Fitch Even News Feed Oct 2018 00:00:00 -0800firmwise Alert: Seventh Circuit Emphasizes Importance of Careful Contract Drafting<p><i><a href=";Path=Y2018/D10-01/C:18-1144:J:Scudder:aut:T:fnOp:N:2227379:S:0">Soarus L.L.C. v. Bolson Materials Int&rsquo;l Corp.,</a></i> recently decided by the Court of Appeals for the Seventh Circuit, demonstrates the consequences of imprecise drafting of nondisclosure agreements.</p> <p>In 2009, Soarus and Bolson executed a nondisclosure agreement regarding a specialty polymer that Soarus distributed&mdash;G-Polymer&mdash;that was originally developed by Nippon. Article 6 of the agreement provided:</p> <p style="margin-left: 40px;">Bolson shall not file any application for a patent or other intellectual property using any piece of Confidential Information or the results of the Evaluation without prior written consent of Nippon.</p> <p>But Article 10 of the agreement carved out an exception to that provision:</p> <p style="margin-left: 40px;">Notwithstanding Article 6 hereof, Bolson is free to patent and protect any new application using G-Polymer<sup>&reg;</sup> in the specific area of Fused Deposition Method Rapid Prototyping Equipment and Methods.</p> <p>Shortly after executing the agreement, Bolson filed a provisional patent application for a 3D printing process utilizing the G-Polymer. The application allegedly revealed confidential information covered by the agreement. Soarus filed suit for breach of contract.</p> <p>The district court granted Bolson&rsquo;s motion for summary judgment, finding that Article 10 was clear and afforded the defendant the ability to disclose the confidential information in its patent application. Soarus appealed.</p> <p>On appeal, the Seventh Circuit affirmed, agreeing with the district court that the terms of the agreement were &ldquo;clear and unambiguous.&rdquo; Although the agreement imposed broad restrictions on the defendant&rsquo;s use of the confidential information, the court found it dispositive that Article 10 used the term &ldquo;notwithstanding,&rdquo; which meant that this clause was controlling. Had Soarus wished to preclude the use of confidential information in any patent filings, &ldquo;the parties instead could (and should) have stated in clear and precise terms&rdquo; this qualification. Accordingly, the court affirmed the district court&rsquo;s grant of summary judgment for the defendant.</p> <p>This case, while perhaps not surprising, is relevant for any companies that routinely use nondisclosure agreements to protect their confidential information. An NDA document should be drafted carefully to ensure that any exceptions to confidentiality are clearly and precisely defined.</p> <p>For more information on this decision, please contact Fitch Even partner <a href=";A=2589&amp;format=xml&amp;p=5482">&shy;Allen E. Hoover</a>.</p> <p><i>Fitch Even law clerk Evan Kline-Wedeen contributed to this alert.<br /> <br type="_moz" /> </i></p> <p><b>Fitch Even IP Alert<sup>&reg;</sup> </b></p>IP Alerts16 Oct 2018 00:00:00 -0800 Alert: USPTO Changes Claim Construction Standard for AIA Proceedings<p>According to a <a href="">final rule change</a> issued on October 10 by the USPTO, all claims challenged in a petition for <i>inter partes</i> review (IPR), covered business method (CBM) review, and post-grant review (PGR) filed on or after November 13, 2018, will be interpreted according to the same standard applied by federal courts in civil patent cases (&ldquo;the <i>Phillips</i> standard&rdquo;). Claims proposed by a patent owner in a motion to amend will also be evaluated under the <i>Phillips</i> standard under the new rules. The new rules also state that any prior claim construction determination concerning a claim term from a district court or an International Trade Commission (ITC) proceeding &ldquo;will be considered&rdquo; if submitted to the Patent Trial and Appeal Board (PTAB) in a timely fashion.</p> <p>Prior to this rule change, the PTAB applied the broadest reasonable interpretation (BRI) standard to unexpired patent claims challenged in an AIA proceeding, as well as to claims proposed in a motion to amend. Only expired claims or claims that would expire prior to the issuance of a final written decision in the proceeding were subject to the <i>Phillips</i> standard.