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A Sea Change after Alice: Recent Court Decisions Show Patents Are Vulnerable under Section 101 Attack

Since 2010, the Supreme Court has issued four decisions on patent-eligible subject matter under 35 U.S.C. § 101. In the most recent decision, Alice Corp. v. CLS Bank, the Court continued the restrictive approach set forth in its own precedents in Gottschalk v. Benson,[1] Parker v. Flook,[2] and Diamond v. Diehr,[3] and invalidated patents directed to computerized methods for mitigating settlement risk by using a third-party intermediary. The most significant passage in the Alice decision is that the Court expressly adopted the two-step test it elaborated in Mayo Collaborative Services v. Prometheus Laboratories[4] for all types of patent subject matter issues, including laws of nature, natural phenomena, and abstract ideas.[5]

Federal Circuit Decision Highlights Risk of Co-owning Patents

Co-owning any piece of property can lead to unwanted and unexpected headaches. And as demonstrated by the Federal Circuit in STC.UNM v. Intel Corp., Fed. Cir. No. 2013-1241, this is especially true with respect to co-ownership of patents. Here, the Federal Circuit held that STC lacked standing to bring its patent infringement lawsuit against Intel because Sandia Corp., a co-owner of the patent-in-suit, refused to voluntarily join the lawsuit, and could not be involuntarily joined under Federal Rule of Civil Procedure 19(a).

Emerging Impact of Inter Partes Review on Hatch Waxman Litigation - A Primer

Hatch-Waxman Litigation in a NutshellHatch-Waxman litigation refers to pharmaceutical patent litigation between a brand drug manufacturer and a generic drug manufacturer under the Hatch-Waxman Act (“Act”). The Act was enacted to facilitate generic drug entry into the market while encouraging pioneer drug development. This is achieved by providing carefully balanced statutory incentives, such as a five-year data exclusivity to the brand firm and a 180-day market exclusivity to the first generic firm, and procedures for approval and marketing of generic drugs.

Estoppel effects of post-grant patent proceedings under the AIA

By now, most patent practitioners are quite familiar with the post-grant patent proceedings (e.g., IPR, PGR, CBM) newly established by the AIA, and their key features, such as the stay and estoppel provisions. Numerous courts have addressed the issue of a stay of civil litigation during the pendency of a post-grant proceeding. The growing defense strategy, upon being sued for patent infringement, is to file a post-grant patent proceeding and seek a stay of the civil litigation, which allows the defendant to move the patent validity issue into a more favorable and usually less expensive forum. Most statistics show that courts in the various jurisdictions with active patent case dockets are quite willing to stay cases.

The USPTO’s Response to Alice Corp. v. CLS Bank

Six days after the Supreme Court handed down its opinion in Alice Corp. v. CLS Bank, which invalidated certain patents disclosing “a computer-implemented scheme for mitigating ‘settlement risk,’” the USPTO issued its own Preliminary Examination Instructions. (An overview of the Alice Corp. decision can be found here.)

High Court Says Computerized Abstract Ideas Not Patent Eligible

In its highly anticipated decision in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, the United States Supreme Court unanimously ruled that an abstract idea is not patentable simply because it is implemented on a computer.

Will Heightened Pleading Standards Curb Patent Litigation Abuse?

One of the solutions proposed to curb perceived patent litigation abuse is to heighten the pleading standards. The idea being that higher pleading standards would enable defendants to seek early dismissal of complaints at the pleading stage. The assumption being that these types of patent plaintiffs cannot meet heightened pleading standards. But how effective would this really be?

The Supreme Court Gave District Courts more Power to Award Attorney’s Fees in Patent Litigation

In two related decisions, the Supreme Court relaxed the standard to award attorney’s fees under Section 285 of the Patent Act (“§285”) and ruled that decisions on §285 are entitled to deference on appeal. In the first case, the Court found that the Federal Circuit’s test for §285, as described in Brooks Furniture Mfg., Inc. v. Dutailier Int'l, Inc., 393 F.3d 1378, 1380 (Fed. Cir. 2005), is “unduly rigid” and inconsistent with the statutory language. Octane Fitness, LLC v. Icon Health & Fitness, Inc., 12-1184, Slip Op. at 7 (2014). The Court reasoned that the only constraint imposed by the text of §285 on a district court’s discretion to award attorney’s fees is that the case must be exceptional. Id. According to its ordinary meaning, the Court held, “an ‘exceptional’ case is simply one that stands out from others with respect to the substantive strength of a party’s litigating position . . . or the unreasonable manner in which the case was litigated.”[1] Id. at 7-8. Further, district courts should consider the totality of the circumstances and make a case-by-case determination on §285 questions. Id. at 8. Finally, the Court held that the evidentiary burden for §285 is a preponderance of the evidence, not clear and convincing evidence as required by the Federal Circuit. Id. at 11.