717 Madison Place

The oral argument of the week is from  IPR Licensing, Inc. v. ZTE Corp.  I thought this oral argument was interesting for its discussion of obviousness issues and some good sound bites by Judge Taranto about “present invention” language and not taking “present invention” out of context.

In a previous post from months ago [link], I noted some comments by Judge Lourie about burying references.  In this oral argument, as well, Judge Lourie was quick to ask why so many references had been cited in the prosecution of the patent.  You can listen to the sound bite [here].  The patent is available [here].  There were ten columns of cited references — and an extensive family history of related applications/ patents.  Curiously, Judge Lourie asked how the invention could be non-obvious if there were hundreds of references cited by the applicant during prosecution.  I take that comment as a suggestion that there is a correlation between the number of references cited and the obviousness of an invention.  To my way of thinking, that simply does not follow.  There are many reasons to cite references.  In this case, for example, it appears there was an extensive family history and previous ITC litigation.

Moreover, the Federal Circuit’s decision in Sciele Pharma Inc. v. Lupin Ltd., 684 F.3d 1253 (Fed. Cir. 2012) incentivizes applicants to cite more art so that such art won’t be given more weight in a subsequent obviousness analysis.

While the ultimate burden of proof does not change, new evidence not considered by the PTO “may `carry more weight’ … than evidence previously considered by the PTO,” and may “`go further toward sustaining the attacker’s unchanging burden.’” Id. at 2251 (quoting Am. Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350 (Fed.Cir.1984)). “[I]f the PTO did not have all material facts before it, its considered judgment may lose significant force” and the burden to persuade the finder of fact by clear and convincing evidence may, therefore, “be easier to sustain.” Id. Instead, the fact that references were previously before the PTO goes to the weight the court or jury might assign to the proffered evidence. Id.

Sciele Pharma Inc. v. Lupin Ltd., 684 F.3d 1253, 1260 (Fed. Cir. 2012).

Further, if cited art is considered part of the intrinsic evidence used to assist in performing claim construction — see, e.g. this [previous post] — query whether a court can put a limit on how much intrinsic evidence an applicant elects to add to the file.

All that being said, ten columns of references is indeed a lot.

The court’s decision in IPR Licensing, Inc. v. ZTE Corp. is available [here].

The entire oral argument from IPR Licensing, Inc. v. ZTE Corp. is available [here].

According to Wikipedia, Judge Pauline Newman of the Federal Circuit will mark a major milestone next Tuesday June 20th, when she turns 90 years old.  I was planning on posting a congratulatory post next Tuesday; but, it occurs to me that there are many people in the patent community who might want to send Judge Newman a card or note of thanks for her public service.  If you are one of those people, I believe an appropriate address would be:

The Honorable Pauline Newman

United States Court of Appeals for the Federal Circuit

717 Madison Place, N.W.

Washington, D.C. 20439.

You can read more about Judge Newman’s amazing career [here].  One thing seems clear, the secret to a long and productive life must be an open mind about patent eligibility.

(For those of you in big firms, I suspect your competitors will be sending unique flower arrangements.)

With Judge Wallach on the panel in the Federal Circuit’s panel-stacking case, I’m curious if the court will look to other areas of the law, such as courts of military justice, to evaluate the fairness of panel stacking.  In U.S. v. Sullivan, the United States Court of Appeals for the Armed Forces approved of a convening authority’s practice because the selected panelists were fairly selected:

First, there is no appearance of an unfair panel in this

case. Although the convening authority deviated from the

Article 25, UCMJ, criteria by categorically excluding flag

officers from the venire panel, he provided Appellant with a

venire of fellow senior captains who were fully qualified to sit

on a court-martial panel. Indeed, we find no basis to conclude

that the convening authority selected the members on any factors

other than their “age, education, training, experience, length

of service, and judicial temperament.” Article 25(d)(2), UCMJ.

Further, the record provides no indication that these panel

members failed to fully, carefully, and appropriately consider

Appellant’s case in arriving at a verdict and sentence.

Moreover, the convening authority’s motivation in excluding flag

officers from this case was not to stack the panel against

Appellant. Rather, the convening authority relied on his

experience in concluding that the flag officers would not be

available to actually sit on the panel and hear the case.4 United

States v. Gooch, 69 M.J. 353, 358 (C.A.A.F. 2011). Based on these

circumstances, we conclude that there was no appearance of

unfairness.

