The “inferior” Board: Supreme Court preserves the Patent Trial and Appeal Board, but empowers the PTO Director with final decision-making authority over Board proceedings
WHDA Blogging Team | July 13, 2021
United States v. Arthrex, Inc. (also, Smith & Nephew, Inc. v. Arthrex, Inc., Arthrex, Inc. v. Smith & Nephew, Inc.) (Supreme Court)
Decided on June 21, 2021
Chief Justice Roberts wrote the opinion of the Court, with Justices Alito, Thomas, Breyer, Sotomayor, Kagan, Gorsuch, Kavanaugh, and Barrett variously concurring and dissenting.[1]
Summary
In U.S. v. Arthrex, the U.S. Supreme Court confirmed that the Administrative Patent Judges (APJs) of the Patent Trial and Appeal Board are improperly appointed in violation of the Appointments Clause of the Constitution. The Court held that 35 U.S.C. §6(c), which provided that only the Board may grant a rehearing of a final decision arising out of an inter partes review proceeding, was unenforceable insofar as the provision denied the Director the power to review the Board’s decision. To cure the constitutional infirmity, the Court held that the correct remedy was to require that the Director review decisions by APJs.
Details
When Arthrex, Inc. saw their U.S. Patent No. 9,179,907 being invalidated by the Patent Trial and Appeal Board, in an inter partes review brought by Smith & Nephew, Inc., they appealed to the Federal Circuit, challenging not only the substance of the Board’s Final Written Decision, but also the constitutionality of the Board. Arthrex argued that the appointment of the Administrative Patent Judges (APJs) violated the Appointments Clause of the Constitution. And being unconstitutionally appointed, the APJs had no authority to deprive Arthrex of their rights in their patent.
Arthrex’s constitutionality argument might have started out as a long-shot. It was the last of their four arguments on appeal, and occupied only 7 of their 149-page opening brief. Remarkably, it was the one that brought Arthrex the most success.
The Appointments Clause (Art. II, §2, cl. 2) of the Constitution provides that principal officers in the U.S. government must be appointed by the President “and by and with the Advice and Consent of the Senate”. But the Appointments Clause also provides that inferior officers may be appointed by “the President alone, in the Courts of Law, or in the Heads of Departments.”
The America Invents Act of 2011 established the Patent and Trial Appeal Board as a tribunal within the Executive Branch. The Board sits in panels of at least three members drawn from the PTO Director, PTO Deputy Director, the Commissioner for Patents, the Commissioner for Trademarks, and APJs. The Secretary of Commerce appoints the members of the Board, except for the Director, who is appointed by the President.
On appeal at the Federal Circuit, the principal question was whether APJs were principal officers or inferior officers, the former requiring appointment by the President as opposed to the Secretary of Commerce.
To answer the question, the Federal Circuit looked mainly to Edmonds v. United States, 520 U.S. 651 (1997).
In Edmonds, the Supreme Court explained that “[w]hether one is an ‘inferior’ officer depends on whether he has a superior”, and “‘inferior officers’ are officers whose work is directed and supervised at some level by others who were appointed by Presidential nomination with the advice and consent of the Senate”. Edmonds, 520 U.S. at 662-63. The Supreme Court in Edmonds articulated three factors that aided in distinguishing between principal and inferior officers: (1) whether an appointed official has the power to review and reverse the officers’ decision; (2) the level of supervision and oversight an appointed official has over the officers; and (3) the appointed official’s power to remove the officers. Id. at 664-65. The central consideration was the “extent of direction or control” that the appointed officials had over the officers, because the objective was to preserve the chain of command down from the President, so that “political accountability” may be preserved. Id. at 663.
Following Edmonds,the Federal Circuit found that APJs were principal officers due to the lack of any presidentially appointed officials who could review decisions by APJs, as well as the lack of unfettered authority on the part of the Secretary of Commerce and Director to remove APJs at will. Because APJs were found to be principal officers, their appointments by the Secretary of Commerce, instead of the President, violated the Appointments Clause.
Having found a constitutional violation, the Federal Circuit then fashioned a remedy that severed and invalidated the statutory limitations on the removal of APJs. The Federal Circuit reasoned that making APJs removable at will would render them inferior officers. The Federal Circuit also determined that, because the invalidity decision against Arthrex’s patent was issued by an unconstitutionally appointed Board, the decision must be vacated and remanded to the Board for a fresh hearing before a panel of new, constitutionally appointed APJs.
