Patent Docs

Judges Issue Standing Orders Regarding the Use of Artificial Intelligence

By Michael Borella --

The impact of generative artificial intelligence (AI) is unsurprisingly significant in the field of education, with some teachers and professors responding by instituting oral examinations, handwritten essays, or requiring that first drafts of written material can only be composed on "locked down" computers with no access to AI tools.  But as the education system (as just one example) is wrestling with the implication of these tools, so is the legal community.

In a recent case that has rocketed into infamy, two lawyers filed a brief in the Southern District of New York that had been written at least in part by the large language model (LLM) ChatGPT.[1]  After opposing counsel and the judge determined that the brief cited to case law that did not exist and the quotes from these fictitious cases were fabrications by ChatGPT, the court imposed sanctions under Rule 11 for purposes of deterrence.  The lawyers were ordered to pay a $5,000 penalty.  Their infraction, which was described in detail by the court, was not the mere use of generative AI, but failing to properly cite check and otherwise vet a brief in a judicial proceeding.

Perhaps in response to this case, we have seen a number of judges issue standing orders on how AI can and cannot be used in proceedings before them.

Eastern District of Pennsylvania Judge Michael M. Baylson published an order on June 6 which states:

If any attorney for a party, or a pro se party, has used Artificial Intelligence ("AI") in the preparation of any complaint, answer, motion, brief, or other paper, filed with the Court, and assigned to Judge Michael M. Baylson, MUST, in a clear and plain factual statement, disclose that AI has been used in any way in the preparation of the filing, and CERTIFY, that each and every citation to the law or the record in the paper, has been verified as accurate.[2]

While Judge Baylson is engaging in an earnest attempt to avoid a mess like the one in New York, his order is overly broad.  Using AI tools such as ChatGPT, Bard, and the like is currently an intentional act on the part of the user.  In the near future, however, as these tools are integrated into legal search and word processing software, lawyers may not know -- and have no reasonable way of finding out -- whether AI has been used at any point during preparation.  For example, are the case summaries provided by your favorite search engine the result of human effort, AI, or both?  Likewise, is the grammar suggestion provided by your word processor the output of AI or a rules-based algorithm?

When considering these issues, it is important to keep in mind the differences between traditional AI and generative AI.  Traditional AI is trained to address specific fields or problems and typically is a form of classifier.  Examples include spam filtering, image classification, speech recognition, and recommendation systems.  Generative AI, on the other hand, is capable of creating new content that is open ended and often not limited to any particular field.  Current generative AI tools include ChatGPT and Bard, but also image generation tools (Dall-E, Stable Diffusion, and Midjourney), as well as music composition tools (no suggestions here as I've yet to find one that allows the non-musician to generate high quality music of a variety of styles from a simple prompt).

In short, traditional AI and generative AI are different animals.  Traditional AI is everywhere already but useful only in limited ways, whereas we are collectively kicking the tires of generative AI but its eventual footprint is likely to be enormous.

In not differentiating between traditional and generative AI, Judge Baylson's order -- if read strictly -- puts a significant burden on lawyers appearing in his court, especially those without a technical background.  Luckily, two other judges have issued orders that are more focused.

U.S. Court of Trade Judge Stephen Alexander Vaden is concerned with the risk of disclosing confidential information to the entities operating generative AI tools.  His order reads:

Generative artificial intelligence programs that supply natural language answers to user prompts, such as ChatGPT or Google Bard, create novel risks to the security of confidential information.  Users having "conversations" with these programs may include confidential information in their prompts, which in turn may result in the corporate owner of the program retaining access to the confidential information.  Although the owners of generative artificial intelligence programs may make representations that they do not retain information supplied by users, their programs "learn" from every user conversation and cannot distinguish which conversations may contain confidential information . . .

Because generative artificial intelligence programs challenge the Court's ability to protect confidential and business proprietary information from access by unauthorized parties, it is hereby:

ORDERED that any submission in a case assigned to Judge Vaden that contains text drafted with the assistance of a generative artificial intelligence program on the basis of natural language prompts, including but not limited to ChatGPT and Google Bard, must be accompanied by:

(1) A disclosure notice that identifies the program used and the specific portions of text that have been so drafted;

(2) A certification that the use of such program has not resulted in the disclosure of any confidential or business proprietary information to any unauthorized party.[3]

These two requirements are simple -- lawyers can use LLMs to assist with submissions, but must notify the court that they did so and attest to not having disclosed a party's confidential information to such tools.  This will incentivize the lawyers to think twice before they submit a ChatGPT prompt such as "Write a legal argument that [trade secret] was improperly obtained by John Smith based on [factual allegations]."

Finally, Judge Arun Subramanian of the Southern District of New York has issued a simple yet balanced and effective order:

Use of ChatGPT and Other Tools.  Counsel is responsible for providing the Court with complete and accurate representations of the record, the procedural history of the case, and any cited legal authorities.  Use of ChatGPT or other such tools is not prohibited, but counsel must at all times personally confirm for themselves the accuracy of any research conducted by these means.  At all times, counsel—and specifically designated Lead Trial Counsel—bears responsibility for any filings made by the party that counsel represents.[4]

In a minimally restrictive fashion, Judge Subramanian reminds lawyers that they are ultimately responsible for the veracity and accuracy of their filings.  This is not unlike reminding senior lawyers that they need to review and check the work of their junior associates.

To be certain, these are not the only standing orders on generative AI that we will see.  Within a few months it may be rare for any judge not to have such an order in place.  Eventually, the gist of such orders will likely be synthesized into a standard of practice adopted by the vast majority of the judiciary.

Of course, this begs the question of whether such a standard of practice will also put disclosure, confidentiality, and veracity requirements on judges' use of generative AI as well.

[1] https://storage.courtlistener.com/recap/gov.uscourts.nysd.575368/gov.uscourts.nysd.575368.54.0_2.pdf.

[2] https://www.paed.uscourts.gov/documents/standord/Standing%20Order%20Re%20Artificial%20Intelligence%206.6.pdf.

[3] https://www.cit.uscourts.gov/sites/cit/files/Order%20on%20Artificial%20Intelligence.pdf.

[4] https://www.nysd.uscourts.gov/sites/default/files/practice_documents/AS%20Subramanian%20Civil%20Individual%20Practices.pdf.

American Axle's Claims Found Eligible on Remand

By Michael Borella --

The storied case of American Axle v. Neapco Holdings has entered a new chapter -- not the final chapter but the plot has thickened considerably.  As a recap, Judge Stark, then of the District Court for the District of Delaware, found all asserted claims of U.S. Patent No. 7,774,911 invalid under 35 U.S.C. § 101 as being directed to a law of nature implemented by well-understood, routine, and conventional means.

The main thrust of this opinion and those that follow was focused on claims 1 and 22, which read:

1.  A method for manufacturing a shaft assembly of a driveline system, the driveline system further including a first driveline component and a second driveline component, the shaft assembly being adapted to transmit torque between the first driveline component and the second driveline component, the method comprising:
    providing a hollow shaft member;
    tuning at least one liner to attenuate at least two types of vibration transmitted through the shaft member; and
    positioning the at least one liner within the shaft member such that the at least one liner is configured to damp shell mode vibrations in the shaft member by an amount that is greater than or equal to about 2%, and the at least one liner is also configured to damp bending mode vibrations in the shaft member, the at least one liner being tuned to within about ±20% of a bending mode natural frequency of the shaft assembly as installed in the driveline system.

22.  A method for manufacturing a shaft assembly of a driveline system, the driveline system further including a first driveline component and a second driveline component, the shaft assembly being adapted to transmit torque between the first driveline component and the second driveline component, the method comprising:
    providing a hollow shaft member;
    tuning a mass and a stiffness of at least one liner, and
    inserting the at least one liner into the shaft member;
    wherein the at least one liner is a tuned resistive absorber for attenuating shell mode vibrations and
    wherein the at least one liner is a tuned reactive absorber for attenuating bending mode vibrations.

A Federal Circuit majority affirmed Judge Stark, adding their observation that the specification of the '911 patent does not disclose how to achieve the claimed goals as further grounds of ineligibility.  Judge Moore penned a vociferous dissent questioning the majority's reading of the record and application of the Alice Corp. v. CLS Bank Int'l two-part eligibility test.

Less than a year later, in response to a petition for en banc rehearing, the majority withdrew its original opinion and handed down a revised opinion finding claim 22 still ineligible but vacating and remanding the District Court's decision about claim 1.  The majority also took the opportunity to express its disagreement with Judge Moore's view of the facts and relevant law.

American Axle filed a petition for Writ of Certiorari with the Supreme Court.  After a long wait, the Court denied the petition.  Thus, the majority's reasoning is still good law.  More correctly, it is still binding precedent -- whether the decision was good is still hotly debated.  Indeed, the reasoning of American Axle was instrumental in an abomination of an ITC decision finding a diamond-encrusted drill bit to be an abstract idea.

Today, we have a decision on remand to the District Court.  Judge Williams has taken on the case, given Judge Stark's promotion to the Federal Circuit.  The issues under dispute were cross-motions related to the eligibility of claim 1 and its dependent claims under § 101, as well as validity under § 102 and non-infringement.  Here, we focus just on the § 101 dust-up.

As an initial matter, the parties disagreed as to whether the Federal Circuit's invalidation of claim 22 could be imputed to claim 1.  Judge Williams quickly put this matter to rest, finding that:

[T]he Federal Circuit expressly stated that "Claim 1 is different than claim 22," and "that the 'characteristics' that can be 'tuned' in claim 1 include variables other than mass and stiffness," which were the variables the Federal Circuit relied on in finding that claim 22 was directed to a natural law, i.e., Hooke's law.

Another preliminary motion went in the other direction, with Judge Williams ruling that the issue of whether claim 1 is directed to an abstract idea (as opposed to a natural law) was not waived by Neapco's lack of contentions on that point until now.  Notably, "the Federal Circuit explicitly remanded the case for the district court to address this alternative eligibility theory, i.e., the abstract idea theory, in the first instance."

Addressing the substance of claim 1 under Alice, Judge Williams started with the premise that "[t]he Alice step one inquiry considers what the patent asserts to be the focus of the claimed advance over the prior art."  He wasted no time concluding that the claimed invention was "directed to a method of designing and manufacturing a tangible propshaft with reduced vibration that includes tuning and  positioning a liner within a propshaft to attenuate bending and shell mode vibration."  According to the judge, this is "[f]ar from an abstract idea," as the claims involve a tangible system and had "an observable real-world impact."

In this regard, Neapco's position that the claims merely recite a "desired result of attenuating certain vibration modes and frequencies" based on abstract concepts of tuning and positioning failed to consider the claims as a whole.  Judge Williams went back to Diamond v. Diehr's prohibition on dissecting claims in the § 101 calculus to support this point.

For further support, Judge Williams appears to agree with Judge Moore in principle that the specification describes "a meaningful improvement to the design and manufacturing of propshafts."  He also notes that "the specification provides the design parameters a person of ordinary skill in the art should use to tune a liner to reduce propshaft vibration . . . [o]ther embodiments illustrate how tuned liners may be physically structured in several distinct ways."  Moreover, the dependent claims explicitly recite how to achieve the specific damping of two modes of vibration.

Neapco's attempt to bifurcate the claims under part one of Alice in order to ignore the "conventional" tangible aspects was, in the opinion of the judge, blurring the line between part one and part two of the test.  Moreover, he was skeptical of Neapco's contentions as improperly incorporating arguments against novelty rather than eligibility.

Accordingly, the District Court found claim 1 and its dependents to not be non-abstract and eligible under part one of Alice.  This obviated the need for a part two analysis.

While this opinion is a breath of fresh air in the patent eligibility swamp (if for no other reason than it simply making sense), the story is still not over.  It is almost inevitable that Neapco will appeal again to the Federal Circuit.  And, it is likely that the appellate proceeding will go against American Axle.

Judge Williams relies heavily on the principles of Diehr, which were modified if not overruled by Alice.  There are numerous precedential Federal Circuit opinions that can be used to counter his findings on the combining of parts one and two of Alice (the Federal Circuit routinely bends it's understanding of Alice to fit its desired outcome), as well as his comments on whether novelty can be considered under part one (it can and has been in many cases including some that Judge Williams quotes for other purposes).  Additionally, if Judge Stark ends up on the panel that hears the appeal, it is unlikely that he will be willing to contradict what he initially concluded about the eligibility of claim 1 over five years ago.

Memorandum Order by District Judge Gregory B. Williams

Moderna Sues Pfizer and BioNTech over mRNA Vaccine Technology

By Kevin E. Noonan --

On Friday, August 26th, Moderna Tx, Inc. and Moderna US, Inc. filed a complaint for patent infringement in Federal district court for the District of Massachusetts against Pfizer, Inc., BioNTech SE, BioNTech Manufacturing GmbH, and BioNTech US, Inc.  (A parallel suit was filed in Germany asserting Moderna's corresponding German patents.)  There are several interesting aspects to this complaint, and perhaps of even greater interest has been the reaction to the filing in light of Moderna's earlier "pledge" to refrain from asserting any of its patents "during the pandemic."

The complaint asserts three patents, identified herein in the context of the claims set forth in the complaint itself:

U.S. Patent No. 10,898,574

Claim 2.  A pharmaceutical composition comprising:
    a plurality of lipid nanoparticles comprising a cationic lipid, a sterol, and a PEG-lipid,
    wherein the lipid nanoparticles comprise an mRNA encoding a polypeptide,
    wherein the mRNA comprises one or more uridines, one or more cytidines, one or more adenosines, and one or more guanosines and wherein substantially all uridines are modified uridines.

