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Rovi Corp. is another great example of how important patents are to companies in the computer age.  When five of Rovi’s patents were initially declared patent ineligible by a district court this past July, Rovi’s stock dropped dramatically relative to the NASDAQ:

Hypothetically, assuming this decision is reversed by the Federal Circuit and the patents are later challenged under 35 U.S.C. §103, it would be interesting to see if the change in stock price could be used as evidence of commercial success.  It would be hard to say that there is no nexus.

It will also be interesting to watch Rovi’s stock price on the day of the oral argument at the Federal Circuit.  For example, will the price fluctuate significantly not only during the oral argument but also when the panel for the case is announced on the morning of the oral argument.  Given how panel dependent patent eligibility outcomes can be, a Mayer, Dyk, Lourie panel might produce an entirely different swing than a Newman, Moore, Linn panel.

Obviously, this post and all other posts on this blog are not investment advice.

If you have been listening to oral argument recordings and have been wondering to whom a particular voice belongs, you should use the link to the audio key page, located on the upper right-hand portion of the home page.  The audio key has been updated to include the voices of the recently appointed Federal Circuit judges.

If you are curious which judge is speaking during an oral argument recording, my suggestion is to:

(1) pull up the opinion;*

(2) note from the opinion who the judges on the panel are; and

(3) use the sound bites on the audio key page to identify the speaker.

*Alternatively, if no opinion has issued and the case was recently argued, you can likely determine the panel from the “Upcoming Oral Arguments” link on the Federal Circuit web site.

The Federal Circuit convened to hear oral arguments in two en banc cases on Friday October 2, 2015.

The oral arguments are available here:

In re Tam:  [Listen]

Lexmark International, Inc. v. Impression Products, Inc.:  [Listen].

The Denver PTAB appears to be firing on all cylinders these days.  This past month the PTAB conducted its first hearing in which the entire panel of judges was located in Denver.  As luck would have it, I happened to be arguing one of the two cases heard that day.  So, I got to be a little part of Denver PTAB history.

The oral argument of the week was argued about seven weeks ago and received a Rule 36 decision.  It covers several interesting issues, such as whether the presence of a means plus function limitation should make a claim patent eligible.  The one issue that I thought got lost in the discussion of means plus function claims, however, is the the issue of preemption.  Namely, if a claim includes a means plus function claim and the means is limited to the structure disclosed in the specification, how could such a claim possibly preempt all the other means of performing that function?  Therefore, how could the claim as a whole preempt the purported abstract idea?

The oral argument also addressed whether evidence should be required to prove that something was an abstract idea.

And, Judge Lourie endeared himself to patent prosecutors everywhere by inquiring whether all business methods should be deemed patent ineligible:  [Listen].

You can listen to the entire oral argument [here].

You can read the Rule 36 decision [here].

From the Federal Circuit web site:

If you did not see the recent notice about expedited ex parte appeals at the USPTO, the Federal Register notice is available [here].

Judge Kara Stoll sat with her first panel of the Federal Circuit this past week. Chief Judge Prost welcomed her to the court:  [Listen].

It is somewhat uncanny how over the years new judges and visiting judges often sit with the Chief Judge on their first panel at the court.

Followers of the USPTO’s updated patent eligibility guidance issued this past July will note that the PTO rebuffs the calls for examiners to provide evidence proving up any assertion of an abstract idea.  The Office places great weight on the fact that in the Bilski case no evidence of an abstract idea was provided to the US district court.  The Office reasons therefore that the appellate courts — which are charged with merely reviewing the record below — could not have based their Bilski decisions on any evidence of an abstract idea.

Here is a link to an interesting article that describes the ways that new evidence can be considered on appeal:  [Link].

I was poking around on Westlaw the other day and ran across materials related to Judge Giles Sutherland Rich’s confirmation proceedings when he was appointed to the Court of Customs and Patent Appeals by President Eisenhower in 1956.  These materials are from witnesses, rather than testimony from Giles Rich himself.  I’m not sure if he was not required to testify or if my search method was flawed; but, I did not locate any actual testimony by Judge Rich in regard to his nomination.  The witnesses’ testimony is available here: [Link].

