Category Archives: Patents

Patent lawsuit map may shift as Supreme Court restricts venue in patent infringement cases

A much-anticipated decision from the U.S. Supreme Court has scaled back the ability of patent plaintiffs to choose the forum in which they file suit. By limiting a practice that many defendants consider to be forum shopping by patent plaintiffs, the Court’s decision may shift the geography of patent infringement lawsuits from the East Texas heartland to the coasts.  

In TC Heartland LLC v. Kraft Foods Group Brands LLC, the Court considered the patent venue statute, 28 U.S.C. § 1400(b), which states: “Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.” The Court held that a patent infringement defendant “resides” only in its state of incorporation, and that “residence” does not include states where the defendant merely conducts business.

In the case, the defendant was organized under Indiana law and headquartered in Indiana. The plaintiff filed suit in Delaware, into which the defendant shipped product but otherwise had no physical or legal presence. The defendant argued that venue in Delaware was improper under the patent venue statute.

The Court agreed with the defendant. Focusing on the meaning of the phrase “where the defendant resides,” the Court held that the term “residence” means only an entity’s state of incorporation, and the term does not include states where an entity merely does business.

The case may deal a blow to the Eastern District of Texas, which has served as the epicenter of patent patent infringement litigation in recent years. However, the Court did not negate the second half of the patent venue clause, which also supports venue “where the defendant has committed acts of infringement and has a regular and established place of business.” Texas ranks second in a list of states where the most Fortune 500 companies are headquartered. Thus, at least some new cases that previously would have gone to the Eastern District of Texas may now shift to other Texas district courts such as the Northern District of Texas (in which Dallas is located) or the Western District of Texas (in which Austin is located).

It is even more likely that new patent filings will spread out to other venues such as the District of Delaware (where more than 2/3 of the Fortune 500, and more than 1 million companies in total, are incorporated) ; the Northern District of California (home to the tech giants of Silicon Valley); or the Southern District of New York (where more Fortune 500 companies are headquartered than in any other state).

The new decision also will make it harder for patent plaintiffs to sue multiple defendants in a single case. If the accused infringers are organized in different states and have different corporate office locations, the patent holder may need to file multiple suits in multiple states.

[Image credit:  Bram Janssens]

Federal Circuit finds credit reporting patent ineligible; calls it the “height of abstraction”

A recent Federal Circuit decision illustrates the high eligibility hurdles that fintech software patents continue to face in view of the Supreme Court’s 2014 Alice v CLS Bank decision.

In Clarilogic, Inc. v. FormFree Holdings Corp. (Fed. Cir. Mar. 15, 2017), the court addressed the eligibility of U.S. Patent 8,762,243, which was directed to methods for electronic account certification and  credit reporting. The representative claim of the patent was: Continue reading

SCOTUS: No laches in patent infringement cases; six-year limit on damages is the rule

A recent Supreme Court decision may make it easier for patent holders to assert older patents, as the decision significantly restricts the availability of laches (i.e., unreasonable delay) as a defense to a patent infringement claim.

The doctrine of laches allows a court to deny a claim if the plaintiff delayed filing the suit and the delay was unreasonable and prejudicial. The Patent Act also includes a six-year limit on the recovery of damages for patent infringement activities.

Until now, most courts interpreted these two legal doctrines as requiring a patent holder to promptly bring suit upon learning of infringing activity, and in any event no longer than six years from the date that the patent holder places the infringer on notice of the claim. The reason for this is to prevent a patent holder from lying in wait by sending a cease and desist letter but never seeking to resolve the dispute in court.

A recent Supreme Court decision has changed this long-standing interpretation. In SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC (Mar. 21, 2017), the patent holder (SCA) sent a letter accusing First Quality of infringement in 2003. In 2010 — seven years after sending the letter — SCA filed suit against First Quality. First Quality argued that SCA’s claim was time-barred under the doctrine of laches. The district court agreed and dismissed the case. The Federal Circuit affirmed, stating that laches prevents recovery of all damages, including those incurred during the 6-year period prior to filing the suit.

The Supreme Court disagreed, noting that “[l]aches is a gap-filling doctrine, and where there is a statute of limitations, there is no gap to fill.” Because Section 286 of the Patent Act imposes a six-year statute of limitations, the Court found that the Patent Act had no gap to fill:  “Laches cannot be interposed as a defense against damages where the infringement occurred within the period prescribed by §286.”

[Image copyright: Lightwise]

Can a patent expire before it issues?

 

In certain situations, yes.  Ordinarily, the term of a patent begins on the grant date and ends twenty years after the filing date of the patent. If the patent claims priority to an earlier-filed nonprovisional patent application, then the twenty-year term is calculated from the filing date of the earlier-filed application.

However, an unusual situation can arise if a patent claims priority to a patent application that was filed more than twenty years ago. A recent court decision from the Eastern District of Texas found such a situation in U.S. Patent 9,094,694. The application for the ‘694 patent was filed in July 2014, and the patent issued in July 2015. However, the ‘694 patent was a continuation of three previous patent applications, the first of which was filed in July 1995. Because of this, the effective filing date of the ‘694 patent was July 8, 1995 and its grant date was July 28, 2015 — more than twenty years after the effective filing date.

There are circumstances in which a patent’s term can be extended beyond the twenty-year term. For example, if a patent application’s processing is held up due to Patent Office delay, the term of the patent can be extended to account for that delay. However, this opportunity for patent term adjustment is lost if the applicant also causes certain delays during prosecution, such as by taking an extension of time or filing a supplemental amendment after filing an additional amendment.

