In SAS Institute v. Iancu, 138 S. Ct. 1348, 1351 (2018), the Supreme Court held that when the Patent Trial and Appeal Board (the Board) institutes an inter partes review, it must decide the patentability of all the claims the petitioner challenged. The Court found that 35 U.S.C. §314(a)’s requirement that the Board find “a reasonable likelihood” that the petitioner will prevail on “at least 1 of the claims challenged in the petition” suggests a regime where “a reasonable prospect of success on a single claim justifies review of them all.” Id. The policy argument that partial institution is efficient because it permits the Board to focus on the most promising challenges and avoid spending time and resources on others was said to be a question for Congress, “not this Court.” Id. at 1352.
Shortly after SAS was decided, the Board set out guidance on April 26, 2018, that stated it “will institute as to all claims or none,” and further stated that if a trial is instituted, it “will institute on all challenges raised in the petition.” Commentators immediately questioned how the Board would manage its caseload and meet the statutorily mandated requirement to issue a final determination not later than one year after the date of a decision to institute review. See 35 U.S.C. §316(a)(11).
In Chevron Oronite Co. LLC v. Infineum Usal.P., IPR2018-00923, Paper 9 (Nov. 7, 2018), the Board denied institution despite finding that the petitioner demonstrated a reasonable likelihood of prevailing with respect to two dependent claims (Paper 9 at 10). The Board cited SAS to state that “[e]ven when a petitioner demonstrates a reasonable likelihood of prevailing with respect to one or more claims, however, institution of review remains discretionary. SAS Inst. v. Iancu, 138 S. Ct. 1348, 1356 (2018).” Id. The Board also cited its guidance, issued on June 5, 2018, explaining that it “may consider the number of claims and grounds that meet the reasonable likelihood standard when deciding whether to institute inter partes review under 35 U.S.C. § 314(a).” Id. at 10-11. The Board ultimately concluded that “instituting a trial with respect to all twenty claims based on evidence and arguments directed to dependent claims 3 and 4 is not an efficient use of the Board’s time and resources,” and it did not institute the review.
This is a reminder of the discretion the Board may exercise to control its docket and of the need for petitioners to be strategic and careful in their challenges, especially those containing multiple claims and/or grounds. Patent owners should continue to emphasize deficiencies in any preliminary responses, especially where such deficiencies may dominate a majority of the claims and/or grounds.
Trademark law recognizes that a color can be used to identify the source of products and therefore, enjoys protection under trademark law. Let’s test your color brand awareness:
• What can Brown do for you? – shipping services
• The little Purple pill – gastrointestinal medicine
If these colors brought UPS and Nexium to mind, then these companies have done their job in using these colors to identify them as the source of their services and products. This association is often built up over time in a process that trademark attorneys refer to as acquiring distinctiveness.
The Trademark Act recognizes that marks that are inherently distinctive can be registered without additional proof of distinctiveness. Marks that are not inherently distinctive, however, may be refused registration unless the applicant can prove that it has acquired distinctiveness with the relevant consumers. This often requires a significant period of use and advertising expenditures before an examiner will permit registration. The time required to build up sufficient proof of use and expenditure leaves a vulnerable gap since the applicant may have no actionable right to exclude others. This gap may be exploited by competitors to offer competing products with similar packaging.
In re Forney
On September 10, 2018, the USPTO considered whether a Forney’s trademark application for a pattern of colors on its packaging could be registered without proof of acquired distinctiveness. In re Forney Industries, ser. no. 86269096. Forney Industries sells a wide variety of hardware products, and packages those products with a black, yellow, and red pattern, as shown in the examples below:
(Photos from USPTO decision in Forney)
Forney applied for a trademark registration for this black, yellow and red color pattern. Upon examination, the Trademark Office refused to register the pattern because it was not inherently distinctive and Forney had not submitted proof that the pattern had acquired distinctiveness.
