As we prepare to enter a new year—and a new decade—it is time once again to look back on the year behind us to assess its impact for the IP world. All in all, it was very much a year of “almosts.” While the Supreme Court is still considering some cases that could herald massive change for patent law, its most notable move this year has largely been to keep its head planted firmly in the sand, particularly when it comes to Section 101 and patent eligibility, signaling that it seems to either believe everything is fine, or that Congress or the Federal Circuit will fix the problem they initially created. Similarly, Congress has been perhaps more active than ever before on IP issues across the board, but has thus far failed to enact or move forward on meaningful legislation at any level. At the U.S. Patent and Trademark Office (USPTO), Andrei Iancu made some heroic changes in examiner guidance on Section 101 that promised to clear up the massive confusion that has developed over the last decade, but the courts refused to acknowledge the USPTO’s authority on the matter, thereby making the changes virtually useless.

The Federal Circuit, on the other hand, has arguably done far too much. The Court charged with providing certainty for patent law has managed to thoroughly muddle the situation—seemingly at this point beyond all repair. With decisions like those recounted below, including Solutran, Chamberlain, Cleveland Clinic, and Chargepoint v. Semaconnect, we are entering 2020 on decidedly shaky patent ground. The Court’s increased use of Rule 36—in which a judgment can be entered without an opinion when it is determined by the panel that one of five conditions exist relating to the underlying decision being sufficient or exhibiting no error of law—has made the prospect of clarity all the more improbable. The rampant use of Rule 36 has been described by former Federal Circuit Chief Judge Paul Michel as “a dereliction of duty”: “When I was on the Court, we used Rule 36 in two very limited circumstances: for pro se personnel cases of no merit at all and for plainly frivolous cases,” Michel told IPWatchdog in September. He continued: “For any case with any merit, there should be some opinion. I consider it a dereliction of duty not to explain their reasoning in at least three to four pages in order to remain consistent with their mission to clarify the patent law.”

On a personal level, however, 2019 has been a year of excitement and growth for IPWatchdog—we hired our first employee, celebrated our 20th anniversary, and began planning our first Annual Meeting for 2020. I was recognized by IAM Magazine as one of the top IP Strategists in the world for the third time, and by Managing IP Magazine as one of the Top 50 Most Influential People in IP for the second time. The year and decade ahead look more promising than ever.

Of course, like any year, there were also great losses—most notably, Senator Birch Bayh passed away in March and Donald Dunner of Finnegan in October. Both were behemoths of the IP world in their respective sectors and they will be sorely missed. Luckily, as is the case for most icons like them, their legacy will continue to live on in the many contributions they have made to the field.

To come up with the following list we have reviewed all of our patent stories from 2019; they appear below in reverse chronological order. If you’d like to review my selections from past years see Top Patent Stories from 2018, Top Patent Stories from 2017, Top 10 Patent Stories from 2016 and Top 10 Patent Stories from 2015.

1. Arthrex v. Smith & Nephew, Inc. (October)

On October 31, the U.S. Court of Appeals for the Federal Circuit, in a landmark opinion authored by Judge Moore, said that the statutory scheme approved by the America Invents Act (AIA) for appointing Administrative Patent Judges (APJs) to the Patent Trial and Appeal Board (PTAB) violated the Appointments Clause of the U.S. Constitution, as it made APJs “principal officers.” While APJs were appointed by the Secretary of Commerce pre-Arthrex, principal officers must be appointed by the U.S. President under the U.S. Constitution, Article II, § 2, cl. 2. To remedy this, the statutory removal provisions that previously had applied to APJs had to be severed so that the Secretary of Commerce or USPTO Director would have the power to remove APJs without cause, said the Court.

Dismissing the government’s and appellees’ arguments that the Appointments Clause issue had been waived by the appellant, Arthrex, Inc., because Arthrex had not raised the issue with the PTAB, the Federal Circuit said that “this is an issue of exceptional importance, and we conclude it is an appropriate use of our discretion to decide the issue over a challenge of waiver.”

Arthrex sent shockwaves through the U.S. patent community and could shape up to be one of the top stories of 2020 as well. With the USPTO announcing on November 13 that it would request rehearing in the case, Congress taking an interest in the implications, and constitutional law scholars agreeing that the issues raised by the decision may very well pique the interest of this Supreme Court, there is a good chance we will see more on this to come. One way or another, as we have written before, the PTAB will be put on trial as a result of this ruling.

