• Wall Street Journal post questions legal reasoning of PTAB in not instituting Tecfidera IPR

    In a story by Joseph Walker posted Sept. 3, 2015 6:56 p.m. ET, there are questions about the legal analysis of PTAB
    in the decision not to institute an IPR over claims of Biogen’s ‘514 Tecfidera patent:


    Jacob S. Sherkow, an associate professor at New York Law School, said he was puzzled by the patent office’s reasoning behind its decision on Tecfidera on Wednesday, which he said contradicted legal precedent.

    (…)

    The patent board, in explaining why it had denied the challenge, said the pilot-study description didn’t prove the drug worked against multiple sclerosis, but was at best a “hope” it would work.

    Mr. Sherkow said determining the effectiveness of an invention is outside the patent judges’ authority in evaluating IPR petitions and that for decades pilot studies have been considered permissible evidence in patent challenges. “I am shocked by the reasoning of the decision,” he said.

    See Hayman Capital’s Kyle Bass Vows to Continue Drug-Patent Challenges

    There are two parts to PTAB’s reasoning that are found in the text: –[PTAB] said the pilot-study description didn’t prove the drug worked against multiple sclerosis, but was at best a “hope” it would work. –

    The written description in the pilot-plant study DID PROVE that members of the genus esters of fumaric acid did work
    to modify the progression of MS, as shown by MRI results involving gadolinium compounds. Thus, the pilot-study was far more than a “hope.”

    The written description did NOT explicitly mention methyl esters, but merely the genus of the class to which methyl esters belonged.

    The big question is whether that deficiency merits denial of the petition for IPR. Does knowledge that a member of a class works to modify MS (as proved by MRI/gadolinium) motivate one of ordinary skill to try class members?

    See the IPBiz post
    PTAB declines to institute IPR against Biogen’s US 8,399,514 related to the MS drug Tecfidera
    published before the Wall Street Journal article.

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  • Intellectual Ventures: out of sight, out of mind, and maybe that is a good thing for the company

    This blogger has begun to wonder whether the onset of late middle age carries with it a bit of clairvoyance. On several occasions over the past several months, he has recalled a person or entity, with whom he has had no contact or information for an extended period of time, only to be reconnected very soon thereafter. And so it was, once again yesterday evening. The object of his thoughts was Intellectual Ventures (IV). It seemed to him that the goings-on of IV were barely in the headlines (or even buried in an inside hard-copy page or on-line sub-link). “What is happening with the company?”, he thought, as he dozed off for the evening.

    Lo and behold, he woke up to a brief item that appeared on Reuters.com, under the caption, “Capital One wins again against Intellectual Ventures patents”. And so it was reported:

    “The increasingly aggressive litigation strategy of Intellectual Ventures, one of the world’s biggest patent owners, took another hit on Wednesday as a U.S. court canceled two of its patents in a dispute with Capital One Financial Corp.

    U.S. District Judge Paul Grimm in Greenbelt, Maryland, agreed with Capital One’s attorneys from Latham & Watkins that the two patents related to business data processing were merely abstract ideas and could not be patented. He overturned the findings of a special master, who had previously recommended that the patents be found valid.”

    Let’s try to put this into context. IV is well known for its strategy of purchasing tens of thousands of patents, partnering with various entities to obtain access to further patents, and maintaining an R&D staff whose goal is to generate further patents. In doing so, IV became the owners of the one of the largest portfolios of patents in the world. The primary aim in accumulating these points was to enter into licensing arrangements. At the outset, the company maintained a public position that litigation was not a preferred means of exploiting its patents. IV was either reviled or admired, depending upon whom you asked, in seeking to monetize knowledge in this manner. What was unconvertible was that IP was the subject of extensive media coverage.

    And then—certain developments took hold. Outside observers began to question whether IV’s licensing model made business sense; perhaps as a hedge, the company has increasingly “ventured” into exploring how its patent knowledge can be used as basis for product development and creating new companies; the company announced substantial lay-offs about a year ago while in parallel establishing a network of approximately 25,000 independent inventors who submit proposals based on their idea with the goal that IV will monetize these ideas and pay the inventor a royalty, and the company has become more active in litigating its patents (as seen from yesterday’s report, not always successfully). Thus IV has seemingly become an object of less immediate media interest while it takes steps to become a slightly more conventional IP-based company.

