Patent Docs

USPTO Updates Service Methods for Notices of Appeal and Related Documents

By Joshua Rich --

In a Federal Register notice dated March 29, 2024, the U.S. Patent and Trademark Office is updating the required method for serving it with a notice of appeal to the U.S. Court of Appeals for the Federal Circuit, a notice of election to proceed by civil action in district court, or a request for extension of time to file a notice of appeal or commence a civil action.  Previously, all such notices or requests had to be served by mail.  Under the new rule, the notices and requests are to be served by email (with Priority Mail as a failsafe if email is not feasible.

The new rule requires a party to serve an email address in the Office of the General Counsel to be posted on the USPTO website.  If that cannot be done, the party can serve the Office of the Solicitor.

While this seems like a small change (and it is), it has some clear benefits for practitioners.  First, it modernizes practice to bring it more in line with the more streamlined process used in litigation.  That is, litigators are accustomed to serving opposing parties by email rather than snail mail.  Second, the USPTO will accord the service copy with a time-stamped receipt date which serves as proof of receipt of service of the notice.  This prevents any potential concern that the service copy "got lost in the mail."  But potentially most importantly, this procedure is just easier -- no printing copies, trips to the Post Office, or other hassle.

Cardiovalve Ltd. v. Edwards Lifesciences Corp. (Fed. Cir. 2024)

By Kevin E. Noonan --

Last week, the Federal Circuit handed down a pair of non-precedential decisions affirming the Patent Trial and Appeal Board (PTAB) in inter partes review (IPR) proceedings.  This post concerns the decision in Cardiovalve Ltd. v. Edwards Lifesciences Corp., which has as its most significant aspect an unnecessary untethering of obviousness with evidence regarding the skill and inventiveness of the person of ordinary skill in the art under KSR International Co. v. Teleflex Inc.

The case arose with Edwards's challenge of claims 1-3, 5, 6, and 8-11 of Cardiovalve's U.S. Patent No. 10,226,341 directed to an apparatus for implanting a prosthetic heart valve in a patient in need thereof. Claim 1 was considered representative by the panel:

1.  Apparatus for use at a native valve of a subject, the native valve including at least a first native leaflet and a second native leaflet, the apparatus comprising:
    an implant, comprising:
    an annular portion, being configured to be placed against an upstream side of the native valve, and having an inner perimeter that defines an opening, and
    at least one leaflet clip:
        (i) coupled to the annular portion,
        (ii) comprising:
            at least two clip arms, movable with respect to each other to open and close the clip; and a clip-controller interface, the clip-controller interface being coupled to at least one of the clip arms, and
        (iii) configured:
            to be coupled to a portion of the first native leaflet by the clip arms being brought together to close around the first native leaflet,
            to be coupled to a portion of the second native leaflet by the clip arms being brought together to close around the second native leaflet, and
            to hold together the portion of the first leaflet and the portion of the second leaflet; and
        a delivery apparatus, configured to deliver the implant to the native valve, and comprising at least one clip controller, the at least one clip controller being reversibly couplable to the clip-controller interface, and configured to facilitate opening and closing of the clip, and the delivery apparatus being intracorporeally decouplable from the implant.
    wherein the bold, italicized language is relevant to the issues before the Court.

The prior art cited in the IPR petition, U.S. Patent No. 7,635,329, in support of Edwards's obviousness contentions, disclosed a device for stabilizing valve leaflets illustrated in Figure 9B of this patent:

where the "device, 14, [that] includes two proximal elements, 16, and two distal elements, 18, [is] configured such that a proximal and distal element pair, when brought together, form a clip that grasps a heart valve leaflet, LF, from the top and bottom [and wherein the] fixation device also includes flaps, 104, which restrict upward motion of the leaflets to better enable the proximal and distal elements to grasp the leaflets."  Also noted in the opinion is that "[o]nce the leaflets have been grasped, the flaps . . . may be removed . . . or may be left behind to assist in holding the leaflets" (emphasis in opinion).  Before the Board, Cardiovalve conceded that all the limitations recited in its claims were disclosed in the '329 patent except that the device comprise "at least one leaflet clip" "coupled to the annular portion" of the device.  The Board found that the pairs of proximal and distal elements disclosed in the '329 patent together constitute a "leaflet clip" as disclosed and claimed in the '341 patent, that the flaps "constitute or contain" an "annular portion, and further that any direct or indirect attachment is a "coupling."  Based on these conclusions, the Board found the challenged claims of the '341 to be obvious, and this appeal followed.

The Federal Circuit affirmed in a decision by Judge Taranto joined by Judges Chen and Stoll.  Cardiovalve's sole argument on appeal was that the Board erred in concluding that it would have been obvious to attach, "either directly or indirectly, [the flaps] disclosed in the '329 patent" to its proximal and distal elements."  The opinion notes that the Board applied the seminal teaching from KSR that:

When there is a design need or market pressure to solve a problem and there are a finite number of identified, predictable solutions, a [relevant artisan] has good reason to pursue the known options within his or her technical grasp.  If this leads to the anticipated success, it is likely the product not of innovation but of ordinary skill and common sense.  In that instance the fact that a combination was obvious to try might show that it was obvious under § 103.

The panel held that the Board had substantial evidence for its conclusion that Edwards satisfied these requirements.  The panel's reasoning was that the disclosure in the '329 patent that the flaps could be "left behind" necessitated that they be attached to something fixed either to the device disclosed therein or to heart tissue, which provided a "finite number of predictable options."  The Board also relied on Edwards's expert witness regarding why the skilled artisan would know to attach the flaps to the device and why such an attachment would be expected to succeed, thus providing the reasonable expectation of success required by KSR (something Cardiovalve did not challenge).  And the fact that there might have been a small number of other alternatives, as argued by Cardiovalve, did not rebut the Board's determination that the one consistent with the invention claimed in the '341 patent was obvious.

The one interesting aspect of the decision, and one that has garnered comment, was the panel's rejection of Cardiovalve's argument that recitation of the "known options" in the cited passage of the KSR opinion should be limited to what was actually known in the prior art.  (Indeed, it was the genius of Giles Rich and PJ Federico to tether obviousness under Section 103 to the prior art in ways that a century of Supreme Court precedent never did, leaving a determination of invalidity under what philosophically was obvious to the "flash of genius" and other inchoate and unpredictable standards.)  The Federal Circuit's basis for negating this requirement on the prior art was that the requirement was "nowhere articulated in KSR, and adopting it would be inconsistent with the Supreme Court's rejection in KSR of a rigid demand for the steps in an obviousness analysis to be proved by prior-art documents, to the exclusion of the knowledge and skill of the relevant artisan."  And the Court refused to recognize such a requirement in its own precedent, abjuring such existing precedent cited by Cardiovalve (specifically, Uber Technologies, Inc. v. X One, Inc., 957 F.3d 1334, 1339–40 (Fed. Cir. 2020); and Bayer Schering Pharma AG v. Barr Laboratories, Inc., 575 F.3d 1341, 1350 (Fed. Cir. 2009); indeed, this reasoning smacks not a little of being equivalent to stating that just because the Court had reasoned correctly in the past did not necessitate continuing to do so).  Of course there is nothing in KSR's averments regarding the basis for making an obviousness determination based on the knowledge and skill of the prior art artisan that does away with the requirement for evidence that the alternatives relied upon to make that determination would have been understood by the worker of ordinary skill at the time the invention was made and not simply presumed to have existed (being the epitome of hindsight, which KSR also warns against).

The remainder of the panel's reasoning for its decision merely begs the question, i.e., assumes the conclusion, based on Edwards's argument that "a relevant artisan would have found it obvious to attach Goldfarb's flaps to its fixation device (and therefore indirectly to its proximal and distal elements), because the flaps, if left behind, had to be attached somewhere and this was an obvious location."  In the Court's application of the cited portion of the KSR decision the opinion states that "when a relevant artisan would have recognized a problem, a consideration of whether only a small number of solutions existed is a natural part of an evaluation of whether a patent-claimed solution would have been obvious.  The Board's undertaking such consideration here was therefore a legitimate exercise of its duty to evaluate whether Edwards was right or wrong about the position Edwards consistently maintained—that attachment to the implant would have been obvious" (the relevance of the italicized language being itself questionable).  The questionable nature of this basis for affirming the Board's decision is even more unfortunate because the opinion contains an ample basis for affirmance, whereby "the Board actually found reasons for a relevant artisan to choose the Edwards-urged solution over the alternative(s)—at the least, greater simplicity," reliance on which would have avoided disturbing dicta in what was otherwise (and fortunately) just another non-precedential opinion by the Court.

