By Scott A. McKeown
| August 25, 2016

Adverse CBM Determination Could Undermine District Court Alice Defense

Alice Corp. Pty, Ltd. v. CLS Bank Int’l (“Alice”) distills the patentable subject matter debate into a two-step analysis.  This analysis overlaps in significant respect with the two-part analysis for assessing whether or not a patent claim qualifies as a covered business method (“CBM”) under Section 18 of the AIA.  For this reason, CBM petitions typically advance a § 101 ground of unpatentability as a matter of course.  The similarities in analytical frameworks — particularly between the “search for an inventive concept” of Alice’s second step and the “technical solution” in CBM’s second part — have not escaped the attention of the Patent Trial and Appeal Board (“PTAB”) and district courts which have compared and sometimes referenced one to support the other.  This relationship should be of particular concern to defendants raising a § 101 invalidity defense in district court actions and should make filing/timing of a CBM petition an important strategic consideration going forward.
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By Scott A. McKeown
| August 19, 2016

Federal Holiday Treatment for Emergencies Not Unprecedented

As many recall, back on December 22nd, the USPTO's e-filing systems crashed. The outage lasted several days as the replacement of large power supplies driving the systems was time consuming. To account for the inability to file electronically during this outage (the predominant channel for accepting filings from the public), the agency issued a notice explaining that December 22nd through 24th were "considered" to be federal holidays for filing purposes.  That is, any filings falling due on December 22-24th would be accepted as timely on the next business day. Given the Christmas holiday of Friday December 25th, and the following weekend, the next business day was December 28th.

Last week, Elm 3DS Innovations, sued the USPTO in the Eastern District of Virginia to enjoin the agency from conducting Inter Partes Review (IPR) of its patents. 3DS argues that the IPRs filed against it were due to be filed on December 24th by statute, and that the agency's action to extend this due date was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, and otherwise in excess of statutory jurisdiction, authority, or limitations." (complaint here)

3DS has an uphill battle.

The USPTO has consistently interpreted the relevant statute to cover non-postal emergencies. Even agencies without a statute conveying discretionary power for such emergencies have employed the same accommodation to extend statutory deadlines.

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By Scott A. McKeown
| August 15, 2016

Amendment Practice to Remain Unpopular Regardless of In Re Aqua Products Outcome

Last Friday the Federal Circuit agreed to rehear In re Aqua Products Inc. The en banc rehearing will consider amendment practices of the Patent Trial & Appeal Board (PTAB) in AIA trial proceedings. Specifically, the Court will explore where the burdens of persuasion and production properly lie for motions to amend. To date the Court has repeatedly found the burden of persuasion to rest with the patentee for motions to amend.

While it appears likely that the Court will shift burdens away from patentees seeking amended claims before the PTAB, practically speaking, such an outcome is unlikely to make much of a difference. At the end of the day, amendments will always remain highly unattractive for patentees at the PTAB.
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By Scott A. McKeown
| August 11, 2016

Opportunity to Amend Prior to Expiration Not Enough


The Patent Trial & Appeal Board (PTAB) applies the broadest reasonable interpretation (BRI) standard of claim construction in all post-grant patent proceedings. See Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2145 (2016). The lone exception is for expired patents.  Once a patent expires, the USPTO switches to the district court “Phillips” framework. The justification for this switch is that patentee may no longer amend at expiration, and that in such cases, the district court construction should apply.

As can be appreciated, the expiration of a patent in the middle of an agency proceeding can result in inefficiencies.  Recently, the PTAB considered whether or not the expiration of a patent on appeal to the Board required a new Philips construction.  The Board determined that since there was an opportunity to amend prior to the appeal (i.e., the justification for applying BRI) that no such do-over was required.  The CAFC disagreed.

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By Scott A. McKeown
| August 2, 2016

RPI Determination Under 315(b) Focuses on Litigation Control


In determining whether a party is a real party-in-interest subject to the one-year statutory bar of 35 U.S.C. § 315(b), the focus of the Patent Trial & Appeal Board (PTAB) to date has been honing in on the exercise of control over the earlier filed patent infringement lawsuit. The PTAB recently considered whether control of the allegedly infringing activity is enough to transform a party not named in the original complaint to an RPI for 315(b) purposes in Department of Justice v. IRIS Corporation Berhad, Case IPR2016-00497, slip op. at 7-9 (PTAB Jul. 25, 2016) (Paper 7).
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