Category Archives: Invalidity

“I know it when I see it.”

Federal trademark law prohibits the registration of a mark that includes “immoral, deceptive, or scandalous matter.” 15 U.S.C. § 1052(a). Today in In re Fox, the Federal Circuit affirmed a scandalous-based rejection under § 1052(a), effectively holding that one of these things is not like the other:

suckers

“Cock Sucker” is scandalous, according to the Federal Circuit, Read the rest of this entry

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Supreme Court to resolve reverse-payment legality

The United States Supreme Court announced Friday that it has agreed to review the issue of reverse patent settlements in drug cases in Federal Trade Commission v. Watson Pharmaceuticals, Inc..  The Federal Trade Commission has been angling for nearly a decade to get this issue before the Supreme Court over concerns about the anticompetitive nature of these settlements. The actual question presented is pretty straightforward:

Whether reverse-payment agreements are per se lawful unless the underlying patent litigation was a sham or the patent was obtained by fraud, or instead are presumptively anticompetitive and unlawful.

The facts of these cases are troubling to many people.  The present case involves AndroGel – a testosterone gel product under patent until 2020.  A generic drug manufacturer filed documents indicating it planned to challenge the AndroGel patents by entering the market with a generic product.  The patent owner, initiated patent infringement litigation to stop the generic, which was settled pursuant to profit-sharing arrangement that included an agreement that would keep the generic versions of AndroGel off the market until 2015 in exchange for a considerable amount of money paid by the patent owner.  The patent owner was essentially paying to keep the generic off the market.

The FTC filed a complaint alleging the settlement violated antitrust law.  The district court dismissed the complaint stating that the FTC failed to state an antitrust claim.  The Eleventh Circuit affirmed the district court stating the general rule that absent sham patent litigation or fraud in obtaining the patent, a reverse payment settlement is immune from antitrust attack so long as its anticompetitive effects fall within the scope of the exclusionary potential of the patent.

In other words, as long as the infringement claim, and the patent it is based on, are not a sham the settlements do not constitute an antitrust violation.  These settlements are controversial because the patent owner is paying the generic drug manufacturer (and alleged infringer) to keep a cheaper version of the drug off the market allowing the patent owner to enjoy a longer period of exclusivity and therefore higher profits, without the patent owner proving its case or proving the validity of the patent.  The FTC’s position is that litigation that allows both litigants to benefit at the expense of the general public amounts to a conspiracy against the general public.

The Supreme Court is likely to take a strong look at these issues as they set directly into conflict intellectual property law, which is based on the idea of a monopoly, and antitrust law which abhors a monopoly.

CLS Bank v. Alice Corp. – “Abstract” Computer Patents Under Attack

The Electronic Frontier Foundation (“EFF”) has filed an amicus brief in CLS Bank v. Alice Corp., wherein the Federal Circuit will be holding an en banc hearing to address the issue of when a computer implemented patent should be invalidated under 35 U.S.C. § 101 for claiming an abstract idea.  Section 101 provides that”[w]hoever invents or discovers anynew and useful process, machine, manufacture, or composition of matter, or anynew and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”  Despite Section 101’s broad and sweeping language, the Supreme Court has routinely recognized that there are limits to what can be patented, and that “laws of nature, physical phenomena, and abstract ideas” fall outside the scope of § 101.  Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010).

The patents in question in CLS Bank v. Alice Corp.[1] cover a computerized trading platform for exchanging obligations so as to eliminate “settlement risk.”(such a platform can be used for stock and foreign currency trades).  The District Court invalidated the patent under Section 101 as covering an “abstract idea” ineligible for patent protection.  The Federal Circuit initially overturned the lower court and upheld the validity of the patent.  According to the majority opinion, “[W]hen — after taking all of the claim recitations into consideration — it is not manifestly evident that a claim is directed to a patent ineligible abstract idea, that claim must not be deemed for that reason to be inadequate under § 101.”  The Court went on to determine that the claims in question passed its newly formulated test because they “appear to cover the practical application of a business concept in a specific way. . .”  The Court’s opinion highlighted specific elements such as creating electronically maintained shadow credit and shadow debit records, requiring such shadow credit and debit records to be held independently of the exchange institution by a supervisory institution, etc.