</p> <p>The USPTO provided a number of reasons for the rule change, with the overriding justification being to increase uniformity, predictability, and efficiency. For example, one reason given was that almost 87% of patents subject to AIA proceedings have also been the subject of patent litigation. The USPTO noted that efficiencies may be realized because the parties could rely on the same claim construction positions taken in litigation as before the PTAB. In addition, the rule change eliminates the potential unfairness of using a broader claim construction standard for patentability determinations in AIA proceedings (resulting in a broader universe of prior art) than used for validity and infringement determinations in federal court. The USPTO also cited Federal Circuit cases stating that a claim construction from the PTAB using the BRI standard may be broader, and is not necessarily the &ldquo;correct construction&rdquo; determined under <i>Phillips</i>.</p> <p>The USPTO also recognized that using the BRI construction in AIA proceedings was no longer justified simply because patent owners have the opportunity to amend the claims, a commonly cited reason in favor of the BRI standard. In particular, the Office noted that only 196 motions to amend had been decided in the past six years, with only <a href=";an=79231&amp;anc=93&amp;format=xml&amp;p=5485">4% of those motions being granted</a> and 90% being denied in their entirety.</p> <p>This is a substantial change in the rules governing AIA post-issuance proceedings. While this change is seen as a benefit to patent owners, it remains to be seen whether this change will have a significant effect on the outcome of AIA trials. Interestingly, the USPTO acknowledged in responding to public comments that the <i>Phillips </i>standard includes the doctrine of construing claims to preserve their validity. The USPTO commented that it did not expect this doctrine to arise frequently in AIA proceedings, given that it is rarely applied in the courts and is limited to cases where &ldquo;the court concludes, after applying all the available tools of claim construction, that the claim is still ambiguous.&rdquo; The USPTO further cited the Federal Circuit&rsquo;s commentary that such doctrine may only be used as a last resort and may not be used to redraft claims to sustain their validity. And as before, unlike in federal court, there is no presumption that a patent is valid in AIA proceedings.</p> <p>All practitioners practicing before the PTAB should be aware of this rule change. More importantly, any petitioners that are currently drafting petitions should take heed. In addition, any pertinent claim construction decisions from federal court or the ITC should be cited to the PTAB with the petition or preliminary response along with any required explanation. After institution of trial, any claim construction decisions should be submitted as soon as possible according to the PTAB&rsquo;s rules on submission of supplemental information. &nbsp;</p> <p>For more information on this decision, please contact Fitch Even partner <a href=";A=2587&amp;format=xml&amp;p=5482">Paul B. Henkelmann</a>, author of this alert.</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p><b>Fitch Even IP Alert<sup>&reg;</sup></b></p>IP Alerts12 Oct 2018 00:00:00 -0800 Even Partner Mark Borsos Published in Wiley Book on Early Drug Development<p>Fitch Even partner <a href=";A=2567&amp;format=xml&amp;p=5482">Mark A. Borsos</a> contributed a chapter to <i><a href="">Early Drug Development: Bringing a Preclinical Candidate to the Clinic</a></i>, a multi-author book recently published by John Wiley &amp; Sons in hard copy and e-book formats. This comprehensive resource is intended to assist those within the pharmaceutical industry to navigate the challenges of developing and testing drug products. Its broad scope brings together critical knowledge from over 80 contributors in many disciplines ranging from process technology to pharmacology to intellectual property.</p> <p>Mark&rsquo;s chapter, &ldquo;Patent Protection Strategy,&rdquo; focuses on intellectual property issues to consider when developing new drugs and discusses high-level strategies to increase the value of patents as a business asset.<br /> &nbsp;</p>Professional Activities11 Oct 2018 00:00:00 -0800 Even Partner Nikki Little to Present at PLI Patent Litigation Seminar<p>Fitch Even partner <a href=";A=2598&amp;format=xml&amp;p=5482">Nicole L. Little</a> will be a featured presenter during the Practising Law Institute seminar on Patent Litigation 2018: Advanced Techniques &amp; Best Practices, taking place on October 17&ndash;18 at the University of Chicago Gleacher Center. The comprehensive program is designed to help corporate counsel and patent litigators and practitioners hone their patent litigation skills, as well as provide an update on recent relevant cases and proposed legislation, trends in patent remedies, and ethics issues in jury cases.</p> <p>Nikki will be co-presenting a session on October 18 on &ldquo;The Big Picture&mdash;Patent Litigation as Part of a Business Strategy,&rdquo; covering the many types of strategic and tactical decisions that should be made before and during litigation, whether on behalf of patent owners or accused infringers.</p> <p>For more information on the program and to register, please visit the <a href=";ID=328358">PLI website</a>.</p>Professional Activities10 Oct 2018 00:00:00 -0800 Alert: Secondary Considerations (May) Help to Save Patent Eligibility<p>The decisions of the Supreme Court in <i>Alice Corp. v. CLS Bank International</i> and <i>Mayo Collaborative Servs. v. Prometheus Labs., Inc</i>. led to the so-called two-step <i>Alice/Mayo</i> test for assessing patent eligibility under 35 U.S.C. 101. Under a first step, one assesses whether a patent claim is directed to a judicial exception (such as being abstract). If true, under a second step, one determines whether there is something else in the claim that represents something significantly more than the exception itself. On October 9, in <i><a href="">Data Engine Technologies LLC v. Google LLC</a></i>, a Federal Circuit panel concluded that an improvement to a spreadsheet program passed the first step of the <i>Alice/Mayo</i> test by not being abstract. In reaching this decision, the panel appeared impressed by factual evidence that many patent practitioners would recognize as being secondary considerations more ordinarily employed to traverse an obviousness rejection under 35 U.S.C. 103.</p> <p>This appeal came to the Federal Circuit following the trial court&rsquo;s entry of judgment on the pleadings based upon a finding that the claims were directed to abstract ideas and hence not patent-eligible under 35 U.S.C. 101. The panel described these patents as having claims for &ldquo;systems and methods for making complex electronic spreadsheets more accessible by providing familiar, user-friendly interface objects&mdash;specifically, notebook tabs&mdash;to navigate through spreadsheets while circumventing the arduous process of searching for, memorizing, and entering complex commands.&rdquo; The panel then concluded that &ldquo;These claims are not abstract, but rather are directed to a specific improved method for navigating through complex three-dimensional electronic spreadsheets.&rdquo;</p> <p>It is interesting that on the way to reaching that conclusion, the panel described, in some detail, factual evidence comprising &ldquo;seven articles dated between 1992 and 1993, all touting the advantages of [this] use of notebook tabs to improve navigation through three-dimensional spreadsheets.&rdquo; For example, the panel quoted the following content from <i>InfoWorld,</i> written when the publication named the patented product, Quattro Pro, the product of the year for productivity applications:</p> <p style="margin-left: 40px;">We collected all the word processors, spreadsheets, databases, personal information managers, and other productivity applications and asked ourselves a question: &ldquo;Which of these programs really changed the way an individual user goes about handling data? Does any one stand out as a productivity booster?&rdquo;</p> <p style="margin-left: 40px;">Our answer was Quattro Pro for Windows. The reason: Borland designed this program from the ground up and examined how spreadsheet users would work in a Windows environment. <i>The notebook metaphor, with pages and tabs for different worksheets, simplifies handling large worksheets</i>. The &ldquo;interface builder&rdquo; lets a user design custom dialog boxes without extensive macro programming. And, of course, Quattro Pro&rsquo;s graphics are stellar.</p> <p>Numerous court decisions and the examination guidelines of the USPTO are making it increasingly clear that in-depth factual inquiries can be highly relevant to assessing whether a patent claim is directed to a judicial exception. The <i>Data Engine</i> decision presents an example where those facts included public lauding deemed relevant to the claimed subject matter.</p> <p>For more information on this ruling, please contact Fitch Even partner <a href=";A=2610&amp;format=xml&amp;p=5482">Steven G. Parmelee</a>, author of this alert.