Forney appealed the Office’s decision to the Trademark Trial and Appeal Board to obtain an administrative review. Forney argued that under the Supreme Court’s decisions in Two Pesos and Wal-Mart, product packaging can be inherently distinctive and normally is taken by the user to indicate origin. The trademark examiner that reviewed Forney’s application countered that despite the Supreme Court’s statement regarding product packaging in Two Pesos, the Court in Wal-Mart, discussing its earlier opinion in Qualitex, clearly stated that color can never be inherently distinctive.
Interestingly, Qualitex did not reach the question of whether color can be inherently distinctive, but Justice Scalia in Wal-Mart as well as other commentators have read it that way.
The Issues in Forney
The Board noted that Qualitex, unlike Forney, involved a single color rather than a pattern, and applied color to a product rather than product packaging. With that in mind, the Board asked:
1) whether a mark consisting of more than one color can be inherently distinctive? and
2) whether there is a different rule for color applied to packaging?
The Board answered both questions negatively, ruling that a color mark consisting of multiple colors applied to product packaging is not capable of being inherently distinctive.
In particular, the Board agreed with Justice Scalia finding that under Qualitex, color can never be inherently distinctive. With respect to the question of whether a pattern of color changed the outcome, the Board found no difference between a single color and multiple colors. Moreover, the Board read Justice Scalia’s characterization of color in Wal-Mart, made while distinguishing the Two Pesos case, as providing an overarching rule that color can never be distinctive regardless of its context within packaging or product design.
The Board’s interpretation of the Supreme Court’s Two Pesos, Qualitex and Wal-Mart cases demonstrates a narrow black-and-white rule when attempting to register color, specifically making proof of acquired distinctiveness a pre-requisite to obtaining a registration for color whether on packaging or a product.
An Ongoing Debate: Two Pesos, Qualitex and Wal-Mart
There has always been debate about whether color can be inherently distinctive when reading Qualitex. In particular, Qualitex limited the issue to whether color could act as a trademark. It did not consider the issue of inherent distinctiveness because the cases below had already established that Qualitex’s green gold color had acquired distinctiveness in the market. Justice Scalia’s statement that Qualitex held that color requires proof of secondary meaning is dicta since color was not at issue in Wal-Mart. Therefore, the question of whether color can be inherently distinctive technically remains available for the Court to decide. The fact that Forney’s packaging bridges the decisions in Two Pesos and Qualitex may provide a vehicle for raising the issue at the Supreme Court. It will be interesting to see if Forney continues to appeal this issue.
In the meantime, the practical outcome of Forney is that we should expect trademark examiners to refuse to register color marks in a packaging context without proof of secondary meaning. Those seeking to claim rights in color marks should use “look for” advertising to foster a consumer’s association of the color with them as the source. Consulting trademark counsel to develop a strategy for establishing consistent use, developing look for advertising, and exploring alternate forms of registration is vital to a successful trademark registrations strategy.
In a memorandum dated June 7, 2018 (Memo), the U.S. Patent and Trademark Office (USPTO) set out new guidance concerning method-of-treatment claims, which should be welcome news for patentees. The memo addressed the decision by the U.S. Court of Appeals for the Federal Circuit in Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals, 887 F.3d 1117 (Fed. Cir. 2018). In particular, the guidance suggests that claims directed to methods of treating a disease will typically meet patent eligibility standards under step one of the U.S. Supreme Court’s Mayo test.
The claims in Vanda were directed to a method of treating a patient with schizophrenia by using iloperidone. Iloperidone is a drug known to cause QTc prolongation (a disruption of the heart’s normal rhythm that can lead to health problems) in patients having a particular genotype associated with poor drug metabolism. Memo at 1. The primary steps of the claims include “determining” with a genotyping assay, and then “administering” a certain quantity of drug based on that determination in order to “treat a particular disease.” Id. at 2. The USPTO noted that the Federal Circuit distinguished Mayo as follows: “The inventors recognized relationships between iloperidone, CYP2D6 metabolism, and QTc prolongation, but that is not what they claimed. They claimed an application of that relationship. Unlike the claim at issue in Mayo, the claims here require a treating doctor to administer iloperidone.” Id., citing Vanda at 1135 (emphasis added).