Claim 9.  The pharmaceutical composition of claim 2, wherein the modified uridine is 1-methyl-pseudouridine.

U.S. Patent No. 10,702,600

Claim 1.  A composition, comprising:
    a messenger ribonucleic acid (mRNA) comprising an open reading frame encoding a betacoronavirus (BetaCoV) S protein or S protein subunit formulated in a lipid nanoparticle.

U.S. Patent No. 10,933,127

Claim 1.  A method comprising administering to a subject
    a messenger ribonucleic acid (mRNA) comprising an open reading frame encoding a betacoronavirus (BetaCoV) S protein or S protein subunit formulated in a lipid nanoparticle
    in an effective amount to induce in the subject an immune response to the BetaCoV S protein or S protein subunit
    wherein the lipid nanoparticle comprises 20-60 mol% ionizable cationic lipid, 5-25 mol% neutral lipid, 25-55 mol% cholesterol, and 0.5-15 mol% PEG-modified lipid.

Of these three asserted patents, the '574 patent has the broadest claims, not being limited to a particular virus or antigenic protein thereof, while the '600 and '127 patents expressly recite mRNAs encoding a b-coronavirus Spike protein; these claims would encompass vaccines to SARS-CoV-1 (the original SARS pandemic vaccine) as well as MERS and SARS-CoV-2 (COVID19).  These claims in particular form a basis for Moderna's allegations of infringement by the Pfizer/BioNTech Comirnaty® vaccine, as recited in several paragraphs in the complaint.  In particular, Moderna alleges that the Comirnaty® vaccine was a direct copy of their vaccine (a path taken over three other competing candidate vaccines), citing public statements by Pfizer CEO Albert Bourla on June 9, 2020, at Goldman Sachs Virtual 41st Annual Global Healthcare Conference (¶20 of the complaint).

Perhaps in recognition of the post-pandemic patent zeitgeist, the complaint has two remarkable features.  The first is a long expostulatory section explaining the long antecedents of the technology Moderna was able to apply towards making its Spike mRNA SARS-CoV-2 vaccine (and the skepticism those efforts elicited pre-pandemic).  This portion of the complaint includes a history of Moderna's development of the underlying mRNA technology as well as its efforts to develop its vaccine (unnoted is that Moderna abjured participation in "Operation Warp Speed" with its attendant Federal government financial support) during the pandemic (and makes the point that their technology is not limited to vaccines against COVID infections).  The complaint also makes the case that the company's IP was both the technical foundation for its successful and rapid development of the COVID vaccine and provided protection against the significant financial and investment risk occasioned by Moderna's development of its vaccine.

The second remarkable feature of the complaint, and Moderna's strategy in bringing suit, is in the Prayer for Relief (and certain sections explaining the limitations of the remedy Moderna asks the Court to grant).  In addition to a judgment that Pfizer and BioNTech infringe by sales of its Comirnaty® vaccine (and that such infringement was willful), Moderna seeks money damages that expressly exclude damages it would be entitled to from "sales to the U.S. government that are subject to 28 U.S.C. § 1498 or to the 92 low- and middle-income countries in the Gavi COVAX Advance Market Commitment (AMC)."  And in the litany of other remedies routinely requested in patent infringement cases (a finding that this is an exceptional case, with an award of attorneys' fees, costs, and expenses under 35 U.S.C. § 285, and treble damages for willful infringement under 35 U.S.C. § 284), expressly excluded is an injunction from "such other relief the Court may deem just and proper."  Deigning to forego compensation for sales to the government under 28 U.S.C. § 1498 is likely done in an effort to avoid any attempt by Pfizer or BioNTech to have the case adjudicated under the statute in the Court of Federal Claims; disclaiming any interest in sales outside the U.S. to countries falling within the scope of the COMAX AMC avoids (or at least tries to) allegations that Moderna is putting its profits and patent rights over the health and lives of the citizens of those countries.

The complaint also addresses Moderna's promises regarding assertion of its IP, specifically quoting its October 8, 2020 press release stating that "while the pandemic continues, Moderna will not enforce our COVID-19 related patents against those making vaccines intended to combat the pandemic" (italics in original) (¶22).  The complaint also provides Moderna's rationale and justification for filing this complaint at this time:

By early 2022, however, the collective fight against COVID-19 had entered a new endemic phase and vaccine supply was no longer a barrier to access in many parts of the world, including the United States.  In view of these developments, Moderna announced on March 7, 2022, that it expected companies such as Pfizer and BioNTech to respect Moderna's intellectual property and would consider a commercially-reasonable license should they request one.  This announcement was widely publicized, including through coverage in The Wall Street Journal.  Critically, however, and to further its belief that intellectual property should never be a barrier to access, as part of this announcement, Moderna committed to never enforce its patents for any COVID-19 vaccine used in the 92 low- and middle-income countries in the Gavi COVAX Advance Market Commitment ("AMC").  This includes any product manufactured outside the AMC countries, such as the World Health Organization's project in South Africa, with respect to COVID-19 vaccines destined for and used in the AMC-92 countries.  Although they have continued to use Moderna's intellectual property, Pfizer and BioNTech have not reached out to Moderna to discuss a license.  (¶23)

The complaint has nonetheless raised the issue of the status of Moderna's promise in the context of patent pledges in other industries, notably for standard-essential patents (SEP) and FRAND ("fair, reasonable, and non-discriminatory") agreements.  Academics (in particular, Jacob Sherkow from the University of Illinois Law School and Jorge Contreras, S.J. Quinney College of Law, University of Utah Law School) have raised the specter of successful suit by Moderna in the face of its earlier promise as creating a challenge threatening the substantial edifice of patent pledges used in these other contexts.  Some distinctions immediately come to mind, however.  One is that the patent pledges in the SEP/FRAND context are associated with consideration for the pledging party, that consideration consisting of, inter alia, compliance by companies licensing SEPs owned by the pledging patentee that provide stability and consistency in licensing regimes and create impediments against non-compliant companies.  Moderna received no such consideration for its pledge (and the effects of any "good will" it might have hoped to gain was ephemeral; after all, all the pledges in the world did not deter the WTO from adopting a patent waiver agreement at the behest of India, South Africa, and other countries who could expect to benefit and did benefit from agreements like the one in Moderna's complaint exempting sales to the COVAX AMC countries from any damages claims sought by Moderna).  Another distinction is that a fair reading of Moderna's promise-by-press-release was its essentially contingent nature; forgoing (or postponing exercise of) its patent rights was always limited to during the pandemic (although it is a fair question to ask who decides when the pandemic is over).  Finally it is not unfair to say that the SEP/FRAND situation is vastly different from patenting vaccines against a pandemic virus; there is, after all, no analogous risk to global health and welfare arising from patent pledges relating to such patents.

On the other hand, if a court does hold Moderna's patent promise to be enforceable (under the doctrine of promissory estoppel, for example), it most likely will be the last time any biotechnology or pharmaceutical company makes such a promise.

There is one other consideration here that may explain Moderna's willingness to file suit at this time that abjures the lion's share of any damages it could reasonably have expected to receive.  Moderna has achieved something of a Holy Grail of patenting:  true platform patents that can be and will be used for the next vaccine, and the one after that, etc.  Bringing a successful suit might result in a healthy damages award but these may pale compared with what could happen during the ~10 -15 years of patent life remaining.  Of course, any suit brings risks and it is not unlikely that Pfizer/BioNTech will petition for inter partes review; indeed, at least one patent owned by the University of Pennsylvania, U.S. Patent No. 8,691,966 (naming BioNTech principal Katalin Kariko as an inventor), discloses and claims mRNA modifications comprising 1-methylpseudouridine (albeit outside the SARS context); this patent has an earliest priority date about 4 years prior to Moderna's patents asserted in the litigation.

All these considerations make for a compelling story that will almost certainly be the subject of future posts.

District Court Rules PureCircle Steviol Glycoside Patents Invalid

By Kevin E. Noonan --

On May 23rd, U.S. District Court Judge James V. Selna of the Central District of California granted summary judgement to Defendant Sweegen, Inc. on its motion that Plaintiff Pure Circle USA Inc.'s claims in suit were invalid for reciting patent ineligible subject matter and for failing to satisfy the written description and enablement requirements of 35 U.S.C. § 112(a), in PureCircle USA Inc. v. SweeGen, Inc.  Neither judgment was surprising in the current patent environment, but the District Court's reasoning is illustrative of the current state of U.S. patent law.

The suit involved methods for making particular glucosylated forms of the natural sweetener steviol obtained from the Stevia rebaudiana plant.  The plant produces a variety of rebaudioside variants having various levels of glycosylation; the most predominant of these in the plant is termed "RebA" but this is not the most commercially valuable form.  That form, termed variably "RebX" and "RebM" contains six glucose residues on the steviol core, illustrated in the opinion by this diagram:

(As will become evident from the claims, there are several intermediate glycosylated rebaudioside derivatives, termed RebB, RebC, RebD, etc.)  The opinion sets forth that RebM is preferred due to its sweetness but that it only exists as "less than about 0.1% by weight of the total steviol glycoside content . . . in the natural stevia plant."

PureCircle asserted all claims in U.S. Patent Nos. 9,243,273 (claims 1-14) and 10,485,257 (claims 1-7), and Sweegen moved for summary judgment that the '257 patent and '257 patent were invalid under 35 U.S.C. § 101 and § 112(a); the opinion set forth these claims as representative:

Claim 1 of the '257 patent:

1.  A method for adding at least one glucose unit to a steviol glycoside substrate to provide a target steviol glycoside, comprising contacting the steviol glycoside substrate with a recombinant biocatalyst protein enzyme comprising UDP-glucosyltransferase, wherein the target steviol glycoside is Rebaudioside X.

Claim 1 of the '273 patent:

1.  A method for making Rebaudioside X comprising a step of converting Rebaudioside D to Rebaudioside X using a UDP-glucosyltransferase, wherein the conversion of Rebaudioside D to Rebaudioside X is at least about 50% complete.

As stated in the opinion, "the method of the Asserted Patents makes Reb M by using UGT enzymes to add sugar units to a steviol glycoside with less than six sugar units until it has six, thereby converting it to Reb M," wherein the UGT-glucosyltransferase enzymes used in the claimed methods are produced recombinantly in yeast cells.

The District Court granted PureCircle's motion that Sweegen's commercial product, Bestevia Reb M, infringed claims 1-7 of the '257 patent, which Sweegen did not dispute "to the extent that the claims are valid."  With regard to invalidity, Sweegen contended that the product of the claims was naturally occurring and that the method for making them merely replicated what occurs natively in the stevia plant.  Accordingly, Sweegen maintained, the claims were invalid for being direct to laws of nature under the Supreme Court's subject matter eligibility jurisprudence, which the District Court recognized to include Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S. Ct. 2347, 2350 (2014); Ass'n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 577 (2013); Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 89 (2012); and Diamond v. Diehr, 450 U.S. 175, 185 (1981).  In addition, Sweegen asserted that the claims lacked an inventive concept base on five distinctions asserted in response by PureCircle:

1) the use of "recombinant" UGT enzymes in Claims 1-7 of the '257 Patent;
2) the use of "host microorganisms" to "express" the UGT enzymes in Claims 6-7 of the '257 Patent and Claims 12-13 of the '273 Patent;
3) the purity percentages for Reb M in Claims 3-5 of the '257 Patent and Claims 4-6 of the '273 Patent;
4) the conversion percentages of Reb D to Reb M in Claims 1 and 7-11 of the '273 Patent; and
5) the use of the UGT76G1 UGT enzyme in Claim 14 of the '273 Patent.

For the first two of these, Sweegen contended that the structure and function of the UDP-glucosyltransferases recited in the claims were identical to these enzymes as they exist in nature and did not recite "any non-natural role the enzyme plays in the claimed process" (which is a frequent source of invalidating comparison for any naturally occurring compound, insofar as changing the structure and/or function reduces or eliminates the desired biological activity).  Regarding the third and fourth allegations of subject matter eligibility, Sweegen argued that the asserted claims contained no "steps or methods for achieving the claimed purity or completion percentages" (although this argument appears more fitting for a non-enablement or indefiniteness arguments).  Finally, as to the fifth allegation, Sweegen argued that the disclosed enzyme, termed UGT76G1 was also naturally occurring.

PureCircle argued that the preparation methods did not occur in nature, with regard to taking an isolated RebA preparation and using a recombinant UDP-glucosyltransferase, analogizing these claims to the claims found patent-eligible in Rapid Litig. Mgmt Ltd. v. CellzDirect, Inc., 827 F.3d 1042, 1047 (Fed. Cir. 2016), and Illumina, Inc. v. Ariosa Diagnostics, 967 F.3d 1319, 1325-29 (Fed. Cir. 2020).  PureCircle also pointed out that, in nature, the plant contains enzymes that deglucosylate steviol glycosides, thus making impossible production of RebM in quantities achieved using the claimed methods.

Sweegen countered by arguing that claims reciting man-made elements can be ineligible under Federal Circuit precedent, citing Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC, 915 F.3d 743, 750, 753-54 (Fed. Cir. 2019); Roche Molecular Systems, Inc. v. CEPHEID, 905 F.3d 1363, 1371-73 (Fed. Cir. 2018); Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1373-74, 1376-77 (Fed. Cir. 2015), and further that the recited enzymes are "structurally and functionally identical to the naturally occurring UGT enzymes" and accordingly do not overcome patent-ineligibility of the asserted claims.  Moreover, Sweegen argued that the purity and percentage of conversion to RebM do not in themselves change the "underlying natural process[es]."  Finally, Sweegen argued that "methods of preparation" are not per se patent-eligible under the cited precedent.

The District Court agreed with Sweegen, finding claims 1-5 of the '257 patent and claims 1-11 and 14 of the '273 patent invalid for reciting patent-ineligible subject matter.  According to the Court, the claims were directed to the natural law of converting rebaudiosides, and specifically RebD, into RebM.  In the Court's view, "there is no dispute that the conversion of steviol glycosides and Reb D to Reb M using UGT enzymes is a natural process."  The Court found this characterization to be supported by disclosure in the specification, which was expressed as disclosing a "biocatalytic process," defined as "the use of natural catalysts, such as protein enzymes, to perform chemical transformations on organic compounds" (emphasis added).  The Court relied on Athena for the proposition that "[s]ynthetically-created chemical compositions that are structurally and functionally identical to their naturally-occurring counterparts . . . are not patent eligible" and the admission in the specification that the recombinant enzymes were structurally and functionally "identical" to the naturally occurring enzymes.  The District Court rejected the distinction PureCircle attempted to draw for "method of preparation" claims analogous to CellzDirect and expressly with regard to any suggestion that such claims are per se patent eligible, as being inconsistent with precedent particularly the Supreme Court's rationale in Alice.

The claims of the '257 patent not invalidated on Section 101 grounds recited:

6.  The method of claim 1, wherein the UDP-glucosyltransferase is expressed in a host microorganism.

7.  The method of claim 6, wherein the host microorganism is selected from the group consisting of: Escherichia coli, Saccharomyces species, Aspergillus species, and Pisehia species.

And the claim of the '273 patent not invalidated on Section 101 grounds recited:

13.  The method of claim 12, wherein the UDP-glucosyltransferase host microorganism is selected from the group consisting of: Escherichia coli, Saccharomyces species, Aspergillus species, and Pischia species.

The District Court recognizing these recited limitations as providing "something more" than the natural law as required under Supreme Court and Federal Circuit precedent, that something being in this case "a particular step performed by a human for achieving a particular result," which the Court finds "takes those claims beyond the natural law itself."

Turning to Sweegen's motion for an invalidity finding on written description grounds, the District Court agreed with Sweegen that the recited claim element "UDP-glucosyltransferase" is a "broad, functionally-defined genus" and thus can embrace "not just naturally occurring UDP-glucosyltransferases, but 'any' UDP-glucosyltransferase mutant, fusion, and UDP-glucosyltransferase known or discovered after the patents' . . . filing date" (estimated by Sweegen to encompass a trillion (1012), molecules, "a limitless number," citing Juno Therapeutics, Inc. v. Kite Pharma, Inc., 10 F.4th 1330, 1337 (Fed. Cir. 2021)).  The District Court also agreed with Sweegen that the specification does not recite a "a representative number of species or identify any common structural features for UGT enzymes" and that the sequence similarities between different UDP-glucosyltransferase were not correlated with enzymatic activity.  In evidence was a comparison between 12 UGT enzymes wherein only 4 had shown an enzymatic activity that added glucose to steviol glycoside molecules.  PureCircle countered this evidence by asserting that the term ""UDP-glucosyltransferase" is structural because, inter alia, there are other UGT enzymes that do not add glucose residues to rebaudiosides and that the Court's claim construction limits the scope of the claims to those UGT enzymes that do transfer glucose moieties into rebaudiosides as disclosed and claimed.  Finally, PureCircle argued that there are disputed material facts that preclude summary judgment, including that the term "UDP-glucosyltransferases" was itself structural and the structure of functional UGT enzymes had been determined by crystallographic comparisons (unfortunately for PureCircle, the District Court found that none of these crystallographically determined common structural features were disclosed in the specification).  Sweegen countered that the specification did not provide (express) written description support for "every" UGT enzyme capable of converting inter alia RebD to RebM (which was the construction the Court gave to the claim element "UDP-glucosyltransferase").  In addition, Sweegen asserted that neither of the specifications disclosed structural features common to members of the genus of UDP-glucosyltransferases.

The District Court considered the issue to be whether the genus of UDP-glucosyltransferases was defined (and described) structurally or functionally and, deciding it was the latter, found that the claims did not provide adequate written description support.  This determination was supported by the stipulated meaning of the term, i.e., "[a] type of enzyme that is capable of transferring a glucose unit from a uridine diphosphate glucose molecule to a steviol glycoside molecule."  Accordingly, the fact that these claims reciting this limitation were "original" claims they were not entitled to a presumption of adequate written description support.  Under these circumstances, the Court held, precedent requires a showing that "the applicant has invented species sufficient to support a claim to the functionally-defined genus," citing Juno, or "structural features common to the members of the genus so that one of skill in the art can 'visualize or recognize' the members of the genus," citing Ariad Pharma. Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1352 (Fed. Cir. 2010).  The opinion states that there is no dispute between the parties that the specification does not expressly disclose "structural features common to all UGT enzymes" having the recited function; in fact only 4 UGT enzymes are disclosed (UGT76G1, UGT91D2, UGT91D2e, and UGT91D11) and the specification further states that "the particular UDP-glucosyltransferase used in each reaction can either be the same or different, depending on the particular site on the steviol glycoside substrate where glucose is to be added."  Amino acid sequence comparisons, which had been sufficient to overcome a written description rejection before the Patent Office were not persuasive before the Court, based on an understanding that "[a]n enzyme's amino acid sequence does not necessarily predict the enzyme's activity (or functionality) and, therefore, testing is always required to determine the enzyme's activity (or functionality)," from which the Court concluded that "two enzymes with the similar sequences can have different functions and two enzymes with very different sequences can have the same function" (which, to be candid overstates what is a relatively weak biological rule of thumb).  But here, the Court found that a comparison of two of the disclosed UDP-glucosyltransferases (UGT76G1 and UGT91D2) did not disclose common structural features sufficient to satisfy the requirement for an adequate written description.  Finally, the District Court found that as of the filing date common structural features between different UDP-glucosyltransferases were not known in the art (and what features that were known were not universally associated with UDP-glucosyltransferase function).  Accordingly, the District Court granted Sweegen's motion that all asserted claims were invalid for failure to satisfy the written description requirement of 35 U.S.C. § 112(a).

The Court dismissed as moot a third ground of invalidity asserted by Sweegen, sounding in non-enablement.  However, in view of the District Court's rationale in its written description determination, and the recent trend at the Federal Circuit in applying the enablement standard in chemical, pharma, and biotechnology cases (see, e.g., Amgen Inc. v. Sanofi and Idenix Pharmaceuticals LLC v. Gilead Sciences Inc.) it is unlikely that PureCircle would have received any different outcome if the Court had considered this ground on the merits.

While the District Court's decision is likely to be followed by an appeal to the Federal Circuit, PureCircle should expect an uphill battle.  On the written description issue, as a question of fact the District Court is entitled to "clear error" deference which should prove difficult to overcome in view of the reasoning based on evidence cited in the opinion.  And no patentee having had their claims invalidated under Section 101 has had any reason to be sanguine on appeal for the past ten years (although the recent Solicitor General's amicus brief recommending the Supreme Court revisit the subject matter eligibility issue in Am. Axle & Mfg., Inc. v. Neapco Holdings LLC at least raises the possibility that there may be (perhaps just faint) hope for the standard to be reconsidered).

Epic Tech, LLC v. Fusion Skill, Inc. (S.D. Tex. 2021)

Electronic Gaming Patents Found Invalid under § 101

By Joseph Herndon --

In the U.S. District Court for the Southern District of Texas (Houston Division), Plaintiff Epic Tech, LLC (a seller of so-called "sweepstakes games") sued Defendants Fusion Skill, Inc. and Texas Wiz, LLC for infringement of U.S. Patent Nos. 9,589,423 and 8,545,315 with the distribution of gaming systems similar to Epic Tech's sweepstakes games.

The two patents at issue are related to the play of sweepstakes games.  The first patent (the '423 patent) is directed to a method of conducting a sweepstakes game in which a computer-based system operating the game immediately determines and credits a player's account with any prize earned before showing the user the results of the game.  According to Epic Tech, this method is beneficial because it "further reinforces to regulators that the prizes are predetermined and that there is no chance or skill involved in the simulated game."

This is important because gambling is illegal in many states, but various methods of evading this prohibition now exist, including converting a gambling-machine-like game into a lottery-like game.  In this method, the result of the game is not determined by random.  Instead, the system is loaded with a finite number of results—i.e., some number of winning tickets and a larger number of losing tickets—from which a ticket is randomly selected upon initiation of the game.  In other words, whereas in a traditional gambling machine game it would be mathematically possible for a player to lose—or win—one trillion times in a row, the precise number of winners and losers over the long run is predetermined in a lottery-based slot machine.  Further distinguishing these sweepstakes games from gambling-like games is the payment method.  Whereas a traditional gambling machine game is played by inserting a payment directly into the machine, a sweepstakes game might be initiated with a token that is given away for free along with an ostensibly unrelated purpose.  Because such a game does not technically require consideration on the part of the player, it can be defined as something other than gambling.

The second patent (the '315 patent) describes a method for conducting computer-based sweepstakes bonus games, or "game-in-games" in the patent's lexicology.  The '315 patent claims a method whereby the playing of a game-in-game is triggered automatically, without player interference, upon the selection of a winning ticket for the initial game.

The Defendants argued that each patent is invalid because it claims an abstract idea as proscribed by 35 U.S.C. § 101.

1.  The '423 patent

The '423 patent is directed to a method of dispensing prizes in an electronic sweepstakes game.  Its purported innovation is for the computer server on which the game is played to credit a player's account with the prize corresponding to the selected sweepstakes entry prior to displaying the results.  This innovation apparently makes the game more appealing to regulators.

Claim 1 of the '423 patent is set forth here:

1.  A method of providing a sweepstakes prize, the method comprising:
    a.  facilitating, by one or more processors, selection of a first plurality of sweepstakes tickets from a second finite plurality of sweepstakes tickets in response to a request from a user;
    b.  prior to a visual display of the results of the first plurality of tickets to a user account, determining, by the one or more processors, a prize associated with each of the first plurality of sweepstakes tickets and a total value for the prizes associated with the first plurality of sweepstakes tickets;
    c.  prior to a visual display of the results of the first plurality of tickets to a user account, crediting to an account for the user, by the one or more processors, the total prize value associated with the first plurality of sweepstakes tickets; and
    d.  providing to the user a visual display of the results of the first plurality of sweepstakes tickets.

The Court followed the two-step Alice test, asking first whether the patent is "directed to a patent-ineligible concept," such as an "abstract idea," and second whether, "if so, the particular elements of the claim, considered both individually and as an ordered combination, do not add enough to transform the nature of the claim into a patent-eligible application."

The Court stated that the '423 patent "flunks" Alice step one because it is directed to an abstract idea.  When computer-related patents are at issue, the critical distinction is whether the focus of the claims is on the specific asserted improvement in computer capabilities or, instead, on a process that qualifies as an abstract idea for which computers are invoked merely as a tool.

Here, the '423 patent claim merely deploys computers as a tool to implement a novel method of executing a sweepstakes game—specifically, in Epic Tech's own words, a new "method for awarding a sweepstakes prize developed by the patentee."  The '423 patent does not describe, and Epic Tech does not claim, any innovation in computer software; instead, the patent merely sets out a new method for using computers to award sweepstakes prizes.  Thus, the Court found the focus of the claims is not on such an improvement in computers as tools, but on certain independently abstract ideas that use computers as tools.

Because the '423 patent was found to be directed to an abstract idea, the Court proceeded to step two of the Alice test.

The Court viewed step two as deciding whether this case is closer to DDR Holdings or Electric Power.  In DDR Holdings, the court held valid a patent that described a novel method for Internet advertising because its claims specified how interactions with the Internet are manipulated to yield a desired result—a result that overrides the routine and conventional sequence of events ordinarily triggered by the click of a hyperlink.  DDR Holdings, LLC v. Hotels.com, LP, 773 F.3d 1245 (Fed. Cir. 2014).

In Electric Power, the patent claimed a method of gathering and displaying information for electric power grid operators, but lacked details for how to accomplish those functions.  The claims alternatively were directed to the solution itself.  Electric Power Group, LLC v. Alstom, S.A., 830 F.3d 1350 (Fed. Cir. 2016).

The Court here found the '423 patent to be more like that in Electric Power.  The '423 patent was found to offer no "arguably inventive" method; rather, it simply instructs a computer to send information to another computer at an earlier step than it otherwise would in the normal course of a sweepstakes game.  The claims were found to lack meaningful details that would save them from § 101 destruction.

2.  The '315 patent

The '315 patent describes a method for operating sweepstakes bonus games, or "game-in-games."  The '315 patent describes its invention as "a method of playing a game-within-a-game" and "a method . . . providing a plurality of gaming terminals within a network."  Specifically, the '315 patent claims two networked computer terminals that simultaneously play a first game and, if the player wins the first game, trigger the playing of a second game.  Notably, the '315 patent does not claim any specific software or hardware necessary to implement this system.

