of Office Actions with § 101 Rejections in E-Commerce Art Units by Technology Type

Table4 Ecomm Rej Nos

Notice here that the number of office actions in March, 2015 fell dramatically, and then in April the flood gates opened and hundreds of actions issued with § 101 rejections. This is consistent with the Office’s statements in January 2015 that it was training examiners in view of the 2014 Interim Guidance, so office actions were being held until the training was completed. Apparently, the training skipped the part about no per se exclusions of business methods.

Now let’s consider notice of allowance rates. First with respect to all Tech Centers.

Percent of Actions that Are Notices of Allowance

Table5 All TCs NOA

This data reflects, of all the actions that were issued in a given period, the percentage that were notices of allowances. (Note here that contrary to the preceding tables, red cells are low percentage, and green cells are high since notices of allowance are good things, not bad things). The numbers look good, with a general increasing trend over time.

Now consider what’s happening in TC 3600’s business methods art units.

Percent of Actions that Are Notices of Allowance in Business Methods

Table6 NOAs in Ecomm

Now the picture is quite different. The rate of NOAs drops dramatically after Alice, especially in finance and banking and operations research. If it seemed that you were no longer getting a NOAs, this is why. The zero percent rate in March, 2015 is a result of the Office holding up actions and NOAs in view of the Interim Guidance training, as mentioned above.

Patents issued in the business methods art units typically are classified in Class 705 for “Data Processing.” I identified all patents with a primary classification in Class 705 since January, 2011, on a month by month basis, to identify year over year trends. Again the black line separates pre-Alice from post-Alice data.

Table7 Class 705 Patents

This table shows a precipitous decline in the number of business method patents issued following Alice, especially year over year. The lag between the June, 2014 Alice decision and the drop off in October 2014 is an artifact of the delay between allowance and issuance, as well as the USPTO’s unprecedented decision to withdraw an unknown number of applications for which the issue fee had already been paid, and issue § 101 rejections. It’s an interesting artifact, as well, that the number of Class 705 patents issued peaked in the month after Alice: you have to remember that these patents were allowed at least three months, and as much as a year, before the Alice decision; it just took a long time to actually get printed as a patent.

Next, we’ll consider abandonment rates, on a comparative basis, looking at the percentages of applications that were ultimately abandoned in relationship to whether or not they received a § 101 rejection. We’ll compare the data from January 2012 to July 2014. Again, consider the entire patent corps:

Percent of Abandoned Applications with Prior § 101 Rejection

Table8 Abandon all TCs

Here we see that of the applications that were abandoned during the respective sample periods, the vast majority did not have a prior § 101 rejection. Only in TC 3600 did the majority shift after Alice with 51.83% applications that received § 101 rejections in July 2014 being subsequently abandoned by May 31, 2015. Again, let’s drill down into the business method art units in TC 3600:

Percent of Abandoned Applications with Prior § 101 Rejection

Table9 Ecomm Abandon

First, prior to Alice, abandonments in the business method units appeared to result more frequently from other than § 101 rejections, typically prior art rejections. This is shown by the fact that the Jan. 2012 “No” column (no prior 101 rejection) is greater than the Jan. 2012 “Yes” column. Then after Alice, there is a huge shift with the vast majority of applications that were abandoned having § 101 rejections, as shown by the July, 2014 “Yes” column. The vast majority of abandonments, upwards of 90%, followed a 101 rejection. That’s applicants essentially giving up over what only a few years ago was a relatively minor hurdle. That’s what happens when you change the rules in the middle of the game. Second, there is also significant differential behavior in the business method areas as compared to the rest of the technology centers after Alice.

Here’s my personal favorite.

Rates of Examiner § 101 Rejections in TC 3600

Table12 Examiner Rates

This table shows the numbers of examiners in the business method art units with respect to the percentage of applications in which they issued § 101 rejections after Alice. The first row shows that during the sampled periods since Alice, 58 business methods examiners issued § 101 rejections in 100% of their applications, for a total of 443 applications. Twenty examiners issued § 101 rejections for between 90% and 99% of their cases, covering 370 applications. In short, 199 examiners issued § 101 rejections more than 70% of the time, covering 3,304 applications or about 70.6% of all applications. This is not “treading carefully.”

