Intellectual Property Attorneys - IP Lawyers

Recently in Patent Litigation Category

Supreme Court Hears Oral Argument on Mayo v. Prometheus: §101 Issues

By Timothy J. Maier on December 9, 2011 10:43 AM | No Comments | No TrackBacks
Earlier this week, the Supreme Court heard oral arguments in Mayo v. Prometheus, an important case that deals with many of the same §101 issues as were present in Bilski earlier this year. 
 
Briefly, Prometheus concerns patents on a method for determining optimal dosage levels for drugs used to treat autoimmune diseases.   In the claimed process, a particular drug is administered to a patient, and the levels of the drug's metabolites present in the patient are then determined.   The process also includes steps wherein presence of a metabolite at certain levels indicates a need to increase or decrease the amount of drug administered in the future.

This case first came to the Federal Circuit after it had decided In re Bilski, but before the Supreme Court issued its decision in Bilski v. Kappos.  As a result, the Federal Circuit applied the machine-or-transformation test as the definitive test under §101, and found the claims to be patent-eligible.   According to the Federal Circuit, the administering and determining steps were transformative and therefore satisfied the second prong of the test, and as a result the claims did not wholly preempt the use of the correlations between metabolite levels and therapeutic efficacy or toxicity.
 
After Bilski v. Kappos, the Supreme Court vacated this case and remanded it to the Federal Circuit for reconsideration, giving that court one of its first opportunities to attempt to apply and interpret Bilski.  On remand, the Federal Circuit characterized the central question as whether Prometheus's claims are drawn to a natural phenomenon, the patenting of which would entirely preempt its use, or whether the claims are only drawn to a particular application of the phenomenon.  Mayo, argued, before the Federal Circuit and again this past week before the Supreme Court, that this was the sole controlling standard, and that Bilski stood for the proposition that, while the machine-or-transformation test is a helpful clue, it cannot be outcome-determinative in this analysis.   According to Mayo, even if the claims passed the machine-or-transformation test, more analysis, such as a robust preemption analysis, would be necessary to make a subject-matter eligibility determination.  Prometheus, on the other hand, argued that the Bilski ruling only meant that patents which did not satisfy the machine-or-transformation test were not necessarily unpatentable, but did not go so far as to say that some patents that do satisfy the test are unpatentable. 
 
The Federal Circuit ultimately agreed with Prometheus.   Does this conception of patent-eligible subject matter comport with the result in Bilski?  In Bilski, the Court never mentioned the machine-or-transformation test as anything other than a useful tool, and a helpful clue in patent-eligibility analysis.  And, as noted by the Federal Circuit, in Benson the Supreme Court stated that "[t]ransformation and reduction of an article to a 'different state or thing' is the clue to the patentability of a process claim that does not include particular machines."   So, while the Supreme Court does support the machine-or-transformation test as useful, it has never explicitly ruled that a claim that passes the test is also per se not preemptive.  However, by the same token, it has never explicitly found a claim that does pass the test to be unpatentable. So, while this line of reasoning in Prometheus does extend somewhat beyond current Supreme Court precedent, it is at least not inconsistent with that precedent.  It will be interesting to see, when the decision in this case finally comes down, whether the Supreme Court is willing to stretch as far as the Federal Circuit. 
 

The Microsoft - Barnes & Noble Saga

By Timothy J. Maier on November 15, 2011 11:24 AM | No Comments | No TrackBacks
In March, after failed licensing negotiations with Barnes & Noble, Microsoft filed against the bookseller and manufacturers Foxconn and Inventec in the U.S. District Court for the Western District of Washington and with the International Trade Commission, claiming the Nook e-reader infringed on five Microsoft patents.  Specifically, Microsoft alleged infringement in the way the Nook displays retrieved images, shows the status of downloaded material on a small screen, edits electronic documents and renders annotations. The trial is scheduled for February, 2011 in Washington.

This is part of Microsoft's attempt to obtain license agreements from phone and tablet manufacturers that infringe on Microsoft's expansive 60,000+ patent portfolio (See Microsoft Sues Motorola for Patent Infringement, and our Smartphone Patent War series Part 1, Part 2 and Part 3 for more on Microsoft's role in the ongoing Patent War).  Microsoft's aggressive stance is making the tech industry nervous, especially in light of Microsoft's recent partnership with Nokia, another patent superpower.

Earlier this month, as a response to Microsoft's allegations, Barnes & Noble asked the Justice Department to conduct an antitrust investigation into Microsoft's business practices.  In a letter to the DOJ, Barnes & Noble alleged that Microsoft has been "attempting to raise its rivals' costs in order to drive out competition and to deter innovation in mobile devices" and that "Microsoft's conduct poses serious antitrust concerns." 

In retort, Microsoft filed a motion with the International Trade Commission on November 9, to compel Google to produce documents or witnesses relating to Google's possible evaluation of Barnes & Noble's allegations, namely whether Microsoft's alleged conduct has had any business effect on Android OS distribution. Microsoft hopes to show that Google remains unharmed by Microsoft's recent litigation.

As the value of exclusive patent rights afforded to inventors and assignees clashes with the need to protect market competition and consumer welfare, Microsoft may find itself once again on the defensive in an antitrust dispute.


For regular updates on current IP issues, please subscribe to our RSS feed or follow us on Twitter @PostGrant.

The Smartphone Patent War, pt. 3: An Uneasy Detente

By Timothy J. Maier on November 2, 2011 9:39 AM | No Comments | No TrackBacks
In light of the ever increasing, expanding and confusing smartphone patent litigation and licensing landscape, we have put together a three part series to apprise you of the current developments.  Hopefully part one begins to untangle the mess for you.  If you missed Parts 1 and 2, please find links here: Part 1 and Part 2.

- - - 

In the last installment, we discussed the basics of patent pooling, a cooperative approach to patent licensing, as well as some of the reasons why such an approach was not able to develop here.  What actually has developed is exactly the type of scenario that patent pools are often used to avoid.  The smartphone industry is now locked in an uneasy détente, a patent Cold War that could conceivably go hot with massive, industry-crippling lawsuits at any instant.  For a time, Google appeared to be falling behind in the arms race, as the apparent "patent gap" loomed between the Android operating system and its competitors at Microsoft, Apple, and Research in Motion.  This worry came to a head after a recent auction for a suite of patents owned by now-defunct Nortel, when a consortium including these three companies appeared to have succeeded in blocking Google from what some considered its last real chance of catching up.  In one fell swoop, Google's acquisition of Motorola Mobility and its portfolio of more than 17,000 issued patents has gone quite a long way toward closing the gap and bringing the industry to an equilibrium that is relatively stable, if somewhat tense.  Essentially, Google has secured the intellectual property equivalent of Mutually Assured Destruction.

Just as in the real Cold War, it is likely that what we see on the surface represents only a fraction of the maneuvering that continues just outside the public eye.  One interesting line of conjecture holds that the purchase of Motorola Mobility was Google's long-term objective all along.  According to this line of reasoning, Google has been interested in buying Motorola Mobility ever since it was spun off from its parent corporation of Motorola in January of this year.  The somewhat unusual collection of technologies comprising Motorola Mobility - including smartphones and internet television, two areas into which Google has recently expanded - lends credence to the idea that Motorola packaged the company intentionally and specifically to appeal to Google.  According to this theory, Google shied away from the purchase after government regulators, including the Federal Trade Commission, began to make noise this summer about antitrust investigations into the software giant.  Google then proceeded to pursue other portfolios, including the Nortel patent suite, in part to goad its competitors into taking action.  When they banded together to defeat Google in that auction, Google took the opportunity to cry foul, and to spin its long-planned acquisition of Motorola Mobility as a purely defensive move designed to protect itself from what it called anticompetitive practices.  Whether or not this version of events is accurate, it exemplifies the type of wheels-within-wheels strategic maneuvering that occurs under the type of patent détente in which these companies are engaged. 
 
A number of lessons can be learned by companies who want to avoid Google's apparent missteps.  First and foremost, the most obvious lesson is that you should join or start a patent pool or other cooperative arrangement if you can.  If the situation permits, patent pools are really excellent tools for creating and increasing efficiency in a technological area.  They allow potential competitors to collaborate, and therefore mitigate the waste of resources that is often the result when large technology companies engage in extensive patent litigation.  In essence, patent pools allow companies to avoid the courtroom and focus their energy on simply doing business.  

Second, if you decide to go it alone, understand the dangers you face.  There are many reasons why cooperative strategies such as patent pools don't work out.  If that happens, it is important to anticipate the type of standoff that will result if you are successful within a technological space.  Google was almost left out in the cold.  For a long time, their business strategy lacked an emphasis on intellectual property, and this very likely could have resulted in the death of the Android operating system. Although it appears that the Motorola Mobility purchase has salvaged the situation in relatively dramatic fashion, Google could have saved itself a major headache and a significant amount of money if it had incorporated a robust program of patent acquisition into its overall strategy from the outset.

The Smartphone Patent War, pt. 2: A kinder, gentler alternative

By Timothy J. Maier on October 28, 2011 1:59 PM | No Comments | No TrackBacks
In light of the ever increasing, expanding and confusing smartphone patent litigation and licensing landscape, we have put together a three part series to apprise you of the current developments.  Hopefully part one begins to untangle the mess for you.  If you missed Part 1, please click this link.

- - - 

One possible approach that could have deflated the budding smartphone patent war at an early stage is a cooperative strategy called patent pooling.  In a patent pool, two or more companies in a technological field come together and agree to cross-license their intellectual property holdings in order to cooperate for the benefit of all involved.  Patent pools are useful because they are efficient.  They give users and manufacturers of a technology a one-stop-shopping experience, and guarantee access to an entire technology space through the door of one relatively simple licensing arrangement.
  
One common example of patent pooling involves developing a patent pool around an already established technological standard in order to safeguard its boundaries and streamline compensation for the companies that created and continue to use the standard.  Generally, in cases like this members of the committee overseeing the standard begin by hiring an independent evaluator.  The independent evaluator examines potential pool submissions and determines whether these patents are essential to the pool.  Essentiality can be determined under a number of different criteria, for instance whether a patent is technically necessary for the standard, whether it is commercially necessary for the standard, or whether a patent is necessarily infringed 100% of the time by a device that is compliant with the standard.  Once the essential patents are determined, the holders of these patents form a group, which meets to determine the rules governing licensing agreements and other administrative matters.  At this point, especially in modern patent pools, government regulators such as the Department of Justice may become involved.  Once approval is obtained, a pool Administrator is hired, and then goes about signing up licensees, distributing royalties, and monitoring infringement.
Although patent pools may sound like a straightforward and collegial strategy for efficiently managing the growth of an entire industry, they are not ideal for every situation.  For example, a pool may simply fail to get off the ground.  If a critical mass of licensors contributing patents to the pool is not present, the pool can simply fail for lack of momentum.  If several of the big players in the industry, or even one very large player, does not join the pool, there may not be enough coverage offered to entice others to join.  Competing licensing arrangements for related technology may also frustrate pool formation and adoption.

Once a pool does get started, it may flounder because joining the pool does not present an attractive economic proposition.  This may be, for instance, because administrative and royalty fees are set too high.  Pools may also set terms for early adopters, who receive more favorable rates than those signing up later.  This can also discourage acceptance by an industry.  In other situations, such as unbalanced technology spaces in which a handful of large corporations do the majority of the manufacturing, those large manufacturers may pay more money by joining a pool than they would save by striking out on their own.  Having a large number of products covered means large royalties paid into the pool, often placing money in the hands of competitors, which can be an unappealing circumstance for some participants.  One of these large manufacturers can avoid the large royalty payments by taking advantage of the fact that in a patent pool, infringement suits are filed by the individual patent owners, not the pool itself.  If one of these large manufacturers has its own independent patent position that is relatively strong, it can chip away at the pool by taking on the other manufacturers one-on-one. 

While all of these problems are evident in the current smartphone patent standoff, there is also another major barrier to the development of a patent pool for managing the smartphone market: a fundamental incompatibility in the business strategies of the major industry players.  In essence, Google takes in the vast majority of its revenue from advertising sales, not hardware or software sales, unlike its competitors.  Google's main goal is to get people online and viewing ads, as often as possible and for as long as possible.  As a result, Google is not interested in charging royalties, and in fact provides its Android operating system free of charge to smartphone manufacturers, with the goal of keeping those smartphones relatively inexpensive so that more people use them more often.  This is directly at odds with, for instance, Apple's business model, which relies primarily on hardware sales, or Microsoft's, which relies on licensing fees from software.  Because of these diverging goals, it is difficult to imagine how these three companies would ever be able to reach a patent pooling or other cross-licensing scheme that is mutually advantageous.  

In the next installment, we will take a closer look at the tense situation that has resulted from the breakdown of patent pooling and other cooperative strategies.

The Smartphone Patent War, pt. 1

By Timothy J. Maier on October 26, 2011 4:03 PM | No Comments | No TrackBacks
In light of the ever increasing, expanding and confusing smartphone patent litigation and licensing landscape, we have put together a three part series to apprise you of the current developments.  Hopefully part one begins to untangle the mess for you.
- - - 

As we reported earlier, on August 15, 2011, Google announced that it would be spending $12.5 billion to purchase Motorola Mobility, a company that currently designs and manufactures smartphones, tablets, Bluetooth accessories, set-tops, DVRs, and other communication devices for its parent company, Motorola.  Although the research and manufacturing capacity of Motorola Mobility is by itself very valuable and no doubt was an appealing target for Google, a consensus has developed that this purchase was equally motivated by something that has recently become very important to the search giant: Motorola Mobility owns a suite of more than 17,000 issued patents relating to mobile devices and smartphone technology.
  
This purchase is simply the latest step in Google's scramble to defend itself in the increasingly hostile smartphone marketplace.  Unlike most of its competitors, before the Motorola Mobility acquisition Google's patent holdings were relatively sparse.  This was not much of a problem for Google until the last few years, when the huge increase in the value of the smartphone market has led to a corresponding explosion in the number of lawsuits related to the technology.  

This extensive litigation has led to a growing list of seeming absurdities.  For instance, for every Android-enabled phone that it sells in the United States, HTC, a large smartphone manufacturer, must pay a licensing fee not to Google, but to its competitor Microsoft, due to a patent-licensing agreement.  Recently, Microsoft announced that, according to its estimation, companies that account for more than 50% of Android-enabled phones worldwide are involved in some sort of patent-licensing agreement with Microsoft.  It is beginning to become clear that the current strategies being employed in this technology space are inefficient almost to the point of unsustainability.  

In the next installment, we will take a look at an alternative to this unstable IP landscape called patent pooling, as well as some of the reasons why such a solution was not able to take root here.

Prometheus v. Mayo SCOTUS Argument set for December 7, 2011

By Timothy J. Maier on October 4, 2011 9:22 AM | No Comments | No TrackBacks

The Supreme Court of the United States is scheduled to hear arguments regarding Prometheus v. Mayo on December 7, 2011.  This case provides the Supreme Court the oppurtunity to clarify the Bilski ruling regarding patentable subject matter in light of the recent patent reform.  In order to refresh your memory, we have provided a summary of the case thus far:

In Prometheus, the patent at issue is a method for administering and subsequently determining the level of toxicity caused by thiopurine drugs used to treat gastrointestinal and autoimmune diseases, including 6-mercaptopurine ("6-MP") and azathiopurine ("AZA").  The latter is merely a "pro-drug" that converts to 6-MP upon administration to a patient.  Prior to filing these claims, these drugs had been widely used to treat diseases such as inflammatory bowel disease and Crohn's disease, but had sometimes caused complications with non-responsiveness and drug toxicity.  As such, the claimed method is a two-step method for (a) "administering" the drug, and (b) "determining" the levels of the drugs metabolites in order provide the doctor with instructions for the next dosage. 

The Federal Circuit has decided this case twice, most recently reviewing the case on remand in light of the Supreme Court's decision in Bilski.  Upon hearing the case in the first instance, the Federal Circuit overturned the district court's finding that Prometheus's asserted medical treatment method was drawn to non-patentable subject matter under §101.  In making this finding, the Federal Circuit applied the machine-or-transformation test, and found the process to be transformative.  However, after the Federal Circuit handed down this ruling, the Supreme Court handed down the famous (or infamous?) Bilski ruling which rendered the machine-or-transformation test "a useful and important clue" of patent eligibility under §101, instead of the sole test.   Due to this, the Federal Circuit's initial ruling was vacated, and the case was remanded to be reconsidered in light of the Supreme Court's Bilksi determination.  

Upon remand, the court once again found the claimed method to be drawn to patentable subject matter.  However, this time the Federal Circuit provided alternate, but similar, reasoning.   In addition to only examining the claimed method under the machine-or-transformation test for a clue as to the patentability of the method, the Court also analyzed whether the method was merely claiming an abstract idea.  

For more information regarding the Federal Circuit's Ruling upon remand, please continue reading. 

Continue reading Prometheus v. Mayo SCOTUS Argument set for December 7, 2011.

America Invents Act: Overview of the Post Grant Review System

By Timothy J. Maier on September 13, 2011 4:01 PM | No Comments | No TrackBacks
One of the more overlooked aspects of the recently passed America Invents Act is the introduction of a post grant system to the United States patent system. Once the bill is implemented, the Board of Patent Appeals and Interferences (BPAI) will become the Patent Trial and Appeal Board (PTAB) and the PTAB will be tasked to handle a new post grant system.  Under the new Post Grant Review (PGR) system, any third party may request to cancel as unpatentable one or more claims of any patent by asserting an argument regarding invalidity and providing evidence to support this argument. 

Many opponents of PGR believe this system will make it harder to acquire patents and will deter, instead of spur, innovation.  However, post grant review, if implemented properly, can provide cheaper alternatives to businesses looking to secure solid intellectual property rights, as documented in a 2006 study arguing for the introduction of a post grant review system.  Instead of acquiring a patent and fending off multiple law suits, PGR can provide a cheaper and faster alternative to litigation.  While PGR may increase some start up costs associated with contested intellectual property, it may decrease costs in the long run so long as the costs associated with PGR remain low. 

For more information about the PGR system, please keep reading.
Continue reading America Invents Act: Overview of the Post Grant Review System.

CAFC Affirms Rejection of Means-Plus-Function Claims On Different Grounds Than the PTO: In re Aoyama

By Timothy J. Maier on August 30, 2011 11:58 AM | No Comments | No TrackBacks

Yesterday the Federal Circuit issued In re Aoyama, in which a three-judge panel of Judge Newman, Judge Gajarsa, and Judge Linn affirmed the rejection of two claims which had been rejected as anticipated.  Judge Newman dissented.  The court, however, affirmed the Board of Patent Appeals and Interferences' (the Board) rejection under new grounds, finding no permissible construction of the claims, and thus, holding the two claims in question indefinite under §112 ¶2.

This ruling has the effect of broadening the court's options when reviewing decisions of the Board.  Further, this case has precedential value in defining definiteness.  However, the Court constructed the opinion fairly narrowly, drawing any conclusions back to the specifics of the case and the means-plus-functions claims at issue.  Thus, it seems the precedential value of this opinion may be limited to cases involving computer implemented means-plus-functions claims.

For more details on the court's ruling, please keep reading.

Continue reading CAFC Affirms Rejection of Means-Plus-Function Claims On Different Grounds Than the PTO: In re Aoyama.

Microsoft Sues Motorola for Patent Infringement

By Timothy J. Maier on August 29, 2011 4:22 PM | No Comments | No TrackBacks

In the latest episode of software giant patent infringement lawsuits, Microsoft has sued Motorola over non-US made handheld phones.  Microsoft alleges that various Motorola phones, including the Droid 2, Droid X and Backflip, infringe seven of Microsoft's patents.  The patents in question relate to the android mobile operating system and involve methods for, among others, ActiveSync email synchronization patents. 

Considering that Google is set to acquire Motorola, this suit is the latest suit in the web of suits between Apple, Microsoft, Google, and other tech companies.  (Click here for a good graphic documenting these suits)  Based on the rash of litigation surrounding Android software, it appears that any company attempting to manufacture or sell android software is going to be involved in litigation.  However, Microsoft has already won a case against HTC and is currently receiving $5.00 per phone.  Thus, it is perceived that this suit is merely a negotiating tool for a similar licensing structure.  It is rumored that Microsoft is now looking for royalties between $7.00 and $12.00 per device. 

 Despite the outrage due to the large number of suits in the software patent arena, a majority of civil suits, regardless of the subject matter, are settled before they ever reach court.  If one of these software suits is able to reach the Federal Circuit, the Federal Circuit may be able to set down firm precedent to prevent future lawsuits.  Until then, however, these suits should not be reason for outrage, and can merely be viewed as negotiating chips, as they have yet to prove to be much more.  Microsoft has a large patent portfolio, a valuable business asset, and is using this asset just as any other asset is used, to generate a profit.

CAFC issues decision on patentability of "isolated" DNA in Myriad case

By Timothy J. Maier on August 2, 2011 5:20 PM | No Comments | No TrackBacks
The Court of Appeals for the Federal Circuit issued a decision in the Myriad case (Association for Molecular Pathology v. PTO) on July 29, 2011. This decision has been long-awaited since 2010, when the District Court of the Southern District of New York, in a summary judgment ruling, invalidated Myriad's claims to isolated DNA sequences for breast cancer genes, as well as method claims to analyzing DNA sequences to detect breast cancer. The District Court invalidated the composition of matter claims based on the rationale that the isolated DNA was no different from the native DNA, due to the nucleotide sequence being the same in the isolated DNA and the DNA naturally found in cancer genes.

In a 2-1 decision, the CAFC reversed the District Court as to patentability of isolated DNA  stating that the "isolated" molecules are in fact patentable subject matter under 35 U.S.C. §101, as the molecules as claimed -- that is, without chemical bonds to other genetic molecules -- do not exist in nature. On the contrary, in nature, these DNA sequences are always found to be covalently bonded to other genetic molecules.

The dissent to the isolated DNA decision argued that the covalent bonds between the claimed DNA sequence and the adjacent molecules is not significant, as the sequence of genes covered by the claim is still the same, "structurally and functionally," regardless of whether it is chemically isolated or found in vivo.

As to the method claims, the CAFC affirmed the District Court's decision, stating that the method claims lacked an inventive step and were merely reciting abstract mental steps for comparing two nucleotide sequences.

It is likely that both parties in this case will seek further review of this decision, either by requesting an en banc rehearing by the CAFC, or by petitioning the Supreme Court. 
« Patent FAQ | Main Index | Archives | Patent Prosecution »

Categories

Monthly Archives

Pages

Disclaimer

This blog and the information contained in this blog are provided for general informational purposes only, are not intended to be legal advice, should not be construed as legal advice, and do not provide specific legal advice on any subject matter. No recipients of content from this blog, clients or otherwise, should act or refrain from acting on the basis of any content included in the blog without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient’s state. This blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state or jurisdiction who is familiar with the specific facts of your situation. If you require legal advice, please consult with a competent attorney licensed to practice in your jurisdiction.