Top Five Stories of 2019

By Donald Zuhn –-

After reflecting upon the events of the past twelve months, Patent Docs presents its 13th annual list of top patent stories.  For 2019, we identified fifteen stories that were covered on Patent Docs last year that we believe had (or are likely to have) a significant impact on patent practitioners and applicants.  In previous posts, we counted down stories #15 to #11 and stories #10 to #6, and today we count down the top five stories of 2019.  As with our other lists (2018, 2017, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, and 2007), links to our coverage of these stories (as well as a few links to articles on related topics) have been provided in case you missed the articles the first time around or wish to go back and have another look.  As always, we love to hear from Patent Docs readers, so if you think we left something off the list or disagree with anything we included, please let us know.  In addition, we will be offering a live webinar on the "Top Patent Law Stories of 2019" on January 22, 2020 from 10:00 am to 11:15 am (CT).  Details regarding the webinar, which will focus on a handful of the most important stories on this year's list, can be found here.

5.  USPTO Updates Subject Matter Eligibility Guidance (Not Once, But Twice)

In January, the U.S. Patent and Trademark Office published updated examination guidance regarding the subject matter eligibility of inventions involving abstract ideas.  At first blush, the updated guidance does not appear to be a radical departure from substantive USPTO examination practice despite raising a few additional procedural hurdles that examiners are to overcome before rejecting claims under 35 U.S.C. § 101.  In October, the USPTO released an update to its January 2019 Subject Matter Eligibility Guidance, in which the Office sought to clarify issues brought up in public comments on the January Guidance.  The patent community will have to wait and see how the new guidance plays out in practice.  If anything, the additional procedural requirements introduced and the limiting of abstract ideas to only three categories is likely to favor applicants for at least some types of inventions.  It is unlikely, however, that any claims that could be found patent-eligible under previous examination procedures are suddenly going to be viewed as ineligible under the new guidance.

For information regarding this and other related topics, please see:

• "USPTO Subject Matter Eligibility October Update: Example 46," November 17, 2019
• "USPTO Publishes Update to Its Subject Matter Eligibility Guidance," October 17, 2019
• "The PTAB Goes to Europe: Four Recent Section 101 Decisions Designated as Informative," July 28, 2019
• "USPTO Presentation on Evaluating Computer-Implemented Functional Claiming under 35 U.S.C. § 112," June 18, 2019
• "USPTO on Patent Eligibility -- Examples 41 and 42," January 24, 2019
• "USPTO on Patent Eligibility -- Example 40," January 20, 2019
• "USPTO on Patent Eligibility -- Examples 38 & 39," January 15, 2019
• "USPTO on Patent Eligibility -- Example 37," January 14, 2019
• "USPTO Issues Updated Subject Matter Eligibility Guidance," January 7, 2019

4.  Post-grant Review of Pre-AIA Patents Constitutional -- USPTO Appointment of APJs at PTAB Unconstitutional

In July, the Federal Circuit in Celgene Corp. v. Peter affirmed a determination by the Patent Trial and Appeal Board (PTAB) that two patents owned by Celgene Corp. were invalid.  In rendering that decision, however, the Federal Circuit also addressed on the merits Celgene's argument that retroactive invalidation of its patents under the inter partes review (IPR) procedures introduced into U.S. patent law by the Leahy-Smith America Invents Act (AIA) is unconstitutional because its patents were granted before enactment of these IPR procedures and thus amounted to a taking under the Fifth Amendment.  The Federal Circuit based its decision that IPRs are not unconstitutional on the history, beginning in 1980, of Patent Office review of previously granted patents, which at least put patentees on notice that the Office could reconsider the validity of the patent grant.  This history made that grant contingent on there not being a successful post-grant challenge, and thus an IPR is nothing more than the latest iteration of such proceedings.

And then in October, the Federal Circuit in Arthrex, Inc. v. Smith & Nephew, Inc. determined that the way in which the U.S. Patent and Trademark Office has appointed administrative patent judges at the PTAB violates the Appointments Clause of the Constitution (Art. II, sec. 2, cl. 2).  According to the opinion, because administrative patent judges are principal officers they must be nominated by the President and confirmed by the Senate.