We find similar, though less dramatic, trends and variations in TC 1600 which handles biotechnology, pharma, and chemistry.

Percent of all Actions with § 101 Rejections in TC 1600 Work Groups

Table10 1600 101 Rej Rate

The red line separate pre-Mayo/Myriad data from post-Mayo/Myriad, and the increase in the post-period is significant. Here too, the various work groups mask the more significant rejection rates in specific technology areas, with the rejection rate in microbiology first jumping up to 34.6% post-Mayo and steadily climbing to the current 53.2%.

Percent of all Actions with § 101 Rejections in TC 1600 by Technology

Table11 1600 Tech Type Rej

This table breaks down the work groups into technology types, and then these are sorting average rejection rate over the past four months. Following Alice, we see a significant increase in eligibility rejections in bioinformatics related applications–inventions that rely on analysis and identification of biological and genetic information, and which are frequently used in diagnostics and drug discovery. This is especially disconcerting because bioinformatics is critical to the development of new diagnostics, therapies and drugs.

Note as well the enormous spike in rejections for plant related applications from 0% between July 2015 and April 2015, to 50% in May 2015. This is likely a result again of the USPTO’s Interim Guidance which essentially instructed examiners to reject any claim that included any form of a natural product.

At least pesticides and herbicides are safe from Alice, since we definitely need more of those. The irony is that the more pesticides and herbicides that come to market, the more we need bioinformatics inventions to identify and treat conditions potentially resulting from these products.

Alice at the Board

The Patent Trial and Appeal Board has been even more hostile to software and business methods patents under the Covered Business Method review program:

Total Petitions

Petitions Granted

Percent Invalid

PTAB CBM Institution on § 101

72

64

89%

PTAB Final Decisions on § 101

27

27

100%

Covered Business Method review is available for patents that claim “a method, apparatus, or operation used in the practice, administration, or management of a financial product or service.” The Board takes a very broad view of what constitutes a financial product or service: if the patent specification happens to mention that the invention may be used in a financial context such as banking, finance, shopping or the like, then that’s sufficient. The Board has found CBM standing in 91% of petitions, and instituted trial in 89% of petitions asserting § 101 invalidity. Once a CBM trial has been instituted, the odds are heavily in the petitioner’s favor: of the 27 final CBM decisions addressing § 101, the Board has found for the petitioner 100% of the time.

Finally, we look at the Board’s activity in handling ex parte appeals from § 101 rejections for the period of March 1, 2015 to May 30, 2015:

  • 32 Ex Parte Decisions on § 101, with 15 in TC 3600.
  • 28 Affirmances overall, 13 in TC 3600
  • Two Reversals on § 101, both in TC 3600
  • Four New Grounds of Rejection for § 101

Following suit with how the Board is handling CBMs, they are also heavily supporting examiners in affirming § 101 rejections. More disconcerting is the trend of new grounds of rejection under § 101. While only four were issued in this period, there have been several dozen since Alice. In this situation, the applicant has appealed, for example, a § 103 rejection. The Board can reverse the examiner on that rejection, but then sua sponte reject all of the claims under § 101. What are the odds that the examiner will ever allow the case? Close to zero. What are the odds that an appeal back to the Board on the examiner’s next § 101 rejection will be reversed? If the Board’s 100% rate of affirming its CBM institution decisions on § 101 is any indication, then you know the answer.

Conclusions

Looking at the overall context of the Alice decision, it’s my view that Supreme Court did not intend this landslide effect. While they were certainly aware of the concerns over patent trolls and bad patents, they framed their decision not as a broadside against these perceived evils, but as simple extension of Bilski and the question of whether computer implementation of an abstract idea imparts eligibility. At oral argument, the members of the Court specifically asked if they needed to rule on the eligibility of software and they were told by CLS and the Solicitor General that they did not. To the extent that there is broad language in that opinion, it is the cautionary instructions to the courts to avoid disemboweling the patent law from the inside, and the emphasis on preemption of fundamental ideas—not just any ideas—as the core concern of the exclusionary rule. The evidence above shows that these guideposts have been rushed past quite quickly on the way to some goal other than the preservation of intellectual property rights.

