A number of significant changes occurred in 2018 at the U.S. Patent and Trademark Office (USPTO). To begin with, in February 2018, a new USPTO Director took office.  Director Andrew Iancu, a former patent litigator with law firm experience, appears to have brought a different perspective than that of his corporate predecessors – Michel Lee (Google) and David Kappos (IBM) – to the job at the helm of the USPTO.  In his Senate confirmation hearings, Iancu made it clear that he felt that better balance was needed in the administrative review of issued patents by the USPTO under the America Invents Act (AIA).   He pledged to assess “improvements in the AIA trial standards and processes.”  Iancu identified “institution decisions, claim construction, the amendment process, and the conduct of hearings” as areas that warranted study.  In fact, Director Iancu did a lot more than study these aspects of practice before the Patent Trial and Appeal Board (PTAB) in 2018.
Continue Reading Year in Review: Changes in PTAB Practice in 2018

In an inter partes review proceeding, a challenger cannot raise patent-eligibility as a ground of invalidity.  Rather, the invalidity grounds are limited to lack of novelty and obviousness.  Notwithstanding, in construing claim terms, the PTAB can decide not to give patentable weight to certain claim limitations that are not patent-eligible. In Praxair Distribution., Inc. v. Mallinckrodt Hospital Products IP Ltd., No. 2016-2616, 2016-2656 (Fed. Cir. May 16, 2018) the PTAB had employed the so-called “printed matter doctrine” not to give patentable weight to certain limitations as merely “providing information”  and the CAFC affirmed the PTAB’s claim construction.

Mallinckrodt is the owner of U.S. Patent No. 8,846,112, which is directed to methods of distributing nitric oxide gas cylinders for pharmaceutical applications.

Claim 1 recites a method of providing pharmaceutically acceptable nitric oxide gas, which includes obtaining a cylinder containing compressed nitric oxide gas, supplying the cylinder to a medical provider who is responsible for treating neonates who have hypoxic respiratory failure, including some who do not have left ventricular dysfunction. Claim 1 further includes the step of providing to the medical provider “(i) information that a recommended dose of inhaled nitric oxide gas for treatment of neonates with hypoxic respiratory failure is 20 ppm nitric oxide and (ii) information that, in patients with preexisting left ventricular dysfunction, inhaled nitric oxide may increase pulmonary capillary wedge pressure (PCWP), leading to pulmonary edema, the information of (ii) being sufficient to cause a medical provider considering inhaled nitric oxide treatment for a plurality of neonatal patients who (a) are suffering from a condition for which inhaled nitric oxide is indicated, and (b) have pre-existing left ventricular dysfunction, to elect to avoid treating one or more of the plurality of patients with inhaled nitric oxide in order to avoid putting the one or more patients at risk of pulmonary edema.”

Independent claim 7 includes a “recommendation that, if pulmonary edema occurs in a patient who has pre-existing [LVD] and is treated with inhaled nitric oxide, the treatment with inhaled nitric oxide should be discontinued” (the “recommendation” limitation). Claim 9 depends on claim 7 and further comprises the following steps: performing at least one diagnostic process to identify a neonatal patient who has hypoxic respiratory failure and is a candidate for inhaled nitric oxide treatment; determining prior to treatment with inhaled nitric oxide that the neonatal patient has pre-existing left ventricular dysfunction; treating the neonatal patient with 20 ppm inhaled nitric oxide, whereupon the neonatal patient experiences pulmonary edema; and in accordance with the recommendation of [claim 7], discontinuing the treatment with inhaled nitric oxide due to the neonatal patient’s pulmonary edema. Id.

The Board applied the printed matter doctrine to interpret the providing information, evaluating, and recommendation claim limitations “to be either printed matter or purely mental steps not entitled to patentable weight, as those limitations lacked a functional relationship to the other claim limitations except in claim 9.” In particular, the PTAB was not persuaded by Mallinckrodt’s argument that the recitation of “a pharmaceutically acceptable nitric oxide gas” in the preamble of the claims would require considering information provided in the label of the supplied product.  Rather, the PTAB construed this limitation as simply “nitric oxide gas that is suitable for pharmaceutical use.”
Continue Reading CAFC Affirms PTAB’s Decision That Printed Matter Doctrine Can Be Used In Claim Construction

