R ECENT D EVELOPMENTS IN P ATENT L AW April 2016 Jason Rantanen Associate Professor University of Iowa College of Law

Based on USPTO statistics as of February 29, 2016 ( decisions/statistics/aia-trial-statistics). Institution rates obtained by dividing institutions by total no. of decisions on institution excluding joinders. Institution rates are higher if ioinders are included as instituted trials. 87% IPR institution rate 65% IPR Institution Rate 74% IPR Institution Rate 67% IPR Institution Rate IPR Petitions Filed and Institution Rates (per quarter)

Source USPTO Patent Trial and Appeal Board Statistics

Based on US Courts Table B-8 (Fiscal Year version), except for FY 2016, which is based on data obtained from cafc.uscourts.gov

In re Cuozzo Speed Techs. 793 F.3d 1268, 1278 (Fed. Cir. 2015) “Even if we were to conclude that Congress did not itself approve the broadest reasonable interpretation standard in enacting the AIA, § 316 provides authority to the PTO to adopt the standard in a regulation.” (Judge Dyk)

Cuozzo Speed Techs. v. Lee 136 S.Ct. 890 (2016) 1.Whether the court of appeals erred in holding that, in IPR proceedings, the Board may construe claims in an issued patent according to their broadest reasonable interpretation rather than their plain and ordinary meaning. 2.Whether the court of appeals erred in holding that, even if the Board exceeds its statutory authority in instituting an IPR proceeding, the Board’s decision whether to institute an IPR proceeding is judicially unreviewable.

Based on US Courts Table B-8 (Fiscal Year version), except for FY 2016, which is based on data obtained from cafc.uscourts.gov

Developments in Patent Law Doctrine 2016

Patent Claims

SimpleAir v. Sony Ericsson Mobile Commc’ns (Fed. Cir. Mar. 31, 2016) “[W]hen the district court reviews only evidence intrinsic to the patent (the patent claims and specifications, along with the patent’s prosecution history), the judge’s determination [as to claim construction] will amount solely to a determination of law, and the Court of Appeals will review that construction de novo.” [Teva]. at 841. “If, on the other hand, a district court resolves factual disputes over evidence extrinsic to the patent, we ‘review for clear error those factual findings that underlie a district court’s claim construction.’” Cardsoft, LLC v. VeriFone, Inc., 807 F.3d 1346, 1350 (Fed. Cir. 2015) (quoting Teva, 135 S. Ct. at 842). “[I]t is not enough that the district court may have heard extrinsic evidence during a claim construction proceeding—rather, the district court must have actually made a factual finding in order to trigger Teva’s deferential review.” Id.

Nautilus, Inc. v. Biosig Instruments, Inc. 134 S.Ct (2014) A patent is invalid for indefiniteness “if its claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.” (Ginsburg, J.)

UltimatePointer v. Nintendo --- F.3d ---- (Fed. Cir. Mar. 1, 2016) “image sensor generating data” means “an image sensor capable of generating data” Result: Claims Not Indefinite.

Dow Chemical v. Nova Chemicals 809 F.3d 1223 (Fed. Cir. 2015) (denial of rehearing en banc) First, despite Nova's claim to the contrary, the panel opinion does not and cannot stand for the proposition that extrinsic evidence cannot be relied upon to determine whether, in light of the state of knowledge of the skilled artisan at the time, a patent's specification is sufficiently definite. Second, despite Dow's contention that it does, the panel's opinion does not alter Supreme Court and our own precedent that fact findings made incident to the ultimate legal conclusion of indefiniteness receive deference on appeal. Finally, the panel's opinion does not alter Supreme Court and our own precedent that the burden of proving indefiniteness, as with any allegation of invalidity, remains on the party challenging validity who must establish it by clear and convincing evidence. (Judge Moore, joined by Judges Newman, O’Malley and Taranto, and Judge Chen in relevant part) Plurality en banc opinion?

Dow Chemical v. Nova Chemicals 809 F.3d 1223 (Fed. Cir. 2015) (denial of rehearing en banc) We agree with Judge Moore that clear and convincing evidence is the standard for patent invalidation; that the burden to establish indefiniteness rests with the accused infringer; that findings of fact by juries are entitled to deference; and that knowledge of someone skilled in the art may be pertinent to the indefiniteness question. In particular, we agree that if a skilled person would choose an established method of measurement, that may be sufficient to defeat a claim of indefiniteness, even if that method is not set forth in haec verba in the patent itself. (Judge Prost, joined by Judges Dyk and Wallach) Plurality en banc opinion?

Williamson v. Citrix Online, LLC (Fed. Cir. 2015) (en banc in part) Issue: Is there a “strong presumption” against application of §112, para. 6 when the claim does not contain the word “means”? En banc court: No. While there is a presumption, it is not a strong one. The presumption can be overcome if a party can “demonstrate [] that the claim term fails to ‘recite sufficiently definite structure or else recites ‘function without reciting specific structure for performing that function.’”

Media Rights Techs. v. Capital One 800 F.3d 1366 (Fed. Cir. 2015), “compliance mechanism” is a means- plus-function term that lacks sufficient disclosed structure. Result: Claims Indefinite.

Multi-party infringement

Akamai Techs. v. Limelight Networks, 797 F.3d 1020 (Fed. Cir. 2015) (en banc) In the past, we have held that an actor is liable for infringement under § 271(a) if it acts through an agent (applying traditional agency principles) or contracts with another to perform one or more steps of a claimed method. See BMC, 498 F.3d at 1380–81. We conclude, on the facts of this case, that liability under § 271(a) can also be found when an alleged infringer conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance…. Alternatively, where two or more actors form a joint enterprise, all can be charged with the acts of the other, rendering each liable for the steps performed by the other as if each is a single actor.

Scope of ITC Jurisdiction

19 U.S.C. § Unfair practices in import trade (1)Subject to paragraph (2), the following are unlawful, and when found by the Commission to exist shall be dealt with, in addition to any other provision of law, as provided in this section: … (B) The importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consignee, of articles that— (i)infringe a valid and enforceable United States patent or a valid and enforceable United States copyright registered under title 17; or ….

Suprema v. ITC 796 F.3d 1338 (Fed. Cir. 2015) (en banc) Section 337 of the Tariff Act of 1930, codified at 19 U.S.C. § 1337 (“Section 337”), declares certain acts unlawful. Among them is importing “articles that... infringe a valid and enforceable United States patent.” 19 U.S.C. § 1337(a)(1)(B)(i). The International Trade Commission (“Commission”) interpreted this provision to cover importation of goods that, after importation, are used by the importer to directly infringe at the inducement of the goods' seller….. We conclude that because Section 337 does not answer the question before us, the Commission's interpretation of Section 337 is entitled to Chevron deference. We hold that the Commission's interpretation is reasonable because it is consistent with Section 337 and Congress' mandate to the Commission to safeguard United States commercial interests at the border.

ClearCorrect Operating v. ITC 810 F.3d 1283 (Fed. Cir. 2015) Here, the Commission concluded that “articles” “should be construed to include electronic transmission of digital data....”…. The Commission's decision to expand the scope of its jurisdiction to include electronic transmissions of digital data runs counter to the “unambiguously expressed intent of Congress.” Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Under step one of Chevron, “[w]e begin with the text of [the statute].” King v. Burwell, ––– U.S. ––––, 135 S.Ct. 2480, 2489, 192 L.Ed.2d 483 (2015). Here, it is clear that “articles” means “material things,” whether when looking to the literal text or when read in context “with a view to [the term's] place in the overall statutory scheme.” Id. Rehearing en banc denied on March 31, 2016

Laches in Patent Law

SCA Hygiene Products Aktiebolag v. First Quality Baby Products 807 F.3d 1311 (Fed. Cir. 2015) (en banc) We conclude that Congress codified a laches defense in 35 U.S.C. § 282(b)(1) that may bar legal remedies. Accordingly, we have no judicial authority to question the law's propriety. Whether Congress considered the quandary in Petrella is irrelevant—in the 1952 Patent Act, Congress settled that laches and a time limitation on the recovery of damages can coexist in patent law. We must respect that statutory law. Nevertheless, we must adjust the laches defense in one respect to harmonize it with Petrella and other Supreme Court precedent. We emphasize that equitable principles apply whenever an accused infringer seeks to use laches to bar ongoing relief. Specifically, as to injunctions, considerations of laches fit naturally within the eBay framework. In contrast, Menendez v. Holt, 128 U.S. 514, 9 S.Ct. 143, 32 L.Ed. 526 (1888), and Petrella counsel that laches will only foreclose an ongoing royalty in extraordinary circumstances.

Post-Sale Restraints

Single use only

Lexmark Int’l. Inc. v. Impression Prods., Inc F.3d ---- (Fed. Cir. 2016) (en banc) First, we adhere to the holding of Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700 (Fed.Cir.1992), that a patentee, when selling a patented article subject to a single-use/no-resale restriction that is lawful and clearly communicated to the purchaser, does not by that sale give the buyer, or downstream buyers, the resale/reuse authority that has been expressly denied…. Second, we adhere to the holding of Jazz Photo Corp. v. International Trade Comm'n, 264 F.3d 1094 (Fed.Cir.2001), that a U.S. patentee, merely by selling or authorizing the sale of a U.S.-patented article abroad, does not authorize the buyer to import the article and sell and use it in the United States, which are infringing acts in the absence of patentee-conferred authority.

If purchaser engages in a use that violates the post-sale encumbrance, patent owner asserts infringement. Issue is whether patent owner has engaged in patent misuse under federal (circuit) law Patent owner sells product with post- sale encumbrance Mallinckrodt/Lexmark Approach: If purchaser engages in a use that violates the post-sale encumbrance, patent owner asserts breach of license. Issue is whether license is enforceable under state law. Breach of license approach:

Enhanced Damages

Halo Electronics, Inc. v. Pulse Electronics, Inc. Whether the Federal Circuit erred by applying a rigid, two-part test for enhancing patent infringement damages under 35 U.S.C. § 284, that is the same as the rigid, two-part test this Court rejected last term in Octane Fitness, LLC v. ICON Health & Fitness, Inc. for imposing attorney fees under the similarly-worded 35 U.S.C. § 285. Stryker Corp. v. Zimmer, Inc. Whether the Federal Circuit improperly abrogated the plain meaning of 35 U.S.C. § 284 by forbidding any award of enhanced damages unless there is a finding of willfulness under a rigid, two- part test, when this Court recently rejected an analogous framework imposed on 35 U.S.C. § 285, the statute providing for attorneys' fee awards in exceptional cases.

Design Patents

35 USC § Additional Design Patent Remedy Whoever during the term of a patent for a design, without license of the owner … sells or exposes for sale... such design or colorable imitation … shall be liable to the owner to the extent of his total profit. Apple Inc. v. Samsung Electronics (Fed. Cir. 2015): § 289 requires award of infringer’s total profit

1. Where a design patent includes unprotected non- ornamental features, should a district court be required to limit that patent to its protected ornamental scope? 2. Where a design patent is applied to only a component of a product, should an award of infringer’s profits be limited to those profits attributable to the component? Samsung Electronics v. Apple --- S.Ct (March 21, 2016)

Patentable Subject Matter

Holding claims to be not directed to patentable subject matter Holding claims to be directed to patentable subject matter Genetic Techs. Ltd. v. Merial L.L.C., No , 2016 WL (Fed. Cir. Apr. 8, 2016) In re Smith, No , 2016 WL (Fed. Cir. Mar. 10, 2016) Mortgage Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314 (Fed. Cir. 2016) Vehicle Intelligence & Safety LLC v. Mercedes-Benz USA, LLC, No , 2015 WL (Fed. Cir. Dec. 28, 2015) Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306 (Fed. Cir. 2015) Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363 (Fed. Cir. 2015) Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343 (Fed. Cir. 2015) Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371 (Fed. Cir. 2015) OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359 (Fed. Cir.) Allvoice Developments US, LLC v. Microsoft Corp., 612 F. App'x 1009 (Fed. Cir.)

Abstract Ideas Laws of Nature Physical Phenomena Patentable Subject Matter

Laws of Nature Abstract Ideas Physical Phenomena Other limits?

R ECENT D EVELOPMENTS IN P ATENT L AW April 2016 Jason Rantanen Associate Professor University of Iowa College of Law