    The compelling question is whether all of this portends a brighter future or rather a grab-bag of measures adopted when the company’s original business model failed to pan out as intended. Ask Edward Jung, IV’s chief technology officer and co-founder stated, “We have built an engine that can solve big problems.” As such, the company is simply proceeding with its long-term plans. Under this view, whether or not the next phases of the company’s activities are as compelling, media-wise, would seem to be irrelevant. In the absence of any dramatic IV-based headlines in the near future, this blogger will likely call on his imagined powers of clairvoyance to revisit the issue.

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  • Reducing risks in VC investments Part II: investing in software

    Here’s the second part of a two-part feature on venture capital, risk and investment, by Martin Callinan (Source Code Control) and Kate Andreeva (Protecode). Their first post dealt with general issues regarding due diligence. The sequel, below, focuses on the special issues facing anyone thinking of investing in innovative software.

    Technology risk

    Not just the software: the business
    strategy must be robust too
     

    Following the strategy review comes a technology review. In the case of a software-driven enterprise, the focus is typically on the ability of both the software and the development team to deliver on the product roadmap in line with the investor’s timelines. There will be a detailed review of the software architecture, code quality, software engineering quality, scalability, and robustness. 

    If the company is a software start-up, an expected pre-requisite is that software development leverages open source software. There may well be valid reasons why a start-up would use open source software but, in the due diligence of a deal flow, the start-up will need a clear and strong justification as to why open source software has not been used. 

    The reality is that many young companies do not understand the value of intellectual property and risks that can be engineered into software applications.  The types of risks that investors will look for are: 

    • Software architecture, scalability, and extensibility
    • Exposure to third-party platforms
    • IP value: an objective view of the software’s unique value in the market
    • IP and patent evaluation – are there any patent infringements?
    • Third party dependencies
    • Open source software risk exposure

    To identify these technology risks, typically a third party specialist will be contracted to perform a source code review. This review can be initiated by the technology organisation before seeking investment, by the VC or private equity organisation as part of the due diligence process, or both. If the organisation goes into a funding exercise without visibility of the quality of their code and associated risks, there is a good chance that investors will view the investment as risky, regardless of the functionality of the technology in question 

    Why due diligence should include an independent source code review

    Apart from identifying current issues in the source code, such as licensing irregularities, problematic intellectual property, or potential security vulnerabilities in software components, which typically can be remedied, reviewing the source code can identify inefficiencies and flaws in the development process.  It can also identify the need to have a proper code inspection process during the development cycle, thus eliminating problems before they arise. 

    It may be appropriate to create an open source software adoption process with proper tooling, which can help lower compliance costs, not to mention minimising disruptions during key transactions. Similar to bugs in software, it is far more efficient and cost-effective to catch issues early. 

    Before discussing source code reviews it is important we are clear what we mean by “source code.” 

    What is source code? 

    Source code is a set of programming language statements and commands a software developer creates that becomes part, or all, of the applications that use website or device runs. There are a plethora of languages used by developers such as C, C++, C#, Java, or scripting languages such as JavaScript, PERL, Python, or PHP. The source code is compiled into an executable which the target device will execute.

    What is a code review or audit? 

    A code review or audit should be performed by an independent third party specialist. VC and private equity firms are unlikely to have these skills in-house. A software company seeking investment is however likely to have somebody in-house with the skills needed to perform the review – but that person may not be able to produce a reliable and objective report. 

    Why is a code review imperative? 

    Developers today rarely code a complete application from scratch. Applications are made up of components of code from a variety of sources which are stitched together to create the finished application. This makes for dynamic and agile development, but with it comes a number of inherent risks. Each component will have a number of attributes, such as how it is licensed and its version. 

    Outside of the function of the application(s), investors need to have details of the make-up and provenance of the code components in the following areas: 

    • Intellectual property and licensing
    • Security of the software
    • How the software be maintained and supported
    • The capabilities and maturity of the components being used
    • Ability to integrate with other applications
    • Quality of the components that make up the application
    • Innovation – if the application be evolved over time
    • Viability of the open source community around the components being used

    Fundamentally, the review boils down to assessing the overall quality and consistency of the code. The source code is an indicator of the quality of the organisation seeking investment. Software development is a creative exercise and developers should be allowed to express their personal style and approach, but in line with the organisation’s standards which all developers should follow. 

