Has the Machine-or-Transformation Test Returned to Prominence in Patent Cases?

The machine-or-transformation test was once the gatekeeper of patent eligibility, but that reign ended in 2010 when the Supreme Court stated in Bilski that it is not the sole test for determining patentability. By 2013 the test became largely ignored, for example in the Federal Circuit’s Ultramercial opinion. When that opinion was vacated and remanded by the Supreme Court, however, the new Federal Circuit Ultramercial opinion issued in November 2014 devoted a large discussion to the test. Given the renewed emphasis by the Federal Circuit on the machine-or-transformation test, practitioners would do well to study the intricacies of the two prongs of the test. Continue reading this entry

U.S. Supreme Court Modifies Federal Circuit’s Standard of Review for Claim Construction in Teva v. Sandoz

On January 20, 2015, resolving a long debated issue, the U.S. Supreme Court set aside the Federal Circuit’s de novo review of every aspect of a lower court’s claim construction decision, rejecting that form of review where the district court has resolved factual disputes and made factual findings about the extrinsic evidence. Teva Pharms. USA, Inc. v. Sandoz, Inc., No. 13-854 (“Op.”) at 1-2. The U.S. Supreme Court held that the “clear error” standard of review applies in those circumstances. Id. However, it also confirmed that the “ultimate” construction of the claim, even where underlying factual disputes have been resolved, remains a legal conclusion that the Federal Circuit can review de novo. Op. at 13. The U.S. Supreme Court also confirmed that de novo review is appropriate in cases where the district court reviews only evidence intrinsic to the patent. Continue reading this entry

Pre-Trial Consolidation May Run Afoul of the America Invents Act

Pawn LemmingsThe America Invents Act introduced a new statute, 35 U.S.C. § 299, which provides that “accused infringers may not be joined in one action as defendants or counterclaim defendants, or have their actions consolidated for trial, based solely on allegations that they each have infringed the patent or patents in suit.” In the years since its enactment, however, Section 299 has done little to change the way patent infringement cases are litigated. Instead of joining multiple patent defendants under Rule 20, district courts now often consolidate unrelated defendants for pre-trial purposes pursuant to Rule 42. Courts have reasoned that because Section 299 does not expressly refer to pre-trial consolidation, it is not prohibited. Although litigants have by and large accepted pre-trial consolidation as the new normal, the legislative history of Section 299 may indicate that this result is not what the drafters intended, and that advocates should think twice before going along with consolidation when it may be against their client’s best interests. Continue reading this entry

Defense to Patent Infringement if Acts Were Performed in a “Quasigovernmental” Capacity Pursuant to a Legal Obligation

A recent Federal Circuit opinion highlights a defense that is available to defendants whose alleged infringement occurred through activities that were undertaken for the United States. In particular, where the United States Government requires private parties to perform quasigovernmental functions pursuant to a legal obligation, a patent owner’s exclusive remedy is to bring a claim against the United States in the U.S. Court of Federal Claims, rather than against the private party in a U.S. District Court.

In IRIS Corp. v. Japan Airlines Corp., _ F.3d _, No. 2010-1051 (Fed. Cir. 2014), the patent owner (“IRIS”) accused Japan Airlines Corporation (“JAL”) of infringing U.S. Patent No. 6,111,506, titled “Method of Making an Improved Security Identification Document Including Contactless Communication Insert Unit.” According to IRIS, certain passports that JAL examined during pre-flight procedures were made using the ’506 Patent’s method, and, therefore, JAL was liable for infringement pursuant to 35 U.S.C. § 271(g). Notably, however, JAL examined the passports pursuant to federal law, “including the Enhanced Border Security Act, 8 U.S.C. § 1221 et seq., the Visa Entry Reform Act of 2002, 19 C.F.R. § 122.75a(d), and certain international treaties.” Continue reading this entry

New Jersey Bankruptcy Court Extends Unusual Protection to Trademark Licensees Under Section 365(n)

A recent Bankruptcy Court decision in New Jersey took an unusual approach in determining  the rights of the debtors’ trademark licensees following the debtors’ rejection of the licenses as executory contracts. In In re Crumbs Bake Shop, Inc., Case No. 14-24287 (10/31/14), Judge Michael Kaplan held that the debtors’ licensees were protected by Section 365(n) of the Bankruptcy Code and could continue to use the licensed marks notwithstanding the rejection, even though that section  – which expressly protects licensees of other types of intellectual property –  makes no mention of trademarks. The decision has been appealed to the Third Circuit. If affirmed, the holding would diverge from the Fourth and Seventh Circuit’s approaches to the same issue and could lead to either a Supreme Court review or legislative action by Congress. Continue reading this entry