Claim 1 of the '315 patent is set forth here:

1.  A computer-implemented method, comprising:
    a.  providing a plurality of gaming terminals linked together via a network, the plurality of gaming terminals comprising at least a first gaming terminal;
    b.  receiving a first request from a first player to play a first sweepstakes game on the first gaming terminal, wherein the first request qualifies the first player to be eligible to win an award associated with the first sweepstakes game;
    c.  in response to receiving the first request:
        i.  receiving a participation credit to play the first sweepstakes game;
        ii.  presenting an option to the first player to participate in a first sweepstakes game-in-game on the first gaming terminal so that the first player can play the first sweepstakes game and concurrently be eligible to win one or more prizes from the first sweepstakes game-in-game, wherein an outcome of the first sweepstakes game-in-game is independent of the outcome of the first sweepstakes game;
        iii.  receiving a second request; and
        iv.  in response to receiving the second request within a predetermined time limit, granting the first player eligibility to win one or more prizes from the first sweepstakes game-in-game;
    d.  triggering a play of the first sweepstakes game-in-game; and
    e.  notifying the first player of their eligibility to win one or more prizes from the play of the first sweepstakes game-in-game,
    wherein once the second sweepstakes game-in-game is triggered to play, the second sweepstakes game-in-game automatically plays on a server without input from the first gaming terminal.

Again, the Court found that the '315 patent "flunks" Alice step one.  Like the '423 patent, the '315 patent expressly describes itself as directed to methods, but does not claim any novel usage or configuration of computer hardware or software.

Next, under Alice step two, the Court found that the '315 patent cannot survive.  Here, the '315 patent merely describes a set of steps that could be performed by any computer—or a fast-moving store clerk—without adding any novel or inventive step.

The '315 patent claims a method of operating two games simultaneously in which the second game is triggered by certain conditions in the first game.  If the '315 patent described some technologically innovative mechanism by which the second game is triggered, it might well be inventive.  But, it does not.  Rather, it simply claims the idea of putting two computers next to each other and having the second computer initiate a game if the first computer produces a winning result.  That idea is abstract and thus unpatentable.

Epic Tech contended that the '315 patent's processes cannot be performed solely by humans because the patent claims a system that "independently control[s]" the game-in-game and "takes no input from the individual human players playing on the gaming terminals."

But the Court found that a human is perfectly capable of independently running a basic game of luck without taking input from a human player—in fact, that is what a casino's croupiers do every day.  In any event, the question is not whether the patent claims a process that cannot be performed by a human, but whether the patent claims a non-ordinary process.

Thus, Defendants' Motion for Partial Summary Judgment on Invalidity was granted as to both patents.

Epic Tech, LLC v. Fusion Skill, Inc. (S.D. Tex. 2021)
Memorandum and Order by U.S. District Judge Ellison

VLSI Technology, LLC v. Intel Corp. (W.D. Texas 2021)

By Michael Borella --

There is an undercurrent in patent law these days that litigation favors the defendant.  Rather than contending infringement of a few claims of one patent, plaintiffs are now advised to assert multiple claims across several patents.  After 35 U.S.C. § 101 challenges, IPR filings, and summary judgment motions, plaintiffs are lucky if they are left with a few claims of one patent to bring to trial.  Analogies have been made that patent portfolios are like Swiss cheese.

But every so often, a patentee wins big, giving the viability of patent assertion campaigns a much-needed shot in the arm.

To that point, patent holder VLSI has won a whopping $2.175 billion jury verdict in the Western District of Texas.  VLSI is the owner of U.S. Patent Nos. 7,523,373 and 7,725,759.  Claim 1 of the '373 patent involves determining the minimum operating voltage of a memory and storing this value in non-volatile memory.  Two voltage sources are provided, and the second is selected to operate the memory if the first is below the minimum value.  Claim 14 of the '759 patent involves a programmable clock controller that can receive a request from a first device coupled to a variable clock frequency bus.  The controller then changes the frequency of a high-speed clock that is used to control the clock frequency of a second device coupled to the bus as well as the bus itself.  Both patents purport to reduce the power consumption of chips.

The jury found that Intel literally infringed claims 1, 5, 6, 9, and 11 of the '373 patent, and infringed claims 14, 17, 18, and 24 of the '759 patent under the doctrine of equivalents.  The jury also found that this infringement was not willful and that Intel had failed to establish anticipation of '759 patent (the validity of the '373 patent was apparently not at issue).

All said, the jury found Intel on the hook for $1.5 billion due to its infringement of the '373 patent and $675 million for its infringement of the '759 patent.  The main justification for damages of this magnitude is that Intel has sold billions of devices infringing the patents.

VLSI is a non-practicing entity, which Intel attempted to use against it at trial.  These efforts fell on deaf ears, but along with the 10-figure sum is likely to drive the ongoing "patent troll" narrative.

This is the second largest patent infringement verdict ever, and it will be the largest if it holds.  A $2.5 billion award to Idenix Pharmaceuticals in 2016 was overturned on invalidity grounds.  Here, an Intel appeal is inevitable, so VLSI will not be counting its money any time soon.

Personalized Media Communications, LLC v. Apple, Inc. (E.D. Tex. 2021)

Signal Processing Claims for Decrypting Encrypted Information Found Patent Eligible

By James Korenchan --

Last week, the U.S. District Court for the Eastern District of Texas, Marshall Division ruled that Defendant Apple, Inc. (hereinafter "Apple") failed to show that claims related to signal processing are patent ineligible under 35 U.S.C. § 101.

Plaintiff Personalized Media Communications, LLC (hereinafter "PMC") asserted that Apple infringed PMC's U.S. Patent. No. 8,191,091 (the '091 patent).  Apple had moved to dismiss all claims of the '091 patent as directed to ineligible subject matter.  The Court denied this motion to dismiss, finding that the '091 patent claims to be patent-eligible.  Apple then moved for summary judgement that all the claims of the '091 patent are invalid under § 101.  (Apple's motion also moved for relief under § 101 with respect to PMC's U.S. Patent Nos. 8,559,635 and 7,752,649, but only the '091 patent was addressed by the Court in the present decision due to it being the only patent set for trial at the time.)

The '091 patent includes four independent claims, including claim 13, which Apple asserted as being representative of all of the claims of the '091 patent.  The Court's decision thus addressed only claim 13.

Claim 13 is as follows:

13.  A method of decrypting programming at a receiver station, said method comprising the steps of:
    receiving an encrypted digital information transmission including encrypted information;
    detecting in said encrypted digital information transmission the presence of an instruct-to-enable signal;
    passing said instruct-to-enable signal to a processor;
    determining a fashion in which said receiver station locates a first decryption key by processing said instruct-to-enable signal;
    locating said first decryption key based on said step of determining;
    decrypting said encrypted information using said first decryption key; and
    outputting said programming based on said step of decrypting.

The '091 patent generally aims to provide an integrated multimedia system in which a "receiver station" can, among other things, combine various types of programming (e.g., television, radio, computer communications), generate user-specific information related to such programming, identify and block those who pirate programming, and -- in the case of the invention of claim 13 -- identify, and then decrypt, programming and instruction signals that are encrypted.

The Court began its analysis by determining whether claim 13 as a whole is directed to an abstract idea.  In its motion for summary judgement and in the previous motion to dismiss, Apple argued that the '091 patent is directed to the abstract idea of "using an instruct-to-enable signal to decrypt (convert from unintelligible to intelligible) information," and asserted that claim 13 claim "focuses on the abstract idea of decrypting encrypted information, rather than the physical system or the specific software that processes and decrypts the information."  Apple argued that this alleged abstract idea is akin to the "manipulation of data" and other abstract ideas that the Federal Circuit found to be patent ineligible in the likes of Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307 (Fed. Cir. 2016), and Digitech Image Techs., LLC v. Elecs. For Imaging, Inc., 758 F.3d 1344, 1351 (Fed. Cir. 2014).  Additionally, Apple argued that all but the decrypting and outputting steps were known in the art before the priority date of the '091 patent.

Apple also noted that the Federal Circuit previously affirmed invalidity of other PMC patents that are "closely related" to the '091 patent under § 101.  Lastly, Apple cited to a deposition of a named inventor in an attempt to demonstrate that the concepts of encryption and decryption were well-known before the '091 patent and fail to render the claims eligible.

In response to Apple's motion to dismiss, the Court had concluded that that the claims of the '091 patent are directed to methods of using an instruct-to-enable signal included in digital information to determine a fashion in which a station locates a decryption key that can decrypt encrypted information.  The Court had also concluded that claim 13 "describes an improvement to the delivery of 'instruct-to-enable signals' and a technical way to decrypt transmitted information.  In support of this improvement, the Court cited to the specification of the '091 patent:

[T]he '091 patent says that transmitting the "instruct-to-enable signal" in the "information transmission" improves the reliability of the signal's delivery.  The patent states the improved delivery process increases the number of functions the "instruct-to-enable signal" can control because the signal can "occur at precise times in programming and can synchronize the operation of receiver station apparatus to the timing of programming transmission."  Second, the claim requires a "receiver station" that is able to "locate[] a first decryption key" by processing the "instruct-to-enable signal."  The specification shows that decrypting "digital programming" "based on" the "control signal" can be a technical solution for causing a receiving device to decrypt a transmission.  [Citations omitted.]

Here, PMC indicated that it agreed with the Court's previous analysis, and the Court indicated that Apple provided no contrary evidence.

The Court nevertheless proceeded with its § 101 analysis, referring yet again to its previous finding that, even if the claims were directed to an abstract idea, additional elements in the claims would transform them into patent-eligible applications of that idea:

Claim 13 of the '091 Patent is a patent-eligible application at least because of its arrangement of steps.  "[A]n inventive concept can be found in the nonconventional and non-generic arrangement of known, conventional pieces."  Bascom Glob. Internet Servs. v. AT&T Mobility LLC, Case No. 2015-1763, 2016 WL 3514158, at *6 (Fed. Cir. Jun. 27, 2016).  Although some of the pieces in the '091 Patent are perhaps known and conventional—such as encryption and decryption—the '091 Patent arranges them in a way that is sufficient to confer an inventive concept, including "determining a fashion in which [a] receiver station locates a first decryption key by processing [an] instruct-to-enable signal" and "locating said first decryption key based on said step of determining."  [Citations omitted.]

The Court thus found that the '091 patent is directed to patent eligible subject matter.

Personalized Media Communications, LLC v. Apple, Inc. (E.D. Tex. 2021)
Report & Recommendation by Magistrate Judge Payne

Sherwin-Williams Co. v. PPG Industries, Inc. (W.D. Pa. 2020)

By Donald Zuhn --

Earlier this month, in Sherwin-Williams Co. v. PPG Industries, Inc., Special Master Henry M. Sneath issued a Report and Recommendation in the U.S. District Court for the Western District of Pennsylvania that a motion by Defendant PPG Industries, Inc. to partially exclude the opinions of Plaintiff Sherwin-Williams Co.'s expert witness should be granted.  In particular, the Special Master recommended that the opinions set forth in ¶¶ 94-117 of the expert's Rebuttal Report be excluded.

Sherwin-Williams initiated the dispute between the parties by filing suit against PPG for infringement of certain claims of U.S. Patent Nos. 8,617,663; 8,835,012; 9,242,763; 9,415,900; and 9,862,854.  The asserted claims are directed to "[a] coating composition for a food or beverage can" that is substantially free of bisphenol A ("BPA").  PPG retained two experts, including Dr. Leon Perez, to opine on the invalidity of the asserted patents, and Sherwin-Williams retained two experts of its own, including Dr. F. Joseph Schork, to rebut the opinions of PPG's experts.

PPG's experts opined that the asserted patents were invalid in view of U.S. Patent No. 5,714,539 (the '539 patent or Perez Patent).  In his Rebuttal Report, Dr. Schork opined that the '539 patent does not disclose a BPA-free coating, explaining that "Perez does not disclose a complete coating formulation," much less one that is BPA-free; that "Perez's lack of reference to BPA is not an affirmative disclosure of a composition that" is substantially free of BPA; that PPG did not to cite the '539 patent as prior art when prosecuting its own BPA-free coating patent; and that when PPG formulated the exemplary latexes disclosed in the '539 patent into coatings, PPG made coatings that contained BPA.

PPG moved to partially exclude the testimony of Dr. Schork -- in particular, ¶¶ 94-117 of Dr. Schork's Rebuttal Report -- arguing, in part, that Sherwin-Williams was bound by its admission to the U.S. Patent and Trademark Office that the '539 patent discloses a BPA-free coating.  The '539 patent had been earlier cited by PPG in its requests for reexamination of two other Sherwin-Williams patents, and in those reexamination proceedings, the Examiner agreed with PPG and issued a rejection based on the '539 patent, stating that "[s]ince Perez makes no teaching as to the presence of bisphenol A or aromatic glycidyl ethers, it is the position of the examiner that they are not present."  Sherwin-Williams responded at the time (in 2012) that "Perez . . . is a BPA-free coating . . . ."  In a footnote of his Report and Recommendation, the Special Master notes that because the asserted patents claim priority to one of the reexamined patents, the prosecution of that reexamined patent, including the reexamination proceedings, are "considered part of the prosecution history of the Asserted Patents" (citing as support Texas Instruments Inc. v. U.S. Int'l Trade Comm'n, 988 F.2d 1165, 1173-75 (Fed. Cir. 1993), wherein the Federal Circuit stated that the prosecution history of a grandparent application created an estoppel of claim in a continuation application).  In the instant case, PPG argues that Sherwin-Williams' admission in the reexamination proceedings "is binding on Sherwin, and therefore any testimony to the contrary is irrelevant, misleading, and unreliable."

