Business Method Patent Challenge

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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.
Continue Reading Is CBM Worth the 101 Risk?

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.
Continue Reading CAFC En Banc Review Unlikely to Spur PTAB Amendments

CAFC Clarifies Burden of Production in AIA Trial Proceedings

In patent examination, once a prima facie case of obviousness is presented in a rejection by the agency, the burden of production switches to the Applicant. In AIA trials, such as Inter Partes Review (IPR) there are no “rejections,” instead, there are “grounds” of unpatentability. These grounds are first presented in a petition, and if satisfying the reasonable likelihood of prevailing standard, instituted for trial by the Patent Trial & Appeal Board (PTAB).  However, institution of a trial ground by the agency is not the same as establishing a prima facie case. 

As the Federal Circuit held yesterday in In re Magnum Oil Tools Int’l, Ltd. the burden of production does not shift to the patentee upon trial institution.
Continue Reading PTAB Institution is Not Akin to Rejection in Patent Examination

Much Maligned PRPS to Phase Out Shortly

In the rush to develop an e-filing system in the months ahead of September 16, 2012, the USPTO deployed a serviceable e-filing system for AIA trial proceedings known as the Patent Review Processing System (PRPS).  While understandable given the time constraints to pull it together, PRPS was a bare bones system that left much to be desired.  Since then, PRPS has done its job, but, the agency has been developing a new, and improved system.  Halleluljah!

That new system is called Patent Trial and Appeal Board End to End (PTAB E2E).  PTAB E2E uses a web browser…
Continue Reading PTAB To Debut New E-Filing System July 9th

High Court Upholds BRI & Appeal Bar for AIA Trial Proceedings

In Cuozzo Speed Technologies, LLC v. Lee, the Supreme Court  unanimously upheld the use of the broadest reasonable interpretation (BRI) of patent claims in AIA trial proceedings, and, upheld (6-2)  the appeal bar for AIA trial institution decisions.  While many simply assumed that the High Court would not have granted certiorari absent an interest in reversing the Federal Circuit, my take all along was that this was just a “kick of the tires” on a BRI issue the Court had not had occasion to address previously.  As I, and the rest of the patent world, have beaten the BRI topic to death, let’s move onto the second issue as this one is more than a bit murky going forward.  

To my eyes, the second issue was less predictable.  That is, did the appeal bar of 35 U.S.C. § 314(d) bar all appeals, or just interlocutory appeals of institution decisions? The High Court upheld the appeal bar, but in the process may have called into question the reviewability of a patent’s CBM eligibility as held by the Federal Circuit in Versata Development Group v. SAP America, Inc.

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Continue Reading Did Cuozzo Unravel Versata CBM Reviewability?

Instituted Grounds Can be Supported with New Evidence Not Present in Petition/Institution Decision

Within the past week, the Court of Appeals for the Federal Circuit (CAFC) has issued two significant opinions on AIA trial practice—both of which explain the critical import of the Administrative Procedure Act (APA). As discussed earlier this week, 5 U.S.C. § 554(b)(3) prevents the Patent Trial & Appeal Board (PTAB) from introducing new claim interpretation theories without notice, or opportunity to respond in SAS Institute Inc., v. ComplemenSoft LLC. On the heels of that decision comes perhaps an even more significant decision in Genzyme Therapeutic Products LP v. BioMarin Pharmaceutical Inc.

In Genzyme, the Court dispelled a widely held belief held by many practitioners and PTAB judges alike.  Namely, that an AIA trial petition must function as a storehouse for all possible evidence and arguments.  In a plainly worded opinion the Federal Circuit found that “[t]he purpose of the trial in an inter partes review proceeding is to give the parties an opportunity to build a record by introducing evidence—not simply to weigh evidence of which the Board is already aware.” (emphasis added) (here)

Simply stated, this decision is an AIA trial practice game changer.
Continue Reading CAFC Makes Clear New Evidence During AIA Trials is Expected

Pre-Suit Opinion of Counsel/PTAB Challenge Critical to Avoiding Enhanced Damages

Section 284 of the Patent Act provides that, upon a finding of patent infringement, courts “may increase the damages up to three times the amount found or assessed.” Up until this past Monday, the Federal Circuit’s en banc decision in In re Seagate Technology, LLC controlled  this determination, requiring patentees to show that an accused infringer’s actions were both objectively and subjectively reckless—both by clear and convincing evidence.