2. Solutran, Inc. v. Elavon, Inc. and The Chamberlain Group v. Techtronic Industries (July and August)

These two decisions came out in July and August, respectively, and underscore the absurdity of the present 101 situation. In Solutran, the Federal Circuit reversed the District of Minnesota’s denial of summary judgment, holding that the claims at issue, which related to processing paper checks, were invalid under Section 101 and that the physicality of the limitations of the claims did not save the claims. “[W]e have previously explained that merely reciting an abstract idea by itself in a claim—even if the idea is novel and non-obvious—is not enough to save it from ineligibility,” Judge Raymond Chen of the Federal Circuit explained for the majority.

As I wrote at the time, “the Federal Circuit can state that proposition until every single judge is blue in the face and there will be one exhausting, inescapable truth—it is wrong! Indeed, this logical impossibility is written into so many Federal Circuit decisions one must wonder how it is possible any of the judges who believe this nonsense were ever able to achieve an acceptable score on the LSAT in order to gain admission to law school in the first place.”

Then, in August, in their ruling in Chamberlain, the Court in part reversed a district court’s finding that certain claims of Chamberlain’s patent for a “moveable barrier operator” (for example, a garage door opener) were not abstract under Section 101. In October, Chamberlain filed a petition for rehearing asking the Court to reconsider its decision, which was widely criticized throughout the IP community. The petition correctly pointed out that the Federal Circuit was flat out wrong. Its decision has called into question the patent eligibility of wireless technologies that incorporate tangible components. As I previously wrote, “it doesn’t take a rocket scientist to realize that this claimed invention isn’t abstract. It is past time for the Supreme Court to put the Alice genie back in the bottle and stop the madness at the Federal Circuit.”

3. STRONGER Reintroduced (July)

In July, Senator Chris Coons (D-DE) and Congressman Steve Stivers (R-OH) reintroduced the STRONGER Patents Act of 2019 in an event on Capitol Hill. Coons first introduced the STRONG Patents Act in 2015, which then became the STRONGER Patents Act in 2017. This latest iteration, like the iterations before it, seeks to take a number of steps to strengthen patent protections and promote American innovation.

While there have been several changes from previous iterations of the bill, perhaps the most important provision contained within the bill has been retained; that provision relates to injunctions for victorious patent owners who have proved infringement and who have also withstood all validity and other challenges to their patents.

Section 106, titled “Restoration of Patents as Property Rights”, would amend Title 35 to add a new 35 U.S.C. 283(b), and would restore the presumption of injunctive relief upon a finding that a patent is both valid and infringed.

Despite much of the rest of the world—both western and eastern—understanding the importance of injunctive relief for patent owners, the STRONGER Act has no chance. STRONGER would at least in part overrule eBay and give patent owners who are victorious in a patent infringement litigation a real opportunity at injunctive relief. It is ironic that a patent owner who proves infringement and has withstood all validity challenges is not routinely granted an injunction, but that is what eBay changed. An injunction merely allows the district court to retain jurisdiction of the case and orders the adjudicated infringer to stop infringing, essentially nothing more than reasserting what the patent grant from the federal government already says. According to Chief Judge Randall Rader, who spoke at an IPWatchdog Patent Masters™ program in September, in China upwards of 97% of victorious patent owners receive an injunction.

Sadly, the STRONGER Patents Act is politically not feasible, primarily because it would overrule eBay, but also because of the many sensible changes to the PTAB, which include raising the proof for invalidity to a clear and convincing standard as is required in federal court.

4. Patent Eligibility Reform Hearings (June)

The Senate Judiciary Committee’s Subcommittee on Intellectual Property held three historic hearings in June on the topic of patent eligibility law in which it heard testimony from an unprecedented total of 45 diverse witnesses across industry and academia. The first hearing heard from witnesses including Paul Michel, Former Chief Judge of the Court of Appeals for the Federal Circuit, who now somewhat famously said: “I’ve spent 22 years on the Federal Circuit and nine years since dealing with patent cases and I cannot predict in a given case whether eligibility will be found or not found. If I can’t do it, how can bankers, venture capitalists, business executives and all the other players in the system make reliable predictions and sensible decisions?” Other witnesses at that hearing included Todd Dickinson and David Kappos, both former Directors of the USPTO; Sherry Knowles, Principal of Knowles Intellectual Property Strategies; and vocal opponents of the legislation including Charles Duan of the R Street Institute and Alex Moss of the Electronic Frontier Foundation.