    The code audit process 

    First, a non-disclosure agreement (NDA) must be in place between the reviewer and the organisation. Once the NDA is in place, the reviewer will question key stakeholders in the organisations to ensure there is a clear understanding of the reasoning behind the audit and the organisation’s environment, such as the size of the portfolio, languages, and tools in use particularly any automatic code generators. A Statement of Work is then produced and agreed upon. This includes:

    • A breakdown of the software portfolio into audit segments 
    • Full automated source code scanning, analysis, and reporting 
    • Resolve copyrights, standard headers, and author tags discovered in the portfolio 
    • Analyse, verify modules, and issue regular audit progress reports 
    • Quality review and sign off of licensing and copyright attributes of every software file in the software portfolio 
    • Delivery of audit report(s), review of the reports.
    The report will be reviewed and signed off by the organisation’s management. Once signed of the final reports will be completed and delivered to the organisation. The reports will include:


    • Audit Report: a high level executive report, containing information and graphic representation of licences, copyrights, OSS projects, security vulnerabilities, and encryption content within the software portfolio.

    • Overview Report and Detailed file-by-file Reports: verified machine-generated reports on the software portfolio. The overview report should be delivered in pdf format. A detailed file-by-file report should be delivered in in CSV (readable by Microsoft Excel application) format.

    • Concatenated Licence List report: containing a consolidated text of all available licences within the software portfolio in pdf format.

    • Security Vulnerability Report: a cross reference of all security vulnerability information as reported by the National Vulnerability Database in pdf format.

    • Encryption Report: a list of open source software projects detected in the portfolio that could be subject to export control, in pdf format.

    About the authors
    Martin Callinan has over 20 years’ experience in the software industry with a focus of Software Asset Management, IT Governance, and risk avoidance. He is currently the director at Source Code Control. Martin contributed to Working Group 21, the group responsible for authoring Standards relating to Software Asset Management, such as ISO/IEC 19770-1. In the past, he worked for Microsoft Limited, FrontRange Solutions, Centennial Software, Snow Software, and Express Metrix Limited.

    Kate Andreeva is the Director of Solutions at Protecode and has over 15 years’ experience in the technology industry as an engineer and sales professional. With a background in electrical engineering and software development, Kate has honed her skills at companies including Performance Technologies, Level Platforms, Klocwork, and Coverity.

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  • Forbes talks about patent privateers

    From Forbes post titled Attack of the Patent Privateers


    One example of this growth is the emergence of so-called patent privateering, which contributes to an ever-greater amount of frivolous or abusive patent litigation. Privateering is a pleasant euphemism for empowering a pirate to attack your competitors for profit. Patent privateering occurs when a company lends or sells a portion of its patents to another litigious company to sue alleged patent infringers who are all too often the competitors of the original patent recipient company that was under the impression it had licensed the entire portfolio. As increasing numbers of startup companies fail for one reason or another, the trend of patent privateering will likely accelerate as will the harm caused to successful businesses of all ages, levels of success and sizes.

    (…)

    There is nothing usual about the growth of patent privateering. Failing or failed startups are seeking to recoup investors’ money, increase profits or advance their competitive position by selling their patents to litigators expressly to instigate lawsuits against the startups’ competitors. Selling the assets – including the patents – of a business is natural part of the business cycle, but only when the patents sold are used by the purchaser for building or enhancing products or services or to defend against other patent trolls’ frivolous claims.

    One recalls that Orville Wright, after Wilbur’s death, sold out his interests, and much of the pre-World War I patent fights, leading to the patent pool, were carried out by investors.

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  • Blue Origin seeks/obtains cancellation of claims 1-13 in IPR2014-01376 related to Blue Origin’s US 8,678,321

    From Paper 12 in IPR2014-01376 :

    A patent owner may
    request judgment against itself “at any time
    during a proceeding” upon cancellation of th
    e particular claims at issue such
    that there is “no remaining claim in the trial.”
    37 C.F.R. § 42.73(b)(2).

    Here, Blue Origin has requested cancellation of all the claims on which trial
    was instituted, hence, no claims will remain
    for trial. Paper 11. In view of
    the cancellation of claims 1–13 of the
    ’321 patent, the entry of final
    judgment adverse to Blue Origin is appropriate.

    The IPR was filed by Space Exploration Technologies Co
    rp. (“SpaceX”).