Citing Procter & Gamble Co. v. Nabisco Brands, Inc., the Special Master notes that "[a] patentee's representations to the PTO during the prosecution of its patent application about the scope of the prior art is a binding admission and should 'be accepted at face value' during subsequent litigation over the patent."  711 F. Supp. 759, 770 (D. Del. 1989).  The Special Master also states that "[a]llowing Sherwin to change its position from August 2012 to Dr. Schork's opinions in February 2019 to the contrary would be severely prejudicial to PPG."  Sherwin-Williams countered that it should not be bound by the earlier admission regarding the '539 patent because it was relying, without the benefit of discovery, on PPG's representation during the reexamination that the '539 patent disclosed a BPA-free coating.  Sherwin-Williams also argued that the cases on which PPG relied in moving to exclude portions of Dr. Schork's Rebuttal Report "[do] not deal with a situation where the patentee's prosecution statement was based upon incomplete information and a misrepresentation by the accused infringer," explaining that "[w]ith the benefit of discovery, Sherwin now knows that PPG's statement to the Patent Office was at best misleading, and that Sherwin should not have relied on that statement."

Because the reexaminations in which the admission was made were ultimately vacated by the Federal Circuit, without the issuance of a reexamination certificate, the Special Master also considered the question of whether the statements that Sherwin-Williams made to the USPTO regarding the '539 patent could be used in the instant litigation.  PPG argued that "the Federal Circuit, when discussing the 'collateral effect' on future litigation, was focused on the preclusive effect of allowing the examiner's cancellation decision itself regarding the Reexam Patents to have legal effect -- not expungement of the entire underlying record."  Sherwin-Williams countered that "the plain language of [the Federal Circuit's opinion) demonstrates that the court vacated the entirety of the reexamination proceedings" (emphasis by Sherwin-Williams).  Sherwin-Williams therefore argued that "PPG's argument that Sherwin is 'estopped' based on the reexaminations is clearly inconsistent with the Federal Circuit's directive that the reexamination must have no 'collateral effect on other litigation.""

While suggesting that "neither party can rely on the interim and thus now vacated examiner's or PTAB's decisions from the reexaminations in the invalidity analysis," the Special Master explains that "[t]he statements made by each party in the reexaminations are part of the underlying facts of the reexamination," and that "[t]hose statements were made to the USPTO and can be relied upon in this litigation for any relevant and legal purpose."  Thus, the Special Master concludes "that Sherwin's statement to the Patent Office about the Perez Patent disclosing BPA-free coatings is a binding admission."  The Special Master also notes that "[b]ecause it was an unfettered statement about a reference and it was not couched in relation to any specific patent claim, it is immaterial whether that statement by Sherwin was ultimately relied upon by the USPTO examiner, the PTAB, or the Federal Circuit," adding that:

Sherwin's statement about the disclosure of the Perez Patent made to the USPTO in August 2012 is one that stands as an underlying fact from the reexamination proceedings.  Sherwin could have rejected or challenged the Patent Office's characterization of the Perez Patent's disclosure in 2012 during the reexaminations, but it did not.  Instead, it adopted the Patent Office's statements about the Perez Patent's disclosure - a fact that it admits was a mistake [citations omitted].

The Special Master also notes that:

It seems unfair that Sherwin gets another bite at characterizing the Perez Patent's disclosure over six years later in Dr. Schork's report, when it so clearly articulated its position in 2012 and PPG and its experts relied on that position from that point forward.  Just because the reexamination proceedings never ended in an adjudication one way or another on the parent patents' (in)validity, this statement was not erased by the mootness of the reexaminations.  Sherwin should be bound by its 2012 statement to the USPTO regarding the disclosure of the Perez Patent.  Dr. Schork's current opinions to the contrary would be unreliable, irrelevant, and confusing to the jury and highly prejudicial to PPG who has relied on that statement in the interim years.

The Special Master therefore recommended that PPG's motion to exclude the opinions set forth at ¶¶ 94-117 of Dr. Schork's Rebuttal Report be granted.

Sherwin-Williams Co. v. PPG Industries, Inc. (W.D. Pa. 2020)
Report and Recommendation of the Special Master on PPG's Motion to Partially Exclude Testimony of Plaintiff's Expert Witness Dr. F. Joseph Schork

Biogen Int'l GmBH v. Mylan Pharmaceuticals Inc. (N.D.W. Va. 2020)

By Kevin E. Noonan --

The written description requirement has had a twenty-five year renaissance, particularly in the chemical and biotechnology arts as a way of restricting claim scope to what an inventor has actually invented (see Regents of the University of California v. Eli Lilly & Co. and "Ariad Pharmaceuticals Inc. v. Eli Lilly & Co.").  In view of the unpredictability of these arts (compared with the mechanical arts; but see Tronzo v. Bionet and Gentry Gallery, Inc. v. Berkline Corp.), the same evidence that supports non-obviousness (due to the skilled worker not having the requisite reasonable expectation of success) can also restrict the scope of what has been described (because there can be much less reliance and supplementation of what the person of ordinary skill would know for disclosures that fail to satisfy the possession test of written description due to that unpredictability).  These conflicting rubrics were part of the District Court's decision last week that Biogen failed to provide adequate written description in ANDA litigation styled Biogen Int'l GmBH v. Mylan Pharmaceuticals Inc.

The case arose over Mylan's attempt to get regulatory approval and come to market with a generic equivalent of Biogen's Tecfidera® (dimethyl/monomethyl fumarate) multiple sclerosis drug.  Biogen asserted Orange Book-listed U.S. Patent Nos. 6,509,376; 7,320,999; 7,619,001; 7,803,840; 8,399,514; and 8,759,393, but the parties dismissed their causes of action on all patents except the '514 patent, where Biogen asserted claims 1-4, 6, 8-13, and 15-16; claim 1 is representative:

1.  A method of treating a subject in need of treatment for multiple sclerosis comprising orally administering to the subject in need thereof a pharmaceutical composition consisting essentially of (a) a therapeutically effective amount of dimethyl fumarate, monomethyl fumarate, or a combination thereof, and (b) one or more pharmaceutically acceptable excipients, wherein the therapeutically effective amount of dimethyl fumarate, monomethyl fumarate, or a combination thereof is about 480 mg per day.

While this litigation was proceeding, Mylan successfully petitioned the Patent Trial and Appeal Board to institute an inter partes review proceeding, on the grounds that the asserted claims of the '514 patent were obvious.  The Board issued a Final Written Decision that Mylan had not shown obviousness by a preponderance of the evidence, and the District Court held that Mylan was collaterally estopped from asserting obviousness as a basis for invalidating the '514 patent in this litigation.  Accordingly, the only ground Mylan pursued before this Court was that the specification of the '514 patent did not satisfy the written description requirement of 35 U.S.C. § 112(a).

Mylan's arguments on its written description defense were grounded on certain characteristics of the '514 specification and its prosecution history.  The '514 patent reflected Biogen's more general research goal of finding treatments for neurological disorders, including but not limited to multiple sclerosis (MS).  Mylan noted that the original named inventor was not a clinician but rather a research scientist investigating the mechanism of action of the claimed compound.  Specifically, the research underlying the '514 patent disclosure showed that DMF could activate a particular metabolic pathway (the Nrf2 pathway).  One important consequence of this inventor's testimony is that he "denied that his research could be extrapolated to a clinical dose of DMF; it 'was never the focus of [his] work to inform the clinical dosing of [DMF].'"  This inventor, Dr. Lukashev, was the only named inventor on the earliest priority applications from which the '514 patent claimed priority.

As originally filed, the claims of the application that matured into the '514 patent did not recite methods of treatment but rather were drawn to methods for identifying compounds that affected the Nrf2 pathway.  However, in April 2011, Biogen received the results of a Phase III clinical study showing that a 480mg/day dose of DMF was effective in treating MS (specifically).  Apparently in response, Biogen replaced the then-pending claims with claims that eventually issued, changed the title of the application, and added as an inventor the scientist who posited that this dosage would be particularly effective as an MS treatment; significantly to the written description calculus Biogen did not supplement its specification which permitted it to rely on a February 8, 2007 earliest priority date.  In addition, Biogen filed a stand-alone provisional application expressly directed to MS treatment with 480mg/day of DMF.  Biogen subsequently abandoned this application when the '514 patent was allowed.

Mylan's argument was simple:  the invention described in the specification filed in 2007 "bears no resemblance to the invention claimed in 2011."  Mylan supported this assertion with two arguments.  First,  Mylan argued that "a POSA [person of skill in the art] would not have expected the claimed invention—a 480mg/day dose of DMF (BID)—to effectively treat MS" and "that nothing in the specification of the '514 Patent teaches otherwise."  Second, Mylan argued that "when viewed as an integrated whole, the combination of selectively-plucked disclosures in the specification of the '514 Patent fails to sufficiently describe the claimed invention—a method of treating MS with a therapeutically effective amount of DMF, i.e., 480mg/day of DMF (BID)."  According to Mylan, the reason for this situation is that "Biogen grafted the '514 claims onto a specification written to cover an entirely different set of inventions, conceived of by an entirely different inventor, and filed more than four years before Biogen's 2011 Phase III trial results demonstrated the effectiveness of the 480[mg/day] dose."

Biogen, for its part, asserted that Mylan was relying on arguments it had asserted for obviousness, and that the '514 specification contained express disclosure -- in Method 4 provided in an Example -- that linked each of these three recited elements of the claims ("(1) a method of treating MS with (2) DMF and/or MMF (3) at a dose of 480 mg per day") in a way sufficient to satisfy the written description requirement.[1]

The District Court held that the '514 specification did not show that the inventors possessed the invention on its earliest claimed priority date.  The Court noted that, although the '514 specification "[s]pan[s] 30 columns," with the first column focusing on MS, the specification is then directed to disclosure of "how 'the Nrf2 pathway may be activated in neurodegenerative and neuroinflammatory diseases as an endogenous protective mechanism,' and how '[e]merging evidence suggests that [plant-derived] compounds may exert their neuroprotective effects by activating cellular stress-response pathways, including the Nrf2 pathway, resulting in the upregulation of neuroprotective genes."  As set forth in the Court's opinion, the '514 specification discloses five methods:

1) methods of screening for at least one new candidate compound for treating a neurological disease;
2) methods of evaluating neuroprotective properties of at least one drug candidate for treating a neurological disease;
3) methods of comparing (e.g., for bioequivalence) at least two pharmaceutical compositions which comprise fumaric acid derivatives;
4) methods of treating a neurological disease by administering to the subject in need thereof at least one compound that is partially structurally similar to DMF or MMF; and
5) methods of treating a neurological disease by a combination therapy that comprises administration of at least one first compound that upregulates the Nrf2 pathway and at least one second compound that does not upregulate the Nrf2pathway.

Even Biogen conceded that Methods 1-3 were directed to screening drug methods and not therapeutic methods, and Method 5 was limited to combination therapies using DMF and other drugs having different activities.  The only disclosure relating to the claimed methods was Method 4, which Biogen contended provided the linkage between the elements of the asserted claims.  The opinion is blunt:  it says plainly "[t]his simply is not so."  The Court understands this method to "broadly describe[] treating neurological diseases with a therapeutically effective amount of DMF; MS is merely one such disease 'among a slew of competing possibilities,'" citing Novozymes A/S v. DuPont Nutrition Biosciences APS by analogy in support of the inadequacy of the '514 patent disclosure.  As further indicia of the lack of necessary specificity of the '514 patent disclosure, the Court cites "an exhaustive list of 'diseases suitable for the [five] methods described' in the '514 Patent."  In view of this listing of a "plethora of neurological diseases," the Court held that there were no blaze marks that would teach the skilled worker to treat MS with DMF at this dosage.  The Court particularly rejected Biogen's contention that the specification would teach the POSA that the '480 mg/day dosage was the preferred dosage, crediting Mylan's expert Dr. Greenberg's testimony in this regard.  The Court particularly focused on the fact that the specification mentions the 480mg/day dosage only once, as part of a preferred range ("from about 480 to about 720mg/day").  The Court found "neither credible no persuasive" Biogen's argument that a POSA would understand that using the lowest effective dose of the narrowest range was preferred.  The Court found it more consistent with what was known at the time the application was filed that dosages of 720 mg/day were effective in treating MS, and 120 and 360 mg/day were ineffective.  In this context, the Court found that a POSA would understand from the '514 patent specification that 720mg/day was effective, to the extent that this was the upper range of every effective dosage range disclosed in the '514 patent.

In the "battle of the experts" the Court was unpersuaded by Biogen's expert (whose credibility Mylan impeached on cross-examination, according to the Court) and clearly persuaded by Mylan's expert.*

The Court also was convinced that the reason for this failure to describe the invention claimed in the '514 patent was that the specification contained predominantly the work and inventions of one inventor (Dr. Lukashev) directed to methods for identifying drugs for treating neurological disorders, while the claims were directed to the other inventor's (Dr. O'Neill) work on developing an effective therapeutic agent for treating MS:

From the evidence presented at trial, Dr. Lukashev's research regarding the activation of the Nrf2 pathway and screening drug compounds had nothing to do with the clinical development of Tecfidera®.  That task fell to Dr. O'Neill and later Dr. Dawson.  Notably, Dr. O'Neill's hypothesis, that a 480mg/day dose of DMF (BID) would be efficacious in treating MS, evolved from his review of Fumapharm's confidential studies of Fumaderm®  [an early Biogen acquisition target], not Dr. Lukashev's unrelated research regarding the mechanism of action [citations to the record omitted].