<br /> &nbsp;</p> <p><b>Fitch Even IP Alert<sup>&reg;</sup></b></p>IP Alerts10 Oct 2018 00:00:00 -0800 Alert: Involuntary Dismissal of Infringement Complaint Doesn't Stop 1-Year Time Limit to File IPR Petition<div ltr=""> <div ltr="" style="margin: 0px; padding: 0px; user-select: text; -webkit-user-drag: none; -webkit-tap-highlight-color: transparent; overflow: visible; cursor: text; clear: both; position: relative; direction: ltr; font-family: &quot;Segoe UI&quot;, &quot;Segoe UI Web&quot;, Arial, Verdana, sans-serif;"> <div ltr=""> <div ltr=""> <div ltr=""> <div ltr="" style="margin: 0px; padding: 0px; user-select: text; -webkit-user-drag: none; -webkit-tap-highlight-color: transparent; overflow: visible; cursor: text; clear: both; position: relative; direction: ltr;"> <div ltr=""> <p paraid="1811779680" paraeid="{f7988b50-cc64-44ac-97d3-17bff8195694}{197}">Title 35 U.S.C. &sect; 315(b) precludes institution of an<em> inter partes</em> review (IPR) if the petition is filed more than one year after the petitioner is served with a complaint alleging infringement of the patent at issue. On August 16, in <a href=""><em>Click-to-Call Technologies, LP v. Ingenio, Inc.</em></a>, the Federal Circuit held that the voluntary dismissal of an infringement complaint without prejudice does not stop section 315(b)&rsquo;s time bar. Then on September 23, finding no reason to distinguish <em>Click-to-Call</em>, the Federal Circuit held in <a href=""><em>Bennett Regulator Guards, Inc. v. Atlanta Gas Light Co.</em></a> that <em>involuntary </em>dismissal of an infringement complaint without prejudice also does not stop the one-year time bar. Accordingly, the court vacated the Patent Trial and Appeal Board's (PTAB&rsquo;s) final written decision of invalidity and remanded for dismissal of the IPR.</p> <p paraid="1811779680" paraeid="{f7988b50-cc64-44ac-97d3-17bff8195694}{197}">As an interesting aside, the Federal Circuit considered sanctions issued by the PTAB against Atlanta Gas for its failure to notify the PTAB (through updated mandatory notices) of its parent company&rsquo;s merger and name change, which occurred late in the proceedings but prior to the final written decision. Bennett raised the issue, and the merger actually raised a conflict with one of the PTAB judges, who then recused himself. The PTAB declined to terminate the IPR as a sanction, but allowed Bennett to move for costs and fees incurred subsequent to the final written decision. The PTAB had not ruled on the motion for fees at the time of the Federal Circuit&rsquo;s decision. Because the PTAB had not yet quantified its sanctions award, the Federal Circuit found the award to be non-final and non-appealable. In addition, the court declined to exercise pendent jurisdiction because the sanctions award was not sufficiently intertwined with the 315(b) and patentability issues before the court. Accordingly, the court remanded for the PTAB to &ldquo;quantify any sanctions.&rdquo;</p> <p paraid="1811779680" paraeid="{f7988b50-cc64-44ac-97d3-17bff8195694}{197}">This case illustrates that patent owners served with a petition should investigate whether any petitioner or related party might be time-barred early in the proceedings. In addition, it is important for petitioners and patent owners to diligently apprise the PTAB of any ownership or other organizational changes to any real parties in interest throughout the entire IPR proceeding.</p> <p paraid="1811779680" paraeid="{f7988b50-cc64-44ac-97d3-17bff8195694}{197}">For more information on this decision, please contact Fitch Even partner <a href=";A=2587&amp;format=xml&amp;p=5482">Paul B. Henkelmann</a>, author of this alert. <br /> <br /> <br /> <strong>Fitch Even IP Alert&reg; </strong></p> </div> <div ltr="">&nbsp;</div> </div> </div> </div> </div> </div> </div>IP Alerts08 Oct 2018 00:00:00 -0800 Alert: Supreme Court to Decide Copyright Costs Dispute<p>Yesterday the U.S. Supreme Court agreed to hear <i>Rimini Street, Inc. v. Oracle USA, Inc</i>., a copyright case in which the lower court awarded over $12 million in non-taxable costs to prevailing party Oracle. &ldquo;Taxable&rdquo; costs are those costs that are specified in the federal statutes that authorize cost awards. The Court of Appeals for the Ninth Circuit affirmed the award of these non-taxable costs. Other circuit courts have not allowed the award of non-taxable costs to the prevailing party in copyright cases, limiting the award of costs to the specifically identified taxable costs.