    **Separately, note that ex parte re-examinations are
    still being successfully done:

    http://www.marketwatch.com/story/taser-wins-legal-challenge-to-invalidate-digital-ally-patent-claims-2015-09-02

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  • Final Written Decision Finding 2 of 3 Challenged Claims Unpatentable IPR2014-00235 Apple Inc. v. THX Ltd.

    Takeaway: Petitioner must provide evidence showing that all of the features of a claim are known and not rely on general statements, even if the feature is allegedly well known to one of ordinary skill in the art. In its … Continue reading

    The post Final Written Decision Finding 2 of 3 Challenged Claims Unpatentable IPR2014-00235

    Apple Inc. v. THX Ltd.

    appeared first on PTAB Trial Blog.

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  • Your “Reality” Must Be Original To Win Copyright Protection

    Since the debut of Candid Camera in the late 1940s, unscripted television of varying genres (from game shows to documentaries) has been a staple of American television. Not until the worldwide success of shows such as Survivor, however, did the genre, and in particular the staged competition variety of unscripted “reality” television, become a dominant source of programming in the US market. Reality television often takes on a familiar pattern – as the season progresses contestants are eliminated by audience and “expert” votes leaving one person or couple to win the grand prize. The myriad ways in which to package this formula has no limits, and in light of the success of such shows, a vast number of people are creating and pitching what they believe to be both original and the next Survivor. And that leads to lawsuits.

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  • The saga of Grail (little company) and Mitsubishi (big company): a problem with enforcing trade secrets (instead of patents) AND the hazards of untranslated emails

    From the Recorder:


    Grail Semiconductors was founded around a memory chip design that combined features of the three types of chips already on the market. But the company failed to recruit investors and had run out of money by April 2001, when its founders met with representatives of Mitsubishi to discuss investment or product-development opportunities. The meeting didn’t lead to a deal. In 2003, Mitsubishi and Hitachi formed a joint venture called Renesas Technology and released a memory chip similar to Grail’s. Grail sued Mitsubishi in 2007, claiming the larger company misappropriated its trade secrets in violation of a nondisclosure agreement.

    During trial, Mitsubishi’s lawyers with Squire Patton (then Squire Sanders) argued Grail’s memory chip technology wasn’t new or valuable when the two companies met in 2001. The meeting was so useless that Mitsubishi’s representatives didn’t even take notes or write up a memo, the lawyers claimed. Mitsubishi’s Kazutoshi Hirayama testified that there was no nondisclosure agreement. And counsel argued there was no evidence of disclosure of trade secrets.

    “[Mitsubishi’s] counsel could only make this argument because the contrary evidence was being concealed,” Grail’s team wrote.

    A recent document dump provided by Mitsubishi’s Japanese arm revealed an email sent the day after the meeting, which Grail’s counsel hadn’t received during the first trial’s discovery period. The email, on which Hirayama was copied, acknowledged there was a nondisclosure agreement in effect, described the meeting in detail and called Grail’s memory chip design “amazing” and “too good to be true,” according to the motion for sanctions.

    Grail’s lawyers claim the email was deleted by Mitsubishi Electric & Electronics USA, the defendant in the case, but kept by the company’s Japanese arm.

    link: http://www.therecorder.com/id=1202734041500/Squire-Patton-and-Sidley-Accused-of-Misconduct-in-Trade-Secrets-Case#ixzz3kitoYv4W

    If the Grail work was so innovative, one would have thought the trade secret case would have been easy to demonstrate.

    If nothing else, the case illustrates the need to crystallize “what are” trade secrets for purposes of later litigation.

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  • PTAB declines to institute IPR against Biogen’s US 8,399,514 related to the MS drug Tecfidera

    In a decision written by FRED E. McKELVEY, former Chief Administrative patent Judge, Board of Patent Appeals and Interferences [BPAI, the predecessor to PTAB], denying institution of inter partes review of Biogen’s US Patent 8,399,514, related to the drug Tecfidera for treating relapsing remitting multiple sclerosis [RRMS], there is great emphasis on the “MS treatment” portion of the challenged claims, e.g.,


    A method of treating a subject in need of treatment
    for multiple sclerosis
    comprising

    a therapeutically effective amount of dimethyl
    fumarate, monomethyl fumarate, or a combination
    thereof,

    The Kappos reference cited against the Biogen patent in the submitted IPR challenge included the text:


    An open-label pilot study
    demonstrated that a product containing a mixture of
    fumaric acid esters significantly reduced the number and
    volume of gadolinium-enhancing (Gd+) lesions in
    patients with RRMS. BG00012 is being investigated for
    the treatment of psoriasis and other autoimmune diseases,
    including MS [multiple sclerosis].