Some commentators believe the Federal Circuit’s decision ignored and/or was inconsistent with recent precedent seeking to rein in the scope of patent eligible subject matter.  According to EFF’s attorney Julie Samuels, patents like the one involved in CLS Bank v. Alice Corp. “lead to harmful monopolies on simple ideas like ways of running a business or cooking a meal.”  Recognizing the inherent difficulties of defining what constitutes an improper “abstract idea”, the EFF is advocating for a more vigorous application of Section 112(f) to combat the perceived problem of overbroad computer implemented patents.  Section 112(f) requires disclosure of structure corresponding to the acts covered by the patent.  According to the EFF, software patents that do not contain an algorithm should automatically be found invalid.  “Giving Section 112(f) the teeth Congress intended would simplify the Section 101 inquiry by limiting the scope of the question and eliminating from contention many patents that this court has already found to be impermissibly abstract,” the group argues.

The Federal Circuit’s en banc order has formulated the questions presented as follows:

a.         What test should the court adopt to determine whether a computer-implemented invention is a patent ineligible “abstract idea”; and when, if ever, does the presence of a computer in a claim lend patent eligibility to an otherwise patent-ineligible idea?

b.              In assessing patent eligibility under 35 U.S.C. § 101 of a computer-implemented invention, should it matter whether the invention is claimed as a method, system, or storage medium; and should such claims at times be considered equivalent for § 101 purposes?

Oral argument has not yet been scheduled for the en banc hearing.  Stay tuned.


[1] U.S. Patent Nos. 5,970,479; 6,912,510; 7,149,720; and 7,725,375.

Are Human Genes Patentable?

Certiorari granted on this question.

Figure 4 of the 5,747,282 Patent

Figure 4 of the 5,747,282 Patent

Nelson Capes previously blogged about the Association for Molecular Pathology vs. Myriad Genetics case here and the science behind it here.

SCOTUSblog has copies of the Supreme Court pleadings here.

Internet Prior Art; Related Circuit Split

In what can be characterized as a case of first impression, the Federal Circuit has concluded that a “printed publication” under 35 U.S.C. 102(b) includes an article distributed online via a subscription mailing list, made available for FTP download, and available on the web. In Voter Verified, Inc. v. Premier Elections Solutions, Inc., The court concluded that the article qualified as prior art even though there was no evidence that it had been indexed by any commercial Internet search engine before the critical date. The Federal Circuit rejected Voter Verified’s suggestion that a web-based reference  must be “searchable by pertinent terms over the internet” to qualify as a prior art “printed publication” as defined by 35 U.S.C. § 102(b). (Slip op. at 7-8.)

Voter Verified  also deepened a existing split between the circuits: The Federal Circuit has now joined the Tenth Circuit in using “internet” rather than “Internet.” See U.S. v. Perrine, 518 F.3d 1196 (10th Cir. 2008). Other circuits—including the Second and Seventh Circuits—disagree on this question, and capitalize “Internet.” E.g., Tamburo v. Dworkin, 601 F.3d 693 (7th Cir. 2010); Rescuecom Corp. v. Google Inc., 562 F.3d 123 (2nd Cir. 2009).

AIA – Summary of new § 102(a) and (b)

The America Invents Act of 2011 contains a number of very important changes to United States patent law. Probably the most discussed change is that of a “first to invent” system to a “first inventor to file” system.  This change is implemented in Sections 102(a) and 102(b) of Title 35 of the United States Code, and will go into effect on March 16, 2013.  These two sections contain a lot of changes making them significantly different from their current counterparts.  It is difficult to read the text of the statute and understand its full impact without going through a number of scenarios.  The link in this post is to a Powerpoint presentation that lays out most of the significant timing questions via a number of distinct scenarios.  The presentation also includes a number of “take-aways” and practice tips that are immediately significant for applicants to understand even prior to March 16, 2013.