In the second hearing on 101 reform, Senator Thom Tillis (R-NC) noted that he and Coons had specifically invited many of the high-tech companies, but they chose not to participate and instead to be represented by David Jones, Executive Director of the High Tech Inventors Alliance (HTIA), who spoke in this hearing. While Tillis said, “that’s ok,” he noted that “silence is consent. What we want here is people working out of the shadows, collaboratively.” HTIA’s members include Amazon, Google, Adobe, Intel, Cisco, Oracle, Dell, and Salesforce. Many of the panelists in the second hearing raised more substantive issues with the proposed section 100(k) and 112(f) than did speakers in the first hearing. Section 100(k) defines the term “useful” in the new section 101 and section 100(f) would eliminate functional claiming. Barbara Fiacco, representing AIPLA; Henry Hadad of Bristol-Myers Squibb and the Intellectual Property Owners Association (IPO) President; Paul Morinville of U.S. Inventor; and Phil Johnson, representing the Coalition for 21st Century Patent Reform, all raised various concerns about one or both of these sections.

The third and final hearing made it clear that considerable changes would be needed to the working draft, and that many stakeholders were concerned with the implications of the new Section 112(f). Tillis pointed to the practical argument made by inventor Paul Morinville about the impossibility of meeting that requirement in the context of software coding language, for example, while Tillis said the tech companies were afraid the language wasn’t strong enough to weed out overbroad software and business method claims that most agree should not be patent eligible.

Tillis also took the opportunity during this hearing to argue that the gene patent hysteria that had been touted by the ACLU and other groups is dead as far as he was concerned, and even one of the anti-reform witnesses testifying at the hearing agreed that the continued narrative that the draft legislation would allow for the patenting of a single human gene was not the issue. Dr. Sean George, Chief Executive Officer at Invitae, a genetic testing company that was sued by Myriad Genetics in 2013, explained during the second panel of the day—perhaps more coherently than his allies in the debate—that his concern was with “method, observation, and association patents that take that genetic information and wrap it up with a disease outcome or an observation that could diagnose a patient or target that patient for a particular therapy.” George claimed that pre-2012, his industry suffered due to patent thickets around such inventions, while post-2012, “I believe the data—the actual facts—would show that the industry is currently experiencing a renaissance.” George’s view was at stark odds with other biotech companies that had testified, however.

Ultimately, the draft 101 bill went back to the drawing board over the Section 112(f) issue, and the prospects of it reappearing in an election year are grim. As long as 112(f) remains in the bill, a significant portion of those who otherwise support 101 reform will oppose the bill because they believe rejections and invalidity arguments will simply move from 101 to 112(f), which will not make patent owners and patent applicants any better off. While that is a reasonable fear, this 101 reform should make it more difficult, perhaps impossible, for defendants to win on a motion to dismiss in federal court. Still, until the pro-reform factions come to agreement there is no chance the bill will move forward, period.

5. FTC v. Qualcomm (May)

In a 233-page Order issued in May, Judge Lucy Koh of the United States Federal District Court for the Northern District of California handed Qualcomm a stinging defeat in the case brought by the Federal Trade Commission (FTC) alleging that Qualcomm engaged in unlawful licensing practices. Judge Koh’s Order granted broad injunctive relief against Qualcomm, including that “Qualcomm must not condition the supply of modem chips on a customer’s patent license status and Qualcomm must negotiate or renegotiate license terms with customers in good faith under conditions free from the threat of lack of access to or discriminatory provision of modem chip supply or associated technical support or access to software.”

