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Too Good to be True? Problems with the Allergan-Saint Regis Mohawk Tribe Deal

Wed, 08 Nov 2017 14:59:04 +0000

Alyssa Grooms After their initial shock, lawmakers are fighting back against pharmaceutical company Allergan’s novel plan to protect the validity of its patents by bypassing the Patent Trial and Appeal Board’s (“PTAB”) scrutiny. In September, Allergan transferred the rights to six key patents on the dry-eye drug Restasis to the Saint Regis Mohawk Native American Indian tribe in an effort to use tribal sovereign immunity to shield the Restasis patents from inter partes review (“IPR”) proceedings at the PTAB.Under the terms of the deal, Allergan transferred ownership of the key Restasis patents to the Saint Regis Tribe, which licensed them back to Allergan. The Tribe then sought to dismiss pending IPR challenges. In return, the Tribe received an upfront payment of $13.75 million and $15 million in additional potential annual royalties.The defense of sovereign immunity as a shield against IPRs is not new. In May, the PTAB dismissed an IPR based on a state university’s assertion of 11th Amendment sovereign immunity.1 The decision reiterated2 that state agencies (e.g., state universities, medical schools, and research centers) enjoy sovereign immunity, which bars IPR challenges to patents they own. Although tribes are subject to sovereign immunity through congressional action, not the 11th Amendment, tribal sovereign immunity generally follows state sovereign immunity. However, Allergan’s efforts represent the first time that an entity that possesses immunity proactively approached patent owners and proposed to take ownership of their patents. If the Allergan-Saint Regis deal works, it could allow Allergan to extend its monopoly on Restasis, thereby maintaining its billion-dollar-plus annual revenue from the drug.A key question in determining the legitimacy of Allergan’s deal is whether the agreement is a “sham.” For the transaction to legally be a sham, it would have to be unlawful or illusory in order to serve as a tax shelter or another deceptive device. The answer to this question lies in the transfer of the bundle of patent rights—and, more specifically, whether the Saint Regis Tribe has enough rights to actually be considered the owner of the patents in question. If Saint Regis is not completely free to use the patents in any way that it wishes, the issue becomes whether the restrictions on Saint Regis are enough to argue that Allergan continues to exercise de facto control over the patents and, therefore, that sovereign immunity should not apply.Additionally, because tribes are subject to sovereign immunity through congressional action, Congress can equally act to remove tribal immunity. In a letter to the Senate Judiciary Committee, four senators called for Senators Chuck Grassley and Dianne Feinstein of the judiciary committee to investigate Allergan's “anti-competitive attempt to shield its patents from review and keep drug prices high." Senator Claire McCaskill also weighed in, calling the arrangement a "brazen loophole" that should be illegal and submitting a bill in the Senate to prohibit transfers to Native American tribes that are structured to take advantage of tribal sovereign immunity.News of the Allergan-Saint Regis deal has sparked interest in Native American tribes pursuing similar arrangements. If they follow Saint Regis’s footsteps, Native American tribes could become significant players in the IP value creation market. However, there are still major outstanding questions. If Allergan retains de facto control over the patents, does sovereign immunity still apply to those patents? Are tribes allowed to rent out their sovereign immunity? Will Congress act to limit the application of sovereign immunity in IPR challenges? Until these questions are answered, other tribes and companies may be deterred from making similar patent transfers.________1 NeoChord, Inc. v. Univ. of Md., Baltimore, Case No. IPR2016-00208, Paper 28 (PT[...]



PTAB Designates Inter Partes Review Decisions as Precedential/Informative

Tue, 31 Oct 2017 20:20:19 +0000

Ann Robl Recently, the Patent Trial and Appeal Board (PTAB) designated one inter partes review decision as precedential and three inter partes review decisions as informative.The precedential decision is General Plastic Industrial Co., Ltd. v. Canon Kabushiki Kaisha, Case IPR2016-01357 (PTAB Sept. 6, 2017) (Paper 19), Section II.B.4.i.  The decision discusses how PTAB decides whether to permit “follow-on” petitions (that is, petitions filed for inter partes review of a patent after the filing of an initial petition for inter partes review of the same patent) and PTAB’s authority to deny such petitions under 35 U.S.C. § 314. The decision also discusses the use of expanded panels by PTAB.The three informative decisions address different aspects of how PTAB addresses whether to institute an IPR under 35 U.S.C. § 325(d) based on whether the same or substantially the same prior art or arguments previously were presented to the Office. As summarized by the USPTO in its October 24 bulletin, the informative decisions address the following:In Unified Patents, Inc. v. Berman, Case IPR2016-01571 (PTAB Dec. 14, 2016) (Paper 10), “the Board denied institution of one ground under § 325(d) because the petitioner asserted an obviousness combination that included a reference the examiner considered during prosecution and a second reference that was cumulative of prior art that the examiner considered. The Board also declined to exercise discretion under § 325(d) with respect to a second asserted obviousness combination, where the examiner did not consider the asserted references during prosecution, and the references were not cumulative of the prior art the examiner considered during prosecution.”In Hospira, Inc. v. Genentech, Inc., Case IPR2017-00739 (PTAB July 27, 2017) (Paper 16) “the Board denied institution under § 325(d) because the examiner considered during prosecution, and found persuasive, the same arguments the petitioner raised regarding the patent owner’s claim to priority. The Board concluded that the examiner’s previous priority determination was dispositive as to each of the asserted grounds of unpatentability.”And, in Cultec, Inc. v. Stormtech LLC, Case IPR2017-00777 (PTAB Aug. 22, 2017) (Paper 7), “the Board denied institution under § 325(d) because (i) the examiner previously considered two of the asserted references—one reference was raised in a third-party submission that the examiner discussed in rejecting the claims and the other reference the examiner cited and applied throughout prosecution; and (ii) the two additional references upon which the petitioner relied were cumulative of prior art the examiner considered during prosecution.” Copies of decisions designated as informative and precedential can be found on the PTAB's Informative Opinions Page and the PTAB’s Precedential Opinions Page of the USPTO website. Additionally, during PTAB’s "Chat with the Chief" webinar on October 24th, the Patent Office announced plans to streamline the Opinions page for easier access to decisions.    [...]


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2017 FIRST Robotics Competition

Tue, 04 Apr 2017 11:24:25 +0000

Jeremy McKinney It is the end of the Oklahoma Regionals of the FIRST Robotics Competition (FRC for short), and as I sit here in the “pit” reflecting on this year’s robotics season I feel privileged and honored to have been a small part of team 5578, the Metro Mechanical Monsters from Oklahoma City, OK.For those who may not be familiar with FRC, FIRST (For Inspiration and Recognition of Science and Technology) is a non-profit organization formed by Dean Kamen (inventor of the Segway) to introduce and promote science, engineering, and technology skills to school-age young people. FRC is the top tier of the FIRST Robotics programs, with high school aged students designing and building competitive robots over a six-week period. Each year there is a unique game with a number of challenges that the students must analyze, then decide which challenges they want to tackle and the requirements for doing so, then design, build, and test a robot that accomplishes those goals. At the FRC level, all the teams get a “kit of parts” each year, but it is far from a "build your own robot kit.” Instead, the kit consists of materials common to most of the robots such as control system components, a few motors and motor controllers, some sensors and switches, and various other bits and pieces to get the team started. The team must then acquire or fabricate everything else they need to build their robot. My firm, Dunlap Codding, has been a sponsor of the FRC Oklahoma Regional competition for the last ten years. This is the third year I have had the privilege of working with the Mechanical Monsters, and I couldn’t be more proud of what they have accomplished. For the last couple of years, we have hacked together what could be loosely referred to as “robots” that moved about (most of the time), but were not great at accomplishing the assigned game tasks. As you’d expect, we did not place highly in competition, but we did have fun and we learned what not to do, mostly by doing things wrong. This year, the students wisely enlisted the help of a more experienced team who graciously included them in their initial strategy session where both teams spent “kickoff day” analyzing this year’s game, talking strategy, and forming a plan for the six-week build period. The students and coaches then came together to design, build, test, re-design, re-build, test again, re-design... well, you get the idea. What inspires me most about this group, is they kept working through the problems that surfaced over, and over, and over again, right up to the last morning of competition, in fact, to field a robot that not only worked but placed 16th overall out of 61 teams in the Oklahoma Regional. While doing well in the competition was an accomplishment that was celebrated by the team, and rightfully so, it is not the focus of FRC or the coaches and mentors of the Mechanical Monsters. Building a robot and participating in competitions are merely vehicles designed to introduce students to engineering, science, and technology and get them more interested in possibly pursuing a STEM career. The Mechanical Monsters have already shown an interest in STEM, they are all students of the Metro Technology Center STEM Academy. As participants in the STEM Academy, students leave their home schools to attend the STEM Academy half the day to take classes such as advanced math, chemistry, physics, and pre-engineering—classes that are not available at their home schools. Participation in the FRC gives these students the opportunity to apply many of the things they learn in class in a real-world scenario where they gain invaluable hands-on experience. It is the goal of the coaches, mentors, and instructors at the STEM Academy that the students’ experiences in FRC will enhance what they have learned and solidify their desir[...]



A Patent Laches Defense No More

Tue, 21 Mar 2017 21:11:40 +0000

Julie Langdon  Today, the Supreme Court vacated a prior Federal Circuit decision when it decided that laches cannot be used as a defense against a claim for damages brought within the Patent Act’s six-year limitation of damages set forth in 35 U.S.C. § 286. SCA Hygiene Products AB et al. v. First Quality Baby Products LLC, 580 U. S. ____ (2017).  This decision stems from a dispute where the Plaintiff, SCA Hygiene Products, waited almost seven years between providing notice of the potential infringement to the Defendant, First Quality,  and filing suit against First Quality; however, during the interim, the damages continued to accrue.  The District Court reasoned that SCA Hygiene was time barred by laches because it unreasonably delayed in bringing its suit, and the Federal Circuit affirmed that decision.  Applying similar logic to that in its opinion in Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U. S. ___ (2014), the Supreme Court held that as long as the damages incurred within the period of limitations set forth by the statute, the equitable defense of laches does not apply. Specifically, the Court rejected the Federal Circuit’s reasoning that the Patent Act has codified a laches defense, and instead decided that by inserting a statute of limitations, Congress intended to preclude laches, and allow the recovery of damages for infringement committed within six years of filing the claim.   The Supreme Court also rejected First Quality’s (and the Federal Circuit’s) position that courts for over a decade had relied on laches to reject claims for damages in patent cases. In its review of the same cases, the Supreme Court stated that the opposite was true – laches was not to be used to bar a claim for damages within the time set forth by Congress.  In closing, the Supreme Court noted the many policy reasons for laches set forth by both First Quality and the amici but indicated that policy alone was not enough to turn over Congress.  The Supreme Court stated, “the doctrine of equitable estoppel provides protection against some of the problems that First Quality highlights, namely, unscrupulous patentees inducing potential targets of infringement suits to invest in the production of arguably infringing products.”  580 U. S., at ____ (slip op., at 16).  Thus, using the Court’s guidance in Petrella, there may still be opportunities to bar the claim for infringement and all associated remedies based on the doctrine of estoppel, specifically in situations such as when the “[patent] owner engages in intentionally misleading representations concerning his abstention from suit, and the alleged infringer detrimentally relies on the [patent] owner's deception.”  572 U. S., at ___ (slip op., at 19). [...]


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Trademark Security Check Point – Draining the Swamp with Random Audits of Trademark Use

Thu, 09 Mar 2017 23:27:16 +0000

Elizabeth Isaac Despite flying with TSA pre-check, random checks in airport security lines seem to be a thing for me. Just last week, a TSA officer randomly wiped down all of my electronics with what looked like a fat piece of litmus paper and then stuck the paper into a futuristic machine for further analysis. Lucky for me, I carry honest electronics.On March 21, 2017, the USPTO will begin randomly checking declarations of use, not looking to find what trademarks owners possess but instead looking to crack down on what trademark owners are lacking. The USPTO recently published a final rule (82 Fed. Reg. 6259) establishing a random audit program to ensure that trademark owners attempting to renew their trademark registrations are indeed using their trademarks in connection with every good and/or service in what may be a laundry list of goods or services in a single class. So, if you own a trademark registration that identifies multiple goods or services in a single class, be prepared to submit additional evidence of your mark being used in connection with any one of the goods or services identified in your registration.Specifically, ten percent of Section 8 and 71 Declarations of Use will be subject to the audit. A Section 8 Declaration is a statement made to the USPTO averring that your federally registered trademark has been in use continuously for a period of five years, and a Section 71 Declaration is essentially the same thing but applies to applications generally filed by international applicants under the Madrid Protocol.Under the current rules, upon filing a Section 8 or 71 Declaration of Use, a registrant is required to submit a specimen showing evidence of the mark being used with at least one good or service in each class identified in the application. This has not changed. However, for a random ten percent of such registrants, the USPTO will next issue an Office Action requiring additional proof for particular goods or services identified in the registration and not already accounted for.  Here comes the random pat down. Registrants will have six months to respond by either submitting evidence of use or simply deleting the goods and services from the registration.The rule was prompted by a pilot program, during which fifty-one percent of the registrations pulled at a security checkpoint for random screening were unable to submit evidence of commercial use for the additional goods and services required. In particular, the USPTO hopes to whittle down registrations filed under the Madrid Protocol, which generally contain a much broader listing of goods and services than do applications filed with the USPTO. The Office also wants to drain the registry of registrations of goods and services that are not in fact being offered with a particular brand name. After all, trademark rights are based on using the mark in commerce.   In sum, you own a trademark registration for LIZZIE BOO for use in connection with shirts, shorts, overalls, jackets, shoes, and hats, all in class 25. You submit a Declaration of Use showing evidence of shirts. Do not be surprised if the USPTO randomly pulls you aside and requires you to submit additional evidence of those overalls. If LIZZIE BOO overalls have been discontinued, well then, drain them from the registration. Photo Cred: M.O. Stevens. Creative Commons Attribution 3.0 Unported license. https://commons.wikimedia.org/wiki/File:Portland_International_Airport_security_check.jpg.The author of the photograph in no way endorses me or my use of this work.  [...]



The Supreme Court Limits Overseas Patent Infringement

Sat, 25 Feb 2017 14:01:47 +0000

Julie L. Langdon On Wednesday, the Supreme Court ruled that the Federal Circuit got it wrong on the reach of overseas patent infringement, and opined that providing one commodity from the United States for incorporation into a multi-component product is not enough for a finding of overseas-based patent infringement.  Life Technologies Corp. v. Promega Corp., No. 14-1538 (2017).  The ruling deals with 35 U.S.C. § 271(f) which states:(1)   Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.(Emphasis added.)  The purpose of § 271(f) was to prevent companies from shipping all of the components of a patented invention outside the United States and reassembling those products offshore in an effort to avoid infringement of U.S. patents.  The Supreme Court opinion stems from a lawsuit in which Promega accused Life Technologies of selling infringing products overseas that were not covered by the patent license agreement between the parties.  The license agreement provided Life Technologies the right to sell a genetic testing kit which included a primer mix, a polymerase, nucleotides, buffer for amplification and control DNA.  Life Technologies produced the allegedly infringing kits in the United Kingdom, and the components of the kits were also produced in the United Kingdom, except for the polymerase, which was produced in the United States, and sent to the United Kingdom to be incorporated in the kit.  Promega asserted that by supplying the polymerase from the United States, Life Technologies was infringing the licensed patent under 35 U.S.C. § 271(f). The District Court disagreed, Promega appealed, and the Federal Circuit reversed the District Court, which led the Supreme Court to grant certiorari to determine whether a party that supplies, from the United States, a single component of a multicomponent invention for manufacture abroad can be held liable for infringement under § 271(f)(1).   In rejecting the Federal Circuit’s reasoning that a single component is enough for a finding of infringement if it is a sufficiently important component of the invention, the Supreme Court ruled that the language “all or a substantial portion of the components” must be more than one component when such as here, all the other parts of the single commodity are supplied from abroad.  The Supreme Court also stated that the term “substantial” in the statute “has a quantitative, not a qualitative, meaning.” While the Supreme Court’s ruling addresses the supply of “one component” of a multi-component product, it does not go deeper than that.  Thus, the required number of components to reach a finding of patent infringement of a multi-component product is still unknown, and will be left to the lower courts and juries to determine, which may prove to be difficult.  Judge and juries will need to determine how many components in relation to total number of components in the product are enough for a finding of infringement.   [...]



Friday Fun (for Associates) - Unusual Order in Patent Infringement Case

Fri, 10 Feb 2017 23:30:48 +0000

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Ann Robl

Move over partners! In X One’s patent infringement case against Uber Technologies (CAND 5-16-cv-06050), Judge Koh has given the associates on the case a chance to argue a motion. Her order of February 3, 2017 states that “the Court and parties had difficulty setting a date for the hearing...because of the schedules of the Court and lead Plaintiff’s counsel.” Though “the Court often finds matters appropriate for resolution without oral argument” “to encourage the parties to give associates opportunities to argue substantive motions, the Court will guarantee a hearing on the dispositive motions if both parties allow associates who graduated from law school in 2009 or later to argue such motions.” 

How often do you see that?? 

Hat tip to Docket Navigator and Evan Talley for noticing this order.

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Where to Search Decisions on Petitions to the USPTO

Fri, 03 Feb 2017 00:34:21 +0000

Alyssa Novak As any attorney knows, when it comes time to make an argument, it is helpful to know how similar cases have been handled. For case law, there are many easy-to-navigate legal databases that allow term searches or searches using regular language. However, the same is not true for searching decisions by the USPTO on petitions. The following is a list of free sources for accessing petition decisions, one of which is word-searchable.USPTO Website: Image File Wrapper (IFW) Petition Decisions can be found on the USPTO’s bulk data website page in the form of 727 1000-page books that are grouped by date from January 2003 to April 2012. Each book may be downloaded as a PDF file consisting of scanned images. These decisions can only be made text-searchable using text character recognition tools.Reed Tech Website: Reed Tech and the USPTO have an agreement to make selected USPTO products available to the public at no charge. Reed Tech’s petition decisions web page is organized in the same 1000-page groupings as the USPTO’s bulk data webpage; however, the decisions are also organized by an eight digit patent application number (two digit series code plus a six digit application number) in ascending order. Similar to the USPTO’s bulk data files, downloaded Reed Tech files are not text-searchable.Google Books: Google obtained the majority of the bulk data set from the USPTO. Although the entire database of petitions is not text searchable, each individual book is searchable.  However, please note that the Google Book data sets are no longer being updated as of 2015.________Photo from USPTO Office of Petitions.  [...]



Update on P3 Program

Thu, 12 Jan 2017 18:47:55 +0000

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Ann Robl

The Post-Prosecution Pilot (“P3”) Program closed today, January 12, at the end of its six-month run.  According to the USPTO, all of the technology centers met their limit of 200 requests, except for TC1600 (Biotechnology and Organic Chemistry), which had 141.

As previously discussed on PHOSITA, the P3 Program was an option for patent applicants who receive a rejection in a final Office Action. Like the Pre-Appeal Brief Conference Pilot Program, in P3 the applicant filed a short response (no more than five pages) to be considered by a panel of three examiners. The applicant also could file an optional non-broadening claim amendment. However, unlike other programs, P3 allowed the applicant to make a twenty minute oral presentation to the examiner panel. Also, the panel’s decision included an explanation supporting its decision, rather than the simple check box of the Pre-Appeal Brief Conference decisions.

The USPTO says that it is evaluating the results of the pilot to determine next steps. I would like to see them keep the program, as more information from the Examiner Panel has the potential to be helpful.

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Legal Guide for Bloggers

Mon, 09 Jan 2017 17:07:13 +0000

Douglas J. Sorocco

This is a reprise of a popular blog post published some years ago.

The EFF has released a Legal Guide for Bloggers. Included in this guide are sections on defamation, reporter's privilege, public records, and workplace blogging. But, the best section, in my mind, was Bloggers' FAQ: Intellectual Property. This section covers copying of other blogs, government documents, Creative Commons, licensing of comments, deep linking, copying of images, the DMCA, trademarks, and right of publicity. If you have any questions about intellectual property and blogging, check it out.

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