The USPTO stressed three main aspects of the Vanda decision. First, claims are to be evaluated as a whole, including arguably conventional genotyping and treatment steps, when determining whether or not the claims are “directed to” a recited natural relationship. Memo at 2. Second, method-of-treatment claims that apply natural relationships as opposed to being “directed to” them are not implicated by Supreme Court decisions in Mayo and Myriad because they “confine their reach to particular applications.” Id. Third, the second step of the Mayo test, i.e., whether or not the treatment steps were routine or conventional, is not necessary once a claim is found not to be directed to patent-ineligible subject matter under step one. Id.
Accordingly, the USPTO provides patentees with helpful guidance when defending method-of-treatment claims under 35 U.S.C. § 101. Although not mentioned in the Memo, the Vanda decision included a dissent by Chief Circuit Judge Sharon Prost that found the claims to be more consistent with Mayo. So despite the helpful views expressed by the majority in Vanda and subsequently adopted by the USPTO, patentees still need to be careful in drafting method-of-treatment claims and should remain prepared to defend the eligibility of such claims under Section 101.
 Mayo Collaborative Serv. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012). Under the Supreme Court’s two-step framework, the Section 101 analysis considers (1) whether the claims at issue are directed to a patent-ineligible concept, i.e., a law of nature, abstract idea or natural phenomenon, and if so, (2) whether additional elements transform the nature of the claims into a patent-eligible concept, i.e., something more than routine or conventional steps.
In Apotex, Inc. et al. v. Novartis AG (IPR 2017-00854, paper 47 dated Feb. 5, 2018), petitioner Apotex sought, and was granted, discovery of a Phase III clinical trial protocol from patent owner Novartis.
The patent at issue in the IPR, U.S. 9,187,405, claims a method for treating relapses in relapsing-remitting multiple sclerosis by orally administering fingolimod “at a daily dosage of 0.5 mg, absent an immediately preceding loading dose regimen.” In its petition for IPR, Apotex alleged that the prior art taught that 0.5 mg of fingolimod was known to be an effective maintenance dose for treating multiple sclerosis. Novartis responded that to the extent that the prior art taught the use of 0.5 mg of fingolimod, it was only in the context of a treatment wherein the maintenance dose is preceded by a loading dose, something that is explicitly absent from the claimed methods. See paper 8 at 25.
After the Patent Trial and Appeal Board (PTAB) instituted the IPR, Novartis elaborated on its position in its response (paper 27), stating that the effectiveness of 0.5 mg as a maintenance dose in the absence of a loading dose, as required by the claims, was a surprising discovery. Although its briefing is heavily redacted, it appears that Novartis asserted that its Phase III clinical trial was aimed at showing the effectiveness of a 1.25 mg per-day dose, and that the study included a 0.5 mg dosing only at the suggestion of the U.S. Food and Drug Administration (FDA). Novartis supported this assertion with an expert declaration authored by a member of the advisory board that helped Novartis design the Phase III clinical trial. After deposing Novartis’s expert, Apotex moved for additional discovery, seeking several documents, including Novartis’s Phase III clinical trial protocol.
In granting Apotex’s request for the Phase III clinical trial protocol, the PTAB applied the standard set forth in Garmin Int’l v. Cuozzo Speed techs. LLC, case IPR2012-00001. The PTAB granted additional discovery based on Apotex’s strong showing under Garmin’s first factor, which requires the petitioner to show more than “the mere possibility of finding something useful, and mere allegation that something useful will be found.” Garmin, paper 26 at 6. Hence, the PTAB stated:
“[b]ecause Novartis has placed its reasons for including that dose at issue, we consider Apotex’s discovery request reasonable. In particular, such discovery would provide means for testing Novartis’s position here against statements it made to the FDA in submitting the protocol and is, thereby, “useful” to Petitioner’s case. Moreover, in pointing to the statements of Dr. Lublin and Ms. Farrell, Apotex demonstrates more than a “mere allegation that something useful will be found” in the protocol, as required under Garmin Factor 1.”
Order at 4. The PTAB gave little weight to Novartis’s counterargument that it would be unduly burdensome to identify the version of the protocol that was provided to the FDA.
It is noteworthy that in addition to the Phase III clinical trial protocol, Apotex requested three other documents: (1) minutes of a meeting with the FDA, (2) Novartis’s briefing book for an end of Phase II meeting and (3) an unredacted version of a particular exhibit. The PTAB denied Apotex’s request as to each of these documents because the existence of useful information in those documents was said to be speculative.
This case demonstrates that additional discovery, including clinical study data, may be available to IPR petitioners when the subject matter of that additional discovery is clearly at issue in the case, and where evidence shows that the requested discovery contains useful information. Here, Apotex appears to have relied upon statements made by Novartis’s expert to demonstrate the existence of useful information within the requested discovery. In deposing declarants, an IPR petitioner should consider whether the patent owner’s declarants can substantiate the existence of useful information within the possession of the patent owner. A patent owner, on the other hand, should consider whether its arguments raise the potential for additional discovery, and if so, whether the IPR petitioner will have a mechanism by which to demonstrate the existence of useful information within the patent owner’s possession.
January was an exciting month for patent professionals still attempting to make sense of the fallout from the Supreme Court’s 2014 Alice Corp. v. CLS Bank International decision. Hot on the heels of its Jan. 10 decision in Finjan, Inc. v. Blue Coat Systems, Inc., the Court of Appeals for the Federal Circuit decided Core Wireless Licensing v. LG Elecs., Inc. on Jan. 25, affirming denial of LG’s summary judgment motion seeking to invalidate Core Wireless’ display interface patent claims for being directed to an exception to statutory subject matter under 35 U.S.C. § 101. In combination with Finjan and earlier decisions, this potentially establishes a trend that courts are increasingly comfortable differentiating between patent claims done on a computer and the maligned “do it on a computer” claims that are the target of much eligibility exception concern.
Core Wireless sued LG, alleging infringement of claims in U.S. Patent nos. 8,713,476 and 8,434,020, both titled “Computing device with improved user interface for applications.” The patents specifically seek to allow users to quickly access data and functionality from un-launched applications using a menu listing, particularly in devices with small form factors. Claim 1 of U.S. Patent No. 8,713,476 was analyzed as representative.
A computing device comprising a display screen, the computing device being configured to display on the screen a menu listing one or more applications, and additionally being configured to display on the screen an application summary that can be reached directly from the menu, wherein the application summary displays a limited list of data offered within the one or more applications, each of the data in the list being selectable to launch the respective application and enable the selected data to be seen within the respective application, and wherein the application summary is displayed while the one or more applications are in an un-launched state.
Claim 1 of U.S. Patent No. 8,434,020 was also analyzed, and it follows a similar structure and includes many of the same terms identified as significant by the court (including “reached directly” and “un-launched state”).
Evaluating these claims, the court turned to its earlier decisions in Visual Memory, Thales, Enfish and Finjan, all of which make clear the importance of analyzing the claims with specificity and searching for technological improvements or unconventional solutions that indicate eligibility. The court rejected LG’s overbroad characterization that the claims are merely an application of the abstract idea of an index. Rather, “these claims are directed to a particular manner of summarizing and presenting information in electronic devices” that require specific manners of use with specific limitations on available data in specific device states. As with earlier decisions, the opinion looked to the specification to discern a problem and claimed unconventional solution. Because of the particularity of the solution, the court found the asserted claims were not directed to an abstract idea in Step 2A of the eligibility framework and did not proceed to Step 2B.
The synopsis of the lower court’s reasoning provides further pointers as to the difference between a “do it on a computer” abstract claim and eligible innovation realized using computers.
It held that the claims are not directed to an abstract idea because, even crediting LG’s characterization of the claims as directed to “displaying an application summary window while the application is in an unlaunched state,” the concepts of “application,” “summary window,” and “unlaunched state” are specific to devices like computers and cell phones. J.A. 9561. The court explained “LG identifie[d] no analog to these concepts outside the context of such devices.” Id. It further noted even “if claim 1 were directed to an abstract idea, it would still be patent eligible at least because it passes the machine-or-transformation test.” J.A. 9562.