Invalidity and Infringement: Not the Same Thing

It’s common for non-lawyers to confuse the issue of whether a patent is valid and the issue of whether a patent is infringed. That’s understandable for non-lawyers. (Less so for lawyers, though: “Counsel who undertake patent infringement litigation should know the difference between validity and infringement and are expected to accurately explain the difference to the court.” Allen Engineering Corp. v. Bartell Industries, 299 F.3d 1336 (Fed. Cir. 2002).)

Nowhere are these issues closer than where a version of a product accused of infringement was made or sold long before the patent was filed. This relationship is captured in the patent-law chestnut “That which infringes if later, anticipates if earlier.” Peters v. Active Manufacturing Co., 129 U.S. 530 (1889).

Confusing infringement and validity is not limited to non-lawyers though. Seasoned legal journalists can make this mistake too. A recent Law.com article titled “MoFo Knocks Out LCD Patent Infringement Suit Against Nikon” states:

Joshua Raskin, a partner at Bernstein Litowitz Berger & Grossmann, told ABC News back in 2008 that in his entire career he’d “never seen a more clear-cut case of patent infringement” than what Nikon allegedly did to his client, University of Illinois professor Kanti Jain. Manhattan federal district court judge Alvin Hellerstein clearly doesn’t agree. In a brief order issued on Tuesday, Judge Hellerstein invalidated patents relating to LCD technology that Jain’s company, Anvik Corporation, has been asserting against Nikon for close to seven years.

The article states that Judge Hellerstein “clearly doesn’t agree” with Raskin’s strong belief of “obvious” infringement. But it’s not clear whether Judge Hellerstein agrees or not with Raskin’s view. The judge thinks the patent is invalid. Raskin thinks the patent is infringed.  Both could be true. But, contrary to the article, it’s not clear that there’s disagreement on the issue of infringement.

It’s About Time

A patent may be invalid for several reasons. It may be non-novel under 35 U.C.S. § 102. The patent may be obvious to one of skill in the art, § 103. Perhaps the patent does not enable one of skill in the art to practice the invention, is indefinite, or lacks a “written description”—all grounds for invalidity under § 112.

Then there is § 101, subject-matter eligibility. This requirement for validity is different than the requirements listed above. Section 101 renders unpatentable natural laws, naturally occurring phenomena, and abstract ideas. The Supreme Court’s decision in Mayo v. Prometheus Labs, however, suggests that the content of § 101 that is truly distinct from sections 102, 103, and 112, lies in examining what I’ll call a given claim’s “future breadth”: the broadness of its scope compared to future, unknown applications. Future breadth differs from ordinary claim breadth, which is the broadness of a claim’s scope as compared to the prior art or an allegedly infringing devices.

Prometheus Labs applied § 101 to invalidate two patents that claimed methods for optimizing the therapeutic efficiency of a drug by administering the drug, measuring its metabolites, and comparing the measurements to a newly discovered concentration range in order to determine whether the drug dose should be increased or decreased. The Court held that the patents effectively  claimed a natural process, i.e. the correlation between metabolite levels and drug effectiveness.

The Court’s analysis under § 101 borrows heavily from invalidity principles under the patent laws, namely sections 102, 103, and 112. This raises the question whether and how much substantive legal content § 101 has that is distinct from the other sections.

Let’s start with something that sounds unique to § 101:

If a law of nature is not patentable, then neither is a process reciting a law of nature, unless that process has additional features that provide practical assurance that the process is more than a drafting effort designed to monopolize the law of nature itself. A patent, for example, could not simply recite a law of nature and then add the instruction “apply the law.”

(Slip op. at 8-9.)

So far, so good. Law of nature + “apply the law” = invalid patent. But because all patent claims rely in part on some law of nature the meaningful inquiry lies in determining whether the non-Law of nature portions of the claim are the equivalent of directing the reader to apply a law of nature. In this inquiry, § 101 begins sound more like sections 102, 103, and 112.

In determining that Prometheus Labs’s patents effectively recite “apply this natural law,” the Court turned away from § 101 and relied on doctrines from other areas of patent law. After disposing of the claim’s directive to administer the drug, and the natural law itself (the “wherein” clause), the Court turns to something that sounds like an anticipation or obviousness inquiry under § 102. In explaining why the “determining” step of the claim does not add enough “additional features” showing “that the process is more than a drafting effort” the Court writes (slip op. at 10):

[M]ethods for determining metabolite levels were well known in the art…. Thus this step tells doctors to engage in well-understood, routine, conventional activity previously engaged in by scientists who work in the field.

So, now the rule for § 101 is as follows: Law of nature + steps known (or obvious) in the art = invalid patent.

The Court’s criticism of Prometheus Labs’ patent also suggests written-description or enablement (§ 112) problems: “[T]he claim simply tells doctors to: (1) measure (somehow) the current level of the relevant metabolite….” As characterized, that limitation could read on later-arising blood-metabolite techniques not adequately described in the patent. (See slip op. at 16-17, discussing this concern.)

The Government suggested that the invalidity inquiry be left entirely to sections other than § 101. The Court rejects this, and holds that § 101 has content distinct from those sections, sometimes. But what is that content, and what’s the motivating concern?

The answer may be found in a “temporal” approach to invalidity. In a sense, sections 102 and 103 examine what the state of the art was at the time the claimed invention was invented—the past. Section 112’s prohibition on indefiniteness can be seen as motivated by a present concern that a person is unable to avoid infringing the patent because its claims are indefinite. Finally, Section 101 can be viewed as being concerned with future breadth, i.e. the risk that patents’ claims are broad enough to capture future general applications of a natural law or process that they must be held invalid.

Initial Thoughts on Mayo v. Prometheus

Yesterday, the Supreme Court in Mayo Collaborative Services v. Prometheus Laboratories, Inc. decided that Prometheus’s claims to a therapeutic process—comprising the steps of (1) administering a thiopurine drug to a patient suffering from an autoimmune disease, (2) determining the level of a particular metabolite in the patient’s blood, and (3) adjusting the amount of the drug up or down based upon certain naturally-occurring correlations between metabolite levels and the need for a higher or lower dose of thiopurine—recited unpatentable subject matter.  Specifically, the Court (in a 9-0 opinion authored by Justice Breyer) concluded that the process claims at issue were not meaningfully distinct from the underlying law of nature—the naturally-occurring correlation itself.  In the Court’s view, the steps of administering the drug, determining the metabolite level, and adjusting the amount of the drug up or down in light of the correlation, did not “add enough . . . to allow the processes . . . to qualify as patent-eligible processes that apply natural laws” (emphasis in original).  In reaching this conclusion, the Court reaffirmed that “[p]urely ‘conventional  or obvious’ ‘[pre]-solution activity” is normally not sufficient to transform an unpatentable law of nature into a patent-eligible application of such a law”; and emphasized its “concern that patent law not inhibit further discovery by improperly tying up the future use of laws of nature.”  Finally, the Court rejected the Federal Circuit’s view that the “transformations” that these processes cause within the human body satisfied the machine-or-transformation test (which test, the Court added , is merely a clue, not the clue, to patentability); the government’s view that the presence of even minimal steps beyond a statement of the law of nature is sufficient to satisfy § 101; and the views of some amici that a finding of unpatentability in this case would necessarily discourage medical research.

Here are some initial thoughts on the opinion and its significance.

1.  I really didn’t know what to expect from the Court as a whole, but it is not surprising that Justice Breyer concluded that the processes at issue were unpatentable.  The issue presented in the case is similar to the issue raised in the 2006 case of Laboratory Corp. of Am. Holdings v. Metabolite Laboratories, Inc., in which Justice Breyer (joined by Justices Stevens and Souter) filed an opinion (dissenting from the Court’s decision to dismiss the writ of certiorari as having been improvidently granted) expressing similar views.  What is interesting is that a unanimous Court signed off on Justice Breyer’s approach.

