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Fed. Cir.: Patent Application Provided Sufficient Written Description to Provide Priority Date
Fed Cir: Patent Trial Appeals Board’s Decision on Assignor Estoppel is Not Reviewable
Fed. Cir.: Automatic Method for Lip Synchronization and Facial Expressions of Animated Characters is Patentable Subject Matter

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Fed. Cir.: Patent Application Provided Sufficient Written Description to Provide Priority Date

On Sept. 20, 2016, a Federal Circuit panel consisting of Judges Reyna, Wallach, and Hughes issued a unanimous opinion, authored by Judge Reyna, in Yeda Research and Development Co., Ltd. v. Abbott GMBH & Co. KG, Case No. 2015-1662 & 2015-1663. The Federal Circuit found that U.S. Patent No. 5,344,915 (the ‘915 patent) is valid since it was entitled to claim priority to the filing date of German patent application P39 15 072 (the ‘072 German application).

Abbott GMBH & Co. KG (Abbott) owns the ‘915 patent, which contains claims directed to a protein referred to as TBP-II. This protein attaches to and neutralizes a different protein, Tumor Necrosis Factor α (TNFa). The TNFa protein is linked to various diseases.

Abbott filed a U.S. patent application on May 4, 1990. The application claimed priority to two German patent applications, the ‘072 German application and German application P39 22 089 (the ‘089 German application). The ‘072 and ‘089 German applications were filed on May 9, 1989, and July 5, 1989, respectively. The importance of the priority date arose from the existence of a published article authored by Dr. Hartmut Engelmann from January 1990 that explained and distinguished TBP-I and TBP-II proteins. If Abbott maintained its U.S. application filing date of May 1990, the invention would have been anticipated by the Engelmann article; however, if the application was given the priority date of May or July 1989, the Engelmann article would not anticipate the invention. The applicant needed to provide an adequate written description in the German patent applications in order to receive one of the priority dates in 1989. Neither German application disclosed the full protein sequence in the ‘915 patent. They did disclose a partial sequence and other relevant information, including a protocol for obtaining the protein from its source, and properties of the protein. Both Abbott and Yeda Research and Development Co. Ltd. (Yeda) agreed that the only protein containing the partial sequence disclosed in the ‘072 German application is TBP-II.

In 1996, Interference No. 103,625 was declared by the Patent Trial and Appeals Board (the Board) between the ‘915 patent and Yeda’s U.S. patent application No. 07/30,443. The Board ruled that the ‘915 patent was invalid because it was anticipated by the Engelmann reference. The Board applied a filing date of May 1990 for Abbott’s application. The district court vacated the Board’s decision and determined that the ‘089 German application disclosed the TBP-II protein with an adequate written description. On remand, the Board found that the ‘072 German application provided an adequate written description for TBP-II to allow the ‘915 patent to utilize the ‘072 German application’s filing date. After an appeal by Yeda, the district court affirmed the Board’s decision. Yeda then appealed the decision to the Federal Circuit.

The Federal Circuit addressed three issues: 1) whether the legal standard used to determine an adequate written description for the ‘915 patent in the ‘072 German application was proper; 2) whether Abbott was precluded from relying on inherent disclosure based on the prosecution history; and 3) whether the district court properly found that the Board’s finding of an adequate written description was supported by substantial evidence. The Federal Circuit focused primarily on the first issue

The court first provided the legal standard for an adequate written description. It stated that an invention must be disclosed in a manner that “clearly allows a person of ordinary skill to recognize that the inventor invented what is claimed and possessed the claimed subject matter at the date of filing.” See, Slip. Op. at 6 (quoting Ariad Pharms., Inc. v. Eli Lilly & Co., 598 F.3d 1336, 1351 (Fed. Cir. 2010)). The court further explained that under the doctrine of inherent disclosure, a specification can serve as an adequate written description by stating the invention’s inherent properties, even if the invention has certain undisclosed yet inherent properties. See, Slip. Op. at 6 (citing Kennecott Corp. v. Kyocera Int’l, Inc., 835 F.2d 1419, 1421 (Fed. Cir. 1997)). The Federal Circuit found that TBP-II is the only protein that could have been disclosed in the ‘072 German application, and therefore inherently discloses the remaining elements of the TBP-II protein.

The court also rejected Yeda’s claim that the prosecution history precluded Abbott from relying on inherent disclosure.

Finally, the Federal Circuit determined that the Board properly determined that the ‘072 German application provided an adequate written description for the ‘915 patent by substantial evidence. The ‘072 German application disclosed nine of the fifteen amino acids in the sequence, and no other protein besides TBP-II matches that sequence.

The district court’s decision that Abbott’s ‘915 patent was supported by an adequate written description in the ‘072 German application was affirmed.