In August, the Ninth Circuit issued a partial stay of Judge Koh’s injunction, likely due to the unusual split between the FTC and Department of Justice (DOJ) on the matter, said attendees of IPWatchdog’s Patent Masters Symposium in September. A number of amicus briefs have been submitted to the Ninth Circuit by stakeholders including Judge Paul Michel and antitrust scholars, and Judge Douglas Ginsburg and others recently wrote an article on the topic. During the Patent Masters Symposium™, FTC Commissioner Christine Wilson addressed attendees, saying that Koh in her lengthy analysis took the opportunity to “radically expand a company’s legal obligation to help its competitors” by reviving a “discredited” 1985 Supreme Court case, Aspen Skiing Co. v. Aspen Highlands Skiing Corp. “My opposition to the court’s opinion does not stem from any desire to help or protect Qualcomm,” Wilson said. “I am focused on applying and preserving sound antitrust principles and this decision scares me.”

More recently, former Homeland Security Secretary Michael Chertoff wrote an opinion piece in the Wall Street Journal chastising the federal government for supporting Qualcomm, which he sees as a national security risk. Chertoff misses the point completely. The real problem Mr. Chertoff should be concerned with is the failure of Qualcomm, the erosion of U.S. patent laws and misapplication of U.S. antitrust laws in a way that has and will favor Huawei.

6. Chargepoint v. SemaConnect (April)

In April, the Federal Circuit issued a ruling in Chargepoint v. SemaConnect, which former Deputy Under Secretary of Commerce for Intellectual Property & Deputy Director of the USPTO Russ Slifer at the time said amounted to the Court having “swallowed all of patent law,” exactly as the Supreme Court had warned against in Alice. The case involved claims for a vehicle charging station; the court found the invention to be ineligible for a patent because, in the view of the CAFC, it was an abstract idea. The court held that “the broad claim language would cover any mechanism for implementing network communication on a charging station, thus preempting the entire industry’s ability to use networked charging stations. This confirms that claim 1 is indeed “directed to” the abstract idea of communication over a network to interact with network-attached devices.”

Slifer filed an amicus brief in the request for rehearing en banc in July, arguing that “ChargePoint’s patents clearly provide improved vehicle charging stations over prior art stations by including more hardware components to allow more sophisticated management of the vehicle charging operation. Yet, under the second Alice step the panel merely characterized the electrical components of the claimed charging station (for example controllable switch, transceiver, controller) as generic and stated that ‘the claims do nothing to improve how charging stations function; instead, the claims merely add generic networking capabilities to those charging stations and say ‘apply it.’…This is not the test set forth in Alice. If it is, we definitely need Congress to fix 101 now!”

In October, ChargePoint, Inc., represented by Supreme Court expert Carter Phillips of Sidley Austin, filed a petition for a writ of certiorari. ChargePoint is asking the Court to weigh in on:

Whether a patent claim to a new and useful improvement to a machine or process may be patent eligible even when it

“involves” or incorporates an abstract idea; and Whether the Court should reevaluate the atextual exception to 35 U.S.C. §101.

7. Matt Clements Returns to Apple (April)

This entire episode, in which Administrative Patent Judge (APJ) Matt Clements sat on several dozen IPR petitions filed by his former litigation client, Apple, was unseemly. While he apparently did not violate any ethical rules of the USPTO or Department of Commerce, that is only because of extraordinarily lax “standards” that require judges to recuse themselves for only a year from matters dealing with former clients. Outside the USPTO, attorneys and Article III constitutional judges would require recusal in such instances for their entire careers. The episode was exacerbated by the revelation in April of this year that Clements was hired as in-house counsel at Apple upon leaving the USPTO. Still, the USPTO does not have anything that approximates a judicial code of conduct for PTAB judges, and at least one APJ continues to be assigned Apple petitions when she previously represented Apple as a patent litigator prior to becoming a PTAB judge. The unwillingness of the USPTO to adopt real ethical standards for its judges that at all approximate the standards they apply to the attorneys and agents they regulate is mystifying.

8. First USPTO Precedential Opinion Panel decision (March)

In September 2018, the United States Patent and Trademark Office (USPTO) announced the substantial revision of Standard Operating Procedures (SOPs) for the paneling of matters before the Patent Trial and Appeal Board (PTAB) (SOP1) and precedential and informative decisions (SOP2), based upon feedback the Office received from stakeholders, courts, legislators, and six years of experience with America Invents Act (AIA) trial proceedings.

