United States: Circuit Training

Last Updated: May 30 2014
Article by Mark S. Davies and Don Daybell

How will the US Court of Appeals for the Federal Circuit deal with cases arising from mechanisms introduced by the America Invents Act? Orrick's Mark S Davies and Donald Daybell discuss

The US Court of Appeals for the Federal Circuit has tremendous influence over the development of US patent law. From its establishment in 1984 up through today, the court has rendered thousands of decisions that touch on virtually all aspects of the patent system.1 Although the Supreme Court and the Congress may have greater formal authority, neither of those institutions is as critical to the daily running of the US patent system.

This year, the Federal Circuit will turn its attention to a set of cases arising from an important new procedure introduced by the America Invents Act. This law introduced several new mechanisms by which parties can ask the US Patent and Trademark Office (USPTO) to reconsider the validity of granted patents. The primary new USPTO proceeding is called "inter partes review," a mechanism by which any issued patent can be challenged on the basis of prior art.2 Another new USPTO proceeding is called "covered business method review," a mechanism by which certain "business method" patents can be challenged on a variety of bases, including prior art as well as other requirements of the patent laws.3 These proceedings both involve a 'mini-trial' before three Administrative Patent Judges (APJ) of the Patent Trial and Appeal Board (PTAB).

Importantly, these APJs are technically trained. All hold degrees in science or engineering and some hold advanced degrees in these areas. They all also have law degrees. The 'trial' before the PTAB is an 18-month long process, involving detailed briefing of the legal and technical issues, depositions of any testifying expert or fact witnesses, and culminating with an oral hearing before the PTAB. The hearing lasts for several hours, and the questions from the judges are often focused on the fine details of the relevant invention and prior art.

Many companies, particular those in the technology sector, have elected to challenge issued patents using this new proceeding. The proceedings are, so far, faster and more streamlined than district court patent litigation while eliminating some of the restrictions that hampered challenges to patents under prior USPTO processes. The PTAB is reporting that it receives three to five petitions every day, about twice what was initially anticipated by the patent office.4 The number of administrative judges at the patent office has more than doubled in response. Most of the patent trials involve electrical/computer patents, see figure on right.

So far, the PTAB has issued 33 final written decisions (not including patent owner requests for adverse judgments) in IPRs, and 11 written decisions in CBMs. Garmin International, Inc v Cuozzo Speed Technologies LLC5 was the first written opinion issued from an inter partes proceeding, and it set the tone for many of the PTAB's rulings. The ruling took its cue from a Supreme Court ruling, KSR Int'tl Co, 550 US 398 (2007), in emphasising that "inferences and creative steps that a person of ordinary skill in the art would employ can be taken into account" in deciding whether a claimed invention is "obvious". The challenged patent related to a speed limit indicator. Applying its technical background, the PTAB invalidated the patent because "one with ordinary skill would have recognized that the dynamically adjustable colored plate suggested by [earlier inventors] can be improved by adding automatic control, if the dynamic settings are automatically-determinable." Many, if not all, of the subsequent written decisions reflect both a detailed understanding of the technical dimensions of the claimed invention and an application of technical experience to assessing whether the "inferences and creative steps" were obvious.

Now, the focus will shift to the Federal Circuit. A party disappointed with a PTAB ruling can appeal the result to the Federal Circuit.6 As with any new agency scheme, the appellate court will have to resolve some initial questions about the procedure. For example, the "real party in interest" provision bars repetitive suits, but neither the statute nor the agency has defined the phrase.7 Similarly, the PTAB has restricted the number of "redundant" arguments a party can make, and the Federal Circuit will no doubt get asked to consider whether this approach squares with the statute.8

But the more enduring question will centre on the Federal Circuit's approach to assessing claimed innovations. The Federal Circuit has jurisdiction over a host of subject matters other than patents, such as government contracts, government employees and veterans' affairs.9 And while some of the Federal Circuit judges have a technical background, many do not. Of the five newly appointed judges, only one has any formal technical training.10 Instead, the judges bring to the bench expertise in a variety of substantive legal areas, such as trade regulation and commercial litigation. Oral argument typically lasts just half an hour, and the focus is often as much on the practical implications of an appellate ruling as on the fine details of any particular patent or art.

This difference in judicial orientation has direct consequences for parties contesting the validity of a patent. The Federal Circuit presentation must make the basic technological principles accessible; place a premium on selecting only the very best points to emphasise; and consider the long term policy consequences of the choice before the court of appeals. For these reasons, approaches that have worked well at the PTAB should be refined and rethought once the proceedings reach the appellate stage.

There is nothing undesirable or even unusual about these differences between the Federal Circuit forum and the PTAB forum. To the contrary, the difference reflects a core strength of the US legal system. Across the wide span of government there are expert agencies that make rulings that are, at times, reviewed by generalist courts. By establishing deferential standards of judicial review and other normative guidelines, Congress has created an effective system whereby interested parties receive a prompt hearing from those trained in the relevant arts while the generalist courts assure that the expert agencies are following sound principles. The patent system is made all the stronger by the interdependency of agency and appellate court.

Figure 1: A breakdown of patents by subject matter challenged through new procedures introduced by the America Invents Act from http://www.uspto.gov/ip/boards/bpai/ stats/041714_aia_stat_graph.pdf.

Footnotes

1.http://www.cafc.uscourts.gov/images/stories/Statistics/patent%20filings%20historical. pdf (line chart showing around 400 patent infringement appeals yearly since 2004).

2. See 35 USC § 311.

3. See 35 USC.§ 326.

4. Erica Teichert, PTAB Says It's Not A 'Death Squad' For Patents, Law360 (April 15, 2014).

5. Case IPR2012-00001 (Nov 13, 2013).

6. 35 USC § 319.

7. 35 USC § 315.

8. Liberty Mutual Ins Co v Progressive Casualty Ins Co., CBM2012-00003.

9. 28 USC § 1295.

10. http://www.cafc.uscourts.gov/judges.

Previously published on www.intellectualpropertymagazine.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

    Disclaimer

    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

    Registration

    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

    Cookies

    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions