Podcast # 10: Hepburn’s Choice and Patent Venue

In which we discuss the Supreme Court’s recent decision in TC Heartland v. Kraft Foods (May 22, 2017).

Intro music is “Rollin at 5” Kevin MacLeod (incompetech.com). Licensed under Creative Commons; By Attribution 3.0; creativecommons.org/licenses/by/3.0/

Contact Iain Cunningham by email at iaincunningham@me.com or on Twitter at @icunning. Tom Vigdal is on Twitter @vigdal.

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Showing possession of a coffee filter system: Rivera v. ITC

Written description decisions are unusually fact intensive. The court must answer (1) what exactly was invented? and (2) what exactly was claimed? Then the court must dissect the differences between the invention and the claims.

A patent has an adequate written description if it “reasonably conveys to those skilled in the art that the inventor had possession of the claimed subject matter as of the filing date.”

In Rivera v. ITC, the patent concerned a coffee brewer that could accept both “cup” and “pod” containers. A “cup” is a small, self-contained plastic cartridge. A “pod” is a small disc-shaped filter containing coffee grounds. Cups and pods hold coffee grounds differently, so it’s a bit of a trick to develop a brewer that can use both.

But Rivera took their claim on a cup-or-pod brewer and asserted that a loose-grounds-inside-a-cup apparatus infringed. This was too far for the ITC and ultimately the Federal Circuit panel:

[T]he question is whether a pod adaptor assembly intended to allow compatibility between distinct brewing systems, also supports an undisclosed configuration that eliminates a fundamental component of one of those systems (i.e., the “pod”) through integration. It does not.

I’ve long supported meaningful enforcement of the written description requirement: Inventors should get patents on what they actually invented. The written description requirement helps enforce that basic (and fair) requirement.

 

Edging towards a bright-line rule for CBM eligibility: Secure Axcess v. PNC Bank

Back in November 2016, the Federal Circuit narrowed the scope of patents eligible for Covered Business Method review. They held that a patent is not eligible for CBM review just because it could involve a financial transaction. Instead, the patent must have a claim that actually contains a financial activity element.

The Federal Circuit’s 2-1 decision in Secure Axcess v. PNC Bank reaffirms that narrowing, and adds that the litigation history of the patent (here targeting financial institutions) is also not relevant:

[A] patent owner’s choice of litigation targets could be influenced by a number of considerations, such as the volume of a particular target’s perceived infringement; the financial condition of the target; which targets are most likely to be willing to settle rather than bear the cost of litigating; available and friendly venues; and so on.

But Judge Lourie dissented, arguing that the patent specification and litigation history clearly described a patent on a “financial product or service,” regardless of whether the claims specifically include a financial transaction.

Will we have a bright-line rule, or an “all the circumstances” test? So far the bright-line rule has the upper hand.

An opportunity to re-read MedImmune: ArcelorMittal v. AK Steel

A complicated decision by the Federal Circuit gives us all an opportunity to review the MedImmune standard. Prior to MedImmune a licensed party could not bring an invalidity suit because it need not fear infringement (i.e., no case or controversy). MedImmune loosened that standard and essentially set forth a “look at all the circumstances” test.

So what if a party kinda asserts patent claims, but it’s really not clear, and then later gives a covenant not to sue. Somewhat predictably the “all the circumstances” test leads to a 2-1 split in ArcelorMittal v. AK Steel. The panel ends up disagreeing on whether the circumstances of a “covenant not to sue” moot the underlying controversy.

Aaaaaand… that’s really all you need to know unless you want the complicated details of this case.

When the PTO will listen to you, but the Federal Circuit won’t: Phigenix v. Immunogen

In Phigenix, Inc. v. Immunogen, Inc., a Federal Circuit panel concluded that a company can have standing to initiate an IPR against a patent, but not have standing to appeal the results of that IPR to the Federal Circuit. This standing gotcha arises because the Article III “case or controversy” requirement requires that a party:

must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the [appellee], (3) that is likely to be redressed by a favorable judicial decision.

In this case Phigenix was a third-party biotechnology company in the same space as the patent owner, and initiated an IPR that the PTO ultimately closed after concluding that the claims were not obvious. Phigenix then of course sought to appeal that decision to the Federal Circuit under the relevant statute that says, “A party to an inter partes review . . . who is dissatisfied with the final written decision of the [PTAB] . . . may appeal the [PTAB]’s decision only to the . . . Federal Circuit.”

Not so fast. The Federal Circuit held that Phigenix could appeal the result, but that didn’t mean it had standing to actually get a decision:

Phigenix does not contend that it faces risk of infringing the ’856 patent, that it is an actual or prospective licensee of the patent, or that it otherwise plans to take any action that would implicate the patent.

Phigenix tried some other arguments surrounding standing, but the Federal Circuit methodically shut these down as well based on relatively solid Supreme Court jurisprudence. It’s hard to say this case is wrong given the case law, but it is no doubt frustrating to see patent decisions dodging the merits of patent validity. These decisions have major public consequences even if they are (very) technically advisory with respect to the advocating party.

Curating Content May Defeat DMCA Protections: Mavrix Photographs v. LiveJournal

The DMCA safe harbor (17 U.S.C. § 512) immunizes websites and other internet service providers from copyright infringement caused by their users if the providers follow certain procedures. Generally this means providers have to remove copyrighted works as soon as they become aware of them.

But what if you have a bunch of volunteer moderators / curators determining which user submissions to post? Are you responsible for copyright infringement if the volunteers approve a copyrighted user submission? It seems likely, if those volunteers qualify as “agents” of your company.

In Mavrix Photographs v. LiveJournal, Inc. (April 2017), a Ninth Circuit panel concluded that volunteer moderators on a website could indeed be “agents” of the website, although the agency determination is a question of fact that cannot be resolved on summary judgment.

Importantly, the panel ruled that curating the posts (i.e. only posting about 1/3 of the submissions) probably didn’t qualify LiveJournal for the safe harbor of posting “at the direction of the user”. Previous decisions have allowed websites to take advantage of the safe harbor so long as they were only making “accessibility enhancing” changes to posts such as reformatting or screening for offensive material. But curation may be too much control:

The question for the fact finder is whether the moderators’ acts were merely accessibility-enhancing activities or whether instead their extensive, manual, and substantive activities went beyond the automatic and limited manual activities we have approved as accessibility-enhancing.

This reading appears to be well within the statutory language, but it threatens to put additional burdens on websites that curate (and begs the question of what exactly is curation / moderation). If you curate, how can you also ensure the content is not copyrighted by someone else? It’s not obvious.

Update: A group of internet companies including Google and Facebook have urged en banc review. They argue that this decision incentivizes companies to do no pre-screening of user submitted material, and that this is bad policy and contrary to the intent of the DMCA.

This all boils down to whether some forms of pre-screening are extensive enough to consider it reasonable that the company should police copyright infringement too. And to be fair the panel’s decision didn’t say one way or the other: it just said there are enough fact issues that you can’t decide on summary judgment.

Hackers steal tools from NSA, hack everyone with them

From the New York Times:

Hackers exploiting data stolen from the United States government conducted extensive cyberattacks on Friday that hit dozens of countries, severely disrupting Britain’s public health system and wreaking havoc on tens of thousands of computers elsewhere, including Russia’s ministry for internal security.

Link

There are really only two things that need to be said about this, both said well by others:

  1. “Remember last year when a whole bunch of people wanted Apple to create a special version of iOS for the U.S. government, under the promise that it would never escape their safe hands and get into the wild?” John Gruber, Daring Fireball (link)
  2. “Either everyone gets security or no one does.” Bruce Schneier (link)

The point is there’s no such thing as a security backdoor that “only I can use.” If you want systems to truly be secure, they must truly be secure.