On May 9, 2018, U.S. Patent and Trademark Office (PTO) issued a notice of proposed rule for changing the standard for construing claims in unexpired patents in inter partes review (IPR), post-grant review (PGR), and transitional covered business method (CBM) proceedings from current broadest reasonable interpretation (BRI) to the same claim construction standard that is

In an inter partes review (IPR) proceeding, the meaning of terms used in challenged claims of an unexpired patent are given their broadest reasonable interpretation in light of the claim language and the specification. The Court of Appeals for the Federal Circuit (CAFC) recently reversed the Board’s interpretation of a claim term in an IPR proceeding (IPR2015-00460) in which Samsung had challenged the validity of certain claims of U.S. Patent No. 6,146,997 of Home Semiconductor Corp. (“Home”) because it found that Board had adopted a claim construction “without regard to the context” in which the term was used in the claims and the specification. In a decision written by Judge Lourie last month, the Federal Circuit panel found that the PTAB had adopted an erroneous interpretation and reversed the decision stating that the PTAB’s finding of invalidity based by anticipation of claim 2 was “not supported by substantial evidence.” (See, Home Electronics v. Samsung Electronics, CAFC Decision No. 2016-2215, July 25, 2017).

The ’997 Patent concerned “a simplified method for forming a self-aligned contact hole,” in which a conductive plug can be formed to electrically connect the semiconductor device to other circuit elements. Independent claim 1 of the ‘997 Patent recites a method of forming a self-aligned contact hole in a semiconductor substrate having a gate electrode and a diffusion region by

forming a conformal layer of etch barrier material overlying the substrate surface including the diffusion region and the upper surface and the sidewalls of the gate electrode,

forming an insulating layer overlying the barrier layer, etching an opening through the insulating layer self-aligned and borderless to the diffusion region by using the barrier layer as an etch stop, and

anisotropically etching the barrier layer underneath the opening, thereby exposing the diffusion region and simultaneously forming a spacer of the etch barrier material on the sidewall of the gate electrode.

Claim 2 of the ‘997 Patent, which depends on claim 1, further recites “forming an oxide layer over the diffusion region and on the sidewalls of the gate electrode by thermal oxidation prior to forming the barrier layer.”

The construction of the phrase “forming an oxide layer over the diffusion region” was at issue in this proceeding. The Patent Owner, Home, argued that this phrase should mean “forming an oxide layer covering the diffusion region,” while the Petitioner, Samsung, argued that the broadest reasonable construction of this phrase is “forming an oxide layer above the diffusion region.” Samsung argued that construing “over” as “covering” was too narrow a reading for a person of ordinary skill in the art. The Board adopted Samsung’s proposed construction for this term and hence held that claims 2 and 9-14 of the ‘997 Patent were anticipated by U.S. Patent No. 6,277,720 (“Doshi”).

The CAFC held that the Board’s construction of “over” as meaning “above” is unreasonable in light of the claim language and the specification. The CAFC noted that “[i]n adopting the ‘full breadth’ of the term as advocated by Samsung, the Board focused on the word ‘above,’ rather than the claim term ‘over.’ That was error.” The CAFC further emphasized that “[e]ven when giving the claim term the broadest reasonable interpretation, the Board cannot construe the claims ‘so broadly that its constructions are unreasonable under general claim construction principles.’”

The CAFC reasoned that the language at issue “is not simply ‘over,’ but is ‘forming an oxide layer over the diffusion region,” and the use of the term ‘over’ in ‘forming an oxide layer over the diffusion region’ connotes more than an insignificant or incidental vertical overlap between the oxide layer and the diffusion region. Although ‘over’ and ‘above’ can be interchangeable in certain contexts, they are not coextensive here, and the full scope of ‘above,’ which is not a claim term, cannot be adopted to give meaning to the actual claim term ‘over’ if that adoption would result in an unreasonable interpretation of the claim term in the context.”
Continue Reading CAFC Finds Another PTAB Claim Construction Unreasonable and Again Reverses an Invalidity Holding

In a rare case of disagreeing with the Patent Trial and Appeal Board (PTAB), the Court of Appeals for the Federal Circuit (CAFC) vacated and remanded a PTAB decision invalidating claims 10-25 of PPC Broadband, Inc.’s U.S. Patent No. 8,323,060, which were challenged in an inter partes review (IPR) proceeding by Corning Optical Communications RF, LLC. (IPR2013-00342).