Then, in March 2019, the USPTO’s Precedential Opinion Panel (POP)—which includes USPTO Director Andrei Iancu, Commissioner for Patents Drew Hirshfeld, and Acting Chief Administrative Patent Judge Scott Boalick—issued its first ever decision, holding that a petitioner may be joined to a proceeding in which it is already a party; that the Board has discretion to allow joinder of new issues in an existing proceeding; and that the existence of a time bar under 35 U.S.C. § 315(b) is one of several factors to consider when exercising this discretion.

Despite that guidance, the POP emphasized that such discretion should be used only in limited circumstances, “namely, where fairness requires it and to avoid undue prejudice to a party.” Because the instant request for joinder was filed as a result of Petitioner’s errors, the Board dismissed the IPR petition, noting that “there are no fairness or undue prejudice concerns implicated, and the Petition is otherwise time-barred under § 315(b).” Proppant Express Investments, LLC and Proppant Express Solutions, LLC v. Oren Technologies, LLC (IPR2018-00914)

9. Senate IP Subcommittee Revived (February)

Early in the year, the Senate Judiciary Committee announced that it would be reviving the Subcommittee on Intellectual Property for the first time since 2007. With Senator Thom Tillis (R-NC) as Chair and Senator Chris Coons (D-DE) as Ranking Member, the Subcommittee hit the ground running in 2019 in an effort to fix U.S. patent eligibility law and address other pressing IP issues. In its first hearing in February, Tillis explained the scope of the Subcommittee’s agenda: “Our nation’s innovation economy is facing what I believe are a number of challenges in the 21st century, from competition of state actors like China to confusion about what even is eligible to be patented,” he said. He voiced his belief that Congress could address those challenges in a bipartisan, bicameral way and he said that the Subcommittee would hold hearings on the need to reform patent eligibility standards, modernize the U.S. Copyright Office, and reform the Patent Trial and Appeal Board (PTAB) “to ensure that patent rights are treated the same way all vested property rights should be treated.”

Coons (D-DE) echoed the sentiment that intellectual property was a bipartisan issue and warned that “recently, principally China, [has] brazenly stolen the fruits of our ingenuity. Counterfeit goods [not only hurt] American companies but line the pockets of organized crime and often present grave safety threats to Americans.”

The Subcommittee has delivered on its ambitious agenda, but, as described above, unfortunately substantive reform on its key mission to fix the patent eligibility mess remains elusive due to a number of roadblocks

10. USPTO Issues Revised Section 101 Guidance (January)

The USPTO announced on January 4, 2019 revised guidance for subject matter eligibility under 35 U.S.C. § 101. The USPTO also announced guidance on the application of 35 U.S.C. § 112 to computer-implemented inventions. The guidance took effect January 7, 2019.

“These guidance documents aim to improve the clarity, consistency, and predictability of actions across the USPTO,” said Under Secretary of Commerce for Intellectual Property and Director of the USPTO Andrei Iancu. “The USPTO will provide training to examiners and administrative patent judges on both documents to ensure that guidance is being properly administered.”

In essence, by narrowly identifying certain subject matter groups as being those that properly qualify for characterization as abstract ideas the USPTO effectively defined what is and what is not an abstract idea, thereby filling a void intentionally left ambiguous by both the Supreme Court and the Federal Circuit. Iancu’s move was in response to the courts’ refusal to define the term abstract idea despite that being the critical term in the Supreme Court’s extra-statutory patent eligibility test. Without a definition for the term abstract idea rulings had been—and still are—nothing short of subjective; some would even say arbitrary and capricious.

Unfortunately, later in the year, in Cleveland Clinic Foundation v. True Health Diagnostics, the Federal Circuit said they were not bound by the USPTO’s guidance. A true statement, but with Iancu the only one willing to do anything to address the uncertainty caused by CAFC interpretations of Alice/Mayo, the Federal Circuit refusing to buy into the USPTO’s sensible approach laid out in this guidance does not bode well for the future, and seems directly responsible for much of the worsening of the eligibility landscape as the year progressed. The Court in Cleveland Clinic wrote:

While we greatly respect the PTO’s expertise on all matters relating to patentability, including patent eligibility, we are not bound by its guidance. And, especially regarding the issue of patent eligibility and the efforts of the courts to determine the distinction between claims directed to natural laws and those directed to patent-eligible applications of those laws, we are mindful of the need for consistent application of our case law.

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