To this day, the Federal Circuit still discusses opinions that Judge Rich wrote for the court, as this sound bite from the oral argument of Alps South, LLC v. Ohio Willow Wood Co. illustrates: [Listen].

The US district courts have not been reticent to recognize that while patent eligibility under 35 U.S.C. §101 is an issue of law, it is informed by underlying issues of fact.  Here are a few quotations from the Federal Circuit and US district courts:

Whether a claim is directed to statutory subject matter is a question of law. Although determination of this question may require findings of underlying facts specific to the particular subject matter and its mode of claiming . . . .

Arrhythmia Research Technology v. Corazonix Corp., 958 F.2d 1053 (Fed. Cir. 1992).

It is well-established that “whether the asserted claims … are invalid for failure to claim statutory subject matter under 35 U.S.C. § 101, is a question of law which we review without deference.” AT & T Corp. v. Excel Commc’ns, Inc., 172 F.3d 1352, 1355 (Fed.Cir.1999). As a question of law, lack of statutory subject matter is a “ground [for affirmance] within the power of the appellate court to formulate.” Chenery, 318 U.S. at 88, 63 S.Ct. 454. While there may be cases in which the legal question as to patentable subject matter may turn on subsidiary factual issues, Comiskey has not identified any relevant fact issues that must be resolved in order to address the patentability of the subject matter of Comiskey’s application. Moreover, since we would review a Board decision on the issue of patentability without deference, see AT & T, 172 F.3d at 1355, the legal issue concerning patentability is not “a determination of policy or judgment which the agency alone is authorized to make.” Chenery, 318 U.S. at 88, 63 S.Ct. 454.

In re Comiskey, 554 F.3d 967 (Fed. Cir. 2009)(Judge Dyk writing for the court).

Whether asserted patent claims are invalid for failure to claim statutory subject matter under § 101 is a question of law. See In re Comiskey, 554 F.3d 967, 975 (Fed. Cir. 2009). However, “determination of this question may require findings of underlying facts specific to the particular subject matter and its mode of claiming.” Arrhythmia Research Tech. Inc. v. Corazonix Corp., 958 F.2d 1053, 1056 (Fed. Cir. 1992). Therefore, because a patent is presumed to be valid pursuant to 35 U.S.C. § 282, a party must prove the factual elements of ineligibility by clear and convincing evidence. See Island Intellectual Prop. LLC v. Deutsche Bank AG, No. 09 Civ. 2675 (KBF), 2012 WL 386282, at *2 (S.D.N.Y. Feb. 6, 2012); Voter Verified, Inc. v. Election Sys. & Software, Inc., 745 F. Supp. 2d 1237, 1251 (M.D. Fla. 2010) (“A patent is presumed valid, and [defendant] bears the burden to prove the factual elements of invalidity under 35 U.S.C. § 101 . . . by clear and convincing evidence.”).

SINCLAIR-ALLISON, INC. v. FIFTH AVENUE PHYSICIAN SERVICES, LLC, No. CIV-12-360-M (W.D. Okla. Dec. 19, 2012).

