Litigation Funding in Uncertain Patent Eligibility Times

A patent is an exclusive right. This means that the owner of a patent can prevent others from engaging in activities that are covered by an issued patent. But as is true with any right, a patent is only worth something if the owner is willing to take action to preserve the rights and litigate against those who are treading on the rights granted. In the United States, that means litigation in federal district court, which can easily cost millions of dollars.

Today, given the climate within the industry, being willing to take action when infringement is suspected is only the first hurdle. Yes, the decision to undertake litigation is a difficult one regardless of whether it is made by a company or an individual. Attention is diverted from other endeavors and opportunities, and there is a very real financial cost associated with litigating a dispute. Litigation is not free.

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A patent conversation with Bruce Kisliuk

Bruce Kisliuk retired from the United States Patent and Trademark Office last summer as the Deputy Commissioner for Patent Administration after a 30+ year career at the Office. He is now a senior patent counselor with Wilson Sonsini Goodrich & Rosati. I had always wanted to interview Kisliuk, but the opportunity never presented itself until recently. I interviewed Kisliuk on November 24, 2015, in a wide ranging conversation that lasted nearly 90 minutes.

In addition to a prolonged and detailed “get to know you” conversation where we dive into his musical tastes, that he is a history buff, and not at all into either Star Trek or Star Wars, we talked substantive patent law for an hour. What follows are the highlights of our conversation.

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Federal Circuit refuses en banc hearing in Ariosa v. Sequenom

Several weeks ago, in a per curiam decision with only Judge Newman dissenting, the United States Court of Appeals for the Federal Circuit denied the Sequenom petition for rehearing en banc. See Ariosa Diagnostics, Inv. v. Sequenom, Inc. Sequenom, the patent holder, had already hired Thomas Goldstein, the founder of SCOTUS blog and renowned Supreme Court advocate, as a part of their appellate team. The case will now undoubtedly move to the Supreme Court. We can only hope that the Supreme Court will take the case and once and for all decide whether they intended for all genomic innovations, no matter how revolutionary, to be patent-ineligible.

If you look quickly at the per curiam decision, you might mistakenly believe that there is a unanimity of thought at the Federal Circuit on the issue of patent eligibility. After all, the case was denied en banc rehearing. But there were three separate written opinions, two concurring with the denial and only Judge Newman dissenting. In truth, if you take the time to read the opinions, you realize that all four of the Judges who signed opinions believe the Supreme Court is wrong on patent eligibility. Given Judge Linn’s concurring opinion at the panel level, we can safely conclude that he too believes the Supreme Court is wrong on this matter.

After the brief per curiam decision, several written opinions followed. First, Judge Lourie, who was joined by Judge Moore, wrote that while the claims at issue may be susceptible to challenge for being too broad or indefinite, “they should not be patent-ineligible on the ground that they set forth natural laws or are abstractions.”

Lourie would go on to conclude:

In sum, it is unsound to have a rule that takes inventions of this nature out of the realm of patent-eligibility on grounds that they only claim a natural phenomenon plus conventional steps, or that they claim abstract concepts. But I agree that the panel did not err in its conclusion that under Supreme Court precedent it had no option other than to affirm the district court.

Even Judge Dyk, who is more skeptical of patents than most of the other judges on the Federal Circuit, thinks the Supreme Court went too far in Mayo, but wrote separately that he believes that any additional guidance must come from the Supreme Court, not the Federal Circuit.

In an uncharacteristically short dissent, Judge Newman wrote:

Precedent does not require that all discoveries of natural phenomena or their application in new ways or for new uses are ineligible for patenting… The new diagnostic method here is novel and unforeseen, and is of profound public benefit… The panel’s decision to withhold access to patenting, now endorsed by the en banc court’s refusal to rehear the case, is devoid of support.

Judge Newman also went on to remind us all that patenting “facilitate[s] the public benefit of provision of this method through medical diagnostic commerce, rather than remaining a laboratory curiosity.”

We haven’t heard the last of this case. The question remains, however, whether the Supreme Court will take the case when given the opportunity or whether they will allow this ruling and the confusion to remain indefinitely.

Will the Federal Circuit Reconsider Ariosa v. Sequenom en banc?

On June 12, 2015, the United States Court of Appeals for the Federal Circuit issued a decision in Ariosa Diagnostics, Inc. v. Sequenom, Inc. The Federal Circuit decision has been widely criticized (see here and here, for example). Sequenom has asked for reconsideration en banc, with 12 separate amici filers in support of Sequenom’s petition for reconsideration en banc.

The original panel decision dealt with whether a non-invasive method for detecting paternally inherited cell-free fetal DNA (“cffDNA”) from a blood sample of a pregnant woman was patentable. See U.S. Patent No. 6,258,540. The district court ruled that the method claims were patent ineligible and the Federal Circuit agreed. Judge Linn was uncomfortable with the decision, but wrote in a concurrence that he thought that the outcome was mandated by the “sweeping language of the test set out in Mayo.”

Sequenom has retained Tom Goldsteinco-founder of the SCOTUS blog, to handle the appeal. Goldstein has served as counsel in over 100 Supreme Court cases over the last 15 years. His presence sends a clear message that Sequenom is heading to the Supreme Court if they do not prevail in an en banc rehearing.

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A Conversation on Patent Eligibility

Earlier this fall, I had the opportunity to do a webinar conversation with Bob Stoll, former Commissioner for Patents at the USPTO and current partner at Drinker Biddle in Washington, D.C.  Our wide-ranging discussion lasted for just over one hour. You can access the entire recording, free, at Patent Eligibility in a Time of Patent Turmoil.

What follows is a bit of our conversation to whet your appetite.

STOLL: As someone very interested in the patent arena and getting the standards correct, I’ve been really worrying about things. I think we are in a very confusing state at the moment. I think that the courts are actually undermining patent eligibility in many different areas. And the irony seems to be, Gene, that the Supreme Court and now this Court of Appeals for the Federal Circuit seem to be not considering the fact that the United States is leading in many of these emerging technologies and specifically thinking about software and diagnostic methods and personalized medicine and gene sequences….

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