Granting Motion to Submit Supplemental Information on Public Availability of Asserted Reference IPR2015-00810-12, 866, 868, 870-71

Takeaway: Unlike the case under 37 C.F.R. § 42.123(b), Petitioner need not show under 37 C.F.R. § 42.123(a) why the supplemental information reasonably could not have been obtained earlier. In its Decision, the Board granted Petitioner’s Motion to Submit Supplemental … Continue reading

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  • Final Written Decision Construing “Adapted For” Language in Preamble IPR2014-00703

    Takeaway: The Board may look to case law and statements in the specification to reach the conclusion that the recitation of “adapted for” in a preamble constitutes a limitation meaning more than merely “capable of.” In its Final Written Decision, … Continue reading

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  • Denying Rehearing of Dismissal of Petitions for Not Naming All Real-Parties-in-Interest IPR2014-00440, 00441, 00736

    Takeaway: A petitioner seeking to correct a petition must actively and affirmatively seek the Board’s authorization to do so, rather than merely suggesting that correction would be appropriate. In its Decision, the Board denied Petitioner’s Request for Rehearing of the … Continue reading

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  • Order Advising that Cross-Examination Will Occur Before At Least One Member of the Board IPR2015-00977

    Takeaway: Witnesses are required to be available for cross-examination in the United States. However, the Board has the discretion to allow a party to substitute witnesses, where travel problems are discovered and brought to the attention of the Board at … Continue reading

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  • Patentee must show patentability over prior art from original case to amend in IPR

    The Federal Circuit affirmed a patentee’s burden included showing patentability over prior art from the patent’s original prosecution history. Prolitec failed to show that its amended claim would still be patentable (non-obvious) over the combination of an original prior art reference and Benalikhoudja. Accordingly, the Court affirmed the Board’s finding of anticipation and obviousness. In her dissent, Judge Newman argued that the PTAB erred in denying Prolitec’s motion to amend, explaining…

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  • How to Create an Excellent Innovation Outpost

    Start-up guru and Lean Launchpad developer Steve Blank has published a fascinating set of four blog posts on Innovation Outposts with co-author Evangelos Simoudis, venture capitalist.  In the first post, the authors discuss a history of corporations and their response to technological change.  The post notes how corporations became very good at development and have spent less time on research.  Essentially, corporations were unable to keep up with innovation occurring outside their specific development field.  In part, this was because of the number of scientists and entrepreneurs moving to start-ups because of the opportunity to do cutting edge work—and this was helped along by the availability of venture capital.  Because of this dynamic, corporations have needed to monitor (“sense”) and “respond” to the development of new technologies that may impact their existing lines of business, particularly in an “innovation cluster,” such as Silicon Valley and Boston.  The second post describes innovation outposts.  It provides several examples of innovation outposts and discusses the functions of those outposts: primarily to “sense” or monitor new technologies and second, to “respond,” such as by acquiring technology or partnering with companies with attractive technology.  The authors note that there is a danger that most innovation outposts will become innovation theater—essentially very good at sensing, but not at responding. 

    To address the danger, the authors, in the third post, provide six questions that should be considered at the C-Level.  And, the authors emphasize that those questions must be considered at that senior management level and not at the corporate R&D level.  The questions provide focus for the corporation and its goals for the innovation cluster.  Finally, the last post provides the nuts and bolts for how to develop an innovation outpost, including having the right staffing and “corporate buy-in for productization.”  The authors plan to write a book based on the subject of the posts.  It would be interesting to see a complimentary discussion of the role of intellectual property and the intellectual property lawyer.  We eagerly await publication of their book!

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  • Two-Step Printed Matter Doctrine: (1) Is it Printed Matter?; (2) Do we give it patentable weight?

