Patent News

Oral argument: Deriving a royalty rate from a lump sum payment amount (posted 03/30/25)

The Federal Circuit, en banc, held oral arguments in Ecofactor v. Google LLC. The case hinges on whether Ecofactor's damages expert, David Kennedy, relied on sufficient facts to support his conclusion of an “$X” “reasonable royalty rate,” based on lump-sum payment amounts cited in prior license deals. The prior license deals, in recitals, specified that the lump sum is based on a royalty rate, while in the body of the licenses, which relate to terms to which both parties agreed, states the opposite – i.e., that the lump sum is not related to a reasonable royalty rate.

In her arguments, Google's attorney summed it as follows: the approach challenged here allows experts to transform unilateral assertions in the recitals (which the licensee has little incentive to challenge) into authoritative expert testimony that the licensee actually agreed to a particular rate and that this “undermines the jury's ability to reach a fair apportionment verdicts.”

Procedural History

Blogs:

Discretionary denials since rescission of Vidal's memorandum (posted 03/27/25)

Kyle W. Kellar of Womble Bond Dickinson surveyed recent PTAB decisions post the rescission of Vidal's “Interim Guidelines” memorandum by the PTO regarding discretionary denials of IPR petitions. “In short, recission of the Interim Guidelines has had no impact, yet” according to Kellar.

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9th Circuit: Minimum royalty "until the expiry of the last licensed patent" not a Brulotte violation (posted 03/15/25)

In C. R. Bard Inc. v. Atrium Medical Corp.,1) the 9th Circuit found that a provision of a patent license, which requires a $3.75M minimum royalty payment until expiry of the last licensed patent, was not a violation of the Brulotte Rule. The Brulotte rule originates in the Supreme Court ruling Brulotte v. Thys Co., 379 U.S. 29 (1964), and held that patent holders may not contract for royalties on any use of a patented invention that occurs after the patent has expired.

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Düsseldorf Local Division of UPC asserts jurisdiction over (non-EU) UK (posted 02/17/25)

In Fujifilm Corp. v. Kodak GmbH, before the Düsseldorf Local Division of the UPC, the court held that it has jurisdiction to render infringement and enforcement decisions implicating the UK, which is not a UPC or EU member state, because:

  • “Pursuant to Art. 4(1) Brussels Ibis Regulation, persons domiciled in a Member State [as Kodak is], whatever their nationality, shall be sued in the courts of that Member State. All the Defendants are domiciled in Germany.”
  • ”[I]n relation to claims against defendants domiciled in a Member State, all the bases for jurisdiction contained in Brussels Ibis Regulation also apply to the UPC and the same is true for the applicable case law of the ECJ. [. . .] Under the Brussels Ibis Regulation, the transferring Contracting Member State does indeed have jurisdiction over third state patent infringement actions in accordance with the case law of the ECJ. . . . The jurisdiction of the UPC is therefore not more limited than that of a national patent infringement court, as not all EU Member States have become Members of the UPCA.“
  • Summary and strategic considerations (Cross-post) (“[T]his decision provides an opportunity to bring all infringement claims before a single court and obtain a comprehensive relief in a single forum, whether or not the claims in question relate to UPC or non-UPC contracting member states.”)

For written description, "the invention is . . . whatever is now claimed." (02/14/25)

In Novartis Pharma. v. Torrent Pharma, the Fed. Cir. reversed the District of Delaware court's finding that the patent at issue failed to meet the written description requirement because it fails to describe the accused product which, while within the scope of the claims, includes improvements not mentioned in the patent. The court reasoned that, “A specification adequately describes an invention when it reasonably conveys . . . that the inventor had possession of the claimed subject matter as of the filing date.” The Fed. Cir. also uphold the lower court's finding that the claims were enabled because “enablement is judged as of the priority date.”

