The Industry Reacts to Cuozzo Speed Technologies v. Lee

On June 20th, the U.S. Supreme Court handed down a decision in Cuozzo Speed Technologies, LLC v. Lee, which may not have wide-reaching implications on the U.S. patent landscape but will nonetheless be troubling to patent owners. In a unanimous 8-0 decision, the court upheld the ability of the Patent Trial and Appeal Board (PTAB) to apply the broadest reasonable interpretation (BRI) of patent claims during an inter partes review (IPR) proceeding. It also declared that PTAB’s use of the IPR system was not judicially reviewable.

“This is obviously a victory for some who challenge a patent’s validity in IPR proceedings since broadly construed claims are more vulnerable to attack than narrowly construed claims,” remarked Scott Daniels, partner at Westerman Hattori Daniels & Adrian, LLP. “Still, the great majority of IPR decisions do not turn on claim construction and for those cases Cuozzo simply makes no difference.”

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Why courts rely on §101 when other sections of the statute seem far better suited

Diamond v. Diehr specifically warned about §102 improperly influencing the §101 analysis, so a §101 analysis was presumably considered separate from a §102, §103 or §112 analysis. Fast forward a little more than a generation. In 2012, Mayo Collaborative Services v. Prometheus Laboratories, Inc. was decided by the Supreme Court, which appeared to disregard the warning of Diamond v. Diehr.

Mayo v. Prometheus addressed the question of whether two patents concerning the use of thiopurine drugs to treat autoimmune diseases satisfied the §101 requirement. The Supreme Court ended up holding that the patents were invalid under §101. But its reasoning confused many patent practitioners and litigators. Justice Breyer, writing for a unanimous Court, stated that, because the steps of “administering” and “determining” were well known and conventional, they were not patent-eligible subject matter. This analysis seems to combine the requirement of patent eligibility with that of novelty and nonobviousness. In other words, in Mayo, the Supreme Court did a corollary of what it specifically warned against doing in Diehr.

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The rise of efficient infringement, a problem for universities

Recent overhauls to America’s patent laws have forced universities and other patent owners into a corner when asserting their rights. Last October, The New York Times reported on the rise of “efficient infringement” which has increased in the wake of the 2011 America Invents Act. Tools created by that legislation to challenge patent validity, such as through the Patent Trial and Appeal Board (PTAB), allow major companies with huge amounts of financial and legal resources to ignore reasonable licensing inquiries and to shift the burden onto the patent owner by challenging the patent’s validity.

Many say that hostility toward patents in the courts has reached new heights, with numerous cutting-edge innovations dealing with software, biotechnology, medical diagnostics and personalized medicine all being routinely found patent ineligible. Rather than take patent licenses, or even engage in negotiations, many companies have calculated that they are better served by ignoring patent rights and openly infringing. These efficient infringers dare universities and other patent owners to sue.

As the New York Times article notes, however, there has been a troubling pattern of associating universities with so-called “patent trolls”on the basis that, like other non-practicing entities (NPEs), universities don’t manufacture products but license their technologies to others. But universities are not patent trolls. In fact, the primary goal of the university is to make sure that as much research done at the university is commercialized as possible.

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06.28.16 | bayh-dole, Patent Issues, posts | Gene Quinn

Supreme Court says district courts have discretion to enhance patent damages

In a unanimous decision delivered by Chief Justice John Roberts (left) in Halo Electronics, Inc. v. Pulse Electronics, Inc.the United States Supreme Court recently did what much of the patent world expected it would do; they overruled the Federal Circuit’s “unduly rigid” test for the awarding of enhanced damages for willful damages put in place by In re Seagate Technology, LLC, 497 F. 3d 1360, 1371 (2007)(en banc).

Under Seagate, in order for a patent owner to be entitled to receive enhanced damages of up to triple the original damages award, the patent owner first had to “show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.” Then, the patentee was required to demonstrate, again by clear and convincing evidence, that the risk of infringement “was either known or so obvious that it should have been known to the accused infringer.” The Supreme Court held that this test was not consistent with the express language of 35 U.S.C. §284.

In the Supreme Court’s recent decisions in Highmark Inc. v. Allcare Health Management Systems, Inc.134 S. Ct. 1744 (2014) and Octane Fitness, LLC v. ICON Health & Fitness, Inc.134 S. Ct. 1749 (2014) the Court, interpreting 35 U.S.C. § 285, found that there was no textual support in the statute to impose an onerous, rigid test for the awarding of attorneys’ fees to a prevailing party in a patent infringement lawsuit. Most notably, the Supreme Court explained to the Federal Circuit that they misinterpreted a key ruling of the Supreme Court when they created their test, which would result in attorneys’ fees almost never being awarded.

That same exact misinterpretation was at the heart of Federal Circuit case law relating to an award of enhanced damages to a victorious patent owner, which was why so many believed that the Supreme Court would grant district courts the same discretion with respect to enhanced damages that they were given with respect to attorneys’ fees in 2014 in Highmark and Octane Fitness.

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Patent Office gives examiners guidance in light of Enfish

Recently, the United States Patent and Trademark Office (USPTO) sent a memo to the Examining Corps with information and instructions relating to the recent ruling in Enfish, LLC v. Microsoft Corp. by the United States Court of Appeals by the Federal Circuit. In Enfish, the Federal Circuit ruled that the software patent claims at issue were not abstract and were patent eligible. This marked the first time in 18 months, since the Court’s ruling in DDR Holdings in December 2014, that the Federal Circuit has found software patent claims to be patent eligible.

The USPTO memo was authored by Robert Bahr, who is Deputy Commissioner for Patent Examination Policy. As you would expect, it accurately explains the importance of the Federal Circuit ruling in Enfish. Bahr tells examiners that, based on the Federal Circuit ruling, they “may determine that a claim directed to improvements in computer-related technology is not directed to an abstract idea under Step 2A of the subject matter eligibility examination guidelines (and is thus patent eligible), without the need to analyze the additional elements under Step 2B.” (emphasis in the original) Bahr goes on to tell examiners that a claim that is “directed to an improvement to computer-related technology (e.g., computer functionality) is likely not similar to claims that have been previously identified as abstract by the courts.”

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06.7.16 | CAFC, Patent Issues, posts, USPTO | Gene Quinn

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