From the evidence presented at trial, the District Court identified the following deficiencies in Biogen's failure to satisfy the written description requirement:  "[i]n sum, Biogen has attempted to satisfy the written description requirement of § 112 by selectively plucking specific words from the specification that correspond to each element of the claimed invention."  Citing Nuvo Pharm. (Ir.) Designated Activity Co. v. Dr. Reddy's Labs. Inc., Enzo Biochem, Inc. v. Gen–Probe Inc., and Novozymes A/S v. DuPont Nutrition Biosciences APS, the Court states that "the Federal Circuit has clearly rejected" the approach Biogen has taken.  Precluded from prevailing on these arguments, the Court found that Biogen must rely on inventor O'Neill's testimony that he invented the claimed invention, which the Court found insufficient under Nuvo Pharm. ("inventor testimony cannot establish written description support where none exists in the four corners of the specification").

The Court also considered "extrinsic" evidence (including the disclosure of the abandoned Biogen application filed immediately after Biogen received the Phase III clinical trial results).  The comparison, wherein this application "provided and discussed in detail a wealth of data generated during Biogen's Phase III study" showed in stark relief the inadequacies of the '514 patent specification.

Finally, the Court took note of the fact that:

At every stage of this case and the related IPR proceeding, Biogen defended against Mylan's obviousness challenge by insisting that a POSA would not have expected a 480mg/day dose of DMF to be efficacious in treating MS. . . .  This statement only underscores the failure of the specification to teach a POSA, who would expect otherwise, that a 480mg/day dose of DMF (BID) is efficacious in treating MS.

The District Court found the facts and circumstances of this case most analogous to the Nuvo Pharm. case, wherein the patent at issue was invalidated on written description grounds.  The Court summarized its findings as follows:

Mylan has established by clear and convincing evidence that the asserted claims of the '514 Patent are invalid for lack of written description.  First, the text of the specification does not reasonably convey to a POSA that Dr. Lukashev and Dr. O'Neill "actually invented" a method of treating MS with a therapeutically effective amount of DMF, i.e., 480mg/day BID, as of February 8, 2007.  This reading of the text is confirmed by the testimony of Dr. Greenberg, Dr. Lukashev, Dr. O'Neill, and Dr. Wynn.  Second, the context of the '514 Patent's prosecution history and the significant omissions from the specification further underscore the failure to adequately describe the claimed invention.  Biogen's attempt to avoid this conclusion by combining a few selectively plucked disclosures from the specification of the '514 Patent has been squarely rejected by the Federal Circuit.

Satisfaction of the written description requirement is a question of fact reviewed for clear error from a bench trial.  In addition, the District Court cited trial testimony from inventors and experts, and the Federal Circuit give substantial deference to the fact-finder for decisions based on the trial court's ability to assess witness credibility and demeanor. Finally, the Federal Circuit has recently increased the stringency with which is assesses satisfaction of the written description requirement (see "Amgen Inc. v. Sanofi").  These factors suggest that Biogen will face quite a challenge in getting the Federal Circuit to reverse the District Court's judgment on appeal.

* In a footnote, the Court illustrated how an expert witness can inform a fact finder regarding complex scientific concepts using commonplace relationships to illustrate the underlying principles:

As described by Mylan's expert witness, Benjamin M. Greenberg, M.D., autoimmune diseases such as MS are much like a confused house cat that mistakes a curtain, or other house-hold objects, for an invading mouse.  Instead of attacking the mouse, the confused cat attacks a portion of the house it is meant to protect.  The cat's breed, and the type of friendly object it attacks, will help identify which autoimmune disease is causing the confusion.  For example, a Siamese cat (i.e., multiple sclerosis) may be confused and attack one part of the house (i.e., the central nervous system), and a Tabby cat (i.e., psoriasis) may be confused and attack another part of the house (i.e., the skin).

[1] Biogen also asserted that Mylan was under a heightened burden of proof because the Patent Office had addressed the written description requirement during prosecution and issued the '514 patent when Biogen successfully overcame this ground of rejection.  This argument was particularly unavailing:  the District Court rejected it out of hand.

Barbaro Technologies, LLC v. Niantic, Inc. (N.D. Cal. 2020)

Claims for an Interactive 3D Virtual Environment Found Patent Ineligible

By James Korenchan --

In the field of computer gaming, the U.S. District Court for the Northern District of California recently granted Defendants' Rule 12 motion alleging that claims 1, 3, and 6 of U.S. Patent No. 8,228,325 (the '325 Patent) are invalid as claiming patent-ineligible subject matter under 35 U.S.C. § 101.  Plaintiff Barbaro Technologies, LLC (hereinafter "Barbaro") had contended that the video games Ingress and Pokémon Go, developed and published by Defendant Niantic, Inc. (hereinafter "Niantic"), infringed these claims.  The suit also involves U.S. Patent No. 7,373,377, of which the '325 Patent is a divisional.  However, Niantic's motion only addressed the claims of the '325 Patent.

The '325 Patent claims a computer system for providing a "three-dimensional virtual thematic environment" (abbreviated in the opinion and hereinafter as "3D VTE").  The background of the '325 Patent notes that "virtual environments, especially those present on the internet, for example, have not provided the user with a real world experience."  The '325 Patent thus aims to integrate audio, video, 2D/3D technology, and other applications or services (e.g., "mini-applications," as the '325 Patent calls them, such as word processing programs or email programs) in order to provide a virtual and real world experience to users.  More particularly, the '325 Patent describes that the 3D VTE can be a gaming environment, geographic environment, or other theme of environment in which and with which a software application can simulate real-world interaction.  For example, a user can select a city to visit and the software will integrate real-world data (e.g., satellite and street view images, 2D/3D graphics) into a 3D VTE resembling the city that the user can navigate and interact with, such as in a third or first person view.  For instance, a user might travel down a street in the simulated city and "enter" a bookstore by clicking a mouse on the virtual representation of the bookstore.  The '325 Patent lists numerous examples of real-time and real-world data that can be integrated into 3D VTEs, such as sports scores, film, news, and a "real-world geographic location of a user."

The claims at issue in this case are reproduced below:

1.  A computer system for providing a virtual thematic environment, comprising:
    at least one memory having at least one program comprising the steps of:

retrieving information for utilization with a three-dimensional virtual thematic environment, from external sources over the internet, said information including a real-world geographic location of a user within said three-dimensional virtual thematic environment; and

integrating said information into the three-dimensional virtual thematic environment, such that the three-dimensional virtual thematic environment includes said real-world geographic location displayed to the user as said three-dimensional virtual thematic environment;

    wherein the user interacts with the three-dimensional virtual thematic environment as a simulated real-world interaction, depending on the user's geographical three-dimensional movement through the three-dimensional virtual thematic environment; and
    at least one processor for running the program.

3.  The system according to claim 1, wherein said information includes real-time information.

6.  The system according to claim 1, further comprising: displaying said information to a user in a mini-application within the virtual thematic environment.

In Alice Corp. v. CLS Bank Int'l, the Supreme Court set forth a two-part test for determining whether a claim is directed to patent-eligible subject matter under § 101.  First, it must be determined whether the claim involves a judicially-excluded law of nature, a natural phenomenon, or an abstract idea.  If so, it must be determined whether the claim recites an inventive concept -- that is, an element or combination of elements that is sufficient to ensure that the claim is significantly more than the judicial exclusion.  But generic computer implementation of an otherwise abstract process does not qualify as significantly more, nor does an element or combination of elements that is well-understood, routine, and conventional.

In applying the first part of the Alice test, the District Court deemed claim 1 to be directed to an abstract idea of removing the disconnect between the user in the real-world and a VTE.  As noted above, and as argued by Barbaro, the prior art virtual environments allegedly did not provide users with real-world experiences, and thus the '325 Patent improves over these environments by providing a way to integrate AV, 2D/3D technology, etc. to maximize a real-world experience for users, thereby effectively removing the disconnect between the real-world user and the 3D VTE.  Barbaro also argued that its claims are analogous to those in Federal Circuit cases such as Enfish, LLC v. Microsoft Corp.

The Court was not convinced, instead asserting that the claimed computer system, memory, and processor are "standard" components, and that "[t]he claims demonstrate the improvement offered by the '325 Patent is directed at a result—integrating the real and virtual worlds—rather than at any particular method of achieving it."  The Court noted that the claimed computer system, memory, and processor are "standard" components, and that the claimed steps can be performed using any combination of existing technologies.  Neither the claims nor the patent specification, in the Court's view, elaborated on how to integrate real-world information into the 3D VTE.  In particular, the Court said:

[T]he claims of the '325 Patent are not directed to the means or method of the claimed invention. They are focused on the result: allowing the user to "interact[] with the [3D VTE] as a simulated real-world interaction, depending on the user's geographical three dimensional movement through the [3D VTE]."  '325 Patent at 42: 53–56.  The specification of the '325 Patent recites dozens of embodiments of the claimed result, accomplished by a variety of existing technologies, as discussed above, but does not purport to make any improvements to them.

The Court also distinguished the asserted claims over those in Enfish and other cases.  The Court pointed out that, in Enfish for instance, the court found that the claims about a database management system were not directed to any form of storing tabular data, but rather to a specific self-referential table.  The Court here further noted that, unlike the specific sensor configuration/method and the specific improvements to computer memory claimed in Thales Visionix Inc. v. United States and Visual Memory LLV v. NVIDIA Corp., respectively, the claimed invention here provided no such improvement to computer technology or specific configuration/method for achieving its desired result.

Instead, the Court analogized the asserted claims to Federal Circuit cases pointed to by Niantic, such as Electric Power Group, LLC v. Alstom S.A., In re Morsa (finding claims for customizing information based on user information and other specific data to be abstract), and Move, Inc. v. Real Estate All. Ltd. (finding claims about displaying real estate properties based on a user-selected area of a map were directed to an abstract idea of collecting, organizing, manipulating, and displaying data and were "devoid of any implementation details").

The Court concluded its part one analysis stating that the claims are directed to an abstract idea because "computers are simply invoked as a tool for solving a problem that has predated them: integrating real-world information about a user into a virtual model."

Regarding part two of the Alice test, Barbaro had argued that integrating real-world information into a virtual world such as a video game solves a uniquely technical problem.  But the Court was quick to note that the concept of building models of real-world locations, and integrating the user's location or a user avatar into such models "long predates computers," and that the framing of Barbaro's argument "ignores the fact that computer games were not the original virtual worlds" (emphasis in original).  And as we've seen before in § 101 cases, this Court found the lack of technological details in the claims and specification -- that is, any details beyond mere instructions to apply a "pre-Internet abstract idea" using generic computer components -- to be fatal to the claims' validity.

Thus, the Court found the asserted claims to be patent ineligible under § 101.

Barbaro Technologies, LLC v. Niantic, Inc. (N.D. Cal. 2020)
Order Granting Motion for Judgment on the Pleadings by District Judge Seeborg

Pebble Tide LLC v. Arlo Technologies, Inc. (D. Del. 2020)

Claims Directed to Capture and Output of Digital Content Held Patent Ineligible

By James Korenchan --

A few weeks ago, the U.S. District Court for the District of Delaware granted Defendants' Rule 12 motions in three different cases, each naming Pebble Tide LLC (hereinafter, "Pebble") as Plaintiff.  The Defendants in the three cases were Arlo Technologies, Inc., Uniden America Corp., and Petcube, Inc.  In granting the Rule 12 motions, the Court found the claims of two asserted patents -- U.S. Patent Nos. 10,261,739 (the '739 patent) and 10,303,411 (the '411 patent) -- to be invalid as being patent ineligible under 35 U.S.C. § 101.

The asserted patents were in the same family and generally related to client-server interactions for capturing and outputting digital content, most notably in the context of printing.  The invention includes a system having an "information apparatus" (e.g., a smartphone having a digital camera, or another computing device that can capture digital content), a server, and a client device (e.g., a computing device for accessing digital content).  The patents state that the invention addresses a need in the art for users to be able to easily output information from information apparatuses to printers or other devices that output content, without having to depend on synchronizing with "stationary" computers such as desktop computers.  The invention also aims to output information to such devices without having to find and install device-dependent or other specific types of drivers, and without losing the original quality of captured content.  More particularly, the patents specifically note that, with the invention, "[u]nlike conventional output or printing, a user does not have to manually pre-install a device driver (e.g., printer driver) from a CD, floppy disk, or download the driver somewhere from a network," which "is well-suited for providing output capability to small and lower-cost mobile devices with limited memory space, power supply and processing capability to still be able to output or print to an output device."  The patents also note that with the invention, "hardware and software installation for static or permanent network connectivity may not be necessary for the output device."