Notably, the convening authority did not select panel members based on a pre-disposed point of view.

The Federal Circuit resolves its internal splits by going en banc.  The USPTO has a similar provision in that it allows all of its PTAB judges to vote whether a decision should be made precedential.  However, the USPTO has something that the Federal Circuit does not have — if the Director of the USPTO chooses to do so, he or she may enlarge a panel with additional judges in order to reconsider an initial appeal decision.  This would be the equivalent of the Federal Circuit’s Chief Judge enlarging a CAFC panel after an initial decision.  Moreover, the USPTO has notice and comment rule making at its disposal.

The PTO’s new acting Director, Joe Matal, has argued several cases before the Federal Circuit during his time in the Solicitor’s office.  One case that comes to mind is  Apple v. Ameranth, a patent eligibility case.  One sound bite that I like from that case is available here: [Listen].  In that sound bite, Mr. Matal noted that it was the Office’s position that secondary indicia could be used by a patent owner to show patent eligibility.  Implicit in his frank statement is a recognition that secondary indicia go toward resolving factual issues that underlie the patent eligibility analysis.

The PTO’s brief in the Apple v. Ameranth case — available [here] — is also instructive.  Part of that brief argued that the patent challenger had failed to provide factual evidence under step 2 of the Alice test that a claim as a whole was (1) routine and (2) conventional.  Therefore, the patent challenger failed to meet its burden of proving the patent claim to be patent ineligible.

1. The Petitioners Presented No Evidence or Argument that the Claims’ Recited Technology Is Routine and Conventional

Dependent claims 3 and 11 include the additional limitation that “the modified second menu can be linked to a specific customer at a specific table directly from the graphical user interface of” a hand-held or other computing device. A66; A67. Claims 6 through 9 and claims 13 through 16 include the additional limitations that the manual modification of the second menu is implemented via handwriting capture, handwriting recognition and conversion to text, voice capture, or voice recognition and conversion to text. A67.
The Board found that the petitioners failed to meet their burden of showing that these additional limitations require only routine and conventional technology. A42; A43.

Before the Board, Ameranth asserted that the ’733 patent’s dependent claims “include additional and independently unique inventive elements.” A1515. In particular, Ameranth asserted that “linking a particular order to a particular customer at a table was novel then and unique to mobility and wireless handhelds.” A1530. Ameranth also argued that claims 6 through 9 and claims 13 through 16 “recite particular kinds of manual modification,” and quoted statements in the press made by the petitioners that, according to

36

Case: 15-1703 Document: 47 Page: 44 Filed: 10/29/2015

Ameranth, confirm the novelty of the recited technologies. A1530. Because Ameranth presented separate arguments for the patentability of these dependent claims, the Board was required to consider them individually rather than treat the independent claims as representative. See Content Extraction and Transmission LLC v. Wells Fargo Bank, N.A., 776 F.3d 1343, 1348 (Fed. Cir. 2014).

The entirety of the petitioners’ reply to Ameranth with respect to these dependent claims consisted of two sentences. First, the petitioners asserted that the claims’ additional “elements are, at most, insignificant extra-solution activity that cannot save subject matter from patent ineligibility.” A1619. The petitioners also argued that “‘linking a particular order to a particular customer at a table’ and ‘manual modification’ are classic examples of manual tasks that cannot be rendered patent-eligible merely by performing them with a computer.” Id.

The petitioners’ first sentence is merely a conclusion that is unaccompanied by any evidence or analysis. It did not satisfy the petitioners’ burden of showing that the challenged claims are unpatentable. See 35 U.S.C.
§ 326(e) (“the petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence”); Dynamic Drinkware, LLC v. National Graphics, Inc., 800 F.3d 1375, 1378-79 (Fed. Cir. 2015).

37

Case: 15-1703 Document: 47 Page: 45 Filed: 10/29/2015

The petitioners’ second statement—that the claimed operations could be performed manually, without a computer—is directed only to the first step of the Alice inquiry. See CyberSource v. Retail Decisions, Inc., 654 F.3d 1366, 1371 (Fed. Cir. 2011) (noting that “methods which can be performed mentally, or which are the equivalent of human mental work, are unpatentable abstract ideas”). The fact that a process can be executed without a computer, however, does not address the second step of the Alice inquiry: whether the process’s actual implementation on a computer requires nonobvious technologies. All computer technology has been, within living memory, new and unconventional. The fact that it could always implement mental processes has not forever rendered it patent ineligible. See Alice, 134 S. Ct. at 2354 (“an invention is not rendered ineligible for patent simply because it involves an abstract concept”).

The petitioners failed to present any evidence or analysis showing that the technology recited in claims 3, 6-9, 11, and 13-16 is routine and conventional. They failed to make their case under Alice. The Board thus properly determined that they had not met “the[ir] burden of proving a proposition of unpatentability by a preponderance of the evidence.” 35 U.S.C. § 326(e).

2. The Petitioners’ New Arguments Were Never Presented to the Board and Are Now Waived

In this Court, the petitioners present several new arguments that the

technology recited in claims 3, 6-9, 11, and 13-16 is routine and conventional. 38

Case: 15-1703 Document: 47 Page: 46 Filed: 10/29/2015

The petitioners contend that prior art patents, admissions in the ’733 patent’s specification, and the specification’s lack of a non-prior art enabling disclosure demonstrate that the recited technology is pre-existing and generic. Because none of these arguments was presented below, they are now waived. See Baxter, 678 F.3d at 1362.

These new arguments also suffer from other deficiencies. The petitioners quote passages of the ’733 patent’s specification that they contend contemplate the use of existing technology to implement handwriting and voice capture.
Pet. Br. at 35-36. The petitioners cite a passage that notes, with respect to the handwriting capture illustrated by figure 8, that “the operator screen on the hand-held [device] can capture handwritten information specific to a customer’s requests directly on the touch-sensitive screen.” A60, col.3, ll.58-60. The petitioners also cite a passage that describes how “a server taking a drink order could select from a menu of her hand-held device’s screen ‘Iced Tea,’ and then record the voice message ‘with lemon’ using her hand-held device integral microphone.” A60, col.4, ll.18-22.

These passages simply describe the intended functioning of the claimed invention. They nowhere state that the technology for implementing handwriting and voice capture is pre-existing. In contrast, for example, to the passages of the specification that the Board relied on to establish that graphical

39

Case: 15-1703 Document: 47 Page: 47 Filed: 10/29/2015

user interfaces and data synchronization are conventional (A31; A32), nothing in these passages identifies commercially available software that implements the claimed functions.

Moreover, again, these passages from specification were never cited to the Board. The Board’s administrative patent judges “are not like pigs, hunting for truffles buried in the record.” Gross v. Town of Cicero, 619 F.3d 697, 702 (7th Cir. 2010). It is the petitioners who bore the burden of marshalling information to make their case.

The petitioners also contend that nothing in the ’733 patent’s specification describes non-prior art means for implementing handwriting and voice capture or linking customers’ locations to their orders. Pet. Br. at 35-37, 42. They appear to argue that such a gap compels a finding that the recited technology is ineligible.

As discussed in section IV.D.2.b of this brief, supra at pp. 27-30, when the Board’s background knowledge indicates that a recited computer function is conventional and routine, the specification’s failure to describe a non-prior art means for implementing the function can confirm that finding. See, e.g., Internet Patents, 790 F.3d at 1348. The absence of an enabling disclosure, however, does not require the Board to conclude that a recited technology is conventional. A claim may recite eligible subject matter and yet simply fail to

40

Case: 15-1703 Document: 47 Page: 48 Filed: 10/29/2015

satisfy the requirements of § 112(a). Claims directed, for example, to a machine for time travel, or to a process for transforming lead into gold, are patent eligible, despite the fact that their accompanying specifications have (so far) failed to describe a means for enabling these inventions. A lack of enablement does not compel a finding that a claim fails Alice’s step two.

Finally, the petitioners assert that they did cite a prior-art patent before the Board that they contend demonstrates the conventionality of handwriting capture and conversion, as well as linking an order to a customer’s location.
Pet. Br. at 37-38, 42 (discussing U.S. Patent No. 4,972,496). This patent was cited in the petitioner’s reply before the Board, but only with respect to the independent claims’ broad recitation of “manually modifying” a document on a handheld computer. A1614-1616. It was not cited in the portion of the reply that addresses the dependent claims, nor was it described in the reply as disclosing the conventionality of handwriting recognition or conversion or linking orders to locations. Because this evidence was never cited in relation to the disputed limitations, the argument is now waived. See Baxter, 678 F.3d at 1362.