If the present trends hold, and I see no reason to suggest that they will not, we will continue to see the zone of patent eligibility curtailed in software (not to mention bio-technology after Mayo and Myriad). Indeed, the more advanced the software technology—the more it takes over the cognitive work once done exclusively by humans, the more seamless it becomes in the fabric of our daily lives—the less patent eligible it is deemed to be by the courts and the USPTO. What technologies will not be funded, what discoveries will not be made, what products will never come to market we do not know. What we do know is this: there is only one law that governs human affairs and that is the law of unintended consequences.

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Federal Circuit Threatens Innovation: Dissecting the Ariosa v. Sequenom Opinion

By Patent Publius

Earlier this month, the Federal Circuit issued its opinion in Ariosa v. Sequenom, a closely-watched biotechnology case with significant repercussions for patent-eligibility analysis generally. Unfortunately, the Federal Circuit misapplies the Supreme Court’s analytical framework from Mayo v. Prometheus, striking down Sequenom’s important innovation for the prenatal diagnosis of fetal abnormalities. The shame here is that the Mayo opinion itself was unnecessarily broad, and the Federal Circuit has now interpreted it to be even broader.

Section 101 of the Patent Act provides that “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter . . . may obtain a patent therefor,” but there are judicial exceptions for “laws of nature, natural phenomenon, and abstract ideas.” Those exceptions are relevant here, where the Federal Circuit considers whether the claimed method of using cell-free fetal DNA (“cffDNA”) to make diagnoses is patentable subject matter.

In the Mayo opinion, the Supreme Court established a two-step analysis for determining whether method claims merely “set forth laws of nature” or instead apply those natural laws with “additional features” so as to become patent-eligible processes. The first step looks at whether the claims are directed to a patent-ineligible law of nature, and the second step looks at whether additional elements “transform the nature of the claim” into something that amounts to more than a claim on the law of nature itself.

Applying Mayo to the case at hand, the Federal Circuit’s analysis of the first step is perfunctory:

In this case, the asserted claims of the ‘540 patent are directed to a multistep method that starts with cffDNA taken from a sample of maternal plasma or serum—a naturally occurring non-cellular fetal DNA that circulates freely in the blood stream of a pregnant woman. . . . It is undisputed that the existence of cffDNA in maternal blood is a natural phenomenon. . . . The method ends with paternally inherited cffDNA, which is also a natural phenomenon. The method therefore begins and ends with a natural phenomenon. Thus, the claims are directed to matter that is naturally occurring.

The Federal Circuit’s conclusion that the method “begins and ends with a natural phenomenon” tells us very little of how this principle is to be applied generally. Certainly, the method begins with a biological sample of maternal plasma or serum that contains paternally-inherited cffDNA, and it makes sense to say that it begins with a natural phenomenon. Of course, everything begins with a natural phenomenon, so this is hardly instructive.

But it’s inaccurate to say that the method simply ends with cffDNA. The method itself takes the miniscule amount of cffDNA found in the sample and exponentially amplifies it to detectable levels. The resulting substance, unlike the beginning sample, gains significant and new utility from a diagnostic perspective. What comes out of the process is an artificially-enriched substance that, unlike the maternal plasma or serum fed into the process, can be used for many diagnostic purposes. That is, the method ends with a substance that is anything but a natural phenomenon.

Applying the second step of the Mayo framework, the Federal Circuit finds that Sequenom’s claimed methods are not significantly transformative:

Like the patentee in Mayo, Sequenom contends that the claimed methods are patent eligible applications of a natural phenomenon, specifically a method for detecting paternally inherited cffDNA. Using methods like PCR to amplify and detect cffDNA was well-understood, routine, and conventional activity in 1997. The method at issue here amounts to a general instruction to doctors to apply routine, conventional techniques when seeking to detect cffDNA. Because the method steps were well-understood, conventional and routine, the method of detecting paternally inherited cffDNA is not new and useful. The only subject matter new and useful as of the date of the application was the discovery of the presence of cffDNA in maternal plasma or serum.

The last sentence is the most perplexing: The “discovery of the presence of cffDNA in maternal plasma or serum” is what sets Sequenom’s method apart from that which was “well-understood, routine, and conventional activity in 1997.” The problem here stems from the Federal Circuit’s failure to consider the claimed method as a whole, as it purportedly sets out to do: “[W]e next consider the elements of each claim both individually and ‘as an ordered combination’ to determine whether additional elements ‘transform the nature of the claim’ into a patent-eligible application.”

Undoubtedly, some parts of Sequenom’s method were already well-known. No one denies, for example, that some of the techniques involved in amplifying and then detecting cffDNA were, in their general features, already conventional activity in the field (e.g., PCR). What makes the Sequenom method patentable is the sum of its parts, that is, the method as a whole that the Federal Circuit acknowledges to contain the new and useful discovery of cffDNA in the maternal plasma or serum.

This is the principal feature of Sequenom’s claimed invention and its central argument throughout the litigation. Yet, the Federal Circuit relegates it to one of “Sequenom’s remaining arguments” and addresses it in a brief paragraph near the end of the opinion, where it inexplicably claims: “This argument implies that the inventive concept lies in the discovery of cffDNA in plasma or serum. Even if so, this is not the invention claimed by the ’540 patent.” On the contrary, this discovery is anything but conventional, and the method as a whole transforms a natural phenomenon into something both artificial and patentable.

Overbroad (and Dangerous) Principles

The overbreadth of the Federal Circuit’s analysis threatens diagnostic methods across the board. If a method of detecting a natural phenomenon is always “directed to” that natural phenomenon, as the Federal Circuit suggests, then all such methods are prima facie patent-ineligible under the first step of the Mayo framework and must fight the uphill battle under its second step. This is particularly troubling since virtually all diagnostic tests detect natural phenomena. Moreover, the Federal Circuit’s application of the second step of the Mayo framework looks at each part of the method individually, ignoring the claimed method as a whole.

Not only is this principle breathtakingly broad in the damage it could cause to the diagnostics industry, it is neither required by, nor even consistent with, the controlling case law. Only claims to natural phenomena are per se patent-ineligible; however, applications of natural phenomena are generally patentable. Detecting a natural phenomenon is not the same thing as the phenomenon itself. It is instead a specific application of that phenomenon. While the Federal Circuit states that applications of natural phenomena are patent-eligible, it quickly proceeds to categorically suggest a principle under which all diagnostic inventions may have one foot in the Section 101 grave.

Another overly-broad principle from the Federal Circuit opinion comes from this statement: “For process claims that encompass natural phenomenon, the process steps are the additional features that must be new and useful.” This may at first seem obvious and uncontroversial, but in the context of the rest of the opinion, it proves quite problematic. The Federal Circuit cites Parker v. Flook as support: “The process itself, not merely the mathematical algorithm, must be new and useful.” But note the subtle distinction between the two quotes. The Supreme Court discussed the “process itself,” while the Federal Circuit discusses the “process steps.”

This distinction has two important effects. First, it is one of many signals in the opinion that demonstrates the Federal Circuit’s improper dissection of the claimed method into its components parts. Rather than consider whether the “process itself” is “new and useful,” as the Flook opinion had done, the Federal Circuit analyzes each step individually. There’s no consideration of how the steps integrate into the process as a whole, and there’s no mention of whether that entire process claims something other than the natural phenomenon itself.

Second, the Federal Circuit looks at each step in a very general way and ignores the details of the steps that confer patent eligibility. For example, the opinion spends much time discussing how routine the PCR method was at the time of filing. But Sequenom never claimed the PCR method itself. The Federal Circuit fails to address Sequenom’s central argument: The claimed method is a new process of detecting cffDNA by devising a novel sample source from which to extract it, namely, maternal plasma or serum. The application and adaptation of known techniques in this inventive way to a newly-discovered sample source is not conventional.

Finally, the most problematic and new principle that may emerge from this opinion is a subtle, yet very significant, extension of Mayo to invalidate claims directed to routine and conventional applications of natural laws. Mayo teaches that the mere addition of what is purely routine and conventional at the time of filing cannot save a claim directed to a law of nature: “In particular, the steps in the claimed processes (apart from the natural laws themselves) involve well-understood, routine, conventional activity previously engaged in by researchers in the field.”