While the question of whether a claim is directed at patent-eligible subject matter is one of law, that determination will often entail the resolution of underlying factual questions. VS Techs, LLC v. Twitter, Inc., 11 CV 43, 2012 WL 1481508, at *4 (E.D. Va. Apr. 27, 2012) (addressing Section 101 and noting that although the ultimate question of validity of patent is a question of law, “there may be underlying factual questions that the jury must answer”) (citing Arrhythmia Research Tech., Inc. v. Corazonix Corp., 958 F.2d 1053, 1055-56 (Fed. Cir. 1992)); see also Microsoft Corp, 131 S. Ct. at 2242-43 (“While the ultimate question of patent validity is one of law, the same factual questions underlying the PTO’s original examination of a patent application will also bear on an invalidity defense in an infringement action.”) (internal marks and citations omitted); Bancorp Servs., L.L.C. v. Sun Life Assurance Co. of Canada (U.S.), 687 F.3d 1266, 1273-74 (Fed. Cir. 2012) (“it will ordinarily be desirable—and often necessary—to resolve claim construction disputes prior to a § 101 analysis, for the determination of patent eligibility requires a full understanding of the basic character of the claimed subject matter”). Courts accordingly have declined to decide the issue of patent eligibility as a matter of law (i.e., prior to fact-finding or claim construction) when the issue depends upon the resolution of a factual dispute. See Card Verification Solutions, LLC v. Citigroup Inc., 13 CV 6339, 2014 WL 4922524, at *5 (N.D. Ill. Sept. 29, 2014); Genetic Techs. Ltd. v. Glaxosmithkline, LLC, 12 CV 299, 2014 U.S. Dist. LEXIS 156473, at *2-4 (M.D.N.C. Aug. 22, 2014); see also VS Techs, 2012 WL 1481508, at *4. Cf. Data Distrib. Techs., LLC v. Brer Affiliates, Inc., 12 CV4878, 2014 WL 4162765, at *5-6 (D.N.J. Aug. 19, 2014) (citing cases and noting that courts have adjudicated patent eligibility prior to claim construction where there are no factual disputes, there was no reasonable construction that would bring claims within patentable subject matter, or the construction most favorable to the patentee are still patent-ineligible).

PROTOSTORM, LLC v. ANTONELLI, TERRY, STOUT & KRAUS, LLP, No. 08-CV-931 (PKC)(JO) (E.D.N.Y. June 5, 2015).

Patentability is a question of law “that may be informed by subsidiary factual issues.” CyberFone 885 F.Supp.2d 710, 715 (D.Del.2012) (citing In re Comiskey, 554 F.3d 967, 976 (Fed.Cir.2009)).

WIRELESS MEDIA INNOVATIONS, LLC v. MAHER TERMINALS, LLC, Civil Action No. 14-7004 (D.N.Y. Apr. 20, 2015).

Patentability under Section 101 is a “threshold inquiry” and a question of law. In re Bilski, 545 F.3d 943, 950-51 (Fed. Cir. 2008), aff’d, Bilski v. Kappas, 561 U.S. 593 (2010). Yet this question oflaw is also one that “may be informed by subsidiary factual issues[.]” CyberFone Sys., LLC v. Cellco P’ship, 885 F. Supp. 2d 710, 715 (D. Del. 2012) (citing In re Comiskey, 554 F.3d 967, 976 (Fed. Cir. 2009)).

EXECWARE, LLC v. BJ’S WHOLESALE CLUB, INC., Civil Action No. 14-233-LPS (D. Del. July 15, 2015).

Patentability under Section 101 is a “threshold inquiry” and a question of law. In re Bilski, 545 F.3d 943, 950-51 (Fed. Cir. 2008), aff’d, Bilski v. Kappas, 561 U.S. 593 (2010). Yet this question of law is also one that “may be informed by subsidiary factual issues[.]” CyberFone Sys., LLC v. Cellco P’ship, 885 F. Supp. 2d 710, 715 (D. Del. 2012) (citing In re Comiskey, 554 F.3d 967, 976 (Fed. Cir. 2009)).

TRIPLAY, INC. v. WhatsAPP INC., Civil Action No. 13-1703-LPS (D. Del. Apr. 28, 2015).

In support of its argument, Plaintiff cites two Federal Circuit cases for the proposition that “whether a patent claim is directed to statutory subject matter is a question of law.” Prometheus Labs. Inc. v. Mavo Collaborative Servs., 628 F.3d 1347, 1353 (Fed. Cir. 2010); see also In re Comiskey, 554 F.3d 967, 975 (Fed. Cir. 2009) (“It is well-established that `whether the asserted claims . . . are invalid for failure to claim statutory subject matter under 35 U.S.C. § 101, is a question of law which we review without deference.”). The language cited by Plaintiff merely articulates that the ultimate question of the validity of a patent is considered to be a question of law. However, Plaintiff ignores the fact that there may be underlying factual questions that the jury must answer in order to reach a conclusion on validity. See Arrhythmia Research Tech., Inc. v. Corazonix Corp., 958 F.2d 1053, 1055-56 (Fed. Cir. 1992) (“Whether a claim is directed to statutory subject matter is a question of law. Although determination of this question may require findings of underlying facts specific to the particular subject matter and its mode of claiming, in this case there were no disputed facts material to the issue.”). Thus, where the issue of validity depends upon the resolution of a factual dispute, a jury is permitted to decide the issue. Once the underlying questions of fact are answered by the jury, the validity issue is resolved.