    The decision by Judge McKelvey of PTAB includes the text


    Petitioner has not
    established the precise nature of the [Kappos] study and whether researchers were
    determining a therapeutically effective amount. The Pilot Study is not a
    description that DMF is useful for treating MS; rather, at best it is a “hope”
    that DMF will turn out to be useful for treating MS. A hope may or may not
    come true and does not establish that DMF is useful for treating MS.

    One notes that if a study showed a product containing a mixture of fumaric acid
    esters reduced the number of gadolinium-enhancing (Gd+) lesions in
    patients with RRMS , then therapeutic effectiveness
    has been established
    . The Kappos people had already found –a therapeutically effective amount–.
    Optimizing amounts when the effect is demonstrated is usually considered “obvious.”
    MRI measurements are standards used by the FDA to judge effectiveness for many
    disease-modifying MS drugs. [note: the “gadolinum” refers to an MRI scan technique,
    including paramagnetic gadolinium, which is sensitive to newly-formed lesions;
    this is related to the NMR relaxation time T1, and is distinct from MRI measures
    related to T2, which are not necessarily solely related to “newly-formed” lesions]

    A separate PTAB argument is that the Kappos reference did not explicitly name the compounds
    of claim 1 which were — dimethyl fumarate, monomethyl fumarate, or a combination
    thereof, — which are species of the genus disclosed by Kappos, fumaric acid esters.
    That is, dimethyl fumarate IS a fumaric acid ester.

    The following paragraph from the PTAB decision is puzzling, and perhaps overly defensive:


    We wish to make clear that we are not engrafting into the § 103(a)
    obviousness evaluation whether DMF as a drug is effective. In re Anthony,
    414 F.2d 1383 (CCPA 1969) (FDA, not USPTO, is responsible for safety of
    drugs which are sought to be patented); In re Watson, 517 F.2d 465 (CCPA
    1975) (Congress has given responsibility to FDA, not USPTO, to determine
    in the first instance whether drugs are safe); Purdue Pharma L.P. v. Endo
    Pharmaceuticals Inc., 438 F.3d 1123, 1134 (Fed. Cir. 2006) (quantum of
    proof necessary for FDA approval is significantly higher than the proof
    required in the USPTO). Nevertheless, Petitioner has bottomed its case on a
    publication describing potential FDA phase I and II testing and we have
    considered the content of Kappos to determine if it describes DMF as being
    known to be useful in treating MS. We are unable, consistent with the
    “description” requirement of § 102(b), to find a reasonable likelihood that
    Kappos teaches that DMF was known to be useful in treating MS.

    If this is an obviousness case under 103, then one wonders about the text


    Consistent with In re Hughes, 345 F.2d 184 (CCPA 1965) (if a
    reference is subject to two interpretations, then it will not support an
    anticipation rejection), we are unable to find that “a fumaric acid ester” as
    described by Kappos is DMF or MMF.

    Gene Quinn of IPWatchdog savaged the decision in the post
    With dubious logic and inaccurate statements of law,
    PTAB denies another Kyle Bass IPR petition

    The decision is paper 23 of the case IPR2015-01136 .

    Bloomberg discussed the reaction of Kyle Bass:


    “They threw Acorda out on a technicality; they threw Biogen out by ignoring the law,” Bass said. “They’re acting like a kangaroo court and we are not going to stand for it.”

    (…)

    Bass accused patent office Director Michelle Lee of directing the judges to find ways to not institute any reviews. “What Michelle Lee and the PTAB need to do is call balls and strikes and not try to change the rules of the game that were legislated to them by Congress,” Bass he said.

    link: http://www.bloomberg.com/news/articles/2015-09-03/bass-vows-to-keep-fighting-u-s-drug-patents-after-setbacks

    ***The Boston Globe wrote


    The America Invents Act of 2012 included a process meant to help companies fight so-called patent trolls holding them up in court. Trolls often acquire dubious intellectual property, claim the products of established companies infringe on their patents, and demand payments.

