Banner & Witcoff offers the following content as a resource to help clients understand and prepare for the potential impact of this case:

On June 12, 2017, the Supreme Court agreed to take up Oil States Energy Services LLC v. Greene’s Energy Group. The question for the Supreme Court is: “Whether inter partes review—an adversarial process used by the Patent and Trademark Office (PTO) to analyze the validity of existing patents—violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.”

Oil States argued in its petition that the inter partes review procedure created by the America Invents Act is unconstitutional because Congress cannot delegate the power to invalidate granted patents to the U.S. Patent and Trademark Office. Oil States maintains that patents are private property rights, which can only be revoked by a federal court under Article III of the Constitution.

Greene’s Energy Group challenged Oil States’ patent on hydraulic fracturing technology at the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board after Oil States sued the company for infringement. The PTAB held in an inter partes review that several claims of the patent were invalid. The Federal Circuit affirmed the decision in May 2016.

The Supreme Court heard arguments in the case on Nov. 27, 2017, and decided on April 24, 2018, that IPRs are constitutional. Knocking the wind out of those who considered the opposite result possible, the decision garnered a majority of seven justices.

The case did not require addition to the Court’s prior formulations of the difference between private rights and public rights. “Inter partes review,” the court stated summarily, “involves one … matter: reconsideration of the Government’s decision to grant a public franchise.” Similarly, the Court stated that “inter partes review falls squarely within the public-rights doctrine.” Touching on the U.S. Patent and Trademark Office’s responsibility to grant patents, the Court stated that IPR is “simply a reconsideration of that grant.” The Congress, the Court stated, has, through the America Invents Act, “reserved the PTO’s authority to conduct [the] reconsideration” in an IPR.

The Court’s opinion turns to what it describes as a long history of the grant of a patent being a matter of public rights. The Court holds “the grant of a patent is a matter between ‘the public, who are the grantors, and … the patentee.’” Specifically, patents are characterized as “‘public franchises.’” Citing Cuozzo, the Court states that IPRs are “a second look at an earlier administrative grant of a patent.” The PTAB’s reviews, the Court states, protect a paramount public interest in seeing that “patent monopolies” are kept within legitimate scope. Making any distinction between after-patent-issuance IPR, and before-issuance patent application, does not change the public or private nature of the property.

Having categorized a patent as a “franchise,” the Court supports its conclusion with franchise cases, on such matters as permission to erect a toll bridge. After the bridge is up, “the Government can exercise its reserved authority” over the franchise. “Thus, the public rights doctrine covers the matter.”

IMPORTANT DATES
  • April 24, 2018 – Supreme Court decision
  • November 27, 2017 – Supreme Court oral arguments
  • June 12, 2017 – Supreme Court grants certiorari
  • November 23, 2016 – Oil States files petition with Supreme Court
  • May 4, 2016 – Federal Circuit issues decision
COURT DOCUMENTS
MEDIA
Banner & Witcoff attorneys are available to answer questions and discuss this case. Media inquiries should be directed to Amanda Robert (312) 463-5465 or arobert@bannerwitcoff.com.

Banner & Witcoff offers the following content as a resource to help clients understand and prepare for the potential impact of this case:

Kraft Foods Group Brands LLC filed suit against TC Heartland LLC in the U.S. District Court for the District of Delaware, alleging that Heartland’s liquid water enhancer products infringe three of Kraft’s patents. Heartland moved to transfer venue to the U.S. District Court for the Southern District of Indiana, where Heartland is headquartered. Heartland argued that Delaware was not a proper venue under § 1400(b) because the company was formed under Indiana law and has no physical presence in Delaware. The district court denied the motion to transfer. The Federal Circuit denied a petition for writ of mandamus, relying on its earlier decision in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990), holding that a defendant’s residency under § 1400(b) is determined using the definition provided in § 1391(c).

On March 27, 2017, the Supreme Court heard arguments in TC Heartland LLC v. Kraft Foods Group Brands LLC. The specific question at issue is “[w]hether the patent venue statute, 28 U.S.C. § 1400(b), which provides that patent infringement actions ‘may be brought in the judicial district where the defendant resides[,]’ is the sole and exclusive provision governing venue in patent infringement actions and is not to be supplemented by the statute governing ‘[v]enue generally,’ 28 U.S.C. § 1391, which has long contained a subsection (c) that, where applicable, deems a corporate entity to reside in multiple judicial districts.”

The Supreme Court case attracted a significant number of amicus curiae briefs offering viewpoints on the impact of VE Holding on patent litigants and businesses, including notably the current prevalence of patent infringement actions filed in the U.S. District Court for the Eastern District of Texas. However, during argument the Justices expressed a general unwillingness to delve into policy considerations and, instead, seemed intent to resolve the question presented purely as a matter of statutory construction. Justice Breyer commented that he didn’t know whether the concentration of cases in East Texas was “good, bad or indifferent.”

