Exergen Corp. v. Kaz USA Represents Another In A String Of Recent Setbacks For Patent Infringement Defendants On Eligibility Challenges

For a third time in the past thirty days, a Judge Moore-led panel has found in favor of a patent owner defending its claims from an eligibility challenge under Section 101.  In Exergen Corp. v. Kaz USA, Inc., Nos. 2016-2315, 2016-2341 (March 8, 2018), a panel majority (Moore, Bryson) upheld a lower court’s post-trial ruling that claims to a method for detecting body temperature using temperature readings from the forehead skin and ambient temperature were patent eligible.  While finding that the claims employed a natural law, the majority held that the lower court’s conclusion that certain claim elements were not routine, well-understood, or conventional was a factual determination that “must be given clear error deference.”  On that basis, the majority refused to overturn the lower court’s decision.  Continue Reading

Squire Patton Boggs Partner Is A 2018 IP Trailblazer

We are delighted to announce that Rahul Pathak has been recognized as an Intellectual Property Trailblazer by the 2018 National Law Journal. Rahul works with clients on a wide range of patent matters, including prosecution, portfolio management, opinions and due diligence, particularly in the chemistry and biochemistry fields. He was chosen from hundreds of candidates to receive this honor. Click here to read our press release.

Understanding The “Twice Rejected” Rule For Initiating An Appeal With The Patent Trial And Appeal Board

Appeals from United States Patent and Trademark Office rejections of patent applications are a critical component of patent prosecution practice.  But, the rule governing the all-important question of when a rejection is ripe for appeal is not the model of clarity that practitioners might expect (See 35 U.S.C. §134).  Under 37 CFR §41.31(a)(1) (emphasis added), “[e]very applicant, any of whose claims has been twice rejected, may appeal from the decision of the examiner to the [Patent Trial and Appeal] Board (PTAB) by filing a notice of appeal.” The wording of 37 CFR §41.31(a)(1), however, is unclear as to whether “twice rejected” requires two rejections of a claim having exactly the same wording. In other words, would amending a claim after an initial rejection prevent an applicant from filing a notice of appeal after receiving a subsequent rejection of the amended claim? As will be discussed below, the answer to that question is no. There is no “exactness requirement” in the “twice rejected” rule (See MPEP §1204). Continue Reading

The Malicious Use Of AI – Why Those “Black Mirror” Scenarios May Be Closer Than We Think

Robot Arm

Developments in artificial intelligence (AI) are proving hugely beneficial for society, both at a commercial and individual level (e.g. face recognition and medical diagnostic technology, route mappers for navigation, robotic pets, cleaners and industrial robots). However, with the advancement of such technology, and the increasing integration of AI into our everyday lives, comes the potential for its misuse or misappropriation.  This is the concern expressed by a number of research bodies and industry experts in a new report, which describes scenarios that could have been taken straight out of the science fiction series “Black Mirror”.

The report – “The Malicious Use of Artificial Intelligence: Forecasting, Prevention and Mitigation”  – considers the potential threats that could arise from the malicious use of AI technology and aims to identify certain interventions which may benefit from further evaluation to help foresee, prevent and mitigate these threats.  The report defines AI as “the use of digital technology to create systems that are capable of performing tasks commonly thought to require intelligence” and it considers “Malicious Use” to include all practices which are intended to “compromise the security of individuals, groups or society”.

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SEC and CFTC Offer Views on Regulation of Virtual Currency

On February 6, 2018, SEC Chairman Jay Clayton and CFTC Chairman Christopher Giancarlo provided testimony on virtual currencies to the U.S. Senate Committee on Banking, Housing, and Urban Affairs.  Their written statements and testimony can be found here.  Below we provide a summary of the written statements and testimony and analysis for participants in the virtual currency and blockchain spaces.

New Possibilities, New Risks

Takeaway:  Both the SEC and CFTC recognize the potential use and value of virtual currency and blockchain technology, but both remain wary of the risks, particularly for investors.

Both Chairmen expressed optimism that developments in financial technology will help facilitate capital formation and provide promising investment opportunities for both institutional and retail investors.  SEC Chairman Clayton noted that these developments may assist regulators in monitoring transactions, holdings, obligations, and market characteristics.  CFTC Chairman Giancarlo expressed optimism that distributed ledgers have the potential to enhance economic efficiency, mitigate centralized systemic risk, defend against fraudulent activity, and improve data quality and governance.  Like Chairman Clayton, Chairman Giancarlo posited that distributed ledger technology could provide assistance to financial market regulators.

At the same time, both Chairmen expressed concern.  Chairman Clayton noted that enthusiasm for obtaining a profitable piece of a new technology can attract fraudsters and bad actors, who prey on this enthusiasm.  Chairman Giancarlo similarly observed that bad actors historically have invoked the concept of innovation to perpetrate age-old frauds.  Both Chairmen repeatedly emphasized the SEC’s and CFTC’s missions to establish a regulatory environment for investors and market participants that fosters innovation, integrity, and confidence. Continue Reading

Multi-National Design Enforcement

We are pleased to announce that Paolo Beconcini, Consultant and IP expert in our Hong Kong office, will be speaking at the International Trademark Association’s conference in London on Tuesday 27 February 2018 on the topic of multi-national design enforcement. Paolo, along with other keynote speakers, will be considering the remedies available in several key jurisdictions for successful design infringement claims, the proofs required for each and likelihood of achieving those remedies.  This is a particularly hot topic in a world where technological advancements make design infringement quick and easy, so this session is one not to be missed. Further information is available here.

The Often Overlooked Step In Drafting And Prosecuting Software-Related Patents

In Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71 (2012), and Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014), the Supreme Court of the United States established a two part test for determining patent subject matter eligibility. While most practitioners tend to focus on the second part of the test, for most software-related patents, focusing on the first part of the test may ultimately be a better strategy for patent drafting and during prosecution before the United States Patent and Trademark Office (“USPTO”).

Part I of the Mayo/Alice test requires an evaluation of whether the claims of a patent application are directed to a law of nature, a natural phenomena, or an abstract idea. Part I of the Mayo/Alice test is referred to as step 2A by the USPTO (See MPEP §2106). If the application is found to be directed to a law of nature, natural phenomena, or abstract idea, Part II of the Mayo/Alice test then requires a determination of whether any element, or combination of elements, in the claim is sufficient to ensure that the claim as a whole amounts to significantly more than the judicial exception. Part II of the Mayo/Alice test is referred to as step 2B by the USPTO (See MPEP §2106).

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Federal Circuit Weighs In On Product-by-Process Claim Construction

The scope of patent claims is generally based on the product itself and not the process, In re Thorpe, 777 F.2d 695, 697 (Fed. Cir. 1985) —except when it’s not, In re Garnero, 412 F.2d 276, 279 (CCPA 1969) (holding that a process claim connotes specific structure in a claimed composite and therefore should be given patentable weight and considered during examination).

In a recent case decided by the United States Court of Appeals for the Federal Circuit, In re Nordt Development Co., LLC, 2017-1445 (Feb. 8, 2018), the Court was faced with determining whether a patent claim reciting a framework for an elastic knee brace is patentable over the art where the claimed brace is formed though injection molding.  Specifically, amended claim 1 of the 13/241,865 Continue Reading

USITC Issues Two More Decisions On Requests For Early Disposition

Activity continues apace in the ITC’s pilot program for early disposition, with two more decisions issued in the past few weeks.  On January 19, the ITC issued a notice instituting an investigation in Certain Solid State Storage Drives, Stacked Electronics Components, and Products Containing Same, Inv. No. 337-TA-1097 that also designated the investigation for early disposition on the economic prong of the domestic industry requirement.  The presiding Administrative Law Judge (Judge Lord) subsequently scheduled a hearing for March 22, 2018 and has set a May 4, 2018 deadline for her decision (Order No. 3).  Among its requirements, the procedural schedule mandates a number of initial disclosures, including a chart of domestic industry contentions, for which it provides a suggested template.  On February 14, the ITC determined not to use the early disposition pilot program in Certain Microfluidic Systems, Inv. No. 337-TA-1100, stating that “the issues –inventorship, ownership, and standing – may be too complex to be decided within 100 days of institution.”

For more on the ITC’s pilot program, see our prior posts (here, here and here).

Does Aatrix Software Provide Software Patent Owners Shelter From The “Alice Storm”?

On February 14, 2018, a Federal Circuit panel in Aatrix Software, Inc. v. Green Shades Software, Inc., No. 2017-1452, overturned a Middle District of Florida decision that held patent claims to systems and methods for importing data into viewable form on a computer to be patent-ineligible under 35 U.S.C. § 101.  According to the majority opinion authored by Judge Moore, the lower court erroneously granted dismissal of the case “in the face of factual allegations” concerning the non-routine and unconventional character of the claimed elements “that, if accepted as true,” would preclude dismissal.  In dissent, Judge Reyna criticized the majority for “attempt[ing] to shift the character of the § 101 inquiry from a legal question to a predominately factual inquiry.”

Indeed, the Aatrix majority opinion represents a significant departure from what the Federal Circuit has repeatedly recognized as the “possible and proper” practice of resolving patent eligibility challenges on the pleadings, a practice that legions of district court decisions have observed over the three years since the Supreme Court’s seminal decision in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014).  Under Alice and its progeny, claims directed to an abstract idea can still be patent-eligible if they contain unconventional or non-routine (“inventive”) elements that individually or in combination limit the application of the idea.  Numerous Federal Circuit panels have affirmed district court ineligibility decisions that were based on the court’s own reading of the elements a patent owner alleged were inventive in light of the patent’s intrinsic record (i.e., the claims, specification, and prosecution history). Continue Reading