"Shall be the property of" is not a present assignment of a future interest (posted 02/05/25)

In Omni Medsci, Inc. v. Apple Inc. (Aug. 2, 2021), the Federal Circuit held that an employment agreement stating “Patents . . . acquired as a result of or in connection with . . . research, or other educational activities conducted by members of the University staff . . . shall be the property of the University.” The majority opinion (with J. Newman dissenting) concluded that the language “is most naturally read as a statement of intended disposition and promise of a potential future assignment, not as a present automatic transfer.

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* Summary and analysis

D. Ariz.: Failure to mark abolishes past damages (posted 01/21/25)

§ 287(a): ”[. . .] In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice.”

In Lighting Defense Group LLC v. Shanghai Sensi Electronic Engineering Co. Ltd. et al. 2), the failure of a licensed third party to mark products as patented triggered 35 U.S.C. § 287. LDG licensed its patent in May of 2020 and argued that opposing party SANSI was liable for infringement prior to that date, i.e., prior any legal requirement to mark. Based on the plain meaning of the statute, the court disagreed.

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Federal Circuit Year in Review (posted 01/11/25)

In 2024, the Federal Circuit issued eighteen opinions labeled “precedential” that were related to patent law. Quotations below omit citations and internal quotation marks. Here is a break-down:

Anticipation / Obviousness

Cytiva Bioprocess R&D AB v. JSR Corp.: Non-obviousness of novel compounds

  • Reasonable expectation of success is not needed for motivation to combine for claims directed to an inherent property of an otherwise obvious composition or process.
  • Lead-compound analysis not required when the prior art expressly suggests the modification
  • Obvious to try is obvious under § 103 when there is a design need or market pressure exists to solve the problem and there are a finite number of identified, predictable solutions.

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Palo Alto Networks, Inc. v. Centripetal Networks, LLC et al.: Motivation to combine (Patent challenger appeals from unsuccessful IPR.)

  • Patentability determinations based on obviousness must “clearly explain[] its holding or rationale regarding motivation to combine and whether the proposed combination teaches the . . . limitation.”
  • “Arguments that 'attack the disclosures of the two references individually' lack merit.”

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Pfizer Inc. v. Sanofi Pasteur Inc.: Optimization of result-effective variables (Patent owner Pfizer challenges IPR holding of invalidity.)

  • If a claimed parameter would have been recognized as result-effective, the optimization of that parameter is normally obvious.

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Virtek Vision Internat'l ULC v. Assembly Guidance Systems, Inc.: Motivation (Patent owner Virtek and patent challenger Aligned Vision cross-appeals IPR findings of a subset of challenged claims invalid.)

  • KSR did not do away with the requirement that there must exist a motivation to combine various prior art references in order for a skilled artisan to make the claimed invention. Here, the court quoted KSR stating “when there is a design need or market pressure to solve a problem and there are a finite number of identified, predictable solutions, a person of ordinary skill has good reason to pursue the known options within his or her technical grasp. If this leads to the anticipated success, it is likely the product not of innovation but of ordinary skill and common sense.” However, because the patent challenger failed to articulate any rationale or motivation for combining the references, it was “error of law” for PTAB to conclude that selection of one known coordinate system over another was obvious.

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Prior Art

Sanho Corp. v. Kaijet Tech. Int'l Ltd.: Excluding prior art under § 102(b)(2)(B) (Patent owner Sanho appeals invalidity finding by PTAB.)

  • A non-confidential, but otherwise private sale of a product embodying an invention does not qualify as a “public disclosure” for an exemption of prior art under 35 U.S.C. § 102(b)(2)(B).

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Weber v. Provisur Tech.: Printed publication requirement. (Patent challenger Weber appeals PTAB holding that Provisur's patents were not invalid.)

  • No minimum number of occasions of access is dispositive of the public accessibility inquiry.
  • It's sufficient to meet public accessibility requirement for a product manual to be obtained (1) upon purchase and (2) upon direct request.”