The challenged claims of PPC’s patent relate to a coaxial cable connector and require that the cable connector include “a continuity member having a nut contact portion positioned to electrically contact the nut and positioned to reside around an external portion of the connector body when the connector is assembled …” The Board held that the broadest reasonable construction of “reside around” was “in the immediate vicinity of; near.” Based on this construction, the Board concluded that the claims were obvious in view of the references cited by the petitioner, Corning, against the claims.

The Board reached this construction by relying on the broadest dictionary definition of the term “around.” In contrast, PPC (the patent owner) had proposed that the broadest reasonable construction of the term “reside around” in light of the claims and the specification is “encircle or surround.”

The CAFC sided with the patent owner and held that in the context of the patent the Board’s construction was not reasonable. The CAFC explained that “[t]he fact that ‘around’ has multiple dictionary meanings does not mean that all of these meanings are reasonable interpretations in light of the specification.” The CAFC further stated that all of the claims of the patent are directed to coaxial cable connectors and the components of these connectors partially or wholly encircle the inner electrical conductor. The CAFC emphasized that “[g]iven the context of this technology, it seems odd to construe the term ‘reside around’ without recognizing the context of its use in terms of the coaxial cable at issue.”
Continue Reading CAFC Vacates a PTAB Decision Due To Faulty Claim Construction

Two recent cases show that simply avoiding a post-grant review proceeding at the U.S. Patent Office’s Patent Trial and Appeal Board (PTAB) not only does not preclude a defendant in underlying patent infringement litigation in a federal district court from raising the same invalidity arguments again, it also may not even influence the court’s claim construction. Moreover, the patent owner may not be allowed to make reference to its prior success in avoiding an administrative trial at the Patent Office as well.

Although 35 U.S.C. § 315(e)(2) provides an estoppel binding on a petitioner (or any party in privity with the petitioner) from raising the same issue in federal court patent infringement litigation if they lose in a PTAB final written decision, it is increasingly clear that a PTAB decision not to institute a trial is not likely to carry much weigh in federal court.

In Adidas AG v. Under Armour Inc. et al, C.A. No. 14-130, slip op. (D. Del. Dec. 15, 2015), the District Court of Delaware denied a defendants’ motion to modify the court’s claim construction order based on a PTAB decision denying institution of an inter partes review (IPR). The patent at issue covers “location aware” fitness trackers, which Addidas has alleged are infringed by Under Armour’s fitness and exercise monitoring systems. Even though Under Armour didn’t get a trial initiated on the Addidas patent at the PTAB, it did like the way the board construed the claims and urged Judge Sleet of the Delaware federal district court to adopt the same construction.

The Delaware District Court declined to change its construction of the term “with respect to a route path.”  Judge Sleet noted in a footnote that the “PTAB’s choice not to institute an IPR is not the type of adjudication that leads to issue preclusion.” The order further noted that the PTAB had not reached a final decision on the claim construction and consequently, the Court “is not bound by a preliminary claim construction used by the PTAB for the limited purpose of denying an IPR request.”
Continue Reading A Decision Not to Institute a Trial at the PTAB Does Not Carry Much Weight in Federal Court

Note: This article is adapted from a longer guest post on Forbes.com last week. To view the Forbes article click here.

Inter partes review (IPR) is a process established by Congress to permit defendants in patent infringement suits to quickly and inexpensively challenge patents asserted against them in an administrative trial at the U.S. Patent Office – and this process has proved to a potent weapon for patent challengers. In the roughly three-years that inter partes review has been available, over 80 percent of the trials have found patent claims to be invalid. Some in Congress are now questioning whether the IPR rules are perhaps skewed too far in favor of the challengers.

At the time the new patent law was enacted in 2012, it was assumed that the IPR process would be used primarily against so-called “patent trolls” rather than the holders of life science patents. And it is safe to say that no one in Congress intended this process to be an opportunity for Wall Street to get into the pharmaceutical patent-busting business. But the law of unintended consequences seems to have come into play.