“This satisfied no one”, as the Supreme Court reflected in U.S. v. Arthrex.
All the parties involved in the Federal Circuit appeal—the government, Arthrex, Smith & Nephew—requested the Court’s review of different aspects of the Federal Circuit’s decision.
Nevertheless, the question before the Court was the same one that faced the Federal Circuit: “[W]hether the PTAB’s structure is consistent with the Appointments Clause, and the appropriate remedy if it is not.”
In a divided 5-4 decision, the Court agreed with the Federal Circuit that APJs were unconstitutionally appointed, but disagreed with the Federal Circuit on the appropriate remedy.
The Court began with the premise that “Congress provided that APJs would be appointed as inferior officers, by the Secretary of Commerce as head of a department”. However, the nature of the APJs’ authority was such that they were really acting as principal officers.
The problem was the lack of supervision over the APJs’ decision-making:
What was “significant” to the outcome [in Edmonds]—review by a superior executive office—is absent here: APJs have the “power to render a final decision on behalf of the United States” without any such review by their nominal superior or any other principal officer in the Executive Branch. The only possibility of review is a petition for rehearing, but Congress unambiguously specified that “[o]nly the Patent and Trial Appeal board may grant rehearings.” [35 U.S.C. § 6(c)]. Such review simply repeats the arrangement challenged as unconstitutional in this suit.
The current setup “diffuses” accountability. The Court recognized that “[he, the Director] is the boss” of APJs in most ways, but the Court was troubled by the Director’s powerlessness over the one source of APJs’ “significant authority”—their power to issue decisions on patentability. In that regard, the Director is relegated to the ministerial duty of issuing a certificate canceling or confirming patent claims. As the Court noted, “[t]he chain of command runs not from the Director to his subordinates, but from the APJs to the Director”.
The government attempted to drum up the Director’s influence over the Board’s decision-making. The government argued that it was the Director who decided whether to initiate inter partes reviews, who could designate APJs predisposed to his views to hear a case, who could vacate an institution decision “if he catches wind of an unfavorable ruling on the way” as long as he intervened before a final written decision, who could “manipulate the composition of the PTAB panel that acts on the rehearing petition”, who could “‘stack’ the panel at rehearing, and who could appoint himself to a panel to reverse a decision at rehearing.
Putting aside the troubling due process and fairness concerns raised by the alleged influences of the Director, the Court criticized the government for creating “a roadmap for the Director to evade a statutory prohibition on review [i.e., 35 U.S.C. § 6(c)] without having him take responsibility for the ultimate decision”:
Even if the Director succeeds in procuring his preferred outcome, such machinations blur the lines of accountability demanded by the Appointments Clause. The parties are left with neither an impartial decision by a panel of experts nor a transparent decision for which a politically accountable officer must take responsibility. And the public can only wonder “on whom the blame or the punishment of a pernicious measure, or series of pernicious measures ought really to fall.”
All this led to the Court’s conclusion that “the unreviewable authority wielded by the APJs during inter partes review is incompatible with their appointment by the Secretary to an inferior office”.
For a solution, the Court disagreed with the Federal Circuit that at-will removal of APJs was the answer. The unconstitutionality of the APJs’ appointments lay in the unreviewability of their decisions, and the Federal Circuit’s proposed solution did not adequately address that problem. The solution must instead empower the Director to review Board decisions:
In our view, however, the structure of the PTO and the governing constitutional principles chart a clear course: Decisions by APJs must be subject to review by the Director.
More particularly, the Court explained that:
The upshot is that the Director cannot rehear and reverse a final decision issued by APJs. If the Director were to have the “authority to take control” of a PTAB proceeding, APJs would properly function as inferior officers.
We conclude that a tailored approach is the appropriate one: Section 6(c) cannot constitutionally be enforced to the extent that its requirements prevent the Director from reviewing final decisions rendered by APJs….The Director may accordingly review final PTAB decisions and, upon review, may issue decisions himself on behalf of the Board. Section 6(c) otherwise remains operative as to the other members of the PTAB.
The Director’s decision is then subject to judicial review:
When reviewing such a decision by the Director, a court must decide the case “conformably to the constitution, disregarding the law” placing restrictions on his review authority in violation of Article II.
Finally, the Court vacated the Federal Circuit’s decision to grant Arthrex a hearing before a new panel of APJs. The Court found sufficient their remedy of a limited remand to the Director to determine whether to rehear Smith & Nephew’s inter partes review petition.
There are few interesting aspects to the Court’s Arthrex opinion.
The Court’s holding is narrow. It applies only to 35 U.S.C. §6(c), which currently provides that “[o]nly the Patent Trial and Appeal Board may grant rehearings”, and only to the extent that section 6(c) prohibits the Director from reviewing the Board’s decisions. The holding also applies only to inter partes reviews—the Court is explicit that “[w]e do not address the Director’s supervision over other types of adjudications conducted by the PTAB, such as the examination process for which the Director has claimed unilateral authority to issue a patent”.
In other words, the Court’s decision is unlikely to bring any radical changes to the Board.
It is also notable that Chief Justice Roberts wrote the majority opinion in Arthrex. In Oil State energy Services, LLC v. Greene’s Energy Group, LLC, 138 S.Ct. 1365 (2018), the Supreme Court held that patent grants involved public rights and the Board’s adjudication of patents without a jury, despite not being an Article III tribunal, was constitutionally permissible. But Chief Justice Roberts joined in the dissenting opinion in that case. The dissent was resolute that the Director and the Board, that is, “a politically appointee and his administrative agents, instead of an independent judge”, should not be permitted to adjudicate patents. Id. at 1380. That is, patent adjudication should be insulated from politics. During the oral argument in Oil State, Chief Justice Roberts raised due process concerns over the Director’s ability to influence Board decisions through panel stacking.
Yet, in Arthrex, Chief Justice Roberts would give the politically appointed Director plenary power to review, modify, and even nullify a Board decision, potentially making the Board vulnerable to political influences. How can Chief Justice Roberts’ positions in Oil State and Arthrex be reconciled?
The Court’s decision in Arthrex also touches on the complex relationship between the PTO, which is an agency, the Board, which is an adjudicatory within the agency, and the Administrative Procedure Act (APA) that is supposed to govern their actions.
The Federal Circuit has suggested in the past that proceedings before the Board are APA-governed formal adjudication subject to the formal adjudication procedures set forth in 5 U.S.C. §§556-557. However, the Court in Arthrex suggested that Board proceedings were actually “adjudication that takes place outside the confines of §557(b)”. If Board proceedings are not subject to the APA, then what, if any, regulatory scheme governs Board proceedings to ensure procedural fairness?
In addition, the plain language of the statutes seems to already authorize the Director to grant rehearings. Section 6(a) provides that “[t]he Director, the Deputy Director, the Commissioner for Patents, the Commissioner for Trademarks, and the administrative patent judges shall constitute the Patent Trial and Appeal Board”, and section 6(c) provides that “[o]nly the Patent Trial and Appeal Board may grant rehearings”. Is the Court really rewriting the statute by giving the Director reviewing powers? Or is the Court merely making explicit what Congress had already intended?
Interestingly, the Court’s opinion referred to the Trademark Modernization Act of 2020, which makes explicit that “the authority of the Director…includes the authority to reconsider, and modify or set aside, a decision of the Trademark Trial and Appeal Board”. The Trademark Modernization Act of 2020 thus shields the Trademark Trial and Appeal Board from copycat constitutional challenges.
What now?
The PTO will now need to issue guidance on how the Court’s holding will be implemented. The PTO’s existing Standard Operating Procedure 2[2] appears to provide a procedural framework for requesting rehearing by the Director, as the SOP2 already establishes the Director’s authority to convene a “Precedential Opinion Panel” to review decisions in cases before the Board and determine, in the Director’s sole discretion, whether to order sua sponte rehearing.
The PTO has its work cut out. Following the Federal Circuit’s decision in Arthrex, Inc. v. Smith & Nephew, Inc., the Chief Administrative Patent Judge of the Board issued a general order holding in abeyance more than 100 Board decisions from post-grant proceedings, which were remanded as a result of the Federal Circuit’s Arthrex decision. See General Order in Cases Remanded under Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019) (Boalick, Chief APJ, PTAB, May 2020).
Also complicating the situation is the current absence of a Director at the PTO. Is a Commissioner of Patent, serving as an Acting Director, constitutionally authorized to review and potentially modify Board decisions? Can the Secretary of Commerce step in while the PTO awaits a new Director?
[1] This review will focus only on the majority opinion.
[2] https://www.uspto.gov/sites/default/files/documents/SOP2%20R10%20FINAL.pdf.