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Fed Cir: Patent Trial Appeals Board’s Decision on Assignor Estoppel is Not Reviewable

On Sept. 23, 2016, a Federal Circuit panel consisting of Judges Lourie, Plager, and Stoll issued a majority opinion, authored by Judge Lourie, in Husky Injection Molding Sys. Ltd. v. Athena Automation Ltd., Case No. 2015-1726 & 2015-1727. Judge Plager wrote a decision concurring-in-part and dissenting-in-part. The majority held that under 35 U.S.C. §314(d), the Patent Trial and Appeals Board’s (the Board) determination to institute inter partes review is final and nonappealable, and the Federal Circuit cannot review the decision of the Board to reject an argument for assignor estoppel.

Husky Injection Molding Systems Ltd. (Husky) owns U.S. Patent 7,670,536 (the ‘536 patent), which contains claims directed to a molding machine with a clamp assembly. The assembly includes lock members and a method to use the lock to couple tie bars to the movable platen. Two lock members engage and lock the platens and assemble the mold.

One of the co-inventors, Schad, was formerly the owner and president of Husky. He assigned the patent to Husky in 2007. Schad later sold the company and formed Athena Automation Ltd. (Athena). Athena then filed a petition for inter partes review of the ‘536 patent, claiming that it was anticipated by two prior art references. Husky’s response only argued that assignor estoppel barred Athena from filing this inter partes review. The Board rejected this argument, stating that as an equitable doctrine, assignor estoppel does not provide an exception to the broad statutory mandate of 35 U.S.C. §311. Section 311 states that anybody besides the owner of a patent may file a petition for inter partes review of the patent. The Board rendered a determination on the merits in 2014, finding some of the claims anticipated by one of the prior art references, and some claims not anticipated. Husky appealed this decision to the Federal Circuit on the ground that assignor estoppel barred Athena from bringing the petition for inter partes review.

The Federal Circuit held that it could not address the decision of the Board rejecting the argument for assignor estoppel. The court focused on 35 U.S.C. §314(d), which states “the determination by the Director whether to institute inter partes review under this section shall be final and nonappealable.” The Federal Circuit went through numerous cases regarding the limit of review on institutional decisions, particularly focusing on Cuozzo Speed Techs. LLC v. Lee, 136 S. Ct. 2131 (2016). In Cuozzo, the Supreme Court affirmed the decision of the Federal Circuit, stating that the “No Appeal” provision precludes any review of the Patent Office’s institutional decisions. See, Slip. Op. at 10 (citing Cuozzo Speed Techs. LLC, 136 S. Ct. at 2141). The Federal Circuit noted that the statutory scheme, interpretation of similar statutes, Congress’ purpose, and the Administrative Procedure Act all demonstrate that Congress intended to bar review of these decisions. See, Slip. Op. at 10 (citing Cuozzo Speed Techs. LLC, 136 S. Ct. at 2140). More specifically, the Supreme Court noted that the language of the statute bars review of the determination to institute inter partes review. See, id. The Federal Circuit went further, foreclosing review “where the grounds for attacking the decision to institute inter partes review consist of questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review.” See, Slip. Op. at 11 (citing Cuozzo Speed Techs. LLC, 136 S. Ct. at 2141).

The Supreme Court in Cuozzo did provide three exceptions to the general rule in 35 U.S.C. §314(d): 1) the implication of constitutional questions; 2) dependency on other closely related statutes, and 3) presentation of other questions of interpretation that reach beyond the section. See, id. The Federal Circuit left open review when the Board acts beyond its statutory authority and if the decision relates to the Board’s authority to invalidate a patent. For example, the court found that a time-bar under 35 U.S.C. §315(b) does not relate directly to the Board’s authority to invalidate a patent; it simply prevents certain parties from bringing forward the challenge. See, Slip. Op. at 13 (citing Achates Reference Publ’g, Inc. v. Apple, Inc., 803 F.3d 652, 657 (Fed. Cir. 2015)).

In light of this case law, the Federal Circuit established a two-part test for determining whether it has authority to review a decision from the Board. First, if the challenge is “closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review,” no review is possible. Slip. Op. at 14 (citing Cuozzo Speed Techs. LLC, 136 S.Ct. at 2141). However, if the challenge implicates constitutional questions, depends on less closely related statutes, or presents questions of interpretation beyond the section, review of the Board’s decision is allowed. See, id. Then, if the challenge is closely related to the decision to institute, review is possible if it relates to the Board’s ultimate invalidation authority for the patent. See, id.