2.  The Mayo Court leaves open the question of what additional steps would suffice to transform an unpatentable law of nature into a patentable process.  In this respect, the opinion resembles the Court’s 2010 decision in Bilski v. Kappos, which reiterated that abstract ideas are not patentable without, however, providing much guidance as to what distinguishes an abstract from a concrete idea.  Presumably the answer to the question will evolve over time in both the USPTO and the courts.

3.  The opinion is in some ways similar to the Court’s 2007 decision in KSR Int’l Co. v. Teleflex Inc., in which Justice Kennedy used the term “common sense” five times in the course of discussing the standard for determining whether an invention is sufficiently nonobvious to qualify for patent protection.  I wouldn’t be surprised if the Court viewed Mayo as a sort of “common sense” opinion as well, to the extent the Court rejected arguments that even minimal steps in addition to the statement of the law of nature would suffice to render a process patent-eligible; indeed, Justice Breyer twice expressed concern that such a standard would merely induce creative claim drafting that would in effect monopolize laws of nature.   Whether such “common sense” approaches are consistent with good innovation policy is a difficult question; one can easily see their appeal, though at the same time they risk introducing a certain “I know it when I see it” quality that can lead to unpredictability and inconsistency in application.  The question I would now ask is whether this same approach will lead the Court to agree with the view, expressed in the district court opinion in Association for Molecular Pathology v. U. S. Patent & Trademark Office, 702 F. Supp. 2d 181, 185 (S.D.N.Y. 2010), rev’d, 653 F.3d 1329 (Fed. Cir. 2011), pet’n for cert. filed, 80 U.S.L.W. 3380 (Dec. 7, 2011), that distinguishing isolated gene sequences from naturally-occurring gene sequences is nothing more than “a lawyer’s trick”?

4.  In my view, rules of patent law should be evaluated and adjusted in light of their consequences, particularly where (as here) the statutory text provides little or no explicit guidance.  Ultimately, then, whether Mayo is a good or a bad decision depends on whether, as some of the amici predicted, the decision will on balance inhibit investments in developing new techniques of personalized medicine or (as other amici predicted) it will encourage such investments by ensuring that the essential building blocks of future innovation remain in the public domain, free for others to draw upon.  In all honesty, neither I nor anyone else really knows what those consequences will be.   We can speculate, given our understanding of the relative importance (or not) of the patent incentive in spurring innovation in this field, of the difficulties (or lack thereof) facing researchers who have to negotiate patent “thickets,” and the like.  At the end of the day, I’m an optimist and I suspect that innovation will proceed apace; so perhaps the opinion reaches the right result as a matter of policy.  I just wish I could be more confident in that expectation.

Mayo Collaborative Services v. Prometheus Labs., Inc.

Nine to zero, the Supreme Court holds that Prometheus’ patent claims, which cover correspondence between blood-metabolite concentrations and the likelihood that a drug dosage will prove ineffective or cause harm, are invalid because the patent “effectively claim[s] the underlying laws of nature themselves.” (Slip op. at 24.)

More importantly though, congratulations to my former antitrust professor, Herbert Hovenkamp, for being quoted by the Court:

C. Bohannan & H.Hovenkamp, Creation without Restraint: Promoting Liberty and Rivalry in Innovation 112 (2012) (“One problem with [process] patents is that the more abstractly their claims are stated, the more difficult it is to determine precisely what they cover. They risk being applied to a wide range of situations that were not anticipated by the patentee”)

At the same time, patent law’s general rules must govern inventive activity in many different fields of human endeavor, with the result that the practical effects of rules that reflect a general effort to balance these considerations may differ from one field to another. See Bohannan & Hovenkamp, Creation without Restraint, at 98–100.

I recall that Professor Hovenkamp was both brilliant and an effective teacher. Although I did not take a class with his co-author, Professor Bohannan, I remember that students regarded her very highly as well. Congrats to them both.

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