Tags: administrative patent judge > Administrative Procedure Act > Constitutional Law > Patent Trial and Appeal Board (PTAB) > Supreme Court
DOCTRINE OF PROSECUTION DISCLAIMER ENSURES THAT CLAIMS ARE NOT CONSTRUED ONE WAY TO GET ALLOWANCE AND IN A DIFFERENT WAY TO AGAINST ACCUSED INFRINGERS
Sung-Hoon Kim | July 8, 2021
SpeedTrack, Inc. v. Amazon.com, Inc. et al.
Decided on June 3, 2021
Prost (author), Bryson, and Reyna
Summary:
The Federal Circuit affirmed the district court’s claim construction orders regarding the hierarchical limitations recited in the SpeedTrack’s ’360 patent based on Applicants’ arguments and claim amendments made during the prosecution of the ’360 patent.
Details:
The ’360 patent
SpeedTrack owns U.S. Patent No. 5,544,360 (“the ’360 patent), which is directed to providing “a computer filing system for accessing files and data according to user-designated criteria.” The ’360 patent discusses that prior-art systems “employ a hierarchical filing structure” which could be very cumbersome when the number of files are large or file categories are not well-defined. In addition, the ’360 patent discusses that some prior-art systems are subject to errors when search queries are mistyped and restricted by the field of each data element and the contents of each field.
However, the ’360 patent discloses a method that uses “hybrid” folders, which “contain those files whose content overlaps more than one physical directory,” for providing freedom from the restrictions caused by hierarchical and other computer filing systems.
Representative claim 1 recites a three-step method: (1) creating a category description table containing category descriptions (having no predefined hierarchical relationship with such list or each other); (2) creating a file information directory as the category descriptions are associated with files; and (3) creating a search filter for searching for files using their associated category descriptions.
1. A method for accessing files in a data storage system of a computer system having means for reading and writing data from the data storage system, displaying information, and accepting user input, the method comprising the steps of:
(a) initially creating in the computer system a category description table containing a plurality of category descriptions, each category description comprising a descriptive name, the category descriptions having no predefined hierarchical relationship with such list or each other;
(b) thereafter creating in the computer system a file information directory comprising at least one entry corresponding to a file on the data storage system, each entry comprising at least a unique file identifier for the corresponding file, and a set of category descriptions selected from the category description table; and
(c) thereafter creating in the computer system a search filter comprising a set of category descriptions, wherein for each category description in the search filter there is guaranteed to be at least one entry in the file information directory having a set of category descriptions matching the set of category descriptions of the search filter.
District Court
In September of 2009, SpeedTrack sued retail website operations for infringement of the ’360 patent. The Northern District construed the hierarchical limitation with the below construction (relied in part on disclaimers made during prosecution):
The category descriptions have no predefined hierarchical relationship. A hierarchical relationship is a relationship that pertains to hierarchy. A hierarchy is a structure in which components are ranked into levels of subordination; each component has zero, one, or more subordinates; and no component has more than one superordinate component.
After that, SpeedTrack moved to clarify the district court’s construction regarding prosecution-history disclaimer.
Subsequently, the district court issued a second claim construction order by adding the following clarification in its first order:
Category descriptions based on predefined hierarchical field-and-value relationships are disclaimed. “Predefined” means that a field is defined as a first step and a value associated with data files is entered into the field as a second step. “Hierarchical relationship” has the meaning stated above. A field and value are ranked into levels of subordination if the field is a higher-order description that restricts the possible meaning of the value, such that the value must refer to the field. To be hierarchical, each field must have zero, one, or more associated values, and each value must have at most one associated field.
In order to support its second claim construction order, the district court analyzed SpeedTrack’s prosecution statements (for their clear disavowal of category descriptions based on hierarchical field-and-value relationships).
The Federal Circuit
The CAFC handled the issue of claim construction.
SpeedTrack acknowledged that the hierarchical limitation was added during the prosecution of the ’360 patent to overcome the Schwartz reference.
During the prosecution, Applicants distinguished their invention from Schwartz by arguing that “unlike prior art hierarchical filing systems, the present invention does not require the 2-part hierarchical relationship between fields or attributes, and associated values for such fields or attributes.”
In addition, Applicants argued that “the present invention is a non-hierarchical filing system that allows essentially ‘free-form’ association of category descriptions to files without regard to rigid definitions of distinct fields containing values.”
Finally, Applicants argued that “this distinction has been clarified in the claims as amended by the addition of the following language in all of the claims: ‘each category description comprising a descriptive name, the category descriptions having no predefined hierarchical relationships with such list or each other.’”).
