USAA Asserts Mobile Check Deposit Patents Against Wells Fargo

On June 7th, San Antonio, TX-based reciprocal inter-insurance exchange United Services Automobile Association (USAA) filed a lawsuit alleging claims of patent infringement against San Francisco, CA-based financial services multinational Wells Fargo. The complaint, filed in the Eastern District of Texas, involves the assertion of patents in the field of mobile financial services which, at first glance, appear as though they may face some rigorous validity challenges thanks to precedent set by the U.S. Supreme Court in its 2014 decision in Alice Corp. v. CLS Bank International.


PTO Proposes to Eliminate BRI at PTAB

The USPTO recently announced proposed rulemaking that would change the prior policy of using the Broadest Reasonable Interpretation (“BRI”) standard for construing unexpired and proposed amended patent claims in PTAB proceedings under the America Invents Act and instead would use the Phillips claim construction standard. The new standard proposed by the USPTO is the same as the standard applied in Article III federal courts and International Trade Commission (“ITC”) proceedings, a change critics of the PTAB process have urged for many years in order to bring uniformity to post grant challenges across forums.

“Having AIA trial proceedings use the same claim construction standard that is applied in federal district courts and ITC proceedings also addresses the concern that potential unfairness could result from using an arguably broader standard in AIA trial proceedings,” the NPRM says. “Under the proposed approach, the Office would construe patent claims and proposed claims based on the record of the IPR, PGR, or CBM proceeding, taking into account the claim language itself, specification, and prosecution history pertaining to the patent. The Office would apply the principles that the Federal Circuit articulated in Phillips and its progeny.”


PTAB Fails to Consider Arguments in Reply Brief

On Friday, June 1st, the Court of Appeals for the Federal Circuit issued a decision in In re: Durance striking down a decision by the Patent Trial and Appeal Board (PTAB) that affirmed a patent examiner’s obviousness rejection of a microwave vacuum-drying apparatus and associated method. The Federal Circuit panel consisting of Judges Alan Lourie, Jimmie Reyna and Raymond Chen determined that the PTAB erred in not considering arguments offered in the patent applicant’s reply brief, which were properly made in response to the examiner’s answer.

In September 2014, the examiner issued a final rejection, which rejected all 37 claims of the patent application on 35 U.S.C. § 103 for obviousness and 35 U.S.C. § 112 for not meeting the written description requirement and lack of enablement. The obviousness finding was based on two pieces of prior art: U.S. Patent No. 6442866, titled Method and Apparatus for Drying or Heat-Treating Products (“Wefers”) and issued in September 2002; and U.S. Patent Application No. 20050019209, titled Method and Device for Sterilizing Containers (“Burger”) and filed in July 2002. The examiner rejected most of the ‘895 patent applications claims after finding that Wefers disclosed every limitation of claim 1 except for the tumbling limitation, which was itself disclosed by Burger. The examiner rejected Durance’s argument that rotating the container to enhance tumbling of the organic material was not present in the Wefers and Burger combination; the examiner found that the organic material’s tumbling was an inherent function of all rotating containers. On the indefiniteness finding, the examiner found that the patent application’s specification did not meet the written description requirement under Section 112 because it did not discuss the rotational speed necessary to tumble the organic material.

After an examiner interview in December 2014, the examiner withdrew the rejection based on the Section 112 grounds but maintained the obviousness rejection based on Burger’s teaching of a transportation means rotating a container through a vacuum chamber from the inlet to the outlet. Durance appealed to the PTAB, arguing that Burger taught the application of plasma to the surface of containers and not the rotation of the containers to tumble the contents for balancing out the microwave radiation applied to the cylinders. Durance further argued that Wefers taught away from agitating products during transportation because it stressed the “gentle continual transport” needed to reduce maintenance expenses. The examiner answered this argument based on new grounds that there was no structural difference between Durance’s claimed invention and the combination of the prior art references. Although Durance argued that the examiner’s understanding of structural identity for rejection, which had never before been articulated, was extremely inaccurate as the claimed invention in the ‘895 patent application required the use of gears, not simply gravity. The PTAB sided with the examiner, finding that Durance’s arguments only addressed individual references and not the combination.

Durance appealed for rehearing by the PTAB, arguing that the Board erroneously ignored reply brief arguments related to the structural identity rejection. In not addressing arguments that the claimed structure is different than the Burger structure, the PTAB “misapprehend[ed] the law” on inherency by ignoring the argument that structural identity cannot be used to show that a method claim is inherently performed by a combination of prior art references. In denying the request for rehearing, the PTAB stated that it did not misapprehend the doctrine on inherency because it didn’t invoke that doctrine in affirming the examiner’s rejection. “In the interest of fairness,” the Board did consider Durance’s reply brief argument that the amount of material packed into the container affects whether the material would tumble, but the Board reiterated that it would not consider other reply brief arguments.

On appeal to the Federal Circuit, Durance argued that substantial evidence doesn’t support the PTAB’s finding that the combination of the prior art references taught the tumbling limitation either expressly or inherently. Durance also argued that the PTAB lacked substantial evidentiary support to show that a skilled artisan would modify Wefers to include the rotation feature disclosed by Burger.

In its discussion of the issues in the appeal, the Federal Circuit opined that “the Court is not confident in the Patent Office’s reasoning for its rejection of the Application” based upon the shifting arguments offered in the patent examiner’s rejections, as well as the PTAB’s argument on appeal that the Federal Circuit should find inherency in the first instance after the PTAB told Durance that inherency was never invoked. In analyzing 37 C.F.R. § 41.41(b), the relevant statute under which the PTAB waived Durance’s reply brief arguments, the Federal Circuit noted that the statute allows a patent owner to include responses to an examiner’s answer in a reply brief. Nothing in the statute bars the patent owner from addressing new arguments made by the examiner that were not articulated in the Final Office Action, the appellate court found.

The PTAB’s refusal to consider Durance’s reply brief arguments on structural dissimilarity between the patent application and the prior art references required vacating the agency’s decision and remanding the case back to the Board, the Federal Circuit held.

Federal Circuit Says Veterinarian’s Suggestion Covered Essential Patent Claim Element

On Thursday, May 3rd, the Court of Appeals for the Federal Circuit issued a decision in In Re VerHoef, a case stemming from a decision by the Patent Trial and Appeal Board (PTAB) to invalidate a patent during an ex parte proceeding on 35 U.S.C. § 102(f) grounds, which governs the patentability of inventions which have been derived from a person who is not listed as an inventor on the patent application. The Federal Circuit panel affirmed the PTAB’s finding that Jeff VerHoef was not the sole inventor of a mobility device for dogs because the device incorporated a suggestion made by a veterinarian working with VerHoef’s dog.

The patent application at issue in this appeal is U.S. Patent Application No. 20130152873, titled Dog Mobility Device and claiming priority to a patent application filed in December 2011; this patent application is subject to pre-America Invents Act Section 102(f). That patent application lists VerHoef as the sole inventor. In an affidavit, VerHoef stated that he had developed the mobility harness covered by the ‘873 patent application, which assists with a dog’s movement of his hind legs, after his dog Reilly had difficulty walking after a surgical operation.

VerHoef worked with a veterinarian, Dr. Alycia Lamb, to provide rehabilitative therapy for Reilly around the same time that VerHoef was working on the mobility device. VerHoef had previously acted on Dr. Lamb’s suggestion to purchase a commercially available harness to support Reilly’s hind leg, but this device caused Reilly to place the leg’s weight on his knuckles instead of his toes. VerHoef recognized that a harness connected to Reilly’s toes would solve the problem and discussing this issue with Dr. Lamb, the vet suggested a strap configured with a figure 8 structure to engage the toes might solve that problem. Incorporating the figure 8 design into the mobility device, VerHoef filed a patent application listing himself and Dr. Lamb as co-inventors. That relationship soured and VerHoef filed the ‘873 patent application on the same day that Dr. Lamb filed a substantially similar patent application listing herself as the sole inventor.

The examiner of VerHoef’s patent application issued a Section 102(f) final rejection after VerHoef submitted his affidavit because the examiner found that VerHoef did not invent the claimed subject matter. On appeal to the PTAB, the Board affirmed the examiner’s decision, finding that the figure 8 loop was an essential element of the invention and finding that VerHoef didn’t maintain “intellectual domination” over the inventive process. During oral arguments on appeal to the Federal Circuit, counsel for VerHoef argued that, while Dr. Lamb did provide the suggestion on the figure 8 loop, VerHoef maintained the work of making the invention and the mere suggestion from Dr. Lamb did not automatically raise her to the level of joint inventor.


USPTO issues patent eligibility guidance

The Federal Register Notice signed by Director Iancu on April 18, 2018, which relates to the Federal Circuit’s recent decision in Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018), officially published on Friday, April 20, 2018. It is good news for patent owners with computer-implemented inventions and promises to bring a much more structured prosecution pathway.

“The USPTO has issued today a Federal Register notice and memorandum to the patent examining corps in response to a recent decision by the U.S. Court of Appeals for the Federal Circuit in Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018), pertaining to subject matter eligibility,” explained Paul Fucito, a spokesman for the United States Patent and Trademark Office in the Office of Communications. “This new guidance pertains to the second step of the Alice-Mayo framework for determining subject matter eligibility, and is focused on how examiners are to analyze and document a conclusion that a claim element is ‘well-understood, routine, conventional’ during the patent examination process.”

Berkheimer is obviously an important and helpful decision from the patentee’s perspective. The Federal Register Notice appears to also be quite helpful as well. (more…)