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A Recent Opinion From The Eastern District Of Texas Addresses Numerous Alice/Section 101 Issues

In its September 24, 2018 opinion in Intellectual Ventures v. Sprint, et. al., the Eastern District of Texas Court made several rulings that touch on a number of issues that patent owners and parties defending patent infringement allegations should consider. This opinion was the result of two identical Section 101 Motions to Dismiss filed in two companion cases involving multiple asserted patents. The first issue addressed by the Court was whether the three claims that the defendant’s motion analyzed were in fact representative of all the asserted claims in the six asserted patents. Noting the brevity with which this was addressed by the defendants (in two footnotes of their motions), the Court determined that defendants failed to sufficiently demonstrate that the three claims were representative of the other claims. The Court then turned to its Alice analysis of the three claims addressed in the defendant’s motions. Here, the Court found one claim to be directed to an abstract concept and failed to contain an inventive concept. (The patent owner’s argument that it would prove an inventive concept at trial didn’t seem to gain much traction). Addressing the second claim, the Court found it directed to an abstract idea but that there was a question of fact as to whether the claim contained an inventive concept. And finally, with respect to the third claim, the Eastern District of Texas Court determined the claim was not directed to an abstract concept under Alice.

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Supreme Court Follows ?On Sale? Bar Precedent in America Invents Act Decision

Earlier this year, the Supreme Court addressed the on-sale provision of the AIA, 35 U.S.C. Sec 102(a), in Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc. In this case, the patent owner, Helsinn, entered into a license agreement and a supply and purchase agreement with a third party. These agreements gave the third party the right to distribute, promote, market, and sell the drug in question. In return, Helsinn received upfront and future royalty payments. The agreements required the third party to keep Helsinn’s proprietary information confidential. The effective filing date of Helsinn’s patent was nearly two years after the two agreements were executed. The District Court held that the on-sale bar did not apply, concluding that under the AIA, an invention is not on sale unless the sale or offer made the claimed invention available to the public. The Federal Circuit reversed, concluding that if the existence of the sale is public, the details of the invention need not be publicly disclosed in the terms of the sale to fall within the AIA on-sale bar. The Supreme Court affirmed. The issue as phrased by the Court was whether, under the AIA, an inventor’s sale of an invention to a third party who is obligated to keep the invention confidential qualifies as prior art for purposes of determining the patentability of the invention. The Court concluded such a sale can qualify as prior art. As noted by the Supreme Court in its Pfaff decision over twenty years ago, every patent statute since 1836 included an on-sale bar provision. Under Pfaff, the Court had ruled (pre-AIA) the on-sale bar applies if two conditions are met. First, the product must be the subject of a commercial offer for sale. Second, the invention must be ready for patenting (which can be shown by proof of reduction to practice, or drawings or descriptions of the invention that are sufficiently specific to enable a person of skill in the art to practice the invention). The Court noted it had previously suggested that a sale or offer need not make an invention available to the public. It also noted the Federal Circuit’s decisions had made explicit that secret sales could invalidate a patent. The court’s decision was based on its determination that when Congress reenacted the on-sale bar language in the AIA that was found in the pre-AIA statute, that Congress had adopted the earlier judicial construction of that phrase. The fact that additional language appears in the AIA statute (otherwise available to the public) did not change that body of precedent according to the Court. The Court also noted that Helsinn was not asking the court to re-visit pre-AIA precedent. Since it had concluded that Congress did not alter the meaning of on-sale when the AIA was enacted, the court held an inventor’s sale of an invention to a third party that is obligated to keep the invention confidential can qualify as prior art under Section 102(a).

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Infringement under the Doctrine of Equivalents is Barred by Prosecution History Estoppel

The Federal Circuit recently affirmed the dismissal of the patent owner’s lawsuit brought for patent infringement under the doctrine of equivalents in Amgen Inc. v. Coherus Biosciences Inc., 2018-1993 (Fed. Cir. July 29, 2019). The case illustrates one of the potential difficulties a patent owner may encounter under the doctrine of equivalents. Prosecution history estoppel is a defense to a charge of infringement under the doctrine of equivalents and prevents a patent owner from recapturing subject matter surrendered from the literal scope of a claim during prosecution. It occurs in two ways. First, and most common, is by the patent applicant making a narrowing amendment to the claim commonly referred to as amendment-based estoppel. The second way is by surrendering claim scope through arguments made during prosecution referred to as argument-based estoppel. In order for argument-based estoppel to apply, the prosecution history must evince a clear and unmistakable surrender of the subject matter. In the Amgen case, the Federal Circuit determined that argument-based estoppel did apply. The court’s ruling was based on arguments made by the patent applicant to overcome the cited prior art in which the applicant stated the prior art did not teach or suggest the particular combinations of [chemical materials] recited in the pending claims. Additionally, during prosecution, the applicant submitted a declaration that described the combination of chemical materials as a particular dual salt combination[s]. The court agreed with the District Court of Delaware that the competitor would reasonably believe that the patent owner surrendered unclaimed combinations.? Ultimately the Federal Circuit concluded the disavowal was a clear and unmistakable surrender.