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Design Patents

LKQ Corp. v. GM Global Tech. Operations, LLC: Design Patent Nonobviousness (Patent challenger LKQ appeals PTAB decision upholding GM's design patent on a vehicle front fender.)

  • The court overturned the Rosen-Durling test for obviousness analysis of design patents.

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Claim Construction

IOENGINE, LLC v. Ingenico Inc.: Printed matter doctrine (Fed. Cir. reversed PTAB's invalidation of claims related to portable data processing devices.)

  • “Encrypted communications” and “program code” are not claimed for the content they are communicating, therefore they are not “printed matter” and the printed matter doctrine does not apply.

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Pacific Biosciences of California, Inc. v. Personal Genomics Taiwan, Inc.: “For identifying a single biomolecule”

  • The PTAB's construction of the phrase, “for identifying a single biomolecule” properly required an apparatus to have the capability to characterize (determine the identity of) a biomolecule by examining that biomolecule alone, with no copies created to form an ensemble for examination.

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Written Description

RAI Strategic Holdings v. Philip Morris Products: Claimed ranges (Appeal by patent owner RAI of post-grant review finding invalidity.)

  • A broader range of a variable in the application as filed provides written description support for a narrower claimed range if the disclosure “reasonably conveys to those skilled in the art that the inventor had possession of the claimed range. The court looked to whether the broad described range pertains to a different invention than the narrower (and subsumed) claimed range.

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Procedural Determinations

ZyXEL Communications v. Unm Rainforest Innovations: Motion to Amend [MTA] Pilot Program. (ZyXEL appeals PTAB's grant to UNMRI's motion to amend and finding claim 8 nonobvious; UNMRI cross-appeals on other findings.)

  • The MTA Pilot Program is designed to allow reply briefs to address and correct errors.

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SoftView LLC v. Apple Inc.: Estoppel (Patent owner SoftView appeals PTAB invalidation of all claims based on estoppel)

  • 37 C.F.R. § 42.73(d)(3)(i) is authorized by 35 U.S.C. § 316(a)(4), and the PTO therefore did not exceed its rulemaking authority in promulgating it.
  • Not patentably distinct is equivalent to substantially the same and goes beyond common law by calling for a comparison between the claims an applicant is obtaining and the finally refused or canceled claim.
  • The Board can employ principles of obviousness under KSR in determining whether a claim is patentably distinct from a prior canceled claim under 37 C.F.R. § 42.73(d)(3)(i).

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Cywee Group Ltd. v. ZTE (USA), Inc.: Joint IPR petitioners (Patent owner Cywee appeals IPR decision holding original and proposed amended claims unpatentable.)

  • Where an active party to an IPR patent challenge no longer meaningfully engages in the IPR proceeding by not filing an opposition brief to a motion to amend, a passive party can file an opposition brief to a motion to amend, even where the passive party agreed to assume the primary role only if the active party ceases to participate in the IPR.

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Koss Corp. v. Bose Corp.: Mootness/Issue Preclusion

  • Filing a (second) amended complaint does not nullify an interlocutory order, where therefore merges with a court's final judgment.

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Platinum Optics Tech. v. Viavi Solutions: Standing (Patent challenger PTOT appeals a final written decision from IPR.)

  • A party does not need Article III standing to appear before an administrative agency, but standing is required once the party seeks review of an agency's final action in a federal court.

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Speck v. Bates: Interference - (Junior party Speck appeals PTAB's decision awarding priority to Bates.)

  • A long-standing exception to section 135(b)(1), wherein an applicant can file its claim after the critical period but 'had already been claiming substantially the same invention as the patentee' during the critical period, are not time-barred. The underlying issue is . . . whether amendments to the Bates '591 application after the critical date changed the claims so that they are not substantially the same as the claims before the critical date. The Board denied Specification's motion to dismiss because it found that the later amended claims did not differ materially from the claims in other patents and patent applications Bates owned that were filed prior to the critical date because 'Speck had not directed the Board to a material limitation of the Bates involved claims that is not present in the earlier Bates claims.

