• Equitable Estoppel Requires Claim Scope Sufficiently Similar to Earlier Claims

    Equitable estoppel does not bar assertion of patent claims later amended by reexamination when those new claims differ in scope from earlier claims in the patent that were not asserted. Thus, a defendant’s reliance on a patentee’s knowing silence and failure to enforce an earlier patent does not shield him from allegations of infringing later-issued claims of different scope.

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  • Incorporation By Reference Does Not Establish Priority

    In an IPR brought by E*Trade in response to an infringement suit by Droplets, the Board found that the Droplets ‘115 patent was invalid due to obviousness. The patent properly claimed priority to the ‘838 patent but also attempted to claim priority to an earlier ‘917 provisional patent and an intervening ‘745 patent through incorporation by reference. The Board concluded that these priority claims were not proper, and the Federal Circuit agreed.

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  • Unreasonably-low royalties in top-down FRAND-rate determinations for TCL v. Ericsson

    While Ericsson is a leading contributor to mobile communications standards, a US District Court in California has significantly undervalued Ericsson’s standard-essential patents (SEPs) by relying heavily on flawed “top-down” valuation analysis that prorates royalties by company for 2G, 3G and 4G based on SEP counting. This analysis applies a series of inaccurate assumptions which whittle down royalty rates from an understated notional maximum in a succession of unreliable steps. The resulting rates derived are a lot lower than those found in a European court’s FRAND determination for the same company in the same year (2017) and for the same 2G, 3G, and 4G patent portfolios. The differences between these US and European determinations are irreconcilable.

    The perils of top-down methodology

    Two nations divided

    In late 2017, Honourable James V. Selna, Judge of the District Court of the Central District of California, handed down a court-ordered fair, reasonable and non-discriminatory (FRAND) license in TCL v. Ericsson.[1] His Court’s Decision used a top-down analysis, together with a comparable license analysis as a cross-check, to determine various FRAND rates. This approach might, at first glance, be perceived as similar to the FRAND determination in the UK’s Unwired Planet decision.[2]However, in that case Honourable Justice Birss centered on Ericsson’s comparable licenses and used top-down analysis only as a cross-check. This difference, among others, led to significantly different results.

    In TCL v. Ericsson, the Court’s tasks were to determine:

    • Whether Ericsson met its FRAND obligation,
    • Whether Ericsson’s final offers before litigation, Offer A and Offer B, satisfy FRAND, 
    • What terms are material to a FRAND license, and then supply the FRAND terms.
    The Court was presented with two principal schemes for determining the proper royalty rates. TCL advocated a “top-down” approach which begins with an aggregate royalty for all patents encompassed in a standard, then determines a firm’s portion of that aggregate. Ericsson used its existing licenses with similarly situated licensees (i.e. comparable licenses) to determine the appropriate rates. Ericsson also offered an “ex ante,” or ex-Standard, approach which seeks to measure in absolute terms the value which Ericsson’s patents add to a product by asking consumers how much they value certain product capabilities such as improved battery life.

    Cap and prorate

    My critique focuses on the use of top-down analysis adopted by the court in the TCL v. Ericsson case, with reference to some metrics used in the UK Unwired Planet decision. One reason for doing so is that both courts were presented almost identical evidence, but each judge chose a different approach, leading to the US District Court granting rates for the Ericsson portfolio that are less than half the rates determined by the UK High Court. I have been critical of top-down methodologies as the key element to determine FRAND royalties in various articles for more than a decade.[3] This critique is the latest in this series. It also follows my work as a testifying expert witness on behalf of Ericsson in the US case.
    Top-down apportionments are almost invariably based on the notions of a fixed royalty rate aggregate or cap and royalty-rate proportionality based on patent counts rather than patent value. Unlike in patent cases, where courts definitively determine validity, infringement and essentiality patent-by-patent; no such determinations were made by the Court on Ericsson’s patents, or on the larger universe of all patents declared by their owners to be possibly essential to the cellular standards.

    Therefore, any ostensible exactitude in the top-down figures derived is spurious. The Court notes that “The search for precision and absolute certainty is a doomed undertaking.” (Decision, page14). I agree: no methodology can provide that in FRAND-rate setting. For example, it is impractical in terms of time or money to conduct —on hundreds or thousands of patents in SEP portfolios—the kind of patent-by-patent analysis typically carried out on no more than a handful of patents in patent infringement and validity litigation.

    Significant failings in the Court’s top-down FRAND-rate determinations include starting with aggregate royalty rate figures that were too low and then whittling these down with a succession of largely erroneous adjustments:
    • It mistakenly regarded announcements and other disclosures of companies’ individual royalty rates and of expected aggregate royalties as multi-mode rates including two or more standards rather than as single-mode rates.
    • These aggregate rates were then prorated with much greater scrutiny and adjustments to the count of Ericsson’s SEPs in the numerator and than for the “relevant universe” of all SEPs in the denominator of the apportionment calculations:
      • Only a subset of Ericsson’s patents with claim charts were included in the numerator, whereas patents were counted in the denominator without any requirement for creation or submission of claim carts,
      • Whereas all Ericsson’s SEPs counted —whether or not patent essentiality was contested by TCL’s experts—were evaluated by the parties for at least 50 hours per patent family, the average time spent evaluating entire patent families counted in the relevant universe was a cursory 45 minutes,
      • Modest adjustments for SEP over-declaration in the relevant universe were based on highly unreliable “error rate” calculations,
      • Substantial and unwarranted geographic adjustments were made to Ericsson’s SEPs and royalty rates,
      • Inapplicable adjustments were made for expiration of Ericsson’s patents while disregarding significant value in new SEPs (e.g. for LTE Advanced).

    Comps and other valuation methods

    Comparable licenses, with the prices in these firmly established by several years of commerce and billions of dollars in licensing payments already made, can provide the most accurate and reliable basis to establish FRAND licensing rates. The inaccuracies there are in interpreting and adjusting figures and terms so that comparisons can be made among licenses on an apples-to-apples basis. Comparable licenses are widely accepted pricing benchmarks in patent cases around the globe, including those involving SEPs. There is also much to comment upon with respect to the (lack of) rigor and accuracy in the Court’s analysis and findings based on Ericsson’s existing licenses: for example, how cross-licenses were “unpacked” to derive “one-way” licensing rates. Nevertheless, I am leaving this and the Court’s rejection of Ericsson’s ex-standard valuation method for others to analyze in detail right now, or for me to do so elsewhere in due course.

    Following my review of the courts’ decisions in both abovementioned cases, I continue to conclude that top-down valuation methodologies are subject to various shortcomings including inaccuracy (i.e. true error rates in determinations are unknown), unreliability (i.e. results are not reproducible consistently) and susceptibility to significant bias (because determinations are so subjective and devoid of an audit trail on how determinations are made). Centering on a top-down methodology that is largely based on only cursory standard-essentiality determinations by TCL’s experts in this case, as the primary means of apportioning FRAND rates is untrustworthy.

    The above is a summary of my critique of the Court’s top-down analysis which is available in full, here, and also in the SSRN eLibrary.

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  • Targeted advertising claims survive Alice step two

    Takeaway: Improvement arguments succeeded in overturning § 101 subject-matter eligibility rejections of claims relating to Internet-based directed-advertising under circumstances involving broadcast TV and simultaneous chat room participation.  The arguments had failed to persuade at step one of the Alice framework but worked at step two.


    Ex parte Relyea
    Appeal No. 2017-001443; Application No. 12/410,588; Tech. Center 3600
    Decided: Apr. 18, 2018

    Inventors for Verizon filed a patent application including the following representative claim for targeted advertising:

    1.      A method comprising:
            providing, by one or more devices, broadcast programming to a plurality of user devices, associated with a plurality of users, via a television network;
            hosting, by the one or more devices, at least one chat group associated with the broadcast programming provided via the television network,
                 hosting the at least one chat group including hosting a virtual chat room for the chat group that provides interaction via at least one of text-based discussion or a video client,
                 the at least one chat group being displayed with the broadcast programming;
            determining, by the one or more devices and based on hosting the at least one chat group, information identifying a group of users, of the plurality of users, currently in a same chat group, of the at least one chat group, associated with the broadcast programming provided via the television network;
            defining, by the one or more devices, a micro-group to include user accounts associated with the group of users in the same chat group, the user accounts being added to the microgroup based on the group of users joining and currently being in the same chat group associated with the broadcast programmmg;
            creating, by the one or more devices, a profile associated with the micro-group based on user information associated with the user accounts;
            monitoring, by the one or more devices and based on hosting the at least one chat group, real time behavior of the group of users in the same chat group to detect one or more actions taken by one or more users of the group of users, the one or more actions being associated with content of the chat group;
            modifying, by the one or more devices, the profile associated with the micro-group based on the one or more actions;
            retrieving, by the one or more devices, advertising content targeted to the group of users in the same chat group based on the profile that is created based on the user information associated with the user accounts of the group of users in the same chat group and that is modified based on the one or more actions taken by the one or more users of the group of users in the same chat group; and
            providing, by the one or more devices, the advertising content to user devices, of the plurality of user devices, associated with users currently in the chat group, the advertising content being displayed in a same view as the chat group and being integrated into a television program included in the broadcast programming provided to the group of users in the same chat group. 

    As explained in the specification, 

    Target advertising typically seeks to generate improved customer response rates by directing particular advertisements to consumers based on observed behavior.  Television service providers that can simultaneously direct a variety of advertisements to smaller similarly-interested groups may be poised to generate more revenue than those using a single advertisement to all viewers watching the same program. . . . Implementations . . . may allow a subscription television service provider to define micro-groups of users and identify micro-group tendencies to provide targeted advertising to members of the micro-group . . . of subscribers to the subscription television service that are associated by an expressed interest.  The micro-group may be created based on a variety of techniques, including social networking (e.g., chat group participation, accepting an invitation as a group member, etc.), past viewing histories, and/or real-time viewing behavior.  In some implementations, the micro-group tendencies may change dynamically as different users join or leave the micro-group.  Implementations described herein may be incorporated using a television display and video client (e.g., a set-top box), a personal computer, a mobile telecommunications device, and/or combinations thereof.

    The examiner identified the abstract idea to which the claims were allegedly directed as “targeting of advertisements to a micro-group of users based on profile data and chat group content.”  The examiner found that such a concept was similar to the decision SmartGene, Inc. v. Advanced Biological Labs., SA, 555 F. App’x 950 (Fed. Cir. 2014), in which new and stored information was compared and analyzed using rules to identify options.  While acknowledging the more recent Enfish decision, the examiner nevertheless found that the claims merely used conventional computers to implement abstract ideas, unlike the self-referential table of Enfish which improved the computing technology itself.

    Appealing the examiner’s Alice rejections, the appellants argued that the claims were not abstract because they provided an improvement in a computer-related technology and addressed a problem “necessarily rooted in computer technology at least because the claims do not recite a process that can be performed in the human mind, or by a human using a pen and paper.”

    The Board did not credit appellants’ arguments relating to step one of the Alice framework. The Board found that the claims did not attempt to solve a challenge particular to the Internet, and thus DDR Holdings was of no particular help.  The Board also found the advertising claims not to be analogous to the rule-based automated computer animation claims found eligible in McRO.

    However, the Board appeared to be persuaded by the appellants’ arguments relating to step two of the framework, the “search for an inventive concept” step, i.e., that the claims “improve[d] the technical field of broadcasting television programs by dynamically integrating targeted advertising content into the television programs that are broadcast to users of the chat group,” and thus provided “a detailed level of targeted advertising [that] was not technologically achievable for television broadcasting in the past”; further that the claims included limitations “not widely prevalent in the field” that “leverage[d] [the] real-time behavior of users in the chat groups to integrate targeted advertising content into broadcast programming”; and still further that the claims were confined to the particular useful application of integrating targeted advertising content “into a television program included in the broadcast programming provided to the group of users in the same chat group.”  The Board appeared to credit the appellants’ assertion that “[t]he ability to integrate the claimed level of detailed targeted advertising was not achievable for television broadcasting in the past” and noted, as the examiner had, that the particular combination of circumstances recited in the claims appeared to be somewhat unique.  Thus, the Board reversed the Alice rejections.

    My take:

    Claims for innovations in targeted advertising on the Internet have been prime targets for Alice rejection or invalidation.  See, e.g., Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253, 1271 (Fed. Cir. 2016); Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1369-70 (Fed. Cir. 2015) Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014); Ex parte Greene, No. 2016-007319 (P.T.A.B Apr. 18, 2018) (claims directed to “identifying indeterminacy for activity-based advertising” deemed an unpatentably abstract “method of organizing human activity”); Ex parte Ferber, No. 2016-008650 (P.T.A.B. Jan. 9, 2018) (claims directed to targeted advertising deemed an unpatentably abstract fundamental economic practice); Ex parte Malden, No. 2016-004867 (P.T.A.B. Jul. 24, 2017) (claims directed to targeted advertising and brokerage of ads held an unpatentably abstract comparison of new and stored information and using rules to identity options); Ex parte Kendall, No. 2015-008182 (P.T.A.B. Apr. 19, 2017) (claims directed to communicating actions within a social network for the purpose of advertising a product and/or selling advertising held an unpatentably abstract fundamental economic practice and method of organizing human activities), reh’g denied, Kendall (P.T.A.B. Aug. 23, 2017); Ex parte Kendall, No. 2015-008149 (P.T.A.B. Apr. 19, 2017) (same).  An overarching reason for this may be because the benefits provided by such claims are characterized not as technical or technological improvements, but instead as business benefits in better targeting a customer’s needs or dynamically adjusting to a customer’s activity.  So it is remarkable that the Internet advertising claims in Relyea passed muster at the Board.  Why were they able to get past Alice?

    The Board compared the claims to the dynamic-display electronic securities trading claims in Trading Technologies International, Inc. v. CQG, Inc., 675 F. App’x 1001 (Fed. Cir. 2017), pointing out that the claims in this case “provide a detailed level of targeted advertising that changes dynamically based on the real-time behavior of users in a chat group.”

    It may be that such dynamic functioning inventively amounts to “significantly more” than the identified abstract idea itself, but on the other hand, it is not clear why such is “more” than “using rules to identify options,” the previously held abstract concept.  The extension of the Trading Technologies holding to apply to dynamic advertising claims may just be yet another example of the subject-matter eligibility pendulum swinging back.

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  • Gregory Vincent can keep UPenn degree

    The Daily Pennsylvanian wrote:

    According to Finger Lakes Times, Penn Graduate School of Education spokesperson Kat Stein commented on the matter in a statement.

    “Based on recommendations by the faculty, Gregory Vincent will be given the opportunity to make revisions to the literature review portion of his dissertation, under Penn Graduate School of Education faculty supervision, which, when completed to our satisfaction, means his degree will stand,” Stein said.

    link: http://www.thedp.com/article/2018/04/penn-former-graduate-and-president-of-hobart-and-william-smith-colleges-can-keep-doctorate-according-to-penn-plagiarism-resignation-penn

    This is basically the same deal that Poshard got at SIU ten years ago:

    Poshard’s revisions to plagiarized thesis completed

    In passing, of Oil States, a 7-2 vote at the Supreme Court :
    PTAB-Lovers Rejoice; IPR Lives!

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  • CBS "60 Minutes" tilts toward MIT/Broad in CRISPR "discovery" saga in piece broadcast on 29 April 2018

    IPBiz has covered the CRISPR “priority of discovery” issue for some time [ e.g., CRISPR is high profile in science, patents; competitor labeled a mere second comer ]

    From the outset of the 29 April 2018 piece on CBS “60 Minutes”, one got the impression that Bill Whitaker of “60 Minutes” tilted toward MIT/Broad in the CRISPR discovery dispute:

    At 36, he’s [Feng Zhang ] already a tenured professor at MIT and a scientific celebrity because he figured out a way to override human genetic instructions using CRISPR.


    For the last seven years, Zhang has been working on CRISPR at the Broad Institute in Cambridge, Massachusetts. It’s a research mecca brimming with some of the brightest scientific minds from Harvard and MIT on a mission to fight disease. CRISPR is making medical research faster, cheaper, easier. Zhang’s colleagues predict it will help them tackle diseases like cancer and Alzheimer’s.

    Work of Shoukhrat Mitalipov at the Center for Embryonic Cell and Gene Therapy at the Oregon Health and Science University was mentioned.

    UC/Berkeley does get a mention:

    If CRISPR is used to treat disease or make a drug it could mean big bucks. The Broad and Feng Zhang hold a primary patent for CRISPR’s use in human cells in the U.S. but no technology is developed in a vacuum. Biochemist Jennifer Dounda [sic: Doudna] at the University of California, Berkeley and her team made landmark CRISPR discoveries.

    This week, they are challenging Zhang and the Broad in court for the rights arguing in part that Zhang’s advance was derived from her team’s breakthrough. It’s a high stakes battle. CRISPR is projected to be a multi-billion dollar market in a decade.

    Yes. The CBS transcript does misspell Doudna’s last name! [see Jennifer A. Doudna ]

    link to CBS transcript: CRISPR: The gene-editing tool revolutionizing biomedical research

    As to CBS saying — This week, they are challenging Zhang and the Broad in court –, what is going on on Monday, April 30 is oral argument at the CAFC of UC/Berkeley’s appeal of an adverse Board decision of no “interference in fact.”
    See STAT All you need to know for round 2 of the CRISPR patent fight .

    The STAT story is of interest for suggesting that the outcome will be determined by “which” judges comprise the panel of three at the CAFC:

    If one is Judge Raymond Chen, the Broad likely has one sure vote: He worked at the patent office for 15 years and is regarded as deferential to it — that is, unlikely to overturn its pro-Broad decision. Advantage: Editas (EDIT), co-founded by Zhang and exclusive licensee of the Broad’s patents for human therapeutic use. If it’s judges Alan Lourie, who spent decades as a corporate patent lawyer, or Timothy Dyk, also an ex-corporate guy and patent expert, that might be good for UC and therefore Intellia (NTLA), co-founded by Doudna and exclusive licensee of her (yet-to-be-issued) CRISPR patents.

    Going back to the Board decision, which relied heavily on statements by Doudna and co-workers on the difficulty of going from prokaryotic systems to eukaryotic systems, one suspects that the CAFC decision will convey an important message to inventors and patent prosecutors about statements of “next steps.”

    As to STAT on the role of Mr. Verrilli in the Myriad Genetics case [got SCOTUS to invalidate patents on human genes ] :

    Argued. For petitioners: Christopher A. Hansen, New York, N. Y. For United States, as amicus curiae: Donald B. Verrilli, Jr., Solicitor General, Department of Justice, Washington, D. C. For respondents: Gregory A Castanias, Washington, D. C.

    Chemical and Engineering News wrote:

    Representing the Justice Department, Donald B. Verrilli Jr. told the justices that Myriad isn’t entitled to a patent on isolated DNA “because it is simply native DNA extracted from the body.” But Verrilli added that Myriad’s lab-created synthetic molecules might be patent-eligible, noting that they “don’t correspond to anything in the body.”

    Justices including Sonia Sotomayor, Stephen Breyer, and Anthony Kennedy seemed receptive to the middle-ground position suggested by Verrilli. Complementary DNA “is not a product of nature,” Sotomayor said. “It’s a product of human innovation.”

    A key part of the Supreme Court decision: “A naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated, but cDNA is patent eligible because it is not naturally occurring

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  • Conference & CLE Calendar

    May 1, 2018 – “Patent Inventorship: Best Practices for Determination and Correction — Distinguishing Between Inventor and Contributor; Navigating Joint Inventorship, Disclosure of Ownership, Real Party in Interest” (Strafford) – 1:00 to 2:30 pm (EDT) …

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  • FCBA Webast on Helsinn v. Teva

    The Federal Circuit Bar Association (FCBA) will be offering a webcast entitled “Will the Supreme Court Step in Again in Helsinn v. Teva? Does a Sale of Confidential Materials Trigger the On-Sale Bar?” on May 10, 2018 from 3:00 pm to 4:00 pm (EST). Mark…

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  • Presentation on European Patent Strategies

    The Intellectual Property Law Association of Chicago (IPLAC) Corporate Committee and Weickmann & Weickmann will be offering a panel discussion on European Patent Strategies by Alfred Keyack, EPO Attaché to the United States, and Dr. Frank Feller, European Patent Attorney on May 10, 2018 from 5:00 pm to 6:05 pm (CT) at SRAM, LLC in Chicago, IL. George Jonas, Downstream Managing Counsel, Global Patents and Technology, BP America, Inc. will moderate the discussion. There is no registration fee for event, but attendees must register in advance. Those interested in registering for event can do so here.

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  • Twisting the Nose of Wax

    Twisting the Nose of Wax

    by Dennis Crouch

    01 Communique Lab. v. Citrix Systems (Fed. Cir. 2018)

    01Com’s U.S. Patent No. 6,928,479 is directed toward a software implemented private communication portal.  The patentee sued Citrix for infringement back in 2006.  Consider that — the lawsuit was filed before eBay limited injunctive relief, before KSR made it easier to invalidate a patent as obvious, before Nautilus raised the standard for indefiniteness, before Alice and Mayo opened the door to eligibility invalidation, and before Congress created the regime of AIA trials.  The long delay in this case should also be a thing-of-the-past.  Here, the district court stayed proceedings for seven years awaiting the outcome of an inter partes reexamination.  The reexam was finally concluded in 2014 with a judgment confirming patentability of the challenged claims.  Although unsuccessful before the PTAB, a 2016 jury sided with Citrix finding on infringement — finding none.  (Note here that Citrix also unsuccessfully argued invalidity to the court and the jury).

    On appeal, the Federal Circuit has affirmed — holding that a new trial is not warranted.

    Continue reading Twisting the Nose of Wax at Patently-O.

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  • 機構



    $$ FIG. 4 shows the clutch mechanism 200 in its assembled form. / 図4は、クラッチ機構200を組立て状態で示して…

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