    By Dennis Crouch The printed matter doctrine probably arises less than it should as its contours are likely integral to an understanding of the patentability of software related inventions.  Like the abstract idea test the doctrine barring the patentability of certain “printed matter” is nonstatutory and judicially created. In the recent DeStefano case, the Federal […]

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  • Judge Newman questions use of "substantial evidence" standard in CAFC review of PTAB decisions in Merck/Gnosis case

    The CAFC finds that negating “teaching away” arguments can amount to
    a showing of “reasonable expectation of success”:

    In a final challenge to the Board’s decision, Merck
    complains that the Board never made an express finding
    that a person of ordinary skill would have a reasonable
    expectation of success in combining Serfontein and
    Marazza, or in further combining Serfontein, Marazza,
    and Ubbink. Under KSR International Co. v. Teleflex
    Inc., 550 U.S. 398, 418, (2007), a factfinder’s analysis of a
    reason to combine known elements in the art “should be
    made explicit.” But KSR does not require an explicit
    statement of a reasonable expectation of success in every
    case. Cf. id. at 419 (cautioning against confining the
    obviousness analysis using formalistic rules). Here, the
    Board addressed Merck’s arguments against a reasonable
    expectation of success in the context of its teaching away
    arguments. By rejecting Merck’s argument that the prior
    art taught away from combining Serfontein, Marazza, and
    Ubbink, the Board impliedly found a reasonable expectation
    of success. We decline to overturn the Board’s decision
    for failure to state expressly that a person of ordinary
    skill would have had a reasonable expectation of success.

    One asks, is a negation of an argument that prior art “taught away” the same thing
    as saying the prior art suggested a “reasonable expectation of success”?

    Is negating a thought that something is bad the same as saying that the thing is

    Judge Newman dissented in the case.

    Her dissent began with a review of the AIA, including the text

    It was believed that the PTO was granting patents too
    easily, and that the courts were not consistently deciding
    patentability issues. To attempt to remedy these deficiencies,
    the America Invents Act created a new adjudicative
    tribunal (the Patent Trial and Appeal Board or
    PTAB) within the Patent and Trademark Office, and
    established new procedures including changes in the
    burdens of proof, limiting the path of judicial review, and
    providing for finality and strict time limits. The purpose
    is to restore an effective and balanced system of patents,
    whereby valid patents may reliably be confirmed and
    invalid patents efficiently invalidated.

    An issue was the majority’s use of the substantial
    evidence standard:

    Thus it is incorrect for this court, as the only reviewing
    tribunal, to review the PTAB decision under the
    highly deferential “substantial evidence” standard. Our
    obligation is to assure that the legislative purpose is met,
    through application of the statute in accordance with its
    purpose. See Calvert Cliffs’ Coordinating Comm., Inc. v.
    U. S. Atomic Energy Comm’n, 449 F.2d 1109, 1111 (D.C.
    Cir. 1971) (“Our duty, in short, is to see that important
    legislative purposes, heralded in the halls of Congress, are
    not lost or misdirected in the vast hallways of the federal
    bureaucracy.”). This court’s resort to deferential “substantial
    evidence” review is at odds with the benefits that
    Congress intended.

    Judge Newman addresses the reasonable likelihood of success issue:

    Marazza does not teach that L-5-MTHF is suitable to
    treat elevated homocysteine, but only that it is an “active”
    folate for treating folate deficiency. Amid the uncertain
    predictability of biological response, this background does
    not provide a reasonable likelihood of successful treatment
    with any selected stereoisomer. Only hindsight
    provides such prophesy.
    The evidence of record does not support the PTAB’s
    apparent assumption that any folate would be effective
    against elevated homocysteine. No reference teaches that
    L-5-MTHF has this activity. A prima facie case cannot be
    based on the inventor’s successful investigations.


    My colleagues find that “the PTAB impliedly found a
    reasonable expectation of success,” observing that the
    PTAB did not accept Merck’s argument that the references
    “taught away” from Merck’s use. It is undisputed
    that no reference taught Merck’s use. There was evidence
    of instability and failures using the L-5-MTHF isomer in
    folate treatments. No reference contains a suggestion to
    use L-5-MTHF or expectation of success. Even Marazza
    states only that there was “an increasing interest” in L-5-
    MTHF. ’611 Patent, col.1, l.25.
    The Court in KSR International Co. v. Teleflex Inc.,
    550 U.S. 398, 421 (2007), in discussing the “obvious to try”
    standard of obviousness, cautioned that something would
    be “obvious to try” if “there are a finite number of identified,
    predictable solutions” with “anticipated success.”
    “The obviousness inquiry entails consideration of whether
    a person of ordinary skill in the art ‘would have been
    motivated to combine the teachings of the prior art references
    to achieve the claimed invention, and . . . would
    have had a reasonable expectation of success in doing so.’”
    Insite Vision Inc. v. Sandoz, Inc., 783 F.3d 853, 859 (Fed.
    Cir. 2015) (quoting Procter & Gamble Co. v. Teva Pharms.
    USA, Inc., 566 F.3d 989, 994 (Fed. Cir. 2009)) (elisions in
    original). Here, the purported “reasonable expectation of
    success” came from the hindsight knowledge of these
    inventors’ success.


    In contrast, Gnosis provided references suggesting
    that lower concentrations of reduced folates could produce
    the same intracellular concentrations as folic acid. PTAB
    Op. at 20-21. Whether or not these inconsistent teachings
    are viewed as “teaching away” they do not teach toward a
    reasonable likelihood of success.
    The panel majority errs
    in law, in stating that “the PTAB impliedly found a reasonable
    expectation of success” based on the PTAB’s
    finding of no “teaching away.” Such “implication” resides
    only in the backward-looking eye of the beholder.

    Newman notes:

    The panel majority acknowledges that “although another
    factfinder may have reasonably evaluated Merck’s
    evidence of objective indicia of non-obviousness differently
    in the first instance, the Board’s conclusion . . . is supported
    by substantial evidence.” Maj. Op. at 17. This is
    another illustration of the flaw in this court’s using the
    substantial evidence standard, for the question before us
    is whether the preponderance of the evidence supports the
    PTAB’s decision.


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  • Federal Circuit Affirms PTAB’s Finding of Obviousness

    Authored by Georg C. Reitboeck and Jessica Cohen-Nowak Digest of South Alabama Medical Science Foundation, v. Gnosis S.P.A., No. 2014-1778, -1780, -1781 (Fed. Cir. Dec. 17, 2015) (precedential). On appeal from the P.T.A.B. Before Newman, Plager and Hughes. Procedural Posture: Patentee appealed … Continue reading

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  • Airbus patents removable aircraft cabins, patent applications include wireless energy transmission

    Airbus Group SE (EPA:AIR), based in Leiden, Netherlands, is a multinational corporation focused on the development of aerospace and defence technologies. Sales figures indicate that Airbus will outsell top rival Boeing Company (NYSE:BA) for 2015, although lagging production may result in Boeing being able to fulfill more orders by the end of the year. Airbus […]

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  • Australia Releases Guidelines on Patentability of Genetic Material – Now That’s How It’s Done

    The Australian Patent Office yesterday released its new guidelines in response to Australia’s High Court decision on the patentability of genetic material. The good news for Australia, though cold comfort for us on the other side of the Pacific, is that the Australian Patent Office has shown our counterpart US institutions the correct way to interpret and apply an important new case carving specific subject matter out of the broad default of patent eligibility. Rather than declaring ineligible…

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  • Final Written Decision Reaching Different Conclusions than Those in Related Reexamination IPR2014-00544

    Takeaway: An expert declaration cannot be excluded on the basis that it applies claim constructions that differ from the Board’s constructions in its decision on institution. In its Final Written Decision, the Board found that all challenged claims (1-30) of … Continue reading

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  • More than just money: a primer on reverse payment settlements

    IP Finance is delighted to publish the following post by Teemu Alexander Puutio, an expert in the analysis and valuation of intellectual property rights and an active researcher of intellectual property rights regimes for private consulting companies and organizations such as the United Nations.

    “Patent litigation is a costly affair. Regardless of which side prevails, each flank racks up impressive accounts with its

    respective counsel. Settlements are widely accepted as one of the most effective ways of curbing private and public costs while keeping innovation and consumer protection close to desired levels. As was recently noted in this blog, the financial flows in some of these settlements have been taking such peculiar turns that they have roused the interest of courts, scholars and even senators, including Democratic Presidential candidate, Bernie Sanders.

    Based on the latest figures of the U.S. Federal Trade Commission (FTC), each year since 2006 has seen between 10–40 final settlements in which the patent holder has agreed to pay the potential infringer, a marked departure from the usual state of affairs. The FTC notes that in FY 2013, these ‘pay-for-delay’ settlements involved 21 pharmaceutical products accounting for $4.3 billion in annual U.S. sales. Many argue that these sales figures include a significant amount attributed to the injury suffered by the consumer, which already in 2010 the FTC estimated to be $3.5 billion per year. With figures such as these being thrown about, it is no surprise that reverse payment settlements are getting their fair share of attention.