    The new law gives third parties the ability to request a review of any unexpired patent by the Patent and Trademark Office, avoiding a lengthy court challenge in the process. It’s an express lane for patent challenges, a process that typically runs up big bills and takes years to resolve in lawsuits.

    This statement overlooked the fact that “inter partes re-examination,” which existed prior to IPRs, gave third parties the ability to request a review of issued patents.

    Boston Globe post Hedge fund loses challenge of patent for Biogen’s MS drug

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  • Dome loses appeal related to US Patent 4,306,042

    Dome lost its appeal to the CAFC:

    Dome owns a patent for making contact-lens material.
    On reexamination, the U.S. Patent and Trademark Office
    found that the claimed method at issue was obvious and
    therefore unpatentable. The district court agreed with
    the Patent Office that the claimed method was unpatentable.
    On appeal, Dome challenges both the standard of
    review employed by the district court and the court’s
    ultimate conclusion on obviousness. Because we conclude
    that the district court applied the proper legal standard
    and because its factual findings were not clearly erroneous,
    we affirm.

    (…)

    In June 1999, the Patent Office ordered reexamination
    and, as a result, the district court stayed litigation
    pending a final determination in the reexamination
    proceeding. The Patent Office confirmed the patentability
    of claims 2, 3, and 4 of the ’042 patent, but it found claim
    1 obvious under 35 U.S.C. § 103(a) (2006).

    As to the evidentiary burden:


    Before reaching Dome’s appeal of the obviousness
    conclusion, we first address Dome’s allegation that the
    district court erred by only requiring the Patent Office to
    show that claim 1 of the ’042 patent is obvious by a preponderance
    of the evidence, rather than by clear and
    convincing evidence. We conclude that the district court
    correctly applied the preponderance of the evidence
    standard.

    (…)

    Alternatively, for ex parte reexaminations filed before
    November 29, 1999, a complaint can be filed in district
    court against the Patent Office. See 37 C.F.R. § 1.303(a)
    (2012); 35 U.S.C. § 145 (“The [district] court may adjudge
    that such applicant is entitled to receive a patent for his
    invention, . . . and such adjudication shall authorize the
    Director to issue such patent . . . .”). “The thrust of such a
    complaint is that the decision of the board is erroneous on
    the facts, the law, or both. Indeed, the board’s decision is
    the jurisdictional base for the suit. . . . [I]t is in essence a
    suit to set aside the final decision of the board.” Fregeau
    v. Mossinghoff, 776 F.2d 1034, 1036–37 (Fed. Cir. 1985).
    Accordingly, if the Patent Office decides after an ex
    parte reexamination that a preponderance of the evidence
    establishes the claimed subject matter is not patentable,
    § 145 authorizes the district court to review whether that
    final decision is correct. The § 145 action in such a case
    does not concern the different question of whether, as part
    of a defense to an infringement action, clear and convincing
    evidence establishes that an issued and asserted
    patent should be held invalid. See id. at 1037 (“it cannot
    seriously be contended that a § 145 action is other than
    one to overturn the board’s decision”).
    Citing 35 U.S.C. § 282 and Microsoft Corp. v. i4i Ltd.
    Partnership, 131 S. Ct. 2238 (2011), Dome argues that the
    district court erred by refusing to hold the Patent Office to
    the clear and convincing evidence standard of proof.
    According to Dome, the presumption of validity in § 282
    applies to its claimed invention because the district court
    action concerns a claim that the Patent Office previously
    allowed to be patented.

    (…)

    The clear and convincing evidence standard in the litigation
    context “stems from our suggestion that the party
    challenging a patent in court ‘bears the added burden of
    overcoming the deference that is due to a qualified government
    agency presumed to have done its job.’” Sciele
    Pharma Inc. v. Lupin Ltd., 684 F.3d 1253, 1260 (Fed. Cir.
    2012) (quoting PharmaStem Therapeutics, Inc. v. ViaCell,
    Inc., 491 F.3d 1342, 1366 (Fed. Cir. 2007)). But “[i]n
    reexamination proceedings, ‘a preponderance of the
    evidence must show nonpatentability before the [Patent
    Office] may reject the claims of a patent application.’”
    Rambus, 731 F.3d at 1255 (quoting Ethicon, Inc. v. Quigg,
    849 F.2d 1422, 1427 (Fed. Cir. 1988)). This standard is
    “substantially lower than in a civil case, . . . [and] there is
    no presumption of validity.” In re Swanson, 540 F.3d
    1368, 1377 (Fed. Cir. 2008) (citations omitted).
    “[A]n examiner is not attacking the validity of a patent,
    but is conducting a subjective examination of claims
    in the light of prior art.” In re Etter, 756 F.2d 852, 857–58
    (Fed. Cir. 1985); see also id. at 857 (“litigation and reexamination
    are distinct proceedings, with distinct parties,
    purposes, procedures, and outcomes”). When the Patent
    Office institutes ex parte reexamination, it reopens prosecution
    to determine whether the claimed subject matter
    should have been allowed in the first place. At that point,
    there is no need to presume that the Patent Office had
    “done its job” in the previous examination. Accordingly,
    the presumption of validity is no longer applicable.
    Our conclusion aligns with the purpose of the reexamination
    process, which includes allowing the Patent Office
    to take a second look at “patents thought ‘doubtful.’” In re
    Etter, 756 F.2d at 857 (quoting H.R. Rep. No. 66-1307, at
    3–4 (1980), reprinted in 1980 U.S.C.C.A.N. 6460, 6462).
    “In a very real sense, the intent underlying reexamination
    is to ‘start over’” in the Patent Office. Id. We would
    hinder this intent if we required the district court here to
    presume that the reexamined claim is valid because of the
    Patent Office’s previous determination and, consequently,
    to impose a burden to defend its own subsequent reexamination
    decision by clear and convincing evidence.

    As to the obviousness issue

    If all elements of a claim are found in the prior art, as
    is the case here, the factfinder must further consider the
    factual questions of whether a person of ordinary skill in
    the art would be motivated to combine those references,
    and whether in making that combination, a person of
    ordinary skill would have had a reasonable expectation of
    success. Id. at 1164. The Supreme Court has cautioned,
    however, that an obviousness determination cannot be
    confined by formalistic rules. KSR Int’l Co. v. Teleflex
    Inc., 550 U.S. 398, 419 (2007). Rather, courts must take
    an “expansive and flexible approach” to the question of
    obviousness. Id. at 415.
    Evidence of a motivation to combine prior art references
    may flow from “‘the nature of the problem to be
    solved.’” Tokai Corp. v. Easton Enters., Inc., 632 F.3d
    1358, 1371 (Fed. Cir. 2011) (quoting Ruiz v. A.B. Chance
    Co., 357 F.3d 1270, 1276 (Fed. Cir. 2004)). Here, the
    record supports the district court’s finding that a person
    of ordinary skill understood that high oxygen permeability
    in contact-lens materials was desirable.

    (…)

    The record, however, supports the district court’s finding
    that other prior art references disclose roadmaps on
    how to offset the disadvantages associated with using
    Tris-type monomers to obtain a material suitable for
    contact lenses.

    (…)

    While Dome’s argument that the claimed subject matter
    would not have been obvious in light of Tanaka’s
    disclosures is plausible, “[t]he burden of overcoming the
    district court’s factual findings is, as it should be, a heavy
    one.” Polaroid Corp. v. Eastman Kodak Co., 789 F.2d
    1556, 1559 (Fed. Cir. 1986). Our standard of review
    requires that we uphold the district court’s factual findings
    on this point, rather than revisiting them de novo. In
    this case, the district court did not clearly err in finding a
    person of ordinary skill would have been motivated to
    combine the identified prior art to arrive at the claimed
    invention, notwithstanding Tanaka’s disclosures regarding
    Tris-type compounds.

    link: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/14-1673.Opinion.9-1-2015.1.PDF

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  • Spotlight on Upcoming Oral Arguments – September 2015

    Tuesday September 8, 2015 Poly-America v. API Industries, No. 15-1248 – Courtroom 402 In granting summary judgment of noninfringement, the district court relied on an expert opinion that API’s accused products and Poly-America’s patented design are not substantially similar under the ordinary-observer test. This appeal asks the Federal Circuit to determine whether experts can opine […]

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    Takeaway: The Board denied institution finding that the Petition raised “the same or substantially the same prior art or arguments” because the new ground merely added additional prior art to the originally asserted ground of unpatentability without substantively changing the … Continue reading

    The post Denying Institution Based on Same or Substantially the Same Prior Art Previously Presented to the Board IPR2015-00723 appeared first on PTAB Trial Blog.

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