Transformative’s Patent News Funnel #3

Transformative’s Patent News Funnel #2
May 8, 2018

Transformative’s Patent News Funnel #3

Transformative’s Patent News Funnel

Issue #3

June 2018

The wait is over!!!  After a bit of a delay (hey, it’s summer time!), the third edition of Transformative’s Patent News Funnel is finally here.  If you haven’t had time to keep track of every patent news development and story while catching waves, barbequing, or generally soaking up the summer sun then here’s your chance to catch up on the latest.  Sign up with us to receive this and similar reports in your in-box or check back regularly to catch the latest.

 

Substantial Stuff and Noteworthy News

 

1.  Woah – 8 Figures!!!  USPTO Issues US Patent 10,000,000!

On June 19, the USPTO issued patent number 10,000,000 to Raytheon Corporation.  See https://www.uspto.gov/about-us/news-updates/united-states-issues-patent-number-10000000.  We probably actually hit 10,000,000 US patents some time ago, but the numbering system has finally caught up (the numbering system started 46 years after the grant of the first US patent, in 1790).  Per Professor Crouch, “The patent is the 10 millionth issued since the current numbering system was established in 1836. Although the count has been going for 182 years, one-half of the patents have been issued over the past 30 years.”  Wow, could we expect patent 20,000,000 before 2050?  Given that US Patent 5,000,000 was granted just 17 years ago in 1991, we think there’s a good chance that will happen.

Happily, the USPTO also did not suffer a Y2K-like catastrophe with the addition of the additional digit (something insiders who will remain nameless here warned us might happen).

In some ways the ‘000 patent looks fairly typical.  For example, the ‘000 patent contains 20 claims and took about 3.5 years to get to issue from filing.  That said, Professor Crouch points out that the ‘000 patent is unusual in that (1) it lists a single inventor, (2) it includes no priority claims, and (3) it is issued to a US corporation (more corporate patents are issued to foreign companies than US ones now, reflecting a global market for innovation).  The patent describes an invention entitled “Coherent Ladar Using Intra-Pixel Quadrature Detection”, by Mr. Joseph Marron of Manhattan Beach, California.  The USPTO says the invention has “applications in such varied fields as autonomous vehicles, medical imaging devices, military defense systems, and space and undersea exploration”.

Congratulations Mr. Marron, Raytheon, USPTO, USA, and contributing inventors everywhere!

 

2. Two CAFC Judges Invite Congress to Provide Clarity to § 101

The CAFC recently denied an en banc (full court) rehearing in the Berkheimer case, which received a lot of coverage last month.  Long-time CAFC Judge Lourie, joined by another long-time CAFC judge, Pauline Newman, wrote a concurrence to the denial making the case that a higher authority should provide clarity on what is and isn’t patentable subject matter, stating “the law needs clarification by higher authority, perhaps by Congress…  Section 101 issues certainly require attention beyond the power of this court.”  Judge Lourie goes on to explain, in some detail, how the “something more” test is confusing and probably unnecessary in many cases.  Judge Lourie, who has training as a chemist, also makes it clear that he believes that uses of products of nature, if otherwise patentable, should be patentable under Section 101, a view we applaud at Transformative.  With seasoned appellate judges who have done much to shape the last several decades of US patent law and the Commissioner of Patents simultaneously indicating it is time for clarity, isn’t it time for Congress to step up?  See more from Patently-O here – https://patentlyo.com/patent/2018/06/lourie-newman-congress.html.

 

3.  USPTO Issues New Guidelines Based on the Vanda Ruling

We covered the Vanda decision in the second issue of the funnel.  The USPTO thought the decision significant enough to issue new guidance to examiners and the public on how to handle medical method of treatment claims following the decision.  A copy of the guidance is posted here https://www.uspto.gov/sites/default/files/documents/memo-vanda-20180607.PDF.  Per the guidance the CAFC found there is an important “distinction between method of treatment claims and those in Mayo.”  Method of treatment claims “apply natural relationships as opposed to being ‘directed to’ them” [such relationships] and “confine” their reach to their particular applications.  Interestingly, USPTO found its prior guidance to already be consistent with Vanda, but nonetheless issued the guidance, which states that method of treatment claims should be found to be patentable subject matter without having to include nonroutine or unconventional steps in order to meet the Alice/Mayo exceptions.  The Vanda decision has been viewed by some as inconsistent with Mayo so we can only hope that the USPTO guidance is going to be upheld by the courts.  We definitely favor the decision and applaud the USPTO for its efforts to provide timely guidance to patent applicants, at least when it comes to how case law impacts substantive examination.

 

Interesting Insights

 

1. Venture Capital Funding is on Pace for Yet Another Record-Breaking Year.

Per PatentDocs, covering other sources, in the first quarter of 2018, venture capitalists invested $28.2 billion in 1,683 deals, which marked the fourth consecutive quarter of more than $20 billion deployed to venture-backed companies.  Clearly this level of funding is great news for innovators!  http://www.patentdocs.org/2018/06/us-venture-funding-on-pace-for-another-record-breaking-year.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+PatentDocs+%28Patent+Docs%29

 

2. IBM Has Led in Issued U.S. Patents for 25 Years in a Row: What has it Learned from the Investment? 

Manny Schecter, Chief IP Counsel at IBM, recently shared the firm’s top 5 learnings from its experience:  (1) patent the right inventions (consider trade secrets or just giving the innovation away), (2) protect your own freedom of action, (3) IP isn’t about attorneys – it’s about culture, (4) IP is now a “global game”; and (5) play a role in shaping a balanced patent policy (our re-wording of “eliminate patent abuse”).  To understand why we re-worded 5 (and whether we did so fairly!) and to learn more read Mr. Schecter’s article on Techonomy.com, https://techonomy.com/2018/03/ibm-led-u-s-patents-25-years-five-lessons-learned/

 

3. Samsung and Apple – Back to Court, Yet Again. 

It’s been 7 years, and now we are on the third district court case relating to Samsung’s infringement of Apple’s patents, most of which may not now even cover current versions of either’s products.  Though Apple initially won just over 1 billion (with a “B”) in damages from Samsung, that was cut back about 50%, and about $400 million of that is up for adjustment still in this next round of the case.  When will it really be over?  Our guess is in about 3-4 more years.  So much for speedy justice.  Read more on the latest round in one of the great patent battles of the decade here –https://giga.law/daily-news/2018/5/10/samsung-apple-return-to-court-to-argue-over-damages-in-patent-case

 

4. UC Berkley Finally Gets A Few Patents on CRISPR.

Continuing the theme of epic patent battles on technology destined to shape our future, Futurism reports that UC Berkley, believed by many to be the pioneer in CRISPR, has finally received some indication it will get some patents out of the USPTO.  Although the USPTO has issued 60 or so CRISPR-related patents to date, including some to Berkley’s main rival in the technology, the Broad Institute of Harvard, it took until now to let a few through for this other key innovator.  More to come, we are betting.  Stay tuned and read more on this development here – https://futurism.com/crispr-patents-uc-berkeley/

 

5. The IP5 Meets in New Orleans. 

The IP5, composed of the USPTO, EPO, SIPO (Chinese Patent Office), JPO, and KIPO, examines 80% of all patent applications filed in the world.  China is now number 1 in examinations, with almost 1.3 million applications filed in that country last year (about 4x as many as were filed in the USA!).  The outcome of the meeting appears to have been incremental improvement and recommitment to efforts such as the global dossier project.  Next up?  Consideration of how artificial intelligence will impact the IP5 offices.  See more here – http://www.fiveipoffices.org/index.html

 

6. The Cost of Patenting in BRICS Countries.   

IP Watchdog recently published a useful report on typical costs of patenting in BRICS countries (Brazil, Russia, India, China, and South Africa).  Counting China in BRICS definitely distorts matters, as 87% of the ~1.5 million patent applications filed in BRICS countries were filed in China.  The report notes that India and Brazil remain among the slowest countries in the world for patent processes, but that efforts were being made in both countries to improve performance.  Russia and China have more typical examination performance times and South Africa avoids the issue by using a deposition system (where applications are not substantively examined).  The BRICS economies have reportedly grown 2.5x in the last 30 years, and now represent 30% of the global economy.  The typical costs for getting patents issued in these countries based on a thorough study?  $41,000 (for a typical 40 page application).  About ¼ of that cost going to Brazil, China, and Russia, respectively, with the remaining quarter going to India and South Africa (in a 2:1 ratio).   Tack on additional 60-75% for translations, however.  Much more about the costs, etc., can be found here – http://www.ipwatchdog.com/2018/05/25/costs-obtaining-maintaining-patent-brics/id=97475/

 

7. Hopeful Sign of Growing Respect for Patents in China? 

Chinese Electronics Company, Xiaomi, reveals it has spent over $1 billion on IP royalties over the past three years in IPO.  More is available at IAM (registration required) – http://www.iam-media.com/blog/Detail.aspx?g=d1473602-2c70-4fd7-808e-0901a1c240fa

 

8. Published US Patent Applications – an Increasingly Important Body of Prior Art. 

Professor Crouch reports that an average US patent will now include citations to at least 50 published US patent applications.  Of course, some applications contribute to this more than others, like Apple’s U.S. Patent No. 9,986,419 with 6,701 citations all to itself!  Read more about the ‘419 patent and the growing citation of US applications in US patents here –   https://patentlyo.com/patent/2018/06/citing-published-applications.html

 