This language is useful for disentangling subject matter eligibility from patentability in view of prior art. The search for an “inventive concept” and discussion of “well-understood, routine, and conventional” uses of computers inheres confusing parallels with obviousness under 35 U.S.C. § 103. Even the helpful guidance of Finjan that eligibility exists where a computer file enables a computer “to do things it could not do before” blurs the lines between eligibility and novelty. The district court’s discussion makes clear that, where the claims are directed to specific technology with no context outside devices, they should not be found abstract.
While Core Wireless is hardly the first matter involving software or computer functionality where eligibility is shown, many earlier decisions seemed to decide by exception rather than rule. DDR admonished its own application by speaking against a broad rule and was lost in a red tide of decisions finding ineligibility. Bascom was similarly decided under Step 2B and injects substantial room for argument as to what constitutes an “ordered combination.” Enfish and Visual Memory are regularly distinguished from software cases by limiting their applicability to claims improving the computer system itself as opposed to claims that add to user-controlled functionality. McRO concerned detailed claims receiving substantial attention as lacking preemption risk. If the rapid-fire decisions finding eligibility of “pure” software in Finjan and Core Wireless suggest a trend, it is that the Court of Appeals for the Federal Circuit is developing a comfort level that no longer requires finding eligible software claims to be the exception to the exception to eligibility.
Core Wireless Licensing S.A.R.L. v. LG Electronics, Inc., et al., nos. 2016-2864 and 2017-1922 (Fed. Cir. Jan. 25, 2018), slip op. at 2-3.
Step 2A is at times referred to as “Step One.” However, by the framework describing steps 1, 2A and 2B, Step One involves determining whether the claim is a process, machine, manufacture or composition of matter. See, e.g., MPEP § 2106.
Core Wireless at 4 quoting Core Wireless Licensing S.A.R.L. v. LG Elecs., Inc., No. 2:14-CV-911-JRG-RSP, 2016 WL 1106438, at *4 (E.D. Tex. Mar. 20, 2016).
See, e.g., Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347, 2350, 189 L. Ed. 2d 296 (2014)
On December 15, 2017, the Court of Appeals for the Federal Circuit struck down as unconstitutional the clause within 15 U.S.C. § 1052(a) (“Section 2(a)”) banning registration of a trademark that “[c]onsists of or comprises immoral…or scandalous matter.”
The In re Brunetti decision came in the wake of Matal v. Tam, a recent Supreme Court case holding that Section 2(a)’s ban on registering “disparaging” trademarks amounts to unconstitutional viewpoint discrimination.
Federal Circuit Judges Dyk, Moore and Stoll concluded that the refusal to register trademarks consisting of immoral or scandalous matter necessarily bans speech based on content, in violation of the First Amendment. Such content-based restrictions are subject to strict scrutiny review, which requires the government to prove that the restriction furthers a compelling interest and is narrowly tailored to achieve that interest.
The court first affirmed the Trademark Trial and Appeal Board’s (“TTAB”) finding, though, that trademark applicant Erik Brunetti’s mark, FUCT, used in connection with a clothing brand, is vulgar and therefore scandalous. TTAB evidence had included online search engine results, dictionary definitions and use of Mr. Brunetti’s mark in the marketplace on products containing sexual imagery. The court rejected Mr. Brunetti’s contention that his mark is not vulgar, but rather is a coined abbreviation for “Friends yoU Can’t Trust,” and noted the United States Patent and Trademark Office’s (“USPTO”) history of equating “scandalous” and “vulgar” marks.
Turning to the constitutional issues in the case, the court rejected the government’s argument that Section 2(a) does not implicate the First Amendment because trademark registration is a government subsidy program or a limited public forum. As the Supreme Court noted in Tam, the government subsidy framework does not apply to trademarks, where applicants for registration pay fees to the USPTO rather than receiving any funds. Furthermore, trademarks function as commercial source indicators, and the fact that they exist on the Principal Register does not transform them into a limited public forum. The court characterized the Principal Register as a database, analogizing government ownership of private land merely because such land is maintained on a government list.