Heartland was questioned on whether the Supreme Court’s ruling in Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957), which held that § 1391(c) had no applicability to the question of venue in patent infringement actions, was controlling because the defendant in the case at issue is a limited liability company (LLC) rather than a corporation. Heartland urged that the principles announced in Fourco Glass still apply, and that the residency of an LLC can be resolved by looking to state law. Justice Ginsburg commented that Heartland was advocating for an unusually narrow definition of venue not found in other areas of law.

The Justices asked Kraft whether § 1400(b) is rendered superfluous by the Federal Circuit’s interpretation of § 1391(c). Kraft argued that 1988 amendments were intended to significantly expand venue, and that it was impractical for Congress to amend every instance in which a specific venue statute was implicated. Kraft also pointed out that § 1400(b) still could apply to defendants who are natural persons. Chief Justice Roberts questioned whether the 1988 amendments were actually intended to overrule Fourco Glass. Justice Kagan also appeared skeptical, questioning whether “for 30 years the Federal Circuit has been ignoring our decision.”

On May 22, 2017, the Supreme Court held that “a domestic corporation ‘resides’ only in its State of incorporation for purposes of the patent venue statute.” The decision reversed the Federal Circuit and confirmed decades-old Supreme Court precedent that the patent venue statute, § 1400(b), does not incorporate a broader definition of residency found in the general venue statute, § 1391(c).

Writing for a unanimous Court with Justice Gorsuch taking no part in consideration or decision of the case, Justice Thomas explained that “[t]he current version of § 1391 does not contain any indication that Congress intended to alter the meaning of § 1400(b) as interpreted in Fourco.”

While the Court’s ruling presumably will result in the case below being transferred out of the U.S. District Court for the District of Delaware, the broader impact of the decision actually could lead to a higher concentration of patent infringement actions in Delaware, where many businesses are incorporated.

IMPORTANT DATES
  • May 22, 2017 – Supreme Court issues decision
  • March 27, 2017 – Supreme Court hears arguments
  • December 14, 2016 – Supreme Court grants TC Heartland’s petition for a writ of certiorari
  • September 12, 2016 – TC Heartland files petition for a writ of certiorari with Supreme Court
  • April 29, 2016 – Federal Circuit issues decision
COURT DOCUMENTS
MEDIA
Banner & Witcoff attorneys are available to answer questions and discuss this case. Media inquiries should be directed to Amanda Robert (312) 463-5465 or arobert@bannerwitcoff.com.

Banner & Witcoff offers the following content as a resource to help clients understand and prepare for the potential impact of this case:

Promega Corp. licensed the Tautz patent (U.S. Reissue No. 37984), which claims a toolkit for genetic testing, to Life Technologies Corp. for the manufacture and sale of the kits in limited licensed law enforcement fields worldwide.

One of the kit’s five components, an enzyme known as the Taq polymerase, was manufactured by Life Technologies in the United States and then shipped to the United Kingdom, where it was combined with the other four other kit components and sold. No U.S. infringement would be found for kit sales made outside the United States, but for one part of the patent statute – 35 U.S.C. §271(f)(1), which reads as follows:

“Whoever without authority supplies or causes to be supplied in or from the United States all or a substan­tial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the com­bination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.”

When Life Technologies began selling the kits outside of its licensed fields of use, Promega sued, claiming that under 35 U.S.C. §271(f)(1), such activity was U.S. patent infringement, since Section 271(f)(1) prohibits the supply from the United States of “all or a substantial portion of the components of a patented invention” for combination abroad.

In the district court case, the jury returned an infringement verdict ($52 million) in favor of Promega, but the court granted Life Technologies’ motion for judgment as a matter of law, holding that §271(f)(1)’s phrase “all or a substantial portion” did not encompass the supply of a single component of a multicomponent invention.

On appeal, the Federal Circuit reversed. In a 2-1 decision, the court held that a single important component could constitute a “substantial portion” of the components of an invention under §271(f)(1) and found the Taq poly­merase to be such a component. The Federal Circuit concluded that one dictionary definition of “sub­stantial” is “important” or “essential,” which it read to suggest that a single important component can be a “‘sub­stantial portion of the components’” of a patented inven­tion.

In its 7-0 decision (with Chief Justice Roberts not participating), the Supreme Court reversed the decision of the Federal Circuit, holding that the supply of a single component of a multi-component invention for manufacture abroad does not give rise to §271(f)(1) liability. Quantity trumps quality.

Because only a single component of the patented invention at issue here was supplied from the United States, the case was reversed and remanded to the Federal Circuit.

IMPORTANT DATES
  • Feb. 22, 2017 – Supreme Court issues decision
  • Dec. 6, 2016 – Supreme Court hears arguments
  • June 27, 2016 – Supreme Court grants petition for a writ of certiorari
  • June 26, 2015 – Life Technologies files petition for a writ of certiorari with Supreme Court
  • Dec. 15, 2014 – Federal Circuit issues decision
COURT DOCUMENTS
MEDIA
Banner & Witcoff attorneys are available to answer questions and discuss this case. Media inquiries should be directed to Amanda Robert (312) 463-5465 or arobert@bannerwitcoff.com.

Banner & Witcoff offers the following content as a resource to help clients understand and prepare for the potential impact of this case:

On February 12, 2016, the U.S. Court of Appeals for the Federal Circuit, in an en banc opinion, ruled in favor of Banner & Witcoff client Lexmark International, Inc., in Lexmark International v. Impression Products, finding the “first sale” doctrine under patent law does not apply to: (1) patented articles sold subject to restrictions on resale and reuse communicated to the buyer at the time of sale; and (2) patented articles first sold outside of the United States.

The Federal Circuit agreed with Lexmark’s arguments that a patentee may conditionally license the manufacture, sale, and/or use of patented articles that otherwise remain the subject to patent-law restrictions. The Federal Circuit also agreed with Lexmark’s arguments that sales of a patented product outside the United States do not exhaust a patent owner’s right to enforce its patent rights in the United States. 

On December 2, 2016, the Supreme Court granted Impression Products’ petition to hear the case. Justices considered:

(1) Whether a “conditional sale” that transfers title to the patented item while specifying post-sale restrictions on the article’s use or resale avoids application of the patent-exhaustion doctrine and therefore permits the enforcement of such post-sale restrictions through the patent law’s infringement remedy; and (2) whether, in light of this court’s holding in Kirtsaeng v. John Wiley & Sons, Inc., that the common-law doctrine barring restraints on alienation that is the basis of exhaustion doctrine “makes no geographical distinctions,” a sale of a patented article – authorized by the U.S. patentee – that takes place outside the United States exhausts the U.S. patent rights in that article.

On May 30, 2017, the Supreme Court changed the law of patent exhaustion – a defense to infringement that holds that patent owners lose their rights after an authorized sale – and limited the ability of patent owners to control the use of patented products once they are sold.

In its decision, the Supreme Court held that the doctrine of patent exhaustion means that post-sale restrictions are not allowed and that U.S. patent rights are exhausted once a patent owner or its distributors sell a patented product anywhere in the world.

The justices said the Federal Circuit was wrong to hold that patent owners can impose restrictions on how patented items can be used or sold in the United States after they are sold and that U.S. patent rights remain in place if a product is first sold in another country.

IMPORTANT DATES
  • May 30, 2017 – Supreme Court decision
  • March 21, 2017 – Supreme Court oral arguments
  • Dec. 2, 2016 – Supreme Court grants certiorari
  • Feb. 12, 2016 – Federal Circuit issues en banc decision
 COURT DOCUMENTS
 MEDIA
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Banner & Witcoff offers the following content as a resource to help clients understand and prepare for the potential impact of this case:

On June 20, 2016, the Supreme Court decided Cuozzo Speed v. Lee, Inc., affirming the Federal Circuit’s judgment in full, thus resolving two significant issues for inter partes review proceedings before the Patent Trial and Appeal Board under the America Invents Act.

First, the Court held that the decision of the PTAB on whether to institute an IPR proceeding is not judicially reviewable unless it involves a constitutional question as to the institution decision. The Court noted that 35 U.S.C. §314(d) states that the “determination by the [Patent Office] whether to institute an inter partes review under this section shall be final and nonappealable.” The Court stated that “where a patent holder merely challenges the Patent Office’s ‘determin[ation] that the information presented in the petition . . . shows that there is a reasonable likelihood’ of success ‘with respect to at least 1 of the claims challenged,’ §314(a), or where a patent holder grounds its [argument] in a statute closely related to that decision to institute [an IPR], §314(d) bars judicial review.” The Court went on to state that in this case, the patent holder’s argument that the petition “was not pleaded ‘with particularity’ under §312 [was] little more than a challenge to the Patent Office’s conclusion, under §314(a), that the ‘information presented in the petition’ warranted review.” The Court concluded that §314(d) barred the patent holder’s efforts to attack the Patent Office’s determination to institute the IPR.

Second, the Court held that the Patent Office had legal authority under 35 U.S.C. §316(a)(4) to issue its regulation requiring the agency, when conducting an IPR, to give a patent claim “its broadest reasonable construction in light of the specification of the patent in which it appears.” 37 CFR §42.100(b). In doing so, the Court rejected the patent owner’s argument that an IPR was a “judicial” proceeding that required the “plain and ordinary meaning” claim construction as required in litigation. The Court noted that in significant respects, an IPR is less like a judicial proceeding and more like a specialized agency proceeding: (i) parties that initiate the proceeding need not have a concrete stake in the outcome; indeed, they may lack constitutional standing; (ii) challengers need not remain in the proceeding; rather, the Patent Office may continue to conduct an IPR even after the adverse party has settled, §317(a); (iii) as the case here, the Patent Office may intervene in a later judicial proceeding to defend its decision—even if the private challengers drop out; and (iv) the burden of proof in an IPR is different than in the district courts, i.e., the IPR challenger (or the Patent Office) must establish unpatentability “by a preponderance of the evidence,” while in district court, a challenger must prove invalidity by “clear and convincing evidence.”

IMPORTANT DATES
  • June 20, 2016 – Supreme Court issues decision
  • April 25, 2016 – Supreme Court hears arguments
  • Jan 15, 2016 – Supreme Court grants Cuozzo’s petition for a writ of certiorari
  • October 6, 2015 – Cuozzo files petition for a writ of certiorari with Supreme Court
  • July 8, 2015 – Federal Circuit issues decision
COURT DOCUMENTS
MEDIA
Banner & Witcoff attorneys are available to answer questions and discuss this case. Media inquiries should be directed to Amanda Robert (312) 463-5465 or arobert@bannerwitcoff.com.
Banner & Witcoff offers the following content as a resource to help clients understand the Leahy-Smith America Invents Act:

On March 8, 2011, the U.S. Senate voted 95 to 5 to pass the Patent Reform Act of 2011 (S. 23). It was introduced by Senator Patrick Leahy on Jan. 25, 2011. On June 23, 2011, the U.S. House of Representatives approved the America Invents Act (H.R. 1249). It was introduced by Congressman Lamar Smith on March 30, 2011, and approved by the House Judiciary Committee in a 32-to-3 vote on April 14, 2011. On Sept. 8, 2011, the U.S. Senate approved the Leahy-Smith America Invents Act (H.R. 1249), finalizing congressional acceptance of long-anticipated U.S. patent reform.

On Sept. 16, 2011, President Barack Obama signed into law the Leahy-Smith America Invents Act (AIA), which introduced the greatest overhaul of patent law since 1952, and transformed many aspects of the patent landscape in the United States.

The AIA enacted several significant provisions, including the transition from a “first-to-invent” system to a “first-inventor-to-file” system; and the establishment of new post-issuance proceedings, such as the inter partes review, post grant review, transitional program for covered business method patents, derivation proceeding and supplemental examination. The act also clarified rules relating to ex partereexamination and made available preissuance submissions.

Please click the links below for more information on these post-issuance proceedings, which are currently available at the USPTO to third parties and patent owners:

Inter Partes Review
Inter partes review (IPR) is a new trial proceeding conducted at the Patent Trial and Appeal Board to review the patentability of one or more claims in a patent only on a ground that could be raised under 35 U.S.C. §§ 102 or 103, and only on the basis of prior art consisting of patents or printed publications.

The inter partes review process begins with a third party (a person who is not the owner of the patent) filing a petition after the later of either: (1) nine months after the grant of the patent or issuance of a reissue patent; or (2) if a post grant review is instituted, the termination of the post grant review. However, pursuant to H.R. 6621, the original nine-month statutory waiting period has been eliminated for all currently issued patents and those with an effective filing date prior to March 16, 2013. Thus, inter partes review proceedings can be immediately filed on these patents. The patent owner may file a preliminary response to the petition.

An inter partes review may be instituted upon a showing that there is a reasonable likelihood that the petitioner would prevail with respect to at least one claim challenged. If the proceeding is instituted and not dismissed, a final determination by the Board will be issued within one year (extendable for good cause by six months).

The AIA authorizes the Office to set standards and procedures for the taking of discovery during an inter partes review, including that discovery be limited the depositions of witnesses submitting affidavits or declarations and what is otherwise necessary in the interest of justice. Routine discovery includes cited documents, cross-examination of declaration testimony and information inconsistent with positions advanced during the proceeding. The parties may agree mutually to provide additional discovery or either party may file an authorized motion seeking additional discovery. A party dissatisfied with the final written decision in an inter partes review may appeal to the Federal Circuit.

The procedure for conducting inter partes review took effect on Sept. 16, 2012, and applies to any patent issued before, on or after Sept. 16, 2012.

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Post Grant Review
Post grant review is a new trial proceeding conducted at the Patent Trial & Appeal Board to review the patentability of one or more claims in a patent on any ground that could be raised under 35 U.S.C. § 282(b)(2) or (3).

The post grant review process begins with a third party filing a petition on or prior to the date that is nine months after the grant of the patent or issuance of a reissue patent. The patent owner may file a preliminary response to the petition. A post grant review may be instituted upon a showing that, it is more likely than not that at least one claim challenged is unpatentable. If the proceeding is instituted and not dismissed, a final determination by the Board will be issued within one year (extendable for good cause by six months).

The AIA authorizes the Office to set standards and procedures for the taking of discovery during a post grant review, including that discovery be limited to evidence directly related to factual assertions advanced by either party in the proceeding. Routine discovery includes cited documents, cross-examination of declaration testimony and information inconsistent with positions advanced during the proceeding. The parties may agree mutually to provide additional discovery or either party may file an authorized motion seeking additional discovery. A party dissatisfied with the final written decision in a post grant review may appeal to the Federal Circuit.

The procedure for conducting post grant review took effect on Sept. 16, 2012, and generally applies to patents issuing from applications subject to first-inventor-to-file provisions of the AIA.

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Transitional Program for Covered Business Method Patents
The transitional program for covered business method patents (TPCBM) is a new trial proceeding conducted at the Patent Trial & Appeal Board to review the patentability of one or more claims in a covered business method patent.

A covered business method review is available for all patents issuing from applications subject to first-inventor-to-file provisions of the AIA, as well as those patents issuing from applications subject to the first-to-invent provisions in current Title 35, provided that the patent is drawn to a covered business method. The AIA specifies that a covered business method patent is a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration or management of a financial product or service, except that the term does not include patents for technological inventions. The petitioner bears the burden to demonstrate that the challenged patent is a covered business method patent and that at least one claim of the challenged patent is not directed to a technological invention to show that the petitioner has standing to proceed. The showing for both covered business method patent and technological invention is based on what is claimed.

The AIA does not specify what a patent for a technological invention covers, and therefore, the Office has promulgated a rule for technological inventions. In determining whether a patent is for a technological invention, the following will be considered on a case-by-case basis: whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution.

TPCBM proceedings employ the standards and procedures of a post grant review (including discovery), with certain exceptions. For example, for first-to-invent patents, only a subset of prior art is available to support the petition. Further, a person may not file a petition for a TPCBM proceeding unless the person or the person’s real party in interest or privy has been sued for infringement of the patent or charged with infringement under the patent. A party dissatisfied with the final written decision in a covered business method review may appeal to the Federal Circuit. A covered business method review is statutorily required to be completed within one year of institution, except that the time may be extended up to six months for good cause.

The procedure for conducting TPCBM review took effect on Sept. 16, 2012, but only applies to covered business method patents. The program will sunset for new TPCBM petitions on Sept. 16, 2020.

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Derivation Proceedings
A derivation proceeding is a new trial proceeding conducted at the Board to determine whether (i) an inventor named in an earlier application derived the claimed invention from an inventor named in the petitioner’s application, and (ii) the earlier application claiming such invention was filed without authorization.

An applicant subject to the first-inventor-to-file provisions may file a petition to institute a derivation proceeding only within one year of the first publication of a claim to an invention that is the same or substantially the same as the earlier application’s claim to the invention. The petition must be supported by substantial evidence that the claimed invention was derived from an inventor named in the petitioner’s application. The AIA provides that where a derivation proceeding is instituted and not dismissed, the Board shall issue a written decision that states whether an inventor named in an earlier application derived the claimed invention from an inventor named in the petitioner’s application without authorization. With respect to derivation proceedings, 35 U.S.C. § 135 was amended to eliminate patent interference proceedings except to the extent that they are limited to the issue of derivation. It appears that the “interest of justice” standard will be used by the Board in deciding requests for additional discovery in derivation proceedings. A party dissatisfied with a final decision in a derivation proceeding may appeal to district court or the Federal Circuit.

The procedure for derivation took effect on March 16, 2013.

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Reexamination

Ex parte reexamination
The reexamination statute and rules permit any person to file a request for an ex parte reexamination containing certain elements and the fee required under 37 CFR § 1.20(c)(1). The Office initially determines if “a substantial new question of patentability” (35 U.S.C. § 303(a)) is presented. If such a new question has been presented, reexamination will be ordered. The reexamination proceedings that follow the order for reexamination are very similar to regular examination procedures in patent applications. The Rules relating to ex parte reexamination were effectively unchanged by the AIA. The AIA did clarify, however, that the patent owner can appeal only a negative decision of the PTAB or BPAI to the CAFC.

Inter partes reexamination
Inter partes review replaces inter partes reexamination as an avenue for a third party’s patentability challenge and the provision in the AIA for inter partes review became effective on Sept. 16, 2012. Pending inter partes reexaminations will not be converted into inter partes review proceedings. Proceedings for inter partes reexamination filed prior to Sept. 16, 2012, will proceed to conclusion even if the proceedings last beyond Sept. 16, 2012. Any request for inter partes reexamination filed on or after Sept. 16, 2012, will not be granted.

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Supplemental Examination Request
The patent owner may request a supplemental examination for a patent so that the Office can consider, reconsider or correct information believed to be relevant to the patent. A third party is not permitted to seek a supplemental examination. The patent owner may present any information believed to be relevant to the patent. The information is not limited to patents or printed publications, but instead may include information concerning any ground of patentability, such as patent eligible subject matter, anticipation, obviousness, written description, enablement, best mode and indefiniteness.

A patent owner may request supplemental examination of any patent during the period of enforceability of the patent. Within three months from the filing date of a request for supplemental examination from a patent owner, the Office will determine whether any of the items of information filed with the request raises a substantial new question of patentability. An item of information includes a document containing information, believed to be relevant to the patent, that the patent owner requests the Office to consider, reconsider or correct. An item of information is not limited to patents and printed publications and may include, for example, a sales receipt or invoice. If the information is not, at least in part, contained within or based on any document filed as part of the request, the discussion within the body of the request relative to the information will be considered to be an “item of information.” For example, if a discussion of a potential application of 35 U.S.C. § 101 to patent claim 1 is wholly contained within the body of the request and is not based, at least in part, on any supporting document, then the discussion in the request will be considered to be an item of information. A request for supplemental examination may include up to 12 items of information.

If a substantial new question of patentability is found for any item of information, then the Office will order an ex parte reexamination of the patent. An ex parte reexamination ordered as a result of a supplemental examination request will be conducted in accordance with the existing rules governing ex parte reexamination, except that:(i) the patent owner will not have the right to file a patent owner statement; and (ii) the Office will address each substantial new question of patentability without regard to whether it is raised by a patent or printed publication.

The effective date for the supplemental examination provision in the AIA was Sept. 16, 2012.

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Preissuance Submissions
A third party may file a submission in any non-provisional utility, design or plant application, as well as in any continuing application, even if the application to which the submission is directed has been abandoned or has not been published. Third-party submissions may not be filed in any issued patent, reissue application or reexamination proceeding. Any member of the public may file a third-party submission, including private persons and corporate entities. However, the third party may not be the applicant or any individual who has a duty to disclose information with respect to the application under 37 C.F.R. § 1.56. A third party may file any patents, published patent applications or other printed publications of potential relevance to the examination of a patent application.

The effective date for the preissuance submission provision in the AIA was Sept. 16, 2012.

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LEGISLATION
OTHER DOCUMENTS
MEDIA

Banner & Witcoff attorneys are available to answer questions and discuss patent reform. Media inquiries should be directed to Amanda Robert at (312) 463-5465 or arobert@bannerwitcoff.com.

Banner & Witcoff offers the following content as a resource to help clients understand and prepare for the potential impact of this case:

Alice’s patents relate to a computerized trading platform used for conducting financial transactions. Under the claimed invention, a third party “settles” (oversees and ensures) obligations between a first and second party so as to eliminate the risk that one party will perform while the other will not.

CLS allegedly began infringing the Alice patents in 2002. After licensing negotiations failed, CLS filed declaratory judgment in the District Court of D.C., asserting invalidity and noninfringement. The District Court granted summary judgment of invalidity, holding that Alice’s patents constituted patent ineligible abstract ideas under § 101.

The district court explained that the method “of employing an intermediary to facilitate simultaneous exchange of obligations in order to minimize risk” is a “basic business or financial concept.” Thus, the court continued, a “computer system merely ‘configured’ to implement an abstract method, is no more patentable than an abstract method that is simply ‘electronically’ implemented.”

At the Federal Circuit, a three-judge panel reversed the district court, holding that computer-implemented inventions like Alice’s are eligible under § 101 unless it is “manifestly evident” that the claims are about an abstract idea. To be “manifestly evident,” the “single most reasonable understanding” must be “that a claim is directed to nothing more than a fundamental truth or disembodied concept, with no limitations in the claim attaching that idea to a specific application.”

CLS petitioned for rehearing en banc, and after granting the petition, the Federal Circuit vacated the earlier panel opinion, reinstated the district court’s holding and ultimately issued six separate opinions spanning more than 125 pages. The Court split 5-5 with respect to the eligibility of Alice’s computer system claims and failed to offer a majority-endorsed approach for determining whether a computer-implemented invention is a patent-ineligible, abstract idea.

In urging the Supreme Court to grant its cert petition, Alice pointed to the Federal Circuit’s “inability to make a decision” and the apparent “enormous confusion that exists” as evidence that prompt intervention is necessary. The Supreme Court granted the petition and heard arguments on March 31, 2014.

In a unanimous opinion authored by Justice Thomas on June 19, 2014, the Court held in Alice Corp. v. CLS Bank Int’l, that all the patent claims in the case, meaning all method, system and “computer-readable medium” claims, were not patent eligible.

While three Justices in concurrence would have decided the case on the principle that no business method patents should exist whatsoever, their principle was not implemented by the whole of the Court. The Court’s test of eligibility, in contrast, is more nuanced blocking patents on fundamental, long-existing practices of human activity, implemented generically on computers, but leaving other practices and implementations open to the possibility of patenting. The question of whether an improvement in computer functioning, or an improvement in non-computer technology or a technical field, will be required for a computer-implemented invention will be a central focus of a foreseeably unending debate.

IMPORTANT DATES
  • June 19, 2014 – Supreme Court issues decision
  • March 31, 2014 – Supreme Court hears oral argument
  • Dec. 6, 2013 – Supreme Court grants Alice’s petition for a writ of certiorari
  • Sept. 4, 2013 – Alice files petition for a writ of certiorari with U.S. Supreme Court
  • May 10, 2013 – Federal Circuit issues en banc decision Oct. 9, 2012 – Federal Circuit orders en banc rehearing
  • July 9, 2012 – Federal Circuit issues panel decision
COURT DOCUMENTS 
USPTO DOCUMENTS
MEDIA

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On June 13, 2016, the Supreme Court issued an unanimous decision in companion cases Halo Electronics, Inc. v. Pulse Electronics, Inc. and Stryker Corp. v. Zimmer, Inc., which rejected the Federal Circuit’s rigid, two-part test for willful infringement and awarding enhanced damages in patent cases under 35 U.S.C. § 284. Although the Supreme Court decision provides district courts with more discretion, the Supreme Court repeatedly instructed that a district court’s discretion is limited and its exercise should be “limited to egregious cases of misconduct beyond typical infringement.”

Both Halo and Stryker challenged the Federal Circuit’s Seagate standard following jury trials in which a jury found willful infringement. In Halo, the district court declined to award enhanced damages under § 284. The district court found that Pulse presented a not objectively baseless trial defense and, therefore, Halo failed to establish the objectively recklessness under the first step of Seagate.

In Stryker, the district court awarded enhanced damages and trebled the amount of damages. The Federal Circuit vacated the award of treble damages because it concluded that Zimmer had asserted reasonable defenses at trial.

In a decision authored by Chief Justice Roberts, the Supreme Court started with the plain language of 35 U.S.C. § 284 and noted that the statute had no explicit limitation or condition attached to awards of enhanced damages. Quoting its 2014 Octane Fitness decision that interpreted 35 U.S.C. § 285 (a discretionary statute relating to the award of attorney’s fees), the Supreme Court held that there is “‘no precise rule or formula’ for awarding damages under § 284.” The Supreme Court again quoted from its 2014 Octane Fitness in holding that theSeagate test was “unduly rigid, and it impermissibly encumbers the statutory grant of discretion to district courts.”

After rejecting the Seagate two-part test, the Supreme Court reiterated the discretionary nature of enhanced damages and repeated that enhanced damages should “generally be reserved for egregious cases typified by willful misconduct.”

Next, the Supreme Court found the Seagate requirement of clear and convincing evidence to prove recklessness “inconsistent with § 284.”

Finally, the Supreme Court rejected “any rigid formula for awarding enhanced damages under § 284 and the Federal Circuit’s framework for reviewing such awards.” Relying on its 2014 Highmark Inc. v. Allcare Health Management System, Inc., decision, the Supreme Court instructed the Federal Circuit to review enhanced damages awards for “an abuse of discretion.”

IMPORTANT DATES 
  • June 13, 2016 – Supreme Court issues opinion
  • Feb. 23, 2016 – Supreme Court oral arguments
  • June 22, 2015 – Halo Electronics and Stryker file petitions for writ of certiorari
  • Dec. 19, 2014 – Federal Circuit issues opinion in Stryker
  • Oct. 22, 2014 – Federal Circuit issues opinion in Halo Electronics
COURT DOCUMENTS 
MEDIA

Banner & Witcoff attorneys are available to answer questions and discuss this case. Media inquiries should be directed to Amanda Robert (312) 463-5465 or arobert@bannerwitcoff.com.

Banner & Witcoff offers the following content as a resource to help clients understand and prepare for the potential impact of this case:

On June 16, 2016, the U.S. Supreme Court ruled in Kirtsaeng v. John Wiley & Sons, Inc., that it is appropriate for a court to give substantial weight to the reasonableness of a losing party’s position when deciding whether to award attorney’s fees in a case brought under the Copyright Act as long as “all other relevant factors” are taken into account.

This case began more than 10 years ago, when Kirtsaeng, a native of Thailand, developed a successful business in which he obtained foreign-edition copies of English-language textbooks abroad below their U.S. market prices and resold them in the U.S. at a profit. Wiley sued Kirtsaeng for copyright infringement in 2008, alleging that Kirtsaeng violated Wiley’s exclusive rights in distributing its copyrighted works and in preventing unauthorized importation of its copyrighted works.

After Kirtsaeng lost at trial, the case ultimately reached the Supreme Court, which ruled in a 6-3 decision (with Justices Ginsburg, Kennedy, and Scalia in dissent) that Kirtsaeng’s actions did not constitute copyright infringement because Wiley’s exclusive rights in the textbooks that Kirtsaeng obtained abroad were exhausted under the “first sale” doctrine. In the three years that have passed since the Supreme Court’s previous ruling, the case has returned to the district court, where Kirtsaeng is now seeking an award of attorney’s fees from Wiley.

The question presented to the Supreme Court in the current Kirtsaeng case — and addressed by the June 16 opinion — is whether the lower courts’ rulings run afoul of the statutory text of the Copyright Act and the Supreme Court’s 1994 ruling in Fogerty v. Fantasy, Inc., by emphasizing the “objective reasonableness” factor over others when deciding whether to award attorney’s fees in a copyright infringement action.

In its opinion, the Court held that it is appropriate for a court to give substantial weight to the reasonableness of a losing party’s position when deciding whether to award attorney’s fees as long as “all other relevant factors” are taken into account. Because it was not clear here whether the lower courts “understood the full scope of that discretion” since their opinions primarily focused on the “objective reasonableness” factor, the Court vacated the lower courts’ rulings in this case and remanded the case back to the district court to ensure that these “other” factors — in addition to reasonableness — are also considered.

IMPORTANT DATES
  • June 16, 2016 – Supreme Court issues decision
  • April 25, 2016 – Supreme Court hears arguments
  • Jan. 15, 2016 – Supreme Court grants Kirtsaeng’s petition for a writ of certiorari
  • Sept. 24, 2015 – Kirtsaeng files petition for a writ of certiorari with Supreme Court
  • May 28, 2015 – Second Circuit issues decision
COURT DOCUMENTS
MEDIA
Banner & Witcoff attorneys are available to answer questions and discuss this case. Media inquiries should be directed to Amanda Robert (312) 463-5465 or arobert@bannerwitcoff.com.

Banner & Witcoff offers the following content as a resource to help clients understand and prepare for the potential impact of this case:

Simon Tam is the founder and bassist for the dance rock band, “The Slants.” He submitted two trademark applications for THE SLANTS. The first application was in 2010, which the U.S. Patent and Trademark Office refused based on “the mark [being] disparaging to people of Asian descent under § 2(a).” Tam again applied in 2011, and the USPTO again refused Tam’s application under § 2(a). The examiner acknowledged that “even though Mr. Tam may have chosen the mark to ‘reappropriate the disparaging term,’ . . . a substantial composite of persons of Asian descent would find the term offensive.”

Tam appealed to the Federal Circuit after the Trademark Trial and Appeal Board affirmed the examiner’s refusal to register the mark. A Federal Circuit panel affirmed the TTAB’s finding that the mark was disparaging. In addition, based on binding precedent from 1981, the panel upheld the constitutionality of Section 2(a). The Federal Circuit sua sponte vacated the panel opinion, and ordered rehearing of the case en banc.

On Dec. 22, 2015, the Federal Circuit held en banc in In Re Simon Shiao Tam that the disparagement provision of Section 2(a) of the Lanham Act is unconstitutional in violation of the First Amendment. Writing for the majority, Judge Moore explained, “The government cannot refuse to register disparaging marks because it disapproves of the expressive messages conveyed by the marks. It cannot refuse to register marks because it concludes that such marks will be disparaging to others.” After considering the provision under both strict scrutiny and intermediate scrutiny, the court concluded that, in either case, the disparagement provision fails to pass constitutional muster.

The Supreme Court granted certiorari in the case, and on June 19, 2017, held that the disparagement clause of the Lanham Act violates the Free Speech Clause of the First Amendment, and therefore is unconstitutional. The disparagement clause—which prohibits federal registration of trademarks “that may ‘disparage or bring into contempt or disrepute’ any ‘persons, living or dead’”—the Court explained, “offends a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend.”

Many speculated that a victory for Tam would pave the way for reinstatement of the trademark for Washington’s professional football team, the Redskins. Six REDSKINS trademarks were cancelled in 2014 by the TTAB, based on the determination that the term disparages Native Americans. The TTAB’s decision was upheld in July 2015 by the U.S. District Court for the Eastern District of Virginia and appealed to the Fourth Circuit in Pro-Football, Inc. v. Amanda Blackhorse et al.

IMPORTANT DATES
  • June 19, 2017 – Supreme Court decision
  • Jan. 18, 2017 – Supreme Court hears arguments
  • Sept. 29, 2016 – Supreme Court grants certiorari
  • Dec. 22, 2015 – Federal Circuit issues en banc decision
  • April 20, 2015 – Federal Circuit issues panel decision
 COURT DOCUMENTS
 MEDIA
Banner & Witcoff attorneys are available to answer questions and discuss these cases. Media inquiries should be directed to Amanda Robert (312) 463-5465 or arobert@bannerwitcoff.com.