Fitch Even News Feedhttps://www.fitcheven.com/?t=39&format=xml&stylesheet=rss&directive=0&records=20en-us22 Apr 2021 00:00:00 -0800firmwisehttp://blogs.law.harvard.edu/tech/rssUsing Persuasion Techniques to Achieve Litigation Success: Part Twohttps://www.fitcheven.com/https://attendee.gotowebinar.com/register/3366691823959415053&format=xml<p>Please join Fitch Even for a free webinar, &ldquo;<a href="https://attendee.gotowebinar.com/register/3366691823959415053">Using Persuasion Techniques to Achieve Litigation Success: Part Two</a>,&rdquo; on April 22 at 9:00 a.m. PDT / 10:00 a.m. MDT / 11:00 a.m. CDT / 12 noon EDT.</p> <p>During this webinar, we continue our discussion of how the persuasion techniques ethos, pathos, and logos can be effectively used during intellectual property litigation. In Part One (<i>recording available </i><a href="https://register.gotowebinar.com/register/316094612774894603"><i>here</i></a>), we explored how these persuasion concepts can be applied when developing case themes, building a litigation team, and selecting and preparing fact witnesses.</p> <p>In Part Two, we&rsquo;ll explore compelling ways to leverage the concepts of ethos, pathos, and logos in other aspects of litigation, including these:</p> <ul> <li>Expert witness selection and reports</li> <li>Written and oral communications with the court</li> <li>Trial</li> </ul> <p>Our speakers will be Fitch Even litigators <a href="https://www.fitcheven.com/?t=3&amp;A=2581&amp;format=xml&amp;p=5482">Karl R. Fink</a>, <a href="https://www.fitcheven.com/?t=3&amp;A=2598&amp;format=xml&amp;p=5482">Nikki Little</a>, and <a href="https://www.fitcheven.com/?t=3&amp;A=2601&amp;format=xml&amp;p=5482">Timothy P. Maloney</a>. They will provide practical insights drawn from their expansive experience handling hotly contested IP disputes.&nbsp;</p> <p>Karl has been a trial lawyer since 1981, handling hundreds of lawsuits in state and federal courts across the U.S., with positive results as first chair in all stages of litigation, including trial and appeal. His practice includes all aspects of IP litigation, creation, management, enforcement, and licensing, with a particular emphasis on complex patent litigation.</p> <p>Nikki is an IP litigator who represents clients in cases across a broad spectrum of technologies. She has participated in numerous jury and bench trials on behalf of clients ranging from individual inventors to multinational corporations. Nikki also represents clients in patent post-issuance proceedings in the USPTO in parallel with ongoing district court proceedings.</p> <p>Tim is a nationally recognized trial lawyer active in all aspects of IP enforcement and defense, with an emphasis on patent, trade secret, and other technology-related litigation. He is an established first-chair trial lawyer with a strong track record in numerous jury and bench trials and in various appeals before the Federal Circuit. Tim has handled over 100 litigation-related patent post-issuance proceedings in the USPTO, consistently achieving favorable outcomes.</p> <p>A recording of this webinar is available through April 21, 2021.</p>Past Webinars22 Apr 2021 00:00:00 -0800https://www.fitcheven.com/https://attendee.gotowebinar.com/register/3366691823959415053&format=xmlFitch Even Partner Joe Marinelli to Moderate Program on IP Litigation at ABA Business Law Spring Meetinghttps://www.fitcheven.com/?t=40&an=115904&format=xml<p>Fitch Even partner <a href="https://www.fitcheven.com/?t=3&amp;A=2603&amp;format=xml&amp;p=5482">Joseph F. Marinelli</a> will serve as moderator for the CLE program &ldquo;Essentials of IP Litigation for Business Lawyers,&rdquo; taking place on April 19 at 2:00 p.m. CDT during the ABA Business Law Virtual Spring Meeting.</p> <p>This program will provide guidance to lawyers on how best to advise clients on key elements of the various types of intellectual property litigation that can arise in the course of doing business. In addition to Joe, the speakers will include former U.S. District Court Chief Judge James F. Holderman, Eric Broxterman of Vertiv, and Mareesa Frederick of Finnegan, who will each share their insights on litigation costs, challenges, and strategies.</p> <p>To learn more about the virtual conference and to register, please visit the <a href="https://web.cvent.com/event/81a892c0-8271-4534-83d8-333f366e2629/websitePage:645d57e4-75eb-4769-b2c0-f201a0bfc6ce">ABA website</a>.&nbsp;</p> <p>&nbsp;</p>Professional Activities14 Apr 2021 00:00:00 -0800https://www.fitcheven.com/?t=40&an=115904&format=xmlIP Alert: Federal Circuit Holds Apple Lacked Standing to Appeal IPRs It Initiated, Distinguishes <i>MedImmune</i>https://www.fitcheven.com/?t=40&an=115894&format=xml<p>On April 7, in <a href="http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/20-1561.OPINION.4-7-2021_1759839.pdf"><i>Apple Inc. v. Qualcomm Incorporated</i></a>, the Federal Circuit held that Apple lacked standing to appeal final decisions by the Patent Trial and Appeal Board (PTAB), upholding validity in two <i>inter partes </i>review (IPR) proceedings involving Qualcomm patents. This case provides an important reminder of the difference between parties entitled to petition for IPR at the PTAB and those with standing in the federal courts. The court held that standing did not exist despite prior litigation between the parties and even though Apple is a licensee of the challenged patents.</p> <p>In 2017, as part of a larger global dispute between the parties, Qualcomm filed a lawsuit against Apple in the Southern District of California alleging infringement of various patents by Apple&rsquo;s iPhone products. In response to the lawsuit, Apple filed IPR petitions challenging the validity of the two patents at issue.</p> <p>In April 2019, Qualcomm and Apple entered into a global settlement agreement that included payment by Apple in exchange for a six-year covenant not to sue (with a potential two-year extension) on tens of thousands of Qualcomm patents, including the petitioned patents. The district court action was dismissed with prejudice, but the IPR proceedings continued. In January 2020, the PTAB issued final written decisions in each IPR upholding the validity of the two patents, and Apple appealed.</p> <p>As an initial matter, the Federal Circuit agreed with Qualcomm that Apple had waived its argument to establish standing because it had failed to address or submit evidence related to standing in its opening brief. Nevertheless, in its discretion, the court decided to address the standing issue.</p> <p>First, Apple argued that it had standing to appeal the IPR decisions based on its ongoing royalty payments pursuant to the parties&rsquo; settlement agreement, citing the <i>MedImmune, Inc. v. Genentech</i>,<i> Inc. </i>decision. In <i>MedImmune</i>, the U.S. Supreme Court held that a patent licensee has standing to challenge a patent&rsquo;s validity in a declaratory judgment action even without breaking or terminating a license agreement by stopping the royalty payments. However, the Federal Circuit here distinguished <i>MedImmune</i>, finding that Apple had not alleged that the validity of the petitioned patents would affect its ongoing contract obligations to make royalty payments. Because the license agreement between Qualcomm and Apple included a license to &ldquo;tens of thousands&rdquo; of patents, the court found that the validity of any individual patent (e.g., either of the two patents at issue) would not affect Apple&rsquo;s royalty obligations. As the court explained, &ldquo;[t]his failure is fatal to establishing standing under the reasoning of <i>MedImmune</i>, whether we analyze Apple&rsquo;s evidence for injury in fact or redressability.&rdquo; The court further opined that &ldquo;[u]ltimately, Apple&rsquo;s assertions amount to little more than an expression of its displeasure with a license provision into which it voluntarily entered,&rdquo; and &ldquo;[s]uch allegations do not establish Article III standing.&rdquo;</p> <p>Second, Apple argued that it had standing to challenge the IPR decisions based on the possibility that Qualcomm could file a lawsuit alleging infringement of the patents after the expiration of their license agreement, which only had an initial six-year term. The court again disagreed, finding that &ldquo;this possibility of suit is too speculative to confer standing&rdquo; and that &ldquo;Apple provides no evidence that it intends to engage in any activity that may give rise to an infringement suit . .&nbsp;. when the license expires.&rdquo; Likewise, the court found that Apple failed to provide &ldquo;the specificity necessary to show that Qualcomm is likely to assert these particular patents against any particular products which would be sold after the license agreement expires.&rdquo;</p> <p>Finally, Apple submitted that &ldquo;its injury is compounded by the likelihood that 35 U.S.C. &sect; 315(e) would estop it from arguing that the [patents] would have been obvious in future disputes.&rdquo; But the Federal Circuit dismissed this argument as well, finding this reasoning had already been rejected in <i>AVX Corp. v. Presidio Components, Inc.</i> (as previously reported <a href="https://www.fitcheven.com/?t=40&amp;an=91295&amp;anc=180&amp;format=xml&amp;p=5486">here</a>) and &ldquo;the harm Apple may face from estoppel is insufficient to provide standing.&rdquo;</p> <p>This decision highlights the difference between parties with rights to petition the PTAB relative to those with declaratory judgment jurisdiction. As noted by the court in this case, &ldquo;[w]hile nearly any person may seek an<i> inter partes </i>review, an appellant must &lsquo;supply the requisite proof of an injury in fact when it seeks review of an agency&rsquo;s final action in a federal court.&rsquo;&rdquo; As such, standing at the federal courts is an issue a petitioner should consider both prior to filing a post-grant review at the PTAB and when appealing from the PTAB to the Federal Circuit. Failing to address standing or submit related evidence in an opening appeal brief could waive the issue, regardless of the merits.</p> <p>For more information on this topic, please contact Fitch Even attorneys <a href="https://www.fitcheven.com/?t=3&amp;A=3766&amp;format=xml&amp;p=5482">Karen J. Wang</a> or <a href="https://www.fitcheven.com/?t=3&amp;A=16703&amp;format=xml&amp;p=5482">Evan Kline-Wedeen</a>, authors of this alert.<br /> <b><br /> Fitch Even IP Alert<sup>&reg;</sup>&nbsp; &nbsp;</b></p>IP Alerts13 Apr 2021 00:00:00 -0800https://www.fitcheven.com/?t=40&an=115894&format=xmlIP Alert: Supreme Court Finds Copying of Software Entitled to Fair Use Defense in <i>Google v. Oracle</i>https://www.fitcheven.com/?t=40&an=115873&format=xml<p>Following multiple jury trials and two Federal Circuit appeals, the U.S. Supreme Court issued its decision in <a href="https://www.supremecourt.gov/opinions/20pdf/18-956_new_o7jp.pdf"><i>Google LLC v. Oracle America, Inc.</i></a> on April 5. The decision addresses important copyright issues related to fair use of computer source code, but does not address the prerequisite issue of whether the code at issue was copyrightable.</p> <p>In a 6 to 2 decision authored by Justice Breyer, the Court held that Google&rsquo;s copying of the Sun Java Application Programming Interface (API), owned by Oracle, was a fair use of that material as a matter of law. Google&rsquo;s copying was therefore defensible, putting an end to Oracle&rsquo;s claim that it was entitled to almost $9 billion in damages. The Court did not rule on whether the &ldquo;declaring code&rdquo; and organizational structure of the Sun Java API are protectible under copyright law, instead assuming &ldquo;purely for argument&rsquo;s sake, that the entire Sun Java API falls within the definition of that which can be copyrighted.&rdquo;</p> <p>The Court&rsquo;s decision provides extensive background of the accused copyright infringement. In about 2005, Google started to work on an API for its Android software. Its plans were to use the Java software language that was popular with many developers. In its development of this platform, Google had about 100 engineers spend three years to develop millions of lines of new computer code. However, because Google wanted this software available to as many software developers as possible, it also copied about 11,500 lines of code from the application programming interface of the Java SE software owned by Oracle. Google released its platform in 2007, and within five years it claimed a significant part of the smartphone market. By 2015, its Android sales accounted for more than $42 billion in revenue.</p> <p>Google&rsquo;s accused Android project uses the Java API as a user interface that allows programmers to write programs for the Android mobile devices. The technology involves three separate essential parts. The first is implementing code that instructs computers on how to perform a specific task. Google created its own implementing code for the accused program. The second is the method call that instructs computer to run the series of steps. Oracle did not accuse the method call portion of the Google software to infringe its work. Third is the declaring code that was the crux of the infringement claim. The declaring code labels and organizes the tasks for the software to perform.</p> <p>The initial case was filed in 2010 and, as the court notes, has had a &ldquo;complex and lengthy history.&rdquo; That history has been outlined in previous alerts found&nbsp;<a href="https://www.fitcheven.com/?t=40&amp;an=30425&amp;anc=180&amp;format=xml&amp;p=5486">here</a> and <a href="https://www.fitcheven.com/?t=40&amp;an=75585&amp;anc=180&amp;format=xml&amp;p=5486">here</a>. The issues accepted for review by the Supreme Court were (1) whether the copied software code is entitled to copyright protection and (2) if so, if the copied use was a &ldquo;fair use.&rdquo; Because fair use would moot the issue of the fundamental copyrightability of the work, the court only addressed the issue of fair use, opting to assume &ldquo;purely for the sake of argument&rdquo; that the code was copyrightable.</p> <p>As a procedural matter, the Court addressed the standard of review of the fair use defense, holding that fair use is an equitable defense that is a mixed question of law and fact for which the court is entitled to a de novo review. Once the appropriate factual determinations are made by the jury, it is up to the court to make the ultimate legal determination regarding the application of the fair use defense to those facts.&nbsp;</p> <p>Under section107 of the Copyright Act, the fair use defense includes an examination of four factors: (1) the purpose and character of the use, (2) the nature of the copyrighted work, (3) the amount and substantiality of the portion of the work used, and (4) the effect of that use on the potential market for the original work. The Court noted that this list is not exhaustive and that some factors may be entitled to more weight than others. The Court&rsquo;s analysis addressed each of these factors.</p> <p>The Court analyzed the nature of the copyrighted work first, placing great emphasis on this factor. It concluded that declaring code is further than most computer programs &ldquo;from the core of copyright.&rdquo; The Court found this part of the software to be functional in nature and &ldquo;inherently bound together with uncopyrightable ideas.&rdquo; These comments question the entire copyrightability of the declaring code, although the Court did not issue a holding on that point.</p> <p>The Court then analyzed the remaining fair use factors in sequence, starting with purpose and character of the use. This factor includes analysis of whether the accused work adds something new and important that makes the work transformative from the original. Here Google precisely copied portions of the work. But Google sought to use this material to create a new product that expands the purpose and usefulness of the software for the Android smartphone application. Even though it precisely copied portions of the software (which is often the case with software copyright issues), Google only copied that portion of the software that was necessary for it to create the new product. This is sometimes referred to as reimplementation, which is considered necessary in the software industry so that different programs can communicate with each other and so that programmers can take advantage of their existing knowledge of the language. The Court concluded that Google&rsquo;s software was transformative, which supports the application of the fair use defense.</p> <p>Other considerations in the purpose and character of the use include commerciality and bad faith. As to the commercial nature of the use of the work, the Court found that a noncommercial purpose usually weighs in support of the fair use defense but the opposite is not automatically the case. Here Google&rsquo;s use was admittedly commercial in nature. However, just as news reporting&mdash;which is expressly entitled to the fair use defense&mdash;is usually commercial, the transformative nature of the use here mitigates the commerciality such that fair use can still apply.</p> <p>As for the issue of bad faith, the Court expressed skepticism as to its usefulness as a factor in this enquiry. Rather than fully explore this factor, the Court held that the strength of the transformative nature of the use outweighs any consideration of good or bad faith in the use.</p> <p>The third fair use factor is the amount and substantiality of the portion of the work that is used in the accused product. Google directly copied 11,500 lines of code from the Java API declaring code. This is the majority of the declaring code in that API. The entire Java API, however, consisted of 2.86 million lines of code, meaning the copied code was only about 0.4 percent of the software. The Court&rsquo;s analysis of this factor balanced the amount of copying in view of the nature of the &ldquo;creative expression&rdquo; found in the work. For example, copying a minor amount of the whole work can still capture the heart of the work, which would weigh against the fair use defense. Conversely, copying a substantial portion of the work can weigh in favor of the defense if the portion copied &ldquo;captures little of the creative expression or is central to the copier&rsquo;s valid purpose.&rdquo;</p> <p>Rather than the amount of the work copied, the Court focused on the amount of the work not copied. The Court noted that Google&rsquo;s purpose was to create an entirely new task-based product for a different environment. According to the Court this is a valid and transformative purpose that tilts the &ldquo;substantiality&rdquo; factor in favor of finding fair use. The Court expressly disagreed with the Federal Circuit, reasoning that Google&rsquo;s valid purpose could not have been accomplished by copying a lesser amount of the work or by creating its own work. As a result, the Court found this factor to also weigh in favor of support of the application of the fair use defense.</p> <p>The last of the four fair use factors is the effect of the product to the market or the value of the copied work. In addition to loss of revenue, the Court added consideration of the public benefit that the copying is likely to produce. The evidence here established that the primary market for the Java software was desktop and laptop computers, which is a very different market than the mobile phone market. The Court noted that Oracle&rsquo;s efforts to go into the mobile phone market were largely ineffective. Again, the Court found that there is potentially a public harm by enforcing the copyright against Google&rsquo;s use, which allows programmers to benefit from their existing knowledge of the software&rsquo;s organization. As a result, this factor also weighs in favor of the fair use defense in these circumstances.</p> <p>The Court did not hold that software, or even the &ldquo;declaring code&rdquo; at issue, is uncopyrightable. Obtaining copyright protection for computer software consequently still has significant value. Instead, the Court applied fair use broader than many courts had previously allowed. Since much of the Court&rsquo;s opinion is influenced by arguments that the defendant only used as much of the copyright protected work as was necessary to create an entirely new purpose, potential defendants have new guidance on the use of copyrighted works for new purposes. For the fair use defense, the nature of copied software and the transformative nature of the accused work may become more important. This decision is particularly instructive for computer software copyright claims, and the Court notes that software claims often entail a different analysis than is applied to other, more traditional, copyright claims. Nonetheless, the principles here may be instructive in other copyright matters if the copied work is bound up with uncopyrightable ideas.</p> <p>For more information on this case and its effects, please contact Fitch Even partner <a href="https://www.fitcheven.com/?t=3&amp;A=2609&amp;format=xml&amp;p=5482">Joseph T. Nabor</a>, author of this alert.<br /> &nbsp;</p> <b>Fitch Even IP Alert<sup>&reg;</sup></b>IP Alerts12 Apr 2021 00:00:00 -0800https://www.fitcheven.com/?t=40&an=115873&format=xmlIP Alert: Federal Circuit Affirms Refusal to Admit Source Code Printouts Obtained from Third Partieshttps://www.fitcheven.com/?t=40&an=115876&format=xml<p>The Federal Circuit&rsquo;s recent decision in <a href="http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/20-1041.OPINION.4-6-2021_1759180.pdf"><i>Wi-LAN Inc. v. Sharp Electronics Corp</i>.</a> demonstrates potential difficulties for plaintiffs in proving infringement where third-party information is necessary to establish that defendants practice the asserted claims. The court affirmed the district court&rsquo;s grant of summary judgment of noninfringement, holding that purported printouts of source code and supporting declarations obtained from third-party chip manufacturers were inadmissible hearsay.</p> <p>Although the court does not explicitly identify what type of information regarding the source code would have been admissible, it identified several problems with the specific printouts presented by Wi-LAN that prevented them from falling within exceptions to the hearsay rule.</p> <p>The accused devices sold by the defendants were smart televisions that incorporated chips that allegedly perform patented methods of &ldquo;deinterlacing&rdquo; older video formats so that the video displays correctly on modern televisions. The district court granted summary judgment in favor of the defendants, holding that Wi-LAN lacked sufficient admissible evidence to prove direct infringement. Wi-LAN relied on source code evidence to oppose summary judgment, consisting of printouts of source code with added commentary. Wi-LAN also relied on declarations from third-party manufacturers stating that the source code printouts related to deinterlacing processes in a specified list of chips and that there were no material differences between the produced printouts and other versions of code made since 2009. These source code printouts and declarations were obtained by Wi-LAN after filing lawsuits against the third-party chip manufacturers.</p> <p>On appeal, the Federal Circuit affirmed, rejecting Wi-LAN&rsquo;s various theories of admissibility. First, Wi-LAN argued that the source code printouts fall under the business records exception to the hearsay rule under FRE 803(6), which requires the records to have been kept in the course of a regularly conducted business activity and certified by the custodian or another qualified witness. The court held that the declarations proffered could not qualify as certification by a custodian. While the court acknowledged that declarations may be used at summary judgment if the witness will be available to testify at trial, it pointed out that Wi-LAN had obtained the information through lawsuits filed against third parties and had admitted that it would likely not be able to compel attendance of the declarants at trial. The court also rejected Wi-LAN&rsquo;s argument that the declarations themselves were admissible under the business records exception, because the declarations resulted from litigation filed against the chip manufacturers, not regular business activities.</p> <p>The business records exception further requires that the opponent does not show that the source of information or the method or circumstance of preparation indicate a lack of trustworthiness. The court pointed out that the defendants had demonstrated a lack of trustworthiness of the printouts, pointing to inconsistent dates in metadata and revision histories, as well as added commentary on the printed source code excerpts. The court also noted that the district court had found that Wi-LAN had failed to obtain change logs, file comparisons, or other evidence that could clear up these inconsistencies.</p> <p>The court also held that the district court did not abuse its discretion in finding that the circumstances under which the printouts were produced were &ldquo;highly dubious&rdquo; and that the printouts lacked indicia of trustworthiness, thus refusing to find the records admissible under Federal Rule of Evidence (FRE) 901(b)(4).</p> <p>Finally, the court rejected Wi-LAN&rsquo;s argument that the printouts should have been admitted into evidence under FRE 703 because they were relied on by Wi-LAN&rsquo;s expert. First, the court pointed out that expert reliance does not translate to admissibility. Second, the court held that Wi-LAN&rsquo;s expert testimony was not itself admissible to establish infringement because Wi-LAN did not establish that experts in the field reasonably rely on unauthenticated source code. The court agreed with the district court that such a use of expert testimony would merely serve as a back door to allow admission of otherwise inadmissible evidence.</p> <p>The Federal Circuit also affirmed denial of Wi-LAN&rsquo;s fallback request for additional time to obtain admissible versions of the source code, noting that Wi-LAN had been on notice that it was going to need the third-party source code and during discovery had repeatedly requested extensions of time to obtain the code.</p> <p>This case illustrates some of the challenges that a plaintiff may face in obtaining admissible evidence of infringement where third parties are involved. Plaintiffs should investigate these issues early in a case and attempt to understand potential opposition to admissibility that may be raised by defendants. If custodians of third-party records will not be able to be presented as live witnesses at trial, their written declarations should be presented early enough during discovery for the defendants to have an opportunity to challenge them, so that any additional evidence that is necessary may be gathered prior to the summary judgment stage. Plaintiffs should also consider deposing custodians of source code or other key third-party documents, providing the opposing party an opportunity to cross-examine those witnesses and creating sworn testimony that may be used in court should the custodians be unavailable.</p> <p>For more information on this case, please contact Fitch Even partner <a href="https://www.fitcheven.com/?t=3&amp;A=2567&amp;format=xml&amp;p=5482">Mark A. Borsos</a>, author of this alert.<br /> <b><br /> Fitch Even IP Alert<sup>&reg;</sup></b></p>IP Alerts12 Apr 2021 00:00:00 -0800https://www.fitcheven.com/?t=40&an=115876&format=xmlFitch Even Attorney Tom James to Moderate IPLAC Program on Trade Secrets Litigationhttps://www.fitcheven.com/?t=40&an=115633&format=xml<p>Fitch Even attorney <a href="https://www.fitcheven.com/?t=3&amp;A=12841&amp;format=xml&amp;p=5482">Thomas A. James</a> will co-moderate &ldquo;Trade Secrets Litigation at the ITC with ITC Judge Cameron Elliot,&rdquo; an online program presented by the Intellectual Property Association of Chicago (IPLAC) on April 8 from 12 noon to 1:00 p.m. CDT.</p> <p>The program will begin with an overview of contemporary issues arising in trade secrets cases at the International Trade Commission. The moderators will then conduct an interview with Judge Elliott, who will share insights regarding such issues, drawing from his experience at the ITC.</p> <p>For more information and to register, please visit the <a href="https://www.iplac.org/index.php?option=com_jevents&amp;task=icalrepeat.detail&amp;evid=113&amp;Itemid=156&amp;year=2021&amp;month=04&amp;day=08&amp;title=trade-secrets-litigation-at-the-itc-with-itc-0judge-cameron-elliot-april-8-2021&amp;uid=cc8ecfeb4fc351b73545512bd9438c55">IPLAC website</a>.</p> <p>&nbsp;</p>Professional Activities26 Mar 2021 00:00:00 -0800https://www.fitcheven.com/?t=40&an=115633&format=xmlIP Alert: EPO Decision G1/19 Addresses Patentability of Computer-Implemented Simulations in Europehttps://www.fitcheven.com/?t=40&an=115544&format=xml<p>On March 10, in <a href="https://documents.epo.org/projects/babylon/eponet.nsf/0/99f4b971c9e3eb2fc125869400340179/$FILE/G_1_19_decision_of_the_Enlarged_Board_of_Appeal_of_10_March_2021_en.pdf">decision G1/19</a>, the European Patent Office (EPO) Enlarged Board of Appeal held that computer-implemented simulations are not <i>per se</i> unpatentable and warrant the same treatment as other computer-implemented inventions. Like other computer-implemented inventions, simulations may be patentable if an inventive step is based on features contributing to the technical character of the claimed simulation.</p> <p>The application at issue, European patent application <a href="https://register.epo.org/application?number=EP03793825">03793825.5</a>, relates to simulation of a pedestrian&rsquo;s movements in an environment. According to the application, while prior art approaches modeled crowds from a macroscopic perspective, the subject application took a more granular approach, modeling multiple individual pedestrians having, <i>e.g.</i>, individual intentions, preferred walking speeds, step lengths, and even preferred clearance tolerance or personal space. Simulating the movement of pedestrians in this manner, as described in the application, may be used to verify whether a building design meets certain requirements, for example, in case of evacuation. The claims recited, in part, a method of simulating movement of an autonomous entity through an environment. The claims as filed did not recite specific inputs or outputs rooted in physical parameters. Originally filed claim 1 recited, in part:</p> <p style="margin-left: 40px;">providing a provisional path through a model of the environment from a current location to an intended destination;<br /> providing a profile for said autonomous entity;<br /> determining a preferred step towards said intended destination . .&nbsp;. ;<br /> determining a personal space .&nbsp;.&nbsp;. [and] determining whether said preferred step is feasible by considering whether obstructions infringe said personal space.</p> <p>The examining division refused the application for lacking inventive step and held that only the use of a computer contributed to the technical character of the claimed simulation method. The applicant appealed this refusal to the Technical Board of Appeal, which in turn, referred three questions to the Enlarged Board of Appeal. These questions form the basis of the G1/19 decision:</p> <ol> <li>In the assessment of inventive step, can the computer-implemented simulation of a technical system or process solve a technical problem by producing a technical effect which goes beyond the simulation&rsquo;s implementation on a computer, if the computer-implemented simulation is claimed as such?</li> <li>If the answer to the first question is yes, what are the relevant criteria for assessing whether a computer-implemented simulation claimed as such solves a technical problem? In particular, is it a sufficient condition that the simulation is based, at least in part, on technical principles underlying the simulated system or process?</li> <li>What are the answers to the first and second questions if the computer-implemented simulation is claimed as part of a design process, in particular for verifying a design?</li> </ol> <p>In its analysis the Enlarged Board referenced the established two-hurdle approach for determining the technicality of computer-implemented inventions. The first hurdle pertains to eligibility under Article 52 of the European Patent Code. To overcome the first hurdle an invention must be &ldquo;technical,&rdquo; which may merely involve the use of a computer in the claim. The second hurdle pertains to inventive step under Article 56 of the EPC and focuses on differences between the prior art and claimed subject matter. In what is referred to as the COMVIK approach, established in the COMVIK case, non-technical features (i.e., excluded subject matter) in a claim may not contribute to inventive step. That is, a feature is only considered for inventive step if, and to the extent, it contributes to the technical character of the claimed subject matter. The COMVIK approach is employed in assessing the patentability of computer-related inventions.</p> <p>The Enlarged Board held that the COMVIK approach, which applies to computer-related inventions, also applies to the assessment of computer-implemented simulations. Accordingly, computer-implemented simulations may be patentable if an inventive step can be based on a feature contributing to the technical character of the claimed simulation. In favorable language, the Enlarged Board noted that &ldquo;no group of computer-implemented inventions can <i>a priori</i> be excluded from patent protection.&rdquo;</p> <p>In reaching its decision, the Enlarged Board noted various components commonly at play in computer-implemented simulations, such as underlying models and algorithms, and how such components may relate to technical features. Depending on whether models and algorithms contribute to any technical effect, they may or may not be taken into account in the inventive step assessment. Underlying models may contribute to technicality if, for example, they are a reason for adapting the computer or its functioning or if they form a further technical use of the outcomes of the simulation such as an impact on physical reality. Similarly, algorithms may contribute to the technicality if adapted to the internal functioning of a computer or if there are real-world external effects.</p> <p>Notably, the Enlarged Board held that a simulation need not have a direct link with physical reality to establish technicality. However, it noted that in most cases such a direct link with physical reality is sufficient to establish technicality. Further, while the Enlarged Board noted that simulations may have few technical effects regarding the inputs and outputs, it suggested that technical improvements to simulations, such as improved accuracy, may be taken into consideration for inventive step.</p> <p>In view of the above, the Enlarged Board answered each referred question as follows:</p> <ol> <li>A computer-implemented simulation of a technical system or process that is claimed as such can, for the purpose of inventive step, solve a technical problem by producing a technical effect going beyond the simulation&rsquo;s implementation on a computer.</li> <li>For that assessment it is not a sufficient condition that the simulation is based, in whole or in part, on technical principles underlying the simulated system or process.</li> <li>The answers to the first and second questions are no different if the computer-implemented simulation is claimed as part of a design process, in particular for verifying a design.</li> </ol> <p>Parts of the EPO&rsquo;s G1/19 decision seem to echo U.S. practice. For example, in its October 2019 Revised Patent Subject Matter Eligibility Guidance, the USPTO outlined a two-pronged approach for determining whether a claim is directed to a judicial exception. The first prong involves evaluating whether the claim recites a judicial exception and the second prong involves a practical application of the judicial exception. The EPO&rsquo;s &ldquo;technicality&rdquo; requirements appear to be similar to the USPTO&rsquo;s discussion of a &ldquo;practical application.&rdquo; In the U.S., for example, relevant considerations for evaluating whether additional elements integrate a judicial exception into a practical application are whether elements improve the functioning of a computer or other technology or implement the judicial exception with a machine or transform a particular article (MPEP 2106.04). Although the USPTO does not require some link with physical reality or an impact on the functioning of the computer or other technology, such features may place the claim in a strong position for patentability. This aspect of U.S. practice appears similar to the standard under the Enlarged Board&rsquo;s decision.</p> <p>Guidance from the USPTO suggests that computer-implemented simulations are not excluded from patentability. In the Subject Matter Eligibility Examples issued by the USPTO on January 7, 2019, Example 38 relates to a computer-implemented simulation. In this example, the USPTO contemplates the possible patentability of simulations. The claim presented in Example 38 is a method of providing a digital computer simulation of an analog audio mixer. The analysis of this claim notes that the claim would be eligible because the steps do not recite any judicial exceptions such as mathematical concepts, mental processes, or methods of organizing human activity.</p> <p>The EPO&rsquo;s G1/19 decision may leave the door open for pursuing computer-related simulations in the EPO. This decision lays out the framework for assessing patentability of such simulations. Accordingly, careful drafting of the application and enumeration of the technical problem and solution may help to highlight the technical effects that are likely to contribute to patentability. We encourage U.S. clients concerned with the patentability of computer simulation in the EPO to contact us for assistance in working with EPO counsel on these questions.</p> <p>For more information on this holding, please contact Fitch Even attorneys <a href="https://www.fitcheven.com/?t=3&amp;A=2599&amp;format=xml&amp;p=5482">Amanda Lowerre-O&rsquo;Donnell</a> or <a href="https://www.fitcheven.com/?t=3&amp;A=19278&amp;format=xml&amp;p=5482">Jacqueline L. Thompson</a>, authors of this alert.<br /> <b><br /> Fitch Even IP Alert<sup>&reg;</sup></b></p>IP Alerts19 Mar 2021 00:00:00 -0800https://www.fitcheven.com/?t=40&an=115544&format=xmlIP Alert: PTAB Estoppel Decisions Under ยง 315(e)(1) Occurring After Institution Are Reviewable on Appealhttps://www.fitcheven.com/?t=40&an=115397&format=xml<p>On March 9, in <a href="http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/19-1688.OPINION.3-9-2021_1745086.pdf"><i>Uniloc 2017 LLC v. Facebook Inc.</i></a>, the Federal Circuit held that the no-appeal provision of 35 U.S.C. &sect; 314(d) does not preclude appellate review of the PTAB&rsquo;s estoppel determination under section 315(e)(1) when &ldquo;the alleged estoppel-triggering event occurred after institution.&rdquo; As stated in section 315(e)(1), a petitioner &ldquo;may not request or maintain&rdquo; an <i>inter partes</i> review (IPR) proceeding as to any ground that the petitioner &ldquo;raised or reasonably could have raised&rdquo; in a prior IPR that resulted in a final written decision regarding the same patent claim.</p> <p>Uniloc owns U.S. Patent No. 9,995,433 (&ldquo;the &rsquo;443 patent&rdquo;), which was challenged in IPR petitions filed by several different parties including Apple, Facebook, and LG Electronics. In relevant part, Apple had filed an initial IPR petition challenging the &rsquo;443 patent, and Facebook subsequently filed two petitions of its own. While both Facebook petitions were still pending, the PTAB instituted Apple&rsquo;s IPR. Shortly after this institution decision, Facebook elected to file a substantively identical follow-on petition and moved to join Apple&rsquo;s IPR, which was granted. Separately, LG filed two IPR petitions that were identical to Facebook&rsquo;s two initial IPR petitions and moved to join those proceedings before the institution decisions, which were also granted.</p> <p>Then, after the PTAB had instituted both Facebook IPRs, the PTAB issued a final written decision in the Apple IPR upholding the patentability of all challenged claims of the &rsquo;443 patent. As a direct result of Facebook having joined the Apple IPR, the PTAB issued a decision in one of the Facebook IPRs partially dismissing Facebook because it was estopped under section 315(e)(1) as to all claims already upheld in the Apple proceeding (i.e., claims 1&ndash;6 and 8). Despite Uniloc&rsquo;s objections, the PTAB allowed Facebook to remain in that IPR to challenge claim 7 of the &rsquo;443 patent. Specifically, the PTAB found that section 315(e)(1) estoppel provisions only applied to grounds that were raised or reasonably could have been raised &ldquo;with respect to that claim,&rdquo; which had not included claim 7. The PTAB later issued its final written decision (as a consolidated decision for both Facebook IPRs), finding that all challenged claims were unpatentable as obvious.</p> <p>Uniloc sought rehearing of both Facebook IPRs, arguing in part that the IPR involving the estoppel question should have been terminated once the original petitioner&mdash;Facebook&mdash;had been deemed estopped. Since &ldquo;[j]oined parties are privy to a petitioner,&rdquo; and LG and Facebook were joined parties, Uniloc argued LG was likewise estopped. The PTAB denied the request.</p> <p>Uniloc appealed and argued in part that the PTAB erred in not finding LG estopped from challenging claims 1&ndash;8 due to its purported relationship with Facebook as a privy or real party in interest. However, before addressing the merits of Uniloc&rsquo;s challenge, the court first assessed whether the no-appeal provision of section 314(d) should apply. After discussing a number of prior decisions concerning section 314(d), the Federal Circuit ultimately found that since the estoppel issue had not arisen until <i>after</i> the institution decision in the Facebook IPRs, section 314(d) did not bar appellate review, holding &ldquo;[W]e see no indication&nbsp;that &sect; 314(d) precludes judicial review of the [PTAB&rsquo;s] application of &sect; 315(e)(1)&rsquo;s estoppel provision in this case, in which the alleged estoppel-triggering event occurred after institution.