Patent

The U.S. Patent and Trademark Office (“USPTO”) has taken various actions in response to the COVID-19 health crisis.  All USPTO offices have been closed to the public since March 16, 2020, though USPTO personnel continue to review filings with ongoing communication to applicants, petitioners, and other parties through remote means. Additionally, relying on inherent administrative powers to alleviate “extraordinary circumstances,” the USPTO has authorized the waiver of certain petition fees for those impacted by the coronavirus, as well the general waiver of the requirement for original, handwritten signatures on certain submissions.  More action from the USPTO is expected in the coming days pursuant to the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which grants additional “emergency relief authority” to the USPTO Director (and the Register of Copyrights) to temporarily “toll, waive, adjust, or modify, any timing deadline” established by law or federal regulation in order to mitigate the impact of disruption to regular business caused by the COVID-19 pandemic.

The stationary bike. A staple in any gym, fitness center or home. While the machine may seem like a standard piece of technology that has been the same since inception, any innovator knows there is always room for improvement.

In a recent suit, Peloton claims to have acted on innovation to disrupt the usage of the stationary bike from a simple workout device, to an at-home, immersive, competitive and community based workout system.

Peloton’s model comprises users having the ability to access daily live classes via a screen on the bike to compete, interact and change the landscape by which they ride. This is experience is fueled by Peloton’s data driven media-technology logistics. Essentially, "PTON" aims to control each user's experience by continuously adapting it by virtue of fostering personal connections between user and on-screen instructor, queuing users to send virtual "high-fives" to each other upon completion of a rigorous workout bit, pushing individuals to challenge virtual "leaderboards," down to manipulating music and volume level dependent on a workout’s level of difficulty.

These features, paired with their trade secrets in marketing, sales and programs have allowed the company to achieve the status of a publicly traded company and a market cap that hovers around $8 billion.

As competitors emerged, Peloton took notice of one in particular, Flywheel Sports. Flywheel produces a subjectively similar product, the “FLY Anywhere” bike. The Anywhere bike utilizes live streaming or on-demand classes, tracking a rider's performance via metrics, comparisons of rider performance to competitors and fostering an online community driven workout system.

In efforts to thwart the competitor, Peloton filed a request for jury trail wherein Peloton claims to have discovered, just months before FLY Anywhere's release, PTON’s CEO, John Foley attended a J.P. Morgan event in order to present the company to potential investors. Allegedly, one investor, Michael Milken, personally probed Foley on future business plans, market retention, and even Peloton's intellectual property. Foley claims to have then found out one month after the event that Milken was one of Flywheel's largest investors. Thus, on information and belief, Peloton claims that Milken's purpose in probing Foley was to acquire information that could help Flywheel and subsequently, the request charges Flywheel with counts of patent infringement.

Fortunately for Peloton, the choice was made to protect themselves against unfair competition through intellectual property, and more specifically, via well written patents. Details on Peloton’s patents can be found in in U.S. Patent 9,174,085, U.S. Patent 9,233,276, U.S. Patent 9,861,855 and U.S. Patent 10,322,315.

The result was the suit ending in a settlement agreement. Flywheel Sports not only admitted that they infringed on Peloton's patents, but also admitted to having copied elements of the Peloton bike in developing their own bike.

As such, Flywheel has agreed to not only discontinue the service provided by the FLY Anywhere bikes, but also discontinue selling the product. As a result, current owners will be able to trade-in their FLY Anywhere bikes for a refurbished Peloton bike, at the cost of Flywheel Sports.

Details on the case can be found here and here.

 The U.S. Supreme Court voted last week on whether or not it would hear one or more of three separate cases involving issues related to subject matter eligibility under U.S. Patent Laws.

As noted in last weeks blog, the cases in which Petitions for Certiorari were under consideration were: HP Inc. v. Berkheimer; Hikma Pharmaceuticals USA Inc. et al. v. Vanda Pharmaceuticals USA, Inc.; and Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC.

The Court denied the petitions for cert in each of the cases, without opinion.

The U.S. Supreme Court is scheduled to hold certiorari votes on Friday, January 10, to decide which cases it will or will not consider. Among them are three cases involving patent eligibility, and if the Court chooses to hear even one of these cases, it could significantly impact how Section 101 of the Patent Laws is applied for years to come.

In no particular order, the cases and questions presented are as follows:

In HP Inc. v. Berkheimer, the Court has been asked to consider whether patent eligibility is a question of law for the court based on the scope of the claims, or a questions of fact for the jury based on the state of the art at the time of the patent. 

See Petition for a Writ of Certiorari here.

Hikma Pharmaceuticals USA Inc. et al. v. Vanda Pharmaceuticals USA, Inc. present the question of whether patents that claim a method of medically treating a patient automatically satisfy Section 101 of the Patent Act, even if they apply a natural law using only routine and conventional steps.

See Petition for a Writ of Certiorari here.

Finally, in Athena Diagnostics, Inc. et al. v. Mayo Collaborative Services, LLC the Court is asked to consider whether a new and specific method of diagnosing a medical condition is patent-eligible subject matter, where the method detects a molecule never previously linked to the condition using novel man-made molecules and a series of specific chemical steps never previously performed.

For more, see Petition for a Writ of Certiorari here.

We, along with the rest of the Intellectual Property Community, will be watching closely to see what the Court decides and why, and we will provide an update in a future blog.

Multiple patent applications have purportedly been filed in several countries by a law school professor on behalf of an artificial intelligence named DABUS. While the applications are not yet open for public inspection, a website devoted to the project details the subject matter of the inventions as an improved food container and a signal beacon, both of which were "created" by the artificial intelligence. The project appears to be an attempt to challenge the definition of "inventor" under the patent laws of various countries, which are generally restricted to individuals. Ostensibly, the purpose of the filings is to create a "case or controversy" by identifying a machine as the "inventor" in order to draw an objection to the applications. Once an application is refused on that basis, the case may be ripe to seek judicial review of the statutory definition of "inventor." Although, whether a machine has standing to appeal such an administrative determination is unclear, unless other interested parties are permitted to carry the suit. 

Identifying a machine as an inventor raises a host of other issues pertaining to the ownership of an invention, inlcuding the right to sue for infringement or collect royalties. Such issues would likely require a legislative amendment, rather than a favorable judicial interpretation of the existing defintion of "inventor," in order to avoid these kinds of ambiguities. 

In a 9-0 opinion issued by Justice Thomas, the Supreme Court held today that even where the buyer is obligated to maintain confidentiality of an invention, the inventor's "secret" sale of an invention may place the invention "on sale" for purposes of the America Invents Act, and confirmed that the America Invents Act did not change the definition of "prior art" with respect to the on-sale bar. 

Monday, 10 December 2018 16:16

When is an invention "on sale?"

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The Supreme Court is currently posed with the question: Does the confidential sale of an invention disqualify that invention from later patenting? Helsinn Healthcare S.A. v. Teva Pharm. USA, Inc., 138 S.Ct. 2678 (2018).

The patent statute does not directly address this question, but does state that an invention is precluded from patenting if that invention was “on sale” or “in public use” prior to the filing date for that patent application. Years of case law have added to the meanings of these terms. But now there is an additional term, “or otherwise available to the public.”  35 U.S.C. § 102(a)(1).  Under which circumstances does this new term preclude patenting? Circumstances that are applicable to the certified question for the Court?

The Supreme Court has previously ruled that public use of an invention will not preclude patenting if the public use is for experimentation.  Pfaff v. Wells Elecs., 525 U.S. 55, (1998).  That Court qualified the statutory language, reading in the experimentation use.  But that Court did not rule on the “on sale” criteria except to identify a distinction between experimental use and “products sold commercially.” Is there a similar qualification of a commercial sale, supported by precedent and legislative history, that can exempt a confidential sale from being barred from patenting?

And where would “otherwise available to the public” fit in here? Does “otherwise” mean that the previous items in the list, such as “on sale,” are also to be understood as “available to the public?” Or is it a modern catch-all for new patentability conditions that were not contemplated when the provision was written in 1952?

Based upon certain criteria including win rate and the time involved to get to trial, a 2018 study by PricewaterhouseCoopers (“PWC”) suggests that patent owners seeking to enforce their rights should file suit either in the Middle District of Florida (encompassing Jacksonville, Ocala, Orlando, Tampa, and Fort Myers), or the Southern District of Florida (which includes the South Florida metropolitan areas of West Palm Beach, Fort Lauderdale, Miami, and the Florida Keys).  Breaking down those factors using case studies and empirical data, PWC found that a patent owner who tried their case in the Middle District of Florida had a remarkable 50% statistical likelihood of prevailing (ranked 2nd in the United States), with the Southern District of Florida not too far behind (ranked 8th in the country).  In terms of the amount of time it took to get to trial –a significant factor in terms of the overall costs and expenses involved for the patent holder – cases brought in the Middle District of Florida were tried in 1.9 years (3nd in the United States), whereas lawsuits filed in the Southern District were tried in 2.1 years (6th in the United States).  Averaging all of the other underlying criteria involved, the PWC survey found that the Middle District of Florida had an “overall rank” of 6th in the entire United States, with the Southern District of Florida closing the gap at 11th in the country. 

Having focused its practice exclusively on patent law and other intellectual property areas since 1959, Malloy & Malloy, P.L. can assist you in filing a patent application or otherwise enforcing your rights, if necessary, through the litigation process.  Malloy & Malloy has an office in Jacksonville, Florida overseen by firm partner, Jennie S. Malloy, as well as offices in South Florida.  Please click the following for full contact information:   https://malloylaw.com/contact

Link to PWC study:   http://www.ipwatchdog.com/wp-content/uploads/2017/05/2017-Patent-Litigation-Study_PwC.pdf

Last month, the United States Supreme Court granted a petition for a writ of certiorari in Helsinn Healthcare S.A., Teva Pharmaceuticals USA, Inc. In 2017, the U.S. Court of Appeals for the Federal Circuit held that a publicly disclosed commercial sale amounts to an invalidating act, even when the details of the invention are not publicly disclosed.

The United States Supreme Court will decide whether under the Leahy-Smith America Invents Act, an inventor’s sale of an invention to a third party that is obligated to keep the invention confidential qualifies as prior art for purposes of determining the patentability of the invention.

The outcome will be interesting, as sometime in 2019 the Supreme Court should provide some guidance on the scope of the on-sale bar (i.e., those acts and/or disclosures that occur prior to the filing date of a patent application, which could affect the validity of a patent). A different issue, which will not be in front of the U.S. Supreme Court for review, at least for a while, is whether a secret commercial sale amounts to an invalidating act.  

 

Following our previous report, the U.S. Supreme Court held in WesternGeco LLC v. ION Geophysical Corp. that WesternGeco, the patent owner, can recover lost foreign profits as a result of ION's infringement under §271(f)(2) of the Patent Act. WesternGeco LLC v. Ion Geophysical Corp., U.S., No. 16-1011, 6/22/18.  Justice Thomas delivered the majority opinion in the 7-2 decision.

Over ION's objection that the lost-profits damages occurred outside of the United States and the foreign conduct after ION's infringement was necessary to give rise to the infringement, Justice Thomas wrote that awarding lost-profits damages under the circumstances was a domestic application, and therefore, consistent with the presumption against extraterritoriality that presumes federal statutes apply within the U.S.

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