</p> <p>Rimini Street sought, and the Court granted, a writ of certiorari on the following question:</p> <p>&ldquo;Whether the Copyright Act&rsquo;s allowance of &lsquo;full costs&rsquo; (17 U.S.C. &sect; 505) to a prevailing party is limited to taxable costs under 28 U.S.C. &sect;&sect; 1920 and 1821, as the Eighth and Eleventh Circuits have held, or also authorizes non-taxable costs, as the Ninth Circuit holds.&rdquo;</p> <p>Fitch Even will report once the Court has issued a decision in this case.<br /> &nbsp;</p> <p><b>Fitch Even IP Alert<sup>&reg;</sup></b></p>IP Alerts28 Sep 2018 00:00:00 -0800 Alert: PTAB Decision Vacated for Failure to Consider Arguments Raised in Petitioner's Reply<p>On August 27, in <i><a href="">Ericsson, Inc. v. Intellectual Ventures I LLC</a></i>, the Federal Circuit held that the Patent Trial and Appeal Board (PTAB) abused its discretion in refusing to consider part of Ericsson&rsquo;s reply brief, when the PTAB had altered its claim construction after Ericsson filed its institution petition. The court therefore vacated and remanded the PTAB&rsquo;s decision.</p> <p>Intellectual Ventures (&ldquo;IV&rdquo;) owns U.S. Patent No. 5,602,831, which is directed to wireless communications systems. The &rsquo;831 patent generally claims a signaling method with multiple features, including an &ldquo;interleaving&rdquo; step and a &ldquo;varying data packet size&rdquo; step. Ericsson challenged the patent in an <i>inter partes</i> review (IPR) proceeding and asserted two prior art references, the Reed and Mahany patents. Ericsson asserted that Reed disclosed &ldquo;interleaving&rdquo; and that Mahany taught &ldquo;varying data packet size.&rdquo;</p> <p>In its petition, Ericsson argued that the claims should be construed under the &ldquo;broadest reasonable interpretation&rdquo; standard. The PTAB agreed and, construing the claims under this standard, instituted the IPR proceedings.</p> <p>IV then filed its patent owner&rsquo;s response, arguing for the first time that the claims should be construed under the narrower standard clarified in <i>Phillips v. AWH Corp.</i> because the patent had expired prior to institution. (See our earlier <a href=";an=76328&amp;anc=180&amp;format=xml&amp;p=5486">IP alert</a> discussing this issue). Ericsson filed a reply acknowledging the narrower construction standard and presenting additional arguments based on this narrowed standard.</p> <p>In its institution decision, based on its construction of two &ldquo;interleaving&rdquo; terms, the PTAB found that Ericsson had not established a reasonable likelihood of success in showing certain claims to be unpatentable over the combination of Reed and Mahany, noting that Reed did not show a certain aspect of the interleaving step. Ericsson argued to the contrary in its reply, contending there was &ldquo;no substantial difference&rdquo; between Reed&rsquo;s technique and the technique claimed under the revised construction, and therefore Reed did contain such disclosure. The PTAB declined to consider this portion of Ericsson&rsquo;s argument, stating that the reply is &ldquo;not an opportunity for Petitioner to identify, for the first time, new and different prior art elements that are alleged to satisfy the claim requirements.&rdquo; Ultimately, the PTAB ruled against Ericsson, and Ericsson appealed.</p> <p>Applying the abuse of discretion standard of review, the Federal Circuit vacated the PTAB&rsquo;s decision and remanded it for consideration of Ericsson&rsquo;s arguments. The Federal Circuit noted that the PTAB does have discretion to strike arguments improperly raised for the first time in a reply. But the court found that Ericsson&rsquo;s petition had generally raised the argument concerning Reed, such that the reply brief did not in fact raise new arguments. Additionally, the PTAB had revised its claim construction after instituting the IPR. The court determined that Ericsson should have been given an opportunity to respond to the altered claim construction. Notwithstanding the outcome of this case, the court cautioned that it was not altering the PTAB&rsquo;s general practice of limiting the content of replies.</p> <p>Under this decision, petitioners may have greater freedom to develop the grounds asserted in the petition through their reply brief. Patent owners have another reason to exert every effort to convince the PTAB not to institute post-grant proceedings, because once trial is instituted, petitioners may be allowed to expand the arguments in the petition.</p> <p>For more information on this decision, please contact Fitch Even partner <a href=";A=2585&amp;format=xml&amp;p=5482">David A. Gosse</a>, author of this alert.</p> <p><i>Fitch Even law clerk Vincent R. Meyer contributed to this alert.