Perhaps the PTO will revise its patent eligibility guidance under Mr. Matal to require factual evidence by examiners when they assert that a claim as a whole recites routine and conventional activity.  Notably, in the PTO’s Ameranth brief, it states:

You can listen to the entire oral argument [here].

You can review the court’s decision [here].

One of the interesting twists in tomorrow’s oral argument of Nidec Motor Corporation v. Zhongshan Broad Ocean Motor Co. is that Nathan Kelley, the USPTO Solicitor, has entered a notice to argue the case on behalf of the USPTO.  If I am not mistaken, Mr. Kelley was serving as the interim Chief Judge of the PTAB at the time the enlarged panel was ordered.  So, this is a very rare instance, or perhaps totally unprecedented, where the Federal Circuit will be able to ask questions directly of the administrative official who ordered an enlarged Board panel.

I suppose some questions that might come up are:

1)  Why was the original panel enlarged?

2) Did the Commissioner order the enlarged panel and how were those instructions communicated?

3) How were the additional judges selected?  What criteria was used to select the additional judges?

4) Has a vote ever been taken among the PTAB judges as a whole as to whether a self-joinder decision of the  PTAB should be made precedential and what was the outcome of that vote?

5)  Did Colonel Jessup order the code red . . . . wait, we already know the answer to that one.

6)  Is the appellant correct that the decision of In re Alappat, while abrogated in part on other grounds, does not sanction the use of stacked panels?

7)  Why isn’t notice and comment rule making a better vehicle for achieving the Commissioner’s policy, especially with the option of Commissioner directed reexamination still available for an unjoined argument in this case?

The oral argument in Nidec Motor Corporation v. Zhongshan Broad Ocean Motor Co. is scheduled for this Thursday. The more interesting issue in this appeal is whether the USPTO improperly stacked the PTAB re-hearing panel to arrive at a preordained outcome.

The USPTO has intervened in the appeal.  Its brief is presented as the intervenor’s brief.  Also, BIO has filed an amicus brief in the appeal.

The briefs are available below:

Appellant’s brief: [link]

Appellee’s brief: [link]

Intervenor’s brief: [link]

Amicus brief: [link]

Reply brief: [link].

The Federal Circuit’s en banc opinion in In re Alappat is available [here].

The Supreme Court’s Cuozzo v. Lee opinion is available [here].

Those of you in the D.C. area might want to mark your calendars for next Thursday.  The Federal Circuit will be hearing oral argument in one of its panel-stacking cases, Nidec Motor Corporation v. Zhongshan Broad Ocean Motor Co.  I will try to post the briefs and more about the appeal in a future post.

To allow the Commissioner to gerrymander the 1575*1575 composition of the board to insure a preordained result directly conflicts with the concept “that in administrative proceedings of a quasi-judicial character the liberty and property of the citizen shall be protected by the rudimentary requirements of fair play.” [Morgan v. United States, 304 U.S. 1, 58 S.Ct. 773 (1938)] at 14-15, 58 S.Ct. at 775. See also Utica Packing Co. v. Block, 781 F.2d 71, 78 (6th Cir.1986) (decision of the Department of Agriculture reversed because the secretary’s removal of the adjudicating officer who rendered the original decision and assigning a new one to rule on a petition for reconsideration violated due process.) “There is no guarantee of fairness when the one who appoints a judge has the power to remove the judge before the end of proceedings for rendering a decision which displeases the appointer.” 781 F.2d at 78.

In re Alappat, 33 F.3d 1526 (Fed. Cir. 1994)(en banc)(Judge Mayer and Judge Michel’s dissenting opinion).

The recent decision in Atlas Power, LLC v. Commonwealth Edison Co. is curious in that it only shows Judges O’Malley and Hughes as the judges on the decision.  Judge Moore presided over the oral argument.  It is unclear if Judge Moore’s name missing from the decision is just an error or a late recusal without explanation. Usually, the Federal Circuit corrects printing errors relatively quickly.

The court’s opinion is available [here].

————————————————————————————————————————–

Update:  May 21, 2017

Whoops — my “erratum.”  I see from this IPLaw360 article [Link] that it was indeed a late recusal without explanation.

The oral argument is available [here].

Any enterprising Chinese restaurants located near courthouses or law offices around the country might want to add this fortune to some of their cookies: