2019 – Secret Sales, Personhood, and the American Rule

In 2019, the US Supreme Court addressed three somewhat nuanced areas of patent law. The Supreme Court started the year by considering whether the on-sale bar of § 102(a)(1) applies to confidential sales where specific details are not made public, in Helsinn Healthcare S.A. v Teva Pharmaceuticals, USA, Inc. ( IP Update Vol. 22, No. 2). In a unanimous decision, the Supreme Court concluded that such a sale qualifies as "on-sale" prior art, and that the different language used in post-AIA § 102(a)(1) did not alter the Court's interpretation given to its pre-AIA counterpart (§ 102(b)). The Supreme Court again turned to patent issues in June 2019, looking to whether the United States Postal Service (USPS) is a "person" such that they may petition for Covered Business Methods review before the PTAB. In a 6-3 decision, the Supreme Court rejected all of the USPS's arguments as to personhood (the consistent usage principle; the executive interpretation; civil liability), finding that the USPS was not a person under the AIA. Finally, the Supreme Court closed out 2019 by blocking the USPTO from recovering attorneys' fees under 35 U.S.C. § 145 in Peter v. NantKwest. The Supreme Court applied the American Rule's presumption against fee shifting, and found that the relevant language of § 145 lacked the "clarity . . . required to deviate from the American Rule."

Looking to 2020

2020 has the potential to offer as many patent-related Supreme Court decision as 2019, with one case already argued, one granted cert and another that is likely to be taken up by the Court. Unlike 2019, however, these three cases have the potential to upend the world of patent litigation.

  • Thryv Inc. v. Click-To-Call Technologies LP (Argued Dec. 9, 2019)
    • Issue: Does 35 U.S.C. § 314(d) permit an appeal of the PTAB's decision to institute an IPR upon finding that 35 U.S.C. § 315(b)'s time bar did not apply?
    • Potential Ramifications: If the Court finds that time bar-related institution decisions are appealable, the cost-effective nature of IPR challenges may be diminished. Justice Ginsburg noted that "[t]here's something unseemly about nullifying the determination on the merits" where the PTAB "has already made the decision that the patent is no good." Some court watchers believe is likely the Court will exclude time bar decisions (§ 315(b)) from the "nonappealable" language of § 314(d).
  • Oracle America, Inc., v. Google Inc. (Granted certiorari 15, 2019)
    • Issues: (1) Does copyright protection extend to a software interface? (2) If so, does the petitioner's use of a software interface in the context of creating a new computer program constitute fair use?
    • Potential Ramifications: Google's supporters such as Microsoft argue that a ruling in favor of Oracle "threatens the viability of the interconnected software ecosystem" and "would have a profoundly destabilizing effect on the entire industry." Whether that is the case remains to be seen, but many large technology companies have put their weight behind Google's position that APIs are not subject to copyright.
  • Collabo Innovations Inc. v. Sony Corp. (Petition filed Nov. 12, 2019)
    • Issues: (1) Does the retroactive application of IPR to a patent that issued before the passage of the AIA violate the Takings Clause of the Fifth Amendment? (2) Does the retroactive application of IPR to a patent that issued before the passage of the AIA violate the Due Process Clause of the Fifth Amendment?
    • Potential Ramifications: If the Supreme Court takes up this case and decides that retroactive application of IPR to pre-AIA patents is Unconstitutional, it would significantly limit the applicability of IPR in patent litigation. Currently, roughly two thirds of IPR petitions are filed against pre-AIA patents. Barring pre-AIA patents from IPR would likely cause a significant uptick in litigation before the district courts.

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.