Needless to say, patentees rarely met these exacting burdens of proof.  

In most cases, accused infringers would raise ex post infringement defenses that raised “a substantial question as to the validity or non-infringement of the patent” to negate a finding of objective recklessness. In other words, even if the infringer was unaware of the colorable defense when infringement began, Seagate’s-objective prong could provide a get-out-of-jail free card if a colorable defense was later developed during trial. The ability to wait for a lawsuit was an especially cost effective tool for in-house counsel that hoped to avoid costly, proactive strategies such as procuring an opinion of counsel, or openly challenging the patent on at the PTAB.  That is, pre-suit, smoking gun evidence of infringement was readily negated by a proficient trial defense. 

The game has now changed—significantly—with the Supreme Court’s decision this week in Halo Elecs. v. Pulse Elecs (here)…
Continue Reading How The PTAB Can Maintain Your Willfulness Halo

Is the PTAB Second Choice for Your Alice Case?

Given the increased willingness of courts to dismiss Alice cases on the pleadings, petitioners may be inclined to withhold 101 grounds from CBM petitions. This is despite the fact that patent claims that qualify for a CBM challenge are often times equally susceptible to a patent eligibility challenge. That is, claims deemed CBM-eligible must satisfy a two-part test that overlaps in material respects with the Alice framework. Still, the ability to reserve the 101 issue for the court while simultaneously pursuing a CBM seems an attractive, defense strategy.

While seemingly the best of both worlds, is this two-pronged approach a smart move?

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Continue Reading Will a Failed CBM Unravel Your Alice Motion?

Impact of Concluded PTAB Proceedings on Litigation

Patent challenge proceedings of the USPTO’s Patent Trial & Appeal Board (PTAB) are designed to provide a low cost, expedited option to district court litigation. Of course, if a patent challenger is unsuccessful at the PTAB, the district court is left to make the ultimate resolution on validity.  Now several years into the PTAB’s existence, closed AIA trial records are being leveraged by the courts to resolve disputed issues of fact.  

Especially as to matters of claim scope, the PTAB’s expansion of the intrinsic record is providing courts with a short cut in assessing otherwise thorny factual determinations. Accused infringers are beginning to favorably leverage this record in related litigation—such as in a motion for summary judgment.   

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Continue Reading PTAB Trial Records Leveraged for Summary Judgement Wins

PTAB Moves to Establish More Precedential Decisions

Yesterday, the Patent Trial & Appeal Board (PTAB) announced the designation of five, additional precedential decisions.

Garmin Int’l v. Cuozzo Speed Techs LLC, IPR2012-00001, Paper 26 (Mar. 5, 2013) – This order discusses the factors considered in evaluating motions for additional discovery in IPR proceedings. Previously designated as informative, this decision has been treated as de facto precedent for quite some time.

Bloomberg, Inc. v. Markets-Alert Pty, Ltd., CBM2013-00005, Paper 32 (May 29, 2013) – This order discusses the factors considered in evaluating motions for additional discovery in CBM proceedings. (Garmin for CBMs)

Oracle Corp. v. Click-to-Call Techs, LP, IPR2013-00312, Paper 26 (October 30, 2013) (precedential only as to Section III.A.) – This decision pertains to interpretation of “served with a complaint” for purposes of triggering the one-year time bar set forth in 35 U.S.C. § 315(b).  More specifically, this decision stands for the proposition that a dismissal of a prior law suit “without prejudice” prevents that suit from triggering the time bar of 315(b).  This has also been de facto precedent at the PTAB.
Continue Reading PTAB Designates Five Precedential Decisions