</i></p> <p>&nbsp;</p> <p><b>Fitch Even IP Alert<sup>&reg;</sup></b></p>IP Alerts14 Sep 2018 00:00:00 -0800 Even Partner Amanda Lowerre O'Donnell to Present at PLI Advanced Patent Prosecution Workshop<p>Fitch Even partner <a href=";A=2599&amp;format=xml&amp;p=5482">Amanda Lowerre O&rsquo;Donnell</a> will be a featured presenter during five sessions of the Practising Law Institute&rsquo;s Advanced Patent Prosecution Workshop 2018: Claim Drafting &amp; Amendment Writing, taking place on September 27&ndash;28, 2018, at the University of Chicago Gleacher Center. The program is designed for corporate practitioners or outside counsel with patent experience who seek to improve their patent preparation and prosecution skills, including claim drafting and amendment writing, conducting examiner interviews, and drafting effective office action responses.</p> <p>On September 27, Amanda will be one of three instructors facilitating an interactive workshop on Advanced Claim Drafting related to the electromechanical field. During this session, attendees will receive individualized feedback from the faculty on claim-drafting exercises.</p> <p>On September 28, Amanda will present a session on Advanced Patent Prosecution Issues, covering topics specific to the electromechanical arts, including the use of means-plus-function claims, how to decide whether and when to amend or not amend claims, and how to structure patentability arguments to gain allowance while minimizing estoppel.</p> <p>Later that day, Amanda will co-facilitate an interactive workshop on &ldquo;Advanced Amendment Drafting,&rdquo; guiding participants as they draft amendments and apply substantive patent law to practical patent prosecution problems. Afterward, she will be among the faculty presenting a session on Examiner Interviews, during which they will discuss the legal requirements for examiner interviews. They will also perform a hypothetical interview, critique it, and provide strategies for achieving a productive examiner interview.</p> <p>In the closing session of the conference, Amanda will participate in a roundtable discussion of USPTO trends and available resources across all technology areas and will provide tips and recommend strategies for effectively prosecuting applications in view of these trends.</p> <p>For more information on the workshop, please visit the <a href="">PLI website</a>.</p> <p>This is the fifth consecutive year that Amanda has served on the faculty of this annual PLI patent prosecution workshop. Amanda focuses her practice primarily on patent prosecution, patent licensing, and commercial clearance assessments. She counsels clients in the U.S. and abroad working in a variety of technical fields and product applications, including electronic components, energy and renewable energy applications, food processing, packaging technology, and medical devices. In addition, Amanda regularly advises clients on business method protections as well as open-source software issues.<br /> <br /> &nbsp;</p>Professional Activities14 Sep 2018 00:00:00 -0800 Even Partner Joe Marinelli to Speak on IP Licensing<p>Fitch Even partner <a href=";A=2603&amp;format=xml&amp;p=5482">Joseph F. Marinelli</a> will copresent two educational modules of &ldquo;IP Licensing for Business Development,&rdquo; an advanced CLE course offered by the Licensing Executives Society (LES) on September 25&ndash;28 in Chicago.</p> <p>During a session on &ldquo;Legal Issues in Patenting, Due Diligence, and Licensing,&rdquo; Joe and his copresenters will discuss legal issues related to intellectual property procurement, enforcement, and licensing transactions. Participants will learn about various types of IP protection and different forms of license agreements, as well as the strategic implications of recent IP developments, among other topics.</p> <p>In a separate session focusing on ethics, Joe and other faculty will lead course participants in an interactive workshop exploring the various ethics questions that can arise during the negotiation of an intellectual property transaction. Topics covered will include conflicts of interest, attorneys&rsquo; confidentiality obligations to clients, conflicts arising from an attorney&rsquo;s representation of an organization, truthfulness in statements to others, and conduct during litigation.<br /> <br /> Attorneys and business professionals are invited to attend. For more information and to register, please visit the <a href="">LES University website</a>.<br /> <br /> &nbsp;</p>Professional Activities13 Sep 2018 00:00:00 -0800