Cardiovalve Ltd. v. Edwards Lifesciences Corp. (Fed. Cir. 2024)
Nonprecedential disposition
Panel: Circuit Judges Taranto, Chen, and Stoll
Opinion by Circuit Judge Taranto

Medtronic, Inc. v. Teleflex Life Sciences Ltd. (Fed. Cir. 2024)

By Kevin E. Noonan --

Last week the Federal Circuit handed down a pair of non-precedential decisions affirming the Patent Trial and Appeal Board (PTAB) in inter partes review (IPR) proceedings.  This post concerns the decision in Medtronic, Inc. v. Teleflex Life Sciences Ltd.

The case arose in two IPR proceedings involving U.S. Patent No. 8,142,413, owned by Teleflex and related to methods for using a coaxial guide catheter in interventional cardiology procedures.  Claims 1, 2, 4, 5, and 7-14 were challenged by Medtronic for being unpatentable for anticipation* or obviousness; claim 1 was considered to be representative by the Court in this appeal:

A method of providing backup support for an interventional cardiology device [ICD]
    for use in the coronary vasculature, the [ICD] being adapted to be passed through a standard guide catheter, the standard guide catheter having continuous lumen extending for a predefined length from a proximal end at a hemostatic valve
    to a distal end adapted to be placed in a branch artery, the continuous lumen of the guide catheter having a circular cross-sectional inner diameter sized such that [ICDs] are insertable into and through the lumen, the method comprising:
        [1.a] inserting the standard guide catheter into a first artery over a guidewire, the standard guide catheter having a distal end;
        [1.b] positioning the distal end of the standard guide catheter in a branch artery that branches off from the first artery;
        [1.c] inserting a flexible tip portion of a coaxial guide catheter defining a tubular structure having a circular cross-section and a length that is shorter than the predefined length of the continuous lumen of the standard guide catheter, into the continuous lumen of the standard guide catheter, and,
        [1.d] further inserting a substantially rigid portion that is proximal of, operably connected to, and more rigid along a longitudinal axis than the flexible tip portion, into the continuous lumen of the standard guide catheter, the substantially rigid portion defining a rail structure without a lumen and having a maximal cross-sectional dimension at a proximal portion that is smaller than the cross-sectional outer diameter of the flexible tip portion and having a length that, when combined with the length of the flexible distal tip portion, defines a total length of the device along the longitudinal axis that is longer than the length of the continuous lumen of the guide catheter;
        [1.e] advancing a distal portion of the flexible tip portion distally beyond the distal end of the standard guide catheter and into the second artery such that the distal portion extends into the second artery and such that at least a portion of the proximal portion of the substantially rigid portion extends proximally through the hemostatic valve;
    and
        [1.f] inserting the [ICD] into and through the continuous lumen of the standard guide catheter alongside of the substantially rigid portion and advancing the [ICD] through and beyond a lumen of the flexible tip portion into contact with or past a lesion in the second artery.

wherein the italicized language in step 1.f is relevant to the issues before the Court.  (The opinion reduces the steps from the complexity of the claim language to the following shorthand regarding the ordered and simplified steps:

1.a: inserting the standard guide catheter;
1.b: positioning the standard guide catheter;
1.c: inserting a coaxial guide catheter;
1.d: inserting a substantially rigid portion;
1.e: advancing the flexible tip portion;
1.f: inserting and advancing the ICD.)

The opinion explains that the claimed method relates to introducing a catheter into coronary arteries through the aorta, and the occasional difficulties arising from "tough lesions"(including stenosis and chronic arterial occlusion) therein which make such introductions difficult and problematic, which are addressed in the claims by using a combination of a guide catheter and a coaxial guide catheter.  The coaxial guide catheter comprises "a tip portion, a reinforced portion, and a substantially rigid portion," with the tip being distal (inserted further into the artery) to the rigid portion.  This arrangement is illustrated by Figs. 8 and 9:

with the following explanation from the '413 patent:

In operation, a guide catheter 56 is inserted into a major blood vessel in the body such as aortic arch 58 over guidewire 64 and the distal end 68 of guide catheter 56 is brought into proximity of ostium 60 of a smaller branch blood vessel, such as coronary artery 62, that it is desired to enter.  Coaxial guide catheter 12, with tapered inner catheter 14, is inserted through guide catheter 56 and over guidewire 64.  Guide catheter 56, guidewire 64, coaxial guide catheter 12, and tapered inner catheter 14 are manipulated to insert tapered inner catheter tip 42 into the ostium 60 of the blood vessel that branches off from the major blood vessel.  The bump tip 22 of coaxial guide catheter 12 is inserted with tapered inner catheter tip 42 well into ostium 60 of coronary artery 62 or other blood vessel until bump tip 22 of coaxial guide catheter 12 achieves a deep-seated position.  Tapered inner catheter 14 is then withdrawn from the lumen of coaxial guide catheter 12.  An interventional cardiology treatment device such as a catheter bearing a stent or a balloon (not shown) is then inserted through the lumen of coaxial guide catheter 12 which remains inside guide catheter 56.

Medtronic challenged these claims in the '413 patent over U.S. Patent No. 7,736,355 (for anticipation) and 7,604,612 (for obviousness, in combination with the '355 patent) in a first IPR and for obviousness over U.S. Patent No. 5,439,445 taken alone or in combination with U.S. Patent Application Publication No. US 2004/0010280.  In rendering its Final Written Decision that the challenged claims were non-obvious over any of these combinations of the asserted prior art, the PTAB construed claim 1 to require that the steps be performed in the recited order.  In both IPRs, the Board further held in its non-obviousness determination that the skilled worker would not have been motivated to combine either set of references.

The Federal Circuit affirmed, in an opinion by Judge Prost, joined by Judges Lourie and Chen.  Regarding the Board's claim construction, the panel affirmed the construction that "inserting the ICD can occur only after advancing the flexible tip portion")(emphasis in opinion); Medtronic advanced a broader interpretation for simultaneous insertion of the ICD and coaxial guide catheter.  The Court reviewed the Board's interpretation of the claim language and support therefor in the specification in arriving at its conclusion.  The relevant portion of the claim language was in 1.e (advancing the flexible tip portion) and 1.f (inserting and advancing the ICD), according to the opinion, which indicates that the tip is  advanced before the ICD if (as the Court affirms) in the proper "in order" recitation of the claimed method steps.  As stated in the opinion, "when the current step of a method claim refers to a previous step using the definite article 'the,' the claim language indicates that the previous step occurs sequentially before the current step," citing Wi-Lan, Inc. v. Apple Inc., 811 F.3d 455, 462 (Fed. Cir. 2016) (although qualifying this principle as not being "an ironclad rule").  This interpretation is further supported by the panel's consideration of the "physical requirements of the substantially rigid portion," in light of the arrangements of the elements (with the tip being "distal" and the rigid portion being "proximal" and that they are "operably connected").  Further recitation of the timing of the insertions also support this interpretation according to the opinion ("the logic of claim 1 suggests that the inserting and advancing the ICD step must occur after advancing the flexible tip portion").  Disclosure in the specification is also consistent with this construction, according to the Court, because it also discloses "an ordered performance of the recited steps in claim 1" as well as the advantages of doing so.

While characterizing Medtronic's construction to the contrary as being "plausible" "in a vacuum," the panel rejects it because Teleflex's construction as adopted by the Board is consistent with the context of the claim language and specification, citing Trs. of Columbia Univ. v. Symantec Corp., 811 F.3d 1359, 1363 (Fed. Cir. 2016).  Medtronic's acquiescence to the requirement for the other steps in the method of claim 1 to be performed in the recited order suggests to the panel that this order should not be interpreted any differently for steps 1.e and 1.f, analogous to the circumstances in Mformation Techs., Inc. v. Rsch. in Motion Ltd., 764 F.3d 1392, 1398 (Fed. Cir. 2014).  And cases that have found disparate step order to be a proper interpretation were cases where such an interpretation was expressly supported by the specification, such as Niazi Licensing Corp. v. St. Jude Med. S.C., Inc., 30 F.4th 1339, 1351–53 (Fed. Cir. 2022), or based on claim differentiation, see Baldwin Graphic Sys., Inc. v. Siebert, Inc., 512 F.3d 1338, 1345 (Fed. Cir. 2008).  Nor were Medtronic's distinctions based on additional recitations in dependent claims 6, 10, and 11 persuasive, the panel stating that the argument "has no support in our reasoning here or the logic and grammar of the claims."

Regarding the Board's finding that the skilled artisan would not have had a reason to combine the '355 and '612 patents, the panel applied the substantial evidence standard of review for what are factual questions supporting the Board's legal determination of non-obviousness.  According to the opinion, the '355 patent discloses an "intravascular foreign matter suction assembly" for removing foreign matter from a blood vessel, whereas the '612 patent discloses emboli protection devices.  The Court rejected Medtronic's assertion of error because, first the Board had expressly considered Medtronic's proposed motivations to combine and its conclusions were supported by substantial evidence; second, the Board compared Medtronic's evidence in favor of a reason to combine the references with Teleflex's contrary evidence and found the latter evidence more persuasive, based in part on expert testimony cited extensively in the Court's opinion; and third, that the Board had not contravened the Supreme Court's decision in KSR International Co. v. Teleflex Inc., 550 U.S. 398, 418–19 (2007), the panel finding that the Board had not improperly applied the "teaching, suggestion, or motivation test" in arriving at its non-obviousness determination.

Turning to the Board's determination that the '445 patent considered alone did not support Medtronic's obviousness challenge, the opinion sets forth the teachings of this patent to be a support catheter (corresponding to the coaxial guide catheter of claim 1) that "protects the fragile balloon of a balloon catheter" (corresponding to the ICD) as that balloon catheter passes through a guide catheter.  The Board determined that the '445 patent had no disclosure of the requirement in claim 1 that the ICD was advanced after advancing the flexible tip portion.  The panel countered Medtronic's assertion of error by noting the "narrow presentation of the evidence" supporting Medtronic's contentions in this regard, including only one paragraph from the '445 patent plus certain expert testimony in support of Medtronic's position.  The Court also found that Medtronic's evidence in support of its position before the Board was wanting, citing Netflix, Inc. v. DivX, LLC, 84 F.4th 1371, 1377 (Fed. Cir. 2023), for the principle that "the Board should also not have to decode a petition to locate additional arguments beyond the ones clearly made."  Also supporting the Board's findings, in the Court's view, was that this argument relied alone on the disclosures of the '445 patent plus the understanding and "ordinary creativity" of the skilled worker, which the Board found insufficient to support an obviousness determination.

Finally, the Court turned to the Board's determination that the combination of the '445 patent and '280 application did not render obvious the challenged claims.  In this regard the panel understood the '280 application to disclose "an emboli protection system that occludes blood flow" by deploying a filter to catch dislodged emboli.  The Board rejected this combination for supporting obviousness because, inter alia, "[the] sealing device [disclosed in the '280 application] is withdrawn before inserting a treatment device like a stent or a balloon because occluding blood flow, which sealing device . . . does, is undesirable," a characterization supported by Teleflex's expert testimony that "occluding blood flow is undesirable, and therefore teaches that the guide seal is deployed only during deployment of the filter and not during the subsequent delivery of [ICDs] such as balloons and stents."  This understanding of the consequences of the combination "undermined what Medtronic['s interpretation] proposed - keeping [the] sealing device . . . in [the] guide catheter . . . during the insertion of a treatment device like [the '445]'s balloon catheter."  The panel rejected Medtronic's argument that the Board had not considered the proposed combination, finding that the Board had done so and come to a contrary conclusion supported by substantial evidence.  The panel held that the Board also properly considered the consequences of the combination of the references and concluded, "in light of the drawbacks of Medtronic's proposed combination" that the skilled worker would not have combined these references as Medtronic contended.

* The Board's decision that the asserted prior art reference did not anticipate the challenged claims was not appealed.

Medtronic, Inc. v. Teleflex Life Sciences Ltd. (Fed. Cir. 2024)
Nonprecedential disposition
Panel: Circuit Judges Lourie, Prost, and Chen
Opinion by Circuit Judge Prost

The New York Times Response to Microsoft's Motion to Dismiss: An LLM Is Not a VCR

By Joshua Rich --

As discussed in our earlier post, Microsoft opened its motion to dismiss portions of the New York Times's OpenAI case pled against it with an extended analogy to the Betamax case.  It argued that the Times was acting like the Motion Picture Association of America in crying wolf over the death of its industry in light of the development of a new technology.[1]  But no analogy is perfect, and the Times opened its opposition to the motion to dismiss by noting the distinctions between an LLM and a VCR.

The Times's opposition starts with an unambiguous distinction shot across the bow based on the evidence that was cited in the complaint, citing the Betamax case in support of the proposition that "A VCR is not preloaded with millions of programs that can be played back if prompted with an opening scene" while "Defendants' AI models can display works that were copied to train them with the right prompt."  It then notes that VCRs do not generate programming that competes with movies, but ChatGPT returns results that copy and summarize the Times's works (that it asserts users would otherwise obtain from the Times itself).  So the Times concludes, "If VCRs had been built with movies to make movies that compete with movies, or if Sony oversaw the VCR's infringing users, [the Betamax case] would have gone the other way."

The Times then answers Microsoft's accusation that it is standing in the way of technological progress.  The Times offers a solution that is easy to describe, if not to execute:  just teach the LLM on non-copyrighted works.  And it drops a PR bomb of its own in doing so, saying rather than doing so, "Microsoft—the richest company in the world—claims that it was entitled to take what it wanted for free."  Turning Microsoft's rhetoric back on itself, the Times argues that respecting copyright and building an LLM without infringing "will promote a future where both GenAI developers and publishers can flourish."[2]

If nothing else, the introduction serves as a valuable reminder to litigators to consider what the other side might do with an analogy you offer.  Microsoft built the logic and righteousness of its case on an analogy, but appears not to have thought about how the analogy could be turned on its head to rebut its own position.  In the end, the judge is likely to focus on the facts of ChatGPT -- not the analogy to a VCR -- and ignore the rhetorical fireworks back and forth.

When it gets to the legal arguments, the Times notes that the issues are almost identical to those raised by OpenAI (save for OpenAI's limitations argument, which Microsoft did not raise), and the Times response is essentially the same.  One difference between the Times's two responses, however, is that the Times repeatedly argued that OpenAI's case citations were inappropriate, whereas it argues that Microsoft may be correct but they relate to later stages of the case, whether on summary judgment or post-trial.  The basic argument is still the same:  the Times should be permitted to take discovery to support its claims, not cut off on a motion to dismiss.

First, the Times starts its argument against Microsoft's attempt to obtain dismissal of the contributory copyright infringement count by noting that six of the eight cases Microsoft relies on were decided later in the case.  The Times then notes that it pled averments of the elements of the claim disputed by Microsoft; while it did not cite evidence, that is generally not required in federal court pleadings.  As with its response to the OpenAI motion to dismiss, the Times does go beyond the pleadings to cite articles that would support the averments of the complaint, but the judge is not likely to require amendment of the complaint to show proof of the plausibility of the factual allegations.  Furthermore, in a situation like this where most (if not all) of the evidence of is in a defendant's hands -- especially evidence of intent -- a judge would be loathe to allow that defendant to prevail without permitting the plaintiff to investigate through discovery.

Second, the Times repeats basically the same arguments about violations of the Digital Millennium Copyright Act as it raised against OpenAI.  While Microsoft (and OpenAI) focuses on how removal of copyright management information does not facilitate third-party infringement, the Times argues the stripping of CMI during training of the LLM and synthetic search retrieval conceals Microsoft's (and OpenAI's) own infringement.  That is, the Times argues Microsoft seeks to focus on the wrong actor and act of infringement for the DMCA violations and that Microsoft's own knowledge of those violations is where the judge should look.  Again, the Times argues it has pled Microsoft's knowledge and should be allowed to take discovery to support its allegations.  As with the contributory copyright infringement claim, the court is likely to allow it to do so.

Finally, the Times addresses its "hot news" state law misappropriation claim by basically focusing on the fact that its pleadings are sufficient, not on whether it will ultimately prevail. It provides scant argument or details beyond a recitation of the allegations of the complaint and notation that Microsoft relies on cases decided at later stages of the case.  Again, as we suggested in our discussion of OpenAI's motion to dismiss, the Times's misappropriation claim is likely to survive the Microsoft motion to dismiss, but may not survive summary judgment.

[1] The first sentence of Microsoft's brief reads, "'The VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone,' warned Jack Valenti, then head of the Motion Picture Association of America, in his 1982 testimony to the House of Representatives."

[2] The Times cites Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, 598 U.S. 508 (2023) and A&M Recs., Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001) as support for its argument.  Neither case is really on point, which Microsoft likely will point out in its reply.

For additional information regarding this topic, please see:

• "The New York Times Calls Out OpenAI on Its Motion to Dismiss," March 18, 2024
• "Microsoft's Motion to Dismiss NY Times Lawsuit over ChatGPT: How is ChatGPT Like a VCR?" March 7, 2024
• "OpenAI's Motion to Dismiss NY Times Lawsuit over ChatGPT: Do They Want to Win or Influence Public Opinion?" March 5, 2024
• "The New York Times Case against OpenAI is Different. Here's Why." February 19, 2024
• "An Analogy for the Current Wave of AI Copyright Lawsuits," November 12, 2023

The New York Times Calls Out OpenAI on Its Motion to Dismiss

By Joshua Rich and Michael Borella --

Responding to the OpenAI brief that read more like a press release than a traditional motion to dismiss, the New York Times attacked OpenAI's approach from the very first sentence, calling the factual background of OpenAI's brief "grandstanding about issues on which it hasn't moved."  The Times echoed the concern we raised in our post on OpenAI's motion to dismiss, that the motion "introduces no fewer than 19 extrinsic documents, none of which can be properly considered on a motion to dismiss, in a submission that for nearly 10 pages reads more like spin than a legal brief."

But none of that stopped the Times from responding to some of the factual arguments or introducing new documents.  Clearly, the Times was most concerned by the public relations value of the accusation that it "hacked" OpenAI to fabricate a copyright lawsuit.  Without citation to the factual record, the Times spends much of its introduction on refuting that claim, which wasn't a basis for the legal arguments in OpenAI's motion.  Then, when it actually gets down to addressing OpenAI's arguments, it props up the contributory copyright infringement claim with a citation to a Gizmodo post and a Wired article rather than relying on the allegations of its complaint.  So while OpenAI is a far worse offender in refusing to focus on the legal issues and the facts of the complaint, the Times was not above employing a similar strategy.

When it got around to addressing the merits of the arguments in OpenAI's motion, the Times argued clearly and forcefully.  Those arguments suggest that the challenged counts of the complaint are likely to survive dismissal, even if they are vulnerable on the ultimate merits.

First, OpenAI had argued that a copyright infringement claim against the teaching of its large language model (LLM) was time-barred by the statute of limitations.  The Times raised two counters.  First, even if the statute of limitations might otherwise bar such claims for the initial training of the OpenAI model, it would not apply to the dataset used for development of more recent models of GPT 3.5 and GPT4, the LLM that underlies ChatGPT.  That is, the Times views the LLMs as different versions that each constitute a copying of the Times's articles rather than consecutive iterations of the same work.

That distinction plays into the Times's second argument -- that it cannot be charged with constructive knowledge of OpenAI's alleged infringement, especially because it would have been quite difficult to investigate prior to the launch of ChatGPT.  A copyright owner is not barred from asserting claims that arise before the statute of limitations if (1) it had not discovered the infringement, and (2) it could not have, with due diligence, discovered the infringement. Only with the launch -- and prompting -- of ChatGPT was the Times able to definitively determine that the OpenAI LLM had been trained with Times articles.  At least, that is a strong argument for avoiding dismissal at this phase of the dispute.  We will see what discovery reveals about the Times's actual or constructive knowledge down the road.

Second, OpenAI had argued that the Times's contributory copyright infringement count should be dismissed because the Times had not identified a specific direct act of infringement.  The Times started by attacking OpenAI's argument head-on, asserting that case law suggests that a plaintiff is not required to identify specific infringements to state a claim for contributory copyright infringement.  The Times next argued that public reports show that members of the public have used ChatGPT to circumvent paywalls and obtain copyrighted Times articles, hinting that discovery would show that there is a factual basis for contributory infringement.  Even more fundamentally, the Times had alerted OpenAI to the threat of contributory infringement and, according to the complaint, OpenAI chose to do nothing to stop that infringement. Each of those bases should preserve the contributory infringement claim.

Third, OpenAI had challenged the Times's Digital Millennium Copyright Act over the lack of evidence of removing copyright management information.  Among other things, the Times accuses OpenAI of removing copyright notices and links to terms of service from articles when teaching its LLM and not including them in output provided in response to user prompts.  The Times disputed the legal arguments that OpenAI made and also the factual claims about what had been removed from the Times's articles.  Again, it is likely that the Times's arguments will be persuasive and discovery will proceed.

Finally, and perhaps most tenuously, the Times argues against OpenAI's motion to dismiss its state court misappropriation claim.  The Times's arguments are likely strong enough to preserve its claim for now, but its arguments highlight just how far this situation is from the past cases in which a misappropriation claim has not been preempted by copyright law.  In those cases, a party reported "hot news" that would diminish in value if the reporting were delayed by minutes or hours.  Here, the Times is attempting to apply the same doctrinal framework to Wirecutter reviews and reports that may be delayed weeks or months from the time they appear in the newspaper or on the Times website (and, for that matter, weeks or months after the products are received for review.  Again, the Times appears to be on the better side of the law on dismissal, but likely will have a far greater challenge on summary judgment.  That is, unless it can show that expeditious reporting of such reviews is necessary for their value, the Times is likely to lose on this count.

Pfizer Inc. v. Sanofi Pasteur Inc. (Fed. Cir. 2024)

By Kevin E. Noonan --

Last week, the Federal Circuit handed down its opinion in Pfizer Inc. v. Sanofi Pasteur Inc., affirming the Patent Trial and Appeal Board's (PTAB) determination that all claims of U.S. Patent No. 9,492,559 challenged in five inter partes review (IPR) proceedings were obvious.  In light of the Office's promulgation of Guidance to the examining corps as well as PTAB judges of the "increased flexibility" in obviousness determinations mandated by the Supreme Court's decision in KSR v. Teleflex and the Federal Circuit's application of that mandate since the Court's decision, the instant decision (by both the PTAB and the Court) is informative if not necessarily illustrative.

The claims of the '559 patent are directed to "immunogenic compositions" (used in vaccines) against Streptococcus pneumoniae capsular saccharide antigens.  Of the 45 claims challenged in these IPRs three were set forth in the opinion as being representative:

1.  An immunogenic composition comprising a Streptococcus pneumoniae serotype 22F glycoconjugate, wherein the glycoconjugate has a molecular weight of between 1000 kDa and 12,500 kDa and comprises an isolated capsular polysaccharide from S. pneumoniae serotype 22F and a carrier protein, and wherein a ratio (w/w) of the polysaccharide to the carrier protein is between 0.4 and 2.

3.  The immunogenic composition of claim 1, wherein the composition further comprises a S. pneumoniae serotype 15B glycoconjugate and a S. pneumoniae serotype 33F glycoconjugate.

4.  The immunogenic composition of claim 3, wherein the composition further comprises a S. pneumoniae serotype 12F glycoconjugate, a S. pneumoniae serotype 10A glycoconjugate, a S. pneumoniae serotype 11A glycoconjugate and a S. pneumoniae serotype 8 glycoconjugate.

Claim 1 recites the claimed compositions most broadly (directed to the serotype 22F glycoconjugate having a range of specific molecular weights) and the two dependent claims recite in addition combinations of two (claim 3) or 4 (claims 4) additional serotype-specific glycoconjugates.  Challengers Merck Sharp & Dohme Corp. and Sanofi Pasteur Inc. and SK Chemicals Co., Ltd. based their obviousness challenges on a combination of prior art:  PCT Patent Application Publication No. 2007/071711 ("GSK-711") and U.S. Patent Application Publication No. 2011/0195086 ("Merck-086"), wherein the opinion notes that GSK-711 was directed to vaccines against S. pneumoniae comprising "'capsular saccharide antigens (preferably conjugated), wherein the saccharides are derived from at least ten serotypes of S. pneumoniae,' which may include an 'S. pneumoniae saccharide conjugate of 22F,'" while Merck-086 disclosed "'multivalent immunogenic composition[s] having 15 distinct polysaccharide-protein conjugates' in which an S. pneumoniae serotype, including 22F, is conjugated to a carrier protein."

In addition to these obviousness determinations, the Board denied Pfizer's contingent motions to amend (as not proposing patentable substitute claims).  This appeal also followed a denial by the Director of Pfizer's request for Director Review on remand from the Federal Circuit's earlier decision in the wake of United States v. Arthrex, Inc.

The Federal Circuit affirmed the Board's finding that claims 1-45 of the '559 patent were obvious and denial of some (as to claims 46, 47, and 50-52) but not others (claims 48 and 49) of Pfizer's proposed substitute claims, remanding with regard to these claims.  The basis for Pfizer's appeal of the Board's obviousness determination was that neither cited reference disclosed the range recited in independent claim 1 ("wherein the glycoconjugate has a molecular weight of between 1000 kDa and 12,500 kDa").  The panel rejected this argument, applying the rubric from OSI Pharms., LLC v. Apotex Inc., 939 F.3d 1375, 1382 (Fed. Cir. 2019) (quoting Regents of Univ. of Cal. v. Broad Inst., Inc., 903 F.3d 1286, 1291 (Fed. Cir. 2018)) that "[a]n obviousness determination requires finding that a person of ordinary skill in the art would have been motivated to combine or modify the teachings in the prior art and would have had a reasonable expectation of success in doing so."  In the Board's view (agreed to by the Federal Circuit), the limitation at issue was a "result-effective variable" and under the "result effective variable doctrine" the skilled artisan "would have been motivated to optimize to provide a conjugate having improved stability and good immune response," based on inter alia E.I. DuPont de Nemours & Co. v. Synvina C.V.  This doctrine depends on the "common sense" of the skilled worker, who would have been motivated not by any specific prior art teaching but generally to "discover the optimum or workable ranges by routine experimentation" (a concept at the heart of the Supreme Court's KSR decision and embodied in the recent Office Guidance, that the person of ordinary skill in the art is not "an automaton").  While typically arising in cases where a claimed numerical range overlaps with a prior art range (see, Genentech, Inc. v. Hospira, Inc.) the opinion asserts that the result-effective variable doctrine is not limited to such instances, and the Court held that the Board was correct in determining whether this variable range, while not expressly recited in the cited prior art, would be a parameter that the skilled worker would be motivated to optimize.  In addition, the opinion notes that the cited references disclosed the molecular weights of the expressly recited 22F serotype as well as 14 other S. pneumoniae serotypes in support of the Board's conclusion (thereby also inherently providing an overlapping molecular weight range for these serotypes and the benefits thereof).  Nor was there anything unknown in the prior art regarding conjugation methods or carrier protein-conjugated polysaccharide antigens according to the opinion, and Pfizer's contrary evidence that whether such conjugates were unexpected must be determined on a case-by-case basis was not persuasive to the panel.  Being dependent on the existence of substantial evidence the Court held that the Board's application of this reasoning for determining that the claims were obvious was not in error and affirmed.

Turning to dependent claims 3 and 4 the Federal Circuit rejected Pfizer's argument (considered and rejected by the Board) that the factual evidence was insufficient to support an obviousness determination because the prior art did not exemplify competence of the other recited carrier protein-conjugated polysaccharide antigens as immunogenic compositions.  Unpredictability, according to the opinion, is not the standard because "the expectation of success need only be reasonable, not absolute," citing Pfizer, Inc. v. Apotex, Inc. (emphasis in opinion).  In addition, these specific polysaccharide antigens (in forms not conjugated to proteins) were known to be immunogenic in the prior art (for example, being encompassed as part of commercially available pneumococcal vaccines such as PNEUMOVAX®).  This reasoning and expert testimony was persuasive to the Board and to the panel that "the person of ordinary skill in the art would have reasonably expected that the claimed glycoconjugates could be incorporated into a vaccine 'while maintaining the immunogenicity to all serotypes in the composition.'"

The opinion considers the Board's denial of Pfizer's motions to amend (to substitute claims for the challenged claims) under the Administrative Procedures Act standard of whether this decision was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," citing 5 U.S.C. § 706(2)(A).  The opinion sets forth proposed substitute claims 46, 48 and 49 in this regard:

46.  An immunogenic composition comprising:
    a Streptococcus pneumoniae serotype 22F glycoconjugate, wherein the 22F glycoconjugate has a molecular weight of between 1000 kDa and 12,500 kDa and comprises an isolated capsular polysaccharide from S. pneumoniae serotype 22F and a CRM₁₉₇ carrier protein, and wherein a ratio (w/w) of the polysaccharide to the carrier protein is between 0.4 and 2;
    glycoconjugates from S. pneumoniae serotypes 1, 3, 4, 5, 6A, 6B, 7F, 9V, 14, 18C, 19A, 19F, and 23F all individually conjugated to CRM₁₉₇;
    an aluminum salt adjuvant; and
    wherein the composition exhibits more than a 2-log increase above baseline in serum IgG levels in New Zealand White Rabbits across all serotypes in the composition following administration of two equal doses of the composition in the form of an initial dose and a booster dose.

48.  The immunogenic composition of claim 1 46, wherein the composition further comprises a S. pneumoniae serotype 15B glycoconjugate and a S. pneumoniae serotype 33F glycoconjugate, wherein said serotypes 15B and 33F are all individually conjugated to CRM₁₉₇.

49.  The immunogenic composition of claim 3 48, wherein the composition further comprises a S. pneumoniae serotype 12F glycoconjugate, a S. pneumoniae serotype 10A glycoconjugate, a S. pneumoniae serotype 11A glycoconjugate and a S. pneumoniae serotype 8 glycoconjugate, wherein said serotypes 12F, 10A, 11A and 8 are all individually conjugated to CRM₁₉₇.

(Where additions underlined and deletions struck through.)

The Federal Circuit affirmed that proposed claim 46 would have been obvious in light of the cited prior art (including U.S. Patent Publication No. 2012/0237542) and "the knowledge of a person of ordinary skill in the art."  The specific teachings of the art (being found in the '542 application) included (the same) thirteen serotypes recited in the proposed claims, combined with the teachings of GSK-711 and Merck-086 regarding the 22F serotype in support of obviousness.  The panel responds to Pfizer's assertion that the combination of the art did not disclose successful production of an immunogenic composition having a 2-log increase in serum IgG by reciting the aphorism that "an expectation of success need only be reasonable, not absolute" from Pfizer, Inc. v. Apotex, Inc. (emphasis in opinion), because here, according to the opinion, the cited art "clearly demonstrated that the claimed 2-log IgG increase could be achieved across various serotypes in a multivalent compositions."  For claim 46, the panel agreed that the Board's denial of Pfizer's motion to amend was supported by substantial evidence.

Not so for claims 48 and 49, however.  The difference for these claims is the limitation that the greater than 2-log increase must be exhibited "across all serotypes within the claimed composition" (emphasis in opinion).  The panel found no explanation in the record for why the Board came to the same conclusion regarding obviousness for these claims that it had for claim 46, and "it is hornbook law" that an administrative agency "must provide a 'reasoned basis' for their actions that is sufficient to permit meaningful judicial review."  See In re Theripion.  On this basis the Federal Circuit remanded for further consideration by the Board.

Finally, the Federal Circuit affirmed the Director's decision not to review the Board's decision in the face of Pfizer's argument that the entire Director Review procedure violates the APA for not being "promulgated through notice-and-comment rulemaking" because the Office has changed its webpage "multiple times since it was created."  In earlier cases, the Court had held that this argument could be successfully made only if an appellant showed "prejudicial error," which Pfizer did not do here according to the opinion.

Pfizer Inc. v. Sanofi Pasteur Inc. (Fed. Cir. 2024)
Panel: Circuit Judges Lourie, Bryson, and Stark
Opinion by Circuit Judge Lourie

FDA Approves Three Interchangeable Biosimilar Drugs in 2024

By Kevin E. Noonan --

After taking most of a decade to approve its first interchangeable biosimilar (Semglee (insulin glargine-yfgn), the U.S. Food and Drug Administration has approved three interchangeable biosimilars since the beginning of this year.

The first of these is simlandi (adalimumab-ryvk), approved on February 24th, made by Alvotech and Teva Pharmaceuticals, and interchangeable with Humira).  The biosimilar, a TNF alpha inhibitor, was approved to be provided as a single-dose autoinjector delivering 40 mg/0.4 mL, for treating  plaque psoriasis, Crohn's disease, ulcerative colitis, rheumatoid arthritis, juvenile idiopathic arthritis, psoriatic arthritis, ankylosing spondylitis, hidradenitis suppurativa, and uveitis.

The FDA also approved on March 5th two interchangeable biosimilars from Sandoz for a pair of Amgen biologic drugs:  Jubbonti (denosumab-bbdz), interchangeable for Prolia (denosumab), and Wyost (denosumab-bbdz), interchangeable for Xgeva (denosumb).  Jubbonti was approved for increasing bone mass in men and women (inter alia due to chemotherapeutic treatment for prostate cancer (men) and breast cancer (women), for osteoporosis (induced by glucocorticoid treatment or otherwise) in men and women, and for preventing fracture in post-menopausal women with osteoporosis.  Wyost was approved for treating patients with multiple myeloma and solid tumor bone metastases, giant cell bone tumors, and treatment of hypercalcemia of malignancy refractory to bisphosphonate therapy.

Both Prolia and Jubbonti have a boxed warning for increased risk of severe hypocalcemia (low blood calcium levels) in patients with advanced chronic kidney disease taking osteoporosis medicine.

With these approvals, there are a total of 48 biosimilars (and 10 interchangeable biosimilars) approved by the FDA since Zarxio was approved in March 2015.

Microsoft's Motion to Dismiss NY Times Lawsuit over ChatGPT: How is ChatGPT Like a VCR?

By Joshua Rich and Michael Borella --

Like OpenAI before it, Microsoft has sought to dismiss portions of the lawsuit the New York Times has brought against it over ChatGPT.  While raising some of the same arguments, Microsoft takes a more traditional path with its motion relying on the facts pled in the Times's complaint.  However, it also relies on an extended analogy to the VCR (and the Supreme Court's "Betamax" decision) to suggest a framework for the court's analysis.

Microsoft's brief opens with a "Preliminary Statement" about the Motion Picture Association of America's resistance to the VCR in the 1980s and the "all-out effort by television and movie producers to stop a groundbreaking new technology."  Those efforts ultimately gave rise to the Supreme Court's "Betamax" decision,[1] in which the closely-divided Court decided that Sony did not contributorily infringe copyright because the ability to "time shift" when a television program was watched constituted a non-infringing fair use of a VCR.

But Microsoft characterizes it as an attempt by existing media to throttle a disruptive technological advance in the crib, just as it accuses the Times of doing for large language models (LLMs) here.  It boldly asserts "copyright law is no more an obstacle to the LLM than it was to the VCR (or the player piano, copy machine, personal computer, internet, or search engine)," despite the key issue -- whether the use of the Times's copyrighted works to train the ChatGPT LLM is a transformative or fair use -- not being raised or argued in the motion.

Instead of the central issue of transformative use, which Microsoft says it will "show on summary judgment," citing the Authors Guild v. Google case[2] relating to digitization of printed books and Google v. Oracle case[3] regarding use of Java APIs, Microsoft's motion to dismiss raises three of the four issues raised in OpenAI's motion to dismiss.  In doing so, however, Microsoft sticks closely to the facts alleged in the Times's complaint.  That is, after the extensive Preliminary Statement related to issues that will be raised later in the case, Microsoft presents a very typical factual background and argument.

First, Microsoft argues that the Times's contributory infringement claim fails as a matter of law because the Times was not able to identify an end user that was directly infringing its copyrights.  Microsoft argues that the contributory infringement "claim is therefore the exact one the Supreme Court rejected when it blessed the VCR."  That, of course, is not true.  ChatGPT provides the end user with the data that includes copyrighted works in the LLP; in contrast, a VCR is content-agnostic.  That is, OpenAI chose the works that it used to train the LLM and provide response to end user prompts on ChatGPT, whereas Sony did not dictate what end users were taping on VCRs.  Furthermore, the VCR did not require training on a massive corpus of copyrighted works in order to even exist.

Nonetheless, Microsoft's argument may succeed because of how the Times has pled its contributory infringement claim.  Rather than arguing that Microsoft encouraged end users to obtain copyrighted works, the Times argued that Microsoft materially contributes to end user infringement by offering products that it knows are capable of distributing infringing works. The argument is a bit tenuous because the Times did not identify an infringing end user or that Microsoft knew the end user was infringing.  The Times may argue that it could not have provided that information because the information passes only between ChatGPT and the end user.  We will have to see how the Times responds to the motion.

Second, Microsoft argues that the Times failed to state a claim under the Digital Millennium Copyright Act (DMCA) because it failed to identify that Microsoft had removed any specific copyright management information (CMI) from a Times work before distributing that work.  Just as with the contributory infringement count, Microsoft argues that the Times did not identify any specific article reproduced or CMI removed.  That appears to be true at this juncture.  Again, however, this information is not easily available (if at all) to the Times.  Further, Microsoft argues that it had an honest belief that training the LLM was a non-infringing fair use.  The court may choose to allow the Times to take discovery to determine if it can find instances of Microsoft removing the CMI from works reproduced by ChatGPT, whether in training or final output.

Finally, Microsoft argues that the state law misappropriation claim is preempted by the Copyright Act.  Traditionally, courts have accorded the Copyright Act broad preemptive effect.  Unless the information is highly time-sensitive "hot news," courts have been loath to find that copyright infringement is not a sufficient (and sole) remedy.  That does not seem to be the case with ChatGPT -- it does not provide information based on Times articles immediately, only after the LLM has been taught on articles.  Thus, the Times's misappropriation count seems the most likely one to be dismissed.

Like OpenAI, Microsoft is using its motion to dismiss as more than just a vehicle to get rid of certain counts.  Instead, it is seeking to create a framework for the case analogous to the Betamax case in addition to arguing for the dismissal of three counts of the complaint.  By doing so in a traditional brief format, it may obtain better results than OpenAI.  Nonetheless, Microsoft's VCR analogy to LLMs is shaky when placed under scrutiny and seems to be a ploy to leverage Hollywood's overblown and ultimately misplaced reaction to early home recording.

[1] Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984).

[2] Authors Guild v. Google Inc., 804 F.3d 202 (2d Cir. 2015).

[3] Google LLC v. Oracle Am., Inc., 141 S.Ct. 1183 (2021).

OpenAI's Motion to Dismiss NY Times Lawsuit over ChatGPT: Do They Want to Win or Influence Public Opinion?

    By Joshua Rich and Michael Borella --

In response to the lawsuit the New York Times has filed against it, OpenAI has sought to dismiss portions of the complaint.[1]  But instead of filing a traditional motion to dismiss that argues that the allegations of the complaint are insufficient to support legal liability, OpenAI went on the offensive.  It sought to recast the case by including an extensive factual background that went far beyond -- and sometimes is incompatible with -- the allegations of the complaint.  In short, the motion to dismiss seems more like an attempt to influence the public view of the Times case, rather than an effort to narrow the scope of the dispute.

On December 27, 2023, the Times filed its lawsuit against Microsoft Corp.; OpenAI, Inc.; and related companies in the U.S. District Court for the Southern District of New York, alleging that those companies have improperly trained large language models (LLMs) on the Times's copyrighted works, and that the defendants then deployed these models for public use.  The Times's complaint includes counts of direct copyright infringement, vicarious copyright infringement, contributory copyright infringement, violations of the Digital Millennium Copyright Act (DMCA), unfair competition by misappropriation, and trademark dilution.  As we have discussed earlier, a notable aspect of the complaint is its specificity -- particularly, it provides several examples of the ChatGPT LLM being able to reproduce Times articles almost verbatim.

On February 26, 2024, OpenAI responded with a motion to dismiss the claims of contributory copyright infringement (Count IV), DMCA violations (Count V), and unfair competition (Count VI).  OpenAI also seeks to have portions of the direct and contributory copyright infringement claims that occurred outside of the statute of limitations dismissed as time-barred.

OpenAI's motion to dismiss is noteworthy for a number of reasons.  Motions to dismiss generally follow a well-trodden path of reciting the factual averments of the complaint, then arguing that those facts, even in the best of circumstances for the plaintiff, do not form the basis of an actionable claim.  That is because the court's standard in reviewing a motion to dismiss is to assume the truth of all of the facts in a well-pled complaint and all reasonable inferences drawn from those facts.  The court will then dismiss the complaint (or parts of it) only if those facts do not form a plausible basis for the claims asserted or if there is some legal bar to the claims that is apparent without any fact finding.  OpenAI did not take that approach.

Instead, OpenAI ranged far afield factually, not limiting itself to the factual averments of the complaint.  In an attempt to do so without drawing the judge's ire, it sought to invoke several of the loopholes that allow the consideration of information outside the express language of a complaint, stretching the exceptions until they would swallow the basic rules on motions to dismiss.  So in the end, the motion's factual background section itself may draw the judge's wrath for a transparent attempt to circumvent the basic rules of motions to dismiss.

Indeed, the factual background section of the motion to dismiss reads more like a press release than a legal pleading in that it introduces new factual allegations, argues that the facts alleged in the complaint are incorrect, suggests affirmative defenses, and contains an overblown self-serving assessment of the company's importance.[2]  But OpenAI actually flat-out admits the most basic premise of the complaint:  that it copied the Times's work and used it to teach the ChatGPT LLM (albeit more than three years ago). That fourteen-page exposition on the history of ChatGPT then bears little, if any, relationship to the four substantive arguments raised in the second half of the motion.

In its first substantive argument, OpenAI plainly asserts that any direct copyright infringement that "occurred more than three years ago" should be dismissed because it is time-barred under the statute of limitations set forth in 17 U.S.C. § 507(b).[3]  However, three years is not necessarily three calendar years; federal courts follow the "discovery rule" that begins the three-year clock when the plaintiff discovers, or reasonably should have discovered, the infringement as opposed to the date of actual infringement.  It is likely that the Times will respond by saying that it did not know -- and could not reasonably know -- of OpenAI's infringement until it could query ChatGPT.

OpenAI states that the Times' copyright infringement position is based on OpenAI's use of the WebText database -- which contains Times works -- to train an early version of GPT (the LLM underlying ChatGPT), and that this training took place more than three years ago.  That is really much more of a misappropriation model of wrongdoing than copyright infringement; OpenAI clearly made a copy of the Times's articles when it first copied them, but it arguably continues to do so every time it creates a derivative work based on those articles.  In addition, OpenAI does little to address why it apparently believes that the Times knew or should have known of these activities.  Further, OpenAI does not specifically address a related allegation in the complaint regarding another database containing Times works that was used to train GPT, Common Crawl.^[4]

Regardless of when OpenAI began using any of these databases, it is well understood that newer versions of GPT are likely to have been trained and retrained on the same or similar sources.  As implied by OpenAI's own website, further ingestion of the Times's works may have occurred during some or all training procedures that have led to numerous iterations of ChatGPT.  Indeed, OpenAI no longer publicly identifies its training data sources or training procedures.  Thus, it is hard to understand how the Times should reasonably have known about all of these possible copying events.  And more fundamentally, OpenAI provides the court with no guidance on how to narrow the case and tease apart the time-barred original infringement and unbarred creation of derivative works in a simple manner.

Second, OpenAI argues that the Times has failed to state a claim for contributory copyright infringement.  Such a claim requires that the plaintiff allege that the defendant knew or had reason to know of copyright infringement of another and that the defendant actually has knowingly induced, caused, or materially contributed to this infringement.  In the complaint, the Times alleged that:

Defendants knew or had reason to know of the direct infringement by end-users because Defendants undertake extensive efforts in developing, testing, and troubleshooting their LLM models and GPT-based products.  Defendants are fully aware that their GPT-based products are capable of distributing unlicensed copies or derivatives of copyrighted Times Works.

Here, OpenAI makes two points.  The first is that the Times' allegations are too generalized and contemplates only the mere possibility of infringement by OpenAI's end users.  That is, there is no concrete end-user direct infringer to which OpenAI's inducement can be tied.  Of course, information about end users' prompts and the result returned would be in OpenAI's hands (if anyone's), not the Times.  The second point, which is rather specious, is that any such contributory infringement would violate OpenAI's terms of use.  It is a curious argument because it does not deny that it may have violated the law, but only that end users may have violated their contractual obligations to OpenAI if they follow OpenAI's lead.  To the extent that OpenAI is contending that it just held the door open and its end users walked through on their own accord, such an angle is unlikely to be persuasive.

Third, in seeking to establish a DMCA violation, the Times alleged that ChatGPT removed "one or more forms of copyright-management information in each of The Times's infringed works, including: copyright notice, title and other identifying information, terms and conditions of use, and identifying numbers or symbols referring to the copyright-management information."  OpenAI responds by, among other things, stating that the Times' allegations do not include the specific copyright-management information that was included in each work, and thus paint with too broad of a brush.  Here, OpenAI has some recent authority on its side, as the judges in parallel cases of Andersen v. Stability AI Ltd. and Tremblay v. OpenAI, Inc. have set the pleading bar to require a higher level of specificity for analogous LLM infringement claims under the DMCA.  It remains to be seen how the Times will seek to distinguish those cases.

Finally, with regard to unfair competition by misappropriation, the Times essentially alleged that OpenAI's use of the Times' content results in a loss of revenue for the Times.  The argument, made in more detail in the complaint, is based on the Times's concern that integration of GPT into a search engine (here, Microsoft's Bing) will obviate the need for readers to subscribe to the Times or visit its website.  In other words, instead of referring users to the Times, the search engine will generate a result that incorporates aspects of the Times's works without giving the Times money or credit.

OpenAI's response here is more traditional than its other arguments:  that such state law claims are preempted by the Copyright Act. That argument is well-established in precedent and relies only on legal arguments (not any factual information) and is thus more likely to succeed than the other, more novel arguments.  OpenAI also addresses one of the complaint's specific example of alleged misappropriation relating to the Times' Wirecutter product recommendations (as source of revenue for the Times).  Specifically, OpenAI analogizes the Wirecutter recommendations to compilations of stock recommendations that were found not to be misappropriation in a previous case.  In a nutshell, OpenAI argues because that the Wirecutter recommendations are not being sold by OpenAI as its own work and the Times did not obtain the recommendations through "efforts akin to reporting," the allegations fail the misappropriation test.  That portion of the argument is less likely to succeed because it would force the judge to delve into the factual similarities and differences.

OpenAI's motion to dismiss seems like it is more of an attempt to convince credulous reporters[5] (and, by extension, the public) of the justice if its ways.  It refuses to accept the Times's characterization of the facts and instead provides its own history and arguments.  But those assertions are not closely tied to the legal arguments OpenAI makes.  So at best, OpenAI is seeking to give the judge a roadmap to what he will see later; at worst, it is a cynical ploy to win over hearts and minds outside of court.  The legal arguments in the motion to dismiss, in contrast, are written in a more traditional manner but have varying likelihoods of success.  We will know more soon, when the Times responds. 

[1] Microsoft has now also moved to dismiss portions of the Complaint, with a far more traditional approach.  We will review that motion in a forthcoming post.

[2] For example, "OpenAI was founded in 2015 to advance digital intelligence in the way that is most likely to benefit humanity as a whole," and "The new GPT-3 model was by far the most powerful language model ever created."  While the GPT family is indeed a very powerful set of large language models, this assertion should be taken with more than a lost shaker of salt.  A standard response employed for years by high tech companies accused of IP theft amounts to "Don't stop us bro, we're innovating."  This response is often made as those companies are raking in huge profits or setting up an environment in which they can do so.

[3] Notably, Microsoft does not make this argument.

[4] OpenAI contends that prior to the three-year period, "it was common knowledge that WebText2 and Common Crawl included numerous articles published by the Times."  That assertion is not drawn from the complaint.