For information regarding this and other related topics, please see:

• "Federal Circuit Holds APJs Are Principal Officers," October 31, 2019
• "OSI Pharmaceuticals, LLC v. Apotex Inc. (Fed Cir. 2019)," October 8, 2019
• "Enzo Life Sciences, Inc. v. Becton, Dickinson and Co. (Fed. Cir. 2019)," August 21, 2019
• "Celgene Corp. v. Peter (Fed. Cir. 2019)," August 5, 2019

3.  Courts Continue to Address Question of Sovereign Immunity in Patent Cases

In April, the U.S. Supreme Court denied a petition for writ of certiorari by the St. Regis Mohawk Indian Tribe on the question (answered in the negative by the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office and the Federal Circuit) of whether tribal sovereign immunity could protect the tribe from being named as a party in an inter partes review (IPR) proceeding after Allergan assigned to the tribe its patents in IPR.  Then in June, in Regents of the University of Minnesota v. LSI Corp., the Federal Circuit determined that State sovereign immunity does not preclude institution of IPR proceedings before the PTAB.  In September, the State of Minnesota filed a petition for certiorari, contending that the Federal Circuit erred in deciding that the University of Minnesota, as an "arm of the state," could not assert sovereign immunity against LSI Corp., which sought to have the PTAB institute an IPR against University-owned patents.  And last fall, the Federal Circuit in Board of Regents of the University of Texas System v. Boston Scientific Corp. refused to recognize the immunity as advanced by the State, in this case asserted over the question of proper venue.  Given the number of cases in which the issue of sovereign immunity in patent cases has been raised, this issue is likely to be selected again for our top stories list in 2020.

For information regarding this and other related topics, please see:

• "Board of Regents of the University of Texas System v. Boston Scientific Corp. (Fed. Cir. 2019)," September 19, 2019
• "State of Minnesota Petitions for Certiorari in Regents of University of Minnesota v. LSI Corp.," September 15, 2019
• "Regents of the University of Minnesota v. LSI Corp. (Fed. Cir. 2019)," June 16, 2019
• "Supreme Court to Revisit Abrogation of State Sovereign Immunity From IP Infringement," June 4, 2019
• "Supreme Court Denied Certiorari Writ by St. Regis Mohawk Indian Tribe in Restatis® IPR," April 15, 2019

2.  Federal Circuit Strikes Down Diagnostic Patent in Athena v. Mayo, But Cannot Find Consensus on Subject Matter Eligibility Solution

In February, in Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC, the Federal Circuit affirmed a District Court decision holding claims 6-9 of U.S. Patent No. 7,267,820 invalid under 35 U.S.C. § 101.  The '820 patent is directed to methods for diagnosing neurological disorders by detecting antibodies to a protein called muscle-specific tyrosine kinase (MuSK).  In July, the Federal Circuit issued a per curiam Order, denying a petition for rehearing en banc filed by Athena.  The per curiam Order was accompanied by eight opinions, four concurring in the denial of the petition and four dissenting in the denial of the petition.  The four concurring opinions were authored by Circuit Judges Lourie, Hughes, Dyk, and Chen, with Chief Judge Prost and Circuit Judges Reyna, Taranto, and Hughes joining in one of the concurrences and Circuit Judge Chen joining in one concurrence and several parts of another.  The four dissenting opinions were authored by Circuit Judges Moore, Newman, Stoll, and O'Malley, with Circuit Judges O'Malley and Stoll joining in one of the dissents and Circuit Judge Wallach joining in three of the dissents.  Thus, a total of seven members of the Court (Chief Judge Prost and Circuit Judges Lourie, Dyk, Reyna, Taranto, Chen, and Hughes) authored or joined opinions concurring in the denial, and a total of five members (Circuit Judges Newman, Moore, O'Malley, Wallach, and Stoll) authored or joined opinions dissenting in the denial.  The Federal Circuit had difficulty reaching a consensus on the solution to the problem of subject matter eligibility.  Some judges felt the Federal Circuit was bound by the Supreme Court's decision in Mayo, some hinted that the problem could only be solved by the Supreme Court or that the Federal Circuit would at least benefit from the Supreme Court's guidance, some thought the Federal Circuit could solve the problem by better distinguishing Mayo, and some thought Congress should step in to solve the problem.  Last fall, Athena filed a petition for a writ of certiorari in the case, requesting that the Supreme Court "provide much-needed guidance on the important question of the patent eligibility of medical diagnostic tests."  (In his brief in Hikma Pharmaceuticals USA Inc. v. Vanda Pharmaceuticals Inc., the Solicitor General suggested that the Supreme Court "should provide additional guidance in a case where the current confusion has a material effect on the outcome of the Section 101 analysis," offering as one example a case involving the patent eligibility of medical-diagnostic methods, and pointing in particular to Athena v. Mayo.)  The Supreme Court is scheduled to discuss Athena's petition at Conference on January 10, 2020.

For information regarding this and other related topics, please see:

• "Athena Diagnostics Seeks Supreme Court Review of Athena Diagnostics v. Mayo Collaborative Services," December 16, 2019
• "iNO Therapeutics LLC v. Praxair Distribution Inc. (Fed. Cir. 2019)," September 3, 2019
• "Genetic Veterinary Sciences, Inc. v. LABOKLIN GmbH (Fed. Cir. 2019)," August 22, 2019
• "Australia Reigns Supreme over U.S. in Patenting Diagnostic Methods," August 6, 2019
• "The Proper Role of the Federal Circuit," July 25, 2019
• "Athena Diagnostics v. Mayo Collaborative Services -- The Dissents," July 17, 2019
• "Athena Diagnostics v. Mayo Collaborative Services -- The Concurrences," July 14, 2019
• "Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC (Fed. Cir. 2019)," July 9, 2019
• "Invitation to Join Amicus Brief in Athena Diagnostics v. Mayo," April 11, 2019
• "Cleveland Clinic Foundation v. True Health Diagnostics LLC (Fed. Cir. 2019)," April 7, 2019
• "Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC (Fed. Cir. 2019)," February 12, 2019

1.  Supreme Court: Secret Sales Trigger On-sale Bar under AIA

In January, the Supreme Court addressed the question of whether Congress intended to change the status of "secret" sales so as not to trigger the on-sale bar of revised 35 U.S.C. § 102 of the Leahy-Smith America Invents Act (AIA) by adding the phrase "or otherwise known to the public."  The Federal Circuit had held that Congress had not done so, and the Supreme Court agreed.  The Court's decision, authored by Justice Thomas, was short (9 pages), unanimous (9-0), and issued quickly (handed down less than seven weeks after oral argument).  The Court recognized that it had "never addressed the precise question presented in this case," but voiced its opinion that "our precedents suggest that a sale or offer of sale need not make an invention available to the public."  The Court based its decision on the well-established principle that, under prior versions of § 102, "secret sales" could trigger the on-sale bar.  These cases were as recent as Pfaff v. Wells Electronics, Inc., 525 U.S. 55 (1998), and as ancient as a trio of 19th Century cases (Consolidated Fruit-Jar Co. v. Wright, 94 U.S. 92 (1877); Smith & Griggs Mfg. Co. v. Sprague, 123 U.S. 249 (1887); Elizabeth v. Pavement Co., 97 U.S. 126 (1878)).  The opinion credits the Federal Circuit with making "explicit what was implicit in our precedent" with regard to the on-sale bar, citing Special Devices, Inc. v. OEA, Inc., 270 F. 3d 1353 (2001), and Woodland Trust v. Flowertree Nursery, Inc., 148 F. 3d 1368 (1998), in support of its conclusion.  Based on this various precedent, the Court was able to reach the conclusion that Congress did not change what activities raised the on-sale bar, which includes secret sales, because there was insufficient evident of that intent.  The Court relied expressly on the Solicitor General's argument that "if 'on sale' had a settled meaning before the AIA was adopted, then adding the phrase 'or otherwise available to the public' to the statute 'would be a fairly oblique way of attempting to overturn' that 'settled body of law.'"  The Court pointed out that the catch-all phrase "otherwise available to the public" is better interpreted to capture "material that does not fit neatly into the statute's enumerated categories but is nevertheless meant to be covered."

For information regarding this and other related topics, please see:

• "Helsinn Healthcare S. A. v. Teva Pharmaceuticals USA, Inc. (2019)," January 22, 2019

Comments

[Paul Cole]

We now do not have long to wait for Supreme Court developments in Athena - Supreme Court conference on Friday.

Note that the decision on the on sale bar in Helsinn is not in accordance with European practice where secret sales would not be held to have made the invention available to the public. So even if there is a bar to a US application, it may nevertheless be possible to protect the relevant subject-matter in Europe.