Ecommerce Patent found to have patent eligible subject matter under Alice.

Thomas Brown | January 27, 2015

DDR Holding, LLC v. Hotels.com, L.P. 

December 5, 2014

Panel:  Wallach, Mayer, and Chen (Circuit Judges). Precedential Opinion by Chen, Dissenting Opinion by Mayer.

Summary

While not all claims purporting to address Internet-centric challenges are eligible for patent, a claimed solution that is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks constitutes patent eligible subject matter.


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Environment of confidentiality and tight control trumps publicly visible location of invention in “public use” challenge to patent validity

Linda Shapiro | January 27, 2015

Delano Farms Company v. California Table Grape Comm.

January 9, 2015

Panel: Prost, Bryson, and Hughes. Opinion by Bryson.

Summary

In a case involving plant patents, the CAFC expounds on what constitutes, and does not constitute, a public use.  The touchstone of public use is “whether the purported use was accessible to the public or was commercially exploited.”  A formal confidentiality agreement is not required to show non-public use.  Because there was an environment of confidentiality and tight control in the actions of the third parties who obtained unauthorized possession of the plant material prior to the critical date, and their use was not accessible to the public, there was no invalidating public use.

Details

After disposing of various procedural issues, the CAFC addressed a challenge to the validity of two plant patents under 35 USC § 102(b) (pre-AIA) based on an alleged public use more than one year before the applications for the patents were filed.

Following a bench trial, the district court found that the actions of two individuals who obtained samples of the two patented plant varieties in an unauthorized manner and planted them in their own fields did not constitute a public use of the two plant varieties and therefore rejected the plaintiffs’ challenge to the patents.  The CAFC affirmed.

The patent applications were filed on September 28, 2004, making the critical date for a section 102(b) public use bar September 28, 2003.  Both plant varieties were made commercially available on July 13, 2005, well after both the critical and filing dates.  In 2001, the U.S. Department of Agriculture (“USDA”) held an experimental variety open house, which was attended by cousins Jim and Larry Ludy.  Jim Ludy asked a USDA employee for some of the plant material for the two varieties.  Although the plant material was not commercially released, and the USDA employee was not authorized to do so, he complied with the request, on the condition that the Ludys not sell the resulting grapes until the varieties were commercially released.  Jim Ludy understood that he was to keep the plant material secret, and he understood the adverse consequences if he failed to do so.

Jim Ludy subsequently grew a number of plants from the plant material, and provided a few buds to Larry.  Larry was aware of the origins of the plant material, and admitted that Jim told him they should keep it to themselves.  Larry grew more plants from the buds he got from Larry, and showed them to his marketer at least twice before the critical date.  The Ludys sold no grapes from their plantings before the critical date.  After the critical date, the marketer sold grapes harvested from the vines under the name of an unrelated variety to avoid detection.  Also after the critical date, Larry Ludy provided some of the plant material to the marketer, who recognized the competitive advantage in possessing plants that were not commercially released.

Based on these findings, the district court found that the plaintiffs failed to meet their burden of showing, by clear and convincing evidence, that the Ludys’ use of the unreleased varieties constituted an invalidating public use.

The CAFC begins its legal analysis by stating the test for public use as being “whether the purported use was accessible to the public or was commercially exploited.”  To be accessible to the public, the actions that constitute the use must “create a reasonable belief as to the invention’s public availability.”  Regardless of whether the actions are taken by the inventor or an unaffiliated third party, relevant factors include:

  • “the nature of the activity that occurred in public”
  • “the public access to and knowledge of the public use”
  • “whether there was any confidentiality obligation imposed on persons who observed them” and if so, the degree of confidentiality
  • [t]he adequacy of any confidentiality guarantees … measured in relation ‘to the party in control of the allegedly invalidating prior use’”

“[A]n agreement of confidentiality, or circumstances creating a similar expectation of secrecy, may negate a public use where there is not commercial exploitation.”  Analogously, a secret or confidential third-party use is not an invalidating public use.

In this case, Jim obtained the plant material with the expectation of secrecy and impressed the need for secrecy on Larry; and even after the critical date, they both acted to conceal their possession of the plants.  The facts are thus readily distinguishable from the seminal Supreme Court decision in Egbert v. Lippmann, 104 U.S. 333 (1881), in which the inventor of a corset gave two of them to a friend to use, without limitation, restriction, or injunction of secrecy.

The CAFC also pointed out that a formal confidentiality agreement is not required to prove that a use is not public.

With respect to disclosure to the marketer, the CAFC referred to the district court’s finding that there was an environment of confidentiality and tight control, and thus no public use.

Finally, the CAFC considered the impact of Ludys growing the plants in locations that were visible from public roads.  The public nature of the location was counteracted by the facts that grape varieties cannot be reliably identified simply by viewing the growing vines, the plantings in question were extremely limited in comparison to the total cultivation of their farms, the plantings were not labeled in any way, and there was no evidence that anyone other than the Ludys and their marketer recognized them.

The CAFC concluded based on the district court’s finding of fact that the purported use was not accessible to the public and did not put the public in possession of the patented plants.

Takeaway

A use by an inventor or an unaffiliated third party is not necessarily a public use, even if the use is made without an explicit confidentiality agreement.  Even without a confidentiality agreement an environment of confidentiality and tight control over the invention and its use can prevent the use from being construed as an invalidating public use.

Full Opinion

Establishing a General Premise Does Not Satisfy the High Burden of Proving an Inherent Disclosure of a Claimed Feature under an Obviousness Rejection

Bernadette McGann | December 22, 2014

Par Pharmaceutical, Inc. v. TWI Pharmaceuticals, Inc.

December 3, 2014

Panel: O’Malley, Wallach, and HughesOpinion by O’Malley.

Summary

Patent 7,101,576 (hereinafter ‘576) is directed towards a method of using megestrol nanoparticles to increase the body mass in a human patient suffering from wasting.

The CAFC vacated a District Court judgment of invalidity of the ‘576 patent and remanded for further analysis.  The CAFC held that the District Court committed an error since the District Court analysis of inherency ignored the specific claim limitations at issue.


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The appeal to the Federal Circuit would be an option if a motion to stay pending the CBM review is denied

Sung-Hoon Kim | December 18, 2014

Versata Software, Inc. v. Callidus Software, Inc.

November 20, 2014

Panel: Chen, Mayer, and Linn. Opinion by Chen.

Summary:

Callidus appealed from the U.S. District Court for the District of Delaware’s denial of a stay pending the PTO’s CBM review of the patents-in-suit.  The Federal Circuit used a four factor test set forth in AIA §18(b) to hold that each factor strongly favors a stay, thereby reversing and remanding with instructions to grant the motion to stay.

본 사건은 피고인 Callidus가 델라웨어주 연방지방법원의 특허재심사 절차 진행 중인 특허 소송에 대한 중지청구(motion to stay) 판결에 불복하여 연방항소법원에 상고한 사건이다.  판결에서 연방항소법원은 18(b)조에 있는 4가지 요소 모두 현 소송 진행상황상 미 특허청의 특허재심사 절차 (CBM) 결과를 기다리는 것이 타당하다고 판결하였다.  따라서, 연방항소법원은 개정 특허법 18(b)조에 의거하여 연방지방법원의 중지청구 판결을 번복하였다.


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