In this case, the Federal Circuit found that the question of assignor estoppel does not fall under one of the three exceptions to the general rule of §314(d). No questions of due process, for example, are raised, the doctrine of assignor estoppel does not come from a statute, and assignor estoppel is within the scope of §314(d). The court then reached part two of the test, where it found that assignor estoppel does not by itself give the Board the power to invalidate the patent. The court reasoned that assignor estoppel would simply prevent certain parties from challenging the patent, as in Achates Reference Publishing.

The Board’s decision against Husky was affirmed for lack of jurisdiction.

Judge Plager wrote a dissenting opinion, arguing that the Federal Circuit did have jurisdiction to review the Board’s determination that assignor estoppel did not apply. Judge Plager focused on the traditions of judicial review, finding that a bar on judicial review should be narrowly tailored. He stated that for these cases, bans on review should be limited to interlocutory appeals. The entire case is proper for judicial review once the Board makes a final decision. He noted that the doctrine of assignor estoppel is from case law and not a statute, that assignor estoppel is not closely connected to the relevant statute, and that it reaches other questions of interpretation beyond the section.

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Fed. Cir.: Automatic Method for Lip Synchronization and Facial Expressions of Animated Characters is Patentable Subject Matter

On Sept. 13, 2016, a Federal Circuit panel consisting of Judges Reyna, Taranto, and Stoll issued a unanimous decision, authored by Judge Reyna, in McRO, Inc. v. Bandai Namco Games America, Inc., Case No. 2015-1080-90 & 2015-1092-1101. The Federal Circuit held that U.S. Patent Nos. 6,307,576 (the ‘576 patent) and 6,611,278 (the ‘278 patent) were properly deemed patent eligible subject matter under 35 U.S.C. §101. The court found that the patented invention was not an abstract idea, as it properly limited itself to a specific process for automated lip synchronization and facial expressions for animated characters.

Both the ‘576 and ‘278 patents were issued to Maury Rosenfeld. The ‘278 patent is a continuation of the ‘576 patent, with both titled “Method for Automatically Animating Lip Synchronization and Facial Expression of Animated Characters.” The patent is directed to a computer automated system that uses rules to create “efficient lip synchronization and manipulation of character facial expressions.”

In 2012 and 2013, McRO filed lawsuits against several video game developers and publishers. On July 10, 2014, the district court ruled that the claims of both patents were directed at ineligible subject matter in violation of §101. The district court used the two step framework established in Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2355 (2014) in support of its decision. The two-step Alice framework looks to: 1) determine whether the claim is directed to a judicial exception, like an abstract idea; and 2) if it is directed to a judicial exception, determine whether the claims have an “inventive concept” to make it patent eligible. See, Slip. Op. at 20 (citing Alice Corp., 134 S. Ct. at 2355). The district court noted that while the claims facially did not seem like an abstract idea, the claims were too broad to satisfy the conditions of §101.

The Federal Circuit focused on the limitation of the claim language in order to determine if the invention satisfied §101 and was eligible for a patent. The court determined that the claims were limited to rules that evaluate subsequences of multiple sequential phonemes and not individual phonemes. The main distinction for the Federal Circuit focused on whether the mathematical formula utilized in the patent was “purely conventional,” as in Parker v. Flook, 437 U.S. 584 (1978), or used “in a process designed to solve a technological problem,” as in Diamond v. Diehr, 450 U.S. 171 (1981). The court determined that the implementation of the mathematics to the program was in a process to solve the technological issue, and was not drawn to an abstract idea. The claims are limited to the specific rules and characteristics that are present in the invention. The court reiterated that courts “must be careful to avoid oversimplifying the claims.” See, Slip. Op. at 21 (citing In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 611 (Fed. Cir. 2016)). This invention allowed computers to produce accurate facial expressions and lip synchronization that were only previously accomplished by humans. They focus on a specific method to improve the relevant technology; here, this occurs because the rules are limiting “in that they define morph weight sets as a function of the timing of phoneme sub-sequences.” Slip. Op. at 22. The computer action here is one that replaces the actions of humans previously. The Federal Circuit found that the use of the computer at issue is merely as a placeholder for a human; the invention is the incorporation of the claimed rules to improve the technological process by allowing the automation of tasks. See, Slip. Op. at 24. The court also noted that the claims did not prevent future innovation in the field. The patents provide a certain type of process for automatically animating lip synchronization by certain rule sets and the relationship between the subsequences of phonemes, timing, and weight of each phoneme at a particular time. There are still other methods of automating lip synchronization and facial expressions that can be patented.

The Federal Circuit determined that the ‘576 and ‘278 patents were not abstract ideas and satisfied §101 as patent eligible subject matter.

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Jeff Ginsberg
is a Partner at Patterson Belknap Webb & Tyler LLP and Assistant Editor of this newsletter. George Soussou is a Law Clerk with the firm.

The views expressed in the article are those of the authors and not necessarily the views of their clients or other attorneys in their firm.

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