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The Federal Circuit will be sitting in southern California this October, with sessions in Los Angeles, Orange County, Irvine, and Malibu.  I’m guessing that the Malibu stop will be at Pepperdine University School of Law.  The schedule from the CAFC web site is shown below:

The OYEZ site is a great site for listening to recordings of oral arguments from the Supreme Court (going back to at least 1956).

Here is a link to the oral arguments from patent cases at the Supreme Court: [Link].

Here is a link to the oral arguments from trademark cases at the Supreme Court [Link].

And, here is a link to the oral arguments from copyright cases at the Supreme Court [Link].

All content on oyez.org and other sites and projects maintained by Oyez is released under the Creative Commons Attribution-NonCommercial 4.0 International License.

I believe it was the oral argument of LendingTree v. Zillow in which the patent owner mentioned “secondary indicia of patent eligibility.”  Because the Supreme Court has conflated patent eligibility with obviousness in its Bilski-Mayo-Alice line of cases, I suppose it is a natural evolution for the patent bar to begin to rely on traditional 103 arguments to establish patent eligibility.

The argument would be that if the elements of a claim as an ordered combination recite something that has achieved, for example, commercial success, then the claimed invention must not have been well-understood, routine, and conventional, as of the date of its invention.  Therefore, the nature of the claim has been transformed into a patent eligible application.

From time to time during oral arguments at the Federal Circuit, grammatical issues arise.  Sometimes a judge will instruct an advocate about what the proper grammatical interpretation of something is (according to that particular judge).  And, at least one judge is a self-described “grammar nerd.”  I’m curious if any of the judges will ever put their grammar credentials on the line to assess the proper grammatical interpretation of “well-understood, routine, conventional activity” from the Mayo/ Alice cases.

It seems clear to me that in the phrase “well-understood, routine, conventional activity” that “well-understood, routine, conventional”  are being used as coordinate adjectives.  The grammar.com site gives this definition for coordinate adjectives:

Coordinate adjectives are two adjectives, of equal weight, modifying the same noun. Generally, you should separate the adjectives with a comma. A good test to use: Put the word and between the two adjectives and see if that makes sense. If so, the adjectives are coordinate adjectives.

Consider this example:

It was a long, hot summer.

See http://www.grammar.com/coordinate-adjective (last accessed August 7, 2016).

As the test makes clear, “well-understood, routine, conventional” is the equivalent of “well-understood, routine, and conventional” — a conjunctive phrase.

The Federal Circuit has noted that a conjunctive test requires that all parts of the test be met.  For example, in Luigi Bormioli v. United States, 304 F.3d 1362 (2002), after determining that Bormioli did not satisfy a criterion of a conjunctive test,  a panel of Judges Dyk, Clevenger, and Archer stated for the Federal Circuit:

We conclude that the Court of International Trade correctly held that Bormioli did not demonstrate that it met TD 85-111’s criterion that its financing arrangement with Bormioli Italy for the subject charges was in writing.

Because the TD 85-111 requirements are conjunctive, we need not address whether Bormioli satisfied the final requirement: that “where required by Customs, the buyer can demonstrate that [1][t]he goods undergoing appraisement are actually sold at the price declared as the price actually paid or payable, and [2][t]he claimed rate of interest does not exceed the level for such transaction prevailing in the country where, and at the time, when the financing was provided.” See TD 85-111. For these reasons, the judgment of the Court of International Trade is

AFFIRMED.

Luigi Bormioli v. United States, 304 F.3d 1362 (2002)(emphasis added).

Other circuits have applied conjunctive principles as well.  For example, in US v. SOTO-MATEO, No. 13-2031 (1st Cir. Aug. 26, 2015), Judges Kayatta, Selya, and Dyk stated for the First Circuit:

A defendant facing a charge of illegal reentry after removal may, under some circumstances, challenge the validity of the underlying order of removal. See 8 U.S.C. § 1326(d); United States v. Luna, 436 F.3d 312, 317 (1st Cir. 2006). To wage such a collateral attack, he must demonstrate that

(1) [he] exhausted any administrative remedies that may have been available to seek relief against the order;

(2) the deportation proceedings at which the order was issued improperly deprived [him] of the opportunity for judicial review; and

(3) the entry of the order was fundamentally unfair.

8 U.S.C. § 1326(d). In reviewing a district court’s determination as to whether a particular defendant has satisfied these requirements, we assay the district court’s subsidiary factual determinations for clear error, see United States v. DeLeon, 444 F.3d 41, 48 (1st Cir. 2006), and afford plenary review to its conclusions of law, see Luna, 436 F.3d at 316. Moreover, when “performing the collateral attack analysis under § 1326(d), [an inquiring] court ordinarily should address the initial test of exhaustion of administrative remedies before going on to the other two tests.” DeLeon, 444 F.3d at 45. The elements of section 1326(d) are conjunctive, and an appellant must satisfy all of those elements in order to prevail on a collateral challenge to his removal order. See Luna, 436 F.3d at 317.

US v. SOTO-MATEO, No. 13-2031 (1st Cir. Aug. 26, 2015)(emphasis added).

If the grammarists on the Federal Circuit choose to apply proper rules of grammar to the “well-understood, routine, conventional activity” test so as to treat it as a tripartite conjunctive test, they could rein in much of the overzealous application of Mayo/Alice that runs rampant today in assessing patent eligibility under 35 U.S.C. §101.

Oral arguments debating the meaning of the claim limitation “real-time” are always interesting.  Here’s a recent one: [Emblaze Ltd. v. Apple, Inc.].

You can read the court’s Rule 36 Judgment here: [Link].

Here is a link to the Federal Register Notice for the USPTO’s new Post-Prosection Pilot (P3) Program [Link].

Here is a link to the USPTO page [Link].

The USPTO posted a new memorandum to its patent subject matter eligibility page today in regard to the Federal Circuit’s recent CellzDirect case.

The memo is available [HERE].

In yesterday’s opinion in Medicines Co. v. Hospira, Inc., __ F.3d __ (Fed. Cir. 2016) (en banc), the Federal Circuit relied upon the Uniform Commercial Code in establishing a test for when an “offer for sale” has been made. The Supreme Court has relied upon the UCC in the past, for example, in Pfaff v. Wells Electronics.   Since the unanimous Federal Circuit looked to the U.C.C. as authority in Medicines Co. v. Hospira, Inc., I wonder if litigants will begin seizing upon the U.C.C.’s definition of “goods” for 35 U.S.C. §101 purposes.

I think one argument might go as follows.  If a patent claim, such as a Beauregard claim, satisfies the U.C.C.’s definition of a “good,” then the claimed subject matter is subject to the U.C.C.  A good is defined by section 2-105 of the U.C.C., as follows.

(1) “Goods” means all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities (Article 8 ) and things in action. “Goods” also includes the unborn young of animals and growing crops and other identified things attached to realty as described in the section on goods to be severed from realty (Section 2-107).

The Supreme Court has said that abstract ideas are “free to all men.”

The Court’s precedents provide three specific exceptions to § 101’s broad patent-eligibility principles: “laws of nature, physical phenomena, and abstract ideas.” Chakrabarty, supra, at 309, 100 S.Ct. 2204. While these exceptions are not required by the statutory text, they are consistent with the notion that a patentable process must be “new and useful.” And, in any case, these exceptions have defined the reach of the statute as a matter of statutory stare decisis going back 150 years. See Le Roy v. Tatham, 14 How. 156, 174-175, 14 L.Ed. 367 (1853). The concepts covered by these exceptions are “part of the storehouse of knowledge of all men . . . free to all men and reserved exclusively to none.” Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130, 68 S.Ct. 440, 92 L.Ed. 588 (1948).

Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010).

The U.C.C. does not state that there are any goods that are abstract ideas and thus free to all men.  So, if claimed subject matter falls under the definition of good, then it must necessarily be non-abstract.

If this is not the case, then the ALI will need to revise the UCC to except those goods that are “abstract,” as any abstract good would necessarily need to be free to all people and reserved exclusively to none.

You can read the Medicines Co. v. Hospira, Inc. en banc decision here: [Read the opinion].

You can listen to the recording of the en banc oral argument here: [Listen].

I was listening to a recording of a recent Federal Circuit oral argument where one of the advocates mentioned that a PWC study reports that forty-four percent of all financial expert reports are excluded under Daubert.  Quite an interesting statistic.  PWC notes:

• 44% of financial experts were excluded in 2015. This is consistent with the 16-year average.
• Across the 16-year timespan, the most common reason for financial expert exclusions has been lack of reliability. Exclusion rates have been highest in intellectual property and product liability cases.
• Testimony “based on sufficient facts or data” is a common stumbling block for financial experts and is the most frequent reason for reliability exclusions.
• In 2015, accountants faced the highest number of challenges and experienced the highest exclusion rate.
• In a majority of cases (78%), appellate courts agree with lower court Daubert rulings on financial experts.

Here’s a link to the PWC study: [Link].

Patent prosecutors — and applicants disillusioned with the patent process — will be particularly receptive to the comments that Judge Moore made during the recent oral argument of In re Neill.  During that oral argument Judge Moore remarked that it seemed like the PTO was merely cherry picking random elements of four different references and smushing them together to arrive at the claimed invention.  Judge Moore would further remark that the PTO was lucky that the standard of review for the case was very deferential.

Judge Moore: How often do you see four reference obviousness rejections? Because I’ll be honest, I’ve never seen one. That’s a lot of references you’ve got to piece together to get to obviousness.

Associate Solicitor for the USPTO:    It’s a good number of references; but, in this case the Examiner found the motivation to ….

Judge Moore:  The question I asked is actually quite personal.  How often have you seen a four reference obviousness rejection; because, I never have.  Not out of the PTO. Never.  I’ve seen people try to argue it in litigation, sure. But, I’ve never seen the PTO go to four separate references and cherry pick items and then combine them together.

Associate Solicitor for the USPTO:    Well, I don’t know if I’ve seen a four reference one; but, I don’t believe that the Board….

Judge Moore:  Or anything greater than four, let’s be clear so that this deposition transcript reads right, four or greater. (Laughter) That’s a lot of references!

Associate Solicitor for the USPTO:    It is; but, the Examiner here . . . All of those references come from the same field of art.  It’s all the transmission and recording of video programming data….

Judge Moore:  Yeah, but the whole reason that Cablevision came up with this invention was to get around Sony.  Like the whole reason they came up with this is to get around the copyright problems with DVR’s in homes and try to reduce the amount of storage you need in your home.  That’s so different than pulling together these pieces … ‘well, this one mentions in the background cost savings;’…  ‘and this one mentions in the background efficient bandwidth;’ … ‘and this one mentions’. . . . And then you’re just like cherry picking random elements from these references and smushing them together to come up with the invention. And it’s . . .  I don’t know, I mean you’re awfully lucky this is a very deferential standard of review, that’s for sure.

[Listen]

I was very surprised that Judge Moore had never before seen a four reference combination coming out of the PTO.  Patent prosecutors who run into her at future bar events might want to relate their war stories.  We already have case law that says construing claims to read out a preferred embodiment is rarely if ever correct.  Perhaps we’ll see case law in the future that says combining four or more references together to reject an applicant’s invention is rarely, if ever, correct.

Here’s a link to an old post about cobbling snippets together: [Link].

You can read the Federal Circuit’s Rule 36 opinion [here].

Updated 9/25/16 to correct reference to “Aro I” instead of Aro II.

The Federal Circuit heard oral arguments in recent months where the “gist” or “heart” of the invention was discussed.  The fact that appellants/appellees, district court judges, and Federal Circuit judges are now openly using the term “gist” and “heart” rather than euphemistic phrases such as “directed to,” “basic idea,” etc. takes on heightened interest because the Supreme Court in its Aro I case back in the 1960’s rejected characterizing claims based on a “gist” or “heart” of the invention:

[I]f anything is settled in the patent law, it is that the combination patent covers only the totality of the elements in the claim and that no element, separately viewed, is within the grant. See the Mercoid cases, supra, 320 U. S., at 667;320 U. S., at 684. The basic fallacy in respondent’s position is that it requires the ascribing to one element of the patented combination 345*345 the status of patented invention in itself. Yet this Court has made it clear in the two Mercoid cases that there is no legally recognizable or protected “essential” element, “gist” or “heart” of the invention in a combination patent. In Mercoid Corp. v. Mid-Continent Co., supra, the Court said:

“That result may not be obviated in the present case by calling the combustion stoker switch the `heart of the invention’ or the `advance in the art.’ The patent is for a combination only. Since none of the separate elements of the combination is claimed as the invention, none of them when dealt with separately is protected by the patent monopoly.” 320 U. S., at 667.

And in Mercoid Corp. v. Minneapolis-Honeywell Co., supra,the Court said:

“The fact that an unpatented part of a combination patent may distinguish the invention does not draw to it the privileges of a patent. That may be done only in the manner provided by law. However worthy it may be, however essential to the patent, an unpatented part of a combination patent is no more entitled to monopolistic protection than any other unpatented device.” 320 U. S., at 684.No element, not itself separately patented, that constitutes one of the elements of a combination patent is entitled to patent monopoly, however essential it may be to the patented combination and no matter how costly or difficult replacement may be.

Aro Mfg. v. Convertible Top Replacement Co., 365 U.S. 336, 344-45 (1961).

Therefore, forcing the Supreme Court to come to terms with Aro I would be a good thing.

The two recent Federal Circuit oral arguments referenced above are:  Jericho Systems Corp. v. Axiomatics and Essociate v. Clickbooth.  You can listen to those oral arguments [here] and [here], respectively.

Judge Reyna happened to sit on both panels.  One might gather that he rejects a “gist” or “heart” of the invention analysis from this sound bite in the Essociate oral argument.  [Listen].  I’ve added this sound bite to the audio key page.

Front (L to R) Judges Clevenger, Plager, Newman, Prost, Mayer, Lourie, and Schall. Back (L to R) Judges Hughes, Taranto, Reyna, Moore, Linn, Bryson, Dyk, O'Malley, Wallach, Chen, and Stoll. (Click on image for a larger view).

The judges are seated according to seniority/tenure on the court. For example, Chief Judge Prost is seated in the middle of the front row, as the most senior. To her right is Judge Newman who has the longest tenure on the court. To Chief Judge Prost’s left is Judge Mayer, who has the second longest tenure on the court after Judge Newman. The seating continues to alternate about Chief Judge Prost by tenure. In the back row, the arrangement by tenure continues and is centered about Judge Bryson. The court’s two newest appointees, Judges Hughes and Stoll, bookend the back row.

One would think that it would be impossible to panel shop at the Federal Circuit; but, I wonder if clever litigants have done so to a limited extent.  For example, I noticed that Judge Dyk frequently sits by designation with the US Court of Appeals for the First Circuit during the last week of July/first week of August.  Presumably, he does not sit with the Federal Circuit in August during those years.  Therefore, I wonder if an appellant has ever cared enough about not having Judge Dyk on the panel that it calculated the average time for briefing etc. and strategically filed the notice of appeal on a date that would most likely have the Federal Circuit hear the argument in August?  I suppose that there’s a pattern as to when senior judges hear oral arguments, as well.  For example, a litigant with a 101 issue might not want — let’s just pick a random judge, Judge Mayer — to hear its case. I wonder if such a litigant has ever looked at the history of appearances and strategized accordingly.  Of course, such litigants would have been significantly limited by the narrow window that one has to file a notice of appeal after a decision by a lower tribunal.

The Federal Circuit can easily counter such tactics by being random with its scheduling.

If you are interested in listening to the oral argument from this week’s important decision in Enfish v. Microsoft, the oral argument recording is available [here].

The decision is available [here].

An audio key to each judge’s voice is available [here].