Publications – Oblon, McClelland, Maier & Neustadt, L.L.P.

Federal Circuit Adopts New Test for Design Patent Obviousness

30 May 2024 00:00:00 -0800

The Federal Circuit’s recent decision in LKQ Corp. v. GM Global Tech. Operations LLC, No. 21-2348, (Fed. Cir. May 21, 2024) (en banc) has overruled the longstanding test for obviousness of design patents. Specifically, the Federal Circuit found that the test for obviousness, known as the Rosen-During test, was inconsistent with Supreme Court precedent that called for “a more flexible approach than the Rosen-During test for determining non-obviousness.”

In place of the Rosen-During test, the Federal Circuit has chosen to align design patents obviousness with that of utility patents. Specifically, invalidity based on obviousness of a patented design will be determined based on the application of the Graham factors laid out by the Supreme Court in Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966). These factors include “the scope and content of the prior art”; “differences between the prior art and the claims at issue”; and “the level of ordinary skill in the pertinent art.” In addition to these factors, secondary considerations such as commercial success, long felt but unsolved needs, failure of others, etc., may be relevant as “indicia of obviousness or nonobviousness.”

Regarding the test for obviousness based on the Graham factors, the Federal Circuit noted that “[t]his test has proven workable for utility patents and we see no reason why it would not be similarly workable for design patents. As with any change, there may be some degree of uncertainty for at least a brief period, but our elimination of the rigid Rosen-Durling test is compelled by both the statute and Supreme Court precedent.”

Just one day after the Federal Circuit handed down their opinion in LKQ, the USPTO issued updated guidance and examining instructions on evaluating obviousness in design patent applications and design patents. Following an introduction to the implications of the Federal Circuit’s LKQ ruling on obviousness for designs, the USPTO provided examining instructions that addressed each of the Graham factors as Factual Inquiry One, Two, and Three.

Of note, Factual Inquiry One (“the scope and content of the prior art”) still requires that a primary reference be identified. Instead of the primary reference being “basically the same” (as under the Rosen-During test), the primary reference need only be “something in existence — not . . . something that might be brought into existence by selecting individual features from prior art and combining them, particularly where combining them would require modification of every individual feature.” The primary reference does not even have be in the same field of endeavor as the claimed design so long as it is analogous art. Any secondary reference must also be analogous art. The USPTO guidance notes that “the Federal Circuit did not define how to determine whether a prior art design outside the field of endeavor of the article of manufacture is analogous.” The USPTO guidance does not explain how to determine whether a prior art design is analogous, but does instruct examiners to “consider the degree to which an ordinarily skilled designer would be motivated to consider other fields.” If the examiner still is unsure, then the examiner should contact their SPE, though it is unclear what metric the SPE will use to help the examiner decide. The USPTO will also begin compiling examples of when a reference has been determined to be analogous art.

In evaluating obviousness of design applications, the USPTO guidance cautions that “there must be some record-supported reason (without impermissible hindsight) that an ordinary designer in the field of the article of manufacture would have modified the primary reference with the feature(s) from the secondary reference(s) to create the same overall appearance as the claimed design. Design examiners should keep in mind that, generally, the more different the overall appearances of the primary reference versus the secondary reference(s), the more difficult it will be to establish a motivation to alter the primary prior art design in light of the secondary one and set forth a prima facie case of obviousness.”

The now-overruled Rosen-Durling test was very workable and helped maintain a high allowance rate for design applications and helped to make it difficult to invalidate existing design patents based on obviousness. Regardless of how workable this new obviousness test proves to be in the design context, it certainly has created a lot of questions for practitioners and examiners, and we will be closely following its implementation.

Second Circuit Affirms Thom Browne, Inc. Jury Verdict, Rejecting adidas Appeal Seeking a New Trial

10 May 2024 00:00:00 -0800

On May 3, 2024, the Second Circuit affirmed the trial court’s judgment favoring Thom Browne, Inc. based on the jury’s verdict of noninfringement of adidas’s ubiquitous Three-Stripe Mark. Adidas Am., Inc. v. Thom Browne, Inc., 2024 U.S. App. LEXIS 10824 (2d Cir. May 3, 2024). The jury had found Thom Browne, Inc.’s four-stripe mark noninfringing.

In seeking a new trial, adidas argued that denial of a jury instruction regarding the third Polaroid factor (similarity of the products or services), exclusion of one aspect of an expert witness’s testimony, and admission of testimony by one of Thom Browne’s experts, constituted prejudicial error.

Adidas had alleged that Thom Browne’s products did not cause point-of-sale confusion, but initial-interest and post-sale confusion. To reflect its initial-interest and post-sale confusion theory, adidas sought to instruct the jury:

[Y]ou should consider the competitive proximity of the parties’ products. In other words, you should compare adidas’s Three-Stripe Mark products with the Accused Products and consider how similar the products are, whether they are sold in the same or similar channels, and whether they are promoted through similar advertising media. Products that are similar, or that are sold or advertised in similar channels, are more likely to be confused than those used in connection with unrelated or non-proximate products.

The district court described adidas’s proposed instruction as “endless and confusing.” The court instructed the jurors to consider “’whether the accused products and adidas products compete for the same consumers.’” Id., Slip op. at *3.

The Second Circuit affirmed holding the district court’s charge proper. Adidas failed to show any error, much less a prejudicial one. The district court instructed the jury multiple times to confine its inquiry to initial-interest and post-sale confusion. The differences between adidas’s proposed instruction and the court’s instruction were immaterial. Adidas could not articulate “a meaningful distinction between ‘competitive proximity’ and ‘competition for the same consumers.’” Id. at *3-4.

Adidas’s argument regarding exclusion of expert testimony also fell flat. The district court had required adidas to proffer an expert witness’s testimony so the court could assess admissibility. When the expert witness, Mr. D’Arienzo, was called to testify, adidas proffered him for one of three topics discussed in his report, specifically, “how different executions can still [be] recognized from a branding device.’” Slip op. at *4. The district court “found that the methodology he used to reach his conclusions – reviewing the opinions of ‘fashionistas on the web,” App’x 236 – was unreliable and thus excluded his testimony on this topic.

On appeal, adidas challenged the district court’s exclusion of D’Arienzo’s testimony on another topic addressed in his report, which was not part of the proffer in the district court – how the lines between luxury and sportswear have blurred. Because adidas declined the district court’s invitation to make a proffer on that subject, the Second Circuit held adidas waived any objection that could arise from D’Arienzo’s silence on that topic. Id., Slip op. at *6.

Adidas also objected to the admission of testimony of JoAnne Arbuckle, one of Thom Browne’s experts. The district court precluded Arbuckle from offering expert testimony but permitted her to testify regarding “’the appearance of [adidas’s] Three-Stripe Mark as an historical matter in numerous situations.’” Id. (quoting App’x 284). The Second Circuit rejected adidas’s objection that Arbuckle’s testimony was within the ken of the average juror, because Arbuckle did not testify as an expert, but rather, as a lay witness. Id.

U.S. Supreme Court Holds Copyright Act's Three Year Statute of Limitations Does Not Limit Damages for an Otherwise Timely Claim

09 May 2024 00:00:00 -0800

In Warner Chappell Music, Inc. v. Nealy, 601 U.S. ___ (May 9, 2024), the U.S. Supreme Court held that the Copyright Act’s three-year statute of limitations does not limit the damages available for otherwise timely claims.

The dispute arose from a music venture in 1983 when Sherman Nealy and Tony Butler formed Music Specialist, Inc. and recorded one album and several singles. The collaboration dissolved, and Nealy then did two stints in prison for drug-related offenses.

Meanwhile, Butler entered into an agreement with Warner Chappel Music, Inc. to license works from the Music Specialist catalog, and Warner Chappell successfully licensed several of the works to various prominent recording artists.

Following his second prison stint, Nealy sued Warner Chappell for copyright infringement alleging that Warner Chappell’s licensing activities infringed his rights in the works dating back to 2008 or ten years before he brought suit. The Copyright Act requires that a plaintiff file suit within “three years after the claim accrued.” § 507(b). “On one understanding of that limitations provision, a copyright claim ‘accrue[s]’ when ‘an infringing act occurs.’” Slip op. at 2 (quoting Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. 663, 670 (2014)). However, under the “discovery rule” applied by courts within the Eleventh Circuit where Nealy filed suit, a claim accrues when “’the plaintiff discovers, or with due diligence should have discovered,’ the infringing act.” Id. Under the discovery rule, Nealy could raise claims based on very old infringements if he discovered them within the three years preceding the lawsuit.

Although the District Court ruled that the discovery rule applied to the timeliness of Nealy’s claim, it held that “even when claims for old infringements are timely, monetary relief is ‘limited’ to ‘three years prior to the filing’ of the action.” This meant Nealy could bring claims for infringing acts beyond the three-year period but could not recover damages for those claims.

On an interlocutory appeal, the Eleventh Circuit reversed rejecting the notion of a three-year damages bar on a timely claim. “Allying itself with the Ninth rather than the Second Circuit, the court held that a plaintiff with a timely claim under the discovery rule may obtain ‘retrospective relief for [an] infringement’ even if it ‘occurr[ed] more than three years before the lawsuit’s filing.’” Slip op. at 3 (quoting 60 F. 4th 1325, 1331 (2023) (citing Starz Entertainment v. MGM, 39 F. 4th 1236, 1244 (9th Cir. 2022)).

Because the applicability of the discovery rule was not challenged below, the U.S. Supreme Court considered the limited issue of whether a timely claim under the discovery rule can get damages going back more than three years. Slip op. at 4-5. The Supreme Court ruled that the plain language of the Copyright Act makes clear that there is no time limitation on the recovery of damages for an otherwise timely claim. The statute of limitations within the Act, the so-called “time-to-sue prescription,” “establishes no separate three-year period for recovering damages . . ..” Slip op. at 5. The Act’s remedial provisions also do not include a time limitation on damages.

“They state without qualification that an infringer is liable either for statutory damages or for the owner’s actual damages and the infringer’s profits. See § 504(a)-(c). There is no time limit on monetary recovery. So a copyright owner possessing a timely claim for infringement is entitled to damages, no matter when the infringement occurred.”

Slip op. at 5.

The Supreme Court expressly rejected the Second Circuit’s three-year damages limitation for timely claims under the discovery rule as lacking textual support and as gutting or silently eliminating the discovery rule. “The Copyright Act contains no separate time-based limit on monetary recovery.” Slip op. at 7.

In dissent, Justice Gorsuch (joined by Justices Thomas and Alito) argued that the Court should not have side-stepped the antecedent question of whether the Copyright Act authorizes a discovery rule for accrual of claims. The discovery rule should only apply in cases of fraud or concealment, Slip op. at 2 (Gorsuch, J., dissenting) (citing TRW Inc. v. Andrews, 534 U.S. 19, 27 (2001)), neither of which was alleged by Nealy. Justice Gorsuch “would have dismissed the case as improvidently granted and awaited another squarely presenting the question whether the Copyright Act authorizes the discovery rule. Better, in my view, to answer a question that does matter than one that almost certainly does not.” Slip op. at 3 (Gorsuch, J., dissenting).

5 IP Rules to Know to Protect Your Business in the United States (article in French)

17 Jan 2024 00:00:00 -0800

Philippe J.C. Signore, Partner with Oblon, discusses the differences between the American and French intellectual property systems.

USPTO Releases Examiner Guidance for The Amgen Enablement Decision

10 Jan 2024 00:00:00 -0800

The USPTO today published its guidance to the examiners on the impact of the Amgen v. Sanofi,143 S. Ct. 1243 (2023), on USPTO practice. The Guidance is basically steady as she goes but with the caveat that the enablement requirement and the Wands factors (In re Wands, 858 F.2d 731, 737 (Fed. Cir. 1988)) apply across all technologies, noting the Court’s reliance on cases involving the telegraph, incandescent lamp filaments and wood glue. The Guidance also noted that the post-Amgen Federal Circuit decisions had reaffirmed the continued validity of the Wands factors as consistent with Amgen, citingMedytox, 71 F.4th at 998- 999, Baxalta Inc, v. Genentech, Inc., 81 F.4^th 1362 (Fed. Cir. 2023), and In re Starrett, 2023 WL 3881360 (Fed. Cir. 2023) (non-precedential).

A copy of the guidance is here.

Penumbra, Inc. v. RapidPulse, Inc.

08 Dec 2023 00:00:00 -0800

Summary

The U.S. Patent Trial & Appeal Board (“PTAB”) designated a portion of its decision in Penumbra, Inc. v. RapidPulse, Inc., as precedential on November 15, 2023.[1]^,[2],[3] This decision distinguishes the priority rules applicable to prior art patents cited against post-AIA patents from the priority rules applicable to pre-AIA patents. In 2015, the Federal Circuit issued an opinion in Dynamic Drinkware, LLC v. National Graphics, Inc., which established that any patent being used as a prior art reference can only have the benefit of priority to a provisional application if the provisional application provided support for the claims in the prior art reference.[4] However, the PTAB’s decision in Penumbra upends that rule for post-AIA patents.

The PTAB held that the language of AIA 35 U.S.C. §§ 102(a)(2) & 102(d) was sufficiently different from the corresponding language in the pre-AIA §102(e) to change the requirements for a reference patent to be entitled to the benefit of a parent provisional application’s filing date. As a result of the PTAB’s holding, there is no longer “[a] need to evaluate whether any claim of a reference patent document is actually entitled to priority when applying such a reference patent as prior art.”[5] Accordingly, for consideration of priority, a reference patent only needs to meet the ministerial requirements of 35 U.S.C. §§ 119 and 120, and the provisional in question need only describe the subject matter relied upon in the reference patent as prior art.[6]

Background

Petitioner Penumbra filed an IPR Petition to challenge U.S. Patent No. 10,531,883 (“the ’883 patent”) held by patent owner RapidPulse, Inc. The ’883 patent describes a medical device designed to aspirate blood clots from cerebral vasculature for the treatment of ischemic strokes. The device functions by alternatively applying and eliminating a vacuum at the distal end of the device such that a clot may be rocked back and forth before aspiration, thereby overcoming the static force of friction so that it can be removed more easily.

Analysis

The PTAB examined Claims 1-18 of the ’883 patent under Petitioner’s arguments that 35 U.S.C. § 103 may render the ’883 patent unpatentable over cited prior art. The cited prior art included U.S. patents to Teigen,[7] Grey,[8] Rubenstein,[9] Yang,[10] and Matteo[11], but only Teigen was of material significance to the precedentially designated portion of this PTAB decision.

The PTAB found that Teigen, along with various combinations of the other prior art references, was sufficient to invalidate all 18 challenged claims of the ’883 patent under 35 U.S.C § 103. However, the application which issued as the Teigen reference was filed on August 24, 2021, which postdated the July 18, 2019, filing date of application no. 16/516,232 (“the ’232 application”) which issued as the ’883 patent. Accordingly, Petitioner argued that Teigen was entitled to the benefit of priority to two provisional applications that predated the ’883 patent’s effective filing date: U.S. provisional application nos. 62/778,708 (“the ’708 provisional”), filed December 12, 2018, and 62/702,804 (“the ’804 provisional”), filed July 24, 2018. Patent Owner likewise argued that the ’883 patent was entitled to priority back to U.S. provisional application no. 62/750,011 (“the ’011 provisional”).

Accordingly, the relevant timeline is as follows:

the ’804 provisional (1^st priority for Teigen) – 7/24/2018
the ’011 provisional (priority for the ’883 patent at issue) – 10/24/2018
the ’708 provisional (2^nd priority for Teigen) – 12/12/2018
the ’232 application (’883 patent at issue) – 7/18/2019
Teigen – 8/24/2021

Priority for Patent at Issue

The PTAB determined that for the ’883 patent to be entitled to the benefit of priority extending back to the ’011 provisional, the ’011 provisional would need to provide written support for the claims of the ’883 patent, notably at issue here, “prevent[ing] forward flow.” The PTAB held that while the ’011 provisional described some embodiments of the device with very little forward flow, it also described embodiments with higher levels of flow and at no point was the key feature of “prevent[ing] forward flow” ever considered by the ’011 provisional as an important or desirable feature. The PTAB ultimately held that the challenged claims were not sufficiently supported by the written description of the ’011 provisional and so the ’883 patent was only entitled to a priority date of July 18, 2019.

Priority for Teigen

The PTAB held that a reading of AIA 35 U.S.C. §§ 102(a)(2) & 102(d) should distinguish AIA patents from pre-AIA patents. The PTAB stated that “AIA § 102 draws a distinction between actually being entitled to a right of priority to, or the benefit of, a prior-filed application … of a claimed invention … and merely being entitled to claim a right of priority to, or the benefit of, a prior-filed application for prior-art purposes.”[12]

Therefore, the requirements to establish priority for a prior art patent cited against an AIA patent are lower than the requirements to establish priority for an AIA patent otherwise. For the purposes of prior art, this means that a patent can be entitled to the benefit of priority to a provisional application so long as it satisfies the ministerial requirements of priority under 35 U.S.C. §§ 119 and 120, and the provisional application provides written description support for the relevant disclosure.

The PTAB also held that while the ’804 and ’708 provisionals did not meet the pre-AIA Dynamic Drinkware priority requirements, they did satisfy this new interpretation. Accordingly, Teigen had the benefit of its earlier priority date back to the ’804 provisional filing date of July 24, 2018.

Conclusion

Because Teigen’s provisional applications both satisfied these new requirements, the earliest priority date available for the Teigen patent was the ’804 provisional’s filing date of July 24, 2018, which predated the ’883 patent’s applicable priority date of July 18, 2019. Therefore, the relevant disclosure in Teigen was available as prior art against the ‘883 patent. This ultimately resulted in a holding of unpatentability for challenged claims 1-18 of the ’883 patent under 35 U.S.C. § 103.

The Penumbra opinion serves as an important reminder that the effective prior art date of a prior art patent may change depending on whether the patent being challenged is subject to the AIA or pre-AIA versions of the patent statute. That said, the Federal Circuit has not yet weighed in to affirm Penumbra’s interpretation of the AIA statute. Stay tuned until the appeals court has also addressed this interesting issue.

[1] Penumbra, Inc. v. RapidPulse, Inc., IPR2021-01466, Paper 34 (March 10, 2023)

[2] https://www.uspto.gov/patents/ptab/precedential-informative-decisions

[3] §II.E.3 designated precedential, see pgs. 28 - 35

[4] Dynamic Drinkware, LLC v. Nat’l Graphics, Inc., 800 F.3d 1375, 1378 (Fed. Cir. 2015)

[5] Penumbra, Inc. v. RapidPulse, Inc., IPR2021-01466, Paper 34 (March 10, 2023) at pg. 32, emphasis added.

[6] Id. at pgs. 30-32

[7] Teigen et al., US 11,096,712 B2, issued Aug. 24, 2021

[8] Grey et al., WO 2014/151209 A1, published Sept. 25, 2014

[9] Morton K. Rubenstein, US 3,955,574, issued May 11, 1976

[10] Yang et al., US 2017/0238953 A1, published Aug. 24, 2017

[11] Joseph Matteo, US 2012/0138833 A1, published June 7, 2012

[12] Penumbra, Inc. v. RapidPulse, Inc., IPR2021-01466, Paper 34 (March 10, 2023) at pg. 31

Fed. Cir. Puts More Patents At Risk of Double-Patenting Ax

31 Aug 2023 00:00:00 -0800

Richard Kelly is quoted in the Law360 article, “Fed. Cir. Puts More Patents At Risk of Double-Patenting Ax.”

Pure AIA Patents and Applications Cannot Be Involved in Interferences

16 Aug 2023 00:00:00 -0800

In SNIPR TECHNOLOGIES LIMITED V. ROCKEFELLER UNIVERSITY, No. 2022-1260 (July 14, 2023) (Chen,* Wallach, and Hughes), a panel of the Court addressed the issue of which patents and patent applications can be the subject of an interference.

SNIPR is the owner of five patents directed to methods of selectively killing bacteria in a mixed set of bacteria using CRISPR gene editing. All of the SNIPR patents claimed priority to a PCT application filed on May 3, 2016. Accordingly, all of the applications from which the SNIPR patents issued were deemed “pure AIA” applications (i.e., applications that only ever contained claims with an effective filing date after March 16, 2023) and so examined and issued under the AIA’s first-inventor-to-file patentability requirements.

Rockefeller University had a pending application that was also directed to methods of selectively killing bacteria. Rockefeller’s application claimed priority to a PCT application filed on February 4, 2014, and a U.S. provisional application filed on February 7, 2013. Based on the filing date of Rockefeller’s provisional application, Rockefeller’s pending application was deemed a “pure pre-AIA” application (i.e., an application that has only ever contained claims with effective filing dates before March 16, 2013).

The Board declared an interference between certain claims of Rockefeller’s pending application and all of the claims of the SNIPR patents. The Board initially identified Rockefeller as the senior party based on the February 2014 filing of the Rockefeller PCT application. SNIPR moved to terminate the interference on the grounds that interferences are unavailable to assess patents governed by the AIA. The Board subsequently redeclared the interference, but this time gave Rockefeller benefit of the pre-AIA filing date of the Rockefeller provisional application.

SNIPR again moved to terminate the interference on the grounds that the AIA eliminated interferences for pure AIA patents and patent applications. The Board again denied SNIPR’s motion using the rationale that Rockefeller’s pending application, as a pure pre-AIA application, had to comply with the pre-AIA version of 35 U.S.C. § 102(g) (which required an interference under pre-AIA 35 U.S.C. § 135 between the claims of Rockefeller’s pending application and the claims of the SNIPR patents).

SNIPR did not file a priority statement alleging an earlier date of invention than the filing date of the Rockefeller provisional application. The Board therefore entered judgment against SNIPR and cancelled all of the claims of all of the SNIPR patents. SNIPR then appealed.

In an opinion by Judge Chen, the panel reversed the Board’s decision and held that first-inventor-to-file patents and patent applications exclusively governed by the AIA, i.e., pure AIA patents and applications, cannot be subject to an interference.

The panel rejected the argument from Rockefeller and the Director of the U.S. Patent & Trademark Office, who had intervened, that AIA § 3(n) required Rockefeller’s pending application, as a pure pre-AIA application, to be evaluated under pre-AIA 35 U.S.C. § 102(g) (which required an interference under pre-AIA 35 U.S.C. § 135(a) to determine priority of invention). In particular, the panel rejected the argument the language of pre-AIA 35 U.S.C. § 135(a) authorizing an interference between an application and “any unexpired patent” gave the Director the authority to declare an interference that included a pure AIA patent like the SNIPR patents.

The panel first reviewed the statutory language of AIA § 3(n) and concluded that only pure pre-AIA and “mixed” patents and patent applications (i.e., patents and applications that contain (or contained at any time) at least one claim with a pre-AIA effective filing date and at least one claim with a post-AIA effective filing date) may be part of an interference. Finding “no hint” of congressional intent to expose pure AIA patents and patent applications to interference, the panel reasoned that AIA § 3(n)(1) and § 3(n)(2) created two separate worlds for interferences: pure pre-AIA and mixed patents and patent applications, which are subject to interferences; and pure AIA patents and patent applications which are not subject to interferences. The panel therefore concluded that the AIA bars pure AIA patents from being subject to an interference.

The panel then turned to the language of pre-AIA 35 U.S.C. § 135(a) and concluded that the language “any unexpired patent” did not include pure AIA patents. Noting that the words of a statute must be read in context and with a view to their place in the overall statutory scheme, the panel concluded that such a reading would be inconsistent with the plain language of AIA § 3(n) (which the panel had concluded did not allow pure AIA patents to be part of interferences). The panel further noted that interpreting “any unexpired patent” in the manner proposed by Rockefeller and the Director would undermine “a central purpose” of the AIA, which was to do away with the first-inventor-to-file system and interferences for future applications. Under the interpretation proposed by Rockefeller and the Director, pure AIA patents could conceivably be dragged into interferences until the year 2034. The panel also noted that the interpretation proposed by Rockefeller and the Director would render superfluous the limited exception of AIA § 3(n)(2), thereby providing another reason to support the conclusion that the phrase “any unexpired patent” in 35 U.S.C. § 135(a) did not include pure AIA patents.

The panel therefore reversed. Because the panel reversed the Board's decision, the claims of all five SNIPR patents were reinstated. And, because the SNIPR patents are ineligible to be included in an interference with the Rockefeller pending application, the PTO will have to issue the Rockefeller pending application without further amendment. Interestingly, this means that there will be multiple patents owned by different parties that claim the same subject matter. While this situation may be resolvable in the future through an AIA trial proceeding or in a district court litigation challenging the validity of the SNIPR patents or the Rockefeller patent, it nevertheless creates a significant potential issue for any third party looking to enter the field.

Joint Inventor Need Not Conceive of Entire Invention – Contribution of Elements of Invention Sufficient for Inventorship

17 Jul 2023 00:00:00 -0800

In BLUE GENTIAN, LLC v. TRISTAR PRODUCTS, INC., No. 2021-2316 (June 9, 2023) (Prost*, Chen, and Stark), a panel of the Court addressed the requirements for co-inventorship of utility and design patents.

Blue Gentian sued Tristar in 2012 for infringement of six patents, four utility patents and two design patents, all of which related to an expandable hose. Among the features of the claimed hose were a flexible elongated outer tube made of a fabric material and a flexible elongated inner tube made from an elastic material which were unsecured to one another except at their ends. Each of the asserted patents named a single inventor, Michael Berardi, who was Blue Gentian’s principal.

Tristar counterclaimed to correct the inventorship of all six asserted patents by adding a co-inventor, Gary Ragner. Ragner was the named inventor on two other patents to expandable hoses that had been licensed by Tristar.

Berardi had filed his first patent application for an expandable hose in November 2011. Significantly, however, three months prior to that filing, on August 23, 2011, Berardi had met with Ragner, who was the founder of Ragner Technology Corporation and had been seeking investors to help Ragner Tech. bring its first product — an expandable hose called the “MicroHose” — to market. At that meeting, Ragner had shown Berardi a document that detailed the manufacturing process of the MicroHose, including an inner elastomer layer and a reinforcement layer made of polyester yarn, as well as a prototype which had a vinyl inner tube and a yarn cord attached to the outside. Berardi was also told that the version of the MicroHose that Ragner Tech. intended to market would have a full fabric cover.

Following an evidentiary hearing, the district court concluded that Ragner should have been named as inventor on all six asserted patents. In particular, the district court found that Ragner conveyed three key elements of the host to Berardi, viz. the fabric outer tube; the elastic inner tube; and attaching the tubes only at their ends, and that these key elements amounted to a significant contribution to at least one claim in each of the asserted patents. The district court therefore entered judgment in favor of Tristar and ordered correction of all six asserted patents under 35 U.S.C. § 256.

Blue Gentian then appealed. In an opinion by Judge Prost, however, the Federal Circuit rejected Blue Gentian’s arguments and affirmed the district court.

The panel first addressed Blue Gentian’s challenges relating to the district court’s findings relating to Ragner’s contribution. The panel rejected Blue Gentian’s suggestion that the district court erred by failing to construe any of the claims of the asserted patents before finding that Ragner had contributed to the invention thereof. The panel noted that Blue Gentian had failed to identify even a single dispute about claim scope that was material to inventorship and found that Blue Gentian’s argument that claim construction is always a threshold requirement was “without merit.”

The panel also rejected Blue Gentian’s attack on the district court’s conclusion that Ragner has made a significant contribution to the claimed inventions, noting that Blue Gentian had relied on the elements attributed to Ragner in distinguishing the claimed invention from the prior art. The panel found that features that a patentee relied upon in distinguishing the prior art are necessarily significant. The panel also found that the same three-element contribution applied to the design patents, since a hose with those elements would necessarily have the appearance shown in the claimed designs.

Turning to the issue of corroboration, the panel rejected Blue Gentian’s argument that the district court erred by only requiring corroboration that Ragner conceived of the three key elements, and not requiring separate corroboration that he communicated those elements to Barardi. The panel found that the evidence relied on by the district court was sufficient to conclude that Ragner had, in fact, conveyed those three elements to Barardi at their meeting. The panel also rejected Blue Gentian’s attacks on individual items of evidence, including the prototype that Ragner showed Barardi, noting that corroboration is based on evaluation of the evidence as a whole.

Finally, on the issue of collaboration, the district court had concluded that the information exchange between Ragner and Barardi at their single meeting was sufficient. The panel agreed, rejecting Blue Gentian’s argument that there could be no collaboration in a situation such as this, where one inventor (Ragner) was trying to design a device different from the other inventor (Barardi). The panel noted the principal that a joint inventor need not conceive of the entire invention, and so found it was irrelevant that Ragner did not intend to invent the hose ultimately claimed in the asserted patents. The panel further noted that the meeting between Ragner and Barardi involved the requisite element of joint behavior, viz., one inventor hearing another’s suggestion at a meeting. The panel therefore concluded the district court had not erred.

Show Me the Money – USPTO Fee Proposals Include Fee Provisions to Impact Applicant Behavior

19 Jun 2023 00:00:00 -0800

The USPTO has opened the discussion on its fees to be effective in 2025. While the PTO is to be applauded for getting ahead of the fee curve, unfortunately some proposed fees are not only outrageous but beyond the PTO’s fee setting authority. The PTO in its fee setting objectives listed as one objective to “Promote efficient operations and efficient filing behaviors.” [Emphasis added]. The PTO’s executive summary quoted in this post is found here along with other supporting documentation. The PTO’s fee setting authority is not unbounded but restricted by several laws. First, the House Report describes the fees in 35 U.S.C. § 41 as the reference point for future adjustments. It provides in part for these fees for over 3 independent claims with a column added for 45% inflation since 2011[1]:

However, the proposal is for $200 for each claim over 20 or a 100% increase and a $600 fee for each independent claim over 3 or a 25% increase. The PTO did not, in its submissions, provide any cost data for FY 2022 or any other previous FY. In its executive summary the PTO described the objective to “Encourage applicants to be more efficient in the number of claims filed.” There is nothing in the PTO’s fee setting authority to use it to influence applicants’ habits. The fee setting provision of the AIA provides:

(a) FEE SETTING.—
(1) IN GENERAL.—The Director may set or adjust by rule any fee established, authorized, or charged under title 35, United States Code, or the Trademark Act of 1946 (15 U.S.C. 1051 et seq.), for any services performed by or materials furnished by, the Office, subject to paragraph (2).
(2) FEES TO RECOVER COSTS.—Fees may be set or adjusted under paragraph (1) only to recover the aggregate estimated costs to the Office for processing, activities, services, and materials relating to patents (in the case of patent fees) and trademarks (in the case of trademark fees), including administrative costs of the Office with respect to such patent or trademark fees (as the case may be). [Emphasis added]

Despite the PTO’s ill-fated attempt to reduce the filing of continuation applications in 2007 it is trying again in the proposals. See Tafas v Doll, 559 F.3d 1345, (Fed. Cir. 2009). The PTO is proposing:

Note that the second and, especially, subsequent requests would exceed the PTO’s cost and represent an 80% increase. It is important to remember that the objective of the fees was to recover 50% of the PTO’s operating costs from pre-issuance fees and 50% post issuance.

Another example of price gouging is the proposed PTE fees:

Note that the proposed fee exceeds the PTO’s cost by a factor of 2.6. The initial interim extension fee does not include the application fee which is separate and must be filed with the interim extension. As for the interim extension fee, the PTO’s cost figure seems high. The fee for a redetermination might be fair if the redetermination simply confirmed the correctness of the initial one, but why should the patentee pay a fee if the PTO performed the determination incorrectly.

Another example of the PTO’s greed can be seen in the terminal disclaimer fee where it is determined by when the disclaimer is filed:

The executive summary justifies the new fees because the sliding fee will prompt early filing of terminal disclaimers, ignoring the fact that many double patenting rejections are in error. It would also punish those who challenge the rejection and lose. The PTO claims that the fees will reduce its costs but does not explain how. How much does it cost to process a terminal disclaimer in a patented application? The PTO doesn’t tell us. This is not cost recovery but an attempt to modify applicant’s actions which is not authorized by statute.

These are but a few of the fees the PTO proposes to use to control applicants. Those in the life science arena will be disproportionately affected if the proposals are adopted.

[1] This table is taken from David Boundy’s May 25, 2023 letter to the Public Advisory Committee which provides a detailed explanation of the PTO’s fee making authority, available here.