    In 2013, the United States Supreme Court, in its decision in the case of FTC v. Actavis, laid down the ground rules for applying antitrust scrutiny to reverse payment settlements. Stating that “[this] form of settlement is unusual, and there is reason for concern that such settlements tend to have significant adverse effects on competition”, it ruled that reverse payment settlements are not immune from antitrust considerations, even if the effect of the settlement would be limited to the ‘scope of the patent’, as previously held by lower courts. The Actavis ruling also made it clear that the potential unlawfulness of reverse payment settlements is to be assessed in line with the rule of reason approach, with particular attention given to the size and justifications offered for the payment involved.

    Still, some argue that the decision left several crucial questions unanswered, including what constitutes a payment that can trigger antitrust scrutiny. In the 2014 decision in In Re Loestrin 24 Fe Antitrust Litigation, Federal Judge William Smith opted for a formalistic interpretation of the ‘cash-focused guidance’ contained in, his words, the ‘confusing’ Actavis decision, and reasoned that “this Court cannot help but find that [the Actavis ruling] applies solely to monetary settlements.”

    Federal judge Judge William Walls, in the case of In re Lamtical, reasoned along similar lines, noting that the “Supreme Court made clear its intent to give patent litigants latitude to settle without triggering the antitrust scrutiny[…]” in cases where no cash payment is involved. According to those amenable to the position of Judges Smith and Walls, patent term splits, side deals on co-promotion and so-called ‘no-authorized-generic’ agreements, would all be immune from antitrust scrutiny under the Actavis framework.

    However, others disagree. The Third Circuit reversed Judge Walls’ decision, ruling that the issue at hand is an “unexplained large transfer of value from the patent holder to the alleged infringer” regardless of the form of consideration. Several recent cases agree with the Third Circuit, including the case of In Re Nexium (Esomeprazole) Antitrust Litigation, where Federal Judge William Young makes a persuasive argument for a broad interpretation of ‘payment’ as “serve[ing] the purpose of aligning the law with modern-day realities.”

    Indeed, by analogy to other areas of law, one can reasonably argue that the courts will ultimately find themselves coalescing around a broader concept of value along the lines that Court of Appeals Judge Richard Posner alluded to in the case of Asahi Glass Co. v. Pentech Pharms, where he noted that every settlement by default incorporates ‘compensation’ within the more comprehensive sense of the term.

    While it is likely that courts will continue to hold divergent views on the forms of payments that trigger antitrust scrutiny, there appears to be wide-spread agreement that even a sizeable payment can be justified. Justifications for such a payment will include covering litigation costs and other commercial arrangements, such as holding inventory or supplying active compounds.It is the view of this guestblogger that many post-Actavis ruminations by lower federal courts have focused too heavily on the form and size of payments at the cost of addressing more meaningful questions, most notably the anti- and pro-competitiveness of the reverse payment settlements in question. In particular, what the post-Actavis lawscape is missing is a solid framework for analyzing the dynamic effects of the transfers involved.

    Taking both R&D capacities and expenditures, as well as dynamic considerations into account, any alteration of a monopoly situation could in theory be pro-competitive; even when the other side of the duopoly would not enter the market covered by the patent during the patent term. It would seem essential to move beyond considerations of size and static market concerns and nudge the rule of reason analysis towards assessing the potentially pro-competitive uses of the financial valuable transfers and bolstering the generic manufacturer’s ability to engage in productive R&D with profits that would have otherwise been retained by the original monopolist. Also, it will be interesting to see whether courts use their discretion more broadly and consider the possibility of ‘correcting’ unlawful settlements, e.g., through mandatory expenditures on R&D or FRAND licensing.

    Perhaps some of our readers, as well as others, are currently involved in cases that will eventually help the courts further clarify the analytical framework of reverse payment settlements in the context of the intersection of patent law and competition law. This guest blogger certainly hopes so.”