9. The Tale of the Invention of the Fidget Spinner – Inspiring and Cautionary.    

Who knew that the motivation for the fidget spinner was ending violence?  Or that the patent on it expired for failure to pay maintenance fees.  A story reflecting how sometimes success is just a step further than we expect.  See it all here – http://ip.com/blog/fidget-spinner/?utm_campaign=innovationq&utm_source=email&utm_medium=ds_marketo_email&utm_content=blog_fidger_spinner&mkt_tok=eyJpIjoiWlRCaFpUSTRNamczWlRjNSIsInQiOiJseE92ZVhRSG1kNVRpQkdaMG5BSzRPdUk5WGJ1V0lRYkNLZVN2b1BFXC9rU3l0Z2FPc2I5MFl5NjRXdnpGUGdOaG5vSTdpWlk4aGdXVTdaRlRrUFRWNm9iUUordTdRMG4yYnlxXC84eHVUTGh3Qm03VmljN21YZFwvZTByK3ludEUrNiJ9

 

The Fine Print

 

1. Is That a “Printed Publication” I Behold? 

Medtronic Inc. v. Mark Barry, is the kind of case that undoubtedly will show up on some law school exams in the future.  Here, the PTAB confirmed the patentability of some of Barry’s patented back-straightening claims found in U.S. Patent Nos. 7,670,358 and 7,776,072, because a set of video and slides distributed by Medtronic were not “printed publications” under the Patent Act, since they were not sufficiently publicly accessible prior to filing of the patent application.  The CAFC, here, however, vacated the lower court — holding that the Board did not consider all the relevant factors in its determination.  More on the case and the numerous precedential cases that weigh these kind of “close calls” on whether a disclosure is a printed publication or not are found in this post at PatentlyO:  https://patentlyo.com/patent/2018/06/defining-printed-publication.html

 

2. Failure to Disclose Sales Contract Leads to Finding of Inequitable Conduct / Court Refuses to Allow Privilege to be Used as both “Sword and Shield”.   

Patently-O covers an interesting case where under pre-AIA 102 an inventor had entered sales contracts for technology claimed in his patent, which were not disclosed to USPTO.  https://patentlyo.com/patent/2018/05/disclose-contract-inequitable.html.  This might have been forgiven since the decision was based on attorney advice, but the patent owner had asserted attorney client privilege to shield the attorney from discovery before introducing this position, so the court excluded the attorney testimony concerning such advice from consideration.

 

3. Boilerplate Reference to “Modifications, Permutations, Additions, and Sub-combinations” does Not Provide Written Description. 

Finnegan covered a recent CAFC case where the patentee in attempting to claim support for broader claims pointed to a passage in the application referring to “modifications, permutations, additions, and sub-combinations”.  Unsurprisingly the CAFC rejected the argument as misplaced reliance on “boilerplate”, which would leave “one to speculate as to the modifications that inventor might have envisioned.”  More on the case is available here – https://www.finnegan.com/en/insights/blogs/federal-circuit-ip/boilerplate-language-in-specification-does-not-support-written-description-to-undescribed-modifications.html

 

4. Infringement by “Manufacture” Means Complete, not Substantial, Manufacture.

Professor Crouch reports on a case involving claims against the government where the alleged infringement happened right before patent expiration, but the allegedly infringing product was only “substantially” complete.  The result?  The court says manufacture means complete manufacture.  See more here – https://patentlyo.com/patent/2018/06/23680.html

 

5. Five Years after the Actavis Case, what is the State of “Pay for Delay” Settlements in Pharmaceutical Patent Cases? 

IP Watchdog has an article reviewing the cases since the Supreme Court’s landmark Actavis decision, holding that FTC may pursue antitrust claims for so-called “pay for delay” settlements between innovator and generic drug companies, which is now five years old.  The trends reflect a meaningful decrease in the number of settlements with potential pay-for-delay elements, wherein generics are paid by branded drug companies to not bring lower-cost alternative drugs to the marketplace.  Read more about it here – http://www.ipwatchdog.com/2018/06/18/ftc-v-actavis-stand-5-years/id=98536/

 

6. Anacor v. Iancu:  An Interesting Example of Chemical/Pharmaceutical Obviousness, Even Where There are Structural Differences Between the Art and the Claimed Invention.

PatentDocs covers a recent CAFC decision upholding the BPAI’s decision that Anacor patent claims are obvious over prior art showing similar functionality as the active pharmaceutical ingredient in Anacor’s product, tavaborole, even though the cited art was admittedly different in terms of prior applications and structure.  The summary and the case might be a good read for practitioners trying to fine tune their understanding of obviousness in such settings.   http://www.patentdocs.org/2018/05/anacor-pharmaceuticals-inc-v-iancu-fed-cir-2018.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+PatentDocs+%28Patent+Docs%29

 

The End of the Funnel

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