As it had in In re Tam, 808 F.3d 1321 (Fed. Cir. 2015), the court expressed concern over potential content-based censorship of trademarks and other speech the government registers, such as copyrighted works. The test for whether a trademark is barred by Section 2(a) asks whether a substantial composite of the public would find the mark “shocking to the sense of truth, decency, or propriety; disgraceful; offensive; disreputable; . . . giving offense to the conscience or moral feelings; . . . or calling out for condemnation.” This test necessarily targets expressive speech, and indeed, the court determined this test’s results change as frequently as do the general population’s moral and ethical viewpoints over time.
The court held Section 2(a) unconstitutional after strict scrutiny review, holding that this provision targets the expressive aspects of speech – rather than its commercial function as a source indicator – and undoubtedly restricts speech based on content. Nor can Section 2(a) survive under intermediate scrutiny analysis, as the government does not have a substantial interest in promoting certain marks over others and cannot possibly apply the test consistently, as the test hinges on popular opinion of what is “scandalous.” Even if the government did have a substantial interest in protecting the public from certain marks – which the court held it does not – Section 2(a) would not directly advance this interest because marks that fail to register can still be used in commerce.
The court’s Brunetti decision does not come as a surprise following the Supreme Court’s striking down of the Section 2(a) ban on “disparaging” trademarks. While the Brunetti court lamented commercial use of vulgar marks, consistency dictates that these offensive words and images may join the likes of similarly vulgar copyrighted works registered by the government. The government has yet to articulate a substantial interest in restricting this speech, and until it does, marks formerly deemed too “vulgar” for registration might now have a better chance to move forward.
In Legend3D, Inc. (Petitioner) v. Prime Focus Creative Services Canada Inc. (Patent Owner), Case IPR2016-00806, the Patent Trial and Appeal Board (Board) lifted a stay of a pending reissue application following a Final Written Decision, thereby allowing the Patent Owner another opportunity to pursue amended claims. Although the Federal Circuit recently determined that the PTAB can no longer place the burden of establishing the patentability of amended claims on the patent owner in IPR proceedings, patent owners may want to consider pursuing alternative claims in a reissue proceeding, given the ex parte nature and procedural flexibility that reissue offers.
Here, the sequence of events was as follows:
March 28, 2016: IPR filed.
29, 2016: Reissue application filed.
2, 2017: Order staying reissue application.
18, 2017: Final Written Decision and denial of Patent Owner’s motion to amend.
8, 2017: Stay of reissue application lifted following lapse of appeal period.
23, 2017: Second preliminary amendment filed in reissue application.
Based on the issuance of the Final Written Decision, and the fact that no appeal was taken, the Board considered the IPR proceeding completed (IPR2016-00806, Paper 79 at 3). The Board also noted that Patent Owner stated that its second preliminary amendment in its reissue application would present claims patentably distinct from the original patent claims (id.).
The Board reasoned that, in view of the completion of the IPR, there was no longer a concern about duplicate efforts and inconsistencies between proceedings (id. at 4). In addressing Petitioner’s arguments that the reissue application was infected by Patent Owner’s misrepresentations during the IPR, the Board noted that Patent Owner must present to the Office the complete record of the IPR proceeding, and that the Office would examine the reissue application in light of the complete record (id.).
Accordingly, this case is a good example of a patent owner keeping its options alive despite a cancelation of all claims in the IPR. Although examined in view of the IPR record and subject to the requirements of the reissue provisions, the ex parte prosecution of a reissue application provides significant flexibility and advantages to a patent owner, especially one tasked with persuading the Office that its amended claims are patentably distinct from those addressed in an IPR.
See Aqua Products, Inc. v. Matal, 2015-1177 (Fed. Cir. 2017).
37 C.F.R. § 42.73(d)(3)(i): Patent applicant or owner. A patent applicant or owner is precluded from taking action inconsistent with the adverse judgment, including obtaining in any patent: (i) A claim that is not patentably distinct from a finally refused or canceled claim; …