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What Does a Patent Lawyer Do?

If you have an idea that requires a patent, you should consider consulting with a patent lawyer.  There are many things a patent lawyer can do, such as advise you on the process for obtaining your patent and help you protect it against infringement. What Is a Patent? Patents can be used to protect any number of ideas and inventions, including: A formula; A process or method; A tool or product; An engineered plant; or A machine. To be patentable, the invention must be original and nonobvious. Patents last from 15 to 20 years, depending on the type of patent. Do You Need a Lawyer to File a Patent Application? You can file a patent application on your own, but it is always a good idea to have a lawyer help you. When you write a patent application, you need to make sure your idea meets all the qualifications for a patent and that you describe it clearly enough to adequately protect it. For example, you need to: Determine which type of patent application to file and whether you need multiple patent applications; Determine whether you need to file a provisional patent application while you prepare your regular application; Explain how the invention works; Demonstrate that the invention is new;  Explain how the invention will be used and why it is useful; and Explain each part of the invention in detail. If you don’t prepare your application correctly, the patent office may reject it. Or even worse, the patent may not adequately protect your idea. Even if you want to do some of the initial draftings on your own, you should have an experienced patent lawyer review your application before you submit it. They can point out anything that might be missing or need more explanation. What Does a Patent Lawyer Do? A patent lawyer can help you with anything related to your patent, including obtaining the patent, licensing your invention, and protecting your patent from infringement. Obtaining a Patent As discussed above, a patent lawyer can draft or review your patent application and help you get your patent approved. Having a lawyer?s assistance as you apply for your patent can help speed along the process and ensure that your patent is adequately protected. Licensing In many cases, the person who creates an invention is not necessarily the person in the best position to manufacture, market, or sell it. Often, you will need to license your patent to actually earn money from it. There are many potential benefits of licensing your patent including: Getting your product to market more quickly; Limiting your liability; Not having to devote your own resources to manufacturing the product; Potentially having a more established name behind your product; and The ability to more easily enter foreign markets. There are many options when it comes to licensing your patent. A patent attorney can advise you on the type of license that makes the most sense for your patent. They can also help you negotiate the license with prospective licensees so you can get more favorable terms. Some things you may discuss with your attorney include: Whether you want to grant someone an exclusive license or license the patent to multiple parties; Whether your licensee will have the right to grant sublicenses to others and under what terms; How you will be paid; How long the license will last; and What actions the licensee needs to take to maintain the license. Patent licenses are complex contracts. They include many detailed provisions that help define and protect your rights and those of the licensee.  You do not want to sign a license agreement without consulting with an attorney. You deserve appropriate compensation for your ingenuity and creativity. An attorney can help protect your interests and see that the agreement appropriately values your patent. Infringement A patent gives you the right to prevent others from using, making, or selling your invention. Nevertheless, there are always those who try to profit from the hard work of other people. If someone else infringes on your patent, it can drastically affect your ability to make money from your invention. However, you have the right to take legal action against patent infringers. If you believe someone has infringed on your patent, you should talk to a patent attorney right away. The longer the infringement continues, the more you stand to lose. Your attorney will likely start by sending a letter to the other party to insist that they stop infringing on your patent. If they refuse, then your attorney will file a complaint in court. They will also likely request a preliminary injunction that will require the other person to stop what they are doing until the matter can be resolved.  Because time is of the essence and there may be a lot of money at stake, it is important to have an experienced patent litigator help you with this process. What Can a Patent Attorney at Polasek Law Do For You? John (Ted) Polasek has been practicing patent law for 25 years. His practice focuses on licensing patents and litigating patent infringement cases. Ted is committed to providing personalized service for each of his clients. This includes flexible fee arrangements that take the needs of individual clients into account. Ted offers a free consultation to discuss your patent-related questions. Contact our firm to schedule your consultation today.

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