Further, the language of the cases cited by Plaintiff merely reaffirms the fact that the issue of validity is reviewable on appeal de novo, like any other question of law. It does not, however, stand for Plaintiffs assertion that the jury should not have been asked to decide this issue. The issue of validity is no different than any other question of law that is answered by the jury because of the issue’s dependence upon the resolution of a factual dispute. For example, the ultimate determination of obviousness is also a question of law but is “based on several underlying factual findings, including (1) the scope and content of the prior art; (2) the level of ordinary skill in the pertinent art; (3) the differences between the claimed invention and the prior art; and (4) evidence of secondary factors, such as commercial success, long-felt need, and the failure of others.” Retractable Techs., Inc. v. Becton. Dickinson & Co., 653 F.3d 1296, 1310 (Fed. Cir. 2011). The issue of validity is no different. As the Court acknowledged in its October 5, 2011 Order, it could not conclude as a matter of law that the patent was not abstract because of a factual dispute over whether a machine is involved in the process, that process being the “taking [of] raw information and putting it into a format which enables people who are knowledgeable or skilled in a particular area to interact with others and discuss relevant topics in their particular field.” Doc. 99 at 10-11. As the issue of validity depended upon the resolution of this factual dispute, the question properly fell within the province of the jury.

VS TECHNOLOGIES, LLC v. TWITTER, INC., Civil Action No. 2: 11cv43 (E.D. Va. Apr. 26, 2012).

Whether the asserted claims are invalid for failure to claim statutory subject matter is a question of law that may be informed by subsidiary factual issues. See In re Comiskey, 554 F.3d 967, 976 (Fed.Cir.2009) (citations omitted).

Cyberfone Systems, LLC v. Cellco Partnership, 885 F. Supp. 2d 710 (D. Del. 2012).

In the recent decision of AIRBUS SAS v. FIREPASS CORPORATION, No. 2014-1808 (Fed. Cir. July 17, 2015), the CAFC gave a tip of the hat to the MPEP by noting:

“The MPEP [is] commonly relied upon as a guide to patent attorneys and patent examiners on procedural matters. . . .” Litton Sys., Inc. v. Whirlpool Corp., 728 F.2d 1423, 1439 (Fed. Cir. 1984). Although the MPEP does not have the force of law, it is entitled to judicial notice “so far as it is an official interpretation of statutes or regulations with which it is not in conflict.” Id. Here, the MPEP is consistent with the statutory scheme and § 1.948(a)(2). MPEP § 2666.05, titled “Third Party Comments After Patent Owner Response,” pertains to § 1.948(a)(2) and the limitations on submission of prior art by the third-party requester after the order for inter partes reexamination. According to § 2666.05, “any such new proposed rejection stands on the same footing as a proposed rejection presented with the request for reexamination.” MPEP § 2666.05 (2008). Section 2666.05 continues, citing MPEP § 2617 for “the required discussion of the pertinency of each reference,” and directing that “[a]n explanation pursuant to the requirements of 35 U.S.C. [§] 311 of how the art applies is no less important at this stage of the prosecution, than it is when filing the request.” Id.

This makes me wonder about a few issues:

1)  How will the court treat continuations filed on the day a patent issues;

2)  Will the court defer to the PTO’s interpretation of “or otherwise available to the public” as used in the AIA;

3) Will the court give deference to the PTO’s patent eligibility guidelines with respect to the meaning of “directed to.”

The Federal Circuit will be sitting in Boston this October.  From the Federal Circuit website:

THE FEDERAL CIRCUIT TO SIT IN

BOSTON, OCT 6-8, 2015

Mark Cohen of the USPTO will be presenting a webcast from the Denver PTO this Friday titled “Anticipating Future Challenges on Chinese IP, Why Being Up-to-Date is Not Enough.”  I understand from a colleague that Mr. Cohen is an extremely accomplished individual with respect to China.  The webcast information is shown below:

Topic: Mark Cohen Challenges on Chinese IP
Host: Digital Multimedia5
Date and Time:
Friday, July 24, 2015 4:00 pm, Eastern Daylight Time (New York, GMT-04:00)
Event number: 642 259 613
Event password: 12345

——————————————————-
To join the audio conference only
——————————————————-
1. Provide your number when you join the event to receive a call back. Alternatively, you can call one of the following numbers:
Dial In: 1-571-270-7000
2. Follow the instructions that you hear on the phone.
Your Cisco Unified MeetingPlace meeting ID: 642 259 613

The Congressional Research Service explains the appointment process for circuit court nominees, after Senate confirmation, as follows [Link]:

After Confirmation of a Nomination Reconsideration

Senate Rule XXXI provides that, after the Senate has confirmed a nomination, any Senator who voted with the majority has the option of moving to reconsider the vote. Only one motion to reconsider is in order on the nomination, and it must be made on the day of the vote or on one of the next two days the Senate meets in executive session. Typically, however, the Senate, before the vote on confirmation has occurred, preempts the motion to reconsider, arranging beforehand by unanimous consent for it to be considered tabled in the event the nomination is confirmed. It is typical, for example, for the Senate, in a unanimous consent time agreement for a confirmation vote on a circuit or district court nomination, to include the provision that, after the vote, “the motion to reconsider be considered made and laid upon the table.” Similarly, UC agreements concerning upcoming cloture votes on nominations often provide for the tabling of the motion to reconsider in the event cloture is invoked and the nominee then confirmed. In either case, tabling the motion prevents any subsequent attempt to reconsider.152

Resolution of Confirmation

With the motion to reconsider tabled, the Secretary of the Senate attests to a resolution of confirmation and transmits it to the White House. (In the rare instance of the Senate voting against confirmation, the Secretary will transmit to the President a resolution of disapproval.) Senate Rule XXXI requires that the Secretary wait until the time for moving to reconsider has expired before notifying the President that a nomination has been confirmed. Such notice, however, in practice “is usually sent immediately, permitted by unanimous consent.”153

Post-Senate Appointment Steps President Signs Commission154

Upon notification of a nominee’s confirmation, the President performs the next step in the appointment process—the signing of the nominee’s commission. The commission is a formal document empowering the nominee to assume the judicial office, which the President must sign before the nominee may begin his or her new duties. The date of a nominee’s commission is the date the President signs it, which usually occurs within a few days of Senate confirmation (but can also occur on the same date as the confirmation itself). The commission is transmitted to the Department of Justice, which then sends it, as well as a packet of other documents, to the nominee.

Oath of Office

The appointment commission packet sent by the Department of Justice includes various forms to accompany the statutory oath of office, which each circuit and district judge must take before exercising the judicial authority of the United States. The oath of office is orally administered by someone legally authorized by state or federal law to administer oaths, including the chief judge or another judge on the court to which the nominee is assuming his or her position. Additionally, in some cases, the home state Senator of a nominee has administered the oath of office. The oath is a combination of the judicial oath of office required of every Justice and judge of the United States under 28 U.S.C. 453 and the general oath administered to all federal government officials, set forth in 5 U.S.C. 3331.155

At the time the oath of office is executed, the nominee himself or herself must also sign and date the commission. If two or more confirmed nominees to the same court sign their commissions on the same date, seniority is determined by seniority of age of the nominees. If, for example, Judges A and B both sign on the same date and Judge A is older than Judge B, then Judge A is considered more senior than Judge B.156

This process—receipt of the packet from the Department of Justice, administering the oath of office to the nominee, including obtaining his or her signature on the commission—typically occurs within a week or two of Senate confirmation. In some cases, however, a nominee might wait longer, for professional reasons, to take the oath and sign his or her commission. For example, a law professor who is confirmed as a U.S. district court judge might wait to sign her commission until after she has finished teaching for the semester.

Investiture

Typically, the last step in the appointment process is the investiture. At this ceremonial event, attended by family and friends, the new judge is sworn in yet again, in the courtroom. The ceremony, however, is not required for the nominee to assume office and can take place weeks or months after the oath of office is executed.