Over the past five months, Kyle Bass, the manager of the Texas-based Hayman Capital Management, has launched at least seven new hedge funds for investors to challenge patents on FDA approved drugs. The funds, named the “Coalition for Affordable Drugs” (Series I – VII), have launched at least 16 challenges to patents owned by Acorda Therapeutics, Shire, Jazz Pharmaceuticals, Pharmacyclics, Celgene, Biogen and Pozen.

The scheme seems too simple to be true: short the stock of a publicly traded pharmaceutical company, file an IPR with the Patent Trial and Appeal Board (PTAB) that sends the stock price tumbling and then cover your short position by buying the stock at a hefty discount caused by the patent challenge.


Continue Reading Bass Goes Fishing: Troubles Ahead for Pharma?

The Cuozzo v. Garmin case, discussed in our blog in January, has been decided in favor of the U.S. Patent and Trademark Office (USPTO). A divided panel decided 2-1 to uphold the USPTO’s claim construction standard used by the Patent Trial and Appeal Board (PTAB) in the new inter partes review proceedings under the America Invents Act (AIA). See, In re: Cuozzo Speed Technologies LLC, CAFC Case Number 2014-1301, Opinion dated February 4, 2015.

The majority decision, written by Judge Timothy Dyk, concludes that Congress authorized the “broadest reasonable interpretation” (BRI) standard for inter partes review (IPR), post-grant review (PGR) and covered business method (CBM) proceedings, even if the statute did not define what claim construction standard should be used.

The majority opinion, in which Judge Raymond Clevenger joined Judge Dyks, found that the adoption of the BRI standard did not exceed the USPTO’s authority. “There is no indication that the AIA was designed to change the claim construction standard that the USPTO has applied for more than 100 years,” according Judges Dyks and Clevenger.

As the name suggests, the BRI rule gives the PTAB the ability to interpret each element of a claim as broadly as reasonably possible so long as the interpretation is not contradicted by the patent specification. The impact of such broad interpretations is that claim language can “read on” prior art that otherwise might not be relevant if the claim element is given its ordinary meaning.
Continue Reading Federal Circuit Panel Blesses BRI Standard for Claim Construction at PTAB But Another Panel May Not

Two of the earliest challenges to patents under the new post grant proceedings established by the America Invents Act (AIA) are now on appeal to the Court of the Appeals for the Federal Circuit and both appeals are taking direct aim at the US Patent and Trademark Office’s decision to adopt a controversial standard for claim construction – the so-called “Broadest Reasonable Interpretation” standard – to govern all of the new AIA proceedings.

Versata v. SAP concerns the very first “covered business method” (CBM) review proceeding (CBM2012-00001) conducted by the USPTO and is on appeal by the Patent Owner, Versata, of the Patent Trial and Appeal Board (PTAB) decision to invalidate certain challenged claims. Cuozzo v. Garmin concerns the first inter partes review (IPR) proceeding and likewise is on appeal from a PTAB decision finding Couzzo’s claims invalid.

Both appellants are challenging the USPTO’s claim construction standard as impermissible substantive rule-making by the agency and arguing that the standard instead should be the same as that applied to issued patents by the federal courts – the so-called Phillips rule that requires judges and juries to give the elements of a claim their “ordinary and customary meaning.” (See, Phillip v AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005))
Continue Reading Does the Broadest Reasonable Interpretation Standard Make Sense?

After nearly a dozen false starts, it appears that the first genuine “Post Grant Review” (PGR) petition may have been filed with the Patent Trial and Appeal Board (PTAB) under the America Invents Act (AIA).

Petition PRG2014-00008 was filed on August 5, 2014 by LaRose Industries, Inc. and Toys “R” Us – Delaware, Inc., challenging U.S. Patent 8,684,420 owned by Choon’s Design Inc. (Apparently, several earlier PGR petitions had been filed in error and have not been made public; hence the assignment of number 00008 to this petition.)

The patent at-issue was based on a series of continuing applications, some of which predated the changeover in U.S. patent laws that provides for Post Grant Review. Under the AIA, Post Grant Review is available to challenge a newly-issued patent – so long as its effective filing date is on or after March 16, 2013. The Petitioners will need to show that Choon was not entitled to any priority date earlier than its actual filing.
Continue Reading First Post Grant Review Petition Filed