The CAFC agreed with the district court’s assessment that predefined field-and-value relationships are excluded from the claims.
The CAFC disagreed with SpeedTrack’s argument that the “category descriptions” of the ’360 patent are not the fields of Schwartz and that the hierarchical limitation precludes predefined hierarchical relationships only among category descriptions.
SpeedTrack argued that Applicants distinguished Schwartz on other grounds. However, the CAFC did not agree with this argument.
In addition, the CAFC noted that SpeedTrack’s position contradicts its other litigation statements. “Ultimately, the doctrine of prosecution disclaimer ensures that claims are not ‘construed one way in order to obtain their allowance and in a different way against accused infringers.’” Aylus Networks, Inc. v. Apple Inc., 856 F.3d 1353, 1360 (Fed. Cir. 2017) (quoting Southwall Techs., Inc. v. Cardinal IG Co., 54 F.3d 1570, 1576 (Fed. Cir. 1995)).
Finally, the CAFC noted that both of the first and second construction orders acknowledged the disclaimer.
Therefore, the CAFC affirmed the district court’s final judgement of noninfringement.
Takeaway:
- Applicants need to be careful about claim amendments and arguments made during the prosecution of their patents.
- Litigation statements, while not inventors’ prosecution statements and do not demonstrate prosecution-history disclaimer, can strengthen the court’s reasonings on the prosecution history.
Revisiting KSR: “A person of ordinary skill is also a person of ordinary creativity, not an automaton.”
WHDA Blogging Team | June 29, 2021
Becton, Dickinson and Company v. Baxter Corporation Englewood
Decided on May 28, 2021
Prost*, Clevenger, and Dyk. Court opinion by Dyk. (*Sharon Prost vacated the position of Chief Judge on May 21, 2021, and Kimberly A. Moore assumed the position of Chief Judge on May 22, 2021.)
Summary
On appeals from the United States Patent and Trademark Office, Patent Trial and Appeal Board in an inter partes review, the Federal Circuit unanimously revered the Board’s conclusion of non-obviousness of an asserted patent, directed to a “method for performing telepharmacy,” and a “system for preparing and managing patient-specific dose orders that have been entered into a first system.” The Federal Circuit stated that, in analysis of obviousness, a person of ordinary skill would also consider a source other than cited prior art references, and established that cancellation of all the claims of a patent does not affect the status of the patent as pre-AIA Section 102(e)(2) reference.
Details
I. Background
Becton, Dickinson and Company (“Becton”) petitioned for inter partes review of claims 1– 13 and 22 of U.S. Patent No. 8,554,579 (“the ’579 patent”), owned by Baxter Corporation Englewood (“Baxter”).
Becton asserted invalidity of the challenged claims primarily based on three prior art references: U.S. Patent No. 8,374,887 (“Alexander”), U.S. Patent No. 6,581,798 (“Liff”), and U.S. Patent Publication No. 2005/0080651 (“Morrison”).
Claims 1 and 8 are illustrative of the ’579 patent, as agreed by the parties. Claim 1 is directed to a “method for performing telepharmacy,” and claim 8 is directed to a “system for preparing and managing patient-specific dose orders that have been entered into a first system.”
There are two contested limitations on appeal: the “verification” limitation in claim 8, and the “highlighting” limitation in claims 1 and 8. Claim 8 recites three elements, an order processing server, a dose preparation station, and a display. The relevant portion of the dose preparation station in claim 8, containing both limitations, reads:
8. A system for preparing and managing patient-specific dose orders that have been entered into a first system, comprising:
a dose preparation station for preparing a plurality of doses based on received dose orders, the dose preparation station being in bi-directional communication with the order processing server and having an interface for providing an operator with a protocol associated with each received drug order and specifying a set of drug preparation steps to fill the drug order, the dose preparation station including an interactive screen that includes prompts that can be highlighted by an operator to receive additional information relative to one particular step and includes areas for entering an input;
. . . and wherein each of the steps must be verified as being properly completed before the operator can continue with the other steps of drug preparation process, the captured image displaying a result of a discrete isolated event performed in accordance with one drug preparation step, wherein verifying the steps includes reviewing all of the discrete images in the data record . . . .