&rdquo;</p> <p>Reaching the merits of Uniloc&rsquo;s estoppel challenge, the court rejected Uniloc&rsquo;s contention that a joined party is inherently privy of the original petitioner and affirmed the PTAB&rsquo;s finding that LG was not a real party in interest or privy of Facebook absent evidence showing that either party exercised control over the other party&rsquo;s decision to file a petition or that the parties coordinated their challenges.</p> <p>The court also held that the PTAB had correctly found Facebook was not estopped from challenging claim 7, even though claim 7 depended from claim 1, which Facebook was estopped from challenging by the final written decision in the Apple IPR. The court reasoned that because claim 7 was not challenged by Apple and because Facebook could not bring its own challenge to claim 7 in the Apple proceeding via joinder under section 315(c), no estoppel arose with respect to that claim.</p> <p>The court also affirmed the PTAB&rsquo;s obviousness determinations as supported by substantial evidence.</p> <p>This decision provides further guidance on the contours of the section 314(d) no-appeal provision and which specific determinations by the PTAB may be appealed. This has been an ever-expanding body of case law, beginning with the Supreme Court&rsquo;s decision in<i> Cuozzo Speed Techs., LLC v. Lee</i>.</p> <p>For more information on this topic, please contact Fitch Even partner <a href="https://www.fitcheven.com/?t=3&amp;A=2587&amp;format=xml&amp;p=5482">Paul B. Henkelmann</a>.</p> <p><i>Fitch Even associate </i><a href="https://www.fitcheven.com/?t=3&amp;A=16703&amp;format=xml&amp;p=5482"><i>Evan Kline-Wedeen</i></a><i> contributed to this alert.<br /> <br /> </i><b>Fitch Even IP Alert<sup>&reg;</sup></b></p>IP Alerts16 Mar 2021 00:00:00 -0800https://www.fitcheven.com/?t=40&an=115397&format=xmlIP Alert: Federal Circuit Gives Guidance on Royalty Evidence and Willfulnesshttps://www.fitcheven.com/?t=40&an=115398&format=xml<p>On March 1, in <a href="http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/19-2418.OPINION.3-1-2021_1740684.pdf"><i>Bayer HealthCare LLC v. Baxalta Inc.</i></a>, the Federal Circuit held that a damages expert in a patent case may testify to a range of reasonable royalty rates and not a single royalty rate, and a jury may reasonably choose a rate within that range. The court also held that an infringer&rsquo;s mere knowledge of infringement of the asserted patent is inadequate to show willful infringement without a further showing of wanton, malicious, and bad-faith behavior.</p> <p>The Federal Circuit addressed Baxalta&rsquo;s appeal of a jury award of $155,190,264 in reasonable royalty damages based on a 17.78% royalty rate applied to a $872,836,128 royalty base. At trial, the expert testified to a range from 5.1% to 42.4%, but not to a single royalty rate. The district court had excluded the expert&rsquo;s chosen single royalty rate of 23.75% because it was the midpoint of the range and inadequately based on the Nash Bargaining Solution and nothing else. The Federal Circuit held the expert&rsquo;s opinion on the upper and lower royalty rates was adequately supported by analysis of <i>Georgia-Pacific </i>factors. The court noted that the jury&rsquo;s decision to use the 17.78% royalty rate was supported with substantial evidence because it was within the range that was in evidence.&nbsp;&nbsp;</p> <p>Regarding the district court&rsquo;s judgment as a matter of law that Baxalta did not willfully infringe the asserted patents, the Federal Circuit rejected Bayer&rsquo;s argument that evidence of Baxalta&rsquo;s knowledge of infringement of the asserted patent was enough to show willfulness. Instead, the Federal Circuit held such evidence &ldquo;is insufficient to establish that Baxalta&rsquo;s &lsquo;conduct rose to the level of wanton, malicious, and bad-faith behavior required for willful infringement.&rsquo;&rdquo; The Federal Circuit went on to explain, &ldquo;Knowledge of the asserted patent and evidence of infringement is necessary, but not sufficient, for a finding of willfulness. Rather, willfulness requires deliberate or intentional infringement.&rdquo; The court&rsquo;s holding begs the question of what more is needed to show deliberate or intentional infringement, but the court did not answer the question or elaborate on what further proof is needed.&nbsp;</p> <p>The <i>Bayer </i>decision provides guidance to parties in establishing a reasonable royalty by allowing the damages expert to testify to a range of reasonable royalty rates without testifying to any single royalty rate and allowing the jury to choose a single rate with the range. The decision also confirms that there is a relatively high bar to proving willful infringement, with mere knowledge of infringement of the asserted patent not being enough.</p> <p>For more information regarding this decision, please contact Fitch Even partner <a href="https://www.fitcheven.com/?t=3&amp;A=2581&amp;format=xml&amp;p=5482">Karl R. Fink</a>, author of this alert.<br /> <b><br /> Fitch Even IP Alert<sup>&reg;</sup></b></p>IP Alerts16 Mar 2021 00:00:00 -0800https://www.fitcheven.com/?t=40&an=115398&format=xmlFitch Even Partner Tom Lebens Featured on <i>That One Case</i> Podcasthttps://www.fitcheven.com/?t=40&an=115222&format=xml<p>Fitch Even partner <a href="https://www.fitcheven.com/?t=3&amp;A=2596&amp;format=xml&amp;p=5482">Thomas F. Lebens</a> was interviewed for an episode of the <i><a href="https://lowerstreet.co/podcasts/that-one-case">That One Case</a>&nbsp;</i>podcast, released yesterday. The podcast features stories about career-changing cases told by lawyers in all areas of practice. In Tom&rsquo;s episode, he shares the story of a pivotal moment during law school when he learned the value of &ldquo;redefining the problem,&rdquo; a concept he has continued to apply in working with clients throughout his career.</p> <p>To listen to the episode, visit the <i>That One Case</i> website <a href="https://lowerstreet.co/podcasts/that-one-case/redefining-the-problem-thomas-lebens-fitch-even-tabin-and-flannery">here</a> or find it on Spotify, Apple Podcasts, and other popular podcast apps.&nbsp;</p>Professional Activities04 Mar 2021 00:00:00 -0800https://www.fitcheven.com/?t=40&an=115222&format=xml