Covered Business Methods

In an inter-partes review proceeding (IPR), a challenger can rely only on patents and printed publications to challenge the validity of a patent claim. In contrast, in a post grant review (PGR) proceeding, a challenger can rely on any ground related to patentability, including prior sale, to challenge a patent claim.  In particular, 35 U.S.C. §102(a)(1) bars a person from receiving a patent on an invention that was “in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.”
Continue Reading Supreme Court Holds That AIA On-Sale Bar Applied to Secret Sales

In a final rule published in the Federal Register on October 11, 2018, the U.S. Patent and Trademark Office (USPTO) took a remarkable step of acknowledging unfairness in the way its Patent Trial and Appeal Board (PTAB) has been conducting trials for the past six years. The rule change will apply to all of the

On May 23, 2018, in XY, LLC v. Trans Ova Genetics, L.C., CAFC held that its affirmance of PTAB’s invalidity decision regarding certain claims of a patent owned by XY in a separate appeal involving a different defendant must be given “immediate issue preclusive effect” with respect to the same claims in the present

A few months ago, the Irish drug company Allergan moved to shield its key patents on its dry-eye drug Restasis from challenge at the Patent Trial and Appeal Board (PTAB) of the U.S. Patent Office by assigning these patents to the Saint Regis Mohawk Tribe in return for a commitment by the tribe, as new owner of the patents, to invoke “sovereign immunity” and request that the PTAB dismiss pending administrative challenges.

However, a recent decision in an unrelated case before the PTAB casts doubt on the viability of this strategy.  In Ericsson v. Regents of the University of Minnesota, IPR2017-01186 (Paper 16 PTAB Dec. 19, 2017), an expanded panel of seven PTAB judges denied the University of Minnesota’s motion to dismiss an inter partes review (IPR) proceeding on the basis of sovereign immunity.  According to the PTAB panel, by filing a patent infringement suit that asserted the challenged patent, the University had waived its immunity at least with respect to the defendants.  One of defendants in that suit, Ericsson, Inc., had initiated the IPR proceeding.

The Ericsson decision involved the questionable practice of “panel-packing” by the PTAB’s chief judge, David Ruschke.  In this instance, the Chief Judge added himself and three of his deputies to the original three judges assigned to the case for the purpose of deciding the University’s motion to dismiss, ostensibly to address the “exceptional nature of the issues presented.”

Two prior PTAB decisions by different panels of judges involving University-owned patents have upheld the sovereign immunity principle.  In Covidien LP v. Univ. of Fla. Research Found., Inc., Case IPR2016-01274 (PTAB Jan. 25, 2017) and NeoChord, Inc. v. Univ. of Md., Balt., Case IPR2016-00208 (PTAB May 23, 2017), prior panels of PTAB judges faced with this issue had found that an IPR proceeding was an adjudicatory proceeding of a federal agency from which state entities are immune.

Judge Ruschke’s opinion on behalf of the enlarged panel confirmed that the sovereign immunity defense was generally available to state universities (and, by implication, other sovereigns like native American tribes) but the immunity was not absolute.  By suing in federal court, Ruschke reasoned that University of Minnesota had waivered this immunity.  He distinguished the prior PTAB panel decisions dismissing IPR petitions on sovereign immunity grounds because they did not involve “a State that filed an action in federal court alleging infringement of the same patent.”  (The Covidien v. Florida case arose out of a licensing dispute in which the university had sued to enforce a patent license agreement and the disgruntled licensee then challenged the patent via an IPR petition.  The Neochord v. Maryland case likewise involved a licensing dispute.)

Nonetheless, Judge Ruschke’s opinion has a logical weakness.  The panel’s finding of a waiver appears to turn on the fact that an invalidity challenge to a patent in a federal infringement case is a compulsory counterclaim.  Because the invalidity challenge must be brought or “be forever barred from doing so, it is not unreasonable to view the state as having consented to such counterclaims.”  The opinion fails to explain why the counterclaim inherent in an infringement suit (i.e. a trial of the invalidity issue in the federal court) is not sufficient in and of itself or why the compulsory nature of the counterclaim should spawn a right to raise this issue in an alternative forum with significantly different (challenger-friendly) rules. 
Continue Reading Allergan’s Mohawk Gambit May Be Doomed – PTAB Rethinks the Scope of Sovereign Immunity

An en banc panel of the Court of Appeals for the Federal Circuit (CAFC) in the case of Aqua Products, Inc. v. Matal recently held that in an inter-partes (IPR) proceeding, the burden of persuasion rests with the challenger to persuade the PATB that substitute claims proposed by a patent owner in a motion to