The Patent Trial and Appeal Board (“Board”) determined that asserted claims were not invalid as obvious. While the Board found that Becton had established that one of ordinary skill in the art would have been motivated to combine Alexander and Liff, as well as Alexander, Liff, and Morrison, and that Baxter’s evidence of secondary considerations was weak, the Board nevertheless determined that Alexander did not teach or render obvious the verification limitation and that combinations of Alexander, Liff, and Morrison did not teach or render obvious the highlighting limitation.
Becton appealed.
II. The Federal Circuit
The Federal Circuit (“the Court”) unanimously revered the Board’s conclusion of non-obviousness because the determination regarding the verification and highlighting limitations is not supported by substantial evidence.
(i) The Verification Limitation
Alexander discloses in a relevant part: “[I]n some embodiments, a remote pharmacist may supervise pharmacy work as it is being performed. For example, in one embodiment, a remote pharmacist may verify each step as it is performed and may provide an indication to a non-pharmacist per- forming the pharmacy that the step was performed correctly. In such an example, the remote pharmacist may provide verification feedback via the same collaboration software, or via another method, such as by telephone.” Alexander, col. 9 ll. 47–54 (emphasis added).
Relying on the above-cited portion of Alexander, the Board found persuasive Baxter’s argument that Alexander “only discusses that ‘a remote pharmacist may verify each step’; not that the remote pharmacist must verify each and every step before the operator is allowed to proceed” (emphasis added).
The Court concluded that the Board’s determination that Alexander does not teach the verification limitation is not supported by substantial evidence because, among other things, the Court found it quite clear that “[i]n the context of Alexander, “may” does not mean “occasionally,” but rather that one “may” choose to systematically check each step.”
(ii) The Highlighting Limitation
Becton did not argue that Liff “directly discloses highlighting to receive additional language about a drug preparation step.” Instead, Becton argued that “Liff discloses basic computer functionality—i.e., using prompts that can be highlighted by the operator to receive additional information—that would render the highlighting limitation obvious when applied in combination with other references,” primarily Alexander.
In support of petition for inter partes review, Dr. Young testified in his declaration that Liff “teaches that the user can highlight various inputs and information displayed on the screen, as illustrated in Figure 14F.”
The Board found that Liff taught “highlight[ing] patient characteristics when dispensing a prepackaged medication.” Baxter did not contend that this aspect of the Board’s decision was erroneous.
Nevertheless, while finding that “this present[ed] a close case,” the Board determined, that “Dr. Young fail[ed] to explain why Liff’s teaching to highlight patient characteristics when dispensing a prepackaged medication would lead one of ordinary skill to highlight prompts in a drug formulation context to receive additional information relative to one particular step in that process, or even what additional information might be relevant.” In addition, the Board found that Becton’s arguments with respect to Morrison did not address the deficiency in its position based on Alexander and Liff.
In contrast, citing KSR (“[a] person of ordinary skill is also a person of ordinary creativity, not an automaton”), the Court concluded that the Board erred in looking to Liff as the only source a person of ordinary skill would consider for what “additional information might be relevant.” The Court reached an opposite conclusion by citing following Dr. Young’s testimony:
“[a] person of ordinary skill in the art would have understood that additional information could be displayed on the tabs taught by Liff” and that “such information could have included the text of the order itself, information relating to who or how the order should be prepared, or where the or- der should be dispensed.”
“[a] medication dose order for compounding a pharmaceutical would have been accompanied by directions for how the dose should be prepared, including step-by-step directions for preparing the dose.”
(iii) An Alternative Ground
As an alternative ground to affirm the Board’s determination of non-obviousness, Baxter argues that the Board erred in determining that Alexander is prior art under 35 U.S.C. § 102(e)(2) (pre-AIA).
It is undisputed that the filing date of the application for Alexander is February 11, 2005, which is before the earliest filing date of the application for the ’579 patent, October 13, 2008; that the Alexander claims were granted; and that the application for Alexander was filed by another.
However, based on the fact that all claims in Alexander (granted on February 12, 2013) were cancelled on February 15, 2018, following inter partes review, Baxter argued that “because the Alexander ‘grant’ had been revoked, it can no longer qualify as a patent ‘granted’ as required for prior art status under Section 102(e)(2).”
The Court rejected Baxter’s argument because “[t]he text of the statute requires only that the patent be “granted,” meaning the “grant[]” has occurred. 35 U.S.C. § 102(e)(2) (pre-AIA)” and “[t]he statute [thus] does not require that the patent be currently valid.”