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  • The CAFC addresses the printed matter doctrine in IN RE: THOMAS L. DISTEFANO, III

    As to the printed matter doctrine:

    When determining a claim’s patentability, the Board
    must read the claim as a whole, considering each and
    every claim limitation. In re Gulack, 703 F.2d 1381, 1385
    (Fed. Cir. 1983). However, we have long held that if a
    limitation claims (a) printed matter that (b) is not functionally
    or structurally related to the physical substrate
    holding the printed matter, it does not lend any patentable
    weight to the patentability analysis. Id. at 1384–85.
    In performing this analysis we do not strike out the
    printed matter and analyze a “new” claim, but simply do
    not give the printed matter any patentable weight: it may
    not be a basis for distinguishing prior art. As we opined
    in In re Gulack:

    Where the printed matter is not functionally related
    to the substrate, the printed matter will not
    distinguish the invention from the prior art in
    terms of patentability. Although the printed matter
    must be considered, in that situation it may
    not be entitled to patentable weight.
    Id. at 1385 (footnote omitted).

    **In passing, from Ex parte Gilmour:

    The Board affirmed the obviousness rejection by finding that the limitation at issue was not to be given patentable weight. First, the Board noted that the limitation appeared to be intended use, as it “added no structure to the claim nor functionally changes the ‘at least one set of text’ that it modifies.”

    Furthermore, according to the Board, “authored not for any purpose related to creating or accessing a profile” was a mental step and as such, it was not entitled to patentable weight. Although the mental steps doctrine is typically used to analyze for compliance with 101, the Board found it also appropriate in assessing patentable weight

    **In passing, as to “no patentable weight”, from Tom Brody, 13 JMRIPL 251 (2014), see discussion of Application of Benson, 418 F.2d 1251 (CCPA 1969 )

    ** Also, from allthingspros:

    **In re Morsa is cited: Anticipation is a factual question and
    thus reviewed for substantial evidence. In re Morsa, 713
    F.3d 104, 109 (Fed. Cir. 2013).

    The issue in Morsa was the enablement of the PMS reference.

    See post at alleylegal:

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  • Judge Newman re-iterates her viewpoints on evidentiary review standards in South Alabama v. Gnosis

    The conclusion of the majority

    Because substantial evidence supports the Board’s
    factual findings, except on the evidence of licensing, and
    because we agree with the ultimate conclusion of obviousness,
    we affirm the Board’s finding that claims 37, 94–97,
    99–100, and 110–111 of the ’915 patent; claim 32 of the
    ’381 patent; and claim 15 of the ’778 patent are invalid
    under 35 U.S.C. § 103.

    Judge Newman re-iterated her assertions made in
    the companion Merck case:

    For the reasons I discussed in Gnosis I, these references
    do not fill the gap between the folate compounds
    described by Marazza and the uses described by Serfontein,
    such that a person of ordinary skill in this field
    would have been motivated to combine these references to
    treat elevated homocysteine with a reasonable expectation
    of success. Ueland provides a description of folate
    and homocysteine biochemistry, and shows the biochemical
    relationship between homocysteine and L-5-MTHF.
    Ueland adds to the scientific investigations that have
    been conducted, but Ueland does not suggest that L-5-
    MTHF would successfully treat the specified diseases and
    overcome the known uncertainties of stability, metabolism,
    and bioavailability. Ueland does not suggest that
    there would be a likelihood of success in using L-5-MTHF
    compositions for the specific purposes discovered and
    developed by the South Alabama scientists. The scientific
    acclaim and licensing and copying that followed their
    work add to the evidence of unobviousness. The PTAB
    erred in evaluating and weighing this evidence.
    For the reasons discussed in my dissenting opinion in
    Gnosis I, obviousness was not established by a preponderance
    of the evidence.
    From my colleagues’ contrary
    ruling, I respectfully dissent.


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  • Federal Circuit Disagrees with PTAB on the Application of the “Printed Matter Doctrine”

    Authored by Georg C. Reitboeck and Jessica Cohen-Nowak Digest of In re: Thomas Distefano, III, No. 2015-1453 (Fed. Cir. Dec. 17, 2015) (precedential). On Appeal from P.T.A.B. Before Prost, Taranto and Hughes. Procedural Posture: Board rejected application claims for anticipation, applying the … Continue reading

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  • Institution Decisions Are Not Reviewable By Federal Circuit, But Whether Patent Qualifies As CBM Is – Sightsound v. Apple

    Takeaway: The Federal Circuit does not have jurisdiction to review institution decisions under 35 U.S.C. § 324(e); however, it is not barred from reviewing whether a patent qualifies as a covered business method patent. In its Opinion, the Federal Circuit … Continue reading

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