The Federal Circuit appears to exclude from the patent system a routine application of a law of nature, rather than, as Mayo requires, a law of nature to which merely routine activities have been appended. That is, if one skilled in the art could, after being informed of a newly-discovered law of nature, use routine skill to arrive at the claimed invention, then that claimed invention may be invalidated under the Federal Circuit’s reasoning.

This is contrary to Mayo, and it could conceivably invalidate huge swaths of meritorious inventions. Once the principles underlying a new method are known, application of those principles to devise that method will very often be obvious. The Supreme Court has been very consistent in saying that applications of laws of nature are patent-eligible, including those applications that would have been obvious in view of newly-discovered laws of nature. It is a subtle, but important, point to recognize that Mayo did not say the opposite, as the Federal Circuit now interprets it.

The Preemption Question

One potential bright spot in the Federal Circuit’s opinion is its treatment of preemption. Instead of being a test for patent eligibility, preemption is properly understood as being solely a policy underlying eligibility exclusions. It can at most serve as an after-the-fact check on whether an already-reached conclusion of eligibility is consistent with this policy. The Federal Circuit here mostly validates this position:

The Supreme Court has made clear that the principle of preemption is the basis for the judicial exceptions to patentability. Alice, 134 S. Ct at 2354 (“We have described the concern that drives this exclusionary principal as one of pre-emption”). For this reason, questions on preemption are inherent in and resolved by the § 101 analysis. . . . Where a patent’s claims are deemed only to disclose patent ineligible subject matter under the Mayo framework, as they are in this case, preemption concerns are fully addressed and made moot.

This may ultimately be a hollow victory, however. The Federal Circuit also says: “While preemption may signal patent ineligible subject matter, the absence of complete preemption does not demonstrate patent eligibility.” The problem here is that it is impossible to ever show complete preemption because it is impossible to know at the time of filing whether something outside the claims could also be conceived. Inventions are, by definition, unforeseeable.

Moreover, allowing anything less than complete preemption to be sufficient to invalidate a claim threatens to invalidate far too much subject matter. By their very nature, patents are preemptive. Allowing courts and patent examiners to freely draw the line between allowable and prohibited levels of preemption invites unpredictable and arbitrary decisions based on personal value judgments. That very problem arose here, where the district court held the claims invalid, at least in part, because they covered what the judge deemed to be “the only commercially viable way of detecting” the embodiment of the law of nature.

The Promising Potential in Judge Linn’s Concurrence

Judge Linn’s concurrence is promising, but it falls short of its full potential. Judge Linn does a better job than the majority in recognizing and understanding the legal significance of the important facts of this case:

[N]o one was amplifying and detecting paternally-inherited cffDNA using the plasma or serum of pregnant mothers. Indeed, the maternal plasma used to be “routinely discarded,” . . . because, as Dr. Evans testified, “nobody thought that fetal cell-free DNA would be present.”

It is encouraging to see that a Federal Circuit judge has finally gone on record to point out the problems caused by ever-broadening applications of Mayo:

I join the court’s opinion invalidating the claims of the ‘540 patent only because I am bound by the sweeping language of the test set out in Mayo Collaborative Services v. Prometheus Laboratories, Inc. . . . In my view, the breadth of the second part of the test was unnecessary to the decision reached in Mayo. This case represents the consequence—perhaps unintended—of that broad language in excluding a meritorious invention from the patent protection it deserves and should have been entitled to retain.

Judge Linn errs, however, in his acquiescence that Mayo requires the majority’s conclusion. Judge Linn’s concurrence generally reads more like a dissent, but he undercuts his own criticism of Mayo and its effects by calling his opinion a “concurrence.” As he laments:

The Supreme Court’s blanket dismissal of conventional post-solution steps leaves no room to distinguish Mayo from this case, even though here no one was amplifying and detecting paternally-inherited cffDNA using the plasma or serum of pregnant mothers.

But the second half of this sentence shows the critical distinction that makes Sequenom’s claims patent-eligible, even in view of Mayo. Unlike the claims analyzed in Mayo, Sequenom’s process is new and not routinely engaged in by researchers in the field. Judge Linn even states the point better elsewhere in his own concurrence:

Unlike in Mayo, the ‘540 patent claims a new method that should be patent eligible. While the instructions in the claims at issue in Mayo had been widely used by doctors—they had been measuring metabolites and recalculating dosages based on toxicity/inefficacy limits for years—here, the amplification and detection of cffDNA had never before been done.

Judge Linn should be praised for critiquing Mayo as bad law that has led to the invalidation of untold meritorious patent claims. Unfortunately, however, he may have unintentionally contributed to the expansive scope of Mayo about which he complains by failing to factually distinguish (and hence cabin) the Supreme Court’s opinion when presented with such a good opportunity to do so.

All told, the Federal Circuit’s opinion in Ariosa v. Sequenom is a predictable, yet unfortunate, application of the Supreme Court’s disastrous reasoning in Mayo. The unintended consequences of the Supreme Court’s opinion have been further realized in the Federal Circuit’s denial of Sequenom’s innovative claimed method for diagnosing fetal abnormalities. Only time will tell how many other innovations will suffer under the Supreme Court’s careless expansion of Section 101’s patent eligibility analysis.

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High Tech Industry Innovation Intellectual Property Theory Internet Inventors Patent Law Patent Theory Patentability Requirements Software Patent Supreme Court Uncategorized

Alice Gets the Most Important Question Right

By far the most important takeaway from today’s Supreme Court decision in Alice Corp. v. CLS Bank  is the Court’s acknowledgment that “many computer-implemented claims are formally addressed to patent-eligible subject matter.”  Despite failing to alleviate the profound confusion caused by its recent §101 analysis in cases like Bilski, Myriad, Mayo, and plenty of earlier cases going all the way back to Benson, the Court once and for all put to rest the absurd notion that computer-implemented inventions are not patentable under §101.

To its credit, the Alice Court issued its opinion without once using the term “software patent,” or even the term “software.”  Many people don’t realize that this is not a term of art in patent law.  There is no category of “software patents” at the PTO, although they do have classifications for every type of invention.  The term is also not an official category in any statutes or court decisions.  Instead, “software patent” is merely a pejorative, rhetorical term used by patent-skeptics in the patent policy debate.  One hears endless arguments about “all those crappy software patents,” or how we need to “fix the software patent problem,” as if there is something deeply wrong with providing patent protection for inventions implemented through software.  But from an inventive or technological standpoint, the notion of creating a separate category of “software patents” doesn’t even make sense. Any process that is implemented through software could also be implemented through hardware (as pointed out succinctly in the IEEE’s amicus brief in Alice), and the efficiencies and design decisions that guide the choice between hardware and software are essentially irrelevant to the core patentability requirements under the Patent Act.

Of course, the Alice Court’s decision still leaves inventors (not to mention patent examiners, lawyers, and judges) with shockingly little guidance for determining whether a claim is “directed to a patent-ineligible concept,” such as an “abstract idea,” and if so, whether it “contains an ‘inventive’ concept sufficient to ‘transform’ the claimed abstract idea into  a patent-eligible application.”  Citing Mayo, the Court again acknowledges that, when broken down into their basic elements, all inventions rely upon abstract ideas, natural phenomena, or laws of nature.  If that’s the case, we might ask why the Court added any of these exceptions into its §101 analysis in the first place.  After all, the Court’s “inventive concept” test for saving claims that are directed at abstract ideas really just looks like a hybrid novelty/non-obviousness determination.

Despite the remaining doctrinal confusion about how to apply the Court’s various pronouncements about which inventions are “abstract ideas” or “laws of nature” and which are not, the Court deserves credit for getting the most important question right.  At long last, it laid to rest the ridiculous argument that software isn’t patentable.  Are claims to computer-implemented inventions patent-eligible subject matter?  Of course they are.  Inventors in the high-tech industry can at least breathe a sigh of relief.  The Court has expressly recognized that the countless incredible technological inventions that form the bedrock of our innovation economy deserve patent protection.