(iv) Secondary Considerations
The Court rejected Baxter’s argument because “Baxter does not meaningfully argue that the weak showing of secondary considerations here could overcome the showing of obviousness based on the prior art.”
Takeaway
· In analysis of obviousness, a person of ordinary skill would also consider a source other than cited prior art references (petitioner’s testimony in this case).
· Cancellation of all the claims of a patent does not affect the status of the patent as pre-AIA Section 102(e)(2) reference.
No likelihood of confusion with the mark BLUE INDUSTRY and opposer’s numerous marks having INDUSTRY as an element
WHDA Blogging Team | June 25, 2021
Pure & Simple Concepts, Inc. v. I H W Management Limited, DBA Finchley Group (non-precedential)
Decided on May 24, 2021
Moore, Reyna, Chen (opinion by Reyna)
Summary
The Court of Appeals for the Federal Circuit (“the CAFC”) affirmed the Board’s determination of no likelihood of confusion or dilution between numerous marks of Pure & Simple Concepts, Inc. (hereinafter “P&S”) having the shared term “INDUSTRY” and “BLUE INDUSTRY” mark of I H W Management Limited, d/b/a The Finchley Group (hereinafter “Fincley”).
Details
P&S owns eight registered trademarks which all use the word “INDUSTRY” and licenses the use of these marks in connection with apparel items. On April 30, 2015, Finchley filed an application to register the mark BLUE INDUSTRY for various clothing items. P&S opposed registration of Finchley’s mark under Section 2(d) and 43(c) of the Lanham Act on the grounds of likelihood of confusion and likelihood of dilution by blurring based on P&S’s previous use and registration of its numerous INDUSTRY marks. The Board dismissed the opposition, finding that P&S failed to prove a likelihood of confusion, and that P&S failed to establish the critical element of fame for dilution.
P&S appealed to the CAFC, contending that the Board erred by (1) not considering all relevant DuPont factors; (2) determining the word “BLUE” to be the dominant term in Finchley’s mark; (3) relying heavily on third-party registrations; and (4) failing to find P&S’s family of marks as being famous.
First, in arguing that the Board erred by not considering all relevant DuPont factors, P&S contended that the Board did not consider that clothing items are more likely to be purchased on an impulse, and therefore, consumers are more likely to be confused. Finchley argued that this argument concerns the DuPont factor 4, which P&S presented no evidence before the Board. The CAFC agreed with Finchley, finding that P&S failed to present the evidence, and accordingly, P&S forfeited argument as to this factor.
Next, P&S contended that the Board erred in concluding that “BLUE” is the dominant term in the commercial impression created by Finchley’s mark. While it is not proper to dissect a mark, “one feature of a mark may be more significant than other features, and [thus] it is proper to give greater force and effect to that dominant feature.” Giant Food, Inc. v. Nation’s Foodservice, Inc., 710 F.2d 1565, 1570 (Fed. Cir. 1983). P&S cited as an example, Trump v. Caesars World, Inc., 645 F. Supp. 1015, 1019 (D.N.J. 1986), where the second word, “Palace,” was found to be dominant in the marks TRUMP PALACE and CEASER’S PALACE. However, the CAFC determined that the Board’s finding that BLUE to be the lead term in Finchley’s mark, and that the term BLUE is most likely to be impressed upon the minds of the purchasers and be remembered was supported by substantial evidence.
Third, P&S argued that the Board erred by heavily relying on third-party registrations. P&S argued that some of these third-party registrations were listed twice, some were canceled, some had no evidence of use, and some listed different goods. Nevertheless, the CAFC affirmed that the term “INDUSTRY,” or the plural thereof, has been registered by numerous third parties to identify clothing and apparel items, and therefore, the term is weak, and the scope is limited as applied to clothing items.
Finally, as to P&S’s dilution claim, the Board determined that the number of registered marks by third parties having the INDUSTRY element precluded a finding that P&S owns a family of marks for the shared INDUSTRY element. In addition, the evidence presented by P&S was insufficient to prove that the marks were famous. The CAFC agreed with the Board’s finding of P&S’s dilution claim.
The CAFC found the Board’s findings are supported by substantial evidence, and the Board correctly found there was no likelihood of confusion of dilution.
Takeaway
- Certain portions of a mark can be determined as being dominant.
- Third party registrations are relevant in proving weakness of certain portions of a mark.
Tags: Dilution > Likelihood of Confusion under 15 U.S.C. § 1052(d) > Trademark