In the case of the ‘694 patent, the USPTO determined that no patent term adjustment applied.  Thus, the term of the patent was not extended beyond the standard twenty-year term. The ‘694 patent also included a terminal disclaimer with respect to patent 8,769,561, which did have a patent term adjustment but which still expired in 2016. Thus, the court determined that the ‘694 patent expired before it granted.

The case discussed above is Bartonfalls LLC v. Turner Broadcasting System, Inc. (E.D. Tex. March 15, 2017).

[Image copyright:  W. Scott McGill]]

Federal Circuit: obviousness requires a clear and explicit explanation

The Federal Circuit recently vacated a Patent Trial and Appeals Board (PTAB) decision that found obvious several claims of a patent application relating to methods for re-configuring icons on a touch-sensitive display. In In re Van Os (Fed. Cir. Jan. 3, 2017), the court’s decision focused on the PTAB’s failure to provide sufficient reasoning for the rejection, rather than the question of whether or not the claims were in fact obvious.reconfiguration

The claims related to a user interface for a touch-sensitive display that would enter a “reconfiguration mode” after it detected a sequence of two touches that had different durations in particular locations of the display. The Examiner and the Board both found the claims to be obvious in view of two prior art patents.

The court found both the Examiner’s and the PTAB’s explanations to be lacking, stating:

Here, neither the Board nor the examiner provided any reasoning or analysis to support finding a motivation to add Gillespie’s disclosure to Hawkins beyond stating it would have been an “intuitive way” to initiate Hawkins’ editing mode. The Board did not explain why modifying Hawkins with the specific disclosure in Gillespie would have been “intuitive” or otherwise identify a motivation to combine.

The court explained that it had a long history of requiring Examiners and the Board to sufficiently explain the reasoning for an obviousness rejection:

Since KSR, we have repeatedly explained that obviousness findings “grounded in ‘common sense’ must contain explicit and clear reasoning providing some rational underpinning why common sense compels a finding of obviousness…. Absent some articulated rationale, a finding that a combination of prior art would have been “common sense” or “intuitive” is no different than merely stating the combination “would have been obvious.”

Because the Board and the Examiner failed to meet their burden, the court directed the USPTO to allow the claims and grant the patent.

Who should be listed as inventors in a patent application?

49458832 - inventor

49458832 – inventor

This is a question that all patent applicants must answer before filing a patent application. However, applicants often answer the question without fully understanding the criteria for “inventorship.” Applicants often simply presume that the inventors listed on an invention disclosure, or the authors of a publication, will be the inventors. This is not necessarily the case, since inventors of an invention and the authors of a document can be (and often are) different.

The consequences of failing to correctly identify the inventors in a patent application can be severe. If an inventor was omitted, the assignee of record may not be the sole owner of the patent rights.  In addition, an incorrect inventor list also may result in an invalid patent. Although inventorship can be corrected after a patent application is filed, and even after the patent grants, it’s much easier to get it right in the first place by answering a few key questions before filing the patent application.

To determine who is an inventor, consider the following:

  • Review the claims at the end of the patent application. The claims define the “invention.”
  • Participating in conception if the invention is the key.  Anyone who contributed to the conception of the invention is an inventor. In other words, anyone who suggested any of the steps or features listed in the claims is an inventor.
  • In contrast, a person who did not help conceive the invention is not an inventor. For example, a person who merely identified the problem is not an inventor unless they also helped conceive the solution. In addition, a person who reduced the invention to practice without helping to conceive it is not an inventor.

Omitting people who merely posed the problem, or who merely helped reduce an invention to practice from a patent application can be difficult, and may result in some bruised egos. For software-related inventions, the people who developed the design specification are typically inventors, but the people who actually created the code are typically not inventors since they merely reduced the design specification to practice. In life sciences, the individuals who specified the parameters for an experiment may be inventors, but the lab employees who actually performed the experiments are typically not inventors. In each of these cases, the coders and lab techs may have spent much more time and effort reducing the invention to practice than the inventors spent conceiving it. However, patent law rewards conception, which may not always equate to time spent or even level of difficulty of the work.

A person can be an inventor even if his or her contribution is relatively small. In fact, a person will be an inventor even if he or she only contributed to one of the features of one of the patent application’s claims. Because of this, it’s important to revisit the inventor list throughout the patent application process, in case claim amendments prompt a need to change the list of identified inventors.

[Image credit:  Ali Gokhan]

Will your patent assignment document satisfy new European Patent Office requirements?

19469909 - signing a document in the officeEffective November 1, 2016, new European Patent Office (EPO) Examination Guidelines governing the transfer of European patent applications will take effect. The new Guidelines make two changes that transacting parties need to know:

  1. the assignment document must include the signatures of both parties (i.e., assignor and assignee); and
  2. the assignment document must include the precise job title of each person who signs the document.

In the past, it was common for a patent holder to execute an assignment in favor of an assignee, without the assignee signing the document. Under the new Guidelines, the EPO will no longer accept an assignment document that uses the single-signature format.

In the past, some assignment documents would list the signing party as something like “authorized representative.” This EPO will no longer accept this practice, either.

The new Guidelines only affect the transfer of pending applications, not granted patents.  However, transacting parties should consider following the new Guidelines in all patent assignments, since the general contract laws of several European countries (including Great Britain and France) typically require both parties to sign a contract. The new Guidelines are also consistent with Article 72 of the European Patent Convention, which states that an assignment of a European patent application requires “the signature of the parties to the contract” (emphasis added).

(Thanks to my Fox Rothschild partner Marilou Watson for bringing this change to my attention.)

[Image credit:  Oleksandr Nebrat]