On October 4, 2017, the Court of Appeals for the Federal Circuit, sitting en banc, overruled an earlier panel decision and found that the Patent Trial and Appeal Board (PTAB) had been impermissibly placing the burden of proving the patentability of amended claims on the Patent Owner, rather than the Petitioner.   See, Aqua Products

In an unusual move to combat the perceived bias in favor of patent challengers at the U.S. Patent Office’s Patent Trial and Appeal Board (PTAB), the Irish drug company Allergan has decided to warehouse its key patents on the dry-eye drug Restasis with the Saint Regis Mohawk Tribe in upstate New York.  Allergan generates over

In the case of Square, Inc. v. Unwired Planet, LLC (CMB2015-00148), the PTAB held that the grounds raised by Square, Inc. (Petitioner) to challenge the validity of claims 1-4 of Unwired Planet’s U.S. Patent No. 7,711,100 could have been raised in a previous petition filed by Square, Inc. against the same patent, and hence denied the institution of a covered business method (CBM) review. In particular, the Board relied on the estoppel provision of 35 USC 325(e)(1), to deny the institution of a CBM review. This portion of section 325 mandates that the petitioner, or the real party in interest or privy of the petitioner, in a post-grant review of a claim that results in a final written decision “may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that post-grant review.”

The Petitioner had previously filed a CBM petition challenging claims 1-4 of the ‘100 patent (CBM2014-00156), which relates to methods for coordinating financial transactions via a wireless network, such as a wireless telephone network. In that proceeding, the petitioner argued that the claims at issue were invalid under 35 U.S.C. §101 as drawn to patent ineligible subject matter as well as invalid under 35 U.S.C. §102 and 103 as either anticipated or rendered obvious by a prior art reference (a thesis by Vazvan). The PTAB initiated a trial on the §101 ground but declined to include the §102 and 103 grounds in the trial because it found the evidence of public availability of the Vazvan thesis deficient. Ultimately, in a final written decision, the PTAB held that the challenged claims were not eligible for patenting pursuant to 35 U.S.C. §101.

Not satisfied with the decision invalidating the claims as patent ineligible subject matter, Square, Inc. filed a second petition arguing that claims 1-4 were invalid under 35 U.S.C. §102 and 103 as anticipated or rendered obvious by a different prior art reference (U.S. Patent No. 5,579,535 of Orlen).
Continue Reading No Second Bite Of The Apple for Square, Inc. – PTAB Applies Estoppel Provision Of 35 U.S.C. §325(e)(1) TO CBM Review

The America Invents Act (AIA) allows a petitioner to request joinder of an inter partes review (IPR) of a patent with an IPR proceeding previously instituted with respect to that patent so long as the request for joinder is filed “no later than one month after the institution date of any inter partes review for which joinder is requested.” 37 C.F.R. 42.122(b). The joinder provision (35 U.S.C. 315(b)) provides:

If the Director institutes an inter partes review, the Director, in his or her discretion, may join as a party to that inter partes review any person who properly files a petition under Section 311 that the Director, after receiving a preliminary response under Section 313 or the expiration of the time for filing such a response, determines warrants the institution of an inter partes review under section 314.

In many cases, a petitioner requesting joinder is the same petitioner who had filed the previously-instituted proceeding. Such requests for joinder are typically made to circumvent the time bar imposed by 35 USC 315(b), which bars the institution of an IPR based on a petition that is “filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.” This time bar does not, however, apply to a request for joinder.
Continue Reading PTAB Panels Are Divided Regarding Interpretation Of The Joinder Provision

On January 21, 2014, the Patent Trial and Appeal Board issued its second Final Written Decision in a Covered Business Method (CBM) Proceeding under the America Invents Act. CBM Proceedings allow for the review of a business method patent on any ground of patentability, and fill a gap between Inter-Partes Review (IPR) which only allows for review based obviousness or novelty, and Post-Grant Review (PGR), which is applicable only to patents issued based on applications filed on or after March 15, 2013, though it allows for review on any ground of patentability.

In this proceeding, CRS Advanced Technologies alleged that certain claims of U.S. Patent No. 6,675,151 were invalid as patent ineligible subject matter under 35 U.S.C. § 101. Broadly, the patent covers systems and methods for placing temporary workers in open positions. The PTAB granted review of all of the challenged claims and held a hearing in August, 2013. The Final Written Decision invalidated all six challenged claims as “directed to abstract, and, therefore, unpatentable, methods for substitute fulfillment.” This is the second time in as many decisions in which the PTAB invalidated business methods claims.

Broadly, the claims are directed toward a method of using a computer to find temporary workers. Claim three, specifically, provides:

Continue Reading PTAB Rejects Covered Business Method Claims