[5] To be fair, few reporters are trained in the law well enough to distinguish between the standard for summary judgment and dismissal. Even some lawyers get it wrong.

USPTO Publishes Updated Guidance for Making Proper Obviousness Determinations

By Michael Borella --

On February 27, 2024, the U.S. Patent and Trademark Office published its Updated Guidance for Making a Proper Determination of Obviousness ("Guidance") in the Federal Register.  The stated goal of the Guidance is:

To provide a review of the flexible approach to determining obviousness that is required by KSR Int'l Co. v. Teleflex Inc. (KSR).  The focus of this document is on post-KSR precedential cases of the United States Court of Appeals for the Federal Circuit (Federal Circuit), to provide further clarification for decision-makers on how the Supreme Court's directives should be applied.

At first blush, the Guidance appears to be merely restating the law and one might be inclined to think that it is much ado about nothing.  However, the Guidance is notable for what it does not cover and may actually lead to its intended audience (mainly examiners and PTAB judges) being more likely to find claims obvious and raising the bar on applicant rebuttals of obviousness contentions.

Put another way, the Guidance sets forth a number of legal principles that could result in examiners believing that they should issue more obviousness rejections.  But it does not acknowledge or even mention that examiners commonly and frequently misapply the law and facts when doing so.  Thus, the Guidance is -- at best -- one-sided in this regard and may result in more time and expense for applicants.

The Guidance states that it "is based on the Office's current understanding of the law and is believed to comport with the binding precedent of the Supreme Court and the Federal Circuit . . . [and] is meant to be consistent with the Office's present examination policy."  It is expected that the Guidance will be incorporated into an updated version of the Manual of Patent Examining Procedure (M.P.E.P.).

One tangential point that the Guidance notes is that the America Invents Act (AIA) changed "the time focus of the obviousness inquiry from 'at the time the invention was made' to 'before the effective filing date of the claimed invention.'"  The Guidance instructs USPTO personnel to "interpret references to 'at the time of invention' in KSR . . . as if they referred to the statutory time focus under the AIA."  Presumably, USPTO personnel should do the same with any use of the term "at the time of the invention" in other cases and in Applicants' comments for purposes of consistency, though such a directive is not made.  Nonetheless, this seems to be a minor clarification that is unlikely to lead to a substantive change in examination.

The Guidance goes on to reiterate that KSR affirmed that the factors set forth in Graham v. John Deere Co. still control the obviousness inquiry.  These factors require that "differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved."  Here, the USPTO missed an opportunity to advise examiners to explicitly state their interpretation of the differences (which sometimes is missing in obviousness rejections) and their understanding of the level of ordinary skill in the art (which is almost never mentioned in obviousness rejections).

More substantively, the main theme of the Guidance is that KSR set forth a flexible rather than robotic obviousness test.  The Guidance states that this flexibility has two aspects, "first with regard to the proper understanding of the scope of the prior art, and second with regard to appropriate reasons to modify the prior art."

On these points, the Guidance asserts that "a proper understanding of the prior art extends to all that the art reasonably suggests, and is not limited to its articulated teachings regarding how to solve the particular technological problem with which the art was primarily concerned."  This requires understanding the prior art "in a flexible manner that credits the common sense and common knowledge of a [person having ordinary skill in the art (PHOSITA)]."

According to the Guidance this means that "[a]n argument that the prior art lacks a specific teaching will not be sufficient to overcome an obviousness rejection when the allegedly missing teaching would have been understood by a PHOSITA—by way of common sense, common knowledge generally, or common knowledge in the relevant art."  The Guidance goes on to give examples from the case law that reject a rigid approach to obviousness and properly combine prior art elements without an express teaching to do so.

The problem here is that the Guidance is silent as to how an examiner is supposed to determine the understanding of a PHOSITA or even the proper level of ordinary skill in the art.  As noted above, such determinations are rarely made explicit in office actions.  And, even when they are explicit, the rationale provided by examiners is often conclusory with little or no supportive reasoning.

The Guidance goes on to note that "the flexible approach to obviousness encompasses not only how to understand the scope of prior art, but also how to provide a reasoned explanation to support a conclusion that claims would have been obvious."  Thus, there are "numerous possible sources that may, either implicitly or explicitly, provide reasons to combine or modify, the prior art to determine that a claimed invention would have been obvious."  As a notable example, a so-called "universal" type of improvement to improve system performance may exist "even absent any hint of suggestion in the references themselves."

The concern with this language is that examiners will use it to justify poorly-reasoned, hand-waving contentions involving uses, modifications, and combinations of prior art.  These concerns are somewhat addressed by the Guidance reiterating that "a proper obviousness rejection still requires the decision-maker to provide adequate analysis based on evidentiary support."  In other words, "Office personnel are required to provide a clear articulation of their reasoning, grounded in relevant facts, when making a determination that a claim would have been obvious."  Having said that, it is rare for said personnel to admit that their articulations have not been clear and the guidance provides little criteria for determining whether an obviousness rejection meets this requirement.

Along similar lines, the Guidance states that "[i]f objective indicia of nonobviousness are properly before the examiner, such as by way of incorporation into the written description as filed or submission of an evidentiary declaration after the filing date, the examiner must consider those indicia, even before the issuance of a first Office action."  While a well-drafted patent application may point out differences between the claimed invention and the prior art known to the applicant, it is not clear in examination procedures whether and to what extent such statements have been considered by examiners.  There currently is no requirement for examiners to make such considerations on the record.

Other issues addressed by the Guidance include the use of common sense by a PHOSITA and how to evaluate the weight of expert opinions.

Notably missing from the Guidance is any example of what a sufficient obviousness rejection would look like in practice.  It would have been helpful for the USPTO to provide examples of properly-reasoned as well as improperly-reasoned obviousness rejections.  As it stands, such details are not present, which may incentivize examiners to continue taking short cuts.

At the very least, the Guidance should have called out a few of the most common and problematic types of examiner errors.  These include <ctrl>-F rejections (the examiner finds the words of the claims in prior art references and does not consider that the words may have multiple meanings or are used in a different context), overreliance on broadest reasonable interpretation (the examiner ignores how a claim term is used in the claim and/or defined in the specification), low-effort rejections of dependent claims (the examiner uses the same references to reject all dependent claims even if those references do not teach the specific elements of those claims), the Where's Waldo rejection (the examiner essentially cites an entire reference -- perhaps dozens of pages long -- and merely tells the applicant that the claim element in question is "in there somewhere"), the "expert" examiner (the examiner claims, without any evidentiary support, that the claim element would be well-known to a PHOSITA because the examiner considers themself an expert in the field), and the ghost claim element (an element that is explicitly recited in a claim that the examiner completely and utterly fails to address).  These are just a few examples.

The point is that the USPTO needs to crack down on examiners taking liberty with lazy examination practices.  Along with the Guidance's discussion of the flexibility the obviousness analysis should be a further and more detailed discussion of how to apply it properly.

Another aspect missing from the Guidance is an acknowledgement that there is a line of Federal Circuit cases that put a fence around overly broad motivations to combine prior art references.  Notably, in Belden Inc. v. Berk-Tek LLC, the Court wrote that "obviousness concerns whether a skilled artisan not only could have made but would have been motivated to make the combinations or modifications of prior art to arrive at the claimed invention" (emphasis added).  Similar language can be found in Personal Web Techs., LLC v. Apple, Inc. and In re NuVasive, Inc. in other words, it is not enough for an examiner to contend that references X and Y could be theoretically combined in some fashion.  Instead, the prima facie burden on the examiner is to establish that a PHOSITA would have been motivated to combine references X and Y in a manner that results what is being claimed by the applicant.

In short, nobody is perfect.  Examiners are human.  Most are not attorneys.  They will make mistakes when applying the law of obviousness.  The USPTO, however, seems content to stick its head in the sand regarding some of the more common and egregious examiner errors that can be found in obviousness rejections without even looking that hard.

If nothing else, the USPTO should be looking closely at examiners who have very high or very low allowance rates in comparison to their art unit or technical center peers as ones that potentially are misapplying the law of obviousness.  The USPTO should also be looking at examiners who are frequently reversed during any stage of the appeals process (e.g., on a pre-appeal brief or PTAB decision) as also potentially misapplying this law.  These individuals should be targeted for additional training on how and how not to employ the obviousness inquiry.