The parties agreed that claim 1 of the '739 patent is representative of the two patents.  It recites:

1.  A system for outputting output data, comprising:
    an information apparatus that includes a digital capturing device for capturing digital content, at least one wireless communication module for wireless communication, and at least one processor, the at least one processor directs the at least one wireless communication module to:
        establish a wireless communication connection with one or more servers over a network that includes the Internet, the one or more servers being distinct devices from the information apparatus;
        transmit, over the wireless communication connection, a device object that includes device information related to the information apparatus, from the information apparatus to the one or more servers; and
        provide, over the wireless communication connection, the digital content captured by the digital capturing device of the information apparatus, from the information apparatus to the one or more servers;
    server software executable at the one or more servers, the one or more servers include at least a network communication interface for network communication, and the one or more servers include memory for storing at least part of the digital content received from the information apparatus;
    client software executable at a client device, the client device is a distinct device from the information apparatus and from the one or more servers, wherein the client device includes:
        one or more wireless communication units for wireless communication,
        an output device for outputting output data; and
        one or more processors for executing at least part of the client software, wherein the client software provides, via the one or more wireless communication units of the client device, one or more job objects to the one or more servers over the network, the one or more job objects including at least one of security information or identification information for accessing the one or more servers, and the one or more job objects further include subscription information for accessing the one or more servers;
    wherein the server software further:
        receives, via the at least one network communication interface, the digital content from the information apparatus;
        stores, in the memory of the one or more servers, at least part of the received digital content;
        generates, at the one or more servers, output data for output at the client device, the output data is related to at least part of the digital content received by the one or more servers from the information apparatus, and the generating of the output data is related, at least partly, to at least a portion of the device object received by the one or more servers from the information apparatus; and
        provides, via the at least one network communication interface of the one or more servers, at least part of the output data, from the one or more servers to the client device, for outputting at least part of the digital content received from the information apparatus, the providing of at least part of the output data is subsequent to the one or more servers having received the one or more job objects from the client software at the client device; and
    wherein the client software further:
        receives, via the one or more wireless communication units of the client device, at least part of the output data from the one or more servers, and the receiving of the at least part of the output data is subsequent to the client device having provided the one or more job objects to the one or more servers over the network; and
        outputs at least part of the output data, received at the client device, at the output device associated with the client device.

If you read this claim and found it to be a long-winded way of describing the storage, generation, and transmission of data, you aren't alone.

In Alice Corp. v. CLS Bank Int'l, the Supreme Court set forth a two-part test for determining whether a claim is directed to patent-eligible subject matter under § 101.  First, it must be determined whether the claim involves a judicially-excluded law of nature, a natural phenomenon, or an abstract idea.  If so, it must be determined whether the claim recites an inventive concept -- that is, an element or combination of elements that is sufficient to ensure that the claim is significantly more than the judicial exclusion.  But generic computer implementation of an otherwise abstract process does not qualify as significantly more, nor does an element or combination of elements that is well-understood, routine, and conventional.

In applying the first part of the Alice test, the Court deemed claim 1 to be directed to an abstract idea of "wirelessly outputting data from one device to another," citing Cellspin Soft, Inc. v. Fitbit, Inc. ("we have consistently held that similar claims reciting the collection, transfer and publishing of data are directed to an abstract idea") in support of this conclusion.  The Court also reached this conclusion based on the similarities between this claim and those held by the Federal Circuit to be abstract in ChargePoint, Inc. v. SemaConnect, Inc. ("abstract claims directed to transmitting data from one device to another").  The Court also found the claim to be lacking technical details, stating that both the claims and the patents' specification merely describe the recited components in functional terms.

Turning to second part of the Alice test, the Court shot down a variety of seemingly scattered attempts at Pebble arguing that the claims recite an inventive concept, even after considering some constructions that Pebble more-recently proposed.  For instance, the Court briefly dismissed Pebble's notions that the "information apparatus" (which the specification states "generally refer[s] to computing devices") or the interplay of the job object process and the device object process is inventive.

The main focus of the Court's discussion on part two was on whether the ordered combination of the conventional computer components and processes is an inventive concept.  Pebble unsuccessfully tried to analogize the combination of elements recited in claim 1 to the claims in Cellspin, which involved steps for acquiring and transferring data from a data capture device to a mobile device.  In response, the Court noted that:

[T]he claims use merely functional language and that nothing in the claims or the specification details how this purported combination achieved the touted results of solving the problem of widespread incompatibility between wireless devices and corresponding output devices.

Pebble was also unsuccessful in trying to analogize claim 1 to BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC.  In BASCOM, the Federal Circuit found the plaintiff's ordered combination of claim elements to be inventive after the plaintiff had demonstrated that its claims recited a specific, discrete implementation of an abstract idea and that the patent itself describes how the claimed arrangement of elements is a technical improvement over the prior art.  By contrast, the Court here believed Pebble was not able to make such a demonstration:

When I asked Pebble Tide's counsel to identify where the asserted patents or complaints concretely describe a specific method that was unconventional, he was unable to do so....  In my view, this case is closer to the Two-Way Media decision of the Federal Circuit in 2017 where that Court held or found that a particular ordered combination of asserted limitations did not reveal an inventive concept because unlike in BASCOM, there, the claim used a conventional ordering of steps with conventional technology to achieve its desired results.

Thus, the Court found the claims of the asserted patents to be patent ineligible under § 101.  This case exemplifies patent-eligibly battles over lengthy claims that, despite their length, are supported by meager technical details and descriptions of improvements to computer technology.

Pebble Tide LLC v. Arlo Technologies, Inc. (D. Del. 2020)
Memorandum Order by District Judge Stark

CareDX, Inc. v. Natera, Inc. (D. Del. 2020)

By Kevin E. Noonan --

Ever since the Supreme Court's decision in Mayo Collaborative Services v. Prometheus Laboratories was handed down in 2012, diagnostic method claims have been routinely invalidated by the district courts and those decisions upheld by the Federal Circuit.  Indeed, in her recent dissent of the Court's denial of patentee's petition for rehearing en banc in Athena Diagnostics v. Mayo Collaborative Services, Judge Newman enumerated the six (now, seven including Athena) Federal Circuit decisions holding diagnostic method claims to be patent ineligible under Section 101.  In her dissent in Athena, Judge O'Malley noted that:

Since Mayo, every diagnostic claim to come before this court has been held ineligible.  While we believe that such claims should be eligible for patent protection, the majority of this court has definitively concluded that the Supreme Court prevents us from so holding.  No need to waste resources with additional en banc requests.  Your only hope lies with the Supreme Court or Congress.  I hope that they recognize the importance of these technologies, the benefits to society, and the market incentives for American business.  And, oh yes, that the statute clearly permits the eligibility of such inventions and that no judicially-created exception should have such a vast embrace.  It is neither a good idea, nor warranted by the statute.  I dissent.

A bleak prospect, to say the least.

But as Justice Breyer mentioned in Mayo, the Supreme Court's eligibility precedent has cautioned "against interpreting patent statutes in ways that make patent eligibility "depend simply on the draftsman's art" without reference to the "principles un­derlying the prohibition against patents for [natural laws]" citing Parker v. Flook, 437 U. S. 584, 593 (1978).  And yet, experience has shown time and again that adapting to the Court's shifting precedents requires competent draftsmen to use their experience and skill as draftsmen to capture for inventors claims to provide protection against expropriation by infringers.  See, e.g., Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals.

The latest example of creative drafting (including how the invention was described in the specification) is a recent decision (Report and Recommendation [to the District Court judge]), by Magistrate Judge Christopher J. Burke in the District of Delaware, who denied defendant's Rule 12(b)(6) motion (of ineligibility) in CareDX, Inc. v. Natera, Inc.  The case arose over the claims in U.S. Patent Application Nos. 8,703,652 and 9,845,497, directed to "methods to help predict the status or outcomes of transplant recipients through sequencing of cell-free nucleic acids ("cfDNA") found in the bodily fluids of a recipient." The rationale behind the invention is rejection of a transplanted organ in a recipient is accompanied by cell death, which releases donor-specific DNA into the recipient's bodily fluids.  Claim 1 of the '652 patent and claim 1 of the '497 patents are representative:

The '652 patent claim 1:

1.  A method for detecting transplant rejection, graft dysfunction, or organ failure, the method comprising:
    (a) providing a sample comprising cell-free nucleic acids from a subject who has received a transplant from a donor;
    (b) obtaining a genotype of donor-specific polymorphisms or a genotype of subject-specific polymorphisms, or obtaining both a genotype of donor-specific polymorphisms and subject-specific polymorphisms, to establish a polymorphism profile for detecting donor cell-free nucleic acids, wherein at least one single nucleotide polymorphism (SNP) is homozygous for the subject if the genotype comprises subject-specific polymorphisms comprising SNPs;
    (c) multiplex sequencing of the cell-free nucleic acids in the sample followed by analysis of the sequencing results using the polymorphism profile to detect donor cell-free nucleic acids and subject cell-free nucleic acids; and
    (d) diagnosing, predicting, or monitoring a transplant status or outcome of the subject who has received the transplant by determining a quantity of the donor cell-free nucleic acids based on the detection of the donor cell-free nucleic acids and subject cell-free nucleic acids by the multiplexed sequencing,
    wherein an increase in the quantity of the donor cell-free nucleic acids over time is indicative of transplant rejection, graft dysfunction or organ failure, and wherein sensitivity of the method is greater than 56% compared to sensitivity of current surveillance methods for cardiac allograft vasculopathy (CAV).

The '497 patent claim 1:

1.  A method of detecting donor-specific circulating cell-free nucleic acids in a solid organ transplant recipient, the method comprising:
    (a) genotyping a solid organ transplant donor to obtain a single nucleotide polymorphism (SNP) profile of the solid organ transplant donor;
    (b) genotyping a solid organ transplant recipient to obtain a SNP profile of the solid organ transplant recipient, wherein the solid organ transplant recipient is selected from the group consisting of: a kidney transplant, a heart transplant, a liver transplant, a pancreas transplant, a lung transplant, a skin transplant, and any combination thereof;
    (c) obtaining a biological sample from the solid organ transplant recipient after the solid organ transplant recipient has received the solid organ transplant from the solid organ transplant donor, wherein the biological sample is selected from the group consisting of blood, serum and plasma, and wherein the biological sample comprises circulating cell-free nucleic acids from the solid organ transplant; and
    (d) determining an amount of donor-specific circulating cell-free nucleic acids from the solid organ transplant in the biological sample by detecting a homozygous or a heterozygous SNP within the donor-specific circulating cell-free nucleic acids from the solid organ transplant in at least one assay,
    wherein the at least one assay comprises high-throughput sequencing or digital polymerase chain reaction (dPCR), and
    wherein the at least one assay detects the donor-specific circulating cell-free nucleic acids from the solid organ transplant when the donor-specific circulating cell-free nucleic acids make up at least 0.03% of the total circulating cell-free nucleic acids in the biological sample.

The Magistrate Judge resolved the issue of whether these claims were ineligible for patenting under 35 U.S.C. § 101 under the first step of the Supreme Court's test enunciated in Mayo and Alice Corp. v. CLS Bank Int'l.  Defendants argued (as they must) that the claims in the patents-in-suit were directed to one of the judicial exceptions (a natural phenomenon, specifically "the correlation between transplant rejection and the presence of naturally occurring [cfDNA] in the bodily fluids of transplant recipients").  The Magistrate, relying on Federal Circuit precedent permitting a court to consider the patent specification in determining "what a patent claim is really directed to at step one [of the Mayo/Alice test]" (Enfish LLC v. Microsoft Corp.) found that:

"[T]he patents' [related] specification repeatedly and consistently states that this basic 'correlation' between the presence of increased levels of donor-specific cfDNA and transplant rejection . . . – i.e., the thing that, according to Defendants, the asserted claims were purportedly 'directed to' – had already been well-known in the art for quite a long time.

The Magistrate's findings further explicated disclosure in the specification related to prior art efforts to use distinguishing markers from donor DNA (Y chromosome sequences from male donors in female recipient, or HLA antigens that differed between donors and recipients) and how those efforts had failed.

The Magistrate then raised this rhetorical question:  "How could it be the case that the 'basic thrust or 'character as a whole' or 'focus' of the purportedly representative claims of the patents is to a naturally-occurring correlation, when the patentee repeatedly states that this very correlation was already well-known in the art?  To ask the question is to answer it," according to the Magistrate, further stating "[i]t does not, in fact, make a lot of sense to think that the claims are directed to something the patent repeatedly says the claims are not directed to."  Relying further on the specification, the Magistrate credits the patentee for "tell[ing] us that what it thinks was really invented here . . . is something other than the correlation itself":

[T]he invention provides a universal approach to noninvasive detection of graft rejection in transplant patients which circumvents the potential problems of microchimerism from DNA from other foreign sources and is general for all organ recipients without consideration of gender.  In some embodiments, a genetic fingerprint is generated for the donor organ.  This approach allows for a reliable identification of sequences arising solely from the organ transplantation that can be made in a manner that is independent of the genders of donor and recipient.

The Magistrate concludes from his analysis that "what the inventors were focused on here was how to develop a new, more accurate and useful analytic method of determining whether significant amounts of cfDNA were present in a transplant recipient's body(so that one could then make use of the known correlation between that fact and indication of transplant rejection)" (emphasis in Report).

The Magistrate does not rely solely on these distinctions, however.  The Report goes on to identify the language in the claims reciting detection methods that are not "routine, conventional, and well-understood":  specifically, digital PC/high-throughout sequencing/ multiplex sequencing methods.  (In footnote 8, the Magistrate states that "the key point here for purposes of Alice's step one is that the claims appear to be 'directed to' these particular methods for detecting – and not to the fact or existence of the natural phenomenon itself" (emphasis in Report)).

Accordingly, the Magistrate concludes that Defendants failed to meet their burden and recommends that the District Court judge deny the motion; tellingly, the Magistrate cites the Federal Circuit's Rapid Litig. Mgmt. Ltd. v CellzDirect Inc. decision in supporting the distinctions he relied upon here in making his Recommendation.