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Voice Tech v. Unified Patents: Appealing after Request for Rehearing (Patent owner Voice Tech appeals from PTAB finding all challenged claims obvious.)

  • An argument not repeated in a Request for Rehearing is not forfeited: “The regulatory requirement that a rehearing request 'identify all matters the party believes the Board misapprehended or overlooked' . . . simply requires the party to identify the issues it wishes to present for rehearing. . . .”

Administrative Procedure Act

Google LLC v. EcoFactor, Inc.: Claim construction and APA (Fed. Cir. vacated PTAB's claim construction.)

  • The Administrative Procedure Act requires that parties are given notice and an opportunity to address changes in claim interpretation​.
    • “The Board may adopt a claim construction of a disputed term that neither party proposes without running afoul of the APA. The Board, however, cannot, without notice and opportunity for the parties to respond, change theories midstream by adopting a claim construction in its final written description that neither party requested nor anticipated. [. . .] [B]ecause Google had notice of the contested claim construction issues and an opportunity to be heard, the Board's claim construction of Claim 1 did not violate the APA.”


Pfizer Inc. v. Sanofi Pasteur Inc.: Director Review (Patent owner Pfizer challenges IPR holding of invalidity.)

  • Failure to abide by notice-and-comment rulemaking in promulgating Director Review procedures is “harmless” unless a party can show prejudice.

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Fed. Cir. defines "predefined" (posted 12/31/24)

In Vivint Inc. v. ADT LLC, the Federal Circuit upheld the PTAB's broad interpretation of the term, “predefined.” Claim 1 specifies, “detecting an entity entering a predefined area based at least in part on camera data.” The IPR panel, in finding that certain claims were anticipated and obvious, determined that “predefined” means “defined in advance” and that the “entire field-of-view of a camera” can be a “predefined area.” Stated the court:

Vivint contends that the Board erred by construing 'predefined area' to 'include whatever the camera sees.' It argues that such a broad construction renders 'entering a predefined area' superfluous. That is incorrect. A camera’s entire field-of-view does not automatically or necessarily correspond to a user’s region of interest. Instead, as the Board explained, 'the term “predefined area,” if applied to a camera’s entire field-of-view, would require the user to set up the camera such that the camera’s entire field-of-view would mark a perimeter [to enter] that corresponds to the user’s region of interest,' for example, by zooming in, panning out, or angling.

(Internal citations removed.)

PTAB opinion vacated for failing to consider motivation in 103 analysis (posted 12/31/24)

In Palo Alto Networks, Inc. v. Centripetal Networks, LLC et al., the Federal Circuit vacated an IPR opinion for failing to make a finding as to whether there was motivation to combine the references under § 103.

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After After Final Consideration Pilot (AFCP 2.0) (posted 12/13/24)

Time to bid a (fond?) farewell to the AFCP program at the Patent Office. IPWatchdog gives us a looking-back and a looking-ahead. Key takeaways include:

  • AFCP submissions account for 10% of application disposals.
  • The USPTO estimated the AFCP program incurred in excess of $15M annually. A proposal to charge a fee of $500 per AFCP was floated and most respondents indicated that the program as a whole was of questionable value and a fee should only be incurred in certain circumstances, e.g., when an amendment is actually entered and/or a interview granted. As a result, the USPTO opted to terminate the program entirely.

After today, applicants will need to revert to prior after-final practice, meaning that typically, only amendments that incorporate allowable subject matter into rejected independent claims (or convert allowable but objected-to dependent claims into independent claims) will be entered.

Intellectual Property as a wealth engine (posted 10/24/24)

Christopher W. Quinn, of Quinn IP Law and also professor of IP innovation and strategy at the University of Michigan, posted a thoughtful article on how IP law is relevant, and some controversial reforms. A worthwhile read!