As refreshing as this opinion is, the reality is that it is a Report and Recommendation and thus one that the District Court judge may not follow (and Defendants are sure to make a case that the Judge should not follow it).  The Magistrate Judge's description of how the draftsman disclosed the invention is reminiscent of the philosophy employed by judo practitioners, who use an opponent's mass and momentum to gain an advantage.  By acknowledging the conventionality of the natural phenomenon underlying the invention, the issue of what the claims were "directed to" under the Mayo/Alice analytical framework could be decided in their favor.  This is important, because the test is to be applied sequentially:  if a defendant cannot satisfy the first, "directed to" prong, a court should not have the occasion to address the second prong relating to whether the recited detection method(s) were "routine, conventional, and well-understood."  This approach also has the benefit of "grasping the nettle" of the tendency to blend other, prior art-related sections of the patent statute, thereby vitiating their effectiveness of blurring the statutory distinctions into a rhetorical mess.  It cannot be said that this approach is a universal one, but it illustrates the wisdom of never acquiescing to the current state of patent eligibility jurisprudence so long as artful drafting (specification and claims) can permit a patentee to prevail.

CareDX, Inc. v. Natera, Inc. (D. Del. 2020)
Report and Recommendation by Magistrate Judge Burke

iLife Technologies, Inc. v. Nintendo of America, Inc. (N.D. Tex. 2020)

By Michael Borella --

With the eligibility rubric of Alice v. CLS Bank, an applicant/patentee must navigate a minefield of pre-issuance and post-issuance validity challenges under 35 U.S.C. § 101 in order to obtain and enforce a patent.

First, through clever drafting, the applicant must convince a U.S. Patent and Trademark Office (USPTO) examiner to not raise a § 101 rejection during prosecution.  If one is raised, the applicant has to persuade the examiner, through amendment or argument, to withdraw it.  If the examiner remains unpersuaded, an appeal to the USPTO's Patent Trial and Appeal Board (PTAB) must serve that function.  Failing that, appeals to the Federal Circuit (which applies a highly-unpredictable eligibility analysis) and even the Supreme Court (which has not found a patent eligible since 1981) are possible.  To be fair, it is unlikely that the high Court will grant certiorari on a § 101 issue these days, as we have recently seen.

Once issued, the patent might be able to be pulled back into the PTAB for a Post-Grant Review (PGR) or a Covered Business Method (CBM) Review.  In addition to that, enforcement proceedings in a district court can subject the patent to further invalidity challenges under § 101 on the pleadings and at summary judgment.  If the district court's § 101 decision is appealed, the patent then has to survive said eligibility analysis of the Federal Circuit, the decision of which could potentially be further appealed to the Supreme Court with said unlikely chance of being heard.

Only once these avenues have been exhausted can the patentee relax and use the surviving patent to enjoin a party from practicing the claimed invention or to seek damages therefrom without the specter of § 101 hanging over the proceedings (this specter is one of stock horror-movie fare -- pale complexion, chunks of missing flesh, sharp claws -- quite non-abstract, if you will).  And yes, the patent also has to be found novel, non-obvious, properly specified, and infringed.

Clearly, an entity seeking an enforceable patent to protect its innovations from copyists and free-riders has a few hurdles to overcome.  Perhaps this would not be a terrible conundrum if the law surrounding patent eligibility was clear.  But it is not.  Don't take my word for it -- read what others more knowledgeable and eloquent have written.

In any event, iLife sued Nintendo in the Northern District of Texas for allegedly infringing U.S. Patent No. 6,864,796.  At issue were the latter's Wii and Wii U motion control wands known as "Wiimotes".

As described by the Court:

The '796 patent generally discloses a system for evaluating body movement relative to an environment.  The system includes a sensor that detects dynamic and static accelerative phenomena of the body.  The sensor senses one or more absolute values, changes in value, or some combination of the same and generates an output signal to [a] processor.  The processor then evaluates the signal to determine whether the body is in an acceptable or unacceptable state.  The patent describes acceptable or unacceptable as within or beyond tolerance.

Regarding the patent, claim 1 was front and center in the accusation of infringment.  It recites:

A system within a communications device capable of evaluating movement of a body relative to an environment, said system comprising:
    a sensor, associable with said body, that senses dynamic and static accelerative phenomena of said body, and
    a processor, associated with said sensor, that processes said sensed dynamic and static accelerative phenomena as a function of at least one accelerative event characteristic to thereby determine whether said evaluated body movement is within environmental tolerance
    wherein said processor generates tolerance indicia in response to said determination; and
    wherein said communication device transmits said tolerance indicia.

The case went to trial and the jury found that Nintendo infringed claim 1, awarding iLife slightly over $10 million in damages.  The jury also found the patent to be not invalid on grounds of purportedly lacking adequate written description and enablement.

Nintendo moved for a judgment as a matter of law, arguing that claim 1 is invalid under § 101, indefinite, and lacks adequate written description and enablement.  We will focus on the eligibility dispute.

In Alice, the Supreme Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under § 101.  One must first decide whether the claim at hand involves a judicially-excluded law of nature, a natural phenomenon, or an abstract idea.  If so, then one must further decide whether any element or combination of elements in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exclusion.  But elements or combinations of elements that are well-understood, routine, and conventional will not lift the claim over the § 101 hurdle.  While this inquiry is generally carried out as a matter of law, factual issues can come into play when determining whether something is well-understood, routine, and conventional.

Applying part one of Alice, the Court found that, not unlike the Federal Circuit decision of Electric Power Group v. Alstom S.A., claim 1 was "directed to the abstract idea of gathering, processing, and transmitting . . . information."  Further, the type of information at play -- dynamic and static accelerative phenomena -- did not render the claim any less abstract.  The Court also noted that "[n]othing in claim 1, understood in light of the specification, requires anything other than conventional sensors and processors performing conventional activities previously known to the industry."  Indeed, the Court cited to such an admission in the specification.

The Court also considered whether the claim involved an improvement to its recited hardware.  Ultimately, the Court concluded that it did not, finding that "the claim does not disclose any improvement in the sensor's ability to collect information, such as collecting previously unknown information or collecting information more accurately [and] it does not disclose some improvement in the processor itself, such as faster or more powerful processing."  Further, the claim "is not limited to any particular configuration of the components that results in a technological improvement . . . [i]nstead, the sensor and processor are merely tools to execute an abstract idea."

Finding claim 1 abstract, the Court moved on to part two of Alice.  Unsurprisingly, the claim fared poorly, with the Court rapidly concluding that "[t]here is no inventive concept in the claim elements, whether considered individually or as an ordered combination . . . [and it] does not add any meaningful limitations to the routine steps of data collection, analysis, and transmission using conventional computer components."

Particularly, "[c]laim 1 requires neither a new source or type of information nor a new method of measuring information [and] provides for an unspecified set of rules for analyzing sensor data, but discloses no further details on those rules, like how data might be evaluated for a child versus an adult."  The Court even used iLife's own claim construction argument that claim 1 "does not contain words requiring any special type of processing" against it.

iLife argued that, in its specification, "the claimed processor distinguishes between normal and abnormal accelerative events, and, when an abnormal event is identified, to indicate whether the abnormal event is tolerable, or within tolerance" as well as distinguishing "other physical characteristics, including temperature, pressure, force, sound, light, relative position, and the like."  But the Court observed that the claim itself does not contain these details or limitations, and therefore does not satisfy part two of the test.

Consequently, the Court ruled the '796 patent invalid under § 101 as a matter of law, effectively rendering the jury verdict moot.

For anyone following § 101 jurisprudence, a quick glance at claim 1 was probably enough to provide an educated guess for which way the Court was going to rule.  Recent § 101 opinions from the Federal Circuit have repeated found that claims lacking in technical detail -- ones that recite what an invention does rather than how the invention accomplishes its goals -- are generally abstract.  This is not the dictionary definition of the word "abstract," but instead a legal fiction that a concrete and tangible invention can be invalid if it is defined in terms of its outcome rather than the process used to achieve that outcome.

Despite there being no inkling of this notion in § 101 of the patent statute and questionable support in the Supreme Court's cases, the post-Alice Federal Circuit has morphed patent-eligibility into a game in which one must guess the level of detail required for an invention to cross over from "abstract" to "non-abstract."  If anything, such considerations are best addressed under §§ 102, 103, and 112 -- the parts of the statute where over-broad claim language can be considered in a more cogent fashion.  But with the Alice hammer all claims look like nails, so here we are.  And the § 101 minefield becomes even more hazardous.

iLife Technologies, Inc. v. Nintendo of America, Inc. (N.D. Tex. 2020)
Order by Chief Judge Lynn

Becon Medical, Ltd. v. Bartlett (E.D. Pa. 2019)

By Donald Zuhn –-

Last month, in Becon Medical, Ltd. v. Bartlett, Senior District Judge Jan E. Dubois of the U.S. District Court for the Eastern District of Pennsylvania denied a motion to stay filed by Defendants Scott P. Bartlett, M.D. and TalexMedical, LLC ("TalexMedical").  In denying TalexMedical's motion, the District Court concluded that all three factors for determining whether to stay an action pending inter partes review weighed against granting a stay.

Plaintiffs Becon Medical, Ltd. and Henry Stephenson Byrd, M.D. ("Becon") initiated the dispute between the parties by filing suit against TalexMedical for infringement of U.S. Patent Nos. 8,167,942 and 8,852,277, contending that TalexMedical infringed the patents by making and selling its non-surgical infant ear correction device, InfantEar (Becon makes and sells the EarWell device).  TalexMedical was served with Becon's complaint on October 10, 2018, and filed its motion to stay approximately three weeks before it requested IPR on October 9, 2019.  By the time TalexMedical requested IPR, the parties had completed fact discovery, the Court had conducted a Markman hearing, and the Court had construed the disputed claim terms.

The District Court noted that in determining whether to stay an action pending an IPR, courts consider three factors:  (1) whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party; (2) whether a stay will simplify the issues in question and trial of the case; and (3) whether discovery is complete and whether a trial date has been set.  With respect to the first factor, the District Court noted that courts look to four sub-factors:  (1) the timing of the request for IPR; (2) the timing of the request for stay; (3) the status of the IPR proceedings; and (4) the relationship of the parties.

In assessing the sub-factors to be considered with respect to the first factor, the District Court indicated that TalexMedical waited until "the last possible day before the statutory deadline" to request IPR, and that "[d]efendants offer no reason for filing their IPR petitions just before the deadline."  The Court also noted that Becon filed its Initial Infringement Contentions approximately seven months before TalexMedical filed for IPR, and that "defendants do not explain the near seven-month delay in filing for IPR after they learned of plaintiffs' infringement contentions."  In view of the above, the Court found "that the timing of defendants' request for IPR suggests that defendants are seeking an inappropriate tactical advantage," and determined that this sub-factor (the timing of the request for IPR) weighed against granting a stay.

With respect to the second sub-factor (the timing of the request for stay), the District Court determined that because TalexMedical filed its motion to stay approximately three weeks before it filed for IPR, this sub-factor weighed in favor of granting a stay.  However, because the PTAB had not yet instituted review, and the IPR proceedings could extend into early 2021 if review was instituted, the Court determined that the third sub-factor (the status of the IPR proceedings) weighed against granting a stay.

Moving to the fourth and final sub-factor (the relationship of the parties), the District Court began by noting that courts are reluctant to stay proceedings where parties are direct competitors because "[w]here parties are direct competitors, a patent infringer can take market share and build brand loyalty while the case is pending, and these injuries may not be recoverable in damages or later injunctive relief" (citing Zillow, Inc. v. Trulia, Inc., No. C12-1549JLR, 2013 WL 5530573, at *6 (W.D. Wash. Oct. 7, 2013)).  In this case, the Court indicated that the parties are direct competitors since they both make non-surgical infant ear correction devices that are marketed and sold to physicians, and therefore, that Becon would likely be unduly prejudiced by a stay.  The Court also noted that Becon had presented strong evidence of willful infringement, and while acknowledging that willful infringement is not traditionally considered by courts in determining whether to grant a stay (and despite noting that Becon did not move for a preliminary injunction), the Court found that the evidence of willful infringement "is relevant to the exercise of its discretion."  The Court therefore concluded that the fourth sub-factor weighed against a stay, and because three of the four sub-factors weighed against granting a stay, determined that the first factor weighed against granting a stay.

Turning to the second factor (whether a stay will simplify the issues in question and trial of the case), the District Court noted that courts in the Third Circuit have generally held that this factor weighs against a stay when the PTAB has not yet decided whether to institute IPR proceedings.  Because the PTAB had not yet decided whether to institute IPR proceedings, the Court concluded that the second factor weighed against granting a stay.

Finally, with respect to the third factor (whether discovery is complete and whether a trial date has been set), the District Court pointed out that while expert discovery had not yet been completed and a trial date had not yet been set, fact discovery had been completed, the Court had conducted a Markman hearing, and the Court had construed the disputed claim terms.  Thus, the District Court determined that both the Court and the parties had already expended significant resources, which weighed against granting a stay.

Having concluded that all three factors weighed against granting a stay, the District Court therefore denied Defendants' Motion to Stay the litigation pending IPR.

Becon Medical, Ltd. v. Bartlett (E.D. Pa. 2019)
Memorandum by Senior District Judge Dubois