Summary of PTAB Precedential and Informative Opinions on Eligibility (posted 09/18/24)

Ex Parte Hannun et al. -- Audio Transcription

Findings: The claims are eligible because:

  • Step 2A – Not an abstract idea
    • Normalizing an input file, generating a jitter set of audio files, generating spectrogram frames, obtaining predicted character probabilities from a trained neural network, and decodeing a transcription of the input audio using the predicted character probability outputs “are not steps that can practically be performed mentally. Nor do we see how the claimed invention recites organizing human activity.” P. 9-10
    • The claims do not recite a mathematical concept because the mathematical algorithm or formula that is disclosed in the specification is not recited in the claims. P. 10.
    • Even if the claims were considered to recite a mathematical concept, the claims are not directed to an abstract idea because the alleged judicial exception is integrated into a practical application, namely, “higher performance.”
  • Step 2B - Significantly more
    • The examiner failed to provide factual support for his conclusion that the claims do not add significantly more to the alleged judicial exception.

Ex parte Smith et al. -- Delaying execution of derivative trade

Findings: the claims are eligible because:

  • The limitations . . . recite the fundamental economic practice of derivative trading because the limitations all recite the operations that would ordinarily take place in a derivatives trading enviornment.
  • Claim 1 adds a delay to the execution of a transaction to allow other market participants to quote at the “best price” and to remove communication or computer hardware advantages among in-crowd market participants. These limitations integrate the recited judicial exception of derivative trading into a practical application.

Dissent:

  • Administrative Judge Bui dissented, stating: “These timing features themselves are not technical in nature and do not provide any 'technical solution to a technical problem' as contemplated by the Federal Circuit in DDR and Amdocs.

Ex parte Kimizuka et al. -- Golf club fitting

Exemplary claim

Ex parte Kimizuka et al. 2018-001081

Findings (citations omitted): The claims are ineligible because:

  • Under the broadest reasonable interpretation of claim 7, the recited determinations can be practically performed in the mind.

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Ex parte Savescu et al. -- Project lifecycle workflows

Ex Parte Savescu et al. (PDF)

Findings: the claims are ineligible because:

  • Overall, limitations (1.a) through (3) encompass steps for creating a workflow that organizes how people perform project tasks. [Therefore], the recited subject matter belongs to the group of certain methods of organizing human activity.
  • [The] additional limitations [i.e., a server, and a step of creating one or more project detail pages on the server]–considered in the context of claim 1 as a whole–do not integrate the abstract idea into a practical application.
  • A person . . . can create a project plan and description without a server. By creating the workflows on a server and adding proejct details to web pages, the recited server merely links the abstract idea to a computer environment. In this way, the server's involvement is merely a field of use, which does not integrate the abstract idea into a practical application.
  • As a whole, claim 1 is directed to an abstractidea on a server used in its ordinary capacity performing well-understood, routine, and conventional activities. For all these reasons, claim 1's limitations, considered individual and in combination, do not provide an inventive concept.

Ex parte Fautz -- Magnetic resonance imaging

Findings: The claims are eligible because:

  • Step 2A, Prong 1
    • The independent claims recite three mathematical formulas. [. . .] as to this idetnified concpet only, we conclude that . . . the independent claims recite an abstract idea: a mathematical concept.
  • Step 2A, Prong 2
    • [T]he additional claims elements reflect an improvement to a technology, and thus the independent claims integrate the recited mathematical concept into a practical application.
      • The mathematical calculations . . . are “a consequence of the arrangement of” the device's coils. This analysis results in an improved reconstructed image. [Therefore], the claimed invention uses the recited mathematical equations to improve the imaging system.

More . . .

Additional blurbs are accessible in categorized lists by accessing the Index link on the left (or, for small-format screens, below).

1)
Case No. 23-16020 (9th Cir. Aug. 23, 2024)
2)
2-22-cv-01476 (D. Ariz. Nov. 27, 2024), modified by this order on motion for limited reconsideration

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